Taylor Capital Buys Back $26M of Tarp Shares

Taylor Capital Group (TAYC) in Chicago plans to retire one-quarter of its Troubled Asset Relief Program stock that the Treasury Department auctioned to private investors last June.

The $5.8 billion-asset company paid $26.4 million for roughly one-fourth of its outstanding preferred shares, plus accrued dividends, it disclosed Thursday. The purchase is expected to close on July 15.

Following the repurchase, Taylor Capital Group, the parent of Cole Taylor Bank, would have about $78.6 million of preferred shares outstanding, it said. It issued the Treasury Department $104.8 million of preferred shares in December 2008 through the Tarp program.

The Treasury auctioned the shares in June 2012 for net proceeds of $92 million. In July 2012, Taylor paid the agency $9.8 million for the stock warrant it issued through the Tarp program, according to the company's latest annual report.

Banks with outstanding Tarp debt have been hurrying to redeem their shares before the interest rate rises to 9% from 5% on the five-year anniversary of the debt's issuance.