01—Abstract
Summary
Summary of the 8-K filed June 28, 2024. Cited figures are marked; the original filing is the authoritative source.
Bank of America announced on June 28, 2024 that it plans to raise its quarterly common stock dividend 8%, from $0.24 to $0.26a per share, beginning in the third quarter of 2024.
The increase is subject to approval by the Board of Directors. The announcement follows the Federal Reserve's 2024 Comprehensive Capital Analysis and Review (CCAR), the annual stress test that sets each bank's capital requirements. Based on the CCAR results, Bank of America's stress capital buffer (SCB) will be 3.2%b, and its CET1 minimum requirement will be 10.7% once finalized.
The new SCB applies from October 1, 2024 through September 30, 2025. As of March 31, 2024, the bank held $197 billionc of regulatory CET1 capital, a CET1 ratio of 11.9%, comfortably above its current 10.0% regulatory minimum. The 8-K itself is brief; its financial substance is in the dividend plan and the capital disclosures, and the filing contains no new earnings or operating results.
For investors, the key takeaways are a meaningful dividend increase backed by a well-capitalized balance sheet and a stress test result that signals the regulatory capital hurdle is manageable. Because the buffer and minimum are set by regulators and the dividend still needs board approval, investors should treat the increase as a planned, not yet final, shareholder return.
02—Key points
Key Highlights
- Planned 8% increase in quarterly common dividend, from $0.24 to $0.26 per share, starting Q3 2024, subject to Board approval.
- Stress capital buffer (SCB) set at 3.2%, effective October 1, 2024 through September 30, 2025, following the 2024 CCAR.
- CET1 minimum requirement will be 10.7% once finalized, up from the current 10.0% regulatory minimum.
- CET1 ratio of 11.9% at March 31, 2024, which exceeds the current 10.0% minimum by about 190 basis points.
- Regulatory CET1 capital of $197 billion at March 31, 2024.
- The filing contains no new earnings or operating results; the substance is capital return and regulatory capital disclosure.
- Press release (Exhibit 99.1) is incorporated by reference and includes forward-looking statement cautions.
03—Questions
Frequently Asked Questions
How much will Bank of America's quarterly dividend increase?
The quarterly common stock dividend is planned to rise from $0.24 to $0.26 per share, an increase of about 8%, beginning in the third quarter of 2024. The increase still requires approval from the Board of Directors.
What is the stress capital buffer and why does it matter?
The stress capital buffer (SCB) is a capital cushion derived from the Federal Reserve's stress test results. Bank of America's SCB is 3.2%, effective October 1, 2024 through September 30, 2025. A higher buffer requires the bank to hold more capital above regulatory minimums, which can constrain dividends and buybacks, so a lower SCB generally gives the bank more flexibility.
Is Bank of America well capitalized under the new requirements?
Yes, based on the disclosed figures. As of March 31, 2024, the CET1 ratio was 11.9%, above the current 10.0% minimum and above the 10.7% minimum expected once the new SCB takes effect. This indicates a meaningful capital cushion.
Does this filing include new earnings or financial performance data?
No. The 8-K covers the dividend plan and capital requirements under the CCAR. It does not report new quarterly or annual earnings. The capital figures cited are as of March 31, 2024.
What should investors watch next?
Investors should watch for Board of Directors approval of the higher dividend, the Federal Reserve's final confirmation of the 3.2% SCB and 10.7% CET1 minimum, and the bank's next earnings release for updated capital ratios and returns.
04—Continue