Largest remaining bank exits CPP
WASHINGTON – The U.S. Department of the Treasury today announced that taxpayers received a full repayment from Popular, Inc. (Popular) of $946 million. Popular, the largest bank that remained in the Capital Purchase Program (CPP), recently received regulatory approval from the Board of Governors of the Federal Reserve to repay taxpayers. With this repayment, taxpayers have recovered $1.22 billion of principal and interest from its original investment of $935 million in Popular. Treasury exchanged its CPP preferred stock in Popular for trust-preferred securities in August 2009 as part of a series of capital-strengthening transactions. Taxpayers will continue to hold warrants to purchase an additional 2,093,284 shares of Popular common stock.
“Popular’s repayment is another significant milestone in Treasury’s wind down of the Troubled Asset Relief Program (TARP), a key part of the Administration’s effort to stabilize the financial system during the financial crisis and avert a second Great Depression,” said Acting Assistant Secretary Tim Bowler. “Treasury has now recovered nearly $30 billion more than it disbursed through the bank support programs. We will continue to evaluate strategies to wind down the remaining investments, balancing the speed of exit with maximizing the return to taxpayers.”
To date, taxpayers have recovered a significant profit from TARP’s bank programs. Including the proceeds from Popular’s repayment, Treasury has now recovered more than $274.5 billion from TARP’s bank programs through repayments, dividends, interest, and other income – compared to the $245 billion initially invested. Taxpayers have recovered $439.6 billion including the sale of Treasury’s AIG shares, compared to total TARP investments of $424.5 billion.
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. Each additional dollar recovered from TARP’s bank programs is an additional dollar of profit for taxpayers.
For more details on Treasury’s lifetime cost estimates for TARP programs, please visit Treasury’s Monthly 105(a) Report to Congress on TARP at this link.