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Remember TARP, the Troubled Asset Relief Program? Since its inception, 742 banks have gained "relief". Under TARP, a bank gets funds in return for preferred shares and a dividend that goes from 5% to 9% after four years.

A banker told me that TARP money is expensive and unnecessary - "I can get Home Loan Bank funds for less." And most banks that still have TARP money got it in late 2008. That means the dividend (really an interest payment) will shortly be 9%. That is really expensive money!

And we think the banking crisis is behind us? Think again. There are still 382 banks that have made no repayments on TARP money as yet. The top twenty in terms of TARP funds outstanding are given in Table 1.

Table 1 - Banks with Largest Balances

That Have Made No TARP Repayments

TARP Outstanding

Bank

($ mil.)

Regions Financial Corporation (RF)

3,500

Zions Bancorporation (ZION)

1,400

Synovus Financial Corp. (SNV)

968

Popular, Inc. (BPOP)

935

First BanCorp (FBP)

424

Sterling Financial Corporation (STSA)

303

Citizens Republic Bancorp, Inc. (CRBC)

300

UCBH Holdings, Inc. (UCBH)

299

First Banks, Inc. (FBSPrA)

295

New York Private Bank & Trust Corporation

267

Flagstar Bancorp, Inc. (FBC)

267

Cathay General Bancorp (CATY)

258

PrivateBancorp, Inc. (PVTB)

244

International Bancshares Corporation (IBOC)

216

MB Financial Inc. (MBFI)

196

Pacific Capital Bancorp (PCBC)

195

United Community Banks, Inc. (UCBI)

180

M&T (Provident Bancshares) (MTB)

152

Dickinson Financial Corporation II

146

Banner Corporation (BANR)

124

Source: U.S. Treasury

In addition to these banks, there are 13 that have made partial repayments. These banks are listed in Table 2.

Table 2 - Banks That Partially Repaid TARP

(in mil. $)

Bank

Original TARP

Outstanding Balance

M&T Bank Corporation

600

230

Central Pacific Financial Corp. (CPF)

135

99

Pinnacle Financial Partners, Inc. (PNFP)

95

71

First South Bancorp, Inc. (FSBK)

50

37

First American Bank Corporation

50

35

StellarOne Corporation (STEL)

30

23

The Bank of Kentucky Financial Corporation (BKYF)

34

17

The First Bancorp, Inc. (FNLC)

25

13

C&F Financial Corporation (CFFI)

20

10

Citizens First Corporation (CZFC)

9

7

First BancTrust Corporation (OTCQB:FIRT)

7

4

Patterson Bancshares, Inc.

4

3

Beach Business Bank (OTC:BBBC)

6

2

Source: U.S. Treasury

I repeat the question posed earlier: Is the bank crisis behind us? With more than 50% of the banks that took TARP money still owing the U.S. Treasury nearly $17 billion, the answer is no. A bank that is paying 9% for its money is not a healthy bank.

Stay away from the banks listed above.

Source: Banks To Avoid