The U.S. Treasury Department revealed that 18 more banks and thrifts did not make the latest dividend payments due Aug. 17 on preferred shares issued under the Troubled Asset Relief Program in addition to the 15 banks and thrifts that 
missed the May 15 dividend payment.
In all, 33 banks and thrifts declined to pay the scheduled distribution on the TARP shares issued under the Capital Purchase Program, according to an Oct. 1 report released by the Treasury.
Click here to access the below list of companies in an Excel spreadsheet.
Participants in the program are required to pay a dividend rate of 5% per year for the first five years, usually in four payments per year. Under the terms of the Capital Purchase Program, failure to pay dividends for six dividend periods triggers the Treasury's right to elect two directors to the institution's board. The next dividend payment is scheduled for Nov. 15.
Banks without holding companies do not have to pay cumulative dividends, meaning that unpaid dividends don't accrue. Banks with holding companies, on the other hand, have to pay cumulative dividends, meaning the missed dividends must eventually be repaid in full.
Most publicly traded banks and thrifts on the Treasury's list had already disclosed to the public that they would not pay the TARP dividends. Fitch Ratings on Sept. 30 downgraded Honolulu-based Central Pacific Financial Corp. ($5.53 billion) after it deferred dividend payments on its hybrid securities, including its $135 million of preferred stock issued under TARP. Fitch had predicted in August that deferral of the dividend "could be imminent" due to the company's postponement of a public stock offering.
Narberth, Pa.-based Royal Bancshares of Pennsylvania Inc. ($1.32 billion) said Aug. 14 that it would suspend dividends on its preferred shares issued under TARP. The company also suspended the interest payments on its $25.8 million outstanding trust preferred securities. The company said it took the actions to support its capital position. The company entered into a consent agreement with the FDIC and the Pennsylvania Department of Banking in July.
The largest company to miss the latest TARP dividend payment is New York-based CIT Group Inc. ($71.02 billion). The business lender announced Aug. 7 that it was suspending preferred dividend payments as part of its attempts to reduce and/or restructure debt in order to avoid a bankruptcy filing.
Other companies that stopped paying TARP dividends in August also failed to report a profitable second quarter, including Nevada City, Calif.-based Citizens Bancorp ($381.2 million), Covington, La.-based Citizens Bank & Trust Co. ($125.3 million), Kansas City, Mo.-based Dickinson Financial Corp. II ($5.61 billion), Granby, Colo.-based Grand Mountain Bancshares Inc., parent of Grand Mountain Bank FSB ($134.7 million), Boise, Idaho-based Idaho Bancorp ($233.2 million), Atlanta-based One Georgia Bank ($249.2 million), Los Angeles-based Pacific City Financial Corp. ($574.9 million), and Patterson, La.-based Patterson Bancshares Inc.
Two companies that missed TARP dividend payments due in May have since resumed payment of the TARP dividend: Fresno, Calif.-based Fresno First Bank ($116.4 million) and Oakland, Calif.-based Community Bank of the Bay ($66.8 million).
The Treasury indicated that Hato Rey, Puerto Rico-based Popular Inc. ($36.50 billion) missed its TARP dividend payment, though the lack of payment was due to the company's exchange of the preferred stock for non-tax-deductable trust preferred securities. The company paid a $13 million exchange fee in connection with the transaction. The new distribution rate on the trust preferred securities is equal to the dividend rate on the preferred dividends. The Treasury indicated that the company made a payment Aug. 24.
Sterne Agee analyst Adam Barkstrom wrote in an Oct. 5 research report that Popular's exchange transaction "is the first conversion of its kind allowed by the government."
