Four more banks have announced their approval to receive taxpayer capital through the Treasury Department’s $700 billion Troubled Asset Purchase Program.
By User, In News, At January 9, 2009 Tags: Banks, Preferred Stock, TARP, Treasury department
Four more banks have announced their approval to receive taxpayer capital through the Treasury Department’s $700 billion Troubled Asset Purchase Program. But a growing number of financial institutions are opting not to take the government money.
At least five banks said this week that they had decided against selling preferred stock to the government. They included United Bankshares Inc., which was approved for $197.3 million in aid, and Bridge Bancorp Inc., which was approved for $15 million
United Bankshares said that although it was honored to be selected for the Treasury Department’s stock-purchase program, it decided that going forward with the deal would not have been in the best interests of shareholders.
“The program’s restrictions on possible future dividend increases, the dilution to earnings, and the uncertainty surrounding future requirements of the program outweighed the benefits of United’s participation,” Chairman Richard Adams said.
The new additions to the Treasury Department’s aid list included PremierWest Bancorp, of Medford, Ore, and German American
Bancorp of Jasper, Indiana. PremierWest was approved to sell $41 million in preferred stock to the government; German American, the holding company for a group of small banks, was approved for $25 million.
PremierWest said Thursday it lost $3.09 million in the fourth quarter of 2008, compared to a profit of $3.75 million in the same period in 2007. Its net income for the full year was $648,000, down 96 percent from the prior year.
German American earned $3.5 million in the fourth quarter, up 25 percent from a year earlier. It said profits for the year totaled $13 million, an increase of 38 percent. The bank noted that its territory, Southern Indiana and parts of Kentucky, had not been as badly hurt by the economic and housing crisis as other parts of the country.
Americana Bancorp, of New Castle, Ind., said it was approved for as much as $9.79 million in taxpayer capital. Heritage Bankshares Inc. of Norfolk, Va., was approved for $5.7 million.