As Bank of America (BAC) continues to cope with fallout from the housing and mortgage crisis, the financial institution may have to pay some year-end employee bonuses in the form of stock because of a possible cash shortfall related to obligations surrounding its buy-back of stock from the federal government.

The company has generated about $1.9 billion in after-tax earnings from sales of various assets, short of the $3 billion it agreed last December to raise as a condition for repurchasing the Bank of America stock held by the government through the Troubled Asset Relief Program.

"We continue to pursue several potential asset sales that may reduce the remaining amount of additional capital required," Bank of America said in a Nov. 5 filing with the Security and Exchange Commission. "In the event that there is a shortfall, it would be met by issuing equity awards of fully vested common stock to certain associates in lieu of a portion of their 2010 year-end cash incentive awards, which would be transferable by associates as soon as administratively practicable."

Bank of America continues to be affected by the fallout of the mortgage crisis. The company is one of a number of U.S. institutions that said last week that they may incur costs defending lawsuits from investors in their mortgage-backed securities.

Bank of America in particular said it's a defendant in cases alleging that documents relating to more than $375 billion in mortgage-backed securities may have contained misrepresentations and omissions, and failed to meet underwriting standards. Wells Fargo (WFC) and Citigroup (C) said they were defendants in similar lawsuits, and that costs may rise because of the resulting litigation.


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lpi2007

Bonuses, I wouldn't give a damn if I got bonuses in gum, BEATS NOTHING. But if you are going to play the stocks, buy all the KY Jelly you can, I think we're all going to get screwed and I'm betting they'll use KY Jelly, I HOPE.

November 08 2010 at 8:49 PM Report abuse +2 rate up rate down Reply
marchwideass

thats great after they charge me 16 per cent and steal my money after we bail them out

November 08 2010 at 8:42 PM Report abuse +1 rate up rate down Reply
vpqueen

Maybe they can ask Obama what he think about this between putts.

November 08 2010 at 6:37 PM Report abuse -2 rate up rate down Reply
usmachinetool

Well if the Bank of America pays bonuses, then I'm certain it was all taxpayers money. Why is it they are giving all their customers seeking MakingHomesAffordable program such a difficult time????????? They want to pay tarp money to their upper management!!!! Well now is the time for our new make up of government to seize the opportunity to make an example out of these large banks, and show them for what they really are- they put out all this propaganda on how to get reduced financing and etc. but in reality, their turning them all down except for a few. All the Board of Directors of the Bank of Georgia should be ashamed of themselves for allowing the upper management to look like they are helping, but really aren't! Being a customer of the Bank of America has been a very painful experience, and as soon as I can I will exit their bank! Why becsuse they are cheating, lieing, and mishandling this program 100% that's why!!!! Big banks have no regard for those of us that have sought refinancing in the MakingHomeAffordable program laid out by our dear Mr. President!!! All I can say is you all within the power structure of Bank of America should be ashamed of yourselves. PERIOD!

November 08 2010 at 6:14 PM Report abuse +5 rate up rate down Reply
BONNIE

You should only get a bonus when you do something. Here they go rewarding the ones's who do nothing again.

November 08 2010 at 5:50 PM Report abuse +10 rate up rate down Reply
resfinc

Hard to imagine that anyone would be earning a bonus if you are not making enough money to pay your bills.

November 08 2010 at 5:39 PM Report abuse +10 rate up rate down Reply
erind03

scumbags!!!

November 08 2010 at 4:56 PM Report abuse +10 rate up rate down Reply