Local TARP recipients holding off on repayments

Of the four area-based bank holding companies that have received money through the federal government's Troubled Asset Relief Program, at least two are waiting to repay the funds.

Between December 2008 and February 2009, Springfield-based Great Southern Bancorp Inc., Guaranty Federal Bancshares Inc. and Liberty Bancshares Inc., as well as Ozark-based Gregg Bancshares Inc. sold shares of stock worth more than $97 million combined to the government as part of TARP's Capital Purchase Program.

Blake Thomas, chief operating officer and counsel for Liberty Bank, said that although the bank's financial strength would allow it to immediately repay its $21.9 million in CPP proceeds, it has not begun the process.

"The intended purpose of the program was to encourage more lending to qualified consumers and businesses, and to allow participating banks the opportunity of working with regulators to acquire troubled or failed banks," Thomas said via e-mail. "Unless there is a severe economic downturn or we pursue an acquisition in conjunction with the (Federal Deposit Insurance Corp.), a decision to repay the CPP funds will be made within the next 12 to 18 months."

Great Southern is holding off on paying back TARP money, said Chief Financial Officer Rex Copeland, because of the capital and liquidity it provides.

"In 2009, we made two acquisitions, and there may be other opportunities in 2010," Copeland said. "We want to stay open to looking at those types of things."

Guaranty Federal Bancshares and Gregg Bancshares officials did not respond to repeated interview requests.

Under the program, the banks pay the government a dividend of 5 percent during the first five years, and 9 percent in year six.[[In-content Ad]]