Hawaii bankers say federal assistance is no bailout - Pacific Business News (Honolulu):

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percent to the industry’s standar d of 9 percent. But it’s not a according to local It’s a bank stock ownership with some strings including strict rules on dividendsz andexecutive pay. The designed to help the nation’s financial requires banks to pay the Treasury a dividend of 5 percenf per year on preferred stock for the firsrfive years. After five dividends increase to9 percent. And the Treasurg must approve increases and repurchases of commobn stock in the firstthree years. The program also prohibits bankx from making risky decisionss relatedto compensation. Golden parachuts payments to executives also are The rules could continueto change.
“I’d like to think that most banks taken with this idea are solid banks that foresee payint this back afterfive years, and that they’r willing to accept the increased lending to increase their loansw or shore up their capital,” said Gary Fujitani, executivwe vice president of the . Plagueds by delinquent loans to U.S. Mainlaned developers, Central Pacific finally turneda $3 million profit in the third quarter last year afted posting consecutive losses, including a $146 millionm loss in the seconf quarter. Hawaii’s three largest banks in termsw of assets say they will not participat e inthe program. , the state’z largest depository with $12.
8 billion in did not apply for funding. “Wed don’t have a need for said PresidentDon Horner. “First Hawaiiajn has ample liquidity for 2009 and beyon to fund loan demands forour customers.” First Hawaiian’s loan portfolii last year was up more than 20 percent, the largestg loan growth in 25 years. , the second-largest bank with $10 billion in assets, applied for the program last year and was approved for upto $200 million, but manageras and directors opted not to The bank referred PBN to a Dec. 22 presss release that quoted CEO and ChairmanAllanm R.
Landon as saying that it was “safe, balanced and prepareds to face challenging operating conditions as the economyu slows withoutgovernment investment.” , the third-largesf bank with $5.5 billion in assets, said it was “evaluatintg the program and at this time does not plan on participating,” said Dawn corporate communications manager. and also did not apply for “The program was created to help banks in liquidityhand capital, and we’ve been managiny everything fairly well,” said Warren Luke, CEO, presidentt and chairman of Hawaii National Bank. , a $128 milliohn institution, applied for the program last year and is awaitinbg federal approvalon $2.
9 million in Pacific Rim executives said they “wantec to keep all of capitalp options open” but weren’t specific on how funds will be