Amex, Hartford, Synovus Among Companies Bidding for TARP Funds

By Linda Shen

Nov. 18 (Bloomberg) -- American Express Co., Hartford Financial Services Group Inc. and Synovus Financial Corp. are among at least 79 companies applying for about $60 billion from the U.S. Troubled Asset Relief Program.

Banks, savings and loans, insurers and credit companies are all vying for a piece of the remaining $125 billion of Treasury Secretary Henry Paulson's program to recapitalize U.S. lenders and thaw the credit markets. The Treasury has already allocated $125 billion to the nine largest banks.

``Between the worsening economy and our growing largess, it seems like the question ought to be raised of how much $700 billion is going to get you,'' said Anthony Davis, an analyst at Stifel Nicolaus & Co. Inc. Davis said of the 115 banks and savings and loans Stifel covers, less than a dozen have turned down TARP funding.

At least 46 banks and lenders have received preliminary approval to sell preferred stock and warrants to the government. At least 33 other companies have put in applications for another $11.4 billion, including three insurers that may acquire savings and loans in order to access the government cash. Publicly traded bankers had to apply for the Treasury funds by Nov. 14.

The U.S. Treasury said yesterday it had completed deals to provide $33.6 billion in new capital to 21 banks including U.S. Bancorp, Capital One Financial Corp., SunTrust Banks Inc. and KeyCorp. The government is giving closely held banks more time to apply, American Bankers Association spokesman John Hall said Nov. 14. The U.S. Treasury said yesterday Dec. 8 will be the deadline for private banks to apply for capital injections.

Insurers

Lincoln National Corp. and Aegon NV, owner of Transamerica Corp., may buy savings and loan companies in Indiana and Maryland whose methods were found to be ``unsafe and unsound'' by the Office of Thrift Supervision. Hartford is acquiring a Florida lender that was told by the OTS in May to curb lending. Genworth Financial Inc.'s target got a ``cease-and-desist'' order tied to potentially fraudulent loans.

The insurers' plans to buy lenders were disclosed on Nov. 14 by Bill Ruberry, a spokesman for the OTS. Lincoln, Hartford, and Genworth announced their intentions in statements. Aegon spokesman Greg Tucker said the insurer may buy a lender and has applied for Treasury funds.

TARP ``keeps morphing into something different,'' Davis said in an interview yesterday. ``It's ironic this thing was designed initially with a three-page document.''

Earlier this month, the Wall Street Journal reported that American Express would seek about $3.5 billion of TARP funding after transforming itself into a bank holding company Nov. 10. CIT Group Inc., the largest U.S. independent commercial lender, also applied to become a bank holding company and said it would apply for as much as $2.5 billion from the government.

``I've been doing this since the mid-80s, but I've never seen anything like this,'' Davis said.

To contact the reporter on this story: Linda Shen in New York at lshen21@bloomberg.net