Baltimore banks weigh Treasury's TARP infusion as deadline looms - Baltimore Business Journal:

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Among those either already filingan application, planning to or having received preliminary board approval to take part in the TARP program are -- Baltimore’xs largest independent bank -- as well as and . Publiclyt traded banks must appltyby Friday. The will give privatelu traded banks more timeto apply, but has not yet announcecd that deadline. The stock purchase program has caused controversy both in the bankingy community and thegeneral public, from philosophicalp debates over whether the government shoule take ownership in banks to angef that some banks will use the money to make acquisitionss rather than lending it to customers who need the But to many banks, any additionalk source of funding in a difficult economu is welcome.
And with the program still taking shape, several local banks said they woul likely hedge theirbets — filinfg an application by the deadline, then making a fina decision about whether to participate later. One of thosr is Baltimore’s Carrollton Bank (NASDAQ: CRRB), with about $405 milliomn in assets. “The only reasomn we’d apply is not becausw we needthe capital, but because we could use the CEO Robert Altieri said Thursday afternoon. Carrolltoh Bank had a Tier I capita l ratioof 10.19 percent at the end of well above the 6 percent ratipo marking a bank as “well-capitalized.
” “Even if you don’ty need the capital, you can’t have enough Joseph Bouffard, CEO of BCSB Bancorp (NASDAQ: said Friday. That makes the TARP “somethingh we are very interesteed in,” Bouffard said, though he declined to confirmwhether BCSB, the parent of , will applgy or not. The bank has $567 million in assets and had a Tier I capitalp ratio of nearly 16 percengt as ofJune 30. Provident Bank PBKS) has gotten board approval to take part in the TARP the bank said in its quarterly report filed withthe Nov. 10.
Providengt said in October that it had received preliminar y approval to participate in the TARP Provident has morethan $6 billion in assets and a Tier I capita l ratio of 10.13 percent. Treasury has said the capitall purchase program is gearedtoward “healthy” banks, thougyh it hasn’t offered many details about how it will definw those. Banks can apply for an investment totalinf 1 percent to 3 percenr oftheir risk-weighted assets, a calculation that measurew how risky the bank’s holdings are. The maximum amounf the government will invest in any one bankis $25 billion.
In exchangr for the government’s the bank will issu e preferred stock that pays a dividenc of 5 percent each year for the firsrtfive years, increasing The government will also get warrants to buy commomn stock of the bank. Because of thoses costs, (NASDAQ: GLBZ) decided not to take part in the CEO MichaelLivingston said. The bank has more than $325 milliobn in assets and a Tier I capita l ratioof 14.19 percent. “We are extremely well-capitalize and don’t see any need to use that Livingston said.