Some healthy banks are asking for bailout money even though they don’t need it.
MetroCorp Bancshares is one that has applied to participate in the U.S. Treasury’s Troubled Assets Relief Program, which is meant to inject capital into banks and get them lending again, even though it’s well-capitalized.
“With the uncertainty moving ahead for the Houston economy, it just would be prudent to have additional capital,” said David Choi, chief financial officer of the $1.6 billion bank.
The bank is looking to use the money to help shore up capital in case energy prices keep dropping and drag Houston’s economy with them.
A steadily appreciating housing market and strong oil and natural gas prices in recent years helped keep the economy — and its banks — strong relative to the rest of the nation.
The exception so far has been Franklin Bank SSB, which regulators seized last week after it failed largely because of troubled real estate loans it made in California and other parts of the country riddled with housing woes.
While local banks may not need the money, they don’t want to pass up an opportunity for cheap capital that would allow them to make more loans or acquire other banks.
Uh, dude. You’re a publicly traded corporation. If you need capital, get it from your shareholders by raising equity, or selling bonds. You have no damn business asking the taxpayers of the United States to recapitalize your company which doesn’t even need to be recapitialized in the first place.
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