By Andy Ostmeyer

aostmeyer@joplinglobe.com

Several community banks in Southwest Missouri have waived off any help from the federal government. Some worry that such help comes with too high a price.

Others are exploring the possibility of allowing the Treasury Department to buy millions of dollars worth of ownership shares in their banks.

“Thank you, we don’t need the federal government’s money,” said Pat O’Neal, chief financial officer for Lamar Bank and Trust. “Our earnings, our capitalization, our loan portfolio are in good shape.”

As part of the federal government’s $700 billion bailout, known officially as the Troubled Assets Relief Program, or TARP, $250 billion was set aside for the Capital Purchase Program, which Treasury Secretary Henry Paulson called “a key component” of the financial rescue.

The Treasury Department is using its money to buy preferred stock in banks, which then must agree to certain conditions, including limits on executive compensation and a ban on lucrative retirement deals called golden parachutes, so long as the federal government holds the equity.

“This is an investment, not an expenditure, and there is no reason to expect this program will cost taxpayers anything,” Paulson said when introducing the program in October. He said the shares eventually would be bought back “with a reasonable return.”

The amount of money available to local banks is set according to a formula based on their risk and other factors.

Lamar Bank and Trust was eligible for $2 million, according to Tom Main, president and chief executive officer.

Other banks opting out of the federal program include First State Bank of Joplin; Community Bank and Trust, based in Neosho; Southwest Missouri Bank, in Joplin and Carthage; and Arvest and Commerce banks.

“We’re OK,” said Alden Buerge, chairman and chief executive officer of First State Bank. “We don’t need that. We’re well-capitalized.”

Rudy Farber, chairman of Community Bank and Trust, noted that banks like his didn’t dabble in some of the trading and problems that afflicted the Wall Street investment banks.

“They didn’t become involved in the derivative market, where there are credit-default swaps,” he said.

Farber also likened being a banker to being a physician: Give a patient too little medicine, and he’ll die; give him too much, and he’ll die, too.