NEW YORK ( -- American Express ( AXP) paid the U.S. government $340 million to repurchase warrants associated with government bailout funds it received earlier this year.

The New York card and travel services company was one of 10 banks in June to repurchase preferred stakes sold to the government as part of the Troubled Assets Relief Program, or TARP. American Express repurchased $3.39 billion of preferred shares sold to the U.S. Treasury in January.

Taking into account the dividends and the repayment of warrants -- which totaled $414.4 million -- Treasury earned an annualized 26% return on its investment, the company said.

American Express said the repurchase price of the warrants reflects "the appreciation of American Express' share price since the preferred shares were issued in January of this year.

Some banks have been haggling with the government over an appropriate price to be paid for the warrants.

According to a Wall Street Journal article earlier this month, the U.S. Treasury has rejected as too low most of the valuation proposals received from the banks looking to repay the warrants. Banks, on the other hand, say the government is demanding too high a price to buy back the warrants.

JPMorgan Chase Chairman and CEO Jamie Dimon, who repeatedly has said his company did not need the government's capital, has told Treasury Secretary Timothy Geithner that he disagreed with the valuations, according to the Journal. JPMorgan Chase, which repaid $25 billion in TARP funds last month, apparently waived its right to buy the warrants, allowing the Treasury to auction them in the public market, which it says will result in an actual market price, according to the Journal article.

When asked if American Express paid full price for the warrants or if it was a negotiated price, a spokeswoman said in an e-mail: "It is the price agreed with U.S. Treasury." She did not comment further on the price paid.

Earlier this month, Goldman Sachs ( GS) and US Bancorp ( USB) also repaid warrants associated with TARP. Goldman said in a release that the $1.1 billion it paid to repurchase warrants represented the "full value" determined by the Treasury.

-- Reported by Laurie Kulikowski in New York.