Treasury sells holdings in four banks

The Treasury Department sold off its shares in four private banks Friday, but failed to auction off holdings in a fifth thanks to insufficient investor appetite.

The government pulled in net proceeds totaling $62.4 million in four small banks that the government invested in as part of the Troubled Asset Relief Program (TARP), after investing $67.5 million in the banks. However, the roughly $5 million loss the government took selling those shares was more than offset by the approximately $12 million it made on dividend payments from the banks while holding those investments.

However, the Treasury held off on selling its shares in Guaranty Federal Bancshares Inc., of Springfield, Mo. It failed to garner enough bids to set that bank's stock above a minimum price the government had set ahead of the offering.

The Treasury successfully divested itself of holdings in BNC Bancorp of High Point, N.C., First Community Corporation of Lexington, S.C., First National Corporation of Strasburg, Va., and Mackinac Financial Corporation of Manistique, Mich.

The bank portion of TARP has turned a profit for the federal government, and the Treasury estimated Friday it has now recovered $21 billion more from banks than originally invested.

However, the overall program is still expected to be a cost to taxpayers — the Congressional Budget Office estimated in March that it will ultimately cost $32 billion, driven largely by expected costs tied to housing relief programs that were never intended to yield payments back to the government.

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