Five more banks approved for funding

Five more banks announced their participation in the Treasury Department's capital purchase program on Monday, including one that paid roughly $800,000 in severance to its president and chief executive when he retired Sept. 30.

Washington Banking Co., of Oak Harbor, Wash., said it had won approval to sell $26.4 million in preferred stock to the government. The company owns Whidbey Bank, which has 19 branches in the Puget Sound region.

Washington Banking had earnings of $1.9 million in the third quarter of 2008, off 32 percent from a year earlier. Net income for the first nine months was $6.7 million, compared with $7.5 million from the same period last year.

Washington Banking said part of the decline was attributable to the retirement package that CEO Michal D. Cann received when he stepped down. Cann announced his retirement on July 2, a few weeks after the company terminated its planned merger with Frontier Financial Corp. of Everett, Wash.

Washington Banking said the two events were not related. According to the Securities and Exchange Commission filing on Cann's severance agreement, he was to get two years of his base salary, calculated as the highest annual figure from the three previous years. He also was to get two times his most recently paid annual bonus, or two times the average of his three prior annual bonuses -- whichever was greater. In addition, Washington Banking gave him the title to a 2005 Chevrolet Tahoe he used for company business.

Cann's salary for the company's most recent fiscal year was $260,950. He was to collect half of his severance payment as a lump sum, and the other half in monthly installments through Sept. 30, 2009.

The other four banks that announced their participation in the Treasury Department's capital purchase program on Monday were First Financial Holdings Inc., based in Charleston, S.C.; TIB Financial Corp., of Naples, Fla.: Citizens South Banking Corp. of Gastonia, N.C.; and Seacoast Commerce Bank of Chula Vista, Calif.

First Financial Holdings said it was approved to sell $65 million in preferred stock to the Treasury Department. First Financial had net income of $22.6 million for its recently completed fiscal year, down 10 percent from the previous year.

TIB Financial said it would receive $37 million in taxpayer money through the government's capital purchase program. The company posted a loss of $2.2 million in the third quarter, compared to a profit of $494,000 in the same period last year.

Citizens South was approved for $20.5 million in new capital. Seacoast Commerce Bank, which operates from a single branch and primarily serves individuals and small- and middle-market businesses, was approved for $1.8 million.

The Treasury Department plans to invest $250 billion in U.S. banks as part of the broader $700 billion Troubled Asset Relief Program.