7 Arkansas Lenders Still Indebted to Treasury After TARP Relief

by George Waldon  on Monday, Nov. 4, 2013 12:00 am  

The concern is the presence of a Treasury observer would subject the private board meetings to public scrutiny under the Freedom of Information Act.

Michael Donnell, chief financial officer of Danville’s Chambers Bancshares Inc., said his company is still weighing its options regarding its exit from the TARP program.

“At this time, a final decision has not been made,” Donnell said in an email response.

The company received $19.8 million in TARP funds. Its $777 million-asset Chambers Bank last year absorbed Peterson Holding Co. after that two-bank holding company defaulted on a loan secured by stock. Peterson owned Decatur State Bank and Grand Savings Bank of Grove, Okla. Chambers Bank sold Grand Savings for an undisclosed sum in April to a local investment group led by Tony Steele and Guy Cable.

Other Considerations

• Liberty Bancshares Inc. of Jonesboro juggled federal funding through two programs before cashing out recently.

Liberty received $57.5 million in TARP funds but left the program in July 2011. The holding company of $2.8 billion-asset Liberty Bank of Arkansas stepped out of TARP’s capital purchase program and into another U.S. Treasury-administered program: the Small Business Lending Fund.

The program could punish participants with rates as high as 9 percent for not putting the money to work or reward participants with interest rates as low as 1 percent for increased small-business lending.

Liberty’s SBLF obligations were repaid on Oct. 24 when its $280 million sale to Conway’s Home Bancshares Inc. was completed.

• The U.S. Treasury has categorized repayment from the largest recipient of TARP funds in Arkansas as “Currently Not Collectible.” Rogers Bancshares Inc. of Little Rock received $25 million and soon began a string of 15 missed quarterly payments. The investment, used to bolster Metropolitan National Bank’s waning capital, is expected to be a large if not total loss.

Rogers Bancshares filed Chapter 11 bankruptcy on July 5 after Metropolitan posted combined losses of $96 million since 2009. Among the debts listed by Rogers Bancshares is more than $5.8 million owed to the U.S. Treasury for dividend payments.

The line of creditors ahead of Uncle Sam doesn’t bode well, even with a pending $53.6 million sale to Simmons First National Corp. of Pine Bluff.

 

 

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