Beginning October 2008 through October 2009, the U.S. Treasury Department has been bailing out U.S. banks. In efforts to undergird the economy, and stabilize the struggling institutions, over $200 billion has been paid out to over 600 mortgage lenders through the Treasury’s Capital Purchase Program.
Surprisingly, almost $71 billion has been paid back to the U.S. Treasury so far. That’s almost 36 percent of $200 billion being paid back by 41 different banks. Interestingly to note, almost 7 percent of the banks who borrowed federal money owed 36 percent of the government’s capital purchase.
Looking at the extensive list of all lenders included can make your head spin. Names like 1st Enterprise Bank, 1st FS Corp. and 1st Source Corporation start off the registry that progresses to a multitude of variations of Bancorp names, ending on Yadkin Valley Financial Corporation, York Traditions Bank and Zion Bancorporation.
The Freeport State Bank of Harper, Kansas received the lowest bailout in the amount of $301,000. It looks like CitiGroup Inc. and JP Morgan Chase & Co. of New York, along with Wells Fargo & Co. based in California, received the largest bailouts in the amount of $25 billion each. Out of the three lenders receiving the biggest bailouts, only JP Morgan Chase & Co. is noted as having paid anything back to the government. To the credit of JP Morgan Chase & Co., the group has repaid the entirety of the $25 billion borrowed.
Not surprisingly, lenders in New York State lead U.S. territory and states in the Union with $79.5 billion in bailout bucks. The ten states that top the list are:
1. New York State - $79.5 billion
2. North Carolina - $28.6
3. California - $27.6 billion
4. Pennsylvania - $9.4 billion
5. Ohio - $7.65 billion
6. Minnesota - $7 billion
7. Georgia - $6.2 billion
8. Illinois - $4.5 billion
9. Virginia - $4.2 billion
10. Connecticut - $3.8 billion
States in which lenders borrowed the least include the following bottom ten:
1. Washington, D.C. - $6 million
2. Wyoming (all in Buffalo) - $8.1 million
3. Rhode Island - $31 million
4. New Hampshire - $40.8 million
5. New Mexico - $45.5 million
6. Nebraska - $51.6 million
7. Maine - $58.4 million
8. Idaho - $81.7 million
9. Arizona - $83 million
10. North Dakota - $85.8 million
The following states and companies are in the top ten to have paid back bailout money in the amounts indicated:
1. New York State — $51.7 billion
– JP Morgan Chase & Co. - $25 billion
– Goldman Sachs Group Inc. - $10 billion
– Morgan Stanley - $10 billion
– American Express Company - $3.4 billion
– First Niagara Financial Group - $184 million
– Signature Bank - $120 million
– Alliance Financial Corporation - $27 million
– Bank of New York Melon Corp. - $3 billion
2. Minnesota - $7 billion
– U.S. Bancorp - $6.6 billion
– TCF Financial Corp. - $361 million
3. Virginia - $3.7 billion
– Capital One Financial Corp. - $3.55 billion
– First Community Bank Shares - $41.5 million
4. North Carolina - $3.15 billion
– BB&T Corp. - $3.13 billion
– Crescent Financial Corporation - $24.9 million
5. Massachusetts - $2.1 billion
– State Street Corp. - $2 billion
– Independent Bank Corp. - $78 million
– Berkshire Hills Bancorp Inc. - $40 million
6. Illinois - $1.6 billion
– Northern Trust Corp. - $1.6 billion
7. New Jersey - $397 million
– Valley National Bancorp - $300 million
– Sun Bancorp, Inc. - $89.3 million
– Somerset Hills Bancorp - $7.4 million
8. California - $248 million
v CVB Financial Corp. - $130 million
– Westamerica Bancorporation - $83.7 million
– Bank of Marin Bancorp - $28 million
– First ULB Corp. - $4.9 million
– Manhattan Bancorp - $1.7 million
9. Washington - $200 million
– Washington Federal Inc. - $200 million
10. Texas - $200 million
– Sterling Bancshares, Inc. - $125 million
– Texas Capital Banchshares, Inc. - $75 million
Don’t let the numbers fool you. Just because a bank borrowed little doesn’t necessarily mean that it is a strong institution. On the contrary, it could be a smaller bank with shallower pockets. That should be even more cause for concern if the bank has not yet repaid borrowed bailout money to the government.
On the other hand, it should be encouraging if your bank is one of the lenders who landed in the top ten list of those who repaid their debt to the government. Also encouraging is that the $150 billion government bailout of the 1980s for the savings and loan debacle served the U.S. economy well. If history repeats itself, this will set the banks on track to overcome the current U.S. economic challenges.
Ki graduated from UT, and stayed in Austin to live and work. He authored a website, which serves Austin real estate buyers. It has a feature, which includes free searches of properties in the Austin MLS. His site also has statistical information on Austin real estate and a graph which shows mortgage rate history.