By By MaryClaire Foster
United Bank announced its participation in two new government programs Monday at a press conference.
The two programs are the FDIC Temporary Liquidity Guarantee Program and the U.S. Treasury Capital Purchase Program.
The FDIC program provides unlimited FDIC insurance on all non-interest bearing transactions and NOW accounts, as well as coverage on certain qualified debt, which could be issued by the bank through Dec. 31, 2009.
The bank’s participation in the Capital Purchase Program requires them to issue to the Treasury preferred stock in the amount of $10.3 million. This program provides additional capital for banks, and is intended to increase credit availability to businesses and consumers and help stabilize and accelerate recovery of the economy.
President and CEO Bob Jones emphasized the fact that the bank had to apply to participate in the Capital Purchase Program and be recommended to the Treasury for participation by the State of Alabama and the FDIC.
Jones said it is important to note that the money does come at a cost.
While it does come at a cost, Jones said that there ability to participate signals that they are well capitalized.
Jones said the programs are a move to strengthen the bank and better serve its customers and are not moves that had to be made for recovery.
Jones said because of the capital position it allows them to better serve their customers.
Jones said their participation in the programs “translate into benefits for our customers in the communities.”
According to Jones, the reasons why some banks are participating and others are not has to do with the way they are structured.
As for what this means for United Bank customers, Jones said it allows them to keep operating normally.
He added that this also gives the bank some leverage in working with customers in tight situations.
Jones said these steps were taken not only to better serve their customers, but also to “offer solutions to the local markets” and ensure confidence in their consumers.
United Bank serves South Alabama and the panhandle of Florida with 17 locations. The bank has more than $460 million in assets.