First Bancorp Receives $63.5 Million From Lending Fund
First Bancorp, the parent company of First Bank, has received an investment of $63.5 million in the company's preferred stock from the U.S. Treasury Department under the Small Business Lending Fund.
The Small Business Lending Fund (SBLF) is a voluntary program intended to encourage small business lending by providing capital to qualified community banks at favorable rates, a news release said. The initial dividend rate on the preferred stock is 5 percent.
Depending on the company's success in meeting certain loan growth targets, the dividend rate could go as low as 1 percent for a period of time. Based on current loan levels, the company will continue to pay the 5 percent rate.
Simultaneously with the receipt of the SBLF funds, the company redeemed the $65 million of shares of preferred stock issued to the treasury in January 2009 under the Capital Purchase Program, a part of the Troubled Asset Relief Program. The treasury continues to hold a warrant to purchase 616,308 shares of the company's common stock at a price of $15.82.
"We are pleased to have been selected among healthy financial institutions to participate in this important program," said Jerry L. Ocheltree, president and CEO of First Bancorp. "We have completed the SBLF capital infusion in support of our small business lending operations and have repaid the CPP investment.
"We believe our participation in the SBLF program is a great opportunity for our company and enhances our ability to meet the credit needs of the small business community in our various markets."
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