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No TARP? No problem.
NEW YORK (CNNMoney.com) -- Two years after the collapse of Lehman Brothers, it seems safe to say that there is still a lot of resentment toward the financial sector. Lehman's bankruptcy set into motion a chain of events that ultimately led to the creation of the government's controversial Troubled Asset Relief Program, or TARP. But some banks avoided bailout rage.
Meet the TARP refusers who said no to government support. Two years later, they remain elated that they never had to accept a dime from Washington.
"It was one of the best decisions of my adult life to say no to TARP. We never seriously considered taking bailout funds," said David Kemper, chief executive officer of Commerce Bancshares (CBSH), a Kansas City-based bank with more than $18 billion in assets.
Kemper said regulators in Washington urged the bank to take part in TARP to show that even strong banks were doing so. But he felt his bank had adequate capital, despite all the fear at the time, and that taking bailout funds would have actually put it at a disadvantage.
That sentiment is shared by Dick Evans, the CEO of Cullen/Frost Bankers (CFR), a San Antonio-based bank with $17 billion in assets and founded in 1868.
"I look at the 142 years the bank has been in business and not participating in TARP is probably one of the top 3 decisions we ever made," Evans said. "It gave us the ability to stay focused on customers. We were able to keep building the company and not be distracted by the government."
That last part is key. At the time TARP was proposed, it was billed as a way for banks to rid themselves of the toxic mortgage assets that got them into trouble in the first place. But that didn't wind up happening.
For many banks that took TARP funds hoping a government lifeline would nurse them back to health, it became quickly obvious that the disadvantages outweighed the benefits.
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