2 Banks Exit TARP, With More to Follow

NY Times ^ | June 17, 2009 | Peter Edmonston

[ml/nj]

With the wiring of nearly $10 billion to the United States Treasury, U.S. Bancorp and BB&T on Wednesday became the first large financial institutions to announce that they have repaid the government in full for the preferred shares it bought last fall under the federal bailout program.

U.S. Bancorp, based in Minneapolis, said Wednesday morning it redeemed $6.6 billion in preferred stock from the Treasury. BB&T, based in Winston Salem, N.C., said that it had bought back the preferred shares for $3.1 billion plus a final dividend payment of about $13.9 million.

Morgan Stanley and Goldman Sachs were also expected to return their federal aid on Wednesday, signaling that the nation’s top bankers are regaining their confidence after the financial crisis that shook Wall Street last fall.

BB&T, U.S. Bancorp, Goldman, Morgan Stanley and six other large financial firms won approval last week to repay the money they received under the Troubled Asset Relief Program, a move that would bring them close to cutting their financial lifeline from Washington.

Among the other banks cleared to exit the TARP were JPMorgan Chase, American Express and Bank of New York Mellon.

[Nachoman]

The gov’t should declare the payment late and charge the banks 29% interest.