Bank of America Corp.'s board authorized about $713 million in dividend payments to the U.S. federal government under the Troubled Asset Relief Program.

The company paid its first dividends totaling $402 million to the Treasury Department in February as part of its commitment to pay back taxpayers as quickly as possible.

Other banks, including JPMorgan Chase & Co. and Goldman Sachs Group Inc., have said they want to repay the funds as soon as they can, possibly this year.

Last month, Bank of America Chief Executive Ken Lewis said it could take two to three years to pay back the funds. The Treasury has injected $45 billion into Bank of America and agreed to backstop as much as $120 billion of its assets.

The bank received an initial $15 billion under Tarp's Capital Purchase Program last fall as the Treasury made investments in the nine largest U.S. banks in an effort to unfreeze credit markets. The government later provided $30 billion more related to the bank's acquisition of Merrill Lynch.

Some banks, such as the small New Jersey institution Sun Bancorp Inc., recently returned all their Tarp money, saying changing rules made keeping the money a burden rather than a boon. Since the middle of March, at least five banks have said they either won't accept Tarp funds or they will return the funds received with interest due to Uncle Sam.

There is concern that regulators might not want banks to repay their government investments too quickly because of the uncertain economic environment. Repaying might also cause questions about the condition of those banks that delay paying the government back.

Looking to shore up its balance sheet, Bank of America has slashed its dividend twice since October. The bank has the lowest tangible common equity ratio of any large bank, at 2.54%. Its earnings are vulnerable to rising unemployment as well as troubles in the commercial real-estate market.

Nonetheless, it expects to take in "close to $50 billion in pretax, pre-provision earnings" this year - that is before subtracting losses from bad loans - which means the bank should quickly recover once the economy bottoms.

Moody's recently lowered its credit ratings on Bank of America, citing, among other things, an increasing "probability that systemic support will be needed."

Bank of America's shares recently traded at $7.49, up 3.5%. The stock price has fallen 47% so far in 2009.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.