August 30, 2009
Authored by: Robert Klingler
On August 27, 2009, the Treasury’s Inspector General released its audit report on the approval of City National Corp.’s receipt of $400 million in TARP Capital Purchase Program funds. The report concludes that City National met the required criteria to receive funding, and that the OCC and Treasury followed the policies and procedures in place at that time for approving City National.
Unlike prior reports, the Appendix to the Treasury’s Inspector General report explicitly provides that acceptable performance ratios for TARP CPP recipients:
- Classified Assets/Net Tier 1 Capital plus Allowance for Loan and Lease Losses (ALLL) ratio of less than 100 percent;
- Non-Performing Loans plus Other Real Estate Owned/Net Tier 1 Capital plus ALLL ratio of less than 40 percent; and
- Construction and Development Loans/Total Risk-Based Capital ratio less than 300 percent.