Two more Mississippi banks get TARP funds

Oxford University Bank is one of eight Mississippi banks that have received federal TARP funds.

Last week two more Mississippi banks accepted federal bailout funds as part of the Troubled Asset Relief Program, or TARP. Cari Gervin has more from Oxford.

Since the Treasury bailouts started last fall, eight Mississippi-based banks have received over $345 million dollars as part of the Capital Purchase Program. Last week, Banc Plus Corporation in Ridgeland received $48 million, while Lafayette Bancorp, the holding company for Oxford University Bank, got just under two million.

“I would rather not have the money,” says Reggie Holley, the president of Oxford University Bank, which has just three branches. He said his bank doesn’t have so much as a foreclosure on the books, knock on wood, but he applied for TARP funds anyway, as a preventative measure.

“The fear of the unknown is really something that you have to prepare for. If the hard times don’t come, if this is the bottom of the economic cycle, then we will be able to return the funds.”

Two million may not seem like much, compared to the billions of dollars going to larger banks. But the amount could be enough to help stimulate the economy on a micro-level. Robert Van Ness is a professor of finance at Ole Miss. He says that even the small TARP loans could have a leveraging effect.

“When a bank takes in a dollar, they don’t hold the dollar and loan that out, they can loan out 90 cents on that amount to somebody. If they get a million dollars, it might have a net effect of being able to lend out four or five times that amount.”

So far, the Treasury has awarded over $196 billion to banks across the nation as part of this program. For MPB News, I’m Cari Gervin in Oxford.