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 Treasury Secretary Timothy Geithner offered some extra assistance to local banks during a speech Wednesday morning at the Independent Community Bankers of America Annual Washington Policy Summit.Obviously the government sees community banks as a good investment. How about private equity investors? During his talk, Geithner announced plans to seek additional funds from the Capital Purchase Program. "We plan to reopen the application window for banks with total assets under $500 million," Geithner announced, "and raise from 3% of risk-weighted assets to 5% the amount for which qualifying institutions can apply." The Treasury is also extending the deadline for small banks to form a holding company to qualify for the Capital Purchase Program. The new capital is being funded by TARP repayments expected from larger banks. Earlier this week, Capital One Financial Corp. (NYSE:COF), U.S. Bancorp (NYSE:USB) and BB&T Corp. (NYSE:BBT) announced plans to sell stock to repay investments the U.S. Treasury made under its Troubled Asset Relief Program. U.S. Bancorp of Minneapolis said it would sell about $2.5 billion of common stock. McLean, Va.-based Capital One, predominantly a credit card issuer, said it would sell 56 million common shares, which were valued at about $1.76 billion based on Friday's closing price. The government's investment in community banks has paid off, and Geithner ticked off several examples of how these entities have helped keep local credit markets percolating since the banking crisis began last fall. In a column just last week, readers from Capital Insight Partners expanded on why this also an excellent time for private equity to start investing in community banks. "Well-managed community banks are particularly attractive opportunities because their reporting and structure tend to be relatively transparent," wrote . The authors also noted that many community banks are trading at a fraction of their tangible book value, so there may be plenty of strong performers out there, preferring private investment over going to the government well one more time. - Tom Groppe @dealscape: Follow me on Twitter Read full text of Geithner speech Read "The bank next store" column on private equity investment in community banks
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