Two months after the U.S. Treasury sold out its preferred stock position in National Bancshares, Inc. at a $3.2-million loss to taxpayers, the Bettendorf-based banking firm announced it had been sold to a Texas financial holding company.
National Bancshares, Inc. – operator of The National Bank and 10 other branches in the Quad Cities – received $24.7 million under the U.S. Treasury's Troubled Asset Relief Program (TARP) in February 2009.
In return, the Treasury received preferred stock and warrants in the bank and was to be paid a 5 percent annual dividend. The bank paid a total of $2.3 million in dividends during 2009 and 2010. The bank had not repaid any of the initial loan amount and its last dividend payment to the Treasury was in November 2010.
Visit ProPublica, a public journalism web site, for a full listing of TARP program bank loans and repayments.
The Treasury late last year announced plans to wind down the TARP program and has been auctioning off the preferred stock it holds in hundreds of smaller banks that received bailout money from the federal government. The dividend rate, after five years at 5 percent, is scheduled to increase to 9 percent next year.
The Treasury auctioned off its preferred stock and warrants in National Bancshares Feb. 20 of this year. The dividends, plus the amount netted from the auction of preferred stock and warrants, totaled just over $21 million, or $3.2 million less than the initial TARP loan amount.
It is not known who purchased the preferred stock or warrants in National Bancshares Feb. 20 as U.S. Treasury officials refused to disclose the names of the buyers.
National Bancshares announced April 24 it was being acquired by financial holding company Triumph Bancorp Inc., of Dallas, TX.
When the National Bancshares sale was announced in April, bank officials in the news release said the acquisition would have no effect on current operations.
National Bancshares operates in the Quad-Cities, Pewaukee, Wis., and Elgin, Ill., and employs 317 people. It was founded in 2001 with $90 million in assets, according to its news release announcing the sale. Its subsidiary, The National Bank, has 19 branches and three loan production offices in Iowa, Illinois and Wisconsin, including 10 bank branches in the Quad-Cities.
