Tomahawk, WI 05/24/2014 (Basicsmedia) – Bank of America Corp (NYSE:BAC) revised its regulatory capital ratios due to the incorrect adjustments during its first quarter 2014 on structured notes related to the acquisition of Merrill Lynch in 2009. The Company believes that the reduction in the ratio will not have any impact over its shareholder’s equity and remains strong in its capital and liquidity ratio.

Capital and liquidity ratio

As of March 31, 2014, the estimated common equity tier 1 capital under Basel 3 transitions revised to $151 billion from $151.6 million with risk weighted assets to $1,282 billion from $1,282.5 billion. So, the ratio was down by ~5 basis points (bps) to 11.8%. Accordingly, the estimated tier 1 capital ratio was down by 21bps to 11.9% and the total capital ratio was down by 21 bps to 14.8%. As a result, the tier 1 leverage ratio revised from 7.6% to 7.4%, down by 12 bps.

Effects

Bank of America Corp (NYSE:BAC) will update and resubmit the data templates as per the notification of the Federal Reserve Board (FRB) by May 27, 2014. But, the FRB has approved its certain prior capital actions including the dividend distribution of $0.01 per share.

Moreover, as per the share repurchase plan announced in March 2013, Bank of America repurchased 86.7 million of common shares for ~$1.4 billion during the first quarter 2014. As of April 2014, the Company has already repurchased 14.4 million shares for ~$233 million, prior to the suspension of 2014 Comprehensive Capital Analysis and Review (CCAR) plan.

Conclusion

Bank of America Corp (NYSE:BAC) will update and review its 2014 CCAR plan through third party prior to the resubmission. The Company needs the FRB approval on capital prior to distribution. Bank of America expects the requested capital actions will be less than the previously announced CCAR plan.

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