Posted on Thu, Oct. 22, 2009

e-mail	print	RSS	reprint
AIM	Digg it	del.icio.us	Facebook

Area banks' interest to Treasury: $1.5 million

BY JERRY SIEBENMARK

The Wichita Eagle

Wichita-area banks have paid the U.S. Treasury more than $1.5 million in interest payments as part of their participation in the Capital Purchase Program.

That's according to documents posted on the Treasury's Web site.

The CPP is part of the Troubled Assets Relief Program.

The total amount of interest payments is shared by three banks in the metro area: Andover-based Equity Bancshares, Argonia-based Farmers & Merchants Financial and Wichita-based Fidelity Financial.

Those three banks applied for and received a capital investment from Treasury. In return, Treasury received preferred stock in the banks. The banks have five years to return the capital investment, and pay Treasury 5 percent interest.

Fidelity Financial, the holding company of Fidelity Bank, has made the highest interest payments, totaling more than $1.29 million.

Fidelity also received the largest capital investment among area banks, $36.3 million in December.

According to the documents, Equity Bancshares, the holding company of Equity Bank, has paid more than $258,000 in interest to Treasury. Equity received $8.75 million in January.

And Farmers, the parent of Farmers & Merchants State Bank, has paid more than $9,600 in dividends. It received $442,000 in March.

Equity CEO Brad Elliott said his bank has no intentions to pay back the investment early, because either way it will have to pay 5 percent interest.

"There wouldn't be a reason to pay it back early," Elliott said. "We took the money... to continue to grow the bank and provide lending to our communities."

Fidelity spokesman Al Sanchez said his bank has not decided whether it would repay the investment early.

"We are regularly making our interest payments," he said.

According to the Treasury documents, only one Kansas bank that received a CPP investment has missed an interest payment: Blue Valley Ban Corp, the Overland Park holding company of Bank of Blue Valley.

Blue Valley CEO Bob Regnier told the Kansas City Star that his company had put off paying interest to Treasury to keep the extra cash on hand.

The next interest payment due date is Nov. 15. Bank companies make the payments on a quarterly basis.

Reach Jerry Siebenmark at 316-268-6576 or jsiebenmark@wichitaeagle.com.

     Showing: Oldest first Newest first Most-recommended first Least-recommended first

@Nyx.AuthorDisplayName@ wrote on @Nyx.PostedAtTime@:

@Nyx.CommentBody@

@Nyx.Recommender@ @Nyx.AbuseReporter@