Emclaire Financial (EMCF) in Emlenton, Pa., has partly redeemed preferred stock it issued through the Small Business Lending Fund.
The $528 million-asset company said Tuesday that it had redeemed half of the $10 million of shares it issued to the Treasury Department through the SBLF in August 2011. Emclaire did not say whether it planned to redeem the rest of the shares.
The action will reduce Emclaire's annual dividend payments by $250,000; the company said it will be well capitalized following the redemption. At June 30, Emclaire's bank had a Tier 1 leverage ratio of 8.8% and total risk-based capital of 16%, according to the Federal Deposit Insurance Corp.
"The SBLF program afforded us the opportunity to augment the bank's already strong capital position and continue our tradition of small business lending," William Marsh, Emclaire's chairman, president and chief executive, said in a press news release. "The partial redemption is consistent with our current capital strategy of redeeming our outstanding preferred stock as we continue to grow earnings and capital."
The Treasury started the SBLF in mid-2011 to provide community banks with capital to lend to small businesses. It has provided more than $4 billion in funding to 332 community banks through the program, the Treasury said in April.