City National Corp. has repaid the final $200 million it received from the government through the Troubled Asset Relief Program, and two other banks are preparing to do the same.
City National got $400 million in public aid in November 2008. The Los Angeles-based company, which has $21.1 billion in assets, sought last spring to pay back all of the money. But regulators required it to retire the obligation in two installments.
City National paid off the first $200 million in December, redeeming preferred stock it issued to government in exchange for aid. The Treasury Department still holds warrants to buy common stock in City National, which also were part of the consideration.
City National has remained well-capitalized and profitable despite higher provisions for loan losses to account for trouble in the residential and commercial real estate markets.
In December, it acquired the banking operations of Imperial Capital Bank, another California institution, after it was shut down by regulators.
Two other TARP recipients - Comerica Inc. and Susquehanna Bancshares Inc. announced stock offerings intended partly to raise enough money to repay the government and exit the program.
Comerica got $2.25 billion in taxpayer funds in November 2008. The Dallas-based company said it hoped to raise $800 million through a sale of common stock.
The
offering, coupled with Comerica's existing cash, would allow the
company to redeem all 2.25 million shares of preferred stock the Treasury
Department holds, the bank announced. Of
the 20 banks that received the most TARP money, Comerica would be the 13th to
repay the government. The
company said it will soon notify the Treasury of
its intent to redeem the stock, subject to consultation with its banking
regulators. The
government also holds 11,479,592 warrants to purchase Comerica common stock at
$29.40 per share. The company's stock was trading at $35.36 per share Tuesday
at 10 a.m. Eastern. Once the
stocks are redeemed, the government would either sell the warrants back to
Comerica or auction them.
Susquehanna, which has headquarters in Lititz., Pa., got $300 million in public aid in December 2008. It filed to sell $300 million of common stock, plus $50 million in trust preferred securities. Susquehanna said it granted underwriters the right to purchase an additional $45 million in common stock to cover overallotments.
Susquehanna said it would use the proceeds of the share sales for general corporate purposes, including the repayment of the TARP money or the acquisition of other banks.
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