East West Bancorp has handed over $306.5 million in preferred stock that it received from the government during the height of the financial crisis. It's a big deal because the Pasadena-based Chinese-American bank had been shelling out millions of dollars in dividend payments. The government funding is a hassle for many banks, both because of the dividends and also various restrictions placed on the institutions. But some local banks are not in a position to repay. From the LAT:
A report by SNL Financial this month showed 123 banks and savings and loans had deferred making the quarterly dividend payments that came due in November on their TARP investments from the Treasury. Skipping these payments can mean that regulators consider a bank too weak for it to deplete its capital by making the payments. Southern California banks that skipped their November TARP dividend payments include Saigon National Bank in Westminster, a Vietnamese-American institution that has missed all eight of its scheduled payments; Premier Service Bank, a Riverside commercial real estate lender that has missed six payments; Pacific City Financial Corp., a Koreatown bank that also has missed six payments; and CalWest Bancorp in Rancho Santa Margarita, parent of business lender South Coast Bank, which has missed only the latest payment.