Bank of America Repays $45 Billion in TARP Money

Bank of America Corp. has repaid the $45 billion it received from the government through the Troubled Asset Relief Program, leaving Citigroup Inc. and Wells Fargo & Co. as the banking companies with the biggest outstanding balances.

Citigroup also took $45 billion from the Treasury Department. It got $20 million in the first wave of TARP investments in October 2008 and got an additional $25 billion when its condition worsened the following month. The latter amount has been converted to common stock, making the U.S. government - and by extension American taxpayers - a major shareholder in the New York-based company.

Wells Fargo got $25 billion in October 2008, partly to help with its acquisition of Wachovia Corp. - a deal that was arranged by regulators worried about Wachovia's heavy mortgage losses.

Bank of America had announced earlier this month that it intended to repay its TARP funds, using a combination of existing cash and money from a $19.3 billion stock offering.

The redemption of the preferred shares it issued to the government frees the company from operating restrictions imposed on TARP recipients, including limits on executive compensation. Bank of America has been having a hard time recruiting a replacement for Kenneth D. Lewis, who is stepping down as chairman and chief executive effective Dec. 31.

Citigroup also has been talking with the government about repaying the $20 billion remaining on its TARP obligations. Wells Fargo says that although it intends to redeem the preferred shares it issued to the Treasury in exchange for  aid, it does not want to issue new stock and dilute the interests of existing investors to raise the money.