The Real Story
Contrary to a recent report, SpiritBank did not “miss TARP payments”. We did defer dividend payments to the Capital Purchase Program (CPP) at the direction of a federal regulator. The repayment terms provide for a delay of payment and our holding company was directed by a federal regulator this past November to utilize this non-payment provision even though the funds were available to do so. We have, however, accrued for these dividend payments to make at such time as we are directed.
The CPP is not a loan to be repaid, it is a preferred stock investment where non-payment of dividends is a typical provision. We have ten years in which to repay this capital investment to the US Treasury and have every intent and capability to do so.
CPP is a program the government implemented after TARP for the stronger, qualifying banks to deploy capital into their communities. Our principal regulators suggested we apply for this program. Using this as capital, we made well over $3 billion dollars in first mortgage residential loans. In fact, SpiritBank recently received a governmental CDFI fund award for increasing lending and investments in our communities.
We’re proud of our participation in this program and the ability it gave us to deploy the capital to help improve local economies as intended. And, we wanted you to have the real story!