(Source: Business Wire)The Bank Holdings (NASDAQ: TBHS) announced the filing of an application with its primary regulator to voluntarily participate in the Capital Purchase Program (CPP) in conjunction with the U.S. Treasury Department's Troubled Asset Relief Program (TARP). The Company's application includes the issuance of $5 million to $15 million in senior preferred stock. The Bank Holdings (the Company) is the parent company of Nevada Security Bank (the Bank), which operates under the name Silverado Bank in California, and Granite Exchange, Inc. (Granite).

On October 14, Secretary of the Treasury Henry Paulson announced decisive actions to protect the U.S. economy. Included in this action was the announcement the Treasury would purchase equity stakes in a wide array of financial institutions. These Qualifying Financial Institutions (QFIs), like Nevada Security Bank and the Company, may participate in selling senior preferred shares to the Treasury in order to raise additional capital. The additional capital will be used to strengthen the Company's capital position and allow the Bank to make more loans to businesses and consumers in their markets. Nine large financial institutions have already agreed to participate in this program and will sell senior preferred shares to the U.S. government on the same terms available to the Company. Under the program, certain rights are granted to the Treasury, including the issuance of warrants having a market price of 15% of the value of the senior preferred shares placed. This warrant issuance may result in the Company asking shareholders to approve an amendment to the Articles of Incorporation authorizing additional common stock shares. There are certain restrictions placed on the Company as well, including executive compensation and the payment of dividends.

"Although the Company and the Bank remain well capitalized, the terms of the CPP are favorable and provide an attractive and low-cost alternative to other capital sources in the market. If granted, the funds will substantially enhance our capital ratios and our ability to lend additional funds in the markets that we serve, facilitating the economic recovery envisioned by Secretary Paulson," said Chairman and CEO Hal Giomi.

The Treasury has indicated senior preferred share purchases will be funded by the end of this calendar year. The shares will be included in the computation of Tier 1 capital for regulatory purposes, enhancing the Company's risk based capital ratios, should it be approved for participation in the program.

About The Bank Holdings

The Bank Holdings is the holding company for Nevada Security Bank and Granite Exchange.