QCR Holdings (QCRH) in Moline, Ill., has repaid about a fourth of its money it received from the Treasury Department's Small Business Lending Fund Program as part of its effort to increase its tangible common equity.
The $2 billion-asset company said Friday that it has redeemed $10.2 million of the $40.1 million in preferred stock it had issued to the Treasury in September. It had used the funds to exit the Troubled Asset Relief Program.
Partially repaying the SBLF preferred capital is a "significant step in our previously stated long-term capital plan," Todd A. Gipple, QCR's chief operating officer and chief financial officer.
A multi-bank holding company, QCR is only the second of the 332 institutions participating in the SBLF program to redeem a portion of the funds. In late May, Oak Valley Bancorp (OVLY) in Oakdale, Calif., paid back half of the $13.5 million it received from the program, which is aimed at stimulating small-business lending. In all, the Treasury awarded $4 billion to community banks and community development through the SBLF program.
QCR said it repaid the $10.2 million with cash on hand and did not need to raise additional capital. The partial redemption will reduce QCR's SBLF preferred dividends by $511,000 annually and increase its diluted earnings per share by 11 cents on an annual basis. The future conversion of its Series E preferred stock will add roughly 1.20% to its TCE ratio.
The company wants to increase its TCE to the mid-6% range from the 3.86% it reported for the first quarter.
