The number of banks missing the deadline for making dividend payments under the Troubled Asset Relief Program continued to rise in February.
Data collected by SNL Financial LC showed 74 institutions, which together had accepted nearly $3.4 billion in capital, did not make their quarterly payment due Feb. 16. That is up from 55 institutions in November and 33 in August.
Failure to pay dividends for six consecutive periods would trigger the Treasury Department's right to elect two directors to a company's board. So far, more than 74 companies have missed three or more payments, including the $65 million-asset Saigon National Bank in Westminster, Calif., which has missed all five payments.
Missed payments do not necessarily denote a troubled company, however. Some new banks that were issued capital under the program were restricted from making payments because state laws didn't allow dividends to be paid in the first years after the bank's creation. Also, some states prevent dividends if banks aren't profitable.
Most companies that accepted Tarp funds from the Treasury have cumulative dividend payments. Banks without holding companies have noncumulative dividends, meaning they do not have to make up missed payments.
Two Tarp participants have failed — Pacific Coast National Bancorp in San Clemente, Calif., and UCBH Holdings Inc. in San Francisco. CIT Group Inc. of New York filed for bankruptcy. Pacific Coast accepted $4.1 million, UCBH accepted a $298 million, and CIT received $2.3 billion.
Those that missed four consecutive payments include Anchor BanCorp Wisconsin Inc. in Madison; Blue Valley BanCorp in Overland Park, Kan.; Commonwealth Business Bank in Los Angeles; Midwest Banc Holdings Inc. in Melrose Park, Ill.; Lone Star Bank in Houston; One United Bank in Boston; Pacific Capital Bancorp in Santa Barbara, Calif.; Peninsula Bank Holding Co. in Palo Alto, Calif.; Premier Service Bank in Riverside, Calif.; Seacoast Banking Corp. of Florida in Stuart; and United American Bank in San Mateo, Calif.