Regions Financial Corp. has repaid the $3.5 billion it received from the US government during the financial crisis, the bank announced today. The Birmingham-based bank was the largest bank that still had to pay back a loan from the Troubled Asset Relief Program, or TARP, the Atlanta Journal-Constitution reported.
"This repayment is another milestone in our effort to wind down TARP and provides an additional profit for taxpayers on the program's investment in banks," Assistant Secretary for Financial Stability Tim Massad said, according to the Wall Street Journal. "Replacing temporary government support with private capital is an important component of continuing to restore financial stability."
Regions said it had repurchased shares of preferred stock the US government held as collateral, eliminating the need the need to pay $175 million in dividends annually, the Atlanta Journal-Constitution reported. The bank said it had paid the US Treasury $593 million in dividends on the shares since it entered the TARP program in 2008.
Regions raised part of the money to pay back the government with a $900 million stock offering and the sale of brokerage Morgan Keegan & Company Inc., the Atlanta Journal-Constitution reported. The sale, to Raymond James Financial Inc. for $1.2 billion, was completed on Monday.
With Region’s repayment, TARP's bank programs have earned a $18 billion profit, Treasury said, according to the Wall Street Journal.
Now the only bank still in TARP that received a bailout of more than $1 billion is Salt Lake City, Utah-based Zions Bancorp, the Wall Street Journal reported. Zions has repaid half of the $1.4 billion investment it got from the government so far and expects to pay back the rest later this year.