United Bancorp (UBMI) in Ann Arbor, Mich., has redeemed the last of its Troubled Asset Relief Program shares.

United bought back the shares and paid all outstanding dividends for $10.4 million, their face value, it said Friday. It funded the redemption with cash from its banking unit and a loan of $4 million under the company's line of credit, it said.

The $918 million-asset United received $20.6 million through the program in January 2009, and the Treasury Department auctioned United's shares last year. The redemption will save United $810,000 a year in dividend payments.

United said that the holding company and its bank unit remain well-capitalized. The bank had a Tier 1 capital ratio of 9.72% and total risk-based capital ratio of 14.85% as of Sept. 30, according to the Federal Deposit Insurance Corp.

Banks have been rushing to exit Tarp before the dividend on preferred shares issued through the program rises to 9% from 5%. Under terms of the program, the dividend rate would rise five years after the bank received the Tarp funds.

There were 89 banks remaining in Tarp as of Nov. 30, the Treasury Department said in its latest report on the program.

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