(Putting his money where his mouth is)
NEW YORK, Jan. 21, 2009 (Reuters) — Bank of America Corp Chief Executive Kenneth Lewis spent about $1.2 million to buy 200,000 common shares on Tuesday, four days after the largest U.S. bank posted its first quarterly loss in 17 years.
Bank of America Chairman, President & CEO Kenneth Lewis speaks with the media after addressing the Detroit Economic club in Detroit November, 18, 2008. REUTERS/Rebecca Cook
The share purchases by Lewis and five directors suggest confidence in prospects for the bank, which last week posted a $1.79 billion fourth-quarter loss and took a $20 billion infusion from the government’s Troubled Asset Relief Program to help it absorb Merrill Lynch & Co.
Bank of America bought Merrill on Jan 1, and has now taken $45 billion of TARP funds. As part of the latest package, the government agreed to share in losses on $118 billion of debt.
According to a Wednesday filing with the U.S. Securities and Exchange Commission, Lewis paid between $5.98 and $6.06 for his shares, well above the Tuesday closing price of $5.10.
Following the transactions, Lewis directly owned 1,460,997 common shares, worth $7.45 million based on the closing price. Lewis also indirectly held 542,235 bank shares through various trusts, and last Nov 4 bought 86,000 preferred shares.
The directors who bought shares on Tuesday include lead director O. Temple Sloan, who bought 41,800 common shares and then gifted 11,000 of them, a separate SEC filing shows.
Lewis, 61, has been criticized for overpaying for Merrill, and for hastily agreeing to the roughly $19.4 billion merger without fully examining its risks.
Shares of Charlotte, North Carolina-based Bank of America have lost more than three-fourths of their value since the purchase was announced Sept 15.
In afternoon trading, Bank of America shares were up $1.62, or 31.8 percent, at $6.72, retracing much of Tuesday’s decline. Much of Wednesday’s gain came after the share purchases were disclosed. The shares closed last week at $7.18.
(Reporting by Jonathan Stempel