Community Based, Nationally Recognized (sm)

Category Archives: TARP Capital

Miscellaneous TARP Stories

By Rob Klingler - Tuesday, January 26, 2010

We’ve identified a number of stories that or posts that never quite made it into individual BankBryanCave.com posts.  Rather than continuing to hold on to them, I’ve assembled them here.

The Simpsons

(more…)

Email This Content Email This Content Posted in TARP Capital. Tagged with , , .

TARP Programs Completed

By Dustin Hall - Monday, January 25, 2010

Two of the more commonly discussed programs that Treasury implemented pursuant to its discretion under TARP, the Capital Purchase Program (the “CPP”) and the Capital Assistance Program (the “CAP”), have been closed.

According to the Treasury’s FAQs, as of December 31, 2009, the Treasury will not make any additional investments under the CPP.  Over 700 institutions participated in the CPP, representing institutions from every state, except Montana and Vermont, and from Puerto Rico and Washington D.C.  California’s institutions were most highly represented, with 72 institutions receiving CPP funds.  Illinois and Missouri followed with 47 and 32 institutions, respectively, receiving CPP funds.

Although Treasury Secretary Geithner has extended TARP generally to October 3, 2010 and President Obama previously announced an that initiative would be developed for small community banks, there is currently no Treasury program aimed at providing capital support for community banks.

The CAP, which was intended to provide capital support to financial institutions in conjunction with the stress tests, was closed on November 9, 2009, without making any investments.

We will provide an update if the Treasury develops and implements any new program.

Email This Content Email This Content Posted in TARP Capital. Tagged with , , , .

December TARP Capital Infusions – TARP Map and List of Recipients Updated

By Dustin Hall - Friday, January 22, 2010

During the month of December, the Treasury completed rounds fifty-two, fifty-three, fifty-four, fifty-five, and fifty-six of TARP Capital infusions.  In these five rounds, which closed on December 4,  December 11, December 18, December 22, and December 29, respectively, the Treasury purchased a total of approximately $159 million in securities from 37 financial institutions (24 of which previously received a TARP capital infusion).  Through December 2009, the Treasury had invested in 709 institutions, totaling approximately $204.9 billion.

In these five rounds, First Community Financial Partners received the largest infusion, $22 million, and Valley Financial Group Ltd. received the smallest infusion, $1.3 million.

(more…)

Email This Content Email This Content Posted in TARP Capital. Tagged with , , , , .

November TARP Capital Infusions – TARP Map and List of Recipients Updated

By Dustin Hall - Wednesday, December 16, 2009

During the month of November, the Treasury completed rounds forty-nine, fifty, and fifty-one of TARP Capital infusions.  In these three rounds, which closed on November 6,  November 13, and November 20, respectively, the Treasury purchased a total of approximately $38 million in securities from 7 financial institutions (3 of which previously received a TARP capital infusion).  Through November 2009, the Treasury had invested in 696 institutions, totaling approximately $204.7 billion.

In these three rounds, Presidio Bank, San Francisco, California, received the largest infusion, $10 million, and Community Pride Bank Corporation, received the smallest infusion, $4.4 million.

Of note during the month of November, F&M Bancshares, HPK Financial Corporation, and Metropolitan Capital Corp., joined WashingtonFirst Bankshares, Inc. as institutions to receive a second investment from Treasury in connection with the TARP expansion for community banks.  F&M Bancshares received an additional $3.5 million and had already received $4.6 million; HPK Financial Corporation received an additional $5 million and had already received $4 million; and Metropolitan Capital Corp. received an additional $2.4 million and had already received $2 million.

During November, nine financial institutions (one of which had already re-paid a portion of its funds) re-paid their TARP capital investments: Bank of Ozarks, Inc. ($75 million), LSB Corporation ($15 million), Wainwright Bank & Trust ($22 million), Union Bankshares Corp. ($59 million), Midwest Regional Bancorp, Inc. ($700,000), 1st United Bancorp, Inc. ($10 million), Magna Bank ($3.5 million, approximately 25% of the outstanding amount), Frontier Bancshares, Inc. ($1.6 million), and Westamerica Bancorporation ($41.9 million, completing its repayment).  As of the end of November, 2009, 53 financial institutions had re-paid all, or some portion, of their TARP Capital investment, bringing the total amount re-paid to approximately $71 billion.  At the end of November 2009,  Treasury’s outstanding investment equaled approximately $133.7 billion.

As discussed in another post,  TARP has been extended until October 3, 2010. 

(more…)

Email This Content Email This Content Posted in TARP Capital. Tagged with , , , , .

Treasury Clarifies Interim Final Rule regarding TARP Executive Compensation Limitations

By Rob Klingler - Monday, December 14, 2009

On December 7, 2009, the Treasury Department published corrections to the preamble and certain provisions of the interim final rules regarding TARP Standards for Compensation and Corporate Governance.

The amendments are generally technical in nature and are designed to clarify certain ambiguities in the original interim final rule and to conform the certification language to reflect the deadlines generally set forth in the regulation and to correct certain cross-references.

The two most important clarifications relate to the identification of most highly compensated employees and the applicability of the “say on pay” requirements.

With regard to the identification of the most highly compensated employees, the correcting amendments make clear that the senior executive officers should NOT be excluded from determinations of the most highly compensated employees.  The rule also makes clear that senior executive officers should not be double-counted; if a provision is applicable to the senior executive officers and a certain number of the most highly compensated employees of the TARP recipient, the senior executive officers (because they are already subject to the provision) are excluded for purposes of determining the most highly compensated employees that are also subject to the provision.  Accordingly, for TARP recipients that received less than $25 million in Capital Purchase Program funding, the prohibition on the payment or accrual of bonus will apply only to the most highly compensated employee (regardless of whether such employee is a senior executive officer).

The correcting amendments also make clear that private companies are not subject to the requirement to provide shareholders a “say on pay.”  Only TARP recipients otherwise subject to SEC regulation are required to provide shareholders with a nonbinding resolution on executive compensation.

Email This Content Email This Content Posted in TARP Capital. Tagged with , .

TARP Extension – Capital for Community Banks?

By Rob Klingler - Thursday, December 10, 2009

On December 9, 2009, Treasury Secretary Geithner exercised his discretion to extend the TARP program through October 3, 2010.  In his letter to Congress certifying the extension, Geithner indicated that the Treasury Department would limit new commitments in 2010 to three areas:

  • mitigating foreclosure;
  • “recently launched initiatives to provide capital to small and community banks, which are important sources of credit for small businesses”  (including additional efforts to facilitate small business lending); and
  • increasing Treasury’s commitment to the Term Asset-Backed Securities Loan Facility (TALF).

The “recently launched initiatives to provide capital to small and community banks, which are important sources of credit for small businesses” presumably refers to the new capital program for community banks previously announced by President Obama on October 21, 2009. President Obama had indicated that the Treasury would be developing a program to provide TARP capital to community banks with less than $1 billion in total assets who committed to increase small business lending.  The capital investment, as proposed, would be limited to 2% of risk-weighted assets and would carry a 3% dividend rate for the first five years.  No indications were provided that the Treasury’s viability standard would be modified to permit additional banks to participate.

Secretary Geithner’s reference to this program is the first follow-up we’ve heard since Obama’s announcement.  As recently as last week, local FDIC officials were telling us that the program appeared to be “dead on arrival” in DC, and there appeared to be little support in Washington for further developments.  We understand the FDIC was advising interested banks to not anticipate any further action, and to seek capital elsewhere.

It remains to be seen whether Secretary Geithner’s letter to Congress represents a renewed interest in this program, merely a political statement indicating a focus on small business lending, or a simple preservation of flexibility going forward.

Email This Content Email This Content Posted in Small Business, TARP Capital. Tagged with , , , .

October TARP Capital Infusions – TARP Map and List of Recipients Updated

By Dustin Hall - Saturday, November 7, 2009

During the month of October, the Treasury completed rounds forty-six, forty-seven, and forty-eight of TARP Capital infusions.  In these three rounds, which closed on October 2,  October 23, and October 30, respectively, the Treasury purchased a total of approximately $58 million in securities from 6 financial institutions (1 of which previously received a TARP capital infusion).  Through October 2009, the Treasury had invested in 692 institutions, totaling approximately $204.7 billion.

In these three rounds, Premier Financial Bancorp, Huntington, West Virginia, received the largest infusion, $22 million, and Providence Bank, Rocky Mount, North Carolina, received the smallest infusion, $4 million.

Of note during the month of October, WashingtonFirst Bankshares, Inc. became the first insitution to receive a second investment from Treasury in connection with the TARP expansion for community banks.  WashingtonFirst received $6.8 million on October 30, 2009 and had already received $6.6 million on January 1, 2009.

During October, three financial institutions re-paid their TARP capital investments: Flushing Financial Corp. ($70 million), Commerce National Bank ($5 million), and LCNB Corp. ($13.4 million).  As of the end of October, 2009, 45 financial institutions had re-paid all, or some portion, of their TARP Capital investment, bringing the total amount re-paid to approximately $70.8 billion.  At the end of October 2009,  Treasury’s outstanding investment equaled approximately $133.9 billion.

(more…)

Email This Content Email This Content Posted in TARP Capital. Tagged with , , , .

President Obama Announces Additional TARP Capital for Community Banks

By Rob Klingler - Wednesday, October 21, 2009

On October 21, 2009, President Obama announced the broad outlines of a new program to provide additional capital to community banks in an effort to spur lending to smaller business.

Actual facts about the new program are currently very sparse.  A review of the currently available information does provide some details that may be attractive to community banks that current have TARP CPP funds, as well as those that currently do not have funds.  However, it does not appear that there will be any change in the Treasury’s determination of which community banks are eligible for TARP funds; participating institutions appear to still need to be viable without the funds.

There are three basic sources of official information:

  1. the text of President Obama’s speech in Landover, Maryland;
  2. the press release announcing the speech; and
  3. a fact sheet on the President’s Small Business Lending Initiatives.

Known Facts

  • The funds will be available to “viable banks with less than $1 billion in assets.”  The announcement does not give any indication that the Treasury will alter its existing viability standards.
  • Participants will be required to submit a small business lending plan explaining how the additional capital will allow them to increase lending to small businesses, and will be required to submit quarterly reports detailing their small business lending activities.
  • The initial dividend rate will be 3% rather than the 5% required under the current TARP Capital Purchase Program.  The dividend will rise to 9% after five years, consistent with the existing TARP Capital Purchase Program.  Presumably, Subchapter S institutions will receive a comparable reduction in the rate paid on the subordinated debt.
  • The amount of capital is limited to 2% or the institution’s risk-weighted assets.  This is less than the 3% permitted under the existing TARP Capital Purchase Program, and less than the 5% currently permitted for institutions that are less than $500 million in total assets.
  • The Treasury is working to finalize program terms “in the coming weeks.”
  • The Treasury will also determine how to handle existing Capital Purchase Program participants to allow them to replace existing capital with investments under the new program (effectively reducing their dividend costs in exchange for a commitment to increase small business lending).
  • Community Development Financial Institutions (CDFIs), including CDFI credit unions, will be able to apply for funds with a dividend rate of 2% for eight years, after which it will increase to 9%.

(more…)

Email This Content Email This Content Posted in Small Business, TARP Capital. Tagged with , , , .

September TARP Capital Infusions – TARP Map and List of Recipients Updated

By Dustin Hall - Monday, October 5, 2009

During the month of September, the Treasury completed rounds forty-two, forty-three, forty-four, and forty-five of TARP Capital infusions.  In these four rounds, which closed on September 4, September 11, September 18, and September 25, respectively, the Treasury purchased a total of approximately $141 million in securities from 14 financial institutions.  Through September 2009, the Treasury had invested in 687 institutions, totaling approximately $204.6 billion.

In these four rounds, Community Bancshares of Mississippi, Inc., Brandon, Mississippi, received the largest infusion, $52 million, and State Bank of Bartley, Bartley, Nebraska, received the smallest infusion, $1.7 million. 

During September, seven financial institutions re-paid their TARP capital investments: Valley National Bancorp ($125 million (approximately 42% of the initial investment)), Centerstate Banks of Florida ($27.9 million), Wesbanco Bank, Inc. ($75 million), Manhattan Bank ($1.7 million), CVB Financial Corp. ($32.5 million (25% of the initial investment)), F.N.B. Corporation ($100 million), and Westamerica Bancorporation (approximately $42 million (50% of initial investment)).  Valley National and CVB Corp. had already re-paid a portion of their TARP investments, and Valley National still has $100 million remaining.  As of the end of September, 2009, 42 financial institutions had re-paid all, or some portion, of their TARP Capital investment, bringing the total amount re-paid to approximately $70.7 billion.  At the end of September 2009,  Treasury’s outstanding investment equaled approximately $133.9 billion.

(more…)

Email This Content Email This Content Posted in TARP Capital. Tagged with , , , , .

OCC Reviewing TARP Recipients for Compliance with TARP Requirements

By Dustin Hall - Thursday, September 24, 2009

We have recently become aware that the OCC is reviewing national bank TARP recipients for their compliance with TARP requirements as part of the formal examination process.  As of part of the examination, the OCC is requesting to review certain documents, policies, and other information related to areas impacted by the TARP regulations.  In particular, the OCC will review a TARP recipient’s Luxury Expenditure Policy, as well as other compensation-related information.

(more…)

Email This Content Email This Content Posted in TARP Capital. Tagged with , , .