Hundreds of banks nationwide, including three in Beaufort County, have been unable to repay federal bailout loans.
About 350 small banks with about $15 billion in outstanding loans face a "significant challenge" in generating new funds to repay the government, according to Christy Romero, special inspector general for the Troubled Asset Relief Program.
In 2008 and 2009, the U.S. Department of the Treasury invested about $205 billion of TARP money in 707 banks of varying sizes to help spur development at the onset of the recession.
The Treasury has since recouped about $190 billion, but 351 -- nearly half -- of the institutions have yet to repay their loans.
Among those is Mount Pleasant-based Tidelands Bank, which operates seven branches, including one in Bluffton. The bank received about $14.5 million in 2008 and has not yet repaid any of it, according to Bobby Mathewes, its chief community banker.
Mathewes said his bank is prohibited from repaying any of that loan by a consent order issued by the Federal Deposit Insurance Corp., which mandates that the bank first raise its capital to at least 8 percent of its total assets.
That percentage was 5.4 at the end of 2011, Mathewes said, and it would be "several years" before his bank could repay the loan on its own.
"In the big picture, community banks are just getting back to the point where we can make money again," Mathewes said. "For the smaller banks, regardless of whether they have a consent order, the capital is just not flowing."
Mathewes added he didn't expect it would take so long to repay the loan when his bank received it more than three years ago.
"We thought it might take a couple years," he said. "We had no idea how severe the recession was going to be."
Mathewes said operations at the bank's branches have not been affected.
CoastalSouth Bancshares Inc., which owns Hilton Head Island-based CoastalStates Bank, has yet to repay any of the $16 million it received in 2009, according to Charlie Christy, its chief financial officer.
He said the loans help fund more than 8,000 mortgages to customers, and the bank made money in the fourth quarter of 2011 and the first quarter of this year.
Christy added that his bank intends to repay the loan "when the time is appropriate."
Attempts to seek comment from Bluffton-based Atlantic Bancshares Inc., which has not repaid any of the $2 million it received, were unsuccessful.