Bank Of America Makes $402 Million TARP Payment To US Government
February 17, 2009: 04:18 PM ET
DOW JONES NEWSWIRES
Bank of America Corp. (BAC) on Tuesday said it made its first payment to the U.S. government due under the Troubled Asset Relief Program - totaling $402 million - in connection with the $45 billion in government investments the bank received from late 2008 through early 2009.
"It is our intention to pay back these loans as soon as possible," said Bank of America Chairman and Chief Executive Ken Lewis. "In the meantime, we are using these funds to support the U.S. economy by extending credit to individuals and businesses."
Nearly $223 million of the payment related to the government's investment in the financial services company under the Capital Purchase Program with an additional $50 million related to the federal government's $10 billion investment in its acquisition of Merrill Lynch & Co. The remaining $129 million was from the government's $20 billion investment last month to help facilitate the acquisition of Merrill Lynch.
Total cash dividend payments to the government in 2009 are expected to reach about $2.8 billion.
Looking to shore up its balance sheet, Bank of America has slashed its dividend twice since October, as the deepening woes of consumers have weighed on the retail bank as it grapples with rising delinquencies in everything from mortgages to credit cards to small business loans. The latest cut last month to a nominal 1 cent a share will save the company some $6 billion a year.
Bank of America shares closed down 12% to $4.90. In recent late trading, shares are up to $4.92.
-By John Kell, Dow Jones Newswires; 201-938-5285; john.kell@dowjones.com
(END) Dow Jones Newswires
02-17-09 1618ET
Copyright (c) 2009 Dow Jones & Company, Inc.
February 17, 2009: 04:18 PM ET
DOW JONES NEWSWIRES
Bank of America Corp. (BAC) on Tuesday said it made its first payment to the U.S. government due under the Troubled Asset Relief Program - totaling $402 million - in connection with the $45 billion in government investments the bank received from late 2008 through early 2009.
"It is our intention to pay back these loans as soon as possible," said Bank of America Chairman and Chief Executive Ken Lewis. "In the meantime, we are using these funds to support the U.S. economy by extending credit to individuals and businesses."
Nearly $223 million of the payment related to the government's investment in the financial services company under the Capital Purchase Program with an additional $50 million related to the federal government's $10 billion investment in its acquisition of Merrill Lynch & Co. The remaining $129 million was from the government's $20 billion investment last month to help facilitate the acquisition of Merrill Lynch.
Total cash dividend payments to the government in 2009 are expected to reach about $2.8 billion.
Looking to shore up its balance sheet, Bank of America has slashed its dividend twice since October, as the deepening woes of consumers have weighed on the retail bank as it grapples with rising delinquencies in everything from mortgages to credit cards to small business loans. The latest cut last month to a nominal 1 cent a share will save the company some $6 billion a year.
Bank of America shares closed down 12% to $4.90. In recent late trading, shares are up to $4.92.
-By John Kell, Dow Jones Newswires; 201-938-5285; john.kell@dowjones.com
(END) Dow Jones Newswires
02-17-09 1618ET
Copyright (c) 2009 Dow Jones & Company, Inc.