TARP's Dividend Skippers

30 Pages Posted: 9 Aug 2010 Last revised: 28 Nov 2010

Dobrina Georgieva

University of St. Thomas

Linus Wilson

University of Louisiana at Lafayette - College of Business Administration

Date Written: November 24, 2010

Abstract

Most of the banks receiving capital injections from the Troubled Asset Relief Program (TARP) issued preferred stock to taxpayers. This paper looks at the factors that affect publicly traded banks’ ability to pay the scheduled TARP preferred stock dividends. Smaller banks with weaker capital ratios and more problem loans are significantly more likely to suspend payments of their bailout dividends.

Keywords: bailout, banking, Capital Purchase Program, dividends, Emergency Economic Stabilization Act, hybrid securities, preferred stock, Small Business Lending Fund, trust preferred, TRUPS, TARP

JEL Classification: G21, G28, G38

Suggested Citation

Georgieva, Dobrina and Wilson, Linus, TARP's Dividend Skippers (November 24, 2010). Available at SSRN: https://ssrn.com/abstract=1654677 or http://dx.doi.org/10.2139/ssrn.1654677

Dobrina Georgieva

University of St. Thomas ( email )

1000 LaSalle Ave.
Minneapolis, MN 55403
United States

Linus Wilson (Contact Author)

University of Louisiana at Lafayette - College of Business Administration ( email )

Department of Economics & Finance
214 Hebrard Blvd., Room 326
Lafayette, LA 70504-0200
United States
(337) 482-6209 (Phone)
(337) 482-6675 (Fax)

HOME PAGE: http://www.linuswilson.com

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