Mis­sis­sippi banks took Fed loans

The Pak Banker - - Company& -

MIS­SIS­SIPPI: Three Mis­sis­sippi banks took ad­van­tage of a Fed­eral Re­serve short­term loan pro­gram aimed at sta­bi­liz­ing mar­kets dur­ing the fi­nan­cial cri­sis.

The Fed last week was re­quired to dis­close more than 21,000 busi­ness trans­ac­tions in its Term Auc­tion Fa­cil­ity pro­gram and other pro­grams.

A Clar­ion-Ledger re­view of the data shows that Tu­pelobased Ban­cor­pSouth, the largest Mis­sis­sippi-based bank with as­sets to­tal­ing $13.6 bil­lion, re­ceived eight TAF loans rang­ing from $50 mil­lion to $300 mil­lion be­tween De­cem­ber 2008 to Au­gust 2009. Jack­son-based Trust­mark Na­tional Bank, with as­sets to­tal­ing $9.4 bil­lion, re­ceived a dozen TAF loans rang­ing from $50 mil­lion to $150 mil­lion.

Fi­nally, Se­na­to­bia-based Sy­camore Bank, with as­sets to­tal­ing $185 mil­lion, re­ceived one TAF loan for $5 mil­lion.

Re­gions Bank, based in Birm­ing­ham with as­sets to­tal­ing $133 bil­lion, par­tic­i­pated in TAF 23 times from Jan­uary 2008 to May 2009, bor­row­ing from $1 bil­lion to $8 bil­lion.

The Fed said all TAF loans, which were col­la­ter­ized, were re­paid in full, with in­ter­est.

Howard L. McMillan, dean of the Else School of Man­age­ment at Mill­saps Col­lege and for­mer pres­i­dent of De­posit Guar­anty, said bank­ing cus­tomers have no rea­son to panic. "(The TAF pro­gram) was cre­ated to meet some short­term liq­uid­ity needs and it had noth­ing to do with a short­age of cap­i­tal re­serve or any­thing like that," he said. "There's re­ally no cause for con­cern."

The TAF pro­gram was es­tab­lished in De­cem­ber 2007 shortly af­ter the first signs of the fi­nan­cial cri­sis sur­faced.

The Fed ini­tially took steps to in­crease liq­uid­ity avail­able through its dis­count win­dow, where banks go to bor­row money. -PB News

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