First Bancshares in Hattiesburg, Miss., has exited the Troubled Asset Relief Program, thanks partly to an assist from another bank.
The $1.3 billion-asset First Bancshares on Tuesday paid $15.9 million to buy back all 17,123 shares of preferred stock that the Treasury Department had purchased in the bank through the Tarp's community development capital initiative during the financial crisis. The company described the price as fair market value, or a 7% discount to par value, in a news release this week.
First Bancshares had the third-largest outstanding balance in the CDCI program as of October, according to the Treasury's Nov. 10 report to Congress about Tarp. No. 1 was Southern Bancorp in Arkansas, and No. 2 was Carver Bancorp in New York, the report said.
The Treasury, as part of its effort to wind down Tarp, in August began letting CDCI lenders repurchase their remaining shares at fair value provided certain conditions were met, the report said.
In connection with the repurchase, First Bancshares obtained a $20 million revolving line of credit from First Tennessee Bank in Memphis, the release said.
The interest on the line of credit, starting at 2.5%, is subject to change periodically based on changes to the Libor rate.
The transaction is another milestone for First Bancshares. In October it agreed to buy two banks, Iberville Bank in Plaquemine, La., and Gulf Coast Community Bank in Pensacola, Fla., for a combined $33.4 million. Both deals are expected to close during the first quarter.