The Field Office Manager for the FDIC’s Atlanta Office recently encouraged a client to go ahead and file the application.  The Manager specifically inquired about whether the client had a “corrective plan” in place to address declining asset quality.  The FDIC plans to follow-up after receiving the application with any questions.

The Field Office Manager said that the goal of the TARP Capital plan was to stabilize banks that have taken action to correct their situation with regard to real estate problems, had a viable plan and could show how the capital would assist them in achieving that plan. He said they were looking for “added value” above and beyond the just waiting for the government to act.  He also confirmed that they were injecting capital in healthy banks to provide liquidity into the market, and that they did not plan to inject capital into banks where the capital would not help.

He asked that the application be emailed to the bank’s Case Manager with a copy to the Field Office Manager.

In light of this guidance from the FDIC, we are slightly revising our advice.  For banks with no issues, we would still recommend waiting.  However, now that the local offices appear to be getting their arms around the TARP Capital program, banks with issues may want to make contact and file.  We are meeting directly with the Atlanta office of the FDIC tomorrow, and will follow up.