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Ever wonder how many companies announced plans to participate in the US’s government TARP (Troubled Asset Relief Program)?
I did a little digging and as of November 18th, there were at least 25 companies either approved or planning to participate. Here’s an unordered list.
- First Midwest Bancorp Inc. (FMBI) - Received preliminary approval for about $193 million worth of investment
- South Financial Group Inc. (TSFG) - Applied
- CoBiz Financial Inc. (COBZ) - Plans to apply
- E*Trade Financial Corp. (ETFC) - Applied for $800 million
- Associated Banc-Corp. (ASBC) - Preliminary approved for $530 million
- Capital Pacific Bancorp (CPBO) - Preliminary approved for $4 million
- Fulton Financial Corp. (FULT) - Filed an application for about $375 million.
- Trustmark Corp. (TRMK) - Preliminary approved and will issue $215 million in senior preferred shares and $32.3 million in common shares.
- Pacific Capital Bancorp (PCBC) - Preliminary approved for about $188 million
- Heritage Commerce Corp. (HTBK) - About $40 million was preliminary approved
- Banner Corp. (BANR) - $124 million was approved in senior preferred, $18 in common shares
- Columbia Banking System Inc. (COLB) - $76.9 million was preliminary approved
- Heritage Financial Corp. (HFWA) - $24 million in senior preferred, $3.6 in common stock.
- Bridge Bancorp (BDGE) - Considering participation
- Cascade Financial Corp. (CASB) - About $39 million
- Midwest Banc Holdings Inc. (MBHI) - About $85.5 million in preferred, $12.8 million of common stock.
- Goldman Sachs - part of the initial 9 banks that the government bought equity stakes into, along with the 8 below
- Morgan Stanley
- J. P. Morgan Chase & Co
- Bank of America
- Merrill Lynch
- Citigroup Inc.
- Wells Fargo & Co.
- Bank of New York Mellon
- State Street Corp
As I know, the TARP is a 5 year program that allows banks to borrow at 5%, an amazingly attractive rate given the circumstances. Do you have any relationships with these banks? Are you scared that so many already announced their desire to participate (and many more assumed to have applied but without any announcements yet)? Does it really matter to you?
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{ 9 comments… read them below or add one }
You have to think the list of companies will continue to grow!
Where will this bailout end? Autos, textiles, infrastructure they are all taking numbers and forming a line. Scary!
If someone was giving away cheap money, wouldn’t you want some of it. I don’t worry about who is going to the TARP to get money. The government is making it attractive to get money, so why not take advantage of it.
It makes the banks a good buy in the next few years. Cheap money and less competition. It’s going to be good to be a bank …
I’m not too concerned about the banks listed. Many probably aren’t doing too bad, they’re just looking for some cheap money.
It would be interesting to see some numbers on those companies. Many of them are probably multi-bank holding companies. I looked at Cobiz which owns a single Bank, CoBiz Bank, FDIC#22683. They are based in Colorado.
That bank actually looks pretty darn healthy. Over $2BB in assets, profitable, good ratios. The rating system we use gives them a superior rating. So the question begs, why do healthy banks need relief using our tax dollars? Of course on the otherhand, why should only incompetence be rewarded?
Just maybe this will help some of the healthy banks take over non-healthy banks and we will all be better off. I noticed you indicated it is a loan, so in theory the money will be paid back with interest.
Anyway, you know I’m not a big fan of all of the bail-outs.
Don’t forget AIG, Hartford Insurance, Genworth, Ford, Chrysler, and GM. You also can’t forget the $25B FDIC wants for consumers in forclosure. The list grows everyday.
In case those reading this article are uninformed, the money they are receiving is coming from the taxpayers and the loans that are being given out are meaningless. They are worth practically nothing other than what the Fed says they are worth.
You forgot to include PNC.
It is kinda confusing how the Treasury is picking and choosing the winners and the losers. There are many healthy banks that received TARP money, presumably to go ahead and consolidate. Most weak banks will not get aid as long as they are not too big to fail. Then, you have National City, supposedly one of the best capitalized banks in the country with 11% Reserve ratio and they were denied TARP aid as being too weak.
All in all, the execution leaves too much to be desired.
Re: auto bailouts, I am firmly against it as it will just make the industry weaker in the long term. Besides, bailing out Chrysler will be like bailing out Cereberus Capital and that is just plain wrong. Private Equity does not deserve loss socialization.
All this free money sloshing around in the system will cause a bigger and much more spectacular asset bubble in the future unless the feds move aggressively to soak up the liquidity in the coming years. So therefore, to avoid Great Depression 3, feds will have to start tightening the money supply at the precise time when the inflation will run rampant (due to large increase in money supply today). This will have the effect of prolonging the recession/Great Depression 2 for longer than necessary.
The only thing the Feds should have done is to ensure the credit markets unfreeze for the right borrowers. Government should not have stepped in to save private companies. No one is too big to fail
My suggestion is withdraw ALL your money from the bank and just invest all of it into new projects online
Actually less risky if you know what you’re doing.
Buying domains and flipping is the EASIEST.
-Mike
Well I just found out my bank was declined for TARP funding — wouldn’t be surprised if they close in 6 months..