Treasury Says 11th Bank Has Repaid Bailout Fund

MARTIN CRUTSINGER

WASHINGTON (AP) — A Texas bank has become the 12th financial institution to return the money it received from the government's $700 billion bailout fund.

The Treasury Department reported Thursday that Sterling Bancshares Inc. of Houston had paid back the $125.2 million loan it received from the government in December.

The department also reported that the amount of new loans being provided from the bailout fund to Chrysler LLC had been reduced to $3.03 billion, from $3.34 billion announced last week because the company had remaining reserves it could contribute to the debtor in financing process. The U.S. loan amount had earlier been reduced because of support provided by the Canadian government.

Sterling Bancshares did not pay the government for the warrants received as part of the financing agreement. So far, only one bank, Centra Financial Holdings Inc. of Morgantown, West Virginia, has paid the government for the warrants, which gave the government the option to buy stock shares in the bank.

Many banks are lobbying the government to drop the requirement that the banks must pay for the warrants.