The Small Business Lending Fund has been
Lending data published by the Treasury Department
The median former Tarp bank increased such credit, defined under the program as loans of $10 million or less to businesses with $50 million or less in revenue, by 8.4% from a mid-2010 baseline as of the third quarter, compared with 21.4% for non-Tarp peers.
Roughly 35.8% of the Tarp banks failed to increase small-business loans by more than 2.5%, compared with 18.1% for the non-Tarp banks.
Overall, the Tarp banks increased small-business loans by 5.1% during the period to $25.9 billion, while the non-Tarp banks increased their small-business loans by 20.9% to $12.7 billion.
Banks that rotated out of Tarp account for about half the institutions that received SBLF capital, and about two-thirds of the $4 billion of total disbursements. The disbursements were made from
Small recipients of Tarp funds have been slow to repay the government generally, perhaps reflecting relatively weak access to capital markets.
In all, banks with less than $10 billion of assets got $14.6 billion of rescue infusions, and $11.1 billion was outstanding as of January last year. The $2.2 billion refinanced using the SBLF accounted for two-thirds of the decline in the outstanding amount through December, to $7.9 billion.
Meanwhile, large banks have repaid about $220 billion disbursed to them, leaving $9 billion outstanding in December.
Trying to
Leaving Tarp was
Explaining his company’s interest in the program, CoBiz Financial Inc. Chief Executive Steven Bangert told investors in July, “It certainly buys us an awful lot of time, allows us to refinance out of Tarp without any dilution.”
The dividend on CoBiz’s Tarp preferred was due to reset to 9% from 5% in December 2013. The dividend on CoBiz’s SBLF capital will be no more than 5% through roughly the middle of 2016 if the company’s small-business lending is no lower than the mid-2010 baseline as of mid-2012.
Small-business loans under the Small Business Lending Fund definition were down 1.4% from the baseline at CoBiz as of the third quarter. SBLF capital accounted for about a third of the $2.4 billion-asset company’s tangible equity, and small-business loans accounted for about half of its entire loan portfolio.
Bangert said the company would be focused on achieving a lower dividend for the SBLF capital, which could be reduced to as little as 1% with a 10%, or roughly $74 million, increase in lending.
“We don’t want to give up on quality and structure,” he said, “but I think when it comes to pricing, we can be a lot more flexible going forward.”