Sunday, March 21, 2010

Has one of your local banks failed to pay a dividend on bailout money? It's a sign of trouble

Hundreds of community banks have yet to return their federal bailout money, indicating that some are still in trouble. Large banks were "among the quickest" to return the investments, but many community banks are failing to pay 5 percent quarterly dividends to the government because they "are struggling with losses on real estate development loans," report Binyamin Appelbaum and David Cho of The Washington Post.

"The list of 82 delinquent banks is significantly longer than the 55 banks that failed to make payments in November, according to an analysis by Linus Wilson, a finance professor at the University of Louisiana at Lafayette," the Post reports. Banks still in the Troubled Assets Relief Program "are not as healthy as the ones that left," Wilson told the newspaper, adding that the missed dividends indicate that the Treasury "probably extended TARP too far, and did not do a lot of due diligence." (Read more)

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