|Utilization of the Treasury's capital purchase program continues to be brisk -- with most institutions promising to use the funds to strengthen community activity. The program taps into available funds from the $750 billion Troubled Asset Relief Program.
The Treasury will purchase $95 million of preferred stock and related warrants from Pinnacle Financial Partners Inc., a press release Tuesday said.
"The additional capital will not only strengthen our lending capacity so that we can do even more to encourage growth and investment for the communities in which we do business but also provide us the opportunity to seize other potential strategic options," Pinnacle President and Chief Executive Officer M. Terry Turner said in the release.
Preferred shares purchased by the Treasury earn 5 percent annually during the first five years then jump to 9 percent.
Preliminary approval for LNB Bancorp Inc. to receive $25 million under the capital plan has been obtained, a statement today said. LNB President and CEO said the capital will be used "to further invest in the growth and economic recovery of our communities."
A $24 million Treasury investment will be made in Severn Bancorp Inc., a news release Tuesday said. The Annapolis, Md.-based firm expects the capital infusion to further strengthen its ability to continue community lending.
HopFed Bancorp Inc. announced today that has received preliminary approval for an $18 million Treasury investment. The deal includes 10-year warrants for common stock equal to 15 percent of the Treasury's preferred stock investment.
The Hopkinsville, Ky.-based company's President and CEO John E. Peck expects that the funds will be used to enhance lending opportunities, expand into new market and make strategic acquisitions.
Los Angeles-based Broadway Financial Corp. -- which originates residential, church and commercial mortgages -- said last week it received a $9 million Treasury investment. Chairman and CEO Paul C. Hudson said the funds would be used to support continued growth. The deal included $1.4 million in warrants.
On Tuesday, Federal Deposit Insurance Corporation Chairman Sheila C. Bair testified before the House Financial Services Committee that more than 1,000 community financial institutions have applied so far for the program, while a number of large banks have also utilized it.
Banks Grab TARP Capital
More than 1,000 financial institutions have applied for or received capital investments from the Troubled Asset Relief Program, according to Congressional testimony. Funds from the program will be used to support lending and acquire other banks.