Maneuvering for money

Another bank has announced plans for a capital injection from the Treasury Department, and several more-diversified financial companies appear to be positioning themselves for federal aid as well.

First Midwest Bancorp Inc., which has headquarters in Itasca, Ill., said it was approved to sell $193 million in preferred stock to the Treasury Department.

The Treasury Department intends to provide $250 billion in capital to financial institutions as part of the $700 billion Troubled Asset Relief Program approved by Congress last month. So far, it has approved deals for roughly $170 billion of that amount.

The deadline for applications is Friday. As the date approaches, there are signs that companies from outside the traditional banking sector might also seek access to the funds.

American Express Co. won permission from the Federal Reserve this week to convert to a bank holding company, which would allow it to tap into various financial assistance programs. The Federal Reserve waived the usual 30-day waiting period, saying "emergency conditions" warranted faster action.

The move also covers two related entities, American Express Travel Related Services and American Express Centurion Bank. American Express is known primarily for its credit-card operations. Because of the financial crisis, it has been having trouble raising money by packaging and selling securities backed by those obligations.

The conversion came just in time for American Express to seek money through TARP.  American Express did not say whether it would apply for the program, in which participants issue preferred stock and warrants to the government in return for public money.

E*Trade Financial Corp. announced last week that it had applied for $800 million in TARP money. Although E*Trade is known primarily as a discount securities brokerage, it also has an online banking operation that takes deposits and offers mortgages and home-equity loans.

E*Trade reported a loss of $320.8 million from continuing operations in the third quarter, compared with a loss of $58.8 million in the same period last year. The bigger loss was partly the result of charges related to its real estate loans and partly because of losses on its shareholdings in Fannie Mae and Freddie Mac, the housing finance giants which were taken over by the federal government.

E*Trade said it expected to losses on its home-equity loan portfolio to total $1.8 billion from 2008 through 2010, up 20 percent from its previous estimate.

American International Group Inc., an insurance and investment firm, will get $40 billion in TARP funds under the revised rescue plan announced Monday. Other insurers also have been maneuvering to gain access to the program, as have auto makers.