Wondering where exactly that mass of financial bailout money is going? The online journalists at ProPublica have some answers, and Northwesterners may be surprised, maybe troubled, by some of them.
Their research finds that as of midday today, $242.02 billion has been designated to 129 financial institutions around the country, to buy senior preferred shares of the various companies. Eight of them are based in the Northwest, six in Washington state, one each in Oregon and Idaho. They are (in order of size): Sterling Financial Corp in Spokane (WA), $303 million; Umpqua in Portland (OR), $214.2 million; Washington Federal in Seattle (WA), $200 million; Banner Corp in Walla Walla (WA), $124 million; Columbia Banking System in Tacoma (WA), $76.9 million; Cascade Financial Corp in Everett (WA), $39 million; Intermountain Community Bancorp in Sandpoint (ID), $27 million; Heritage Financial in Olympia (WA), $24 million.
Unlike the federal bank takeovers, this is a voluntary program, and banks (or banking companies) apply to participate - to sell shares of stock.
Another that should be of regional interest is Wells Fargo - one of the top banking operations in the Northwest - in San Francisco, getting $25 billion. It is in fact one of the biggest dollar recipients, tied for third place overall; first and second go to Citigroup and AIG, respectively. Wells seems on its face a puzzler, since it was praised (and rightly) for avoiding much of the bad-mortgage financial garbage that sank so many others. But Wells is buying Wachovia Corporation, which did make a mass of bad loans, so at least some of that funding is understandable.
But what of the others? Some curious questions start to arise, including the question of how many of these federal stock buys are really needed. At least one Northwest bank CEO says explicitly, in a press release, that his bank didn't need it at all. (more…)