Banks Announce Government Investments
Updated from 7:25 a.m. EDT
A host of regional banks on Monday said they had agreed to sell preferred equity stakes to the federal government, in an expected expansion of a program to stabilize the U.S. banking system.
KeyCorp
(KEY) - Get Report
,
Huntington Bancshares
(HBAN) - Get Report
,
Fifth Third Bancorp
(FITB) - Get Report
,
SunTrust Bank
(STI) - Get Report
,
Comerica
(CMA) - Get Report
Northern Trust
(NTRS) - Get Report
and
Capital One Financial
(COF) - Get Report
all said they had agreed to participate in the program, in which the Treasury Department will invest $250 billion in capital from the Troubled Asset Relief Program, or TARP, into banks to encourage stalled lending.
PNC Financial Group
(PNC) - Get Report
on Friday said it had accepted a $7.7 billion investment through the program, as it agreed to a $5.7 billion deal for
(NCC)
. The deal was seen as a potential bellwether for how banks will use the capital.
First Horizon
(FHM)
on Friday said it had received $866 million through the program. Birmingham, Ala.-based
(RF) - Get Report
last week also said the government had accepted its application to be part of the program.
In all, almost two dozen
are expected to receive investments. The government had planned to announce the investments Friday or Monday, but held off after fearing that banks that did not receive investments would be seen as weak and further disrupt shaky equities markets.
The regional bank investments by the federal government follow an initial round of investments in the nation's largest banks, including
Citigroup
(C) - Get Report
,
JPMorgan Chase
(JPM) - Get Report
and
Bank of America
(BAC) - Get Report
.
Capital One and SunTrust announced the two largest investments, with $3.55 billion and $3.5 billion, respectively. Fifth Third accepted a $3.4 billion infusion, KeyCorp took in $2.5 billion, Comerica got $2.25 billion, Northern Trust received $1.5 billion and Huntington garnered $1.4 billion.
Some of the banks took other measures to preserve capital. SunTrust said it would cut its dividend 30%.
This article was written by a staff member of TheStreet.com.
