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January 27, 2009
tg-03

Treasury Provides Funding to Bolster Healthy, Local Banks

Capital Purchase Program Funds 23 Banks
to Help Meet Lending Needs of Local Consumers, Businesses

Washington, DC - The U.S. Treasury Department today announced investments of approximately $386 million in 23 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 regional, small and large financial institutions as well as Community Development Financial Institutions through total CPP investments of $194.2 billion in 317 institutions in 43 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 through the CPP is the United Labor Bank, which provides cash management services to unions, multi-family lending and small commercial real estate loans throughout California.

"With the addition of this capital, we will expand our branch network from five branches to seven or eight in the Pacific Northwest. We also plan to expand our lending platform with the addition of residential loan products. Our lending goals for the 2009 business year will exceed $50 million of new loan growth," said Malcolm Hotchkiss, President and Chief Executive Officer, First ULB Corp and United Labor Bank.

Under the CPP, Treasury is purchasing up to a total of $250 billion of senior preferred shares from viable 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/.

The following is a complete list of banks receiving funding on January 23, 2009:

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REPORTS

• Transaction Report (1/27/2009)