On January 12, 2009, the FDIC issued a Financial Institution Letter, FIL-1-2009, addressing the use of funding from Federal Financial Stability and Guaranty programs. FIL-1-2009 was brought to the attention of one of our financial institution clients that is a pubic reporting company and a TARP recipient, during the course of its annual examination. Based on the guidance in the FIL, we advised the client to document and summarize the data that it had been monitoring on its use of TARP proceeds and also to include a fairly brief discussion summarizing that information in its Annual Report on Form 10-K. This advice is intended to address the suggestion in the FIL that state nonmember banks “summarize such information in published annual reports and financial statements. Including such information in public reports will provide important information for shareholder and public evaluation of participation in these programs.”
If you are a smaller reporting company that has not finalized your 10-K, you should consider adding this disclosure, or perhaps including it elsewhere in public releases or reports. Also, to the extent you have an examination scheduled in the coming weeks and months, be prepared for an inquiry concerning this FIL.
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.
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.
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.
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.
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.
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.
During the month of August, the Treasury completed rounds thirty-eight, thirty-nine, forty, and forty-one of TARP Capital infusions. In these four rounds, which closed on August 7, August 14, August 21, and August 28, respectively, the Treasury purchased a total of approximately $130 million in securities from 9 financial institutions. Through August 2009, the Treasury had invested in 673 institutions, totaling approximately $204.5 billion.
In these four rounds, U.S. Century Bank, Miami, Florida, received the largest infusion, $50 million, and Bank Financial Services, Inc., received the smallest infusion, $1 million.
During August, three financial institutions re-paid their TARP capital investments: CVB Financial Corporation ($97.5 million (75% of the initial investment)), Bancorp Rhode Island, Inc. ($30 million), and State Bankshares, Inc. ($12.5 million (25% of the initial investment)). As of the end of August, 2009, 37 financial institutions had re-paid all, or some portion, of their TARP Capital investment, bringing the total amount re-paid to approximately $70.3 billion. At the end of August 2009, Treasury’s outstanding investment equaled approximately $134.2 billion.
During the month of July, the Treasury completed rounds thirty-four, thirty-five, thirty-six, and thirty-seven of TARP Capital infusions. In these four rounds, which closed on July 10, July 17, July 24, and July 31, respectively, the Treasury purchased a total of approximately $1.2 billion in securities from 14 financial institutions. Through July, the Treasury had invested in 664 institutions, totaling approximately $204.3 billion.
In these four rounds, Lincoln National Corporation, Radnor, Pennsylvania, received the largest infusion, $950 million, and Plato Holdings, Inc., Saint Paul, Minnesota, received the smallest infusion, $2.5 million. Of note during the July closings, Yadkin Valley Financial Corporation received an additional $13.3 million investment after having received a $36 million investment on January 16, 2009.
During July, two financial institutions repaid their TARP capital investments: First Community Bankshares, Inc., Bluefield, Virginia ($41.5 million); and Old Line Bancshares, Inc., Bowie, Maryland ($7 million). As of the end of July, 34 financial institutions had re-paid all, or some portion, of their TARP Capital investment, bringing the total amount re-paid to approximately $70.2 billion. At the end of July, Treasury’s outstanding investment equaled approximately $134.2 billion.
On June 23, 2009 and June 30, 2009, the Treasury announced the completion of the thirty-second and thirty-third rounds, respectively, of TARP Capital infusions. In these two rounds, which closed on June 19 and June 26, the Treasury purchased a total of approximately $3.7 billion in securities from 26 financial institutions. The Treasury has now invested in 650 institutions, totaling approximately $203.2 billion.
In these two rounds, Hartford Financial Services Group, Inc., Hartford, Connecticut, received the largest infusion, $3.4 billion. Gold Canyon Bank, Gold Canyon, Arizona, received the smallest infusion, $1.6 million.
Of note during the last two weeks of June, 2009, eleven institutions re-paid approximately $68.3 billion. The largest re-payments came from JPMorgan & Chase ($25 billion), The Goldman Sachs Group, Inc. ($10 billion), and Morgan Stanley ($10 billion). As of June 30, 2009, the total amount re-paid under the TARP Capital Purchase Program is approximately $70.1 billion, and Treasury’s outstanding investment equals approximately $133.1 billion.
Also of note, the Treasury provided the warrant disposition information for a number of institutions that had previously re-paid the Treasury (please click here for our discussion of the disposition process). The Treasury disposed of the additional investment of thirteen institutions (10 public (via warrants) and 3 private (via preferred stock)). The proceeds from these dispositions totaled approximately $19.4 million.