The momentum to escape Treasury Department oversight has accelerated, with three more banks deciding to return the money they received under the Troubled Asset Relief Program.
Capital One Financial Corp., BB&T Corp., and U.S. Bancorp announced that they would sell shares in order to give back the billions they received as part of the $700 billion bailout program.
Federal regulators said last week that all three had passed the stress tests designed to see how they would fare in a deeper downturn, and did not need to raise more capital. It has been widely expected that companies that passed the test would move quickly to withdraw from the TARP program.
BB&T Corp., based in North Carolina, said it had reduced its dividend by 68 percent to conserve cash and would seek to raise $1.5 billion through a public offering. It owes the government $3.1 billion in bailout money plus accrued dividends.
"We firmly believe this action is in the long-term best interests of our shareholders and our company because of the risk and uncertainty associated with being a TARP participant," said Kelly King, BB&T's chief executive officer. He called the decision to cut the dividend "the worst day in my 37-year career."
Capital One announced similar plans, promising to sell 56 million shares to raise as much as $1.5 billion. It owes $3.5 billion plus dividends. U.S. Bancorp plans to sell enough stock to raise $2.5 billion. That will go toward the $6.6 billion it owes the government.
At least 12 banks have already redeemed the preferred shares they sold to the government. Several other financial institutions, including Texas Capital Bancshares Inc. and City National Corp., are in the process of paying back their TARP money.
Capital One Financial Corp., BB&T Corp., and U.S. Bancorp announced that they would sell shares in order to give back the billions they received as part of the $700 billion bailout program.
Federal regulators said last week that all three had passed the stress tests designed to see how they would fare in a deeper downturn, and did not need to raise more capital. It has been widely expected that companies that passed the test would move quickly to withdraw from the TARP program.
BB&T Corp., based in North Carolina, said it had reduced its dividend by 68 percent to conserve cash and would seek to raise $1.5 billion through a public offering. It owes the government $3.1 billion in bailout money plus accrued dividends.
"We firmly believe this action is in the long-term best interests of our shareholders and our company because of the risk and uncertainty associated with being a TARP participant," said Kelly King, BB&T's chief executive officer. He called the decision to cut the dividend "the worst day in my 37-year career."
Capital One announced similar plans, promising to sell 56 million shares to raise as much as $1.5 billion. It owes $3.5 billion plus dividends. U.S. Bancorp plans to sell enough stock to raise $2.5 billion. That will go toward the $6.6 billion it owes the government.
At least 12 banks have already redeemed the preferred shares they sold to the government. Several other financial institutions, including Texas Capital Bancshares Inc. and City National Corp., are in the process of paying back their TARP money.
published May 11, 2009, 0 Comments
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