Daniel Gross

Treasury Reaps $72 Million in 2 TARP Transactions

Nearly four years after the Lehman Brothers debacle, the government rescue efforts and bailouts continue to wind down. The central component of the TARP was the Capital Purchase Program (CPP), under which Treasury purchased preferred shares in hundreds of banks and received warrants in return. Banks started to return the capital in June 2009, with the largest institutions repaying first.

In all, CPP recipients took $204.9 billion in public funds. Banks have returned $190.58 billion of that capital. Add in dividends ($11.68 billion), gains on the sale of Citigroup common stock ($6.85 billion), and funds received from the sale of warrants ($7.67 billion) and the CPP has turned a "profit" thus far of about $11.88 billion. (Here's the most recent TARP summary).

Last week, Treasury added to these returns with two transactions that brought in a combined $72 million.

Pinnacle Financial Partners, which took $95 million in December 2008, had returned $23.75 million in December 2011. On June 20, it returned the remaining $71.25 million. Treasury still holds warrants in the company.

Treasury reaped $760,000 selling warrants it had received in Wilshire Bancorp, based in Los Angeles, Calif.

Daniel Gross is economics editor at Yahoo! Finance.

Follow him on Twitter @grossdm; email him at grossdaniel11@yahoo.com.

View Comments (1)