The Treasury Department was set Tuesday to sell the warrants it held in Cathay General Bancorp (CATY) in Los Angeles.

Treasury had obtained more than 1.8 million warrants in Cathay through the Troubled Asset Relief Program; each gives the owner the right to buy a Cathay share for 20.96 — a 23% discount to Cathay's closing price of $27.19 on Monday, the day before Treasury announced the start of the sale.

Cathay shares were down nearly 3% late in the trading day Tuesday.

At the minimum bid price of $6.50 per warrant, the Treasury would raise about $12 million if all the warrants are sold. The auction began Tuesday morning and was scheduled to close at 6:30 p.m.; Deutsche Bank Securities was the auction agent.

The $10.8 billion-asset Cathay completed its exit from Tarp with a $129 million payment in September. It received $258 million through the program in December 2008.

Cathay earned $32.6 million in the third quarter, up 7% from the same period in 2012, and $91.7 million in the first nine months of the year. In May, it announced plans to enter the Las Vegas market.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.