Another bank has begun a sale of common stock with a view towards exiting the $700 billion bailout program.
Umpqua Holdings Corp., owners of Oregon-based Umpqua Bank, said it had commenced selling $175 million in stock. It said the money raised could be used to either explore the acquisition of other banks or for "the eventual redemption" of the $214 million in preferred shares that the bank sold the government as part of the Troubled Asset Relief Program.
The bank is one of many in recent months to raise private capital as a first step towards abandoning the unpopular program. Since it began last year, banking executives have complained that it comes with too many strings attached, including restrictions on executive pay and the distribution of cash dividends.
In order to redeem the shares, Treasury has said that banks must be able to prove they can survive both without direct TARP assistance and without government loan guarantees. A successful stock sale on the open market could presumably fulfill both conditions.
Other banks to follow this path include JPMorgan Chase & Co., American Express Co., Morgan Stanley, and KeyCorp.
Umpqua Holdings Corp., owners of Oregon-based Umpqua Bank, said it had commenced selling $175 million in stock. It said the money raised could be used to either explore the acquisition of other banks or for "the eventual redemption" of the $214 million in preferred shares that the bank sold the government as part of the Troubled Asset Relief Program.
The bank is one of many in recent months to raise private capital as a first step towards abandoning the unpopular program. Since it began last year, banking executives have complained that it comes with too many strings attached, including restrictions on executive pay and the distribution of cash dividends.
In order to redeem the shares, Treasury has said that banks must be able to prove they can survive both without direct TARP assistance and without government loan guarantees. A successful stock sale on the open market could presumably fulfill both conditions.
Other banks to follow this path include JPMorgan Chase & Co., American Express Co., Morgan Stanley, and KeyCorp.
published August 12, 2009, 0 Comments
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