Please ensure Javascript is enabled for purposes of website accessibility

Five Maryland banks miss TARP payment

Five Maryland banks that took bailout money as part of the Troubled Asset Relief Program missed their February dividend payments to the federal government, with one bank now having missed six required payments.

According to information gathered by SNL Financial, a total of 142 banks and thrifts missed the Feb. 15 dividend payment required under TARP. There were 123 that missed payments in November and 115 in August. Rising Sun Bancorp, parent company of NBRS Financial, has now missed six TARP payments, which makes it eligible for the U.S. Treasury Department to appoint two members to the company’s board of directors.

Rising Sun Bancorp sold $5.9 million in preferred stock to the Department of Treasury when it entered TARP in January 2009. The company has made $195,637 in dividend payments, with the last an $82,000 payment made in August 2009. According to the Federal Deposit Insurance Corp., NBRS reported a net loss of $5.8 million for 2010, compared to a net loss of $3.8 million in 2009.

February also marked the second month in a row that First United Corp. of Oakland missed its TARP payments. The bank entered TARP in January 2009 and sold $30 million in preferred stock. First United has made $2.3 million in payments, with the last made in August 2010.

In Maryland, three other banks missed the February payment: Cecil Bancorp Inc., parent company of CecilBank; Patapsco Bancorp Inc., parent company of The Patapsco Bank, and Harbor Bankshares, parent company of Harbor Bank.

Maryland Financial Bank, which had missed four payments, made its November and February payments.

It was the fifth missed payment for Cecil Bancorp and the fourth for Patapsco Bancorp. Harbor Bank, after being on the list once before, made a payment in May 2010, but has since missed the August, November and February payments.

Kevin Curry, a senior banking analyst with SNL Financial, said there are usually multiple pressures on the banks to not make a payment, especially if its bottom line is shaky.

“In some cases, it’s the regulators, while in other cases it’s the shareholders saying not to make the payment,” Curry said. “But, overall, if they don’t have the capital to make the payment without trouble, that’s why they miss them.”

Nationwide, 32 banks have missed six or more payments. The SNL report said the Treasury Department had observers attend board meetings at all but one of the institutions missing six or more payments. Of the 32 institutions at six or more missed payments, 14 had missed six while 11 missed seven and six have missed eight. One, Saigon National Bank, in California, has not made any payments.

In Maryland, five banks that were in TARP have since made payments in full. Those banks are Sandy Spring Bank, Shore Bank, BCSB Bancorp, Old Line Bancshares and Capital Bancorp. According to information collected by ProPublica, a nonprofit investigative journalism website, the five banks cumulatively repaid more than $131 million.

Calls to Rising Sun Bancorp and Cecil Bancorp were not returned. Harbor Bank CEO Joseph Haskins Jr. was out of the country and not available for comment.