WASHINGTON – WASHINGTON (AP) — A sale of First Financial Bancorp warrants has brought the government $2.97 million, the latest move to recoup costs for taxpayers from the $700 billion financial bailout.
The Treasury Department says it sold 465,117 warrants at a price of $6.70 per warrant. Treasury had set a minimum bid price of $4. Warrants give the purchaser the right to buy common stock at a fixed price.
The auction of the warrants, which was conducted Wednesday, represent an additional return for the government on the $80 million in support it provided the Cincinnati bank at the height of the financial crisis in December 2008.
The warrant auction represented First Financial's last link to the bailout fund, known as the Troubled Asset Relief Program or TARP. The bank had repaid its $80 million in support in February of this year.
Financial institutions have been eager to cut ties to the bailout program to escape various restrictions imposed on banks including limits on executive compensation and dividend payments.
The First Financial Bancorp warrants give the holders the right to buy an equal amount of shares of First Financial stock at a price of $12.90.
The auction price of $6.70 means that the stock would need to be selling above $19.60 for an investor to recoup the $6.70 paid for the warrant and the option price of $12.90 for the stock.
In trading Wednesday, First Financial stock closed at $15.87. Over the past year, the stock has traded in a range of $7.21 to $21.35.