Florida banks tap new federal stimulus program

First Busey Corp., First Federal Bancorp, Florida Shores Bancorp and HomeBancorp are the first banks with branches in the region to tap the Small Business Lending Fund.

Not all that money will go straight to small-business borrowers. Busey, the largest recipient of the four, used its funds to pay off debt from TARP, the Troubled Asset Relief Program.

The U.S. Department of Treasury this week earmarked another $767 million for 50 community banks in its new lending program.

A total of 130 banks have now accepted $1.8 billion from the $30 billion program, known as SBLF.

Unlike the maligned TARP program, the SBLF is geared to provide a cheap source of funds for smaller, healthy banks. Only banks under $10 billion in assets qualify, and those under $1 billion can borrow at a higher percentage of their assets.

Small banks can apply for up to 5 percent of their risk-based assets. They are allowed to leverage those funds up to 10 times — an $8 million award could translate into $80 million in loans to small businesses.

The Treasury provides the capital in return for preferred stock in each bank. The bank starts with a 5 percent dividend payment on that stock, but it can drop as low as 1 percent if the bank shows loan growth of 10 percent per year.

Some banks are using SBLF funds to redeem TARP preferred shares, which lowers their borrowing costs and gets them out of that bailout program.

Florida Shores Bancorp, the Pompano Beach-based parent of Florida Shores Bank Southwest in Venice, received $12.8 million in SBLF funding for its two banks.

Florida Shores-Southwest received about $7 million last week, chief executive Jim Kuhlman said Thursday.

The bank, which opened in November 2007, is about to reach $300 million in assets.

“Today we were $297 million, and with normal first-of-the-month activity, we should pass this mark in the next few days,” Kuhlman said.

First Federal Bank of Lake City, which has three offices in Sarasota and Manatee counties, took $20 million.

First Federal bought the failed Flagship National Bank of Bradenton in October 2009.

HomeBanc of Tampa, which has a branch in Lakewood Ranch, received $7.4 million.

Busey of Champaign, Ill., which operates four offices in south Sarasota and Charlotte counties, received $72.7 million.

The company immediately used those funds and its own money to repay the $100 million it borrowed under the TARP program in March 2009.

By exiting TARP, the $3.5 billion-asset bank will be able to boost small-business lending, chief executive Van Dukeman said in a statement.

Several local banks are still waiting to hear from Treasury on their funding applications.

Insignia Bank of Sarasota asked for $5 million, and Gateway Bank of Southwest Florida in Sarasota applied for $5.5 million.

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