Bank of America Makes $402 Million TARP Dividend Payment to U.S. Government

Bank of America Corporation today announced that it made its first dividend payment to the U.S. government under the Troubled Asset Relief Program.
 
The payment, totaling $402 million, reflects Bank of America’s ongoing commitment to paying back U.S. taxpayers. Today’s payment represents the dividend on the Fixed-Rate Cumulative Perpetual Preferred Stock issued in connection with the $45 billion in government investments that Bank of America received in late 2008 and early 2009.

Approximately $223 million relates to the federal government’s $15 billion investment in Bank of America made under the Capital Purchase Program of the Troubled Asset Relief legislation and an additional $50 million relates to the federal government’s $10 billion investment in Bank of America as part of the agreement to acquire Merrill Lynch & Co., Inc. The remaining $129 million stems from the government’s $20 billion investment on January 16 to help facilitate the acquisition of Merrill Lynch. Total cash dividend payments to the government in 2009 will reach approximately $2.8 billion.

"It is our intention to pay back these loans, as soon as possible," said Bank of America Chairman and Chief Executive Officer Ken Lewis. "In the meantime, we are using these funds to support the U.S. economy by extending credit to individuals and businesses."

Bank of America extended more than $115 billion in new credit during the fourth quarter of 2008, of which about $49 billion was in commercial non-real estate; $45 billion was in mortgages; nearly $8 billion was in domestic card and unsecured consumer loans; nearly $7 billion was in commercial real estate; more than $5 billion was in home equity products; and approximately $2 billion was in consumer Dealer Financial Services.

Bank of America also committed to assisting as many as 630,000 customers to help them stay in their homes, representing more than $100 billion in mortgage financing. In 2008, the company modified approximately 230,000 home loans – representing more than $44 billion in mortgage financing. Bank of America also modified nearly 700,000 credit card loans for borrowers experiencing financial hardship last year.

Bank of America
Bank of America is one of the world’s largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The company provides unmatched convenience in the United States, serving more than 59 million consumer and small business relationships with more than 6,100 retail banking offices, nearly 18,700 ATMs and award-winning online banking with nearly 29 million active users. Following the acquisition of Merrill Lynch on January 1, 2009, Bank of America is among the world’s leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to more than 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients in more than 150 countries. Bank of America Corporation stock is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.