Bank of America Corp sold more than $19 billion of equity on Thursday amid strong investor interest as it races to shed government regulatory curbs that have bedeviled its CEO search.

The money raised will help repay $45 billion in government bailout funds the bank took at the height of the financial crisis as it struggled with heavy writedowns stemming from its acquisitions of mortgage lender Countrywide and investment bank Merrill Lynch.

The bank had previously said it planned to sell securities next Monday, but moved the sale forward because of demand. The size of the deal grew to $19.29 billion of common equivalent securities, from an originally planned $18.8 billion, according to a pricing document sent to investors and obtained by Reuters.

The securities sold at $15 each, about 5 percent below where Bank of America shares closed on Thursday. The securities will convert to common stock once equity investors approve an increase in authorized Bank of America shares. The bank's shares fell to $15.58 in aftermarket trading.

The offering is the biggest yet in a year that has seen at least 100 U.S. banks sell stock to strengthen their capital as they sustained losses from mortgages, credit card debt and business loans.

Chief Financial Officer Joe Price said on a conference call with investors the bank was seeing signs of credit stabilization and that managed losses on credit cards had plateaued.

Consumers continue to experience stress ... however we are seeing signs of stabilization, Price said.

ASSET SALES PLANNED

The bank also plans to sell $4 billion of assets as part of its plan to repay the funds borrowed under the Troubled Asset Relief Program, Price said on the call. The bank is looking at assets to sell, and to the extent it does not shed assets, the bank will issue more shares.

Repaying the money helps the bank's search for a successor to Chief Executive Kenneth Lewis by reducing government involvement, analysts said. Lewis is due to retire at the end of the year.

In testimony before a Senate Banking Committee hearing on Thursday, Federal Reserve Chairman Ben Bernanke said Bank of America repaying TARP funds is good news, adding that the real problems to the financial system have mostly been outside the bank holding companies.

But one top regulator cautioned that the government needs to be careful about letting big financial firms repay bailout money because there will not be more government support going forward. I think, in general, they need to be very careful with it, said Sheila Bair, chairman of bank regulator the Federal Deposit Insurance Corp.

'AN INCREMENTAL POSITIVE'

Bank of America's surprise move to repay TARP funds may pressure rivals to follow suit, but many big banks may not rush to repay all the funds they borrowed.

Concerns about possible share dilution for other banks that may follow Bank of America's lead helped depress stock prices of PNC Financial Services Inc
and Wells Fargo & Co , both cited as top candidates for TARP repayment.

PNC fell 6.4 percent to close at $52.89, while Wells Fargo fell 3.5 percent to close at $26.49. Bank of America shares rose 0.7 percent to close at $15.76 after earlier gaining as much as 6 percent.

A total of about 1.03 million option contracts changed hands in BofA, three times the average daily volume, according to option analytics firm Trade Alert.

The full repayment of TARP is an incremental positive in the sense that it relieves the intense regulatory and political scrutiny tied to its receipt of government money, Credit Suisse analyst Moshe Orenbuch said in a note to clients on Thursday.

The equity offering listed Bank of America-Merrill Lynch and UBS AG's UBS Investment Bank as underwriters, according to a filing with the U.S. Securities and Exchange Commission.

(Reporting by Dan Wilchins)

(Additional reporting by Juan Lagorio, Doris Frankel, Chuck Mikolajczak, Lilla Zuill, and Elinor Comlay, Editing by Tim Dobbyn, Gerald E. McCormick and Carol Bishopric)