Virginia Commerce Bancorp Inc. of Arlington intended to raise $25 million in a private offering this month, but now the $2.7 billion-asset company is considering applying for a cash infusion from the Treasury Department instead.

The $4.3 billion-asset First Busey Corp. in Urbana, Ill., is weighing a similar move, putting off its plan to issue $30 million of trust-preferred securities.

And though the $1.1 billion-asset Dearborn Bancorp Inc. in Michigan had no plans to raise capital, its president and chief executive officer, Michael J. Ross, said it plans to apply for funding from the government.

"The opportunities to raise capital today are very scarce," Mr. Ross said in an interview Wednesday. "So this is a great way for us to fortify our balance sheet, which is very important."

Selling preferred shares to the government will cost banks roughly half of what they might pay for capital raised by other means, bankers and analysts said. And that is assuming banks could even find willing investors.

Under its Capital Purchase Program, the Treasury intends to purchase $250 billion of senior preferred shares in financial institutions, with $125 billion set aside for community and regional banks. Those that issue the shares would pay a 5% rate for the first five years and 9% after that, and the proceeds from the sale of the shares would qualify as Tier 1 capital.

The aim of the Treasury's plan is to get banks lending again, though healthy banks are expected to also use the money to acquire weaker rivals.

Even though First Niagara Financial Group in Lockport, N.Y., just raised $100 million in capital, John Koelmel, the president and CEO, said on its earnings conference call Wednesday that it still might participate in the government program, with the intent of using the money to buy branches or banks.

"When we raised the $100 million, we were very explicit that it wasn't with an eye toward acquisitions," Mr. Koelmel said on the call.

But another cash infusion could better position First Niagara for future acquisitions, potentially larger ones than it might have otherwise considered, he said.

Virginia Commerce, First Busey, and Dearborn all remain well capitalized, though each has had asset-quality problems of late. They revealed their interest in the Capital Purchase Program in their earnings announcements this week.

Virginia Commerce raised $25 million in capital in September by selling trust-preferred securities to its officers and directors. The company intended to raise another $25 million this quarter to provide an additional cushion against rising credit costs and the economic downturn, but Peter A. Converse, its CEO, said in its earnings release that the government program is "a potentially attractive alternative" to the proposed private offering. He said Virginia Commerce is "seriously evaluating" whether to participate. A call to Virginia Commerce was not returned by press time.

Companies must apply for the program by Nov. 14. They can request an investment ranging from 1% to 3% of their total risk-based assets.

Carter Bundy, an analyst at Stifel, Nicolaus & Co. Inc., said he expects Virginia Commerce to seek about $48 million, or 2% of its risk-based assets. "I'll be very surprised if they don't back the truck up and load up on these preferred shares," he said. "If they are able to get it, it makes a lot of sense to do it."

With the September capital raise, Virginia Commerce fattened its risk-based capital ratio to 11.59%, from 10.42% at the end of the second quarter.

But the company, which reported earnings Tuesday, had a "dramatic" deterioration in loan quality, Mr. Bundy said. Its net income dropped 61% from a year earlier, to $2.7 million, because of rising nonperformers and chargeoffs.

Nonperforming assets plus loans past due 90 days or more jumped to $85.3 million, or 3.20% of total assets, from $43.9 million, or 1.65%, the previous quarter.

Dearborn's Mr. Ross said his company would request the maximum level, because it wants to expand lending.

"We'll use part of that to support our problem-loan situations, but part of it will absolutely be directed toward new loans," he said. "I don't think it would be wise for banks to take capital just to take it. I think it's important to leverage that capital to improve their profitability."

He said that Dearborn last raised capital in November 2006, when it sold $65 million of common stock, and that it would not be seeking more now if the government program had not come along. "Capital right now is difficult to obtain, and I would think it would be very expensive."

Dearborn, which has been experiencing credit issues for a while, swung to a profit of $1.42 million in the third quarter, from a loss of $855,000 the year earlier.

Still, its nonperforming assets jumped 25% from the previous quarter, to $78.2 million, or 7.25% of total assets. In reporting its earnings Tuesday, the company said that had shifted its emphasis from seeking growth to improving liquidity and capital.

The Treasury said it would invest in banks at its discretion and that it would not disclose which banks get rejected.

But Charles Thayer, the chairman of the American Association of Bank Directors, said a rejection would be a material event that publicly traded companies would have to disclose in a Securities and Exchange Commission filing. And even if that were not required, shareholders would certainly ask why a company was not participating. "As a practical matter, I don't know how you'd avoid disclosure," Mr. Thayer said.

He said government officials need guard against triggering a run on the rejected banks and creating failures.

"By definition, if you don't qualify, that means you're unhealthy," he said. "That can't be a good thing from a customer viewpoint."

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