Another day, another $2 billion
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Type of Content: Article By Chris Carey on November 14, 2008 11:33 PM | 2 Comments | No TrackBacks Eight banks announced Friday that they would be receiving a total of $2.07 billion from the Treasury Department through the government purchase of newly issued shares. Synovus, which has headquarters in Columbus, Ga., said it would receive $973 million in taxpayer money. That bank, the second-largest in Georgia, had originally said it would seek up to $900 million in capital through the program. The Treasury Department approved The South Financial Group, of Greenville, N.C., to sell $347 million in preferred stock to the government. It chose the bank despite concerns that the company's founder and chief executive abruptly moved up his retirement date, leaving with a so-called "golden parachute'' package worth an estimated $18 million. South Carolina's governor, Mark Sanford, has asked the Treasury Department to investigate the move, which came just before the bank applied to participate in the $700 billion Troubled Asset Relief Program. The rules of that program penalize such payouts. Some readers have asked why BailoutSleuth keeps publishing these roundups of banks that were chosen for government aid. We're doing it because the Treasury Department is not. That agency has taken the position that it will disclose the investments only after the money changes hands - a policy that makes it harder for the public to raise objections. Our lists come from press releases issued by participating banks. East West Bancorp, of Pasadena, Calif., said Friday that it will sell $316 million in preferred stock to the Treasury Department. That bank focuses primarily on Asian-American businesses and consumers. Citizens Republic Bancorp, of Flint, Mich., was approved for $300 million in Treasury Department money. Eastern Michigan is one of the nation's foreclosure capitals, and Citizens Republic has been hurt by souring commercial and residential real-estate loans. Nara Bancorp of Los Angeles was approved for $67 million, and Peoples Bancorp , based in Marietta, Ohio, got $39 million. First 1st Financial Services Corp., of Hendersonville, N.C. got $16.3 million from the Treasury Department, while Broadway Financial Group of Los Angeles got $9 million. Both of those banks said that they had already completed the share sales. In another twist in the maneuvering for federal aid, four insurance companies have announced deals to buy savings and loans. The acquisitions would enable them to seek some of the $250 billion that the Treasury Department has allocated for stock purchases in financial institutions. The insurers hoping to gain access to government money via that route are Hartford Financial Services Group, Lincoln Financial Group, Genworth Financial Inc. and Aegon NV., the Dutch parent of Transamerica. Hartford said it would seek as much as $3.4 billion in capital from the Treasury Department. The others did not specify how much they might seek. Aegon has already received $3.8 billion in capital from the Dutch government Read »
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