Unity Bancorp (UNTY) in Clinton, N.J., has received approval to buy back its remaining shares issued to the Treasury Department through the Troubled Asset Relief Program.

The $827 million-asset company will pay the Treasury Department $10.4 million for just over 10.3 million shares of preferred stock, it announced Monday. The Treasury has approved the buyback, which will take place on July 3.

Unity received $20.6 million through Tarp in December 2008, and redeemed half the preferred stock issued through the program in May 2013. Following the July 3 redemption, the Treasury will still hold warrants to purchase nearly 765,000 shares of the company's stock, which Unity will attempt to buy back, it said.

"As our asset quality and earnings have improved, we believe it is time to redeem these shares," said Unity President and Chief Executive James Hughes in the news release. "Since receiving the Tarp investment, Unity has paid the U.S. Treasury approximately $4.5 million in preferred stock dividends. We believe the U.S. Treasury made a sound investment in Unity and it has earned a healthy return on that investment."

Following the redemption of its Tarp stock, Unity will have a Tier 1 leverage ratio of 9.59% and a total risk-based ratio of 12.22%, it said.

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