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OTC Bulletin Board and TARP Capital

OTC Bulletin Board and TARP Capital

December 10, 2008

Authored by: Robert Klingler

The Treasury’s fourth round of completed TARP Capital infusions added four more public companies that are traded on the Over-The-Counter Bulletin Board (OTCBB): Blue Valley Ban Corp., Coastal Banking Company, Inc., Manhattan Bancorp, and Oak Valley Bancorp.  As a result, it seems clear that the Treasury is willing to allow public reporting companies that are traded over the OTCBB participate in the TARP Capital program under the public company terms.

As we’ve previously noted, the definition provided by the Treasury of a publicly traded company is “a company (1) whose securities are traded on a national securities exchange and (2) required to file, under the federal securities laws, periodic reports such as the annual (Form 10-K) and quarterly (Form 10-Q) reports with either the Securities and Exchange Commission or its primary federal bank regulator.”  While the Treasury has not defined what constitutes a national securities exchange, the OTCBB is generally not considered a “national securities exchange.”  The SEC does not consider the OTCBB to be a national securities exchange.   Neither does the OTCBB itself, which states that it is “not an issuer listing service, market or exchange.”

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What is "Publicly Traded?"

What is "Publicly Traded?"

November 17, 2008

Authored by: Robert Klingler

1st Financial Services Corporation’s inclusion on the Treasury’s Transaction Report, as an OTCBB company, appears to show that the Treasury is NOT requiring that companies be traded on a national securities exchange in order to participate in the TARP Capital program for publicly traded companies.  The inclusion would also suggest that any company that is required to file periodic reports under the federal securities law: (a) is considered a “publicly traded” company, (b) had a deadline to apply of November 14, 2008, and (c) is not eligible to participate in the newly announced TARP Capital program for private companies.

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Round Two of TARP Capital Injections

Round Two of TARP Capital Injections

November 17, 2008

Authored by: Robert Klingler

On November 17, 2008, the Treasury published an updated Transaction Report, showing 21 new TARP Capital transactions that closed on November 14, 2008, bringing the total number of completed transactions to 30, with a total outlay of $146.8 billion (exclusive of the settlement of Merrill Lynch’s investment of $10 billion, which is pending its merger with Bank of America).

The second round includes many of the nation’s next largest banks, including BB&T, Capital One, Comerica, First Tennessee, Huntington, KeyBank, M&I, Northern Trust, Regions, SunTrust, U.S. Bancorp, and Zions.

The second round also included some smaller community banks:

  • Bank of Commerce Holdings (Redding, California) is the parent holding company of Redding Bank of Commerce, Roseville Bank of Commerce, Sutter Bank of Commerce, and Bank of Commerce Mortgage, with total assets of $618 million as of December 31, 2007.  Bank of Commerce Holdings is traded on the NASDAQ Global Market under the trading symbol BOCH.
  • 1st Financial Services Corporation (Hendersonville, North Carolina) is the parent holding company of Mountain 1st Bank & Trust Company, with total assets of $606 million as of December 31, 2007.  1st Financial Services Corporation is traded on the NASDAQ Over-the-Counter Bulletin Board under the trading symbol FFIS.
  • Broadway Financial Corporation (Los Angeles, California) is the parent holding company of Broadway Federal Savings and Loan Association, with total assets of $357 million as of December 31, 2007.  Broadway Financial Corporation is traded on the NASDAQ Capital Market under the trading symbol BYFC.
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Non-Exchange Listed, Private and Sub S

We spoke with an official with the Federal Reserve Bank of Atlanta official yesterday who informed us that:

  • Non-exchange-listed public companies are being considered “private companies” or as “not publicly traded” by the Treasury Department; and
  • While the federal banking regulators will continue to review applications by private companies at this time, they have been instructed not to forward such applications to the Treasury Department until further guidance is published by the Treasury Department.
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