REUTERS - Bank of America Corp
The restatement means that the bank holds less capital than previously estimated.
Bank of America, whose shares were down 5 percent in early trading on Monday, was ordered by the Federal Reserve to suspend and resubmit its capital plans for 2014.
The Fed said the bank must address the errors in its regulatory capital calculations and ensure there were no further problems with its reporting. (http://link.reuters.com/zef88v)
After annual "stress tests" of U.S. banks in March, the Fed ordered Bank of America to scale back its original capital plan because it would have left it with inadequate capital in the event of a crisis. (http://link.reuters.com/byf88v)
Bank of America said the miscalculation was related to the treatment of structured notes after the purchase of Merrill Lynch at the height of the financial crisis.
The bank agreed to buy Merrill Lynch for about $50 billion on Sept. 14, 2008 - the day before Lehman Brothers Holdings Inc went bankrupt - in a hurried deal that won praise for former CEO Ken Lewis at the time and probably prevented Merrill's demise.
The bank said it discovered the miscalculation after it released its first-quarter results on April 16. BofA is required to resubmit its capital plan within 30 days.
The reduction in regulatory capital and ratios will have no impact on the company's historical consolidated financial statements or shareholders' equity, BofA said.
Bank of America shares were at $15.23 in early trading on the New York Stock Exchange. Up to Friday's close, the stock had barely budged since the start of the year. The KBW bank index <.BKX> slipped about 1.7 percent in the same period.
(Reporting by Tanya Agrawal in Bangalore; Editing by Don Sebastian and Ted Kerr)