So what is it: strong or troubled?
Remember the huge bank bailout called TARP, which stands for Troubled Asset Relief Program? Here is a website where you can track the TARP money. Which Alabama based bank has taken the most TARP money? Regions Bank. They’ve taken $3.5 billion in TARP money so far.
I thought that was a bit odd given their recent advertising campaign where they talk about how strong and safe they are. Here’s a press release they put out boasting that they are a “strong national institution” that has “worked with the FDIC to provide a safe harbor for the customers of a failed bank.”
Maybe I don’t understand the banking business, but I don’t see how you can be both a “strong” institution and be a federal welfare case to the tune of $3.5 billion.
Update: Regions is suspending retirement contributions to employee retirement accounts to save money. Sounds like the move of a strong company to me.
I work for Regions Bank here in North Alabama. I would like to reiterate that the point of TARP was for the government to help the strongest financial institutions remain strong. Not every bank was offered this money. And Regions happens to be the largest bank in Alabama so of course they’ll be taking the most TARP money in this state.
Also, Regions has been asked by the FDIC twice in the past 6 months to take over 2 failing banks in Georgia. This is why TARP exists. TARP helps Regions stay strong and Regions keeps the financial market running a little bit more smoothly by keeping banks open instead of letting the FDIC have to step in and start a bidding war.
And lastly, part of the rules with TARP is that the financial institutions that partake in the money must cut their expenses as part of the deal. How is Regions doing this? Well instead of firing what the equivalent dollar value of 1400 employees is, they’re suspending matching 401(k) contributions temporarily until the markets stabilize. I think this was an EXCELLENT choice on the part of Regions. Cut some contributions to retirement instead of firing people. This is not the only way Regions is cutting expenses by the way.
Oh and did you see what Colonial Bank’s stock price is? It was 45 cents as of yesterday’s closing. They may be acquired by another bank pretty soon…
You go girl, well put! I’m also a Regions employee. I’d rather see the suspension of company matches to my 401k than job losses. I’m very proud each time the FDIC taps our bank to take over deposits for other failing banks. You know they’re scrutinizing all banks and the fact that they’ve chosen us several times to take over the failed banks speaks volumes about their faith in our stability. Regions is a strong bank and our leadership has always taken the right steps to protect our stockholders, customers and employees.