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"Treasury Funding 4 Banks in D.C. Area"

By Alejandro Lazo
Washington Post Staff Writer
Tuesday, November 18, 2008; D04


The Treasury Department said yesterday that it has made investments in
four banks with a presence in the Washington area, adding to a list of
financial firms that are participating in the government's efforts to
prop up the U.S. financial system.

The deadline for publicly traded banks and thrifts to apply for
federal rescue funds from the Treasury's capital investment program
was Friday, and a flurry of financial firms announced that they would
apply as that deadline closed.

The Treasury has agreed to invest $175.3 billion in 69 financial
institutions nationally, according to a report released yesterday by
the New York investment bank Keefe, Bruyette & Woods. The Treasury
said yesterday that 29 of those companies have already received the
money.

Among firms with a local presence that received Treasury money were
Capital One Financial of McLean, Provident Bankshares of Baltimore,
SunTrust Banks of Atlanta and Winston-Salem, N.C.-based BB&T.

Bert Ely, a local banking analyst, said that while some banks have
publicly announced that they are not interested in taking federal
dollars, access to the money has increasingly become a stamp of
approval for others.

"There are some banks that have said flat out, 'We are not
interested,' but there are other banks where the approval of
participating in the program is seen as a sign that they are not on
the verge of failure," he said.

Several banks also have expressed interest in using the money to fund
acquisitions of other firms. How banks use the money has become an
issue of contention recently, with congressional leaders pushing for
banks to make more loans with the dollars they get.

Capital One, one of the largest issuers of credit cards in the United
States, received about $3.6 billion from the government, according to
the Treasury. SunTrust and BB&T received $3.5 billion and $3.1
billion, respectively; Provident received $151.5 million.

Neither SunTrust nor BB&T issued statements about how they would use
the money. Tatiana Stead, a spokeswoman for Capital One, said in an e-
mail that the company would use the money "consistent with restoring
the liquidity and stability of our financial system."

Jeff K. Davis, an analyst who follows Provident for Memphis-based Wolf
River Capital, said the bank likely will use the money to increase its
lending in the Washington area, but may fund acquisitions next year,
if the economy improves.

Gary N. Geisel, chairman and chief executive of Provident, said in an
interview that the priority will be on increasing lending in the
Washington area.

[Staff writer Binyamin Appelbaum contributed to this story.]

http://www.washingtonpost.com/wp-dyn/content/article/2008/11/17/AR2008111703187.html?nav=hcmoduletmv