In its monthly report for May, the US
Treasury reported that repayments of the Troubled Asset Relief
Program (TARP) fund have exceeded the total amount of outstanding
TARP funds by $4bn until the end of the month.
TARP repayments totalled $194bn at the end of
the May, exceeding the outstanding TARP funds of $190bn.
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The US Treasury now expects the total cost of
TARP to be around $105bn, down $11.4bn from its previous estimate
in February.
However, 91 banks missed their 17 May TARP
payment, well ahead of the 55 banks which missed their payments in
November and 74 which failed to make payments in February.
According to a report from consultancy SNL
Financial: “Of the 91, 23 did not make a payment for the first time
since entering TARP.
“The 91 delinquent institutions have received
approximately $3.5bn for preferred shares, approximately 1.7% of
the $204.9bn issued to the more than 700 participants of the
programme.”
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By GlobalDataOverall, 20 institutions have missed four
payments, while eight — the two largest being California-based
Pacific Capital and Wisconsin-based Anchor BanCorp have missed five
payments.
California-based Saigon National Bank has
missed its sixth dividend payment, which the company disclosed
prior to the payment date.
Under the terms of the Capital Purchase
Program, failure to pay dividends for six dividend periods triggers
the Treasury’s right to elect two directors to the institution’s
board.
According to SNL, the 23 newly delinquent
institutions received slightly more than $300m in government funds,
the largest being North Carolina-headquartered FNB United, which
issued $51.5m in preferred shares to the Treasury.
“Missed dividend payments can highlight the
financial risks that the US government has taken in investing in
the banking community,” said SNL in a note to clients.
New York-based CIT Group’s bankruptcy and the
failure of California-headquartered Pacific Coast National Bancorp
and UCBH Holdings led to $2.6bn in Treasury losses.
All three institutions had previously missed
dividend payments.
|
Losses |
||
|
TARP – participants to have |
||
|
Institution |
Total assets |
Number of missed |
|
CIT Group |
58.1 |
2 |
|
FirstBanCorp |
18.8 |
4 |
|
South Financial Group |
12.4 |
2 |
|
Citizens Republic BanCorp |
11.7 |
2 |
|
Sterling Financial |
10.6 |
4 |
|
First Banks Inc |
9.1 |
4 |
|
Pacific Capital BanCorp |
7.4 |
5 |
|
Dickinson Financial Group |
5.9 |
4 |
|
Anchor BanCorp |
4.5 |
5 |
|
Central Pacific Financial |
4.4 |
4 |
|
Source: SNL Financial |
||
