Local shareholders profit at our expense

Seven Washington state banks recently received approvals for taxpayer bailout money under the Federal Troubled Asset Relief Program (TARP). This U.S. taxpayer money is intended to strengthen balance sheets of troubled banks to allow them to continue making loans to ease the credit crisis. I find it very troubling that following an approval to receive federal bailout funds three of these Washington banks announced their intent to continue paying quarterly dividends to shareholders.

Cascade Bank of Everett received approval of $39 million in TARP funding and then announced a $0.045 quarterly shareholder dividend (same as previous quarter) payable Jan. 20, 2009.

Banner Corporation (Banner Bank) — $124 million TARP funding and intends to pay out a $0.05 quarterly dividend to shareholders (same as previous quarter) on Jan. 12, 2009.

Washington Federal of Seattle — $200 million in TARP funds and will pay a $0.05 quarterly dividend to shareholders on Jan. 16, 2009.

It should be noted that decisions to pay dividends are made by a bank’s board of directors, many of which hold a significant number of shares in the banks they represent. While I generally support the use of taxpayer dollars to shore up the troubled U.S. financial system, I am appalled that investors and bank executives are profiting at U.S. taxpayers’ expense. How can a bank take taxpayer “bailout” money and then immediately turn around and share profits with their shareholders and officers?

Makes you wonder whether they needed a bailout in the first place.

Vince Martinis

Everett