Four regional banks have become the first institutions to repay TARP funds, the New York Times reported Tuesday. The repurchase of stocks bought months ago by the Treasury Department marks the beginning of what industry sources have for weeks indicated will be a flight from bailout funds as federal regulation tightens in recipient firms. New York-based Signature Bank (SBNY) announced Tuesday it had returned $120 million to the Treasury and boasted tangible common equity in excess of 8 percent after the return. Among the first four firms to repurchase stock from the Treasury, Signature Bank also boasts the largest repurchase. Combined with contributions from three other regional banks, repurchases of stock through the Capital Purchase Program total $338 million. "The revised, expanded legislation included in the American Recovery and Reinvestment Act of 2009, passed on February 17, 2009, adversely affected our business model and it became apparent that we should return these funds to the Treasury," president and CEO Joseph DePaolo said in a media statement. "The return of these funds allows us to continue to execute our business model...." Old National Bancorp (ONB) said Tuesday it had repurchased all of the $100 million in preferred stock the Treasury had bought through the Troubled Asset Relief Program. The company said it had hired an outside firm to conduct a "rigorous stress test" comparable to the Treasury-implemented one for significant institutions. With the Treasury's blessing, Old National went ahead with the stock repurchases. "Based on the results of the stress test, the company believes it is well-positioned to withstand the current and future economic challenges," company officials said in a press statement. IBERIABANK Corp. (IBKC), the holding company of Louisiana-based IBERIABANK and Pulaski Bank and Trust Co., announced Tuesday it returned $90 million to the Treasury through the redemption of all shares of preferred stock sold back in December through the TARP. Bank of Marin Bancorp (BMRC), the parent company of Bank of Marin, announced Tuesday it had repurchased $28 million of preferred stock previously sold to the Treasury. Company officials assured investors in a media statement that Bank of Marin retains risk-based capital exceeding the standard for a "well-capitalized" institution. "[B]y participating in [the TARP], we did our part to help stimulate the local economy during a volatile time for the financial markets," said president and CEO Russell Colombo. "Given the operating restrictions we experienced as a participant, we believe this decision is in the best interest of our customers, shareholders and employees." Next in the flight from aid? The growing public outrage towards bankers, evident in the AIG bonus debacle, clearly has banking executives anxious to get out of the government’s back pocket as soon as possible, with Bank of America Corp. (BAC) CEO Ken Lewis telling the Los Angeles Times in late March that he intends BofA to begin repayment of government funds as soon as a “stress test” of the bank is complete at the end of the month. Firms receiving government aid are subject to strict executive compensation restrictions, and a growing fear of changing standards over how much freedom firms have to manage their businesses. Goldman Sachs (GS) confirmed that it planned to pay its entire $10 billion TARP stake back, possibly by the end of April, following the disclosure of “stress test” results. In late February, Financial Services chairman Barney Frank and other House Democrats issued a letter demanding repayment of $1.6 billion after learning of Northern Trust Corp.'s (NTRS) sponsorship of a luxury golf tournament. The company on Feb. 27 sent a reply to Congress defending the golf tournament expenditures as a long-planned event not dependent any of the TARP capital. Northern Trust “has engaged [its] regulators with the goal of repaying Capital Purchase Program funds as quickly as prudently possible” under repayment guidelines released by the Treasury in late February, officials said in the letter. Write to Diana Golobay at Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.