Banks cash in | Three Maine banks tap Fed bailout funds
Nearly $50 million will be parceled out to three Maine banks under the U.S. Treasury’s Capital Purchase Program, part of the $700 billion economic stimulus package Congress approved in October. The program was created under the Emergency Economic Stabilization Act to stimulate the economy by lending capital at favorable terms to healthy financial institutions willing to sell preferred stock directly to the government. For the banks to participate in the stimulus package program, the U.S. Treasury Department and the bank’s board of directors and shareholders must approve the issuance of preferred stock to the U.S. Treasury in exchange for stimulus funds, according to a press release from Bar Harbor Bankshares. The following banks have announced allotments under the plan:
- The First Bancorp of Damariscotta said it received preliminary approval to obtain $25 million through the program. The bank has 14 branches in Midcoast and Down East Maine. “By participating in the program, The First will have greater capacity to lend in the communities we serve, which is especially important in these challenging economic times,” Daniel Daigneault, The First’s president and CEO, said in a press release.
- Bar Harbor Bank & Trust, which has 12 branches in Down East and MidCoast Maine, has received preliminary approval for approximately $18.8 million. “We intend to use this additional capital to increase commercial and consumer lending, where possible and prudent, to stimulate economic activity throughout our local and regional markets,” Joseph M. Murphy, the bank’s president and CEO, said in a press release.
- Northeast Bancorp of Lewiston, parent company of Northeast Bank, has received $4.2 million under the program. The amount represents about one percent of Northeast’s risk-based assets and is the minimum level for participation in the program, the Sun Journal reported. The bank’s allotment “is testimony to Northeast’s continued commitment to serving the needs of area businesses and families, and the overall strength of our balance sheet,” Jim Delamater, Northeast Bancorp president and CEO, said in a press release. The company operates 11 bank branches in Maine.
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