Treasury Updates Tarp Wind-Down Plans

The Treasury Department expects to sell its stakes in roughly 144 banks in the coming year.

The Treasury said Tuesday that 218 banks remain in the Trouble Asset Relief Program's Capital Purchase Program, under which Treasury purchased preferred stakes worth roughly $205 billion in 707 financial institutions over roughly 14 months beginning in October 2008.

The department, which has been selling its stakes as part of a plan to wind down its ownership of the institutions, says it expects to auction roughly two-thirds of its remaining stakes in 2013.

Most of Treasury's remaining stakes are in community lenders. The largest companies remaining in the program are the $26 billion-asset Synovus Financial (SNV) of Columbus, Ga., and the $36 billion-asset Popular Inc. (BPOP) of Puerto Rico.

"We believe that the approach we've outlined is good for taxpayers and good for our nation's community banks," Timothy Massad, assistant secretary for financial stability, wrote in a note published Tuesday. "Indeed, as we've previously noted, selling these investments can be beneficial for community banks that don't have easy access to the capital markets because it attracts new, private capital to replace temporary government support."

Massad said Treasury expects that most banks whose stakes it continues to hold would be able to redeem the government's shares at their original value.

According to Treasury, since March the department has auctioned its investments in 91 banks while 49 others have repaid the government fully.

Massad said the government has recovered $268 billion from a total of $245 billion it invested in a series of programs to bail out banks during the financial crisis.