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Phoenix Withdraws Tarp App

By Allison Bell

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Another insurer has decided to end efforts to qualify for Troubled Asset Relief Program aid.

Phoenix Companies Inc., Hartford, says it is withdrawing its TARP application because it has been unable to complete efforts to acquire American Sterling Bank, Sugar Creek, Mo., from American Sterling Corp., the bank’s parent company.

“Phoenix had pursued TARP for potential additional financial flexibility in this difficult market environment but remains well-capitalized,” the company says in a statement.

Phoenix has received approval to become a savings and loan holding company, and it had an acquisition agreement with American Sterling Corp.

But the Federal Deposit Insurance Corp. has been appointed as the receiver for American Sterling. Metcalf Bank, Lee’s Summit, Mo., is assuming American Sterling’s deposits and buying the bank’s assets from the FDIC, Phoenix says.

Because the FDIC receivership would keep American Sterling Corp. from satisfying some closing conditions, the receivership “effectively terminates the acquisition agreement between Phoenix and American Sterling Corporation,” Phoenix says.

Other companies that have ended TARP application efforts in recent weeks include Genworth Financial Inc., Richmond, Va.; MetLife Inc., New York; and Protective Life Corp., Birmingham, Ala.