First Citizens Banc (FCZA) in Sandusky, Ohio, has raised $25 million to exit the Troubled Asset Relief Program.

First Citizens said it raised the money in a preferred stock offering that closed Thursday. It sold 1 million shares at $25 each, and will pay 6.5% interest on each share.

First Citizens plans to use the money to redeem its Tarp shares, and has asked the Federal Reserve Board to approve the repurchase.

The company received $23.2 million in Tarp in 2009, and the Treasury Department auctioned the shares last year. First Citizens hopes to buy back the shares before the dividend rate rises to 9% from 5% on February 14, it said.

"The successful completion of this offering allows us to begin focusing on other initiatives including our core business of banking," First Citizens Chief Executive James Miller said in a press release. "I am pleased with the level of local involvement we were able to generate for this offering."

The dividend rate on Tarp shares rises to 9% five years after the shares were issued, and community banks have been rushing to redeem their shares ahead of that deadline.

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