NJ Bank gets bailout funds

by: Jason Springer

Sat Jan 03, 2009 at 10:49:10 AM EST

Central Jersey Bancorp will receive $11.3 million from the federal government's program to fortify banks, according to documents filed with the U.S. Securities and Exchange Commission earlier this week.
The Ocean Township-based parent company of Central Jersey Bank said it planned to use the money to improve its "already strong capital position'' and to lend to the community.

Central Jersey Bancorp has 13 locations in Monmouth and Ocean Counties. The article talked about why some banks applied for bailout funds and others didn't. Here's how it works:

The agreement called for the Treasury Department to purchase 11,300 shares of Central Jersey Bancorp preferred stock. That means the government would be paid back before other shareholders in case of a bankruptcy.
The government also received the option to purchase up to 268,621 shares of common stock at $6.31 a share for up to 10 years.
The government will receive dividends of 5 percent a year for the first five years and 9 percent a year after that -- subject to approval of the company's board of directors.

I guess if the government is giving out money, it's good for some NJ banks to get a piece of the pie. I'd still prefer some of the money come my way, but that request seems to be falling on deaf ears. Maybe I need to start a bank.

Jason Springer :: NJ Bank gets bailout funds

Tags: Bailout, bankruptcy, bank, central jersey bancorp, Economy, (All Tags)

Print Friendly View

Send As Email

NJ Bank gets bailout funds | 2 comments

Strong Capital Position (0.00 / 0)

If they already have a strong capital position, why are they getting TARP funds? And why are they allowed to "shore up" their capital position with tax dollars?

This money should be wheeled right back out the door in loans to stimulate the economy, not used to make corporations more solvent. Local businesses who employ people are suffering because they can't get basic operating loans, and TARP money should go toward that and not toward helping bank shareholders improve their positions.

by: nathanrudy @ Sat Jan 03, 2009 at 16:01:59 PM UTC