U.S. Treasury selling stock warrants in TARP recipient Wintrust

Wintrust Financial

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STEVE CHIOTAKIS: Taxpayers didn't just bail out too-big-to-fail banks. The government also gave money to community banks. And now with an economic recovery going on, the banks are paying taxpayers back. Today, in Illinois, the investment could really pay dividends.

Marketplace senior business correspondent Bob Moon explains.


BOB MOON: The government will be auctioning off so-called stock warrants in Chicago-area based Wintrust Financial, which allow holders to buy shares at discounted prices. Banking industry consultant Bert Ely says these kinds of sales are adding to tens of millions in dividend payments Uncle Sam has already raked in.

BERT ELY: This is a little bit of sweetener, so to speak, for taxpayers, which basically increases the profit that the government makes on its investment in the bank.

Provided all the warrants being offered get snapped up, today's auction could raise a minimum of $21 million. But Ely notes the government has been selling its interests in larger banks that might be more attractive to investors.

ELY: The big banks, where you have a very substantial amount of stock outstanding, lots of stockholders, the warrants are easier to sell.

Whatever the government takes in, these sales are bolstering the positive side of the ledger for the Troubled Asset Relief Program. On the other hand, the AIG and car industry bailouts and foreclosure prevention program are expected to lose money, for a projected net loss of as much as $28 billion.

I'm Bob Moon for Marketplace.

About the author

Bob Moon is Marketplace’s senior business correspondent, based in Los Angeles.

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