U.S. Treasury Starts Auctions of Stakes in 11 TARP Banks

   By Jeffrey Sparshott 
 

WASHINGTON--The U.S. Treasury Department said Monday it started to sell off stakes it holds in 11 banks that received rescue funds at the height of the financial crisis, continuing the process of winding down the bailout launched in 2008.

The auctions started Monday morning and will close at 6:30 p.m. EDT on Tuesday.

Nearly four years after the launch of the Troubled Asset Relief Program, or TARP, the Treasury continues to hold stakes in 291 financial institutions.

The Treasury is auctioning its shares in:

--Blue Ridge Bancshares Inc. of Independence, Mo. (which received $12 million from TARP's Capital Purchase Program)

--First Gothenburg Bancshares Inc., Gothenburg, Neb. ($7.57 million)

--Blackhawk Bancorp Inc. (BHWB), Beloit, Wis. ($10 million)

--Germantown Capital Corp., Germantown, Tenn. ($4.97 million)

--CenterBank, Milford, Ohio ($2.25 million)

--Oak Ridge Financial Services Inc. (BKOR), Oak Ridge, N.C. ($7.7 million)

--Congaree Bancshares Inc. (CNRB), Cayce, S.C. ($3.29 million)

--Metro City Bank, Doraville, Ga. ($7.7 million)

--Peoples Bancshares of TN Inc., Madisonville, Tenn. ($3.9 million)

--The Little Bank (LTLB) Inc., Kinston, N.C. ($7.5 million)

--HomeTown Bankshares Corp. (HMTA), Roanoke, Va. ($10 million)

Each of the 11 banks has submitted an offer to the Treasury to buy back their own preferred shares, but other investors will be able to place bids at the auction.

TARP, which also included rescues in the housing, auto and insurance sectors, will likely end up costing taxpayers. Earlier this month, the Congressional Budget Office estimated the final price tag at $24 billion, down from an estimate of $32 billion made in the spring. The lower cost was due largely to an increase in market value of the government's investments American International Group Inc. (AIG).

--Eric Morath contributed to this article.

Write to Jeffrey Sparshott at [e-mail].