Annapolis Bancorp (ANNB) has repaid half of the $8.2 million it owed the Treasury Department under the Troubled Asset Relief Program.

The $442 million-asset company said Wednesday that it redeemed roughly 4,000 shares of preferred stock for $4.1 million without rising addition capital. At March 31, the company's Tier 1 capital ratio was 12.7%.

The Treasury Department still holds 4,000 preferred shares and a warrant to purchase almost 300,000 shares of common stock at $4.08 per share. The company expects to pay off its balance before the scheduled dividend rate increases in January 2014, Richard M. Lerner, chairman and chief executive, said in a news release.

The Annapolis, Md., company received its Tarp funds in January 2009.

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