US Treasury auctions bailout bank stocks

NEW YORK, June 11 (IFR) - The US Treasury on Monday opened a three-day auction of preferred stock it acquired in seven banks that received TARP bailout money during the financial crisis.

The Treasury has set minimum prices for the shares in the institutions, which would yield at least $221m if all the stock is sold when the auction ends at close of business Wednesday.

It is selling shares in Taylor Capital, Ameris Bancorp, First Defiance Financial Corp, Farmers Capital Bank, LNB Bancorp, First Capital Bancorp and United Bancorp.

The offer, conducted through joint bookrunners and auction agents Bank of America Merrill Lynch and Sandler O'Neill, is expected to be priced through a modified Dutch auction, by which bids are submitted at specified increments.

The Treasury has set a minimum per share price of $737 for 104,823 shares of Taylor Capital ; $763.50 for 52,000 shares of Ameris and $912 for 37,000 shares of First Defiance.

Farmers Capital has a minimum share price of $671.25 for 30,000 shares; LNB Bancorp is set at $744.50 for 25,223 shares; United Bancorp has a minimum $706.25 price per share for 20,600 shares; and First Capital Bancorp is at $819.25 for 20,600 shares.

At settlement, winning bidders will be required to pay the clearing price for the stock plus accrued and unpaid dividends from and including May 15 2012. The accrued dividends on each of the institutions' stock are $4.72 per share.

Investors may bid on individual or multiple preferred stock positions.