6 more U.S. banks pay back bailout funds

Six more U.S. banks repaid their government bailouts, bringing the bank capital program close to 99 per cent recovery, the Treasury Department says.

Close to 99% recovery in bank capital program

The Associated Press Posted: Mar 17, 2011 8:43 AM EDT | Last Updated: March 17, 2011

Six more U.S.banks repaid their government bailouts, bringing the bank capital program close to 99 per cent recovery, the Treasury Department said Wednesday.

Deals announced Wednesday:

Fifth Third Bancorp., based in Cincinnati, paid $280 million USto rebuy warrants. Warrants are investments that give their owners the right to buy new shares at a set price on some future date. Treasury obtained them from most of the bailed-out banks as a deal-sweetener. Fifth Third repaid $3.4 billion USof Treasury's original investmen last month.
National Penn Bancshares Inc., based in Boyertown, Penn., repaid $150 million US of bailout money, and forked over $645,833 of dividends that it owed to Treasury.
Lakeland Bancorp Inc., based in Oak Ridge, N.J. repaid $20 million US of bailout money and paid $86,111 USin dividends. The bank still holds $19 million US of bailout money.
Stockmens Financial Corp., based in Rapid City., S.D. repaid its remaining $11.6 million USbailout and paid $49,807 USin dividends. The bank also repurchased preferred shares that Treasury obtained by exercising warrants for $778,000, US and paid $6,030 USof dividends on those shares.
Bridge Capital Holdings, based in San Jose, Calif. repaid $8.9 million USin bailout money and coughed up $38,164 USin dividends.
Heritage Bancshares, based in Norfolk, Va., repaid $2.6 million US of its bailout and $11,220 US in dividends.

The department received proceeds of $475 million USwhen the banks repurchased preferred shares and other investments that the Treasury Department got in exchange for its cash injections.

Banks received a total of $245 billion USunder the program.

The Treasury Department has collected about $244 billion USin repayments, fees and other income from banks.

The department expects the bank program will finish with a profit of about $20 billion US.

Losses are expected, however, on the administration's struggling foreclosure-prevention programs.

Money from those programs goes to homeowners, mortgage companies and investors.

If homeowners' payments are lowered successfully, the government can't recover that cash.

Losses also are possible from the automaker bailouts.

And it's not clear whether taxpayers will recoup the money used to prop up insurance conglomerate American International Group Inc.

Those costs might offset the extra revenue from the bank investments.

The nonpartisan Congressional Budget Office estimates that the programs, drawn from a $700 billion USfund known as the Troubled Asset Relief Program, will cost $25 billion US.

The Treasury Department says the number will be lower once it has sold off some of its AIG shares. The government now owns 92 per cent of that company.

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