The Treasury Department announced Tuesday that it plans to sell off its shares in seven more community banks as part of its ongoing effort to wind down the Troubled Asset Relief Program.

The Treasury in March auctioned off its preferred shares in six community banks and has said that it intends to hold more auctions in the future as it seeks to recover its remaining investments in more than 300 banks that are still participating in Tarp. In the March auction it recovered roughly $362 million of the $411 million it invested in the six banks in late 2008 and early 2009.

The Treasury said the next auction will be held on or around June 7. The banks participating in the next round are: the $4.8 billion-asset Taylor Capital (TAYC) in Chicago; the $3 billion-asset Ameris Bancorp (ABCB) in Moultrie, Ga.; the $2 billion-asset First Defiance Financial (FDEF) in Defiance, Ohio; the $1.9 billion-asset Farmers Capital (FFKT) in Frankfort, Ky.; the $1.2 billion-asset LNB Bancorp (LNBB) in Lorain, Ohio; the $913 million-asset United Bancorp (UMBI) in Ann Arbor, Mich.; and the $529 million-asset First Capital Bancorp (FCVA) in Glen Allen, Va.

The seven banks combined received $281 million from the Treasury and all are current on their quarterly dividend payments, according to data from the Keefe, Bruyette & Woods. The shares will be sold through a modified Dutch auction process in which interested investors will be asked to submit bids at specific increments.

The Treasury invested $245 billion in more than 700 banks under the Tarp program and to date has taken in about $264 billion through repayments, dividends interest and other income.

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