The government said Tuesday it has provided $80.7 million to 10 banks in the latest payments from the $700 billion financial rescue fund.

The Treasury Department said it has spent $198.58 billion under a program to buy banks’ preferred stock in an effort to bolster their balance sheets.

Among the latest recipients, Heritage Oaks Bancorp of Paso Robles, Calif., got $21 million and Community First Bancshares Inc. of Union City, Tenn., received $20 million.

The smallest amount received among the 10 banks was $442,000 paid to Farmers & Merchants Financial Corp. of Argonia, Kan.

The payments were made last Friday but not disclosed until Tuesday. Under the legislation Congress passed last October to set up the bailout fund, the government has two business days to report any new transactions.

Treasury Secretary Timothy Geithner announced on Monday that the administration plans to tap the bailout fund for between $75 billion and $100 billion to launch an effort with the Federal Reserve, the Federal Deposit Insurance Corp. and private investors to buy as much as $1 trillion in toxic assets off banks’ balance sheets.

The former Bush administration set a target of using $250 billion of the first $350 billion in bailout support to purchase stock as a way of bolstering their capital reserves so that they would resume more normal lending.

However, many banking experts believe that the banking crisis, the worst in seven decades, will not be resolved until the toxic assets are removed from banks’ books, allowing them to boost lending and also attract more investment capital.

Copyright 2009 The Associated Press