Treasury Fails to Sell Tarp Shares in Guaranty Federal

The Treasury Department recouped $62.4 million in its latest auction of the securities it owns from the Troubled Asset Relief Program, but it was unable to find a buyer for shares Guaranty Federal Bancshares in Springfield, Mo.

The Treasury sets minimum prices for each security in the auctions and the department said Friday that it did not receive sufficient bids for the Guaranty shares. The $648 million-asset Guaranty received $17 million in funds under Tarp in January 2009.

The agency is aggressively working to wind down Tarp. Through five auctions, the Treasury has recovered roughly $1.2 billion of the approximately $1.3 billion it initially invested in 37 banks. It has also recently sold $381.5 million of preferred shares it held in M&T Bank Corp. (MTB) and plans to auction off preferred shares of multiple banks that have been packaged together beginning the fall.

The other banks involved in the latest auction were BNC Bancorp in High Point, N.C.; First Community Corp. in Lexington, S.C.; First National Corp. in Strasburg, Va.; and Mackinac Financial Corp. in Manistique, Mich. The five banks had received a combined $84 million from the program.

During its last auction, the Treasury also failed to find buyers for preferred shares it owns First Community Financial in Joliet, Ill., and First Western Financial in Denver.