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Protective Life (NYSE: PL | Quote | Chart | News | PowerRating) said it plans to buy Florida-based Bonifay Holding Co. Inc. and Bank of Bonifay, a subsidiary. The acquisition depends on negotiation of a definitive agreement and approval of its participation in the CPP, said the Birmingham, Ala.-based Protective. It said it filed a bank holding company application with the U.S. Federal Reserve Board of Governors and an application for the Treasury's CPP under the Troubled Asset Relief Program.
Principal Financial (NYSE: PFG), which has a federal savings bank subsidiary, also said it applied to participate for up to $2 billion in the CPP as a savings and loan holding company. The life insurer, which is also a top U.S. seller of 401(k) retirement plans, said that if it participates, it would issue preferred shares and warrants to the Treasury.
On the morning of Nov. 19, Protective Life's stock was down 7.78% from the previous close, trading at $7.59 a share, while Principal's stock was down 7.41%, trading at $13.25 a share.
Though several large life insurers were made to disclose their applications in the process of explaining why they had applied to change their holding company structures, most in the industry are remaining mum on whether they had submitted applications ahead of Treasury's 5 p.m. Nov. 14 deadline. The program is open only to federally regulated, U.S.-controlled banks, savings associations, and certain bank and savings and loan holding companies (BestWire, Nov 18, 2008).
Some companies confirmed they are not participating.
Chris Winans, a spokesman for Axa Financial, said when Axa released its "activity indicators for the for the first nine months of 2008, we said we had no current plans to raise capital. Accordingly, Axa Financial has not applied to TARP and has no plans to apply." Axa Financial does not own a bank or thrift in the United States, he said in a telephone interview. The New York-based Axa Financial is a unit of Axa SA of France.
State Farm, which owns a bank and has life insurance operations, will not participate in the Treasury program, said Jeff McCollum, a State Farm spokesman.
A spokesman for Nationwide Financial (NYSE: NFS) said it reviewed its options and decided not to participate in TARP. The company also owns a bank.
Allstate Financial couldn't immediately be reached for comment.
Dutch financial services firm Aegon NV -- already participating in a 3 billion euro ($3.78 billion) rescue plan involving the Dutch government and the company's largest shareholder, Association Aegon -- is making a bid to purchase Crofton, Md.-based Suburban Federal Savings Bank. The company's Cedar Rapids, Iowa-based subsidiary Transamerica Life Insurance Co. has filed an application with the OTS to be recognized as a savings and loan holding company (BestWire, Nov. 18, 2008).
Genworth Financial (NYSE: GNW), which could be eligible for $1 billion in Treasury funds, has recently announced plans to purchase Maple Grove, Minn.-based InterBank fsb. Hartford Financial (NYSE: HIG) announced a $10 million deal to purchase Sanford, Fla.-based Federal Trust Bank, and has said it will commit roughly $100 million to recapitalize the lender. The multiline insurer estimates it could be eligible for between $1.1 billion and $3.4 billion under the guidelines Treasury has set out for the CPP (BestWire, Nov. 18, 2008).
Other life insurers could already be eligible to participate in the CPP by virtue of being organized as bank holding companies, as in the case of MetLife Inc., (NYSE: MET) the largest U.S. life insurer, and number two insurer Prudential Financial Inc. (NYSE: PRU), which operates a savings banks supervised by the OTS. Prudential Financial spokesman Bob DeFelippo and MetLife spokesman John Calagna both offered no comment on whether their companies had applied to participate in the CPP (BestWire, Nov. 18, 2008).
(By Fran Matso Lysiak, senior associate editor, BestWeek: fran.lysiak@ambest.com)
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