Bank of America resubmits capital plan to Federal Reserve
05/27/2014 9:35 AM
05/27/2014 6:39 PM
A month after suspending a planned dividend increase, Bank of America said Tuesday that it has finished reviewing its capital figures and has submitted a new plan to the Federal Reserve.
The announcement ends an internal financial examination after Bank of America discovered it hadn’t properly accounted for types of debt securities inherited in its 2009 acquisition of Merrill Lynch. That led the Charlotte bank to overstate its capital by about $4 billion.
Bank of America had already won Fed approval for a quarterly dividend increase from 1 cent to 5 cents per share, and a $4 billion stock buyback, but the miscalculation forced the bank to scrap its plans. Bank of America said its new capital plan would return less capital to shareholders.
The bank brought in a third party to review what led to the mistake. Bank of America said Tuesday that the review resulted in another small adjustment to its capital. The new change was less than one basis point.
The Federal Reserve has 75 days to examine Bank of America’s new plan and decide whether to approve it.
Spokesman Jerry Dubrowski said the bank is continuing to look into how the error occurred.
Bank of America shares rose more than 3 percent Tuesday, closing at $15.21.
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