SBT Bancorp, parent company of Simsbury Bank & Trust Co., has received approval to receive $4 million under the Treasury's Capital Purchase Program, in exchange for a preferred stock stake in the banking company.

“It appears that there will not be a quick end to the current financial market turmoil and period of general economic weakness,” said SBT Bancorp President and CEO Martin J. Geitz. “The U.S. government’s efforts to stabilize the financial system have resulted in progress as liquidity has improved … We believe that during this period of continuing uncertainty, it is prudent and appropriate to maintain higher than typical capital levels and access to all available liquidity sources.”

Currently, SBT Bancorp’s Certificate of Incorporation does not include authority to issue preferred stock. The corporation has scheduled a special shareholder’s meeting to consider a proposal to amend the certificate to authorize preferred stock. 

Shareholder approval of this proposal is required in order for the corporation to participate in the Treasury’s Capital Purchase Program.

Simsbury Bank has also chosen to participate in the FDIC’s Temporary Liquidity Guarantee Program. This program allows customers with balances in certain non-interest bearing accounts above the otherwise applicable FDIC guaranty limit of $250,000 with the benefit of FDIC insurance on the entire amount. Simsbury Bank will pay FDIC an annual fee of 10 basis points on any deposits benefiting from the higher insurance coverage level.

In a statement, the company noted that even without federal intervention, it still meets all regulatory requirements of a “well-capitalized” institution.

SBT Bancorp and Simsbury Bank said they do not anticipate participating in other Treasury, FDIC and Federal Reserve programs announced since the onset of the financial market crisis for which it would qualify.