BANK OF AMERICA TO REPAY $45 BILLION IN TARP MONIES

Charlotte, NC-based, $2.39 trillion-asset Bank of America Corp. (B of A) has received regulatory approval to repurchase the $45 billion in stock it sold the U.S. Treasury under the Troubled Asset Relief Program (TARP). In order to accomplish this, B of A will tap $26.2 billion in excess liquidity, generate $4 billion through asset sales, liberate $1.7 billion by paying employee bonuses with stock instead of cash, and raise $18.8 billion by issuing “common equivalent securities” to be converted to common stock. B of A President and CEO Kenneth Lewis said, “We are pleased to be able to fully repay the investment with interest…. This is good news.” B of A said the repayment will reduce fourth quarter income available to shareholders by $4.1 billion, since the book value of the preferred stock is less than the amount paid.