Bank of America Comments on Stress Test Results; Plans to Increase Quarterly Dividend to $0.22 per share

Rhea-AI Summary

Bank of America, based in Charlotte, N.C., announced plans to raise its quarterly dividend by 5% to $0.22 per share, effective Q3 2022. This decision follows the Federal Reserve's 2022 Comprehensive Capital Analysis and Review (CCAR), which revealed that the bank's stress capital buffer will increase by 100 basis points, affecting its CET1 capital requirement starting October 1, 2022. As of March 31, 2022, Bank of America had $170 billion in regulatory CET1 capital and a CET1 ratio of 10.4%.

Positive

• Increase in quarterly dividend to $0.22 per share reflects strong financial position.
• CET1 ratio at 10.4% indicates solid capital adequacy.
• Remaining $17 billion in the stock repurchase program supports shareholder returns.

Negative

• Stress capital buffer increased by 100 basis points, indicating higher capital requirements.

CHARLOTTE, N.C., June 27, 2022 /PRNewswire/ -- Bank of America today commented on the results of the Federal Reserve's 2022 Comprehensive Capital Analysis and Review (CCAR) and announced plans to increase its quarterly common stock dividend to $0.22 per share beginning in the third quarter of 2022.

Based on the 2022 CCAR results, Bank of America's stress capital buffer (SCB) will be approximately 100 bps higher than the current 2.5% level and will therefore add approximately 100 bps to our CET1 minimum requirement of 9.5%. When finalized, this new SCB will be effective from October 1, 2022 to September 30, 2023.  At March 31, 2022 Bank of America had $170 billion of regulatory CET1 capital and a CET1 ratio of 10.4%.

"Our responsible growth strategy over the last decade has put us in a strong position to support our clients and deliver for shareholders," said Bank of America Chair and Chief Executive Officer Brian Moynihan. "In October 2021, we renewed the Company's previously announced $25 billion common stock purchase program with $17 billion remaining as of March 31, 2022, and today we are also announcing that we expect to increase the quarterly common stock dividend by 5% to $0.22 per share." Bank of America Chief Financial Officer Alastair Borthwick added that "the 2022 annual stress test results once again support that Bank of America maintains a strong capital position to serve its customers and clients through the current economic environment and our continued discipline around risk has us well prepared for a severe economic stress scenario."

The common stock dividend is subject to approval from the Company's Board of Directors.

Forward-Looking Statements

Certain statements contained in this news release may constitute "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent the current expectations, plans or forecasts of Bank of America based on available information. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. These statements often use words like "expects," "anticipates," "believes," "estimates," "targets," "intends," "plans," "predict," "goal" and other similar expressions or future or conditional verbs such as "will," "may," "might," "should," "would" and "could." 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.

Forward-looking statements represent Bank of America's current expectations, plans or forecasts of its future results, revenues, expenses, dividends, efficiency ratio, capital measures, and future business and economic conditions more generally, and other future matters. These statements are not guarantees of future results or performance and involve certain known and unknown 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 forward-looking statements due to a variety of factors. You should not place undue reliance on any forward-looking statement and should consider all of the precautionary statements, uncertainties and risks discussed in Bank of America's filings with the Securities and Exchange Commission, including in Bank of America's Current Report on Form 8-K dated October 20, 2021, announcing Bank of America's common stock repurchase program, under Item 1A. "Risk Factors" of Bank of America's Annual Report on Form 10-K for the year ended December 31, 2021, and in any of Bank of America's other subsequent Securities and Exchange Commission filings.

Bank of America

Bank of America is one of the world's leading 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 67 million consumer and small business clients with approximately 4,100 retail financial centers, approximately 16,000 ATMs, and award-winning digital banking with approximately 54 million verified digital users. Bank of America is a global leader in wealth management, 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 approximately 3 million small business households through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and approximately 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.

For more Bank of America news, including dividend announcements and other important information, visit Bank of America newsroom and register for news email alerts.

Investors May Contact:
Lee McEntire, Bank of America
Phone:  1.980.388.6780
lee.mcentire@bofa.com

Jonathan G. Blum, Bank of America (Fixed Income)
Phone: 1.212.449.3112
jonathan.blum@bofa.com

Reporters May Contact:
Bill Halldin, Bank of America
Phone: 1.916.718.1251
william.halldin@bofa.com

Christopher P. Feeney, Bank of America
Phone: 1.980.386.6794
christopher.feeney@bofa.com

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SOURCE Bank of America Corporation

FAQ

What is Bank of America's new dividend amount and effective date?

Bank of America will increase its quarterly dividend to $0.22 per share, effective in the third quarter of 2022.

What was Bank of America's CET1 ratio as of March 31, 2022?

As of March 31, 2022, Bank of America had a CET1 ratio of 10.4%.

What is the impact of the increased stress capital buffer on BAC?

The stress capital buffer will rise by 100 basis points, adding to Bank of America's CET1 minimum requirement.

How much capital did Bank of America have as of March 31, 2022?

Bank of America had $170 billion of regulatory CET1 capital as of March 31, 2022.