Sturgis Bancorp, the holding company for Sturgis Bank & Trust Company, has announced that it will not participate in the US Treasury Department’s capital purchase programme.
In March 2009, the company received preliminary approval for participation in the capital purchase programme (CPP).
Sturgis Bancorp said that participation in the Treasury’s CPP required the company to sign agreements with the Treasury that would allow the terms and conditions of participation to change on an on-going basis. The agreement is one sided and grants Congress the ability to modify the conditions of the agreement at any time. These ever-changing conditions are of great concern, added Sturgis Bancorp.
Eric Eishen, president and CEO of Sturgis Bancorp, said: Management believes the additional requirements already imposed, as well as the uncertainty of additional requirements, may be detrimental to the long-term success of the company. The bank was profitable in 2008 and our capital levels exceed regulatory requirements. Bank management has reviewed asset quality and projected financial performance for 2009. Based on this review, the board of directors feels confident we have sufficient resources to meet our capital needs.
