gne1963 (79.25)

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5 Regional Banks on TARP Funding: "No Thanks!"

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January 27, 2009 – Comments (3) | RELATED TICKERS: NYB , GBCI , BMTC

From the Mountain Time Zone, you may remember, Glacier Bank (GBCI)... On Dec 30, 2008, Glacier issued this statement: "We greatly appreciate the federal government's recognition of our financial strength in approving Glacier's participation in the TARP Capital Purchase Program. However, with the $94 million in net proceeds from our successful common stock offering, we are already one of the most strongly capitalized banking companies in the country, with total risk-based capital of approximately 16%. Consequently, we do not believe that participation in TARP is in our shareholders' best interests."

On the West Coast, the Bank of Napa (BNNP) announced right before Christmas that, "it will not participate in the Department of Treasury’s Capital Purchase Program (TCPP), and will not accept TARP funds. CEO Tom LeMasters stated, “Having considered our strong balance sheet, well capitalized position, and solid credit quality we determined that TCPP provided no material benefit to the shareholders and customers of Bank of Napa.”

With assets of $32.1 billion, New York Community Bancorp, Inc. (NYB) is the 29th largest US bank and a leading producer of multi-family loans in New York City and the northeast. Last week it announced, "that it has declined to participate in the Capital Purchase Program of the U.S. Treasury’s Troubled Asset Relief Program (“TARP”)." Chairman, President, and Chief Executive Officer Joseph R. Ficalora continued, “We believe that our current capital position is sufficient to support the communities we serve and to enhance shareholder value by growing our assets, our franchise, and our earnings capacity."

From the Mid-Atlantic region, Bryn Mawr Bank Corp, (BMTC) also has declined TARP help: Bryn Mawr CEO Ted Peters said the bank has enough capital and access to a variety of liquidity sources to support its loan growth initiatives. Peters said the bank decided it wasn’t necessary to participate in the program. “As a community bank we did not make sub-prime loans and as a result of our conservative lending practices our balance sheet is strong,” Peters said in a statement. “We are very optimistic about our ability to serve the future borrowing needs of the communities we serve.”

And from Fort Lauderdale, OptimumBank Holdings (OPHC) Chairman of the Board, Albert J. Finch said, "After careful consideration of all factors associated with receipt of TARP funds and the fact that the Company has capital well in excess of that required to be considered well-capitalized under banking regulations, we have decided to decline the TARP money."

So from across the country you see banks with strong balance sheets, access to liquidity, well capitalized asset portfolios, and solid credit quality. Why is that not highlighted in the national press headlines?

It is indeed frustrating, because you know that given all the data, there is no credit crunch at most banks

goodnewseconomist.com

3 Comments – Post Your Own

#1) On January 27, 2009 at 6:02 PM, jgseattle (87.08) wrote:

HP worked with the same local bank until the financing needs of HP out paced the banks ability to lend.

Small community banks have a place and SHOULD have missed this problem because they should know the customers better, and hold the mortgages they issue and not buy mortgages oon the market.

The big banks that do finance a lot of the large business are trouble. And the small banks are looking a lot harder at peoples ability to pay back and job securitty thus leading to less avaliabitly to credit.

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#2) On January 27, 2009 at 6:53 PM, rd80 (99.37) wrote:

It isn't highlighted in the press because it's much easier to sensationalize John Thain spending a million bucks redecorating the office than it is to make a big deal about the mangement at one of these banks doing a good job.

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#3) On January 27, 2009 at 9:54 PM, gne1963 (79.25) wrote:

I'd just like to see some of these solid conservative management team elevated to run some of the elite banks in our top ten, that placed all the stupid junk bets and now are taking the majority of the TARP funds... There is no credit crunch at most banks, so i'd like to transport their management teams into the large financial institutions prior to dolling out the TARP funds to bail them out... and right into something else stupid...

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