Two community banks have repaid the Troubled Asset Relief Program.
Virginia Commerce Bancorp (VCBI) in Arlington paid $71.3 million from retained earnings and liquidity to redeem all of its preferred shares, the $3 billion-asset company said Tuesday. The payment included $71 million in liquidation value of the stock and roughly $256,000 in accrued and unpaid dividends for the current quarter.
Virginia Commerce had planned on beginning its repayment in June but delayed its repurchase under guidance from the Federal Reserve Bank of Richmond.
The repurchase will cut about $5.5 million annually in cash dividends on preferred stock and related expenses, the company said. Virginia Commerce will accelerate an unaccreted discount on its books that had been tied to the Tarp shares; the move is expected to reduce net income available to common shareholders by roughly $1.9 million, or 6 cents per common share, in the fourth quarter.
Virginia Commerce reported in October third-quarter profit of $7.1 million, up more than 36% from a year earlier.
The company now plans to negotiate the repurchases of Treasury’s warrant to purchase almost 2.7 million of its shares. Virginia Commerce received $71 million in December 2008.
First American Bank in Elk Grove Village, Ill., repaid $37.5 million in notes from Treasury after raising $26 million in fresh equity from existing shareholders, Crain’s Chicago Business reported Tuesday.
Late last year the $2.9 billion-asset company repaid $15 million of the funds it had received. In July 2009, the company had issued $50 million in notes and $2.5 million in warrants to Treasury. The warrants had previously been converted into notes.