At least seven community banks have taken the Treasury Department up on its offer to make bigger capital injections under the Troubled Asset Relief Program.

When Tarp was created in October, all banks were allowed to apply for an investment of up to 3% of their risk-weighted assets. Last month, the Treasury reopened the application process for banks with assets under $500 million, and said that this time they could apply for infusions of up to 5% of risk-weighted assets. The bigger investments would be funded by repayments from larger institutions that no longer want to participate in the program.

Tarp has become widely unpopular with bankers because of the stigma it has with the general public and the fear of government interference. But observers say some banks might still consider Tarp an attractive option if they need capital and are unable to get it cheaply elsewhere.

The $422 million-asset OneFinancial Corp. in Little Rock was the first to accept more than 3%, receiving $17.3 million, or 5% of its risk-weighted assets, on June 5. The company would have been eligible for just $10.4 million under the 3% rule.

Others accepting more than 3% included the $192 million-asset First Vernon Bancshares Inc. in Vernon, Ala.; the $104 million-asset Virginia Company Bank in Newport News; the $110 million-asset First Financial Bancshares Inc. in Lawrence, Kan.; the $223 million-asset Biscayne Bancshares Inc. in Coconut Grove, Fla.; and the $213 million-asset RCB Financial Corp. in Rome, Ga.

The Treasury disclosed these investments on its Web site.

The $478 million-asset Security Capital Corp. in Batesville, Miss., said in a Security and Exchange Commission filing Tuesday that it plans to take an investment, totaling about $17.4 million, on Friday.

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