Treasury Provides Funding to Bolster 42 Healthy, Local Banks Nationwide

Treasury Provides Funding to Bolster 42 Healthy, Local Banks Nationwide

 

February 3, 2009
TG-13

 

First banks in Arizona and Nebraska receive capital to increase lending; Banks in 45 states now participating in Treasury program

Washington, DC – The U.S. Treasury Department today announced investments of approximately $1.15 billion in 42 banks across the nation as part of its Capital Purchase Program (CPP), a means to directly infuse capital into healthy, viable banks with the goal of increasing the flow of financing available to small businesses and consumers. With additional capital, banks are better able to meet the lending needs of their customers, and businesses have greater access to the credit that they need to keep operating and growing.

Since its inception in October 2008, Treasury has strengthened healthy small and large, regional, and national, financial institutions, as well as Community Development Financial Institutions (CDFIs), through total CPP investments of $195.33 billion in 359 institutions in 45 states and Puerto Rico. To date, the largest investment was $25 billion and the smallest investment was approximately $1 million.

Among the most recent banks to receive Treasury funding was Legacy Bancorp of Milwaukee, Wisconsin, a CDFI founded by African-American women and one of the fastest growing community banks in the nation. CDFIs such as Legacy provide vital credit and financial services to low-income areas that are often unavailable from commercial banks.

Farmers and Merchants Bank, which primarily serves farms and rural businesses, became the first Nebraska bank to receive Treasury investments through CPP.

“We believe this investment will enable our institution to take advantage of opportunities to further strengthen our position in the marketplace. In particular, we believe the investment will increase Farmers & Merchants Bank’s lending capacity, thereby enhancing our ability to assist our core customers in meeting the challenges of a recessionary environment while positioning them to take full advantage of an economic recovery,” said Gerry Dunlap, President and Chief Executive of Country Bankshares, Inc., the bank holding company of Farmers and Merchants Bank.

Also receiving CPP funding was Firstbank Corporation of Alma, Michigan, which operates 53 banking offices throughout the state’s Lower Penninsula.

“This additional capital will facilitate expanded service to our customers and the communities we serve in Michigan,” said Chief Executive Officer Thomas R. Sullivan. “We plan to use the additional capital to further increase the capacity of our banks to make prudent loans to customers, while serving customer and community needs for deposit and other banking services. This is a time when economies at all levels – local, state, regional, and national – urgently need supportive, quality oriented, well-run banks. As a community banking company with six affiliate banks, we at Firstbank Corporation are excited about the prospects that this additional capital provides.”

Under the CPP, Treasury is purchasing up to a total of $250 billion of senior preferred shares from healthy U.S. financial institutions such as those announced today. Institutions that participate in the CPP must comply with restrictions on executive compensation during the period that Treasury holds equity issued through the CPP and agree to limitations on dividends and stock repurchases.  Banks participating in the CPP will pay the Treasury a five percent dividend on senior preferred shares for the first five years following the investment and a rate of nine percent per year thereafter. Banks may repay Treasury under the conditions established in the purchase agreements, and Treasury may sell these shares when market conditions stabilize. Further information about the terms of the program, including weekly transactions, can be found at http://www.treas.gov/initiatives/eesa/.

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The following is a complete list of banks receiving funding on January 30, 2009:

Arkansas
	Rogers Bancshares, Inc.	$25,000,000
Arizona
	Goldwater Bank, N.A.	$2,568,000
California
	Beach Business Bank	$6,000,000
	Central Valley Community Bancorp	$7,000,000
	Ojai Community Bank	$2,080,000
	Peninsula Bank Holding Co.	$6,000,000
	Plumas Bancorp	$11,949,000
	Valley Commerce Bancorp	7,700,000
Colorado
	Bankers’ Bank of the West Bancorp, Inc.	$12,639,000
Florida
	First Southern Bancorp, Inc.	$10,900,000
Georgia
	Metro City Bank	$7,700,000
Illinois
	PrivateBancorp, Inc.	$243,815,000
Indiana
	AMB Financial Corp.	$3,674,000
Kansas
	Equity Bancshares, Inc.	$8,750,000
	UBT Bancshares, Inc.	$8,950,000
Maryland
	Monument Bank	$4,734,000
	Annapolis Bancorp, Inc.	$8,152,000
	First United Corporation	$30,000,000
Maine
	Katahdin Bankshares Corp.	$10,449,000
Michigan
	Firstbank Corporation	$33,000,000
	Flagstar Bancorp, Inc.	$266,657,000
Missouri
	Guaranty Federal Bancshares, Inc.	$17,000,000
North Carolina
	Oak Ridge Financial Services, Inc.	$7,700,000
Nebraska
	Adbanc, Inc	$12,720,000
	Country Bank Shares, Inc.	$7,525,000
New Hampshire
	Northway Financial, Inc.	$10,000,000
New Jersey
	Community Partners Bancorp	$9,000,000
	Hilltop Community Bancorp, Inc.	$4,000,000
	Parke Bancorp, Inc.	$16,288,000
	Stewardship Financial Corporation	$10,000,000
Ohio
	Peoples Bancorp Inc.	$39,000,000
Pennsylvania
	DNB Financial Corporation	$11,750,000
	First Resource Bank	$2,600,000
South Carolina
	Greer Bancshares Incorporated	9,993,000
Tennessee
	F & M Bancshares, Inc.	$4,609,000
Texas
	Central Bancshares, Inc.	$5,800,000
Virginia
	Central Virginia Bankshares, Inc.	$11,385,000
	Middleburg Financial Corporation	$22,000,000
	WashingtonFirst Bank	$6,633,000
Washington
	W.T.B. Financial Corporation	$110,000,000
Wisconsin
	Anchor BanCorp Wisconsin Inc.	$110,000,000
	Legacy Bancorp, Inc.	$5,498,000