NEW YORK (AP) — Bank of America is suspending a long-awaited dividend increase and stock buyback program after the bank discovered an error in a financial report it gave to the Federal Reserve.
The bank said in statement Monday that the error was related to how it valued securities obtained in its acquisition of Merrill Lynch during the financial crisis in 2009.
As a result, the bank slightly overstated the amount of capital it held and other financial ratios it reported last month as part of its earnings release and its annual financial checkup with the Federal Reserve, the bank's regulator.
Those ratios are a crucial measure of a bank's health and help investors and regulators determine how much of a financial cushion it has to help it survive another financial crisis.
The error didn't affect BofA's earnings, according to the bank's statement.
The news hit the bank's stock in early trading Monday. BofA slumped 69 cents, or 4.4 percent, to $15.26.
The Charlotte, N.C.-based bank, said it has already notified the Federal Reserve about the needed revisions. It was only last month that the Fed cleared BofA's proposal to raise its dividend for the first time since the financial crisis when the bank passed its "stress test," an annual check-up the Fed conducts on the country's biggest financial institutions.