W.Va. Bank Becomes First To Cut All Bailout Ties

MARTIN CRUTSINGER

WASHINGTON (AP) — A West Virginia bank has become the first to completely cut its ties to the federal government's $700 billion financial rescue program.

The Treasury Department said Friday that Centra Financial Holdings Inc. of Morgantown, W.Va., has given the government $750,000 to buy back warrants Treasury was holding that gave it an ownership share in the company.

That transaction means Centra Financial has now paid the full costs of participating in the financial rescue program. On March 31 the bank returned the $15 million in capital infusions the government had provided.

Centra Financial was among the banks that chose not to participate in the Federal Deposit Insurance Corp.'s rescue program guaranteeing hundreds of billions of dollars in U.S. banks' debt, intended to help thaw the freeze in bank-to-bank lending. Under the temporary program, the FDIC provides insurance for loans between banks, guaranteeing the new debt in the event of payment default by the borrowing bank.

A number of big banks that have received federal money under the bailout program have benefited at the same time from the FDIC debt guarantees.