Another bank is bailing out of the TARP now that it is quickly becoming a political lightning rod. Shore Bancshares has notified the Treasury Department that it will return the $25 million in taxpayer capital it received in January, Bailoutslueth is reporting.
Shore, based in Easton, Md., is the seventh bank to file for redemption of the preferred stock issued in return for aid through the $700 billion Troubled Asset Relief Program. More than 500 banks have taken public money through the program.
W. Moorhead Vermilye, Shore’s chairman and chief executive, said changes in TARP rules and public perceptions about the program have put his bank at a competitive disadvantage.
“The representation made by the Treasury concerning TARP was that the program was designed to attract broad participation by healthy institutions and that our participation in the program was important to restore confidence in our financial system and ensure that credit continue to be available to consumers and businesses,” Vermilye said in a prepared statement. “Over the past few months, however, it has become clear to us that the public, including many members of Congress, view institutions that participated in TARP as having done so because they are weak and not because they wanted to do their part to foster economic recovery. We do not believe that TARP has been handled in such a way as to distinguish strong institutions from those that have capital adequacy or other problems.”