BofA Gains Most in Year After Revising Dividend PlanCraig Giammona
Bank of America Corp. rose the most in more than a year after the firm resubmitted its request to the Federal Reserve for a dividend increase.
The stock climbed 3.6 percent to $15.25 at 11:46 a.m. in New York, the best showing in the 24-company KBW Bank Index, and rose as much as 4 percent during the session. The company said in a regulatory filing today that it had sent its new capital plan to the central bank. Shares of the Charlotte, North Carolina-based lender had slumped 5.5 percent this year through last week.
Bank of America last month suspended plans for a dividend increase and $4 billion of share repurchases because of an error in its stress test submission to the Fed. The company had said the revised version would include a smaller payout request than the original, which called for increasing the quarterly amount to 5 cents a share from 1 cent. The bank didn’t specify how much it was seeking this time.
“The feeling is Bank of America will be able, at some point this year, to pay a better dividend,” said Nancy Bush, a bank analyst who founded NAB Research LLC in New Jersey. Some investors had been unsure the company would resubmit this year, let alone this quickly, Bush said.
The Fed has 75 days to review the new data, according to Bank of America, which said it can’t give assurances about the timing or outcome of the decision.
The bank’s revisions “resulted in additional adjustments that had a de minimis effect (less than one basis point reduction) on the corporation’s reported regulatory capital ratios for the period ended Sept. 30, 2013, and no effect on such ratios for the period ended March 31, 2014,” BofA said.
Separately, Bank of America was retained to sell the Los Angeles Clippers, two people with direct knowledge of the situation told Bloomberg News. The people requested anonymity because the sale process for the National Basketball Association team isn’t public.
Jim Nash, a managing director at Bank of America, declined to comment on the Clippers deal. Pierce O’Donnell, the attorney for Shelly Sterling, wife of team owner Donald Sterling, didn’t immediately respond to a message left at his Los Angeles office prior to business hours.