Two more banks have decided to reverse plans to accept bailout money, while a third announced its intent to give back the money it already received.
Alabama-based Pinnacle Bancshares Inc., in its quarterly shareholders report, cited "the constraints of this program" and an "uncertain political climate" in deciding not to follow through on the already-approved $4.8 million capital infusion.
Since the Treasury Department began allocating money from the $700 billion Troubled Asset Relief Program last year, a number of financial institutions that took government aid have changed their minds and sought to pay it back.
Other banks withdrew their applications while waiting for approval. Concerns about bad public relations and restrictions on executive pay and shareholder dividends have been the most common reasons.
Tennessee-based Magna Bank said it plans to return its bailout money as soon as possible. According to the Memphis Daily News, the bank no longer sees the $14 million it received as a business advantage.
"It's nice to have the extra capital, but there's a stigma attached to the TARP money now that didn't used to be there. It's now perceived to be bailout money," Magna's chairman, Kirk Bailey, told the paper.
"We didn't view it that way when we took the money in December. We viewed it as additional capital to try to grow the franchise and do the things that government wanted done to grow the economy."
A third bank, AmericanWest Bancorp also announced a change of plans in its earnings report, saying that it would withdraw its application for $57 million in bailout funding.
The bank, based in eastern Washington, said it made the decision mainly because it was unable to raise sufficient private equity to match the government's contribution. It said it would continue talks with private investors to shore up the company's equity position.
Alabama-based Pinnacle Bancshares Inc., in its quarterly shareholders report, cited "the constraints of this program" and an "uncertain political climate" in deciding not to follow through on the already-approved $4.8 million capital infusion.
Since the Treasury Department began allocating money from the $700 billion Troubled Asset Relief Program last year, a number of financial institutions that took government aid have changed their minds and sought to pay it back.
Other banks withdrew their applications while waiting for approval. Concerns about bad public relations and restrictions on executive pay and shareholder dividends have been the most common reasons.
Tennessee-based Magna Bank said it plans to return its bailout money as soon as possible. According to the Memphis Daily News, the bank no longer sees the $14 million it received as a business advantage.
"It's nice to have the extra capital, but there's a stigma attached to the TARP money now that didn't used to be there. It's now perceived to be bailout money," Magna's chairman, Kirk Bailey, told the paper.
"We didn't view it that way when we took the money in December. We viewed it as additional capital to try to grow the franchise and do the things that government wanted done to grow the economy."
A third bank, AmericanWest Bancorp also announced a change of plans in its earnings report, saying that it would withdraw its application for $57 million in bailout funding.
The bank, based in eastern Washington, said it made the decision mainly because it was unable to raise sufficient private equity to match the government's contribution. It said it would continue talks with private investors to shore up the company's equity position.
0 Comments
Leave a comment