Taxpayers could lose more than $60 million of a $135 million bailout package the U.S. Treasury gave to Central Pacific Financial Corp., the parent of Central Pacific Bank, in January 2009.

The magnitude of the loss came to light Thursday when the Treasury said it expects to make $35.9 million from the sale of 2.85 million Central Pacific shares — or approximately half of the bank shares that it owns.

"The government may not come out whole in this particular case," said analyst Joe Gladue, who follows Central Pacific for Haverford, Pa.-based B. Riley & Co. "But they’ll get a good portion of their loan back, and they also will have saved a fairly significant bank in the Hawaii economy."

The Treasury said it hopes to sell the 2.85 million shares at $12.75 each. If the Treasury were to sell its remaining 2.8 million Central Pacific shares at the same price, it would receive another $36.3 million, leaving it with total proceeds of roughly $72.2 million — or $62.8 million less than what it invested into the bank. The Treasury also is out $2 million of unpaid dividends that it was owed by Central Pacific.

"Treasury’s approach is to strike an appropriate balance between exiting our investments in private companies as soon as practicable and maximizing value for taxpayers," Treasury spokesman Matt Anderson said.

The Treasury made its investment in Central Pacific, the state’s fourth-largest bank, to help it overcome losses due to the collapse of the bank’s California real estate investments. The investment was part of the Troubled Asset Relief Program, or TARP, which was passed by Congress in October 2008.

In 2008, when the real estate market was tanking, Central Pacific lost $138.4 million. In 2009 it lost $313.7 million, and in 2010 it lost $251 million.

Central Pacific is making positive strides now, and the Treasury’s loss is not a surprise, said Gladue.

"That’s a risk of business," he said. "It’s not usually the government’s business, but it is a risk of making loans, and the government has so far made out fairly well. There have been a few banks that received TARP loans that failed completely, but the idea was to stabilize the banking system, and that really has occurred. In Central Pacific’s case, clearly the bank had some pretty deep problems, and it’s largely addressed those and is recovering from them."

Tax Foundation of Hawaii President Lowell Kalapa said that while he’s concerned by the loss of more than $60 million in taxpayer money from the bailout, his greater concern was that the bank was not strong enough to repay the loan.

"What should be of greater concern to this community is that this bank is still not in a solid position, and whether the leadership has been prudent to get themselves out of this hole," said Kalapa. "I understand the bank was in an awfully weak position when (Central Pacific CEO) John Dean took over (in March 2010) and could not make good on the repayment. The question is not necessarily his leadership, but the condition of the bank."

Central Pacific Bank had a $4.6 million profit last quarter, its first positive quarter in two years.

Central Pacific officials declined to comment Thursday on the Treasury’s action.

Despite the loss from the Central Pacific loan, the Treasury has come out ahead from the $245 billion in loans it made to 763 banks under TARP.

"To date we’ve been paid back $253 billion through repayments and dividends," Anderson said. "So we have an $8 billion profit, and any additional income from the bank program provides an additional return for taxpayers."

Of the 763 banks that received loans, 116 have fully repaid their loans, nine are in bankruptcy or receivership, nine have had their shares sold by the Treasury and two banks have merged. The Treasury still has outstanding investments in 627 banks.