American Express repays $3.39 bil in TARP funds

NEW YORK (AP) -- American Express Co. said Wednesday it repaid the $3.39 billion it received last fall as part of the government's $700 billion bank investment program.

American Express 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 credit card lender also paid the Treasury Department $15.1 million of accrued dividends on the investment. American Express had previously paid the government $59.3 million in 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.

Wednesday's repayment did not include the repurchase of the warrants. American Express said it plans to notify the Treasury Department of its intent to purchase them. The financial firm issued warrants for the government to purchase about 24.3 million shares of common stock.

Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley, Bank of New York Mellon Corp., 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 American Express fell 74 cents, or 3 percent, to $23.95 in Wednesday trading.