Several small regional banks said Tuesday they have paid back federal rescue funds given to them by the government.
IberiaBank (IBKC) of Lafayette, La., said it has paid back $90 million; Old National Bancorp (ONB) of Evansville, Ind., said it has paid back $100 million; Signature Bank of New York (SBNY) said it has paid back $120 million; and Bank of Marin Bancorp (BMRC) of Novato, Calif., said it has paid back $28 million.
All of the banks said they repaid their rescue loans buy redeeming all of the preferred shares of stock they sold to the Treasury Department in December as part of the Troubled Asset Relief Program, and the Treasury Department confirmed that to FOXBusiness.
The announcements are the first instances of banks paying back TARP money.
Russell A. Colombo, chief executive officer of Bank of Marin, said in a statement it was in the “best interests of our customers, shareholders and employees” to pay back the money due to operating restrictions placed on his bank for participating in TARP.
Colombo said that by participating in TARP, his bank “did our part to help stimulate the local economy during a volatile time for the financial markets.”
IberiaBank Chief Executive Daryl G. Byrd said in a statement: “We are pleased to be among the first financial institutions to pay back the Treasury’s TARP investment. We believe we were uniquely positioned as the only financial institution to have consummated a Qualified Equity Offering subsequent to the TARP transaction, and thereby retired half of the original TARP warrant shares. We appreciate the consideration and cooperation of the Treasury’s representatives who completed the redemption of our preferred stock in an efficient manner.”
IberiaBank said it expects to incur a $2.2 million charge in the first quarter in the form of an accelerated deemed dividend to account for the difference between the amount at which the preferred stock sale was initially recorded and its redemption price.
“Repurchasing our preferred stock will enable us to continue to fulfill our mission of serving as a community partner with integrity,” said Old National Bancorp Chief Executive Bob Jones in a statement.
Signature Bank President and CEO Joseph DiPaolo said that terms imposed on TARP-funded banks “adversely affected our business model and it became apparent that we should return these funds to the Treasury. The return of these funds allows us to continue to execute our business model, which includes the successful recruitment and retention of highly talented banking professionals throughout the metropolitan New York area.”
--Rich Edson contributed to this article.
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