This particular piece of reporting sums up my views accurately:
George W. Hamlin IV, president and chief executive of Canandaigua National Corp., said in a letter to shareholders that it was approved last month for $20 million in TARP funds.
Hamlin said Canandaigua National did not need the extra capital, but added that it could be useful in spurring growth and funding new loans. He noted that the bank participated in a similar program during the economic crisis of the 1930s, selling preferred stock to the government to raise an additional $300,000. It redeemed the shares after five years.
"Were today's program as simple and effective as that presented, now 75 years ago, we would likely be an enthusiastic participant,'' he wrote.
Canandaigua National thinks that the true cost of the capital from the TARP program is higher than the stated dividend rate on the shares because of the extra cost of filing related government paperwork and registration statements with the SEC.
Hamlin said the bank also objects to the restrictions on dividend payments and stock repurchases for banks receiving TARP funds, and on a provision that allows the government to alter the terms and conditions of the program.
"Because we cannot anticipate what these changes might entail, we cannot properly plan for the use of this capital,'' he wrote. "The interests of the government may be contrary to the interests of our community and shareholders. The right of one party to unilaterally amend a bilateral contract is wholly inappropriate as a matter of common business practice and it would be foolish for any prudent business organization to voluntarily and intelligently accept such a provision."
I like how George Hamlin IV thinks. I might just have to open an account at Canandaigua National.