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More Than 90 Banks Miss Scheduled TARP Payments

Big jump from last quarter.


Source:  Reuters

More than 90 U.S. banks and thrifts missed making a May 17 payment to the U.S. government under its main bank bailout program, signaling a rising number of lenders are struggling to meet their obligations.

The statistics, compiled by SNL Financial from U.S. Treasury data, showed 91 banks and thrifts skipped the May dividend payment under the Troubled Asset Relief Program, or TARP. It was the first missed payment for 23 of the banks; for the others, it was at least their second miss.

The number of banks missing their TARP payments rose for the third straight quarter. In February, 74 banks deferred their payments; 55 deferred last November.

SNL Financial's analysis found 20 banks have missed four or more payments since the program began in 2008, while eight banks have missed five payments.

Under the TARP program, the U.S. Treasury invested in preferred shares issued banks looking for funds. The banks were to make regular dividend payments to the Treasury, and have the right to repurchase the shares at some point in the future.

While many of the largest U.S. banks easily repaid billions in TARP aid, more than 600 smaller banks still hold $130 billion from the program, created at the height of the financial crisis.

In some cases, small banks are renegotiating the repayment terms. Midwest Banc Holdings , for example, agreed to swap $84.8 million in preferred shares issued under the TARP program in 2008 for $15.5 million in common shares. That would have meant an 80 percent loss for the government—and the U.S. taxpayer—on the initial investment. But the swap was contingent on the bank raising more private capital, which it failed to do. Regulators seized the bank in May.

The next quarterly TARP payments to the U.S. Treasury are due by August 16.




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Reader Comments (15)

Maybe the free money from the Fed has come to an end.

Fed buys the banks bad debt (bad mortgage loans).
Fed does reverse repos to give the bad banks easy free money.
The U.S. Treasury buys the banks bad debt (bad mortgage loans).
U.S. Gov and Fed change rules for capitalization.

Result...Banks still failing.
Jun 17, 2010 at 3:23 PM | Unregistered CommenterZarathustra
Jun 17, 2010 at 3:40 PM | Unregistered CommenterKen
zara...good summary...as you know, regional banks are loaded to the gills with bad commercial real estate loans...many hundreds more will fail i'm sure...the fdic weekend-shutdown crew will be busy for years..
Jun 17, 2010 at 3:42 PM | Registered CommenterDailyBail
Nothing to worry about...the systems are fine...

NEW YORK -- Erroneous trades briefly prompted shares of The Washington Post Co. to more than double in value Wednesday afternoon, triggering for the first time new circuit breakers put in place by the Securities and Exchange Commission after the "flash crash" that sent markets plunging last month.

Jun 17, 2010 at 3:50 PM | Registered CommenterDailyBail
Ken: That was a nice group of statistics and photos.

A propos another Daily Bail showing Obama lying seven times within a few minutes, America itself is clearly a nation of liars.

Our lying is based on distorted advertising claims, and distorted news filtered by large corporate news agencies such as FOX, CNBC and CNN. And our perceptions are distorted by bad statistics AND the hiding (or willful ignorance of) the kind of statistics and graphs that you presented.

The whole place is sinking like a stone under its own moral perfidy. I wish we could point to a cancerous few and remove them from the body politic but we can't. The sickness is too pervasive and endemic to what America has become. Bankers, bakers, candlestick makers and educators, I'm afraid we're all cut from the same cloth.
Jun 17, 2010 at 5:23 PM | Unregistered CommenterJames Street


One of the big reasons Obama has a lot of time to golf. His boss is busy working.
Jun 17, 2010 at 7:05 PM | Unregistered CommenterZarathustra
BP Aware Of Cracks In Oil Well Two Months Before Explosion
Paul Joseph Watson
Prison Planet.com
Thursday, June 17, 2010
BP was aware of cracks appearing in the Macondo well as far back as February, right around the time Goldman Sachs and BP Chairman Tony Hayward were busy dumping their stocks in the company on the eve of the explosion that led to the oil spill, according to information uncovered by congressional investigators.
The Mining and Mineral Services agency released documents to Bloomberg indicating that BP “was trying to seal cracks in the well about 40 miles (64 kilometers) off the Louisiana coast,” according to the report.
The fissures, which BP began to attempt to fix on February 13, could have played a role in the disaster, though this is a question still being explored by investigators. Improperly sealed, the cracks cause explosive natural gas to rush up the shaft.
“The company attempted a “cement squeeze,” which involves pumping cement to seal the fissures, according to a well activity report. Over the following week the company made repeated attempts to plug cracks that were draining expensive drilling fluid, known as “mud,” into the surrounding rocks,” states the report.
As we previously highlighted, eyewitness evidence indicates that Deepwater Horizon managers knew that the BP oil rig had major problems before its explosion on April 20. A crew member who rescued burning workers on the rig told Houston attorney Tony Buzbee of a conversation between Deepwater Horizon installation manager Jimmy Harrell and someone in Houston. According to the witness, Harrell was screaming, “Are you fucking happy? Are you fucking happy? The rig’s on fire! I told you this was gonna happen.”

Jun 17, 2010 at 7:14 PM | Unregistered Commenterken
DB...Fairness Doctrine (Dems are going to rename it) will be incorporated into the Net Neutrality debate (really)...

Time to take a stand...




Barry Soetoro???



Maybe DB should decide? Do you agree Cally?
Jun 17, 2010 at 7:23 PM | Unregistered CommenterZarathustra
G et
O ut now,
L eave the
D ollar
Jun 17, 2010 at 8:53 PM | Unregistered CommenterRecoverylessRecovery
I wanted Rudy to win.
Jun 18, 2010 at 1:55 AM | Unregistered CommenterZarathustra

Jun 18, 2010 at 12:57 PM | Unregistered Commenterken

Actually, he simply went back HOME.
Jun 23, 2010 at 4:12 PM | Unregistered CommenterRecoverylessRecovery

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