Cardinal Financial has declined to participate in the Capital Purchase Programme of the U.S. Treasury’s Troubled Asset Relief Programme.
Earlier, the company has announced that its application for $41.2 million in capital under the Capital Purchase Programme (CPP) had received the U.S. Treasury’s preliminary approval. The company said its capital ratios are substantially in excess of the regulatory ratios, and its asset quality has been better than the industry average.
Bernard Clineburg, chairman and CEO of Cardinal Financial, said: we performed careful analysis and concluded that the significant expense of the programme and challenge to prudently and profitably deploy the capital were inconsistent with our long term strategic objectives, and that the participation in the CPP would not be in the best interest of Cardinal’s shareholders.
The U.S. Treasury recently created the capital purchase programme (CPP) which is part of the troubled assets relief programme to encourage qualifying U.S. financial institutions to increase the flow of financing to businesses and consumers, thereby restoring liquidity and stability to the U.S. financial system. Companies participating in the programme must adopt the Treasury Department’s standards for executive compensation and corporate governance, for the period during which Treasury holds equity issued under this programme. These standards generally apply to the chief executive officer, chief financial officer and the next three most highly compensated executive officers. The approval is subject to certain conditions and the execution of definitive agreements.
