by James A. Hughes, president & CEO of Unity Bancorp
As the President of a 15-branch Community Bank, headquartered in Hunterdon County, I feel compelled to say thank you to the taxpayers. Nearly five years ago, when the national financial crises erupted, the Government implemented the Capital Purchase Program (CPP), or Troubled Asset Relief Program (TARP), as it is commonly known, to provide capital to financial institutions. We participated in this program and it was a win for both Unity and the U. S. taxpayers.
Five years ago, Unity raised $20 million in funds from the CCP. At that time, raising capital in either the public and private sector was either unavailable or cost prohibitive. Although the cost was expensive at 5%, the new capital allowed Unity to continue to fund loans to businesses and consumers in our community.
Five years have passed and although the economy is still in recovery, the outlook is promising. We have recently repaid all of the capital to the Treasury, and although we are pleased to remove the expensive capital from our books, we were fortunate that the program was made available to us. I would say the taxpayers received an excellent return on their investment in Unity Bank with the $7.2 million the bank paid in dividends and fees, in addition to full repayment of the principal.
Community banks are an integral part of the financial infrastructure, making the lion’s share of loans to individuals and small businesses in our country. The taxpayers helped Unity Bank maintain its independence as a local community bank during one of the most difficult financial periods in our Nation’s history. Today, Unity Bank is stronger than ever and we continue to be committed to providing customers with a banking experience that is second to none.
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