Five more banks have announced their acceptance into the Treasury Department's capital purchase program. They will receive as much as $242.2 million of the $250 billion that the government plans to inject into U.S. financial institutions.
1st Source Corp., based in South Bend, Ind., said it was approved to sell up to $111 million in preferred stock to the government. The company, which serves northern Indiana and southwestern Michigan, said it was still weighing whether to go ahead with the deal.
"1st Source is already well capitalized so we must balance the additional good we may be able to accomplish in our community and for our clients against this relatively expensive equity investment by the federal government,'' said Christopher J. Murphy III, chairman and chief executive officer.
The company reported a slight drop in profits for the third quarter and first nine months of the year, citing an $8.07 million charge for its investment in Fannie Mae and Freddie Mac, the government-sponsored mortgage companies that were put into conservatorship in September. On the same day it announced its results, 1st Source announced a 14.3 percent increase in its quarterly stock dividend.
West Bancorporation Inc., of West Des Moines, Iowa., said it was approved to sell $36 million in stock to the Treasury Department. It is the first bank in Iowa to gain admittance to the program. West Bancorporation lost $360,000 in the third quarter, compared to a profit of $4.95 million in the same period of 2007. It had previously announced that it lost $4 million on loans to a customer that had been the victim of fraud, and $1.72 million on an unsecured note issued by bankrupt Lehman Brothers Holdings Inc.
BNC Bancorp, based in Thomasville, N.C., is getting $31.3 million in government money. It said it would use the additional capital for general corporate purposes, with an emphasis on meeting the needs of its customers and the communities it serves. BNC is the parent company of the Bank of North Carolina. Its earnings for the third quarter fell nearly 43 percent, with provisions for bad loans doubling from the same period a year earlier.
Crescent Financial Corp., of Cary, N.C., said it was approved to $24.9 million in preferred stock. Eastern Virginia Bankshares, of Tappahannock, Va., was approved for $24 million.
LSB Corp., of North Andover, Mass., said it would get $15 million in government money. It is the parent company of River Bank, which has seven branches in Massachusetts and New Hampshire. LSB reported a loss of $8.3 million for the third quarter, largely reflecting a writedown on its investments in Fannie Mae and Freddie Mac, the government-sponsored mortgage companies.
Gerald T. Mulligan, LSB's president and chief executive, had harsh words for the Treasury Department after it took control of Fannie Mae and Freddie Mac.
"In my opinion, the hasty and ill considered U.S. Treasury conservatorship of Fannie Mae and Freddie Mac needlessly destroyed value and reduced capital in hundreds of well-run community banks that have been otherwise unaffected by, and blameless for, the problems confronting the national economy,'' Mulligan said when announcing LSB's quarterly earnings in October.
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