Citizens First of Kentucky Plans Tarp Escape

Citizens First Corp. in Bowling Green, Ky., said Thursday that it has agreed to repay part of its outstanding debt under the Troubled Asset Relief Program.

The $334.3 million-asset company reached a "letter agreement" with the Treasury Department on Feb. 16 to buy back 25% of the preferred stock it issued to the agency as part of the Capital Purchase Program.

Citizens First paid $2.2 million for 63 of the 250 shares.

As a result of the purchase, the company will recognize $50,000 of unaccreted discount on the stock as of the date of purchase.

It will also reduce its annual dividend payments, by $111,000.

The company said in a press release that "capital at the bank remains unchanged following this transaction."

The Treasury will continue to own $6.6 million of the company's preferred stock; it has a warrant to buy 254,218 shares of common stock at an initial exercise price of $5.18.

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