The repayment to U.S. taxpayers will be made after the completion of a securities offering, the bank said. Shareholders will be asked at a special meeting to approve an increase in the bank's authorized shares as part of the offering. No date was set for the meeting.
The repayment means Bank of America is freed from executive compensation restrictions imposed by pay czar Ken Feinberg, which have hampered its search for a new top boss. The bank also will not have to clear other executives' compensation with Feinberg. And he will have no say on the final total compensation and pension for departing CEO Ken Lewis.
The bank indicated that it has approval of the U.S. Treasury and regulators.
"We are pleased that Bank of America is moving ahead with plans to pay the taxpayers back in full," a Treasury official said in a statement. "As banks replace Treasury investments with private capital, confidence in the financial system increases, taxpayers are made whole, and government's unprecedented involvement in the private sector lessens.
"While we have more work ahead to improve lending and spur job creation, today's announcement is another step in the right direction. We also welcome Bank of America's commitment to strengthen lending to small business and their on-going efforts to modify mortgages and keep more families in their homes."
Bank of America also said it agreed to increase its equity holdings by $4 billion by selling assets, actions that must be approved by the Board of Governors of the Federal Reserve and under contract by June 30. If the asset sales are not completed by the end of 2010, the bank said, it has agreed it would raise capital through a common stock offering.
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