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Florida Banks Get $164 Million In Bailout Funds So Far

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By KRISTA KLAUS

kklaus@wfla.com

Published: February 10, 2009

Nine Florida banks, including one in the Tampa Bay area, have applied for and received $164 million in bailout money under the federal government's $700 billion rescue package of financial institutions, according to the latest data from the U.S. Treasury Department.

First Community Bank of America, based in Pinellas Park, received $10.6 million in so-called TARP funds on Dec. 23. TARP stands for Troubled Asset Relief Program.

The bank has 10 branches in the Bay area and total assets of $500 million, according to Chief Financial Officer Stan McClelland.

"It is an investment in the bank, and it really is an honor to have the government think we're qualified to get the money," McClelland said.

Over the past year, First Community customers began falling behind on loan payments, McClelland said, and the bank needed financial assistance to shore up its balance sheets.

"We're trying to work out problems with customers, but we have to take some losses," he said, adding that the bank plans to use the funds to make more loans.

Former Federal Deposit Insurance Corp. Chairman Bill Isaac said banks that agree to the conditions of receiving TARP funds are giving up a lot of autonomy.

"The government would not tolerate banks writing contracts like the government has written here," said Isaac, who lives in Sarasota and works as a banking industry consultant.

In exchange for TARP funds, banks agree to allow the government broad access to banking operations.

Among other things, the government has authority to set executive pay levels, oversee board operations and future loan terms.

The bottom line, Isaac tells clients, is that TARP funds are not a magic bullet.

"I've had banks ask me, 'Should we apply for the TARP funds?' And I say, 'Not unless you're desperate for them,'" Isaac said.

Nine Florida banks have requested TARP funds so far. The distributions range from $5 million to $50 million. As of Monday, the largest amount granted went to Seacoast Banking Corp. in Stuart.

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