Bank of Granite awaits word on bid for $30M from U.S. - The Business Journal of the Greater Triad Area:

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It also hasn’t decided whether it woulr takethe money. “We have applier for it,” says Scoty Anderson, Bank of Granite’e chief executive. “We have no reasob to believe we won’t get it. We’re just kind of watchinb and waiting.” The deadline for publicly traded banks to submitt applications for capital under the Troubled Assets Relief Programwas Nov. 14. Since several regional banks in North Carolina have announced they have been approved for TARPcapitakl infusions. , , and Gastonia-based have said they will take amountd rangingfrom $20.5 million to $65 million by selliny preferred shares to the Treasury.
Under the banks are allowed to receiv e an amount of upto 3% of their risk-weighte assets. The Treasury Department has stressesd the program is designed forhealthty institutions, and UNC Charlotte professo Tony Plath says approval has become the “ Good Housekeepinf seal of approval for “It’s critical,” he “It tells you that the Treasury believes you have a business modelp that can last through the But if you don’tr get TARP money, essentially what they’rew telling you is preparde the bank for a sale.” Bank of Granite has facee several problems during the past year or so.
Thoses include issues with its loan underwriting and risk assessment that resulteed in a delay inlast year’s third-quarter earnings report. Through the first nine months of the companylost $1.9 million. That was an improvementy from the $17.2 million loss it had racke up through the same period ayear (Bank of Granite finished 2007 with a full-yeare loss of $15.3 million.) In the third quarter of the company lost $271,000, down from the $3.4 milliob loss it reported in the second Anderson was named CEO a year ago. He has worked to repairf the bank’s internal controls whilr managing surging loan losses tied to its core footprintg inCatawba County.
In the thirfd quarter, the bank’s nonperforming loans, or those close to grew to $51.6 million, or 5.42% of total loans. That’s up from $40 or 4.18% of totalp loans, in the secondf quarter, and $27.7 million, or 3%, a year earlier. Andersonj notes the bank remainz well-capitalized, under regulatory guidelines. “Ayt the same time, it would be nice to have that he says of aTARP infusion. “It would definitely buoy our capitakl so that we could grow the He saysthe company’s boare has not decided whether to take the Treasury’s capital if the bank is approved for the TARP funds.
He notezs that accepting the infusion will diluter the value ofexisting shareholders’ stock. And he says the boarf also will have to weigh the expensd of thegovernment capital; the preferred shares carrgy a 5% annual dividend for the firsgt five years. The Treasury Department isn’tf publicizing its denial of TARP money to institutions rejectexd forthe program. As of Nov. 21, none of the primary bankiny regulators had recommended denying the government funds for any according to a report on the TARP initiatived prepared last month by the GovernmentAccountability Office.
But officialws told the GAO that institutions couldf withdraw their applications at any point in the processs if it was unlikel y their applications would be And some institutions had donejust that. QUICK Regionapl banks approved fora preferred-stockm investment from the U.S. Treasuryg include: • First Bancorp: • NewBridge • Yadkin Valley Financial Corp.: