Michigan bank approved for TARP

Birmingham Bloomfield Bancshares Inc., a small Michigan bank, said it was approved for $1.63 million in taxpayer capital through the Treasury Department's Troubled Asset Relief Program.

The company operates the Bank of Birmingham, in the northern suburbs of Detroit. It had total assets of $67.3 million at the end of 2008, up from $47.3 million a year earlier. Its loans outstanding on Dec. 31 were $56.8 million.

Robert E. Farr, president and chief executive, said the bank has been careful in its lending and is solid financially. Unlike some bankers, Farr expressed no reservations about taking on the federal government as an investor.

"The injection of TARP funds will both strengthen our balance sheet and enable us to prudently increase lending,'' he said in a prepared statement. "One especially important commercial-lending area for us is the area's small and medium companies, which have been virtually squeezed out of the credit markets. We are optimistic about 2009 and our prospects for continued growth.''

Banks participating in TARP get a capital injection from the government in return for preferred stock that pays a dividend of 5 percent a year for the first five years and 9 percent therafter.

Companies that take the money also have to accept certain restrictions on executive compensation, dividend increases, stock buybacks and other uses of money.