April 24, 2009
Out From Under the TARP
At Hot Air I read the story of TCF Bank. Which has at considerable cost, escaped control of The One and the Tax Cheat of the Treasury by buying its way out of the TARP program.
If I'm figuring it right (and there's no guarantee of that) the Fed made a profit of .94%. So the Tax Cheat managed to do a little better than the current Fed Discount rate of .5%. If they can keep that up The Fed will make about $3.1 billion above what they could have brought in loaning banks money at the discoount rate. Add that to the $100 million The One told his cabinet to save and we're well on our way to a balanced budget.
In a nutshell, being associated with TARP was tarnishing the banks reputation - even though it didn't need the money. Plus it sounds like the people that run the bank had a serious problem with The Fed changing the rules and taking greater control. Good for them.
This part I don't get, or like. TCF has 127.7 million shares of outstanding stock (up 6.12% in today's trading). The Fed just made them cut their dividend by $25.5 million dollars. According to the bank they have the capital to continue operating as they wish, without TARP money (plus interest). Now The Fed has forced them to hold on to another $25.5 million in capital.
Will The One and his apprentice force TCF to use that money to issue CRA loans to people who can't afford to pay them back? Did they just do it out of spite?
Will the money sit there on the books until they pay an even bigger dividend the next time around?
Congtarulations to TDF and it's chairman William A. Cooper for kicking the TARP to the curb. I think I will have to nominate them for a mention on Heroes of Capitalism.
TCF Financial Corporation announced Wednesday that it had completed the repurchase of its TARP preferred stock from the U.S. Treasury. It paid a redemption price of $361.2 million plus accrued dividends of $3.4 million.
If I'm figuring it right (and there's no guarantee of that) the Fed made a profit of .94%. So the Tax Cheat managed to do a little better than the current Fed Discount rate of .5%. If they can keep that up The Fed will make about $3.1 billion above what they could have brought in loaning banks money at the discoount rate. Add that to the $100 million The One told his cabinet to save and we're well on our way to a balanced budget.
TCF Chairman and CEO William A. Cooper said the bank had maintained a strong capital position over the last year through its own operations, and it didn’t need to rely on the public capital infusion to continue its traditional lending pace. Cooper said TCF is the largest bank to pay back TARP funds to the U.S. Treasury.
TCF’s executives had complained that Treasury and the U.S. Congress had subverted the TARP program by changing its rules after banks had joined. Those rules added controls over compensation and dividends programs, and Cooper said those changes contributed to a stigma of weakness and reliance on public support – a stigma that didn’t reflect his bank’s condition.
TCF’s executives had complained that Treasury and the U.S. Congress had subverted the TARP program by changing its rules after banks had joined. Those rules added controls over compensation and dividends programs, and Cooper said those changes contributed to a stigma of weakness and reliance on public support – a stigma that didn’t reflect his bank’s condition.
In a nutshell, being associated with TARP was tarnishing the banks reputation - even though it didn't need the money. Plus it sounds like the people that run the bank had a serious problem with The Fed changing the rules and taking greater control. Good for them.
As part of the agreement for withdrawing from the program, TCF also agreed to reduce its first-quarter dividend from 25 cents to 5 cents.
This part I don't get, or like. TCF has 127.7 million shares of outstanding stock (up 6.12% in today's trading). The Fed just made them cut their dividend by $25.5 million dollars. According to the bank they have the capital to continue operating as they wish, without TARP money (plus interest). Now The Fed has forced them to hold on to another $25.5 million in capital.
Will The One and his apprentice force TCF to use that money to issue CRA loans to people who can't afford to pay them back? Did they just do it out of spite?
Will the money sit there on the books until they pay an even bigger dividend the next time around?
Congtarulations to TDF and it's chairman William A. Cooper for kicking the TARP to the curb. I think I will have to nominate them for a mention on Heroes of Capitalism.
Posted by: Stephen Macklin at 03:55 PM | No Comments | Add Comment
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