More TARP money may soon be repaid

If all goes according to plan, more money borrowed under the Troubled Asset Relief Program might be flowing back to the Treasury Department in the near future. 

In the first case, the repayment depends on the company raising money through public stock offerings, as well as securing the government's approval to repay the monies borrowed, plus interest.

First Community Bancshares, Inc. (FCBC), a $2.2 billion financial holding company, is the parent company of First Community Bank, N.A. 

Headquartered in Virginia, First Community has 71 branches there and in West Virginia, North Carolina, South Carolina, and Tennessee.

The company is currently selling stock in the hope of raising approximately $50 million of new capital.  According to the press release earlier this month, the bank plans to use the money "for general corporate purposes which may include, among other uses, support for organic and opportunistic acquisition-based growth, as well as the repurchase of the preferred stock issued to the U.S. Department of the Treasury... as part of the TARP Capital Purchase Program."

First Community got $41.5 million in aid from the Treasury on Nov. 21.

Sandler O'Neill + Partners, L.P. and Raymond James & Associates, the co-managers for the offering, will have a 30-day option to purchase up to 15 percent more common stock from First Community if the offering is oversold.

The second situation is slightly different; the bank in question hasn't committed to repaying the CPP loan early, but says it might do so if the economy improves.

Park National Corp. (PRK), which operates its national subsidiary, Park National Bank, is also selling stock with the goal of raising up to $70 million.

According to a recent article in the Columbus Dispatch, Park is trying to raise capital through the stock sale "...as a cushion in case the economy worsens."  It continues:

"We don't need to raise the capital. We're in a very strong capital position, and anything we can raise will make us even stronger," said Brady Burt, Park's chief accounting officer.

The money is an insurance policy in case the economy takes a turn for the worse, he said. If it doesn't, it could be used to repay some or all of the $100 million the Newark-based bank received from the U.S. Treasury Department's Troubled Asset Relief Program.

Park National Corp. got $100 million in taxpayer capital through the stock-purchase program on Dec. 23.