Bank of America Up Despite $19B Offering

CHARLOTTE, N.C. (TheStreet) -- Bank of America (BAC)'s stock rallied nearly 4% Friday even as the bank raised $19.29 billion in new equity to pay back the $45 billion in owes the federal government.

The shares leapt 3.7% to $16.35 in recent trades. Volume was approaching 900 million shares with roughly half an hour left in the session, more than four times the issue's trailing three-month daily average churn of 185 million. The rally is particularly impressive as other big financial names were essentially flat, with Citigroup (C) up 0.74%, Wells Fargo(WFC) up 0.38% and JPMorgan Chase (JPM) down 0.29%.

The surge comes with the company pricing its offering at the equivalent of a less than 5% discount to where the common stock closed on Thursday.

RealMoney contributor Tim Melvin notes the gain is impressive not only because of the size of the offering (meaning significant shareholder dilution) but also because Bank of America is still searching for a CEO to replace Ken Lewis, who is resigning at the end of the year.

Then again, many commentators have said that the fact that the government still has a large stake in Bank of America is precisely the reason it has had trouble finding a CEO. At least six outside candidates have turned the job down, The Wall Street Journal reported Friday, with some concerned about pay restrictions that would be imposed by the government. The fact that Bank of America no longer has to answer to government-imposed pay guidelines and other mandates may make it easier to fill the seat.