Five banks approved; one says no thanks

Four more banks announced their participation in the Treasury Department 's stock purchase program Thursday, while a fifth said it was declining the taxpayer money that it was selected to receive.

Evans Bancorp Inc., of Hamburg, N.Y., said its board of directors concluded that the bank did not need the $11.9 million it was allocated, because it already had a strong balance sheet and had little exposure to subprime loans or other troubled assets.

"Other considerations with this decision include the potential impact on our shareholders as the result of dividend constraints placed by the government and uncertainty revolving around the terms of the agreements,'' President David J. Nasca said in a prepared statement. "Evans Bank is actively lending in our community, and we are more than able to meet customer demands and execute our strategic plan without these funds.''

Evans Bank is the first financial institution we have seen that applied for a portion of the $250 billion in government money, was approved and then rejected the entire investment. The other four banks announcing their selection for the program on Thursday would receive a little over $117 million.

MainSource Financial Group, based in Greensburg, Ind., said it was approved to sell $57 million in preferred stock to the Treasury Department. MainSource's earnings for the third quarter were off 3.6 percent from the same period of 2007. It said its expenses for loan losses were $5.3 million, compared to $1.2 million a year earlier.

MainSource has branches in Indiana, Ohio and Kentucky. It acquired 1st Independence Financial Group Inc., of Lousiville, Ky., in August.

Shore Bancshares Inc., based in Easton, Md., said it was approved for $25 million in taxpayer capital. Shore is the parent company of three banks - Talbot Bank, Centreville National Bank of Maryland and Felton Bank. The company's earnings for the third quarter and first nine months of the year were little changed from 2007.

Bar Harbor Bankshares, of Bar Harbor, Maine, was approved to sell $18.75 million in preferred stock to the government. The company said its earnings for the third quarter were up 21.5 percent, largely because of investment gains, and that its non-performing loans remained at relatively low levels by industry standards.

Timberland Bancorp, of Hoquiam, Wash., is eligible for $16.6 million in new capital through the Treasury Department. Timberland's earnings for its 2008 fiscal year fell 50.9 percent, reflecting a loss on an investment and increased loan-loss provisions.

The preferred stock that the banks are selling to the Treasury Department pay an annual dividend of 5 percent the first five years and 9 percent thereafter. The deals also give the government warrants to buy common stock, which could provide a return to taxpayers if the banks' share prices rise over time.