(Source: Richmond Times - Dispatch)
One Richmond-area bank expanded its business into Maryland. Another says it saved a homeowner from foreclosure. A third says it can continue making loans. These are three ways 19 Virginia banks are using a total of $4.1 billion received through the federal government's Troubled Assets Relief Program.
Community Bankers Trust Corp., based in western Henrico County, received $17.7 million from the Treasury on Dec. 19.
Six weeks later, the bank holding company announced it had acquired Suburban Federal Savings Bank with $312 million in deposits and seven branches in the Baltimore-Washington area.
C&F Financial Corp. of West Point used some of the $20 million it received Jan. 9 to take slightly riskier approaches to lending - including giving a homeowner more time to make a house payment.
Central Virginia Bankshares plans to use the $11.4 million from Treasury to help bolster the capital it can lend after taking major losses on preferred stock in Fannie Mae and Freddie Mac last year.
Of the 19 Virginia banks that have gotten help so far, the median amount is $20 million.
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Despite the sour economy, Community Bankers is growing.
The company leapfrogged two states in November to buy from federal regulators four branches of The Community Bank of Loganville, a failed community bank in suburban Atlanta. It assumed about $600 million in Georgia bank's deposits.
Community Bankers acquired Suburban Federal Savings Bank in late January. The company credited the Treasury bailout money with helping it expand.
"The enhancement allows us to continue growing the bank," said Gary A. Simanson, vice chairman of Community Bankers. "We would have still looked at transactions whether we raised the Treasury funding or not."
Borrowers are unlikely to see a difference in lending based on the added capital from Treasury, Simanson said, calling the government funds "an insurance policy for uncertain times."
"We're not functioning any different today than we were [before the government infusion]," Simanson said, adding that the bank maintains conservative lending standards.
Community Bankers operates 13 locations across Virginia, including branches for the Bank of Essex, Bank of Powhatan, Bank of Goochland and Bank of Louisa.
At year-end, the bank's capitalization ratio, a measurement of strength, was 15.9 percent. The Federal Deposit Insurance Corp. considers anything above 10 percent well-capitalized.
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Officials of C&F Financial, which operates 18 branches of C&F Bank between Hampton Roads and Richmond, said the Treasury money is making a more tangible difference.
After Congress passed the bailout, C&F officials had no plans to apply for the money.
