Bank of America needs more than $80 billion in capital: FBR

MarketWatch ^ | 2009-01-20

[rabscuttle385]

Wells Fargo also will likely cut dividend to boost capital, analyst says

BY ALISTAIR BARR

SAN FRANCISCO (MarketWatch) — Bank of America Corp. needs more than $80 billion in new common equity capital to support the huge amount of assets on its balance sheet, an analyst said Tuesday.

Friedman, Billings, Ramsey's Paul Miller also said Wells Fargo & Co. (NYSE:WFC) probably will have to cut its dividend soon as that bank tries to boost capital. Shares of Bank of America slumped 29% to close at $5.10 on Tuesday. That's the lowest level since late 1990. Wells Fargo lost 24% to close at $114.23, the lowest level in roughly a decade.

Bank of America (NYSE:BAC) reported a $1.79 billion fourth-quarter loss on Friday, and said its newly acquired brokerage unit, Merrill Lynch, lost more than $15 billion in the same period.

Charlotte, N.C.-based Bank of America enters 2009 with $61.7 billion of tangible common equity, supporting $2.4 trillion of tangible assets, Miller wrote in a note.

The bank probably needs to maintain a tangible equity ratio of 6% to 9%, he said. "It would take over $80 billion of new common equity to reach even the low end of the range, and we believe Bank of America simply is not generating sufficient capital internally in this environment to put a dent in this size capital hole."

[rabscuttle385]

*Ping!*

[rabscuttle385]

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[pnh102]

Hopefully el Banco Del Messico will croak for good. Jerks.

[April Lexington]

Oh, no! Who would have ever guessed that B of A might need more taxpayer money(oooppps, I forgot, we are only borrowing the money from the Chinese)to clean up the ML cram-down.

Them boys been had!

[April Lexington]

The bank probably needs to maintain a tangible equity ratio of 6% to 9%, he said. "It would take over $80 billion of new common equity to reach even the low end of the range, and we believe Bank of America simply is not generating sufficient capital internally in this environment to put a dent in this size capital hole."

Them fellas is BROKE!

[KoRn]

A few million would set my family right!

[TheBattman]

Please let them fold. Please. The US Taxpayer cannot afford to bail out this king of bad business. Period. It is a bottomless hole that will fill in quicker if they are allowed to die.

[GeronL]

Bankrupting America. How many trillions in ‘bailouts’ this year?

[spokeshave]

TARP 3X3 coming right up (you known what)

I guess a 3X3 is less painful that a 4X4

[steelyourfaith]

BofA used to be based in San Francisco, I believe.

So, does this effect FDIC insured money market account?

[rabscuttle385]

So, does this effect FDIC insured money market account?

If it's an FDIC-insured Money Market Savings Account (not a Money Market Fund), then you *should* be fine, assuming that the FDIC doesn't go under.

The old Bank of America was based out of Los Angeles, until bought by A.P. Giannini's Bank of Italy out of Frisco. Of course, the whole outfit was later taken over by NationsBank out of Charlotte.

[steve86]

If more large banks fail the FDIC will be out of funds to replenish accounts and it will be wait-in-line time. The dollars you finally get might not be worth much after running printing presses 24 hrs/day for months.

[Sarah Barracuda]

my Mom has money in Bank of America as well as Well’s Fargo, is Bank of America on the verge of tanking?

[tubebender]

My Mom and Dad used to bank at Giannini’s in FResno. I still have a few statements and canceled checks from around Oct 1929. It was around this time AP took over BofA as I have a couple of statements and checks on that bank. Shortly after that they lost the farm and had to move...

[Deo volente]

It’s like throwing money into a black hole. It just gets sucked up and disappears.

WHY did Bank of America think that it could buy the toxic waste of Countrywide Financial and the failing Merrill Lynch and make it all work out? And now they expect the taxpayers to set things right???

The government should just say, “NO!!!”

[Seaplaner]

Now the Bank that openly advertised they would give credit cards to illegals with no proof of citizenship needed wants our tax money to bail them out. Where do we go to yell "HELL NO!"

This was my though precisely.

They chose to give $$ to illegal aliens with no ssan...

I choose to let them fry.

.

[Deo volente]

“Bankrupting America. How many trillions in ‘bailouts’ this year?”

Well, as of late November, 2008, about $8 trillion was committed by the government. That figure has undoubtedly grown since then, and will continue to grow under the Obama regime.

http://www.nytimes.com/imagepages/2008/11/26/business/20081126_FED_graph1.html

[Chet 99]

Well, if everyone tries to withdraw at once? Yes. Like any other bank.