Treasury to Sell $158M Tarp Stake in Nine Banks

The Treasury Department has begun an auction for its Troubled Asset Relief Program stake in nine more banks.

On Monday morning the Treasury began a Dutch auction for the shares, which it expects to close on Thursday evening. The total value of the preferred stock and debt that the Treasury plans to sell is approximately $158 million and represents its full Tarp holdings in nine banks.

The single largest stake the Treasury plans to auction is its $73 million holding in Old Second Bancorp in Aurora, Ill., the parent company of the $1.9 billion-asset Old Second National Bank.

The other companies whose Tarp stakes are included in the auction are the $216 million-asset Boscobel Bancorp in Boscobel, Wis.; the $425 million-asset Coastal Banking in Beaufort, S.C.; the $425 million-asset CoastalSouth Bancshares in Hilton Head, S.C.; the $439 million-asset First Reliance Bancshares in Florence, S.C.; the $394 million-asset Northwest Bancorporation in Spokane, Wash.; the $137 million-asset Santa Clara Valley Bank in Santa Paula, Calif.; the $567 million-asset Southcrest Financial Group in Peachtree City, Ga.; and the $830 million-asset Queensborough Company in Louisville, Ga.

The Treasury had planned to auction its $10 million stake in Coastal Banking earlier this month, but canceled the sale after the company was given permission from the Federal Reserve to pay dividends.

The Treasury has held a number of auctions over the past year as part of its effort to wind down the Tarp program and to date has sold stakes in nearly 100 banks. A little more than 200 banks remain in the program and its plan is to sell its stakes in roughly two-thirds of them.