Somerville-based Central Bancorp, holding company for Central Co-operative Bank, is one of several banks to repay the U.S. Treasury Department’s TARP funds since late August – and like many of its peers, it used more federal money to do so.

On Aug. 25, Central fully redeemed its $10 million worth of preferred shares held by the U.S. Treasury. Central used the treasury’s Small Business Lending Fund (SBLF) program to pay off its TARP obligation, the bank said.

So far, 279 of the 707 institutions that accepted TARP assistance have repaid the program. One hundred of the 103 institutions to repay the program in August and September used the SBLF to do so, according to SNL Financial.

Central sold preferred stock to the Treasury under the TARP Capital Purchase Program on Dec. 5, 2008.

In conjunction with its participation in the TARP Capital Purchase Program, the Treasury also received a warrant to purchase up to 234,742 shares of Central’s common stock at an exercise price of $6.39 per share. Central is currently evaluating whether to seek an agreement with the Treasury to repurchase the warrant at its fair market value.

The SBLF was intended to encourage small business lending by providing capital to community banks at low interest rates.