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The Treasury has commenced another auction of Tarp holdings. At least banks are planning to use the auction as an opportunity to retire preferred shares that will carry a 9% interest rate in late 2003.
June 11 -
The Treasury Department plans to auction pools of securities in nearly two-thirds of the banks left in the Troubled Asset Relief Program, its most aggressive move yet to get small banks out of the program.
June 19 -
The Treasury Department has successfully sold off its shares in seven more community banks as part of its ongoing effort to wind down the four-year-old Troubled Asset Relief Program.
June 14
The Treasury Department is auctioning off shares it owns in seven more community banks still left in the Troubled Asset Relief Program and at least five of the banks intend to bid on all or some of the shares themselves.
The agency kicked off the auction Monday morning and said in a news release that it would run through Wednesday evening. As in the prior two auctions the preferred shares will be sold to the highest bidder through a modified Dutch auction process.
The seven banking companies participating in the latest auction are: the $2.2 billion-asset Fidelity Southern (LION) in Atlanta; the $1.5 billion-asset Firstbank in Alma, Mich.; the $1.1 billion-asset First Citizens Banc (FCZA) in Sandusky, Ohio; the $1.5 billion-asset MetroCorp Bancshares (MCBI) in Houston; the $1 billion-asset Peoples Bancorp of North Carolina (PEBK) in Newton; the $1.3 billion-asset Pulaski Financial (PULB) in St. Louis; and Southern First Bancshares (SFST) in Greenville, S.C.
The seven companies received a total of $224 million form Tarp's Capital Purchase Program between December 2008 and February 2009. In Securities and Exchange Commission filings Monday, four of them -- Firstbank, MetroCorp, Peoples and Southern First -- said they have received permission from their regulators to bid on all or a portion of the outstanding shares and one, First Citizens, said that it expects certain directors to bid on up to $13 million of its $23 million of outstanding shares.
Fidelity Southern and Pulaski did not indicate that they would seek to buy the shares themselves.
Thirteen banks have participated in the previous two auctions, but only a handful bought back their own shares. In the last auction completed in mid-June, the Treasury recouped $245 million of the $281 million it initially invested in the seven banks.
The Treasury intends to hold several more auctions throughout the summer as it seeks to wind down Tarp. It also last week notified about 200 of the roughly 300 banks still in the program that it intends to package the preferred shares of multiple banks into pools and then auction off the pools. The pools will largely consist of banks that individually are unlikely to attract much interest from investors in their own.
