Treasury to auction off TARP preferreds issued by seven banks

By Stephanie N. Rotondo

Phoenix, June 5 - The U.S. Department of the Treasury announced Tuesday plans to begin public Dutch auctions for its holdings in seven issuers that participated in the Troubled Asset Relief Program.

The seven banks include Ameris Bancorp, Farmers Capital Bank Corp., First Capital Bancorp Inc., First Defiance Financial Corp., LNB Bancorp Inc., Taylor Capital Group Inc. and United Bancorp Inc.

The auctions will take place on or about June 11. The offering price will be decided via a Dutch auction process.

Bank of America Merrill Lynch and Sandler O'Neill + Partners LP are the auction agents and joint bookrunners.

None of the issuers will receive any proceeds from the sales of the fixed-rate cumulative perpetual preferred stock.

The dividend rate for each issue is currently 5% and increases to 9% in 2014 unless the preferreds are redeemed prior to that date.

During the duration of the TARP program, the Treasury paid out $245 billion of taxpayer funds to troubled financial institutions. To date, the Treasury has recovered $264 billion through repayments, dividends, interest and other income, according to a Treasury press release.

The agency noted that it expects to announce more auctions in the coming weeks.

Treasury TARP auctions

Issuer Amount

Ameris Bancorp $52 million

Farmers Capital Bank Corp. $30 million

First Capital Bancorp Inc. $10.96 million

First Defiance Financial Corp. $37 million

LNB Bancorp Inc. $25.22 million

Taylor Capital Group Inc. $104.82 million

United Bancorp Inc. $20.6 million

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