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TARP Bank Program's Positive Return Hits $18 Billion

It might have been a risky investment at the time, but the Troubled Asset Relief Program (TARP) continues to look like a better idea with each repayment.

Following Regions Financial Corporation's repurchase of its outstanding $3.5 billion in TARP Capital Purchase Program (CPP) preferred stock, Treasury officials noted last week that positive return from TARP bank programs had reached $18 billion. The agency invested a total of $245 billion in the TARP bank programs, and has thus far has recovered $263 billion through repayments, dividends, interest and other income.

In addition to their $3.5 billion repayment, Regions Financial has also paid taxpayers $593 million in dividends over the life of its TARP investment, and the Treasury continues to hold warrants to purchase common stock in the company. The disposition of those warrants will provide an additional positive return for taxpayers.

"This repayment is another milestone in our efforts to wind down TARP and provides an additional profit for taxpayers on the program's investment in banks," said Assistant Secretary for Financial Stability Tim Massad. "Replacing temporary government support with private capital is an important component of continuing to restore financial stability."

While TARP bank programs have already turned a profit, on the whole, TARP still remains slightly in the red. To date, taxpayers have recovered 81%, or $337 billion of the $415 billion in total funds disbursed across all TARP programs.

Jacob Barron, CICP, NACM staff writer