The First to tap fed stimulus funds
The First Bancorp today said it received preliminary approval to obtain $25 million from the U.S. Treasury's Capital Purchase Program, part of the $700 billion economic stimulus package Congress approved in October.
The Capital Purchase Program was created under the Emergency Economic Stabilization Act and is intended to improve the flow of financing to businesses by providing healthy financial institutions the opportunity to raise additional capital at favorable terms by selling preferred stock directly to the U.S. Treasury, according to a press release from the bank. The Damariscotta-based company said a special meeting of the bank's shareholders is scheduled for Dec. 29 to amend the company's articles of incorporation to authorize the issuance of preferred stock to the government. "By participating in the program, The First will have greater capacity to lend in the communities we serve, which is especially important in these challenging economic times," Daniel Daigneault, The First's president and CEO, said in the release.
The First Bancorp, which has 14 bank branches in Midcoast and Down East Maine, is the second bank in the area to say it is selling stock to the U.S. government to obtain additional capital at favorable terms. Bar Harbor Bank & Trust yesterday said it is seeking $18.8 million in stimulus package funds from the Treasury Department.
Daigneault said the bank is in a strong financial position, but that "enhancing our capital position is especially prudent given the current state of the United States economy."
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