Jen
03-05-2009, 10:20 PM
A bank in my hometown has refused 100 million dollars of bailout money (http://www.journaltimes.com/articles/2009/03/05/local_news/doc49b073b2aa4d1649224462.txt).
“Contrary to the perception some have that this is a bailout, I think to the contrary, this is capital that is rather expensive,” said Richard Hansen, President and Chief Executive Officer of Johnson Financial Group.
The cost of paying the money back is too high, with too many regulations attached, and the company doesn’t need it, Hansen said.
Basically, the government wanted to buy $100 million in stock and sell it back in five years at the future value, plus other factors, Hansen said. He said the money may have cost the company as much as $11 million per year, when combining interest, appreciated value of stock and the elimination of certain tax discounts. Then, once the company entered into the agreement, he said, the government could change the agreement at any time.
“At these terms and at these costs, that was not a bailout. The government will make a lot of money on it,” Hansen said.
Whether they're right or wrong, I salute them, as do many of the people commenting in the article. One stated, "Johnson Bank, you've just earned yourself a new customer." Another stated, "I will be leaving Wells Fargo soon for Johnson as this is what a true American company does when faced with a decision to become socialistic."
I guess there are some conservatives left in liberal-ass Wisconsin, though one guy did sneak in there saying banks being nationalized is inevitable so Johnson is stuipd for not taking the money.
Thoughts?
“Contrary to the perception some have that this is a bailout, I think to the contrary, this is capital that is rather expensive,” said Richard Hansen, President and Chief Executive Officer of Johnson Financial Group.
The cost of paying the money back is too high, with too many regulations attached, and the company doesn’t need it, Hansen said.
Basically, the government wanted to buy $100 million in stock and sell it back in five years at the future value, plus other factors, Hansen said. He said the money may have cost the company as much as $11 million per year, when combining interest, appreciated value of stock and the elimination of certain tax discounts. Then, once the company entered into the agreement, he said, the government could change the agreement at any time.
“At these terms and at these costs, that was not a bailout. The government will make a lot of money on it,” Hansen said.
Whether they're right or wrong, I salute them, as do many of the people commenting in the article. One stated, "Johnson Bank, you've just earned yourself a new customer." Another stated, "I will be leaving Wells Fargo soon for Johnson as this is what a true American company does when faced with a decision to become socialistic."
I guess there are some conservatives left in liberal-ass Wisconsin, though one guy did sneak in there saying banks being nationalized is inevitable so Johnson is stuipd for not taking the money.
Thoughts?