February 2009 Archives

Regulators closed two more banks Friday, bringing the number that have failed since the first of the year to 16.

The operations of both banks - Security Savings Bank of Henderson, Nev., and Heritage Community Bank of Glenwood, Ill,. were taken over by other institutions.

One of the acquirors was a bank whose own finances were strengthened by taxpayer capital from the Treasury Department's $700 billion Troubled Asset Relief Program.

Ten of the 16 banks that were seized by regulators this year have been absorbed by others that got TARP funds.

The Nevada Financial Institutions Division closed Security Savings and appointed the Federal Deposit Insurance Corp. as receiver. It arranged for Bank of Nevada, based in Las Vegas, to acquire its $175.2 million in deposits and its two branches.

Bank of Nevada also agreed to buy $111.3 million of the failed institution's $238.3 million in assets.

The Illinois Department of Professional Regulation seized Heritage Community and appointed the FDIC as receiver. It struck a deal with MB Financial Inc., which has headquarters in Chicago, to take over the bank's $218.6 million in deposits and its four branches.

MB Financial agreed to buy $230.5 million of the bank's $232.9 million at a discount of $14.5 million. In addition, the FDIC entered into a loss-sharing arrangement on $181 million of those assets.

MB Financial got $196 million in TARP money in December, selling preferred stock and warrants to the Treasury Department as part of its plan to inject capital into banks to shore up their balance sheets and help spur lending.

The FDIC estimated that the two latest bank closings would cost its deposit insurance fund about $100 million. It said in a report this week that 252 banks and savings institutions were on its "Problem List" at the end of 2008, up from 171 three months earlier. It noted that the number was the highest since the middle of 1995.

The Treasury Department will convert as much as $25 billion of its preferred stock in Citigroup Inc. into common shares, as part of a broader plan to strengthen the company's capital structure.

It said in a press release that private holders of Citigroup's preferred shares also will be exchanging them for common shares, and that it will match them on a dollar-for-dollar basis.

Although the plan does not call for the Treasury Department to give Citigroup more capital, it would increase the government's stake in the company to more than 30 percent. the plan also would mean more risk for taxpayers, as common shares rank below preferred shares in their claim on assets in a bankruptcy or liquidation.

Citigroup's chief executive, Vikram S. Pandit, will remain in that position, but the company agreed to overhaul its board of directors so that a majority will be new, independent members.

The Treasury Department completed investments in 23 banks, including 15 that were new to BailoutSleuth's running tally of companies getting taxpayer capital.

The combined dollar value of the latest transactions was $365.4 million. All but three of the banks covered by those deals were privately held.

The Treasury Department said in a transaction summary that BancPlus Corp., of Ridgeland, Miss., sold $48 million in preferred stock to the government as part of the $700 billion Troubled Asset Relief Program.

Central Community Corp., of Temple, Tex., got $22 million in taxpayer capital. It is the holding company for First State Bank Central Texas.

Liberty Shares Inc., of Hinesville, Ga., sold $17.3 million in preferred stock to the government. White River Bancshares Co., based in Fayetteville, Ark., got $16.8 million, while Security State Bancshares Inc., of Charleston, Mo., got $12.5 million.

The new additions to the TARP list also included the colorfully named Crazy Woman Creek Bancorp, of Buffalo, Wyo. It owns  Buffalo Federal Savings Bank, which operates banks in Buffalo, Gillette, Sheridan and Casper.

The other banks getting taxpayer capital were:

Florida Business BancGroup Inc. (Tampa, Fla.) -- $9.49 million

Hamilton State Bancshares (Hoschton, Ga.) -- $7.0 million

Guaranty Bancorp (Woodsville, N.H.) -- $6.92 million

The Private Bank of California (Los Angeles) -- $5.45 million

First Priority Financial Corp. (Malvern, Pa.) -- $4.58 million

Hometown Bancorp of Alabama Inc. (Oneonta, Ala.) -- $3.25 million

CBB Bancorp (Cartersville, Ga) -- $2.64 million

Market Bancorporation Inc. (New Market, Minn.) -- $2.06 million

Lafayette Bancorp (Oxford, Miss) - $2.0 million 

Four more banks have received, or been approved for, taxpayer capital through the Treasury Department's $700 billion Troubled Asset Relief Program.

Northern States Financial Corp., of Waukegan, Ill., said it sold $17.2 million in preferred stock to the government. The parent company of NorStates Bank reported a $1.73 million loss for the first nine months of 2008, compared to a profit of $3.16 million in the same period of 2007. The company added $5.1 million in loan-loss provisions in the third quarter, and took a $2.2 million writedown on its investment securities.

Mid-Wisconsin Financial Inc., of Medford, Wis., said it received $10 million in TARP funds. The company reported earnings of $1.24 million for 2008, up 10.7 percent from 2007. Mid-Wisconsin provides retail and commercial banking services in eight central Wisconsin counties.

Sonoma Valley Bancorp, of Sonoma, Calif., said it got $8.65 million in TARP funds after its shareholders voted to amend the company's articles of incorporation to allow the issuance of preferred stock. Sonoma Valley reported a profit of $3.3 million last year, down 23.7 percent from 2007.

First BancTrust Corp., of Paris, Ill., said it was approved for $7.35 million in taxpayer capital through TARP. It had earnings of $863,000 for the first nine months of 2008, off 1.7 percent from the same period a year earlier.

Both Sonoma Valley and First BancTrust appointed new chief executive officers just before receiving the TARP money.

Regulators shut down an Oregon bank on Friday, marking the six straight week that a failing bank has been taken over.

The Oregon Department of Consumer and Business Services closed Silver Falls Bank, of Silverton, Ore. The Federal Deposit Insurance Corp. arranged for Citizens Bank, of Corvallis, Ore., to take over Silver Falls' branches and deposits.

As of Feb. 9, Silver Falls had $131.4 million in assets and $116.3 million in deposits.

Silver Falls was the 14^th U.S. bank to fail in 2009. The total for all of last year was 25.

Citizens Bank bought all of Silver Falls' deposits, as well as roughly $13 million in assets.

The FDIC estimated that the bank failure would cost its deposit insurance fund about $50 million. It said selling Silver Falls' deposits to Citizens Bank was the least costly resolution.

Of the 14 banks that have been closed by regulators since Jan. 1, nine were absorbed by financial institutions that got taxpayer capital through the Treasury Department's Troubled Asset Relief Program.

Citizens Bank did not apply for any of the money available through that $700 billion program, which was approved by Congress in October. The bank says its conservative approach to lending has largely insulated it from the problems other institutions are facing.

Three more banks have announced their selection for the Treasury Department's stock-purchase program.

A fourth said in its annual filing with the Securities and Exchange Commission that it also had been approved to receive taxpayer capital through the $700 billion Troubled Asset Relief Program but had strong reservations about the terms.

Integra Bank Corp., of Evansville, Ind., said it was approved to sell $83.5 million in preferred stock to the government. Integra lost $29.2 million in the first nine months of 2008, compared with a profit of $24.9 million in the same period a year earlier. Integra attributed the reversal largely to a $25.7 million increase in loan-loss provisions, $6.26 million in securities losses and a $48 million charge for goodwill impairment.

Pacific Mercantile Bancorp, of Costa Mesa, Calif., said it was approved for $25.5 million in TARP funds. The company was profitable through the first nine months of 2008, although its $525,000 in earnings represented an 88.6 percent decline from a year earlier. It cited higher loan-loss provisions and lower interest income.

Howard Bancorp Inc., based in Ellicott City, Md., said it was approved to sell $5.98 million in stock to the government through the TARP initiative. The company had profits of $337,000 in 2008, off 77 percent from a year earlier.

George W. Hamlin IV, president and chief executive of Canandaigua National Corp., said in a letter to shareholders that it was approved last month for $20 million in TARP funds.

Hamlin said Canandaigua National did not need the extra capital, but added that it could be useful in spurring growth and funding new loans. He noted that the bank participated in a similar program during the economic crisis of the 1930s, selling preferred stock to the government to raise an additional $300,000. It redeemed the shares after five years.

"Were today's program as simple and effective as that presented, now 75 years ago, we would likely be an enthusiastic participant,'' he wrote.

Canandaigua National thinks that the true cost of the capital from the TARP program is higher than the stated dividend rate on the shares because of the extra cost of filing related government paperwork and registration statements with the SEC.

Hamlin said the bank also objects to the restrictions on dividend payments and stock repurchases for banks receiving TARP funds, and on a provision that allows the government to alter the terms and conditions of the program.

"Because we cannot anticipate what these changes might entail, we cannot properly plan for the use of this capital,'' he wrote. "The interests of the government may be contrary to the interests of our community and shareholders. The right of one party to unilaterally amend a bilateral contract is wholly inappropriate as a matter of common business practice and it would be foolish for any prudent business organization to voluntarily and intelligently accept such a provision."

The Treasury Department invested in 56 financial institutions in the past two weeks, including the first Wyoming bank chosen to participate in the $700 billion Troubled Asset Relief Program.

The list included 47 banks that were new to BailoutSleuth's running tally of companies getting taxpayer capital. The latest transactions pushed the total number of banks that have been approved for government aid to nearly 420.

Financial Security Corp., of Basin, Wyo., got $5 million in TARP funds, becoming the first bank in its state to get taxpayer capital. It operates Security State Bank. Six deals announced Tuesday were worth less than $1 million each, making them the smallest since the Treasury Department began injecting capital into banks in October.

FNB United Corp., of Asheboro, N.C., got the biggest chunk of money. It sold $51.5 million in preferred stock to the government. FNB United, which operates CommunityOne Bank and Dover Mortgage bank, posted a loss of $3.18 million last year, compared with a profit of $12.4 million in 2007. The company took $26.5 million in loan-loss provisions, with half of that coming in the final quarter of the year.

Reliance Bancshares Inc., based Frontenac, Mo., got $40 million. Reliance has branches in the St. Louis area and southwest Florida. It had a loss of $1.2 million for the first nine months of 2008, compared with a profit of $1.69 million a year earlier.

QCR Holdings Inc., of Moline, Ill., sold $38.2 million in preferred stock to the government. It had a profit of $6.7 million last year, up 15.5 percent. QCR is the holding company for banks in the Quad Cities area of Iowa and Illinois, in Cedar Rapids, Iowa, and in Rockford, Ill.

Bank of Kentucky Financial Corp., in Crestview Hills, Ky., got $34.0 million in taxpayer capital. It had profits of $11.3 million last year, up 2 percent from 2007. However, its earnings for the fourth quarter were off 10 percent because of increased loan-loss provisions.

First Market Bank, of Richmond, Va., got $33.9 million in TARP money. The privately held company is owned by Ukrop's Super Markets Inc., a regional grocery chain in Virginia, and Markel Corp., a property and casualty insurer.

Liberty Bancshares Inc., of Springfield, Mo., got $21.9 million in the latest ground of Treasury Department investments. Peoples Bancorp, of Lynden, Wash., got $18 million and F&M Financial Corp., of Clarksville, Tenn., $17.2 million.

A almost identically named company, F & M Financial Corp., of Salisbury, N.C., got $17 million. Stockmens Financial Corp., of Rapid City, S.D., got $15.6 million, and State Capital Corp., of Greenwood, Miss. got $15 million

To see the other banks that got TARP funds, follow the link to the rest of the story.

Regulators closed four more banks on Friday, seizing their assets and deposits and placing them with other financial institutions.

Two of the four failed banks were absorbed by companies that had received taxpayer capital through the $700 billion Troubled Asset Relief Program, continuing a trend that BailoutSleuth has been tracking for the past few months.

Of the thirteen banks shut down by regulators since the start of the year, nine were taken over by other institutions whose own balance sheets had been bolstered by the government.

The Florida Office of Financial Regulation closed Riverside Bank of the Gulf Coast, in Cape Coral, Fla. The Federal Deposit Insurance Corp. was appointed as receiver, and it negotiated a purchase agreement with TIB Financial Corp. of Naples, Fla.

Riverside's nine branches will reopen Tuesday as TIB Bank branches. Riverside had $539 million in assets and $424 million in deposits. TIB agreed to pay the FDIC a 1.3 percent premium.

TIB got $37 million in TARP money from the Treasury Department in early December.

The Oregon Division of Finance and Corporate Securities closed Pinnacle Bank in Beaverton, Ore., on Friday. Its lone office and most of its assets were purchased by Washington Trust Bank of Spokane, Wash.

Washington Trust's privately held parent company, W.T.B. Financial Corp., got $110 million in TARP money late last month.

Pinnacle Bank had roughly $73 million in assets and $64 million in deposits. Washington Trust bought $72 million of the assets at a $7.6 million discount. The FDIC and Washington Trust also entered into a loss-sharing arrangement covering $66 million of those assets. The FDIC did not specify the terms of that deal.

The Illinois Division of Banking closed Corn Belt Bank and Trust Co. of Pittsfield, Ill., on Friday. It was taken over by Carlinville National Bank, of Carlinville, Ill.

Corn Belt had $271.8 million in assets and $234.4 in deposits. Carlinville Bank bought $60.7 million of Corn Belt's assets, mainly cash and marketable securities. It assumed all of the banks deposits.

Corn Belt's two offices will reopen Tuesday as Carlinville National branches.

The Nebraska Department of Banking and Finance closed Sherman County Bank of Loup City, Neb., on Friday. Its $85.1 million in deposits and $21.8 million of its assets were taken over by Heritage Bank of Wood River, Neb.

Sherman County Bank's four offices will reopen on Tuesday as Heritage Bank branches.

The FDIC estimated that the latest round of bank failures would cost its insurance fund $341.6 million.

When the Treasury Department hired the accounting firm of PricewaterhouseCooopers LLP in October to work on the Troubled Asset Relief Program, it said the initial order was worth $191,469.

Four months later, the value of the contract - whose financial terms were blacked out by the Treasury Department - has grown to more than $1.6 million.

Similarly, the Treasury Department's agreement with the accounting firm of Ernst & Young has risen from the initial amount of $492,006 to nearly $2 million. The terms of that deal also have never been made public.

The revised contract values were reported in the Government Accountability Office's latest update on the transparency and oversight of the $700 billion financial-industry rescue program.

That same report shows that the law firm of Sonnenschein Nath & Rosenthal LLP has assumed responsibility for two contracts that the Treasury Department had awarded to Thacher Proffitt & Wood LLP, which dissolved in January.

One of those contracts was to advise the Treasury Department on the purchase of asset-backed securities, The other was to provide legal services on the government's loans to the auto industry.

The  Treasury Department did not issue a press release on the latter contract. According to the GAO report, it was awarded on Nov. 7, 2008, with an initial value of $233,663. The agreement was modified twice in December, boosting the contract ceiling price to $1.46 million. The second adjustment, which added $1 million  of that amount, came after Thacher Proffitt announced that it was shutting down.

Thacher Proffitt had been one of the leading law firms in the field of mortgage-backed and asset-backed securities. Its fortunes declined as the economic crisis set in and the market for those securities collapsed.

About 100 Thacher Proffitt lawyers moved to Sonnenschein Nath at the start of this year.

The Treasury Department said in December that Thacher Proffitt's contract to provide advice on asset-backed securities had an initial term of six months and was not expected to cost more than $500,000.

The contract that the department posted on its website concealed the hourly rate it agreed to pay for firm's services. The document noted that the government would pay for no more than 1,300 hours of legal work.

The GAO said in its report that the Treasury Department's first task order under the agreement was worth $249,999.    

BailoutSleuth filed requests under the Freedom of Information Act for unredacted copies of the  PricewaterhouseCoopers and Ernst & Young contracts. We also have asked for the first contract the government awarded to Thacher Proffitt.

Nearly three months have passed and the Treasury Department has yet to release them or provide us with a reason why they should remain confidential.

Despite recent reports that Citigroup Inc. had sought to buy a $50 million corporate jet and Bank of America Corp. had planned a massive "Super Bowl Fun Fest," eight executives representing the largest recipients of TARP funds told Congress today that they were using the government money responsibly and expanding the credit supply as intended.

"We have not used any of the funds to pay dividends or compensation," said Robert P. Kelly, chairman and chief executive officer of Bank of New York Mellon Corp.

Bank of New York Mellon and the other banks whose executives testified Tuesday got $165 billion in bailout money through the Troubled Asset Relief Program.

"Since we received the capital investment under TARP on 1 October 2008, our lending volumes have been significant, particularly in light of the rapidly deteriorating economic environment," said James Dimon, chairman and CEO of JPMorgan Chase & Co.

"In the fourth quarter alone, we extended more than $115 billion in new credit to consumers and businesses," said Bank of America's Kenneth Lewis.

But according to Rep. Gary Ackerman (D-NY), very little of that was new lending when compared to levels from previous years.  "It seems to me and some of us that this money hasn't reached the street, that you haven't loaned it out," Ackerman said.

All of the bank executives agreed to detail their use of TARP funds in writing. A few took the opportunity during their opening remarks to announce that they were releasing public reports on their spending. (Citigroup's is here; Bank of America's is here.)

Ackerman's questioning also led to perhaps the most telling sign that the taxpayers may be disappointed in their recent investments: Only three of the eight executives said they had bought more shares in their companies in the previous six months.

BailoutSleuth will continue to monitor Congressional oversight of TARP and will follow up on the executives' promises to detail how they've spent their part of the $350 billion already distributed under the $700 billion program.

BailoutSleuth is getting some competition in following the flow of TARP money -- from the Treasury Department itself.

Treasury Secretary Tim Geithner told the Senate Banking Committee yesterday that his agency was setting up a website that will help taxpayers track which companies are getting government aid and how they are using the money.

The site is www.financialstability.gov.

"We propose to establish a new framework of oversight and governance of all aspects of our Financial Stability Plan,'' Geithner said in prepared testimony released by the Treasury Department. "The American people will be able to see where their tax dollars are going, and the return on their government's investment. They will be able to see whether the conditions placed on banks and institutions are being met and enforced. They will be able to see whether boards of directors are being responsible with taxpayer dollars and how they're compensating their executives. And they will be able to see how these actions are impacting the overall flow of lending and the cost of borrowing.''

Geithner said the website is part of the new administration's push for greater transparency and oversight.

BailoutSleuth noticed a shift in the Treasury Department's approach last week, when it announced that 42 banks had received taxpayer capital through the $700 billion Troubled Asset Relief Program. For the first time since the agency began injecting capital into banks in October, it offered explanations of why certain banks merited the aid.

It noted that Legacy Bancorp, of Milwaukee, was a community development bank founded by African-American women and was one of the fastest-growing institutions of its type in the country. The Treasury Department said Legacy, which received $5.5 million in TARP funds, served low-income areas, providing credit and financial services that are often not available from commercial banks.

The release also quoted the president of Farmers and Merchants Bank, of Milford, Neb., explaining how the $7.52 million it got would help its agricultural and rural customers.

Given our mission, BailoutSleuth applauds any steps toward greater openness in the federal government's economic-stability efforts.

We'd be more convinced of the sincerity of those effort if the Treasury Department would respond to BailoutSleuth's requests under the federal Freedom of Information for information that was blacked out or cut out of contracts the agency signed with investment firms, accounting firms and law firms for advisory work on the TARP program.

It's been nearly three months, and we're still waiting.

Five more banks have announced their approval for the Treasury Department's $700 billion Troubled Asset Relief Program.

Collectively, the five were cleared to receive nearly $137 million in taxpayer capital.

First Merchants Corp., of Muncie, Ind., accounted for the biggest chunk of that money. It was approved to sell $166 million of preferred stock to the Treasury Department. First Merchants was profitable last year, with net income of $20.6 million. But its earnings were off 35 percent from 2007.

Centrix Bank, of Bedford, N.H., sold $7.5 million in stock to the government. Centix had net income of $3.3 million last year, up 9 percent.

Monarch Community Bancorp, of Coldwater, Mich., was approved for $6.79 million, while Blue River Bancshares Inc., based in Shelbyville, Ind., was approved for $5 million. Hyperion Bank, of Philadelphia, got $1.5 million.

In another TARP-related development, a law firm filed a purported securities class-action suit against Colonial BancGroup Inc., of Montgomery, Ala. 

The suit alleged that Colonial deceived investors when it announced in early December that it had been approved for $550 million in taxpayer capital. The bank holding company did not disclose in its initial press release that the Treasury Department was requiring it to raise $300 million in private capital as a condition for getting government aid.

Colonial's shares surged after it made the announcement. They fell sharply when the company put out a second release in late January noting the government's caveat. The suit was filed by Klafter Olsen & Lesser LLP on behalf of investors who bought shares between Dec. 2 and Jan. 27.

Five more banks said they were approved to recieve taxpayer capital through the Treasury Department's $700 billion Troubled Asset Relief Program.

First Busey Corp., of Urbana, Ill., said it was authorized to sell $110 million in preferred stock to the government. The company has 45 branches in southern Illinois, as well as a banking center in Indianapolis and a loan office in Fort Myers, Fla.

First Busey posted a loss of $15.3 million for 2008, compared with a profit of $31.5 million in 2007. The company took $75.8 million in loan-loss provisions in the fourth quarter, bringing its total for the year to $98.3 million.

The company said most of its chargeoffs during 2008 were attributable to real estate loans in southeast Florida.

First Place Financial Corp., of Warren, Ohio, said it was approved for $75 million through the Treasury Department's stock-purchase program. The company lost $8.75 million in the first half of its current fiscal year, compared to a profit of $3.11 million in the same period a year earlier. It cited higher loan loss-provisions for the reversal.

Blackhawk Bancorp Inc., of Beloit, Wis., was approved for $10 million. The company has remained profitable, posting net income of $2.16 million through the first nine months of 2008, up nearly 25 percent from the same period of 2007.

Alaska Pacific Bancshares Inc., of Juneau, Alaska, said it got $4.8 million in taxpayer capital from the Treasury Department. Alaska Pacific lost $1.3 million in the first nine months of 2008, compared with a profit of $735,000 in the same period of 2007.

SBT Bancorp Inc., the parent company of Simsbury Bank & Trust in Simsbury, Conn., said it was approved for $4 million from the Treasury Department.

"We are experiencing a financial market crisis unlike any since the 1930's, and it is contributing to a dramatic weakening of the overall economy,'' said Martin J. Geitz., SBT's president and chief executive. "Although Simsbury Bank is well capitalized and enjoys a strong and liquid balance sheet, it is prudent to participate in these programs to enhance our capacity and flexibility to serve the loan, deposit and investment needs of our consumer and business customers.''

Regulators shut down three more banks Friday - two in California and one in Georgia.

Once again, the failed banks' deposits were taken over by financial institutions that have either received taxpayer capital through the Treasury Department's Troubled Asset Relief Program or been approved for funding.

Of the nine banks that have been closed since the start of the year, seven have been absorbed by companies whose own balance sheets were strengthened with money from the $700 billion TARP initiative.

The California Department of Financial Institutions shut down Alliance Bank, of Culver City and appointed the Federal Deposit Insurance Corp. as receiver. The FDIC enlisted California Bank & Trust of San Diego to take over the branches and deposits.

California Bank & Trust is a subsidiary of Zions Bancorporation, a Utah holding company that got $1.3 billion in TARP money in November, when it sold preferred stock and warrants to the government. California Bank & Trust agreed to buy $1.12 billion of Alliance Bank's $1.14 billion in deposits, at a discount of $9.9 million.

The failed bank's five offices will reopen Monday as California Bank & Trust branches.

The California Department of Financial Institutions also closed County Bank, based in Merced. Westamerica Bancorporation, of San Rafael, Calif., agreed to assume all of County Bank's $1.3 billion in deposits and buy all of its assets.

County Bank's 39 branches will reopen as Westamerica branches. Westamerica said Friday that it had been approved for $83 million in taxpayer capital through TARP.

The bank also negotiated a loss-sharing agreement with the FDIC on County Bank's $1.2 billion in loans. Under the deal, Westamerica will be responsible for 20 percent of County Bank's first $269 million in losses on loans and repossessed collateral. The FDIC will cover the other 80 percent. If losses top $269 million, Westamerica will be responsible for 5 percent of the additional amount and the FDIC will cover the rest.

Georgia regulators on Friday shut down FirstBank Financial Services, in McDonough, 30 miles southeast of Atlanta. Regions Financial Corp., of Birmingham, Ala., agreed to assume FirstBank's $279 million in deposits and purchase $17 million of its assets. FirstBank's four branches will reopen Saturday as Regions Bank branches.

Regions Financial got $3.5 billion in TARP money in November.

The Government Accountability Office has spilled one of the Treasury Department's TARP secrets, revealing the value of the Bank of New York Mellon's contract to serve as master custodian for the financial-industry rescue program.

In a report issued late last week, the GAO estimated that Bank of New York Mellon would receive $20 million over three years.

The Treasury Department hired Bank of New York Mellon in October to keep tabs on the assets it would buy and sell through the $700 billion Troubled Asset Relief Program. But when it posted the contract on its web site, it blacked out the portion outlining how much the bank would be paid and how that pay would be calculated.

Since then, the Treasury Department has declined to disclose the terms of the deal. BailoutSleuth filed a Freedom of Information Act request in November, seeking an unredacted version of the agreement. More than two-and-a-half months later, we have yet to receive a decision from the Treasury Department on our request.

But the GAO filled in some of the blanks about Bank of New York Mellon's compensation in one of its periodic reports on transparency and accountability issues surrounding the TARP initiative - which include taxpayer investments in banks, loans to automakers, and government guarantees on certain portfolios of troubled assets.

The GAO's 112-page report included a summary of TARP contracts showing that Bank of New York Mellon was to receive an estimated $20 million through Oct. 14, 2011. The report noted that the company's compensation for the custodian job was based on flat fee, plus a fixed percentage of the asset values under its watch.

Bank of New York Mellon's contract is by far the largest that the Treasury Department  has awarded to any of its financial or legal advisors on TARP. The next biggest deals were with two law firms, Hughes Hubbard & Reed LLP and Squire Sanders & Dempsey LLP, which got contracts worth $5.64 million and $5.52 million, respectively.

The Treasury Department did not respond to our request for comment on the GAO's disclosure. Bank of New York Mellon referred us to the Treasury Department, saying it was the customer's prerogative to discuss the details of contract.

Bank of New York Mellon has more than $23 trillion in assets under custody and administration. It was one of 70 companies that submitted proposals for the job, which includes helping with custodial services, accounting, auction management and other tasks. Of those, 10 met all of the Treasury Department's eligibility requirements.

Bank of New York Mellon also sold $3 billion of its preferred stock to the government in October, as part of the Treasury Department's plan to inject capital into banks to shore up their balance sheets and spur lending.

The Treasury Department said Tuesday it completed investments in 42 banks, including the first in Nebraska and Arizona to get direct government aid.

The list included 25 financial institutions that had not yet appeared on BailoutSleuth's running tally of companies getting taxpayer capital through the $700 billion Troubled Asset Relief Program.

The Treasury Department said the latest round of investments totaled $1.5 billion, bringing the combined dollar amount of its completed stock deals with U.S. banks to $195.3 billion. That excludes additional investments of $20 billion each in Citigroup Inc., and Bank of America Corp.

W.T.B. Financial Corp., of Spokane, Wash., got $110 million in taxpayer capital last week, according to the government's latest summary of stock purchases. W.T. B. Financial is the privately held parent company of Washington Trust Bank.

Firstbank Corp., of Alma, Mich., sold $33 million in preferred stock to the Treasury Department. The publicly traded company was profitable through the first nine months of 2008, although its earnings were down more than 50 percent.

First United Corp., of Oakland, Md., got $30 million in public money. It reported a $9.1 million profit for the first nine months of 2008, up 3.4 percent from the same period of 2007.

Rogers Bancshares Inc., of Jonesboro, Ark., got $25 million from the Treasury Department. Parke Bancorp Inc., of Sewell, N.J., got $16.3 million, and Adbanc Inc., of Ogallala, Neb., got $12.7 million.

Adbanc was one of two Nebraska banks that received TARP funds. The other was Country Bank Shares Inc., of Milford, which operates Farmers & Merchants Bank. It got $7.52 million.

Goldwater Bank, of Scottsdale, Ariz., sold $2.57 million in stock to the government, making it the first bank in that state to be approved for the Treasury Department program.

To see the other banks that were added to the TARP list, follow the link to the rest of the story.

Six more banks -- four of them in California -- have announced their approval for the Treasury Department's $700 billion Troubled Asset Relief Program. The total amount of taxpayer capital allocated to the companies was $71.7 million.

Middleburg Financial Corp., of Middleburg, Va., said it sold $22 million in preferred stock to the Treasury Department. It announced last week that it turned a $491,000 profit for the fourth quarter, compared to a $2.8 million loss a year earlier. The bank also was profitable for all of 2008, though earnings fell 15 percent.

Plumas Bancorp, of Quincy, Cal., said it received $11.9 million in TARP funds. The bank, in a mountain community in northeastern California, posted a $1.4 million loss in the fourth quarter because of higher loan-loss provisions. It had net income of $306,000 for the year, down 92 percent from 2007.

 "Our company benefits from this investment as it allow us to enhance our existing plans to meet the financial needs of our clients by increasing our lending capacity, support local economic expansion and pursue Plumas Bank's opportunities for continued growth, all of which are in the long-term interest of the company and its shareholders,'' President Douglas N. Biddle said in a prepared statement.

Stewardship Financial Corp., based in Midland Park, N.J. was approved for $10 million in taxpayer capital. Valley Commerce Bancorp, of Visalia, Calif., got $7.7 million.

Peninsula Bank Holding Co., of Palo Alto, Calif., said its subsidiary, the Private Bank of the Peninsula, received $6 million in TARP funds. Premier Service Bank, of Riverside, Calif., was approved for $4 million.