Bank of America sets $713 million TARP payment

Bank of America Corp. said Thursday its board has authorized roughly $713 million in dividend payments to the U.S. government under the troubled asset relief program.

The government's financial bailout program was extended to a number of financial institutions. Many of the major banks that were recipients have since chosen to pay back the funds. By paying back the federal money, the banks free themselves from limits on executive pay.

Citigroup Inc. and Bank of America, two of the most troubled financial institutions, have taken $45 billion each in bailout money.

Besides the preferred stock, the banks that took bailout money issued warrants that give the government the right to buy bank stock at a fixed price later. Bank stocks have been battered but are expected to rise as the economy recovers, so the warrants could deliver substantial profits to taxpayers.

Or the government could sell the warrants back to the banks "at fair market value," the Treasury Department said _ presumably also locking in profits for the taxpayers.

The company also said on Thursday that its board also authorized dividends on nearly 20 preferred stocks.

Shares of Bank of America fell 41 cents to close at $12.64 Thursday.