The company, whose shares started getting crushed after its preannounced earnings Tuesday fell well below expectations, is raising the money to help with its acquisition of Merrill Lynch and to offset rising loan losses.
The capital-raising met with some skepticism from investors who are looking to meet personally with Bank of America CEO Ken Lewis face to face to discuss the company's plans.
Bank of America said its quarterly earnings fell a wider-than-expected 68 percent.
"(Lower) earnings, cutting dividends, forecasting difficult times ahead—I think that's going to be the mantra for most companies reporting, particularly in the financial area," said Robert Lutts, chief investment officer of Cabot Money Management, told Reuters.
While Bank of America reported earnings two weeks early, quarterly results at top rivals such as JPMorgan Chase remain a big question mark.
Bank of America has not avoided the credit losses and writedowns that have plagued banks during the last year, but its large deposit base and retail banking network is seen as a source of strength in the current credit environment.
The stock also has been buoyed by the short-selling prohibition that expires Thursday.
But Bank of America recorded an additional $1.6 billion in writedowns for the third quarter, bringing the total over the last five quarters to just below $17 billion.
This figure is still well below the tally of large retail rival Citigroup , which has recorded more than $57.5 billion in writedowns since the credit crisis began a year ago. Citi has not yet reported third-quarter results.
Smith Asset Management Chief Executive William Smith said Bank of America's results were "typical results you would see in any contraction of the economy, in any contraction of credit." Smith said he still saw the company as a strong bank.
Yet there may be concerns ahead as Bank of America looks to complete its acquisition of Merrill Lynch.
Merrill is likely to post large writedowns from its fixed-income, currencies and commodities business this quarter, and its valuable wealth management business may also be starting to feel the pinch, according to Wachovia Capital Markets analyst Douglas Sipkin.
This may worry Lewis, who described the wealth management business as the "crown jewel" of the Merrill acquisition when the deal was announced last month.
-- Reuters contributed to this report.
