CPP provides low-cost capital to deal with the economic slump
PremierWest Bancorp has received preliminary approval from the U.S. Department of the Treasury to participate in the capital purchase programme up to $41 million.
The U.S. Treasury Department’s capital purchase programme (CPP) was designed to promote and support confidence in the nation’s banking system while promoting renewed lending.
Jim Ford, president and CEO of PremierWest Bancorp, said: This is another indication that PremierWest continues to be viewed as a healthy financial institution. We continue to be well-capitalised and have a strong franchise even without the additional capital. We feel that the programme provides low-cost capital to deal with this economic environment at a time when additional capital is at unusually high costs.
The U.S. Treasury’s capital purchase programme is a voluntary programme designed to assist healthy institutions build their capital positions to support the U.S. economy by increasing the flow of financing to the U.S. businesses and consumers. Under the programme, senior preferred stock is issued to the U.S. Department of Treasury. The preferred stock will pay a dividend for the first five years, after which the rate will increase to 9% if the preferred shares are not redeemed by the company.