Washington Federal Inc. has been approved to return the $200 million it received as part of the federal government's rescue of the financial sector.
The Seattle-based savings and loan bank is the first in the Pacific Northwest to redeem the shares it gave the Treasury Department as part of the $700 billion Troubled Asset Relief Program.
Roy M. Whitehead, the bank's chief executive, cited public relations confusion and tougher regulatory restrictions as reasons for backing out of the bailout.
"Investors viewed the funds as debt rather than equity, the public viewed it as a bailout, Congress retroactively added onerous additional restrictions, and the overall cost was substantially higher than other funding sources," Whitehead said in a prepared statement.
Banks wishing to return bailout funding must prove that they would be adequately capitalized without government financial assistance or loan guarantees. Washington Federal said that its tier 1 capital and financial risks ratios - two critical measurements of bank health -- would remain above the minimum standards set by regulators.
In addition to returning the $200 million it received in November, Washington Federal will also pay the Treasury $5.3 million in accrued dividends.
The Seattle-based savings and loan bank is the first in the Pacific Northwest to redeem the shares it gave the Treasury Department as part of the $700 billion Troubled Asset Relief Program.
Roy M. Whitehead, the bank's chief executive, cited public relations confusion and tougher regulatory restrictions as reasons for backing out of the bailout.
"Investors viewed the funds as debt rather than equity, the public viewed it as a bailout, Congress retroactively added onerous additional restrictions, and the overall cost was substantially higher than other funding sources," Whitehead said in a prepared statement.
Banks wishing to return bailout funding must prove that they would be adequately capitalized without government financial assistance or loan guarantees. Washington Federal said that its tier 1 capital and financial risks ratios - two critical measurements of bank health -- would remain above the minimum standards set by regulators.
In addition to returning the $200 million it received in November, Washington Federal will also pay the Treasury $5.3 million in accrued dividends.
published May 27, 2009, 0 Comments
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