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NEW YORK — Bank of New York Mellon said Wednesday it repaid the $3 billion it received last fall as part of the government's $700 billion bank investment program.
Bank of New York Mellon received the money as part of the Treasury Department's Troubled Asset Relief Program to help revive the stagnant credit and lending markets amid one of the worst periods of the credit crisis.
The New York-based custody bank also paid the Treasury Department $36.25 million of accrued dividends on the investment.
The government provided banks with capital in exchange for preferred stock and warrants to purchase common shares. The preferred stock carried an interest rate of 5 percent. The investment also included certain restrictions, such as caps on executive compensation that left some banks pushing to repay the loan as quickly as possible.
Bank of New York Mellon said it will record a one-time after-tax charge of about $197 million in the second quarter tied to the repayment.
Wednesday's repayment did not include the repurchase of the warrants. Bank of New York Mellon said it plans to notify the Treasury Department of its intent to purchase them. Bank of New York issued warrants for the government to purchase about 14.5 million common shares.
Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley, American Express Co., U.S. Bancorp, Northern Trust Corp. and BB&T Corp. have also said they repaid the government investments as part of the program.
Last week, the government granted 10 of the country's largest banks approval to pay back a total of $68 billion in TARP funds. Wednesday was the first day those banks were eligible to repay the loans.
Shares of Bank of New York Mellon rose 36 cents to $28.74 in afternoon trading.
