TARP Capital Purchase Loss Breaks $100 Billion Barrier on Nationalization Fears

NEW YORK — According to the Ethisphere TARP Index, when markets closed on Friday, February 20, 2009, the government’s Troubled Asset Recovery Program (TARP) investment was down approximately 54.9 percent or $107.7 billion out of the original investment principal of $195.5 billion. Created by the Ethisphere Institute, a non-partisan research think tank, the Ethisphere TARP Index tracks the U.S. Federal Government’s return on its investments under the capital purchase portion of TARP. To date, each taxpaying household has lost $768 of its investment.

“Fears of the U.S. Government nationalizing a number of banks caused the Dow to drop to its lowest point in six years, led by many of the financial institutions in the TARP Index," said Stefan Linssen, Managing Editor of Ethisphere Magazine and one of the lead research analysts behind the Ethisphere TARP Index. "The decline ended when the Obama administration announced it has no plans to nationalize the banking system and reports emerged that the U.S. Treasury will provide more details on how it’s going to handle the financial crisis next week.”

Results for Week Ended February 20, 2009

“Calamity Investment” results for the week include:

1. Citigroup (C) – loss of $21.8 billion or 87.2 percent
2. Bank of America (BAC) – loss of $20.0 billion or 79.9 percent
3. Wells Fargo (WFC) – $16.3 billion or 65.2 percent
4. JP Morgan (JPM) – loss of $12.5 billion or 50.0 percent

Investment return statistics under the Ethisphere TARP Index are presented on the comparative basis of both including and excluding several “calamity investments” to provide a more accurate cross-section of the Treasury’s investing campaign. The Adjusted Ethisphere TARP Index and below rankings exclude investments in Bank of America, Citigroup, JP Morgan and Wells Fargo.

The Adjusted Ethisphere TARP Index was down approximately 38.6 percent or $37 billion out of the original investment principal of $95.5 billion.

Top performers on an absolute basis include:

1. Morgan Stanley (MS) – gain of $699.4 million or 7.0 percent
2. BB&T Corporation (MSDXP) – gain of $63.9 million or 2.0 percent
3. 1st Source Corporation (SRCE) – gain of $17.5 million or 15.7 percent

Top performers on a relative basis include:

1. Great Southern Bancorp (GSBC) – gain of 27.1 percent or $15.7 million
2. Monarch Community Bancorp (MCBF) – gain of 17.7 percent or $1.2 million
3. 1st Source Corporation (SRCE) – gain of 15.7 percent or $17.5 million

Worst performers on an absolute basis include:

1. US Bancorp (USB) – loss of $4.1 billion or 62.6 percent
2. SunTrust Banks (STI) – loss of $3.8 billion or 78.8 percent
3. PNC Financial Services (PNC) – loss of $3.8 billion or 50.2 percent

Worst performers on a relative basis include:

1. Huntington Bancshares (HBAN) – loss of 85.1 percent or $1.2 billion
2. Webster Financial Corp (WBS) – loss of 80.5 percent or $321.9 million
3. Marshall & Ilsley Corporation (MI) – loss of 79.4 percent or $1.4 billion

Weekly reports detailing performance and drivers will be published at http://ethisphere.com/ethisphere-tarp-index-report/. Through the Index, Ethisphere hopes to encourage participating companies to promote transparency, accountability and ethical business practices related to the TARP funds.

Methodology
In addition to the aggregate investment basis costs and current valuation of investments under TARP’s capital purchase program, the Ethisphere TARP Index also tracks individual TARP investments. The methodology is based on the cumulative total of public and private companies’ value, as well as interest set to have been received by The U.S. Treasury.

About Ethisphere Institute
The research-based Ethisphere Institute is a leading international think-tank dedicated to the creation, advancement and sharing of best practices in business ethics, corporate social responsibility, anti-corruption and sustainability. The Institute’s associated membership group, the Ethisphere Council, is a forum for business ethics that includes over 200 leading corporations, universities and institutions. The Ethisphere Council is dedicated to the development and advancement of individuals on its membership council through increased efficiency, innovation, tools, mentoring, advice, and unique career opportunities. Ethisphere Magazine, which publishes the globally recognized World’s Most Ethical Companies Ranking™, is the quarterly publication of the Institute. More information on the Ethisphere Institute, including ranking projects and membership, can be found at http://www.ethisphere.org.