WASHINGTON – As part of its ongoing efforts to wind
down and recover its remaining Capital Purchase Program (CPP) investments under
the Troubled Asset Relief Program (TARP), the U.S. Department of the Treasury
today announced its intention to sell several preferred stock CPP investments.
Treasury intends to conduct auctions for all of its preferred stock (the
CPP Securities) in the following six institutions:
Corporation (Ottawa, IL);
DeSoto County Bank
(Horn Lake, MS);
First Banks, Inc.
Corporation (Rome, GA);
Inc. (Frontenac, MO); and
Severn Bancorp, Inc.
These auctions are part of a
series of auctions that will include the CPP Securities of the 53 financial
institutions included in Treasury’s December 18, 2012 announcement and are
part of the overall strategy that Treasury outlined for winding down its
remaining TARP bank investments in a way that protects taxpayer interests,
promotes financial stability, and preserves the strength of our nation’s
community banks. Treasury indicated that it intends to use a combination of
repayments, restructurings, and sales to manage and recover those remaining
TARP’s bank programs have already earned a significant
profit for taxpayers. To date, Treasury has recovered almost $273 billion from
TARP’s bank programs through repayments, dividends, interest, and other income
– compared to the $245 billion initially invested. Approximately $2
billion of the repayments were refinanced under the Small Business Lending Fund
(SBLF). Congress created the SBLF outside of TARP and required Treasury to let
CPP institutions repay TARP funds by borrowing under that program. Treasury has remaining outstanding CPP
investments in 119 institutions. For more details on Treasury’s lifetime cost
estimates for TARP programs, please visit Treasury’s Monthly 105(a) Report to
Congress on TARP here.
Treasury expects to commence the auctions, which will be offered
principally to domestic qualified institutional buyers and certain domestic
institutional accredited investors, on or about September 12, 2013. The
auctions are expected to close at 6:00 pm, New York City time, on September 17,
2013. These offerings will be executed
using a modified Dutch auction methodology that establishes a market price by
allowing investors to submit bids at specified increments similar to the
process Treasury used to auction other CPP investments. The auction procedures will not include the
submission of “all or none” bids.
Securities that will be sold in the auction have not been and will not be
registered under the Securities Act of 1933, as amended (the Act), and may not
be offered or sold in the United States or to, or for the benefit of, U.S.
persons absent registration under, or an applicable exemption from, the
registration requirements of the Act and applicable state securities law. The CPP Securities will be offered only to
(1) domestic “qualified institutional buyers” as defined in Rule 144A under the
Act, (2) certain domestic institutional “accredited investors” as defined in
Rule 501(a) under the Act that have total assets of not less than $25,000,000
and (3) in certain cases, certain directors and executive officers of the
respective issuers of the CPP Securities.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy the CPP Securities, and shall not constitute an
offer, solicitation or sale in any jurisdiction in which, or to any persons to
whom, such offering, solicitation or sale would be unlawful.