March 2009 Archives

The Treasury Department has completed investments in 14 more banks, using a total of $192 million from the $700 billion Troubled Asset Relief Program.

Of the banks that sold preferred shares to the government, 11 were new to BailoutSleuth's running tally of TARP participants.

Alpine Banks of Colorado, which is based in Glenwood Springs, Co., got $70 million, nearly twice as much as any other recipient in the latest round. Alpine has 25 branches serving the mountain and ski communities on the western slope of the Rocky Mountains.

Alpine reported profits of $32.7 million last year, down about 19 percent from 2007, partly because of higher loan-loss provisions.

As  BailoutSleuth previously reported, Trinity Capital Corp., of Los Alamos, N.M., got $35.5 million in TARP money, and Spirit Bankcorp Inc., of Bristow, Okla., got $30 million.

CBS Banc-Corp, which is based in Russellville, Ala., got $24.3 million. It is the parent company of CB&S Bank, which operates 42 branches in Alabama, Mississippi and Tennessee.

MS Financial Inc., of Kingwood, Texas, sold $7.72 million in preferred shares to the government. It operates Main Street Bank in Kingwood, which is northeast of Houston.

The other banks and holding companies getting taxpayer capital were:

Naples Bancorp Inc. (Naples, Fla.) -- $4 million

SBT Bancorp Inc. (Simsbury, Conn.) -- $4.0 million

Pathway Bancorp (Cairo, Neb.) -- $3.73 million

Triad Bancorp Inc. (Frontenac, Mo.) -- $3.7 million

Clover Community Bancshares Inc. (Clover, S.C.) -- $3.0 million

CSRA Bancorp (Wrens, Ga.) -- $2.47 million

IBT Bancorp Inc. (Irving, Texas) -- $2.29 million

Maryland Financial Bank (Towson, Md.) -- $1.7 million

Colonial American Bank (West Conshohocken, Pa.) -- $574,000

Union Bankshares Corp., a Virginia company that got $59 million in taxpayer capital through the Troubled Asset Relief Program, is acquiring another bank that got $33.9 million in federal aid.

Union Bankshares said it signed an agreement to buy First Market Bank, of Richmond, Va., in an all-stock deal worth $105.4 million.

Union Bankshares is based in Bowling Green. It said the merger would make it the largest Virginia-based community banking organization, with 97 branches and more than $3.9 billion in assets.

The banks said they expected to complete the merger by the end of the year. The combined company will have headquarters in Richmond and operate under the name Union First Market Bankshares Corp.

Union Bankshares currently has three operating units - Union Bank, Northern Neck State Bank and Rappahannock National Bank.

Union Bankshares is a publicly traded company. It had profits of $14.5 million last year, down 26.5 percent from 2007.

First Market Bank is privately held. It has 39 branches, mostly in the Richmond area, and more than $1.3 billion in assets.

Union Bankshares sold $59 million in preferred stock to the Treasury Department in December as part of the $700 billion TARP initiative. First Market got $33.9 million last month.

First Market's shareholders will control roughly one-third of the combined company. The bank is owned by Ukrop's Super Markets Inc., a grocery chain that houses many of its branches, members of the Ukrop family and Markel Corp., a property and casualty insurer.

Two more banks said they were approved for taxpayer capital through the Treasury Department's $700 billion Troubled Asset Relief Program.

Meanwhile, two other banks announced that they were declining their allotments of government money.

Trinity Capital Corp., the owner of Los Alamos National Bank in Los Alamos, N.M., said it sold $35.5 million in preferred stock to the Treasury Department.

Trinity Capital was the first company in New Mexico to get TARP funds. That leaves just three other states - Alaska, Montana and Vermont - without a bank or other business in the program.

SpirtBank, based in Tulsa, Okla., said it got $30 million in taxpayer capital through TARP. The bank has $1.25 billion in assets and operates 17 branches across Oklahoma.

Albert C. "Kell" Kelly Jr., SpiritBank's chief executive, said the bank saw participation in TARP as an opportunity to help Oklahomans and help foster the state's entrepreneurial spirit.

"Because of SpiritBank's track record of involvement in communities throughout the state, we feel there's no one better suited to take on this responsibility and get this money into the hands of creditworthy Oklahoma individuals and businesses,'' he said in a statement.

First Business Financial Services Inc., of Madison, Wis., announced that its board of directors had decided to decline the $27 million in TARP funds for which it was recently approved.

The company cited the cost of participating in the program, as well as the  potential long-term impact on its shares.

Rockport National Bancorp Inc., of Rockport, Mass., said it also was opting out of TARP. It had been approved for $3 million in taxpayer capital in January but hadn't completed the deal.

More than 50 banks that were approved for TARP funds have decided against taking the money.

Regulators shut down Omni National Bank in Atlanta on Friday and enlisted SunTrust Banks Inc. to temporarily run its branches and assist depositors.

Omni National had six branch offices, in Atlanta; Dalton, Ga.; Tampa, Fla.; Chicago; Dallas and Houston. It had assets of $956 million and deposits of $796.8 million.

The Office of the Comptroller of the Currency closed Omni National and appointed the Federal Deposit Insurance Corp. as receiver.

It arranged for SunTrust to operate the failed banks branches until April 27. During the 30-day transition period, Omni National customers in Georgia and Florida can either move their accounts to SunTrust or get checks for the amounts in their Omni National accounts. Customers in Illinois and Texas can either close their accounts or have SunTrust send them their remaining balances.

Omni National was the 21^st bank to fail this year, compared with 25 for all of 2008. It had been struggling under the weight of more than $110 million in bad real estate loans, and regulators earlier this month ordered the bank to raise additional capital, improve accounting controls and take other measures to improve its financial stability.

The Comptroller of the Currency said in a press release that it decided to shut down Omni National after finding that it had "experienced substantial dissipation of assets and earnings due to unsafe and unsound practices." It said the bank's losses depleted most of its capital, and said there was "no reasonable prospect'' that it would become adequately capitalized without federal assistance.

The FDIC estimated that the closing would cost its deposit insurance fund around $290 million.

Of the 21 banks that have failed this year, 12 were taken over by institutions whose own balance sheets were strengthened by taxpayer capital from the Treasury Department's $700 billion Troubled Asset Relief Program. SunTrust got $4.9 billion, in two installments.

Shore Bancshares Inc. has notified the Treasury Department that it will return the $25 million in taxpayer capital it received in January.

Shore, based in Easton, Md., is the seventh bank to file for redemption of the preferred stock issued in return for aid through the $700 billion Troubled Asset Relief Program.

More than 500 banks have taken public money through the program.

W. Moorhead Vermilye, Shore's chairman and chief executive, said changes in TARP rules and public perceptions about the program have put his bank at a competitive disadvantage.

"The representation made by the Treasury concerning TARP was that the program was designed to attract broad participation by healthy institutions and that our participation in the program was important to restore confidence in our financial system and ensure that credit continue to be available to consumers and businesses," Vermilye said in a prepared statement. "Over the past few months, however, it has become clear to us that the public, including many members of Congress, view institutions that participated in TARP as having done so because they are weak and not because they wanted to do their part to foster economic recovery. We do not believe that TARP has been handled in such a way as to distinguish strong institutions from those that have capital adequacy or other problems."

Shore operates Talbot Bank, Centreville National Bank of Maryland and Felton Bank. It also owns several insurance units, an investment advisory firm and a mortage company.

Morgan Stanley's chief executive, John J. Mack, and its two co-presidents declined any bonuses for 2008. But the company's newly released proxy statement shows that three other top executives got cash awards averaging $2.3 million each.

Morgan Stanley got $10 billion in taxpayer capital last October through the Treasury Department's Troubled Asset Relief Program, which imposes restrictions on executive salaries and bonuses.

Mack got $800,000 in salary last year, and $435,097 in other compensation, for a total of $1.24 million. The non-cash compensation consisted mainly of his personal use of corporate aircraft, and of security provided him by the company.

Mack had total compensation of $1.6 million in 2007, making him one of the lowest-paid executives at the big investment banks. Morgan Stanley said that, effective March 10r, Mack will begin reimbursing the company for his personal use of corporate aircraft.

Colm Kelleher, chief financial officer and co-head of strategic planning, got $322,903 in salary last year. The London-based executive got a cash bonus of $2.91 million, as well as a long-term incentive award of $1.06 million and restricted stock the company valued at $728,122.

Additional compensation, including $2.2 million related to his overseas assignment, brought his total package to $7.44 million. Keller had total compensation of $21 million in 2007.

Morgan Stanley said Kelleher's bonus reflected his role in "prudently and proactively managing the company's capital and liquidity.'' It also cited his role in developing the company's response to the financial crisis and in communicating effectively with analysts and investors during the market turbulence.

Morgan Stanley also noted that Kelleher played an important role in arranging the $10 billion capital injection from the Treasury Department, as well as other large investments from the China Investment Corp. and Mitsubishi UFJ Financial Group.

Morgan Stanley had profits of $1.7 billion last year, down from $3.2 billion in 2007.

Gary G. Lynch, the company's chief legal officer, got $300,000 in salary in 2008, along with a cash bonus of $2.37 million and a long-term incentive award of $796,500. His total compensation was $4.02 million, down from $11.9 million in 2007.

Thomas R. Nides, chief administrative officer, collected $300,000 in salary, a cash bonus of $1.81 million and a long-term incentive award of $535,000. He had total compensation of $3.14 million, compared with $6.33 million in 2007.

Walid A. Chammah, one of Morgan Stanley's co-presidents, got $322,903 in salary last year, and had total compensation of $1.2 million. He was not an executive officer of the company in 2007. Morgan Stanley did not list the compensation of James P. Gorman, its other co-president.

A former executive of Citizens Republic Bancorp Inc., which got $300 million in public money through the Troubled Asset Relief Program, says he was fired after objecting to a multimillion-dollar payout sought by the company's chairman and chief executive.

John D. Schwab, who was executive vice president and chief credit officer, said in a wrongul-termination suit that he was forced out after urging a member of the company's board of directors to block Chairman William R. Hartman's demands.

Schwab filed suit in a Michigan state court, alleging that Hartman retaliated against him for opposing the compensation plan. Schwab said in a press release announcing the suit that he had argued that any large bonus payment to Hartman would violate restrictions imposed on banks that take TARP money from the Treasury Department.

Citizens Republic declined to comment on the suit, citing a policy of not discussing pending litigation.

Hartman stepped down as Citizens Republic's president and chief executive effective Jan. 31. However, he remains non-executive chairman of the board until the company's annual meeting on May 27.

The proxy statement for the meeting shows that Hartman, who is 60, will get to take his pension payments under Citizens Republic's supplemental benefits plan as a lump sum. The present value of those benefits were $6.88 million at the end of last year.

Citizens Republic noted that its obligations under the supplemental benefits plan are unfunded and are subject to its ability to make the payments when they are due. In other words, they are paid out of the company's general accounts.  

Citizens Republic is based in Flint, Mich., and has operations in Michigan, Ohio, Wisconsin and Iowa. It has been hit hard by the real estate slump and the auto industry's troubles. It posted a $393.1 million loss for 2008, compared with a profit of $100.8 million in 2007. Nearly half of the red ink was attributable to the fourth quarter.

Hartman and Schwab both joined Citizens Republic in 2002. The company's proxy statement shows that Hartman was paid $780,000 in salary last year and had total compensation of $1.87 million. Schwab received $295,000 in salary and $603,983 in total compensation.

In a press release announcing his wrongful termination suit, Schwab said he was approached in early December by board member Ben Laird, who told him that Hartman was seeking a guaranteed four-year contract and a $7.5 million "special bonus." Schwab said he told Laird the payments were inappropriate.

Citizens Republic had already been approved for $300 million in TARP funds. It accepted the money on December 12, issuing preferred stock to the government in return.

According to Schwab's account, the board rejected some of Hartman's compensation demands. Schwab said that Hartman summoned him to a meeting on Jan. 29, two days before Hartman's retirement took effect.

Hartman announced that Schwab also would be retiring, adding that Schwab had "undermined'' him. Citizens Republic announced Schwab's departure on Feb. 2.

Schwab, 64, said in the press release that he had no intention of retiring. He noted that he had been one of four candidates interviewed to succeed Hartman as chief executive and had said during that process that we was willing to work another three to five years.

The Treasury Department has completed investments in 10 more banks, distributing $80.7 million in taxpayer capital.

Nine of the banks were new to BailoutSleuth's running tally of more than 500 institutions that have sold stock to the government as part of the $700 billion Troubled Asset Relief Program.

The Treasury Department has invested nearly $198.6 billion of the $250 billion originally set aside for capital injections to banks.

Heritage Oaks Bancorp, of Paso Robles, Calif., completed its previously announced deal for $21 million.

Community First Bancshares Inc., of Union City, Tenn., sold $20 million of its preferred stock to the government, while First NBC Bank Holding Co., of New Orleans, sold $17.8 million worth. Both of those banks are privately held.

Seven other privately held financial institutions got TARP money in the latest round of deals.

Premier Bank Holding Co., of Tallahassee, Fla., received $9.5 million, while First Colebrook Bancorp Inc., of Colebrook, N.H., got $4.5 million. Peoples Bancshares of TN Inc., based in Madisonville, Tenn., got $3.9 million

The other banks getting taxpayer capital were:

Citizens Bank & Trust Co. (Covington, La.) -- $2.4 million

Farmers State Bankshares Inc. (Holton, Kan.) -- $700,000   

Kirksville Bancorp Inc. (Kirksville, Mo.) -- $470,000

Farmers & Merchants Financial Corp. (Argonia, Kan.) -- $442,000

The Treasury Department has announced details of its plan to buy $500 billion to $1 trillion in so-called "toxic assets'' from banks and other financial companies, through partnerships with private investors.

The Treasury Department will use $75 billion to $100 billion from the $700 billion Troubled Asset Relief Program to finance the government's investment in pools of distressed real estate loans, mortgage-backed securities and other assets, according to an overview posted on the agency's web site.

It refers to them by a more benign name -- legacy assets

The plan is built around three main principles: Maximizing the impact of taxpayer dollars, sharing the risk and profits with private-sector partners, and using market competition to establish asset prices.

Here's how the program would work: A bank that wants to sell loans can approach the Federal Deposit Insurance Corp. The FDIC decides whether to create an investment pool around the assets. If so, it auctions the pool and forms a public-private partnership with the winning bidder.

The plan relies on leverage. The Treasury Department offered an example using a 6-to-1 debt to equity ratio. In its example, a pool of assets with a face value of $100 sold at auction for $84.  In that scenario, the FDIC would provide financing guarantees for $72, leaving $12 of equity. The Treasury Department would provide half of the equity funding, or $6, as would the private investor.

The private investor would be responsible for the servicing and disposition of the loan pool, using asset managers approved and overseen by the FDIC.

The mechanism for mortgage-backed securities is different. The Treasury Department says it will approve as many as five asset managers with a track record for purchasing such assets. They can then seek money from private investors, with the Treasury Department providing matching equity for every dollar raised.

The asset managers can get additional debt financing for an amount equal to 50 percent of the total equity in the fund. The Treasury Department said that, in some cases, it might provide amounts up to  100 percent of the equity, adding even more purchasing power. The asset managers will have full discretion over the investment decisions of the funds, although the Treasury Department said it expects that they will largely adhere to a long term, buy and hold strategy.

Federal regulators took over two big credit unions, which could be a sign of growing problems in that segment of the financial industry.

Regulators put U.S. Central Corporate Federal Credit Union and Western Corporate Federal Credit Union into conservatorship, saying the actions were needed to resolve balance sheet issues and preserve the stability of the broader credit union system.

The two credit unions have $57 billion in assets between them. They provide financing and investment services to retail credit unions, the cooperative financial institutions owned by their depositors.

The National Credit Union Administration said the seizure of U.S. Central and Western Corporate would have no direct impact on the 90 million Americans who belong to credit unions. The government agency  emphasized that the nation's retail credit unions remain strong, with a net worth exceeding 10 percent of assets and increasing deposits, membership and loan volumes.

U.S. Central, based in Lenexa, Kan., has about $34 billion in assets, including money invested by retail credit unions. The NCUA pumped $1 billion in new capital into U.S. Central in January in an effort to shore up its finances and bolster customer confidence.

Western Corporate, based in San Dimas, Calif., has $23 billion in assets. Regulators plan to keep both credit unions in operation, but will replace management and make other changes.

The NCUA said it had performed a detailed analysis and stress test of the mortgage- and asset-backed securities held by all corporate credit unions. The review found an unacceptably high concentration of risk in just two places - U.S. Central and Western Corporate.

"Securities held by U.S. Central and WesCorp deteriorated further since late January 2009, contributing to diminished liquidity and payment system capacities, as well as further loss of confidence by member credit unions and other stakeholders,'' the agency said in a press release on the seizure.

Further analysis of the mortgage- and asset-backed securities held by the credit unions led the NCUA to boost the reserves for losses in the industry's deposit insurance fund by $1.2 billion, to $5.9 billion.

Birmingham Bloomfield Bancshares Inc., a small Michigan bank, said it was approved for $1.63 million in taxpayer capital through the Treasury Department's Troubled Asset Relief Program.

The company operates the Bank of Birmingham, in the northern suburbs of Detroit. It had total assets of $67.3 million at the end of 2008, up from $47.3 million a year earlier. Its loans outstanding on Dec. 31 were $56.8 million.

Robert E. Farr, president and chief executive, said the bank has been careful in its lending and is solid financially. Unlike some bankers, Farr expressed no reservations about taking on the federal government as an investor.

"The injection of TARP funds will both strengthen our balance sheet and enable us to prudently increase lending,'' he said in a prepared statement. "One especially important commercial-lending area for us is the area's small and medium companies, which have been virtually squeezed out of the credit markets. We are optimistic about 2009 and our prospects for continued growth.''

Banks participating in TARP get a capital injection from the government in return for preferred stock that pays a dividend of 5 percent a year for the first five years and 9 percent therafter.

Companies that take the money also have to accept certain restrictions on executive compensation, dividend increases, stock buybacks and other uses of money.

The Treasury Department has completed stock purchases in 19 more financial institutions, 14 of which were new to BailoutSleuth's running tally of companies getting taxpayer capital.

Discover Financial Services, known mainly as a credit-card issuer, accounted for $1.2 billion of the nearly $1.46 billion in new government investment through the Troubled Asset Relief Program.

BancIndependent Inc., of Sheffield, Ala., sold $21 million in preferred stock to the government. Sovereign Bancshares Inc., of Dallas, got $18.2 million, while First American International Corp., of Brooklyn, N.Y., got $17 million. All of those companies are privately held.

Three other banks got $10 million or more in taxpayer capital. The smallest government share purchase in the latest round of deals was $425,000.

Eleven American International Group Inc. employees who got "retention'' bonuses of $1 million or more last week no longer work there, New York Attorney General Andrew Cuomo reported.

AIG came under harsh criticism when it paid more than $160 million in bonuses to employees of its financial products division, whose activities contributed heavily to the company's near collapse.

AIG has received more than $170 billion in public money since October, as part of a rescue plan that gave the U.S. government an 80 percent stake in the company..

Cuomo said in a letter to Rep. Barney Frank, the head of the House Financial Services Committee, that his office had subpoenaed AIG for the names of the employees who received bonuses

Seventy three AIG employees got retention bonuses of $1 million or more, including the 11 who are no longer with the company, Cuomo said. Seven of the recipients got more than $4 million each, with the highest payout being $6.4 million.

Although AIG agreed not to make any bonus payments from its $600 million deferred compensation pool, it tapped a separate retention bonus pool for last week's payments.

AIG contended that the employees who got bonuses were vital to unwinding the financial products business, which marketed credit default swaps and other exotic and risky instruments.

Cuomo noted that AIG's unwillingness to identify those employees makes it impossible for outsiders to evaluate that claim, or to understand why money went to people who have left the company.

"Until we obtain the names of these individuals, it is impossible to determine when and why they left the firm and how it is that they received these payments,'' he said.

According to Cuomo's letter, 22 AIG employees got bonuses of $2 million or more, collecting $72 million between them. That amounts to more than 40 percent of the total payout.

AIG Chairman Edward M. Liddy said in a letter to Treasury Secretary Timothy F. Geithner that the company was contractually obligated to make the payments.

Liddy even argued that breaching the contracts could lead some of AIG's counterparties in trillions of dollars worth of financial transactions to declare the company in default, triggering even bigger economic claims that could doom it

Bank of Marin has notified the Treasury Department that it intends to redeem the $28 million in preferred stock it sold to the government in December, making it the fifth bank to officially opt out of the Troubled Asset Relief Program.

President Russell A. Columbo said in a letter to customers and shareholders that Bank of Marin agreed to take the money to help stimulate the local economy at a volatile time for the financial markets.

Congress voted in October to authorize $250 billion in government investment in U.S. banks through TARP initiative called the Capital Purchase Program. The capital injections were intended to shore up battered balance sheets and spur lending.

Columbo noted that Bank of Marin, which is based in Novato, Calif., has abided by the spirit of the TARP legislation. It originated $27.1 million in new loans within a month of getting the money, he said.

"However, the rules of the TARP program have changed frequently and have had unforeseen negative implications as to how we can best run our business,'' Columbo said in his letter. "We have operated successfully as an independent institution for nearly 20 years, and while we respect the goals of the TARP program, we believe we are closest to the needs of our local community. As a result, our Board of Directors and senior management team have determined it is in the best interest of our shareholders, customers and employees to end our participation in the Capital Purchase Program and continue to operate independently."

Meanwhile, the president of another San Franciso area bank said it also intended to return its TARP money. Brian Garrett, who runs Community Bank of the Bay in Oakland, told the San Francisco Business Times that its board had authorized the return of $1.75 million it got in January.

Citigroup Inc. said in an SEC filing Monday that Chief Executive Vikram Pandit had total compensation of $10.8 million last year. But that figure does not reflect the original value of stock and options he got when he joined the company at the start of 2008.

Citigroup said in the proxy statement for its annual shareholders meeting that the stock awards were worth nearly $37.3 million at the time they were granted.

The commentary and charts in Citigroup's filing were confusing enough that many news outlets reported without caveats that Pandit's pay package was worth $10.8 million.

Citigroup got $25 billion in taxpayer capital in October through the Troubled Asset Relief Program, and has since received an additional $20 billion. Banks that accept goverment aid become subject to restrictions on executive compensation.

Pandit's salary for 2008 was $958,333. That pay, plus the value of the restricted stock and options he got as a sign-on bonus, brought his total compensation to $38.2 million.

However, a steep drop in Citigroup's stock has wiped out most of the stated value of those awards. The company said the shares that Pandit received were worth $1.83 million as of last Thursday.

In its summary compensation table, Citigroup valued the restricted stock and options that Pandit received at $9.84 million, a number that it said reflected the accounting costs it recorded for those awards.

Pandit and Chief Financial Officer Gary Crittenden received no bonuses or performance-based equity awards last year. Citigroup listed Crittenden's total compensation for 2008 at $12.2 million, down from $19.4 million the previous year. Most of that compensation was stock that has declined significantly in value.

Crittenden's salary was $500,000 last year. His compensation also included $126,256 worth of ground transportation, which works out to an average of $345 a day.

Three other Citigroup executives fared much better in the cash compensation department. The company awarded them bonuses that it described as "deferred cash retention awards.''

James Forese, co-head of Citigroup's global markets business, was granted $5.26 million. Ajay Banga, chief executive of Citigroup's Asia Pacific operations, and Stephen Volk, the company's vice chairman, were granted $3.6 million each.

Those awards were granted in January of this year but included in their compensation totals for 2008. The three also got performance-based stock and option awards. Citigroup valued those at $3.5 million for Forese and $2.6 million for Banga and Volk.

State Street Corp. said Chairman Ronald E. Logue got $28.7 million in total compensation last year, a period in which the company's shares lost nearly 47 percent of their value.

Unlike some of the companies in its peer group, State Street remained profitable, with earnings rising 13 percent from 2007.

State Street got $2 billion in taxpayer capital last October as one of the first companies to sell stock to the government under the Treasury Department's $700 billion Troubled Asset Relief Program. By accepting the money, the company agreed to abide by new restrictions on executive compensation.

Logue's total compensation rose 1.3 percent from 2007. According to State Street's proxy statement for its annual meeting in May, he got $1 million in salary last year, unchanged from the previous year. Logue got no bonus, in keeping with the company's decision not to award any incentive compensation to its top executives last year. He got a cash bonus of $3.75 million in 2007.

Logue received stock awards that State Street valued at $13.4 million, an increase from $7.96 million in 2007. According to the proxy statement, he also got stock options and stock appreciation rights the company valued at $6.44 million, down from $8.2 million last year.

State Street said the stock awards were granted in February 2008 and were part of his incentive compensation for prior years. It said the amounts listed for both categories represented the accounting expenses that the company incurred, rather than their current value.

Logue's stock awards in 2008 included a grant of 50,287 restricted shares. They were worth $81.71 each when they were issued, putting their total value at $4.11 million. At State Street's current stock price, those shares are worth about $1.16 million.

Logue also was awarded stock appreciation rights covering 256,701 shares, at a base price of $81.71. State Street valued that award at $5.41 million. With the steep decline in the company's stock, those rights are currently worthless.

State Street's stock started 2008 at $81.20 a share, and ended at $39.33. It has continued falling in the first three months of this year, closing Monday at $23.12.

Logue's compensation for 2008 also included a $7.78 million increase in the actuarial present value of his accumulated benefits under the company's defined and supplemental pension plans.

State Street said it provided Logue with a car and "driver/security specialist,'' at a cost of $34,695. It also provided home security, at a cost of $18,329.

Joseph J. Hooley, State Street's president and chief operating officer, had total compensation of $11.6 million last year, up 12.6 percent from 2007. The salary portion of that was $763,452, which amounted to an increase of 5.3 percent.

Chief Financial Officer Edward J. Resch had total compensation of $11.4 million, as did Vice Chairman Joseph C. Antonellis. State Street said Hooley and Antonellis also were provided cars and drivers, as well as home security.

American International Group Inc. finally revealed which financial institutions benefited most from the $170 billion government rescue package that has kept the firm out of bankruptcy.

The three biggest recipients of the public money that AIG passed along to counterparties in various transactions were Goldman Sachs Group Inc. ($12.9 billion), Societe Generale Group ($11.9 billion) and Deutsche Bank ($11.8 billion).

Bank of America Corp. and Merrill Lynch & Co., also figured prominently on the list of payees that AIG included in a surprise press release. The two companies, which completed a merger on Jan. 1, received a collective $12 billion.

AIG got an emergency $85 billion loan from the Federal Reserve last September, as part of a rescue plan that gave the government an 80 percent stake in the insurance and investment firm. The aid package later grew to twice that amount as AIG's troubles deepened.

AIG has been under intense pressure from members of Congress to reveal where the money pouring in and out of the company went.

AIG said $22.4 billion of the initial $85 billion went to provide counterparties to certain credit default swap transactions with additional capital. The biggest recipients of those payments, made between Sept. 16 and Dec. 31, were Societe General, the big French bank ($4.1 billion), Deutsche Bank, of Germany ($2.6 billion) and Goldman Sachs, which has headquarters in New York ($2.5 billion).

Credit default swaps are insurance-like transactions in which a buyer makes payments to a seller -- in this case AIG -- in return for a payout if a specific bond or other debt security goes into default. AIG got hammered when the economy slumped and defaults rose, leaving it unable to make good on all of its obligations.

In November, AIG and the Federal Reserve Bank of New York created an entity called Maiden Lane III to buy the securities underlying some of the credit-default swap transactions from the counterparties, thus cancelling the contracts.

AIG said $27.1 billion was paid out in those transactions. Societe Generale got $6.9 billion from Maiden Lane III, Deutsche Bank got $2.8 billion and Goldman Sachs got $5.6 billion.

Henry M. Paulson Jr., who was Treasury Secretary when the AIG rescue package was put together, is the former chairman and chief executive of Goldman Sachs. Timothy F. Geithner, who succeeded Paulson at Treasury, was president of the Federal Reserve Bank of New York and also played a key role in the AIG bailout.

For five months, BailoutSleuth has been waiting for the Treasury Department to provide a complete, unredacted copy of its services agreement with Bank of New York Mellon, the master custodian for the $700 billion Troubled Asset Relief Program.

We finally located one, on a web site that the Treasury Department set up to post copies of its investment contracts with banks, its loan deals with auto makers and other TARP-related documents.

Although the link to the Bank of New York Mellon contract didn't work, we deleted some extraneous elements from the web address and were able to access the document.

The contract reveals information that was blacked out in an earlier version that the Treasury Department made public when it hired the company in October. That version obscured all details of Bank of New York Mellon's compensation, marking an inauspicious start to the Treasury Department's pledge of transparency.

As master custodian, the bank is responsible for keeping track of the billions of dollars in cash and securities flowing through TARP. It also is supposed to assist in the valuation and sale of those assets.

The contract we found on the Treasury Department's web site shows that, for the period from Oct. 14, 2008 through Nov. 30, 2008, Bank of New York Mellon was to be paid a flat fee of $3.87 million. Since Dec. 1, it has been paid under a formula that involves the total dollar amount of the Treasury's investments in bank stock through the so-called Capital Purchase Program, plus the number of transactions completed under other TARP initiatives.

The agreement calls for Bank of New York Mellon to receive a monthly fee equal to one-twelfth of 0.0015 percent of the total amount invested in the shares of the banks, credit card companies and other institutions. The minimum annual fee is $2 million.

As of Friday, when the Treasury Department completed the purchase of $1.2 billion of preferred stock in Discover Financial Services, the total amount invested was at least $198.2 billion. That figure would translate to an annualized fee of $2.97 million.

Another bank has been approved for taxpayer capital through the Treasury Department's Troubled Asset Relief Program, which is facing a growing number of defections by prior recipients.

American Community Bancorp Inc., of Evansville, Ind., said it was approved to sell $7.5 million in preferred stock to the government. It is the parent company of the Bank of Evansville. The company reported profits of $1.3 million for 2008, up 157 percent from the prior year. However, it posted a $180,872 loss for the fourth quarter, primarily because of increased loan-loss provisions.

Meanwhile, Sun Bancorp Inc. said it filed notice with the Treasury Department to redeem the $89.3 million in shares it sold to the government through the TARP Capital Purchase Program. Sun Bancorp is based in Vineland, N.J. It has $3.6 billion in assets and operates 70 Sun National Bank branches in its home state.

"When the Capital Purchase Program became available to well capitalized and healthy financial institutions like Sun, it was a positive partnership between the government and business to stimulate the economy through additional lending and support,'' President Thomas X. Geisel said in a prepared statement. "The partnership then became politicized, the rules and regulations changed, and the dynamics of the partnership substantially shifted. These changes significantly restricted the way we support our customers and communities, as well as the way we run our business."

Sun Bancorp is the fourth TARP recipient, out of nearly 500, to notify the Treasury Department of its intent to pull out of the program. Signature Bank, of New York, said Tuesday that it intended to return the $120 million it received.

The chief executive of Independent Bank Corp., which operates Rockland Trust in Massachusetts, said it also might return its $78 million in TARP money. Christopher Oddleifson told The Patriot Ledger in Quincy, Mass., this week that revised compensation rules for banks getting taxpayer capital could make it harder for the company to recruit and retain talented managers.

The Treasury Department has completed investments in 22 additional banks, bringing the number of institutions that have received taxpayer capital within striking range of 500.

The latest banks to sell shares to the government through the $700 billion Troubled Asset Relief Program included 16 that had not been on BailoutSleuth's running tally of companies approved for aid.

The 22 banks on Tuesday's list got $284.7 million. First Busey Corp., of Urbana, Ill., accounted for $100 million of that total. It announced last month that it had been approved for TARP funds.

Park Bancorporation Inc., of Madison, Wis., sold $23.2 million in preferred stock to the government. The bank, like most of the others on the latest list, is privately held.

First Reliance Bancshares Inc., of  Florence, S.C., got $15.3 million in TARP funds. First Reliance reported profits of $625,632 for 2008, off 75 percent from 2007. It posted a loss of $1.6 million in the fourth quarter, primarily because of reserves for troubled loans.

Three Texas banks also received taxpayer capital in the latest round of deals, which closed on Friday. First Texas BHC Inc., based in Fort Worth, Texas, got $13.5 million. It operates Southwest Bank. Farmers & Merchants Bancshares Inc., of Houston, got $11.0 million and BOH Holdings Inc., also of Houston, got $10 million.

PeoplesSouth Bancshares Inc., of Colquitt, Ga., got $12.3 million in TARP funds, and Blue Ridge Banchares Inc., of Independence, Mo., got $12.0 million.

Nine other banks that were new to BailoutSleuth's running tally got less than $10 million each. They were:

Regent Bancorp Inc. (Davie, Fla.) -- $9.98 million

Highlands Independent Bancshares Inc. (Sebring, Fla.) -- $6.7 million

First Southwest Bancorporation Inc. (Alamosa, Colo.) -- $5.5 million

Germantown Capital Corp. (Germantown, Tenn.) -- $4.97 million

Pinnacle Bank Holding Co. (Orange City, Fla.) -- $4.39 million

Marine Bank & Trust Co. (Vero Beach, Fla.) -- $3 million

AmeriBank Holding Co. (Collinsville, Okla.) -- $2.49 million

Merchants and Planters Bancshares Inc. (Toone, Tenn.) -- $1.88 million

Community Bancshares of Kansas Inc. (Goff, Kan.) -- $500,000

Four months have passed since BailoutSleuth filed Freedom of Information Act requests for unredacted copies of the Treasury Department's contracts with six companies hired to provide financial and legal services to its Troubled Asset Relief Program.

To date, we have received no decision from the government.

As BailoutSleuth previously reported, the Treasury Department blacked out or deleted compensation figures and other information from the public versions of the contracts it posted on its web site.

The Treasury Department's contract with Bank of New York Mellon, the master custodian for all TARP assets, blacked out the sections of the contract that outlined how much the firm would be paid for its services and how its fees would be determined.

A report on TARP transparency by the Government Accountability Office put the estimated value of the deal at $20 million over three years.

The Treasury Department's contacts with two accounting firms, Pricewaterhouse Coopers LLP and Ernst & Young, also blacked out information about their deals. Pricewaterhouse Coopers was hired to provide internal controls for the $700 billion TARP fund, while Ernst & Young was hired for general accounting and consulting.

The Treasury Department's press release on the accounting contracts did include dollar amounts for the initial orders. But the GAO report showed that the contracts have since been modified or expanded, and that payments to those firms have far exceeded the original amounts.

The Treasury Department also blacked out or deleted sections of its agreements with three law firms - Simpson Thacher & Bartlett LLP, Hughes Hubbard and Reed LLP and Squire Sanders Dempsey LLP.

The Treasury Department said its deals with Hughes Hubbard and Squires Sanders would be worth around $5.5 million per firm, making them the second and third biggest TARP contacts.

BailoutSleuth will keep pushing for full disclosure of the contract details and report back on what we find.

Two more banks have received taxpayer capital through the Treasury Department's $700 billion Troubled Asset Relief Program.

First Federal Bankshares of Arkansas Inc., based in Harrison, Ark., sold $16.5 million in preferred stock to the government. First Federal had profits of $2.5 million last year, off 3.8 percent from 2007. However, fourth quarter earnings were down 70 percent.

Citizens Bancshares Corp., of Atlanta, said it got $7.46 million through the Treasury Department's Capital Purchase Program, part of the broader TARP initiative. Citizens Bancshares had profits of $1.17 million through the first nine months of 2008, down nearly 38 percent from the same period in 2007. It said an increase in loan-loss provisions was the biggest factor in the earnings decline.

Citizens Bancshares is the parent company of Citizens Trust Bank, which primarily serves African-American customers . It has branches in Georgia and Alabama.

Under the Capital Purchase Program, banks sell the government preferred stock that carries a cash dividend of 5 percent a year for the first five years, and 9 percent thereafter.

Roughly 470 banks have received taxpayer capital through the program.

If it's Friday, regulators somewhere must be closing a bank. This week, it was Freedom Bank of Georgia, a four-branch operation in the northeastern corner of that state.

The Georgia Department of Banking and Finance shut down Freedom Bank and appointed the Federal Deposit Insurance Corp. as receiver. It arranged for Northeast Georgia Bank to take over the deposits and most of the assets.

Friday's action marked the eighth straight week that regulators have closed a failing bank. So far this year, 17 banks have gone under, compared with 25 for all of 2008.

Freedom Bank was based in Commerce, Ga. It had approximately $161 million in deposits and $173 million in assets. Its branches will reopen on Monday as Northeast Georgia Bank locations.

The FDIC said Northeast Georgia Bank agreed to buy $167 million of the failed bank's assets, at a discount of $13.65 million. The FDIC and the bank also agreed to a loss-sharing arrangement covering $96.5 million of those assets.

The FDIC estimated that the bank closing will cost its deposit insurance fund $36.2 million.

German American Bancorp Inc. said this week it would turn down $25 million in taxpayer capital from the Treasury Department and raise funds through a private debt offering instead.

German American, of Jasper, Ind., joined roughly 50 other banks that were approved for aid through the $700 billion Troubled Asset Relief Program but have publicly opted out, saying they didn't need the money or objected to the restrictions that would come with it.

The banks renouncing TARP include institutions of all sizes, from all parts of the country. New York Community Bancorp Inc., of Westbury, N.Y., turned down $596 million, which would have made it one of the top 30 TARP recipients.  Landmark Bancorp Inc., of Manhattan, Kan., declined $12 million in taxpayer capital. American River Bancshares, of Sacramento, Calif, turned down $6 million.

BailoutSleuth compiled its list of TARP decliners from press releases issued by the banks, from Securities and Exchange Commission filings and from news accounts. Our roster does not include another large group of banks that would have qualified for TARP funds but withdrew their applications before they were approved.

To see an alphabetical list of the banks that have turned down their TARP allotments, click on the link that leads to the rest of the story.

If you know of any institutions we've overlooked, please let us know and well add their details.

A New York Times report about former Countrywide Financial Corp. executives profiting from the Federal Deposit Insurance Corp.'s liquidation of distressed home loans led BailoutSleuth to wonder what else the agency was selling and how it was screening buyers.

We found that the FDIC has outsourced the job, turning to several  private companies to auction off the assets left behind by 25 bank failures last year and 16 so far this year.

This week, the FDIC is auctioning off $485 million in performing and non-performing loans originated by Silver State Bank in Henderson, Nev., which was closed by regulators on Sept. 5. Bids for that pool of loans were due Tuesday.

First Financial Network Inc., of Oklahoma City, Okla., is overseeing the auction, along with at least one other loan sale on the FDIC's calendar. The Debt Exchange Inc., a Boston company that does business as DebtX, is handling the sale of $532 million in loans for the FDIC later this month. Those assets -- which represent the remains of five different banks -- include everything from real estate loans to consumer loans and commercial and industrial loans.

Keefe Bruyette & Woods Inc., a New York investment firm, handled the recent sale of $1.45 billion in residential and commercial loans from the failed First National Bank of Nevada, in Reno, and an affiliate, First Heritage Bank of Newport Beach, Calif.

BailoutSleuth has been hearing some interesting things about that auction, in which a Minnesota bank got $730 in residential real estate loans and an obscure Salt Lake City company got more than $700 million in commercial real estate loans. We will report more details on that sale as we confirm what we've been told.

The New York Times reported this week that Private National Mortgage Acceptance Company LLC (PennyMac), run by former Countrywide President Stanford L. Kurland, has been snapping up loans from struggling or failed financial institutions.

In one deal, the Times reported, PennyMac bought control of roughly $560 million in largely delinquent home loans for $43.2 million. Those loans were originated by First National Bank of Nevada, which was seized by regulators in July. First National Bank's portfolio was marketed for the FDIC by Stifel, Nicolaus & Co. of St. Louis.

PennyMac is backed by two hedge fund operators, BlackRock Inc. of New York and Highfields Capital Management LP of Boston.

The New York Times reported that more than a dozen former Countrywide executives are working at PennyMac, which has headquarters in Calabasas, Calif. Countrywide has been widely blamed for helping touch off the nation's current economic crisis, by making loans to legions of risky borrowers who either defaulted on their mortgages or are in danger of doing so. 

Countrywide's activities are the subject of investigations by the Securities and Exchange Commission and the Justice Department, Neither probe has produced charges against the company or its executives. Bank of America Corp. bought Countrywide last year.

The Federal Deposit Insurance Corp. said last week that it sold $1.45 billion in real-estate loans through partnership deals with two private bidders, unloading some of the assets of a failed Nevada bank.

One of the winning bidders was a generically named entity called Diversified Business Strategies. The press release provided no additional information, but BailoutSleuth found that Diversified Business Strategies was a limited liability company formed in May 2007 by a Salt Lake City lawyer and two real estate agents.

No sooner had the FDIC announced the deal than Sorenson Group Holdings LLC, controlled by one of Utah's most prominent families, said it had acquired Diversified Business Strategies' interest in $701 million of commercial real estate loans once held by failed banks.

BailoutSleuth has been trying to get more information from the FDIC about how Diversified Business Strategies won the bidding, what it presented as its bona fides and whether it disclosed it would be selling the loans. The FDIC has not responded to our queries, nor have the other participants in the deals.

We will provide more information on this deal as we uncover it.

The Treasury Department said Tuesday it completed investments in 28 U.S. banks, including 21 that had not previously appeared on BailoutSleuth's running tally of institutions getting taxpayer capital.

The deals were worth $394.9 million, lifting the total amount that the government has invested through its stock-purchase program to nearly $196.8 billion.

All but a handful of the banks on this week's list are privately held. The Treasury Department's stock purchases are part of the broader $700 billion Troubled Asset Relief Program.

Lakeland Financial Corp., of Warsaw, Ind., got the biggest capital injection -- $56 million. Its subsidiary, Lake City Bank, serves 12 counties in northern Indiana. The company reported profits of $19.7 million for 2008, up 2.6 percent from 2007.

TriState Capital Holdings Inc., which has headquarters in Pittsburgh, got $23.0 million in taxpayer capital. The privately held company has branches in Pennsylvania, Ohio and New Jersey.

Central Bancorp Inc., of Garland, Tex., sold $22.5 million in preferred stock to the government, while Community First Inc., of Columbia, Tenn., sold $17.8 million worth.

Southern First Bancshares Inc., of Greenville, S.C., got $17.3 million in TARP funds. The company reported profits of $1.9 million last year, down 44.1 percent from 2007. It attributed the decline to increased loan-loss provisions and a writeoff on its shares in Fannie Mae, the mortgage giant that was taken over by the government.

Two other banks got more than $10 million each in the Treasury Department's latest round of investments. Under the program, the government buys preferred stock that pays cash dividends of 5 percent annually for the first five years, and 9 percent thereafter.

Medallion Bank, of Salt Lake City got $11.8 million in taxpayer capital. Ridgestone Financial Services Inc., of Brookfield, Wis., got $10.9 million.

To see the other banks that got TARP funds in the latest round of transactions, follow the link to the rest of the story.

Four more banks have announced their acceptance into the Treasury Department's $700 billion Troubled Asset Relief Program.

National Bancshares Inc., based in Bettendorf, Iowa, said it sold $24.6 million in preferred stock to the government in a deal completed Friday. The privately held company owns THE National Bank, which has branches in Iowa, Illinois and Minnesota.

D.L. Evans Bank, of Albion, Idaho, said it was approved for $19.9 million in taxpayer capital. The privately held company has 13 branches throughout Idaho. 

FNB Bancorp, of South San Francisco, Calif., got $12 million in TARP funds. FNB reported earnings of $3.96 million in 2008, down 40.7 percent from 2007. The company took $3.04 million in loan-loss provisions, up from $690,000 a year earlier.

Another Bay Area institution, California Bank of Commerce, said it sold $4 million in preferred stock to the government. The bank, in Lafayette, Calif., was created in 2007 and targets middle-market businesses and professionals.

The Treasury Department has been releasing weekly summaries of completed TARP transactions, in keeping with its pledge to disclose the deals within five to 10 business days of their closing.

A new list is likely in the next day or so. To find summaries of all of the Treasury Department's bailout-related transactions, click on this link.

Iberiabank Corp., which got $90 million in taxpayer capital through the Treasury Department's Troubled Asset Relief Program, says it objects to changes in the program and wants to return the money.

The company said it has filed notice with the Treasury Department to redeem the preferred stock it sold the government, along with accumulated interest of $575,000.

Iberiabank is based in Lafayette, La. and has banking operations in eight states. It was approved last November for up to $115 million in TARP money. It finalized a deal in early December for $90 million.

Although Iberiabank initially thought it could use the money to help stimulate the credit markets -- as Congress intended when it approved the $700 billion TARP initiative -- new rules governing participants changed its mind, President Daryl G. Byrd said.

"We believe recent actions, interpretations, and commentary regarding various aspects of the program places our Company at an unacceptable competitive disadvantage,'' Byrd said in a prepared statement. "Our Board of Directors has determined that continued participation in this program is no longer in the best interest of our Company and its shareholders."  

Iberiabank is the only bank that has formally begun the process of buying back the shares it issued to the government. But Northern Trust Corp., of Chicago, said it also intends to repay the $1.57 billion in TARP money it received "as quicky as possible.''

Northern Trust drew criticism last week for splurging on three days of festivities tied to its sponsorship of a Professional Golfers Association of America event, the Northern Trust Open.

According to news reports, the company spent $100,000 to hire the band Chicago for a private concert, and paid undisclosed sums to two other musical acts, Sheryl Crow and Earth, Wind & fire. In addition, it flew employees and guests to the Los Angeles area for the event and put them up in some of the top hotels in the area.

Northern Trust said it did not spend any TARP money on the event, noting that the program prohibits the use of those funds for advertising, marketing and entertainment.