Updated Monday, August 3, 2015 as of 1:08 PM ET

BofA Suspends Buyback, Dividend Increase After Finding Error

Bank of America, which last month won approval to lift its dividend for the first time since the financial crisis, said it will suspend that increase and $4 billion of planned buybacks because of an error in its capital planning.

Bank of America will resubmit its proposal to the Federal Reserve, the Charlotte, North Carolina-based lender said today in a statement. The company said it incorrectly adjusted for cumulative realized losses on structured notes issued by Merrill Lynch.

Chief Executive Officer Brian Moynihan had planned on boosting the bank’s quarterly payout to 5 cents a share from 1 cent, five years after the firm cut the dividend to a token amount during the financial crisis. Bank of America said today its revised proposal will probably feature lower payouts than in its original plan.

The estimated Tier 1 capital ratio is actually 11.9% as of March 31, which is 21 basis points below what the company previously reported, according to today’s statement. The Tier 1 leverage ratio was 7.4%, or 12 basis points lower. A basis point is 0.01 percentage point.

Bank of America must resubmit a capital plan within 30 days and undertake a review to ensure no other errors, the Fed said today in a separate statement.

Bank of America declined 2.4% to $15.57 at 8:45 a.m. in early trading in New York.

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