JPMorgan Chase&Co. on Wednesday joined a handful of other banks in repaying government bailout funds it received last fall.
The New York-based bank repaid in full $25 billion in loans it received as part of the Troubled Asset Relief Program, or TARP. JPMorgan has already paid the government $795.1 million in dividends on the preferred stock investment, which carried a 5 percent annual dividend rate.
JPMorgan also plans to notify the Treasury Department of its intent to repurchase the 10-year warrants issued to the government as part of its investment in the bank. The warrants granted the government the right to buy shares at a fixed price over the next 10 years. Banks repaying TARP now have the right to purchase the warrants the Treasury holds at fair market value.
Last fall, the government poured $125 billion into nine major banks, including JPMorgan, in the form of preferred stock purchases in the hopes of increasing lending to businesses and consumers after the credit markets froze up. The government then made another $125 billion available to a number of other, smaller banks.
The government's shares carried a 5 percent annual dividend that was to increase to 9 percent after five years. The increase in the rate was aimed at providing an incentive for the banks to return the money, but the repayments that were made Wednesday come sooner than many anticipated.
Morgan Stanley, U.S. Bancorp and BB&T Corp. also announced they paid back money they received from the government. Last week, the government granted 10 of the country's largest banks approval to pay back a total of $68 billion in funding from TARP.
The 10 banks already have paid dividends on the preferred stock totaling about $1.8 billion over the last seven months.
Wednesday is the first day that the banks are eligible to begin repaying the funds.
JPMorgan shares slipped 44 cents to $33.06 in afternoon trading.