CHARLOTTE, N.C., June 2 /PRNewswire/ -- Bank of America Corporation today
said it has raised almost $33 billion towards the $33.9 billion capital buffer
identified by the Federal Reserve's Supervisory Capital Assessment Program
(SCAP) and now believes it will comfortably exceed that number.
To date, Bank of America has entered into agreements with certain holders
of (non-government) perpetual preferred shares to exchange their holdings of
approximately $9.5 billion of perpetual preferred stock into approximately 704
million shares of common stock. This results in a total benefit to Tier 1
common capital of $9.5 billion.
Other capital-enhancing elements already achieved include:
- $13.5 billion from the direct sale of common stock.
- A capital gain from the sale of shares in China Construction Bank.
- A $2.1 billion benefit from the deferred tax asset due to the increase
in Tier 1 Capital.
- Approximately $1.3 billion in reduced dividends on preferred shares
over 2009-2010 associated with the shares exchanged into common stock.
- Approximately a $2 billion benefit from other dispositions.
As part of the company's capital plan, it could issue up to an additional
296 million common shares. Included in that number, as previously announced,
Bank of America has offered to exchange more perpetual preferred stock for up
to 200 million shares of common stock by the end of June under an exchange
offer that commenced May 28, 2009. These exchanges would result in further
reductions in preferred dividends.
"We are pleased to have nearly reached our goal this quickly," said Joe
Price, chief financial officer.
Bank of America hopes to use the majority of the proceeds from these
initiatives to reduce reliance on government support for the company.
The company has also recently raised long-term debt without government
guarantees. Bank of America sold $3 billion in five-year notes on May 8 and
$2.5 billion in 10-year notes on May 28 without Federal Deposit Insurance
Bank of America
Bank of America is one of the world's largest financial institutions,
serving individual consumers, small- and middle-market businesses and large
corporations with a full range of banking, investing, asset management and
other financial and risk management products and services. The company
provides unmatched convenience in the United States, serving approximately 55
million consumer and small business relationships with more than 6,100 retail
banking offices, more than 18,500 ATMs and award-winning online banking with
nearly 30 million active users. Bank of America is among the world's leading
wealth management companies and is a global leader in corporate and investment
banking and trading across a broad range of asset classes serving
corporations, governments, institutions and individuals around the world. Bank
of America offers industry-leading support to more than 4 million small
business owners through a suite of innovative, easy-to-use online products and
services. The company serves clients in more than 150 countries. Bank of
America Corporation stock (NYSE: BAC) is a component of the Dow Jones
Industrial Average and is listed on the New York Stock Exchange.
Bank of America and its management may make certain statements that
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation reform Act of 1995. These statements are not historical
facts, but instead represent Bank of America's current expectations, plans or
forecasts of its plan to raise capital and other similar matters. These
statements are not guarantees of future results or performance and involve
certain risks, uncertainties and assumptions that are difficult to predict and
are often beyond Bank of America's control. Actual outcomes and results may
differ materially from those expressed in, or implied by, any of these
You should not place undue reliance on any forward-looking statement and
should consider all of the following uncertainties and risks, as well as those
more fully discussed under Item 1A. "Risk Factors" of Bank of America's 2008
Annual Report on Form 10-K and in any of Bank of America's subsequent SEC
filings: negative economic conditions that adversely affect the general
economy, housing prices, the job market, consumer confidence and spending
habits; the level and volatility of the capital markets, interest rates,
currency values and other market indices; changes in consumer, investor and
counterparty confidence in, and the related impact on, financial markets and
institutions; Bank of America's credit ratings and the credit ratings of its
securitizations; estimates of fair value of certain Bank of America assets and
liabilities; legislative and regulatory actions in the United States and
internationally; the impact of litigation and regulatory investigations,
including costs, expenses, settlements and judgments; various monetary and
fiscal policies and regulations of the U.S. and non-U.S. governments; changes
in accounting standards, rules and interpretations and the impact on Bank of
America's financial statements; increased globalization of the financial
services industry and competition with other U.S. and international financial
institutions; Bank of America's ability to attract new employees and retain
and motivate existing employees; mergers and acquisitions and their
integration into Bank of America; Bank of America's reputation; and decisions
to downsize, sell or close units or otherwise change the business mix of Bank
of America. Forward-looking statements speak only as of the date they are
made, and Bank of America undertakes no obligation to update any
forward-looking statement to reflect the impact of circumstances or events
that arise after the date the forward-looking statement was made.
SOURCE Bank of America Corporation
CONTACT: Investors: Kevin Stitt, +1-704-386-5667, Lee McEntire,
+1-704-388-6780, Grace Yoon, +1-212-449-7323, or Reporters: Scott Silvestri,
+1-980-388-9921, firstname.lastname@example.org, all of Bank of America