GO
Loading...

Breaking News from CNBC's Kate Kelly: B of A Dividend May Not Change as a Result of Capital Resubmission

WHEN: Today, Monday, April 28th

WHERE: CNBC's "Squawk on the Street"

Following is the unofficial transcript of breaking news from CNBC's Kate Kelly. Following is a link to the video on CNBC.com: http://video.cnbc.com/gallery/?video=3000270836.

All references must be sourced to CNBC.

KATE KELLY: WELCOME BACK TO "SQUAWK ON THE STREET." I'M KATE KELLY WITH SOME BREAKING NEWS ON THE B OF A ANNOUNCEMENT OF THIS MORNING. AS YOU RECALL, THEY ARE GOING TO RESUBMIT THEIR CAPITAL PLAN TO THE FED THAT WILL TAKE PLACE ON MAY 27THAS A RESULT OF AN ERROR DISCOVERED JUST IN THE LAST 72 HOURS OR SO ON THE REGULATORY CAPITAL ACCOUNTING FOR SOME STRUCTURED NOTES THAT GO BACK TO 2009. B OF A CEO BRIAN MOYNIHAN HELD AN EXECUTIVE CALL AROUND 9 O'CLOCK THIS MORNING TO DISCUSS SOME OF THESE CAPITAL ISSUES WITH SENIOR EXECUTIVES. APPARENTLY IT WAS BRIEF AND ALSO REASSURING. THIS WAS SORT OF AN ISOLATED PROBLEM ALBEIT ONE THAT WENT UNNOTICED FOR A FULL ALMOST FIVE YEARS. AND IT IS SOMETHING THAT COULD EFFECT THEIR DIVIDEND AND THEIR BUY BACK PLAN. THEY DON'T KNOW THE DIVIDEND, WHICH WAS SCHEDULED TO GO UP TO A NICKLE PER QUARTER, STARTING IN THE SECOND QUARTER, MAY BE AFFECTED. PERHAPS NOT, THOUGH. PERHAPS THE PAIN WILL BE TAKEN IN THE BUY BACK RATHER THAN THE DIVIDEND. IN ADDITION, TERRY LAUGHLIN, UNTIL RECENTLY, THE COMPANY'S CHIEF RISK OFFICER, IS GOING TO BE REASSIGNED TO MANAGE THIS CAPITAL RESUBMISSION PROCESS. HE WAS RECENTLY MOVED INTO A STRATEGIC POSITION UNRELATED TO THIS I'M TOLD, INITIALLY, BUT NOW HE IS GOING TO BE IN CHARGE OF WORKING WITH THE COMPANY AND WORKING WITH THE FED TO MAKE SURE THAT EVERYTHING IS ACCOUNTED FOR WHEN THEY RESUBMIT. THIS ERROR WAS DISCOVERED, GUYS, IN THE COURSE OF PREPARING THE 10-Q, WHICH WAS SUPPOSED TO BE ISSUED THIS WEEK. THEY ARE GOING TO WORK TO REMEDY IT AND OBVIOUSLY GET THE Q OUT AS FAST AS POSSIBLE. BUT SARA, YOU KNOW, OBVIOUSLY, A BIG BLACK EYE FOR BANK OF AMERICA THIS MORNING. A VERY UNFORTUNATE NEW DEVELOPMENT AND THE STOCK IS GETTING HAMMERED.

About CNBC:

With CNBC in the U.S., CNBC in Asia Pacific, CNBC in Europe, Middle East and Africa, CNBC World and CNBC HD, CNBC is the recognized world leader in business news and provides real-time financial market coverage and business information to approximately 371 million homes worldwide, including more than 100 million households in the United States and Canada. CNBC also provides daily business updates to 400 million households across China. The network's 16 live hours a day of business programming in North America (weekdays from 4:00 a.m. - 8:00 p.m. ET) is produced at CNBC's global headquarters in Englewood Cliffs, N.J., and includes reports from CNBC News bureaus worldwide. CNBC at night is the all new CNBC Prime featuring a mix of new reality programming, CNBC's highly successful series produced exclusively for CNBC including "American Greed" and "Crime Inc." and a number of distinctive in-house documentaries.

CNBC also has a vast portfolio of digital products which deliver real-time financial market news and information across a variety of platforms. These include CNBC.com, the online destination for global business; CNBC PRO, the premium, integrated desktop/mobile service that provides real-time global market data and live access to CNBC global programming; and a suite of CNBC Mobile products including the CNBC Real-Time iPhone and iPad Apps.

Members of the media can receive more information about CNBC and its programming on the NBC Universal Media Village Web site at http://www.nbcumv.com/mediavillage/networks/cnbc/