They have been doing very well, but maybe these days BAC is one large cap that I might want to step back from...
Whoops...
BANK OF AMERICA: We Screwed Up Calculating How Much Capital We Have
Kabul water park children slides
Reuters
Youths slide down a huge slide at a public water park in Kabul, October 4, 2013.
This morning Bank of America put out a statement revising its regulatory capital levels lower than the bank previously thought.
As a result, and at the request of the Federal Reserve, the bank will have to suspend its plans to boost dividends and repurchase stock. Naturally, this does not make shareholders happy.
The stock is down almost 3% in premarket trading on the news.
From the bank’s release:
On April 16, the company issued a press release announcing preliminary financial results for the quarter ended March 31, 2014. As part of such release, the company included estimated preliminary Basel 3 capital amounts and ratios as well as Basel 1 capital amounts and ratios for 2013. Subsequent to the press release, the company discovered an incorrect adjustment being applied in the determination of regulatory capital related to the application of the fair value option to certain legacy Merrill Lynch structured notes resulting in an overstatement of its regulatory capital amounts and ratios. The company correctly adjusted for the cumulative unrealized change on structured notes accounted for under the fair value option, but it incorrectly adjusted for cumulative realized losses on Merrill Lynch issued structured notes that had matured or were redeemed by the company subsequent to the date of the Merrill Lynch acquisition.
This month, Bank of America missed earnings estimates due to a one-time legal charge.
They have been doing very well, but maybe these days BAC is one large cap that I might want to step back from...