Banks Line Up for Government Money

As of Tuesday morning, 21 regional banks have been preliminarily approved for capital assistance through the U.S. Treasury’s Capital Purchase Program (CPP). This total is on top of the nine largest banks that were initially approved.

CPP is a program the government launched to encourage U.S. financial institutions to build capital and increase the flow of financing to businesses and consumers, in the hopes that it would bolster the national economy. The government will invest up to $250 billion in senior preferred bank shares, the funds coming from the $700 billion bailout plan approved by Congress in early October. The program is voluntary and at the discretion of banks to apply. Banks have until 5:00pm on November 14 to apply.

The government has already spent $156.6 billion, including $125 billion for the nine largest banks, of the initial $250 billion set aside for the program. The nine largest banks and the amount of money they will receive include:

• Citigroup $25 billion
• JP Morgan $25 billion
• Bank of America $25 billion
• Wells Fargo $25 billion
• Goldman Sachs $10 billion
• Morgan Stanley $10 billion
• Bank of New York $3 billion
• State Street Corporation $2 billion

In addition, 20 Regional banks have accepted the program and have projected amounts needed for bank shares. These banks and projected amounts they will receive include:

• PNC Financial $7.7 billion
• Provident Bank $5.4 million
• Sun Trust $3.5 billion
• Capital One $3.55 billion
• Key Corp $2.5 billion
• National City Corp. $395 million
• First Niagara Financial Group Inc. $ 186 million
• Northern Trust $1.5 billion
• Huntington Bancshares $1.4 billion 
• Regions Financial Corp $3.5 billion
• First Third Bancorp $3.4 billion
• BB&T $3.1 billion
• First Horizon $866 million
• Comerica Incorporated $2.25 billion
• UCBH Holdings $298 million
• Washington Federal $230 million
• Valley National Bancorp $330 million 
• Zions Bancorporation $1.4 billion 
• Umpqua Holdings Corporation $214 million

Old National Bancorp is still considering if they want to take part in the program.

PNC agreed Friday to buy National City Corp for $5.58 billion. The acquisition of the bank will make PNC the 5th U.S. bank by deposits.