HispanicBusiness

The U.S. Treasury Department announced Friday that it sold its stake in Exchange Bank for $39.7 million in an auction conducted this week.

The stock sale, which is expected to be finalized by Aug. 10, will free the bank to resume paying dividends that fund the Doyle scholarship program for Santa Rosa Junior College students.

The Treasury Department did not disclose the identities of the buyers.

During an auction this week, it sold 43,000 preferred shares of Exchange Bank stock at $875.25 per share, or a discount of 12.5 percent, and 2,150 shares at $965.10 per share, or a discount of 4.5 percent.

Exchange Bank borrowed $45 million from the Treasury Department in 2008 under the Troubled Asset Relief Program, or TARP, which was designed to shore up the U.S. financial system during the peak of the financial crisis.

"TARP's bank investment programs were critical to stabilizing an economy in freefall and have already realized a nearly $20 billion positive return for taxpayers," Tim Massad. assistant secretary for financial stability, said in a statement. "These auctions are an important part of our efforts to wind down the program in a way that helps support our nation's community banks and recovers additional taxpayer dollars."