The parent companies of two local banks are among privately held financial institutions that have accepted assistance under the Troubled Asset Relief Program.
TARP is a component of the U.S. Treasury Department's Capital Purchase Program. The $700-billion bailout fund is intended to inject fresh capital into the nation's banks as a way to encourage them to resume more normal lending. The program, which provides for the sale of senior preferred shares to the Treasury, was made available to healthy banks of all sizes throughout the country on a voluntary basis.
Regions Financial Corp. (NYSE:RF), of Birmingham, Ala., announced in November that it had sold $3.5 billion in preferred shares in the company to the Treasury. Regions Bank has branches in Eupora and Mathiston.
"This government investment program is an important step in supporting consumers and businesses that will drive economic recovery and growth," said Dowd Ritter, Regions' chairman, president and CEO. "These funds will strengthen our Tier 1 capital to approximately 10.5 percent and enable us to continue lending where our high standards of credit quality, full pricing and depository relationships can be met."
Cadence Financial Corp. (Nasdaq: CADE), which reported a $3.4 million loss for 2008, is among nine Mississippi-based banks that have accepted the federal bailout money. Cadence Bank locations include a branch in Maben.
The financial holding company announced in January that it completed the sale of $44 million of preferred stock to the Treasury Department under the CPP.
"The $44 million preferred stock sale will further strengthen Cadence's already solid capital base," said Lewis F. Mallory Jr., chairman and CEO of the Starkville-based bank. "(W)e expect the additional capital to be an important part in supporting loan growth as the economy improves."
Mallory, in Monday's Hattiesburg American, said that a virtual shutdown in the equity markets was a major influence in the decision to participate in TARP.
"We couldn't go out and raise capital in the market we were in," Mallory told the newspaper. "It was an opportunity to get capital, and better we go down the road to find we don't need it rather than look up a year from now and need it."
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