An Atlanta community bank this week became the first in the state to repay Uncle Sam for aid it received during the depths of the financial crisis.
The parent company of Georgia Commerce Bank on Wednesday repurchased $9.1 million in preferred shares and warrants held by the federal government's Troubled Asset Relief Program.
The announcement is a jolt of good news for a beleaguered state banking industry better known the past few years for leading the nation in bank failures.
Georgia Commerce used the funds it received in February 2009 not as a bailout to fill holes in its balance sheet, but to make new loans, bank Chairman and CEO Mark Tipton said.
“We grew our loans 13 percent from the moment we got TARP to Wednesday, when we paid it off,” he said.
Georgia Commerce, which largely avoided the real estate troubles many other state lenders encountered, recently raised $21 million in investor cash to repay TARP and fund future growth.
Twenty-six Georgia banks received government cash infusions under TARP. They have paid $631.4 million in dividends to the government, according to a tally by the Georgia Bankers Association.
Atlanta-based SunTrust Banks, which received $4.85 billion in TARP aid, is expected to announce a plan to repay the government sometime this year. Blairsville-based United Community Banks announced Monday that it would suspend dividend payments to the government to comply with certain Federal Reserve rules.
Joe Brannen, president and CEO of the GBA, called Georgia Commerce's announcement "encouraging" and reiterated Treasury Department estimates that the direct investment in banks could ultimately result in as much as $20 billion in profit for taxpayers.