WASHINGTON (Dow Jones)--The number of banks participating in the $700 billion Troubled Asset Relief Program that have missed paying dividends due to the U.S. government rose in the third quarter, with 123 missing their Nov. 15 payments, a research firm reported Wednesday.
That number is up from 115 institutions deferring their dividend payments in August, 91 deferrals in May and 74 deferrals in February.
However, many community banks are expected to seek to convert their TARP investment into a $30 billion Obama administration small-business initiative approved by the U.S. Congress in September. As part of that plan, participating banks' dividends could fall to as low as 1%, depending on their level of lending to small businesses.
[...]These insolvent banks should have been already taken over by the FDIC, but this corrupt institution is still not acting, probably hoping that the zombie banks will, for some reason, return from the dead back to life.
Cumulatively, these tardy banks owe the Treasury Dept. roughly $161 million in dividends, according to SNL. Of the 123 deferrers, 20 institutions have missed six or more payments and 18 missed payments for the first time since entering the program, the report said.
Three banks that had previously missed dividend payments failed during the most recent payment period.
Westminster, Calif.-based Saigon National Bank (SAGN) is the only institution that has failed to make payment on all eight dividends required to date, according to SNL.
Some of the other banks that have deferred dividend payments include Pacific Capital Bancorp (PCBC), Anchor BanCorp Wisconsin Inc. (ABCW) and Midwest Banc Holdings (MBHIQ).