TCF Financial Corp. (TCB) said Monday it got government approval
to buy back all the preferred stock it issued to the Treasury
Department under the Troubled Asset Relief Program for $361.2
million, joining a number of other smaller banks that have returned
the government funds because of the restrictions tied to them.
The Minnesota-based bank also slashed its common-share dividend
80% to 5 cents a share, which it said was in accordance with recent
industry guidance from the Federal Reserve Board.
TCF's shares were recently down 5.4% at $14.28 amid weak opening
for U.S. stock markets.
"Participation in the TARP has created a competitive
disadvantage for TCF and we believe it is in the best interest of
our stockholders to repurchase these shares," said Chairman and
Chief Executive William Cooper.
The company had said earlier this month it filed the necessary
paperwork to begin repaying the Treasury.
Although it has gotten easier for banks to return the
government's funds, regulators must still approve the transactions
to make sure institutions maintain adequate capital levels.
Executives at other banks, such as Bank of Marin Bancorp (BMRC)
CEO Russ Colombo, have said they exited or want to exit the program
because of dividend restrictions, compensation limits, continuously
changing rules and a provision that could have allowed for
government officials to sit on a company's board.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com