By Lisa Hochgraf
"Selling stock to the federal government seemed like a good deal when three western New York banks took TARP funds in December. Today, all three are either exploring or on the verge of leaving the program early."
So began the article "Banks bow out of TARP program" by staff writer Diana Louise Carter in Sunday's Democrat and Chronicle, the local daily here in Rochester, N.Y.
The article goes on to explain that three banks with a presence here--First Niagara Bank of Lockport, Five Star Bank of Warsaw and M&T Bank--were looking at getting out of the Troubled Asset Relief Program early. "Changing public perception, changing rules and the reality of TARP's costs have all conspired to make some banks start running or jogging to the exit two years early," Carter writes.
And here's what the bank executives say in the article:
Peter G. Humphrey, CEO of Five Star Bank: "From a reputation standpoint, we think it makes sense to exit the program. It sounds corny, but we thought it was our patriotic duty to support the banking system as a whole." At the time, bankers didn't realize they would tarnish their image by participating, Carter's text adds.
John Koelmel, CEO of First Niagara: "I don't think it's prudent to take or raise any more capital than we can reasonably put to work in a reasonable amount of time."
M&T spokesperson: "We took the money to support the federal government's effort."
More from a bank that ultimately didn't take TARP funds: "In the public's mind, (taking TARP money) meant you were weak or unscrupulous," says George W. Hamlin IV, president/CEO of Canandaigua National Bank, Canandaigua, which, according to the article, withdrew its TARP application last fall.
So in light of this, are you feeling relieved as I am that the CU industry didn't have full access to TARP funds?
Lisa Hochgraf is a CUES editor.
Also read "NCUA: Tell us Where you Stand."
