A bank that received $300 million in bailout funding last year is considering asking for $290 million more as part of an aggressive drive to shore up its balance sheet.
Michigan-based Citizens Republic Bancorp announced that it was calling a special shareholders' meeting to consider "multiple capital raising alternatives" in response to deteriorating economic conditions.
The worries at Citizens Republic are the latest sign that not all of the banks that got taxpayer capital through the $700 billion Troubled Asset Relief Program were as solid as the Treasury Department represented.
Michigan, which is home to a large automobile sector, has been battered over the past year by rising unemployment and a depressed housing market. Citizens Republic lost $393.1 million last year, and also reported a $45.1 million loss for the first quarter of this year.
Citizens Republic said the options under consideration include asking the Treasury Department to buy an additional $190 million in preferred stock through TARP's Capital Purchase Program, and to provide $100 million through another initiative called the Capital Assistance Program.
Citizens Republic said it could use some of its Capital Assistance Program funds to buy back a portion of the preferred stock it sold the government when it received its first round of bailout funding
The bank is also considering another stock sale, offering debt holders the opportunity to convert debentures into common stock, and exchanging shares of common stock for outstanding trust preferred securities.
When the TARP program was first announced, officials said that only healthy banks could receive assistance, but Treasury refused to publish the criteria it used to make that determination.
Recent weeks have seen increased signs of bailed-out banks continuing to struggle with their balance sheets. BailoutSleuth previously reported that at least three banks have suspended dividend payments to the government in order to conserve cash.
Michigan-based Citizens Republic Bancorp announced that it was calling a special shareholders' meeting to consider "multiple capital raising alternatives" in response to deteriorating economic conditions.
The worries at Citizens Republic are the latest sign that not all of the banks that got taxpayer capital through the $700 billion Troubled Asset Relief Program were as solid as the Treasury Department represented.
Michigan, which is home to a large automobile sector, has been battered over the past year by rising unemployment and a depressed housing market. Citizens Republic lost $393.1 million last year, and also reported a $45.1 million loss for the first quarter of this year.
Citizens Republic said the options under consideration include asking the Treasury Department to buy an additional $190 million in preferred stock through TARP's Capital Purchase Program, and to provide $100 million through another initiative called the Capital Assistance Program.
Citizens Republic said it could use some of its Capital Assistance Program funds to buy back a portion of the preferred stock it sold the government when it received its first round of bailout funding
The bank is also considering another stock sale, offering debt holders the opportunity to convert debentures into common stock, and exchanging shares of common stock for outstanding trust preferred securities.
When the TARP program was first announced, officials said that only healthy banks could receive assistance, but Treasury refused to publish the criteria it used to make that determination.
Recent weeks have seen increased signs of bailed-out banks continuing to struggle with their balance sheets. BailoutSleuth previously reported that at least three banks have suspended dividend payments to the government in order to conserve cash.
published June 26, 2009, 0 Comments
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