Feds sell F&M Bank stock
By Emily Ford
SALISBURY - The U.S. Treasury Department is selling its stake in four banks, including F&M Financial Corp., based in Salisbury.
The sale comes as the federal government continues to wind down the Capital Purchase Program, part of the Troubled Asset Relief Program, or TARP.
U.S. Treasury on Monday also auctioned its preferred stock in Alpine Banks of Colorado in Glenwood Springs, First Community Financial Partners in Joliet, Ill., and F&M Financial in Clarksville, Tenn.
The modified Dutch auctions were offered to certain institutional buyers and investors.
Steve Fisher, president of F&M in Salisbury, said he will know more about the results of the sale when the auction is complete later this week.
Under TARP's Capital Purchase Program, the government invested cash in exchange for shares.
More than three years later, U.S. Treasury still owns stock in 302 banks and has been working aggressively to end the program by auctioning off shares.
Overall, the government has recovered $266 billion from TARP's banks through repayments, dividends, interest and other income, compared to $245 billion originally invested, the Treasury Department said.
In 2009, F&M Bank received $17 million from TARP's Capital Purchase Program.
At the time, F&M Chairman Paul Fisher said the additional capital would allow the bank to make $80 million to $90 million in new loans.
Participation in the Capital Purchase Program was an acknowledgement of stability and strong capital positions, local bank representatives said.
U.S. Treasury injected money into financially stable banks to help them support new lending, they said.
In response, the community banks initiated lending programs aimed at helping builders, developers and qualified homebuyers.
In a February 2009 e-mail to employees, Steve Fisher explained the bank's reasons for participating in the Capital Purchase Program:
g Capital is important to the health of any bank.
g F&M already knew it needed more capital for future growth.
g Because of the current economy, capital is not available.
g The government is offering capital to healthy banks.
g F&M is taking advantage of the CPP the same as its competitors.
g F&M plans to pay back the money over the next five years with interest.
g "And it's a good thing for our bank and our economy."
Contact reporter Emily Ford at 704-797-4264.