Tuesday, October 1, 2013

Park Sterling pays back the Treasury

Park Sterling Corp. has paid back the $20.5 million preferred stock investment the U.S. Treasury made in Citizens South Bank in 2010, the bank announced Tuesday. (Park Sterling bought Citizens South last year). The money was through the government's Small Business Lending Fund program, which sought to give community banks the capital to lend more.

The program itself was met with mixed reviews. Only a small fraction of the money authorized for the program was ever invested in the banks, and about half of the money that did make it out was only used to pay the government back for the bank bailout. Citizens South was one of those banks who used lending fund money to pay back the Troubled Asset Relief Program investment.

But, arguably, the investment in Citizens South worked out. The bank increased its small business lending by 38 percent over where it was before the capital came in -- to $163 million.

Park Sterling paid the money back in cash in the form of a dividend. No word on whether the Treasury had anybody in the office to accept the money, though.

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