First Southern Bank to get $10.9M in TARP money

Jan 7, 2009

South Florida Business Journal--January 6, 2009

by Brian Bandell

First Southern Bank has become the first South Florida-based bank to receive preliminary approval to receive money from the federal Troubled Assets Relief Program (TARP).

The Boca Raton bank said Tuesday that it could sell $10.9 million in preferred stock to the U.S. Department of the Treasury‘s Capital Purchase Program.

A $10.9 million infusion from the government program would boost First Southern’s $42.9 million in equity capital as of Sept. 30 by 25.4 percent.

“We view the additional capital as an opportunity to bolster an already solid capital position,” First Southern Bank President and CEO Franklin G. Burnside said in a press release. “It could enhance our ability to take advantage of opportunities that may arise within our footprint and to continue making quality, relationship-based loans in the communities we serve.”

Founded in 1987, the bank has five offices. Its financial position appeared strong in the third quarter.

If the private community bank participates, it must make certain agreements with the government, but it did not disclose what they would be.

First Southern had net income of $855,000 in the first nine months of 2008, with $563,000 of that coming in the third quarter, according to the Federal Deposit Insurance Corp. Only 0.86 percent of its loans were noncurrent – a far better ratio than at most South Florida banks.

The bank had $395 million in assets as of Sept. 30, making it the fifth-largest bank based in Palm Beach County.

Other South Florida-based banks that applied for TARP funding include BankAtlantic, Ocean Bank and Great Florida Bank.

Nationwide, the Treasury Department had invested $15 billion of its $250 billion Capital Purchase Program in seven banks as of Dec. 31.

Those recipients are: