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 It's payday for Uncle Sam, as a number of banks give the federal government back its capital from the Troubled Asset Relief Plan Wednesday. BB&T Corp. (NYSE:BBT) and Morgan Stanley (NYSE:MS) were out early with statement saying how pleased they were to give Treasury back its respective $3.1 billion and $10 billion, followed closely by J.P. Morgan Chase & Co. (NYSE:JPM), which returned $25 billion.Also expected to return TARP money Wednesday are Goldman Sachs Group Inc. (NYSE:GS) with $10 billion and U.S. Bancorp (NYSE:USB) with $6.6 billion. Overall, the five banks may repay roughly $54.7 billion Wednesday. For banks like J.P. Morgan the repayment can't come fast enough, as its costs -- in dividends and interest -- were estimated at $1.48 billion by Rochdale Securities LLC analyst Richard Bove on Tuesday. Morgan Stanley's costs came in around $1.02 billion, according to Bove. Overall, the repaying banks will shell out roughly $3.88 billion in the second quarter to repay TARP, the analyst estimates. The billions flowing back into Treasury's coffers are unlikely to change the negative public perception of TARP or of its chief architect, former Treasury Secretary Hank Paulson. Debate over Paulson's actions and their effects continues as some praise him for saving the U.S. financial system and other criticize him as orchestrating a bailout for Wall Street. While the government may have its money back, but its far from the end of the road for each bank's connection to TARP, as the loose end of the warrants that the Treasury was issued remain an issue. The government holds warrants from all TARP recipients, typically for 15% of however much capital was received, so that taxpayers could benefit from any upside to the bailout. While the banks are anxious to buy the warrants backs -- since they could leave them open to remaining under the TARP's compensation restrictions -- they have thus far balked paying full market value for them. In its press release, J.P. Morgan said it notified the Treasury of its intention to repurchase 10-year warrants, but did not specify if the two sides had agreed on a price. - George White See Dealscape post on TARP warrants See Dealscape post on Hank Paulson See J.P. Morgan press release
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