Mid Penn Bancorp (MPB) in Millersburg, Pa., has repaid the $10 million it owes the Troubled Asset Relief Program.
The $724 million-asset parent of Mid Penn Bank said Friday it has redeemed the preferred stock the company issued to the Treasury Department in December 2008 in exchange for the Tarp funds.
Mid Penn paid Treasury roughly $59,000 of dividends that had accrued. The company says it expects to save $500,000 in dividend payments annually by buying back the shares.
Mid Penn also said it expects buy back from the Treasury a warrant to purchase up to roughly 73,000 shares of the company's common stock. Under the terms of an agreement with the Treasury, the buyback depends on the ability of Mid Penn and Treasury to agree on the warrant's value, Mid Penn said Friday in a filing with the Securities and Exchange Commission.
"We are pleased and proud to make this announcement, and we believe that our full repayment to Tarp validates the strength and stability of Mid Penn," Rory Ritrievi, Mid Penn's chief executive, said in a news release. "Mid Penn is in a position to be able to do this as a result of successful years of income and capital preservation in 2010, 2011 and 2012."
Though Mid Penn did not detail the source of funds the bank used to repay the government, it has raised $4.8 million since September via a sale of preferred stock, according to the securities filing.