The U.S. Treasury Department has awarded a large majority of the funds through a program meant to offer a source of cheap capital to community development financial institutions and minority depository institutions.
The Emergency Capital Investment Program, or ECIP, created by Congress last year, was slated to allocate up to $9 billion in capital to community development financial institutions, or CDFIs, and minority depository institutions, or MDIs, to provide financing to small businesses, minority-owned businesses and consumers in low-income and underserved communities. The program has awarded nearly $8.3 billion to 92 banks and 70 credit unions, according to data the Treasury released in September. A small number of investments are still pending, according to a Treasury official.
The funds can assist the financial institutions in making a wide range of investments, including M&A transactions, and the program's participants will take part in quarterly reporting. However, the Treasury does not expect the reporting to begin before January 2023. The department will finalize the ECIP reporting guidelines after reviewing and responding to public comments that were due by Aug. 29, according to the Treasury official.
The largest banks
The largest bank to receive ECIP investments was Ridgeland, Miss.-based BancPlus Corp., which has $6.57 billion in total assets and received $250 million. The second-largest was McAllen, Texas-based Lone Star National Bancshares--Texas Inc., which has $3.16 billion in assets and received $215 million, and the third was Coral Gables, Fla.-based Banesco USA, which has $2.59 billion in total assets and received $250 million.
The largest credit unions
The largest credit union that received ECIP investments was Tampa, Fla.-based Suncoast CU, which has $15.77 billion in total assets and received $175 million. The second-largest was Littleton, Mass.-based Workers FCU, which has $2.46 billion in assets and received $150 million, and the third-largest was Durham, N.C.-based Self-Help FCU, which has $2.12 billion in total assets and received a $250 million investment, the most of any credit union.
Nationwide distribution
The states that have received the most money are Mississippi, Louisiana, North Carolina, California and Texas. Institutions in Mississippi have received a total of nearly $1.7 billion, those in Louisiana received about $780.8 million, those in North Carolina $734.6 million, those in California $672 million and those in Texas $549.5 million. Financial institutions in 16 states and Puerto Rico have not received funds.
Next steps
Under the program's rules, CDFIs and MDIs are required to pay the Treasury an annual dividend beginning two years after receiving the investment. Program participants can reduce the dividend they must pay from 2% to 1.25% by increasing qualified lending to between 200% and 400% of the capital investment, and to 0.5% by increasing qualified lending to more than 400%. For banks, investments will be in the form of preferred stock; for credit unions, they will be in the form of subordinated debt.
 | * Click here for a list of all 162 ECIP participants and their S&P Global Market Intelligence key institution numbers. |