Small Miidwest Banks Taking Tarp $ This Time

Posted on August 9th, 2009 in All Articles.

Under regulatory pressure and facing few capital-raising options, some small lenders are looking to the government for help. Again.
By David Ellis, CNNMoney.com staff writer
August 7, 2009: 11:37 PM
NEW YORK (CNNMoney.com) — For some banks, the grim reality is that another dose of TARP may be their best shot at salvation.

Overwhelmed by loan losses, some hard-hit lenders are hitting up the Treasury Department for even more money from the Troubled Asset Relief Program.

Last week, Midwest Banc Holdings, a community bank based just outside of Chicago, outlined an extensive capital raising initiative after suffering its second consecutive quarterly loss. The bank said it had applied for as much as $138 million under Treasury’s Capital Assistance Program, or CAP, an extension of the original TARP. The bank received $84.7 million in TARP funds last December.

Citizens Republic Bancorp, a Flint, Mich.-based bank that has suffered along with the local automotive industry, revealed in late June that it too was considering tapping up to $290 million from CAP, part of which would be used to redeem a portion of the Treasury’s original $300 million investment made last December.