Charlotte-based CommunityOne Bancorp, the last lender based in the Charlotte area still part of the federal bailout of the financial system, is one step closer to exiting the program.
The Treasury Department said Tuesday it will sell about 1.1 million of the shares it acquired from the lender under the Troubled Asset Relief Program, known as TARP. U.S. taxpayers pumped $51.5 million into the bank in the wake of the financial crisis.
Among Charlotte banks, Bank of America paid back its $45 billion bailout in 2009. Treasury sold shares it owned in Bank of Commerce in 2012.
The Treasury Department said it expects to receive $10.1 million from the sale of CommunityOne stock. That is in addition to $3.9 million in dividend payments the Treasury has already received from its investment in the lender.
After the sale, the Treasury Department will still hold rights to purchase 22,072 shares of the lender’s common stock. The Treasury said those shares could be sold to pay back taxpayers for their investment.
It’s not unusual for the Treasury Department to sell TARP investments for less than the original value as it unwinds the bailout program. But according to the government, it has made a profit on the program overall. On Tuesday, the agency said it has recovered more than $273 billion after investing $245 billion in banks through TARP.
In 2009, CommunityOne, then known as FNB United, sold the preferred stock to the Treasury Department. As part of the bank’s recapitalization two years later, the Treasury converted the preferred stock to common stock at a 75 percent discount.
The Treasury Department said Tuesday it is selling the common shares for $9.35 per share, the price at which the stock closed Monday. After the sale, the Treasury will no longer own common shares of CommunityOne.
FNB United changed its name to CommunityOne Bancorp last year after it completed the merger of its two banks, Granite Falls-based Bank of Granite and Asheboro-based CommunityOne Bank, as part of an effort to help it return to profitability.
The lender has struggled to become profitable since the financial crisis. But that is changing: It posted a profit in the first three months of this year, its third profitable quarter in a row. In October, the lender reported its first operating profit since the second quarter of 2008.
CommunityOne shares dropped 2 percent Tuesday to close at $9.16. The lender’s shares are down about 28 percent since the start of the year.
CommunityOne Bank has $2 billion in assets and 50 branches in North Carolina, including in the Charlotte metropolitan area.