Bank CEO explains use of TARP funds

POPLAR BLUFF, MO (KFVS) - You've heard about the big banks getting big bucks from the government, but it's not just the big banks.  Some right here in the Heartland are seeing that relief money.

Bank holding companies in Poplar Bluff and Charleston, Missouri and Carmi, Illinois have taken advantage of the Troubled Asset Relief Program.
Southern Missouri Bankcorp, Inc. in Poplar Bluff received $9.55 million back in December in TARP funds.
The CEO of the bank says those tarp funds have been put to good use and will help folks right here in the Heartland.

First off, the CEO Southern Missouri Bank says his bank is not in any in trouble.  He says they took the TARP money to help his bank grow.

"When we participated in the TARP program we actually did it out of a position of strength and on one of the things we felt like we could do is an opportunity to expand in other marketplaces while the availability of cash is pretty tight," said Greg Steffens, CEO of Southern Missouri Bank. 
He says the bank's holding company used the $9.55 million in federal money for three main things--securities (those are pools of mortgages), municipal bonds, and to acquire a troubled bank.
While the average person probably won't see a direct effect, Steffens says those things have already helped the American economy.
"The main benefit is being able to increase the availability of credit by people in the secondary market," Steffens said. 
Steffens points to the fact that a 30-year fixed mortgage from Freddie Mac dropped from 6.5 percent in October to currently less than five percent.
The TARP funds could also be used for projects on Main Street in your town without you knowing it.
Southern Missouri bought several municipal bonds.
"The small town of Matthews, Missouri had a water and sewer project that they were going on and when we received the funding for TARP and we had these funds to deploy," Steffens said. "We funded the majority of that water and sewer district."
By acquiring a troubled bank, Steffens says it helps shore up stability and free up lending.
"If a healthy bank acquired a troubled institution, you're able to expand the lending opportunities and improve the opportunity for customers to reach the financial products that they're used to," Steffens said.
One other aspect to the TARP program, Southern Missouri pays $120,000 back to the government every quarter and since taking the TARP money, the government has an ownership stake in the company.
The two other bank holding companies in the Heartland to receive TARP money are Southern Iliinois Bankcorp in Carmi which received $5 million and Security State Bancshares in Charleston that received $12.5 million.

Visit the Treasury Department's list of transaction reports for a complete list of companies receiving TARP funds.