The Treasury Department announced on Wednesday that Fifth Third Bancorp of Cincinnati, Ohio, has fully repaid its $3.4 billion in Troubled Asset Relief Program funds.
Fifth Third had previously paid more than $340 million in dividends to Treasury on the preferred shares, representing a return on the investment of approximately 10%.
"We expect that the programs within Tarp to provide direct financial support to banks will provide a profit for taxpayers, and today's repayments move us even closer to achieving that result," Tim Massad, acting Treasury assistant secretary for financial stability, said in a press release. "As the economy heals, we're continuing to see private capital step up and replace public support in the financial sector, which has dramatically lowered the cost of Tarp for taxpayers."
Treasury also said it plans to continue to hold warrants to purchase Fifth Third Bancorp common stock.
Fifth Third had raised $1.7 billion in a stock offering Jan.20, to help it repurchase the preferred shares. Just a handful of big banks, including SunTrust Banks Inc., Regions Financial Corp. and KeyCorp, are still holding onto government funds.
The company said it is considering whether to buy back the warrants from Treasury.
Also on Thursday, Peoples Bancorp of Marietta, Ohio, repurchased $21 million in Tarp preferred shares. The repayment reduces Peoples Bancorp's total amount of outstanding Tarp capital shares from $39 million to $18 million. To date, Peoples Bancorp has paid a total of $3.5 million in dividends to Treasury.
Treasury also announced with this repayment the administration has received approximately $243 billion in total repayments and other income from Tarp, more than the $245 billion total disbursements under the program. Treasury estimated that the bank capital program sin tarp will ultimately turn a profit of nearly $20 billion.
