Paul Gores
Journal Sentinel Online
March 5, 2009
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Johnson Bank has turned down a $100 million capital infusion from the U.S. Treasury, saying it doesn't need the money and there are too many strings attached to taking it.
Top executives of Racine-based Johnson Bank, which with $5.7 billion in assets is the third-biggest bank based in Wisconsin, said Thursday that they weighed many factors – among them the overall financial costs of the capital and the public perception about receiving Troubled Asset Relief Program (TARP) capital - before deciding against it.
Russell C. Weyers, chief operating officer of Johnson Financial Group, said privately-owned Johnson Bank is run with long-term financial goals and growth in mind, and taking TARP money might force it to alter how it operates.
"We're just not interested in allowing it to change the way we do business," Weyers said. "And that's why we're walking away from it. We don't need the money, we're well-capitalized, and we can continue to operate our business the way we're operating today without it."
Although the Treasury has said TARP capital is going to healthy banks as part of its effort to strengthen and stabilize the financial system, some large unhealthy banks have received the funds, too. Bankers and bank analysts say that has led to confusion about the TARP program with the public.
"The public perception generally is that this is a bailout. And for some institutions perhaps it is," said Richard A. Hansen, president and chief executive of Johnson Financial Group. "For us, it wouldn't be a bailout. It would be expensive capital that we feel we don't need. But the perception by our communities as receiving a bailout is not an acceptable thing that we want to do to our brand."
So far, 10 other Wisconsin banks have received, or announced that they have been approved to receive, TARP capital.
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