Five Maryland banks that took bailout money as part of the Troubled Asset Relief Program missed the August dividend payment to the federal government.
According to information gathered by SNL Financial, 115 banks in total missed the Aug. 16 dividend payment required under TARP.
The five Maryland banks that missed the August payment included Cecil Bancorp Inc., parent company of CecilBank; Patapsco Bancorp Inc., parent company of The Patapsco Bank; Maryland Financial Bank; Rising Sun Bancorp., parent company of NBRS Financial; and Harbor Bankshares, parent company of Harbor Bank.
It was Patapsco Bancorp’s second time missing a payment and Cecil Bancorp’s third. For Rising Sun Bancorp and Maryland Financial Bank, August marked the fourth missed payment. Harbor Bank had been on the list earlier but made the May payment.
The TARP agreement does contain a penalty clause if a bank misses enough dividend payments. The biggest penalty comes if a bank misses six dividend payments when the Treasury gains the right to appoint two members to the company’s board of directors.
According to SNL, The 115 institutions not making the August payment received $3.6 billion in TARP funds, which is almost 2 percent of the $204.9 billion disbursed to the more than 700 institutions under the Capital Purchase Program.