Local banks keep lending strong with TARP
Anyone want to bet that their lending standards were a bit different than those used by Citigroup, Wells Fargo, etc?
First Merchants President and CEO Mike Rechin said that bank would probably repurchase its $116 million worth of stock within two or three years but had no immediate plans to do so, predicting the economy would not turn around in the next year.
“Our original interest was it gives you the capital to try to be an active lender in the community,” Rechin said. “I don’t think the balance of this year is likely to get a lot stronger economically, so I like having access to the capital.”
Locally, Mike Baker, who is regional president of First Merchants in the Madison County area, can use the extra capital to provide for any type of lending, from mortgages to small business loans.
Rechin said First Merchants, headquartered in Muncie, probably wouldn’t have a problem lending the money even if it didn’t participate in TARP, but the extra funds would help the bank if the recession continues.
“We were well capitalized before the money,” he said. “I don’t think we would have a problem, but the safety cushion that the excess capital provides makes me very confident that even if the recession lasts until 2010, that we’re going to continue to be a real consistent source of banking services for our customers.”