Bailout funds arrive in NH

By DENIS PAISTE
New Hampshire Union Leader Staff
Tuesday, Dec. 23, 2008

MANCHESTER – Federal bailout money has started to arrive for troubled financial institutions in the Granite State.

Monadnock Bancorp. Inc. of Peterborough will use $1,834,000 in federal Troubled Asset Relief Program funds to increase business and home loans, its president said yesterday.

The parent of Monadnock Community Bank received the funds Friday, William M. Pierce, president and chief executive officer said, yesterday.

The money, part of the government's massive $700 billion financial system bailout, was made available through Treasury's Capital Purchase Program, which is part of a part of the TARP.

Monadnock Bancorp. appears to be the only New Hampshire bank so far to receive TARP money. Once the funds are approved, the Treasury waits two business days to report the deals.

Monadnock's federal assistance is part of the initial distribution of the first $250 billion in bailout money. The government closed on another $1.9 billion in bailout money with 43 banks yesterday, but details will not be reported until Friday or Monday.

"We had to apply and we had to be approved because, really, only the strong banks would qualify for this program," Pierce said.

The U.S. Treasury Department announced the funding yesterday, which was part of a $2.8 billion investment in 49 banks made on Friday, Dec. 19. Treasury receives preferred stock and warrants from participating institutions.

The Treasury Department purchased 1,834 shares of newly issued, non-voting Monadnock Bancorp, Inc. cumulative senior preferred stock, Series A, valued at $1.834 million, with an initial annual dividend rate of 5 percent. The Treasury also received warrants, which were immediately exercisable, for 92 shares of non-voting Monadnock Bancorp, Inc. cumulative senior preferred stock, Series B, with an annual dividend rate of 9 percent. The Treasury immediately exercised the warrant, Monadnock Bancorp said in an SEC filing.

"By adding to our capital, it really allows us to grow, stay independent and be a community-oriented financial institution," Pierce said. "We also are an SBA lender, so we do business loans as well as home loans."

Pierce said he believes economic conditions in New Hampshire are more favorable than the rest of the country.

Monadnock Bancorp. has assets of $110 million, with one branch in Peterborough, and one in Winchendon, Mass.

It has 28 employees.

Monadnock Community Bank evolved from AWANE (Automotive Wholesalers Association of New England, Inc.) Credit Union, which was chartered in 1971.

Monadnock Bancorp, Inc. (MNKB) is traded over the counter. Shares were unchanged yesterday at $3.45.