Some banks are just saying no to bailout money…

November 14, 2008

The deadline for banks to apply for the Treasury Department’s Capital Purchase Program is just hours away and as we’ve footnoted before, banks have been busily filing both their applications with Treasury and 8Ks with the SEC announcing their applications and approvals of Treasury funds. The WSJ has a handy list to show you who’s getting what. So far, they count 60 banks that are on the receiving end of $214 billion and many more are likely to come in today before the 5 pm deadline.

But here at footnoted, we’re much more fascinated in the steady trickle of filings from banks that have chosen not to participate in the program. That’s right — they’re turning down the money! In our routine trawl of the filings, we’ve come across a dozen banks that have issued 8Ks in the past few days that essentially say “Thanks, but no thanks” to that taxpayer money. According to Keefe, Bruyette & Woods research, 29 banks had announced as of yesterday that they won’t be participating in the program.

Among the ones we’ve noticed are Bancfirst Corp. (BANF), which filed this press release in an 8K yesterday. In the release, Bancfirst notes that it would like to buy additional banks and that accepting the money would make that harder to do because “Congress has expressed concern about financial institutions accepting funding from the U.S. Treasury to fund the acquisitions of banks.”

New Jersey-based Investors Bancorp (ISBC) is also turning the Treasury down, saying that it has the ability to raise its own capital. California-based TriCo Bancshares (TCBK) also cited potential merger opportunities in the 8K it filed yesterday, with CEO Richard Smith adding that “those funds can be made available for others.” And, in its’ press release Defiance,Oh-based Rurban Financial (RBNF) sounded pretty defiant: “Our view is that some of the restrictions within the announced provisions of the Capital Purchase Program appear to limit our options. In our view, there also remain too many unknowns within the program for us to prudently enter the program.

So while there’s likely to be more banks scurrying to make today’s deadline, there’s also some who, in the words of Nancy Reagan, are just saying no.

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