Treasury: $386M to healthy banks
The government bolsters viable local banks with cash infusions designed to boost lending.
NEW YORK (CNNMoney.com) -- The Treasury Department announced Tuesday that it had provided about $386 million in investment capital to 23 local banks in an effort to make cash available to small businesses and consumers.
The government's Capital Purchase Program is aimed at boosting healthy banks, and is designed to give their customers greater access to credit, the Treasury Department said.
The three largest capital infusions in the most recent batch went to 1st Source Corp. in South Bend, Ind. ($111 million), Liberty Bancshares, Inc. in Jonesboro, Ark. ($57.5 million), and WSFS Financial Corp. in Wilmington, Del. ($52.6 million).
The additional funding was welcomed by First ULB Corp. in Oakland, Calif., who received $4.9 million in government investment.
"With the addition of this capital, we will expand our branch network from five branches to seven or eight in the Pacific Northwest. We also plan to expand our lending platform with the addition of residential loan products," said First ULB president Malcolm Hotchkiss in a statement.
The Treasury department said it intends to spend a total of $250 billion on shares of healthy local banks. Those who accept the funding also agree to pay the government a 5% dividend for the first five years and 9% for every subsequent year.
Since the program's start last October, the CPP program has invested $194.2 billion into 317 institutions across the country, with the largest investment being $25 billion, and the smallest being about $1 million.