Iberiabank is giving back its TARP funds, one of the first banks to do so.
Iberiabank had accessed nearly $91 million via the government's Capital Purchase Program. It said it wanted to give back the funds because of the additional restrictions the government has placed on banks that access the TARP program. The restrictions were not in place when Iberiabank had accessed the funds.
"The Capital Purchase Program under TARP has assisted in the effort to provide stability to the financial services industry during this period of unprecedented uncertainty. When we decided to accept funds under this program, we believe we were the type of healthy bank that could employ the funds in the manner consistent with the goals initially set out by Congress and the Treasury in supporting the expansion of credit to the markets we serve. We believe recent actions, interpretations, and commentary regarding various aspects of the program places our Company at an unacceptable competitive disadvantage. Our Board of Directors has determined that continued participation in this program is no longer in the best interest of our Company and its shareholders. Our Company occupies a unique position of strength, growth, and opportunity relative to other participants in the financial services industry. We are pleased to be able to redeem the Treasury's investment in our Company."
In related news, community banks have been hesitating over accepting TARP funds. They are working to get out the message that the funds accessed via the CPP program, while a part of TARP, is intended for healthy banks and not for financial institutions at risk of failing.