Additional bailout to BofA for Merrill Lynch & Co. Inc. was a mistake

Chief Executive of Bank of America Corp., Kenneth Lewis, stated that the bank's request for $20 billion in federal funds to support BofA's acquisition of Merrill Lynch & Co. Inc. was a "tactical mistake." 

Lewis said the extra bailout funds from the Troubled Asset Relief Program made BofA appear as weak as Citigroup Inc., according to The Financial Times. He also revealed his intention to remain as CEO of the bank until it repays the entire amount of TARP funds it owes to the government, that equals to $45 billion. He even gave a possible timetable: of two to three years. Lewis told the newspaper an "abundance of caution" led him to take more aid than he said was necessary to absorb Merrill’s $15 billion fourth-quarter loss. The bank bought Merrill Lynch on January, 1 for $29.1 billion, including $8.6 billion in preferred stock.

Last week the office of N.Y. Attorney General Andrew Cuomo deposed former Merrill Chief Executive John Thain and Lewis concerning Merrill executives who received nearly $4 billion in bonuses. Merrill gave the payments just weeks before the troubled brokerage firm was purchased by BofA. Cuomo has contended BofA was aware of the decision to award bonuses before Merrill’s fourth-quarter earnings were announced. 

BofA's stocks, that have traded between $2.53 and $43.46 per share over the last year, was trading at around $3.60 per share late Monday, that’s 8% down from Friday's closing $3.95 price per share.