UPDATE 2-Bank of America to repay TARP

* BofA finalizing plans to repay $45 billion TARP aid

* Outgoing CEO Lewis wanted to repay TARP before retiring

* Shares rise 2.2 pct in after-hours trade

NEW YORK, Dec 2 (Reuters) - Bank of America Corp (BAC.N)
has reached an agreement with the U.S. government to repay its
$45 billion of bailout funds in the next few days, the company
said on Wednesday.

The Charlotte, North Carolina-based banking giant is
expected to sign the documents repaying its Troubled Asset
Relief Program funds over the next few days.

A U.S. Treasury official called the repayment a step in the
right direction, adding that replacing Treasury investments
with private capital would provide a boost to confidence.

The announcement comes as the bank has bristled under the
U.S. pay czar Kenneth Feinberg's curbs on compensation for
senior management and repeatedly expressed a desire to repay
the funds as soon as possible.

Under the agreement's terms, the bank would use the
proceeds from the sale of $18.8 billion of "common equivalent
securities." The remainder would be repaid through $26.2
billion of cash.

The bank is repurchasing all of its shares outstanding
under the TARP program but not repurchasing the warrants.

The deal was negotiated by Chief Risk Officer Greg Curl,
according to press reports. Curl has been mentioned as a
contender to replace retiring Chief Executive Ken Lewis.

Analysts said the negotiations would be a positive for Curl
in his contention for the top job.

"It's a feather in his cap," said Anton Schutz, president
of Mendon Capital in Rochester, New York.

A bank spokesman was not immediately available for
comment.

The move comes as the bank has struggled in its ongoing CEO
search to find a replacement for Lewis.

Analysts and bank observers have said the struggle stemmed
in part from the $45 billion of government aid extended to the
bank. The U.S pay czar curbed the pay for top executives and
introduced other restrictions.

Lewis, retiring at year's end, has repeatedly said his goal
was to repay the funds before he left the company.

The bank's shares rose 2.2 percent to $16 in after-hours
trade.
(Reporting by Joe Rauch; Editing by Matthew Lewis and Steve
Orlofsky)
((joe.rauch@thomsonreuters.com; + 1 704 692 5885; Reuters
Messaging: joe.rauch.reuters.com@reuters.net))