RICHMOND, Calif.--(Business Wire)--
The Board of Directors of Mechanics Bank yesterday voted to approve the bank's
participation in the U.S. Treasury's Capital Purchase Program (CPP.) Under the
program's terms, the bank will receive $60 million of additional capital in
exchange for preferred stock paying a dividend rate of 5 percent per annum for
the first five years of the program.
The Treasury granted preliminary approval for Mechanics Bank's application on
December 11th. Management and the Board extensively analyzed and debated the
decision to accept the funds, culminating in the January 5 Board of Directors
meeting.
The CPP is part of the Troubled Assets Relief Program (TARP). It is intended to
inject additional capital into the banking system to create more stability
during these volatile times. Qualifying banks--and only strong banks were
eligible--were invited to apply for up to 3% of risk-weighted assets in exchange
for preferred stock. Capital given to participating banks must be paid back,
along with a 5% dividend. (For more information, go to
http://treas.gov/press/releases/hp1207.htm.)
"The CPP is open only to healthy banks and our approval for participation is a
confirmation of our strength and stability," said Steve Buster, Mechanics Bank
CEO. "We are very well capitalized currently and did not need this additional
capital, so we had to carefully consider whether accepting it made sense. In the
end, we felt there were compelling reasons to go ahead. The additional capital
will not only ensure our ability to help our valued clients with new credit
through this period of economic uncertainty, but it could come in handy if a
truly excellent growth opportunity arises."
For more than a century, Mechanics Bank has been committed to helping people
build prosperous communities as a trusted financial partner, forging lasting
relationships through teamwork, respect and integrity. The $2.7 billion
independent bank, headquartered in Richmond, California, offers personal
banking, business banking, trust, brokerage and wealth management services
through 33 offices across Northern California. For more information, please
visit www.mechbank.com.
Mechanics Bank
Patricia Hudson, 510-741-3436
pat_hudson@mechbank.com
or
Hatti Hamlin, 925-872-4328
hattihamlin@aol.com
Copyright Business Wire 2009
