The holding company of Equity Bank said Monday it has repaid Troubled Asset Relief Program money it acquired along with its acquisition of an Overland Park bank and holding company two years ago.
Wichita-based Equity Bancshares said in a news release that it completed repayment of TARP funds to the Treasury that First Community Bancshares received before Equity acquired it in October 2012.
Equity repaid the full value of the TARP money, which totaled $15.54 million. Equity repaid it through a loan from ServisFirst Bank based in Birmingham, Ala.
“We have enough capital to do it, but it (the loan) gives us the ability to have excess capital to go look at other acquisitions,” Equity CEO Brad Elliott said in an interview.
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Elliott said when Equity acquired First Community it was past due on its TARP payments.
“Equity Bank brought all those (past due payments) current ... and worked with Treasury to find a pay-off date,” he said.
This is the second time that Equity Bancshares has repaid TARP money. In August 2011 it paid off $9.2 million in TARP money it had applied for and received from Treasury in January 2009.
The TARP program was created by Treasury and authorized by Congress in response to the 2008 financial crisis to stabilize capital for banks. The capital that Equity and 15 other Kansas banks received was through TARP’s Capital Purchase Program.
In exchange for the capital infusions, banks gave up preferred stock in their holding companies to Treasury. They had five years to repay the infusion at 5 percent interest.
Beyond five years, the interest rate reset to 9 percent.