WASHINGTON — The Treasury Department launched Monday a public offering of preferred stock in six banks, seeking to recoup investments made during the financial crisis.
In its first-ever auction of preferred stock acquired through the Troubled Asset Relief Program, Treasury is seeking to sell stakes in Banner Corp. (BANR) of Walla Walla, Wash., First Financial Holdings Inc. (FFCH) of Charleston, S.C.; MainSource Financial Group Inc. (MSFG) of Greensburg, Ind.; Seacoast Banking Corp. (SBCF) of Stuart, Fla.; Wilshire Bancorp Inc. (WIBC) of Los Angeles; and WSFS Financial Corp. (WSFS) of Wilmington, Del.
The auction will close Wednesday at 6:30 p.m. ET.
Treasury said earlier this month that it was conducting the public Dutch auctions to recoup as much of its $410.8 million investment in the six banks as possible.
More than three years after the launch of the Troubled Asset Relief Program in 2008 the federal government still owns stakes in 361 banks, which still owe the government $16 billion. TARP's Capital Purchase Program, or CPP, was the main federal effort to help stabilize financial markets. Treasury provided capital to banks through the purchase of shares or debt.
The biggest banks such as Citigroup Inc. (C) and Bank of America Corp. (BAC) have paid back their bailouts. But many smaller banks have struggled to repay the government.
Many Main Street banks still face difficulties, as they are often saddled with poorly performing commercial-real-estate loans and limited ability to raise funds. Together with weak regional economies and tough lending environment, many of these the banks haven't been able to repay TARP funds.
The Government Accountability Office, the investigative arm of Congress, said in a report this month that more banks are missing dividend, interest and other repayments to the Treasury Department and some may never exit from the federal financial-system bailout.