The Treasury Department has picked 10 more banks to receive taxpayer money as part of its financial-services industry rescue efforts. The total amount they will receive through stock sales to the government is roughly $606 million.
Sterling Financial Corp., which is based in Spokane, Wash., said the Treasury Department had approved its request for $303 million in capital. Sterling has branches in five western states, and also has two mortgage subsidiaries that make real-estate and commercial loans. The company reported last month that earnings for the first three quarters of the year were off nearly 75 percent from a year ago, primarily reflecting increases loss provisions on its real-estate loans.
Independent Bank Corp., of Ionia, Mich., is getting $72 million in taxpayer funds. The bank posted a $5.3 million loss for the third quarter -- in part because of a writedown on its stock in Fannie Mae and Freddie Mac -- putting it into the red for the year.
Center Financial Corp., a Los Angeles bank that serves the Korean-American community, will get $55 million from the Treasury Department. The bank reported a loss in the third quarter after booking $15 million in charges for the settlement of litigation bought by a group of Korean Banks and a Korean import-export agency.
Fidelity Southern Corp., based in Atlanta, said it was approved to sell $48.2 million in preferred stock to the government. The bank holding company has quadrupled its loan-loss reserves, producing losses for the third quarter and first nine months of 2008.
The Treasury Department is providing $250 billion in capital to banks as part of the broader $700 billion Troubled Asset Relief Program approved by Congress last month. Under the plan, the banks sell preferred stock that pays annual dividends of 5 percent for the first five years and 9 percent thereafter. The government also will receive warrants to buy common stock in the institutions, which could provide returns to taxpayers if the shares increase in value.
First Defiance Financial Corp., of Defiance, Ohio, will get $37 million in fresh capital from the Treasury Department. The bank has remained solidly profitable despite some hits to its asset base. Tennessee Commerce Bancorp, which has headquarters in Franklin, Tenn., said it would get $30 million.
VIST Financial Corp., based in Wyomissing, Pa., will get $25 million. Unity Bancorp, of Clinton, N.J., will receive $20.6 million. American River Bankshares, of Sacramento, will get $8 million, and Central Federal Corp., of Fairlawn, Ohio, will get $7.23 million.
