While every bank that took money from the government through TARP would like to get the government off their backs, some actually have plans in the works. The only question left is who will be first.

The bank that's made the loudest noises since February is Goldman Sachs (GS). It even raised $5 billion selling common equity shares. The firm got $10 billion in TARP funds. Goldman says it's "highly confident" it will repay funds soon.

What other banks are trying to win the payback race?

  • American Express (AXP) needs to repay $3.4 billion and said it already filed requests with the Federal Reserve and Treasury Department to repay the funds. The company says it has the cash and doesn't need to sell stock.
  • Bank of New York Mellon Corp. (BK) issued $1.5 billion in debt not guaranteed by the government and will use the proceeds to repay $3 billion in TARP funds.
  • BB&T Corp. (BBT) cut its dividend by 68 percent from 47 cents to 15 cents as part of its plan to repay TARP. It will issue $1.5 billion of common stock to repay the $3.1 billion in TARP funds.
  • JPMorgan Chase (JPM) wants to start the repayment process as soon as possible. Chase cut its dividend by 87 percent to just 5 cents, which will save $5 billion of capital in a year. But the bank has not yet publicly identified where it will get the rest of the $25 billion to repay TARP.
  • Morgan Stanley (MS) plans to raise $2 billion by issuing common stock and raise $3 billion in debt through bonds not backed by the government towards repayment of the $10 billion in TARP. In addition to that repayment the stress tests indicated that Morgan Stanley needs to raise $1.8 billion, so don't look for the bank to be among the first to repay.
  • State Street Corp. (STT) says it has the funds to pay back $2 billion in TARP funds, but State Street's Chief Executive Ronald Logue has committed to the timing for repayment. He said in a statement, "We are now in a position to consider repayment for the TARP preferred stock," but didn't actually indicate they have started the process.
  • U.S. Bancorp (USB) made it clear it wants to return the $6.6 billion in TARP funds and it got a clean bill of health after the stress tests, but has given no indication of how it plans to raise the funds to repay TARP.
So who do you think will be the first major bank to repay TARP?

Lita Epstein has written more than 25 books, including Trading for Dummies and Reading Financial Reports for Dummies.

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