Monday, November 17, 2008
Both injections were for amounts of roughly one-third of the banks Tier 1 capital. Treasury Secretary Paulson says the government is pretty much done with the TARP program for now, "not going to be looking to start up new things unless they're necessary." Obviously Friday's grilling of the head of the TARP project has chastened the Treasury.
"TCF has always been well-capitalized with adequate liquidity to facilitate lending through our strong retail deposit franchise. By participating in this program, we can expand lending beyond our previous growth plans," said William A. Cooper, TCF Chairman and Chief Executive Officer.
The $361 million investment by the U.S. Treasury will be in exchange for 361,172 shares of senior perpetual preferred stock. The preferred stock will pay cumulative dividends equal to five percent for the first five years and nine percent thereafter.
I doubt that Bill Cooper expects to expand lending with the money. There should be some laid away for more loan loss provisions over the next few quarters. There may also be money now for a little more consolidation of the banking sector (which maybe is part of the plan? Oh, who knows what the plan is now?)