The Treasury Department reported Tuesday that five of the eight Kansas banks participating in its Small Business Lending Fund program — including Wichita-based Equity Bancshares — have increased their lending since the program’s inception.
Treasury said total lending among those Kansas institutions increased by more than $74.8 million since it began tracking their lending in July 2011.
The program provided capital to participating banks. As those banks increase their lending, the dividend rate can decrease to as low as 1 percent. The program was part of the Small Business Jobs Act signed into law in 2010.
According to a Treasury report released Tuesday, Equity Bancshares, the holding company of Equity Bank, has increased its business lending by 28 percent, a $34 million increase. Equity’s baseline level at the start of the program was $123 million. That has increased to $158 million, according to the report. The report says it is paying a 1 percent dividend rate. Equity received $16.4 million in capital from Treasury.
Brad Elliott, Equity’s CEO, said the foundation of his bank is small business lending and participation in SBLF was a way for the bank to raise more capital cheaply to increase that lending.
“Our strategic plan and the goals of the program align perfectly,” he said.
But not all participating Kansas banks have increased their lending. The report said three Kansas banks — Bern Bancshares, the holding company of State Bank of Bern; Brotherhood Bancshares, the Kansas City, Kan., holding company of Brotherhood Bank & Trust; and Farmers State Bankshares, the Holton-based holding company of Farmers State Bank — saw declines in lending from their baselines.
According to the report, Brotherhood Bancshares had the greatest decline, at nearly 32 percent, followed by an 8 percent decline at Farmers State and a 1 percent decline at Bern Bancshares. As a result, Brotherhood, Farmers State and Bern each have a 5 percent dividend interest rate.
The other Kansas banks participating in the program, and which have grown their small business lending, are CB Bancshares Corp. of Weir; the holding company of CBW Bank; Freedom Bancshares of Overland Park, the holding company of Freedom Bank; Osborne Investments of Osborne, the holding company of Farmers Bank of Osborne; and UBT Bancshares of Marysville, the holding company of United Bank & Trust.
Nationally, Treasury said participating banks have increased lending by $7.4 billion since the program’s inception.