A California bank has received permission from the federal government to return tens of millions of dollars in bailout funds.
CVB Financial Corp., the parent company of Ontario, Calif.-based Citizens Business Bank, said the Treasury Department last week granted it final regulatory approval to redeem the $130 million in preferred stock it sold the department as part of the Troubled Asset Relief Program.
Banks have been eager to leave the TARP program ever since the program began, citing unhappiness over government restrictions on executive pay and the payment of cash dividends.
CVB, like many financial institutions seeking to exit the bailout program, sold new stock to private investors, raising enough to repay the public money it received through TARP. The Treasury has said that it will permit banks to withdraw only if they can prove they are sufficiently capitalized and can raise money without government backing.
CVB's stock sale last week raised $132 million, the company said in a press release. In addition to repaying the original $130 million in federal assistance, CVB is also obligated to pay approximately $4.5 million in accrued and unpaid dividends.
In addition to relieving itself of government interference in its operations, the bank hopes that Treasury's approval to withdraw will signal to investors that the company is sound.
"It sends the message to the investment community that the government feels we can adequately pay them back," Chris Myers, the bank's chief executive, told The Sun newspaper. "It also sends a message to all the short sellers out there."
CVB Financial Corp., the parent company of Ontario, Calif.-based Citizens Business Bank, said the Treasury Department last week granted it final regulatory approval to redeem the $130 million in preferred stock it sold the department as part of the Troubled Asset Relief Program.
Banks have been eager to leave the TARP program ever since the program began, citing unhappiness over government restrictions on executive pay and the payment of cash dividends.
CVB, like many financial institutions seeking to exit the bailout program, sold new stock to private investors, raising enough to repay the public money it received through TARP. The Treasury has said that it will permit banks to withdraw only if they can prove they are sufficiently capitalized and can raise money without government backing.
CVB's stock sale last week raised $132 million, the company said in a press release. In addition to repaying the original $130 million in federal assistance, CVB is also obligated to pay approximately $4.5 million in accrued and unpaid dividends.
In addition to relieving itself of government interference in its operations, the bank hopes that Treasury's approval to withdraw will signal to investors that the company is sound.
"It sends the message to the investment community that the government feels we can adequately pay them back," Chris Myers, the bank's chief executive, told The Sun newspaper. "It also sends a message to all the short sellers out there."
published August 17, 2009, 0 Comments
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