At least four banking companies announced Tuesday that they had returned the government's capital.

Iberiabank Corp. in Lafayette, La., Old National Bancorp in Evansville, Ind., Bank of Marin Bancorp in Novato, Calif., and Signature Bank in New York said they redeemed all the preferred shares they issued to the Treasury Department in December.

Bob Jones, the president and chief executive officer of the $7.9 billion-asset Old National, cited not only the growing public outrage over the Troubled Asset Relief Program, but also the quickly changing perceptions of government capital among analysts and investors.

"Equity analysts are giving you no credit for it, because they are only focused on the tangible common equity ratio, and the rating agencies are discounting it or viewing it as debt," Jones said. "So we began to view it as debt that we really didn't need."

Congress made it easier to repay Tarp funds when it enacted the economic stimulus package in February. As originally designed, the program required banks to hold the government investment for at least three years. Banks also had to raise an equivalent amount of private capital before redeeming the preferred shares. Those obstacles have been removed, though banks still must receive approval from their primary federal regulator for any payback.

Many healthy Tarp recipients have become disenchanted with the program, saying the political climate shifted from one where they were encouraged to take the money to stimulate the economy to one where they are being treated punitively. Several have said they will return the capital as soon as possible, including the $16.3 billion-asset TCF Financial Corp. in Wayzata, Minn., and the $82 billion-asset Northern Trust Corp. in Chicago.

Iberiabank had received $90 million from the government; Old National, $100 million; Signature, $120 million; and Bank of Marin, $28 million.

The Treasury agreement requires 30 days' notice before any redemption, and the $5.4 billion-asset Iberiabank is believed to be the first Tarp recipient to officially give that notice. It did so in late February. On Tuesday it became the first to say it had repaid the money.

"We are very happy we were in a position to do so," said Daryl G. Byrd, Iberiabank's president and CEO. He cited the stigma associated with Tarp money, restrictions on compensation and dividends, and the possibility of more rule changes. "We just don't want to allow our company to be at a competitive disadvantage."

Iberiabank said it would report $3.3 million of first-quarter redemption-related charges: $2.2 million to account for a difference in the redemption price and the amount at which the initial stock sale was recorded, and $1.1 million for a previously scheduled cash dividend.

Iberiabank and Old National said they also intend to repurchase warrants issued as part of their infusions.

The $1 billion-asset Bank of Marin said that it was unsure whether it would redeem its warrant, which will expire in 10 years. If it chose not to, the Treasury would sell the warrant on the open market, the company said. The $7.2 billion-asset Signature did not specify its plans for the warrant.

Robert Klingler, an associate at Bryan Cave LLP, said that in spelling out how companies can repay the government's investment, the Treasury allowed for redeeming all or some of the stock.

A public company that repurchased all the preferred shares would have 15 days to repurchase the warrant or issue a new one with different wording, Klingler said. The change in wording would remove a provision to reduce the number of shares covered by the warrant in the event of a qualified equity offering.

Jones said he understands why reports of fat bonuses, expensive parties and office remodelings at some struggling companies that took government money have turned public opinion against Tarp. "We took it because it was intended to help healthy banks be healthier, and we felt it was good for the overall banking system," he said. But now Old National wants to distance itself from the program, Jones said. "The public has every right to be outraged, and we didn't want to be part of it."

Sandler O'Neill & Partners LP stress-tested the company using the same metrics the Treasury is prescribing for larger institutions, Jones said; the test showed Old National had enough capital, reserves and potential earnings to ensure it would remain well capitalized.

"We also have other opportunities and other levers to pull if things get difficult," he said, and his company does not anticipate raising capital in the immediate future. Jones also said that he is not expecting the repayment to require a charge to earnings, though he is waiting for clarity from Old National's auditors.

Old National's reputation might have a few Tarp-related scratches, he said, but he is proud it is one of the first companies to get out of the program. "The fact that we were able to pay it is a blue ribbon that reflects the strength in difficult times."

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