Haviland State Bank's holding company is the first Kansas bank holding company to repay its borrowings from the Capital Purchase Program, part of the Treasury Department's Troubled Assets Relief Program.
The bank, which has $33 million in assets, was among six banks from across the country to settle their CPP obligations, Treasury said Wednesday.
Treasury said Haviland Bancshares repaid the $425,000 it received in additional capital, plus $2,597 in accrued dividends.
According to Treasury's most recent CPP transactions report, none of the other 16 Kansas banks that received a capital infusion have repaid all of their borrowings. In the Wichita area, that includes Equity Bancshares, Fidelity Financial and Farmers & Merchants Financial.
Equity Bancshares CEO Brad Elliott didn't rule out paying back early the $8.75 million it received in January 2009.
"We have raised an additional $20 million in capital since taking out TARP," Elliott said. "We currently think we have uses for that (CPP) capital plus the new capital.
" (But) we're keeping our options open on what the best avenues are for retiring it (the CPP capital)."
Haviland State Bank president Stan Robertson said Wednesday that his bank applied for the CPP money only because the nation's financial system was in crisis in the fall of 2008.
That crisis is what spurred the federal government to create TARP and the CPP, intended to bolster the capital of and encourage continued lending from otherwise healthy banks and thrifts until the crisis passed.
At the time, the outlook from that crisis was "cloudy" at best, Robertson said.
"That outlook, or lack of outlook, the unknown, was exactly what spurred us to go ahead and apply for and close on" the CPP money, he said.
Robertson added that in no way was Haviland State under duress at the time it applied for and received the capital infusion.
In hindsight, the rural Kiowa County bank didn't need the extra capital to weather the crisis.
"The way things turned out, at least in rural America, here in the Midwest, it probably wasn't necessary," Robertson said.