Bank of America, the second-biggest U.S. bank by assets, said its board approved the repurchase of as much as $800 million in shares.
The repurchases are in addition to the $4 billion announced a year ago, the Charlotte-based bank said Friday in a regulatory filing.
The latest buyback is to offset share dilution that would otherwise result from recent incentive-compensation awards, according to the filing.
“The Federal Reserve did not object to the corporation’s proposed repurchases,” the bank said in the filing.
Share repurchases reduce the number of outstanding shares on the market. They can make the price of a stock go up by boosting earnings per share.
Since the financial crisis, the largest banks must receive approval each year from the Fed to return capital to shareholders – through buying back stock or raising dividends. The Observer contributed.