BofA ‘stress test’ score adjusted down

03/21/2014 6:44 PM

03/21/2014 6:45 PM

The Federal Reserve revised its “stress test” results for Bank of America on Friday, resulting in a slightly poorer performance for the Charlotte-based bank.

The Fed said the bank’s minimum capital ratio would drop to 5.9 percent in a severe, hypothetical economic crisis. The revised figure is lower than the Fed’s 6 percent minimum ratio issued Thursday.

The new calculation still puts the bank above regulators’ 5 percent minimum buffer for top-tier capital.

Since the financial crisis, major U.S. lenders participate in the annual health checks, which measure whether they would have enough of a capital cushion to continue lending in a downturn. This year’s tests were based on how 30 bank holding companies would fare in a deep recession that would include a jump in unemployment and a 50 percent drop in the stock market.

Bank of America posted the lowest minimum capital ratio among big banks under Thursday’s results. Friday’s revisions did not change that.

Overall, the Fed revised its figures for 15 bank holding companies, adjusting some up and others down. In a press release, the Fed attributed the changes in part to “inconsistencies” in how the tests treated fourth quarter 2013 dividend increases or stock buybacks.

BB&T fared better under the revisions, with its minimum ratio climbing to 8.4 percent from 8.2 percent in the initial results. Wells Fargo’s results were unchanged at 8.2 percent.

In this year’s round of testing, only Utah-based Zions Bancorporation failed to meet the minimum capital buffer requirement. Friday’s changes did not result in any additional banks falling below the 5 percent minimum hurdle.

A spokesman for Bank of America declined to comment on the Fed’s revised figure.

Editor's Choice Videos

Join the Discussion

Charlotte Observer is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Terms of Service