A pair of community banks have reduced the Treasury Department's ownership stake in their companies.

Lakeland Bancorp Inc. in Oak Ridge, N.J., said Wednesday that it had redeemed $20 million of preferred stock it issued to the Treasury as part of the Troubled Asset Relief Program. Lakeland paid about $20.1 million, including accrued and unpaid dividends.

The $2.8 billion-asset company said the payment would result in annualized savings of $1.2 million. Lakeland, which received $59 million in Tarp funds and repaid $20 million in August, said it would try to redeem the additional $19 million as the economy improves.

Heritage Bankshares Inc. in Norfolk, Va., said Tuesday that it had received approval to redeem part of its $10.1 million of Tarp funds.

Heritage expects to pay the Treasury $2.6 million, including accrued dividends. The $267 million-asset company said it would repay the rest as it builds capital to avoid diluting existing common shareholders.

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