National Bank of Arizona said it will become the first Arizona-based bank to receive funds under the U.S. Treasury Department's $700 billion program to stabilize the nation's financial system.
The bank will receive a portion of the $1.4 billion given to its parent company, Zions Bancorp., the bank said Tuesday.
Wells Fargo, JPMorgan Chase and Bank of America, all with operations in Arizona, will also receive money. Details of how their programs will affect Arizona were not available Tuesday.
"We have pledged to use the money for the benefit of our customers and shareholders," said Chase Bank spokeswoman Mary Jane Rogers. "Hopefully in the coming weeks we should know more details."
She said JPMorgan Chase, the second largest bank in the U.S., will receive $25 million in the first installment of the program.
"We have continued lending to businesses and consumers in Arizona, but we realize the importance of this capital infusion for the whole system," Rogers said.
National Bank of Arizona, the fourth-largest bank in the state and operating 11 branches in the East Valley and Scottsdale, expects to receive funds within 30 days, said President Keith Maio.
The specific uses in Arizona have not been determined but the money will be available to expand lending, deal with bad loans and other uses, he said.
In exchange, the U.S. government will receive preferred stock in Zions. The deal is structured so the bank will have the incentive to pay back the government as quickly as possible because the expense will increase with time, Maio said.
"The bottom line is the $250 billion allocated for this program is truly an investment," he said. "I believe 100 percent the taxpayers will get their money back with interest."
The Treasury Department is parceling out the money to healthy institutions to quickly restore the flow of credit.