Bank of America ( BAC) on Friday said it would pay $713 million in quarterly dividends to the U.S. government related to the federal bailout funds it has received. The dividends, to be paid in mid-May, are connected to the $45 billion preferred equity stake in BofA purchased under the Treasury's Troubled Asset Relief Program, or TARP. The company said that the new payment, on top of the roughly $400 million it already paid to the government in February, reflect "the company's ongoing commitment to pay back taxpayers as quickly as possible." BofA will pay a cash dividend of $312.50 a share, or $188 million, on the Fixed Rate Cumulative Perpetual Preferred Stock, Series N. The payment relates to the government's initial $15 billion investment in BofA in October. The company also plans to pay a cash dividend of $312.50 per share, or $125 million, on the Fixed Rate Cumulative Perpetual Preferred Stock, Series Q, related to the government's $10 billion investment in Merrill Lynch, made at the same time. BofA purchased Merrill Lynch on Dec. 31. But the biggest portion of the dividend payment has to do with the government's second investment into BofA, made in January, totaling $20 billion. BofA is paying a cash dividend of a whopping $500 a share, or $400 million, on the Fixed Rate Cumulative Perpetual Preferred Stock, Series R, related to the $20 billion investment. Bigger-than-expected losses at Merrill that became apparent late last year forced BofA to seek the second federal investment. BofA CEO Ken Lewis has endured sharp criticism as a result, including some activist investor groups seeking his ouster.
Citigroup ( C) also has received two injections from the government totaling $45 billion. In late February Citi announced that the government would convert a portion of its preferred stake to common equity. The move would boost Citi's tangible common equity, it said. Lewis has publicly said that he regrets taking as large of an injection as he did from the government, which he reiterated on Thursday during an interview with CNBC. BofA directors also authorized other preferred stock dividends, the company said. BofA shares recently were rising 2.8% to $7.44.