Banks get U.S. funds for loansThe U.S. Department of the Treasury's Small Business Lending Fund this year has released funding for small Tennessee banks. Treasury officials say the capital is intended to increase lending to small businesses and help them expand operations and create jobs. Tennessee banks that received funding since Aug. 1, 2011, include:Avenue Financial Holdings Inc., Nashville; $19 millionCarroll Financial Services Inc., Huntingdon; $3 millionCapitalMark Bank & Trust, Chattanooga; $18.2 millionCommunity First Bancshares Inc., Union City; $30.9 millionEvolve Bancorp Inc., Cordova; $4.7 millionFranklin Financial Network Inc., Franklin; $10 millionIndependent Holdings Inc., Memphis; $34.9 millionInsCorp Inc., Nashville; $3 millionLandmark Community Bank, Collierville; $8 millionMerchants and Planters Bancshares Inc., Bolivar; $2 millionMagna Bank, Memphis; $18.4 millionMoneytree Corp., Lenoir City; $10 millionPlanters Financial Group Inc., Clarksville; $22 millionSequatchie Valley Bancshares Inc., Dunlap; $5 millionSmartFinancial Inc., Pigeon Forge; $12 millionSouthern Heritage Bancshares Inc., Cleveland; $5.1 millionSumner Bank & Trust, Gallatin; $4.3 millionSource: U.S. Department of the Treasury
Banks in Southeast Tennessee were among 17 lenders across the state to get a chunk of billions in funding from the U.S. Department of the Treasury's Small Business Lending Fund aimed at boosting small business lending and creating jobs.
Since early August, Chattanooga's CapitalMark Bank & Trust, Dunlap's Citizens Tri-County Bank and Southern Heritage Bank in Cleveland divvied up $28.3 million in a loan pool released in mid-September, officials said.
In Cleveland, Southern Heritage Bank President and CEO Lee Stewart said the $5.1 million in capital the bank got will produce three times that amount in small-business loans.
"We do intend to do our best to increase our small business lending," Stewart said. Southern Heritage Bank is held by the company, Southern Heritage Bancshares Inc.
"We anticipate and hope for an increase in loans of up to $15 million in the next three years, and we'll use the Small Business Lending Fund to help fund that growth," he said.
He said he expects the most activity to come from new industrial development and expansion by companies like Whirlpool.
The funding is part of more than $4 billion released to 332 community banks across the nation, according to federal officials.
In Dunlap, Citizens Tri-County Bank Chairman and CEO Glenn Barker said business and industry has taken an economic beating in recent years and business leaders might not know what kind of help is out there.
The $5 million in funding the bank got will go mostly toward advertising and informational campaigns targeting businesses, Barker said. Citizens Tri-County Bank is held by Sequatchie Valley Bancshares Inc.
"We're going to make some promotions to support our small businesses," Barker said. "We're going to promote small-business loans in our area for the next six months at least."
Barker noted that, as part of the program, banks receiving the funds must repay them. The initial dividend rate banks must pay for the money will be, at most, 5 percent, according to the U.S. Treasury Department. If a bank's small business lending increases by 10 percent or more, then the rate will fall to as low as 1 percent.
The Small Business Lending Fund helps for small community banks much as the Troubled Asset Relief Program, known as TARP, helped large banks.
In Chattanooga, CapitalMark Bank & Trust chairman, president and CEO Craig Holley said the $18.2 million in capital the bank got can be lent to businesses that have annual revenues below $50 million.
"We recognize that the well-being of our community is directly dependent on the vitality of small businesses and their ability to obtain capital to invest, expand and hire," Holley said in a release.