W.Va. bank becomes first to cut all bailout ties

WASHINGTON -- 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 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. The bank on March 31 returned the $15 million in capital infusions the government had provided.

Six other banks have paid back the capital infusions — with Shore Bancshares of Easton, Md., this week becoming latest to pay back the $25 million it received. But Centra Financial was the first to also pay the government for the warrants, Treasury said.

Including Shore Bancshares, the seven banks have paid back the government $467.3 million. But that's out of the nearly $200 billion that the government has provided under the program to more than 500 banks.

In a letter to House Speaker Nancy Pelosi, D-Calif., released Friday, Treasury said it has received $2.5 billion in dividend payments from banks that have received support from the capital purchase program.

Several of the nation's biggest banks, including JPMorgan Chase, Morgan Stanley and Goldman Sachs Grou, have said they want to return the bailout money but have yet to do so.

The government on May 4 is scheduled to release the results of "stress tests" banking regulators are conducting on the 19 largest banks to see whether they have sufficient resources to withstand an even more severe economic downturn.