Bank of America, the bank that turned to Warren Buffett in 2011 for a capital injection, reached a deal with the billionaire’s company to change terms so the investment is treated more favorably by regulators.
Bloomberg News reports that the amendment would allow the bank to count preferred shares with a $2.9 billion carrying value as Tier 1 capital, the bank said in a filing with the U.S. Securities and Exchange Commission Tuesday.
The deal with Buffett’s Berkshire Hathaway must be approved by the bank’s shareholders in a May vote, according to the filing.
The agreement will 'benefit our Tier 1 capital and leverage ratios', Bank of America said in the filing. 'We do not expect any impact to our financial condition or results of operations as a result of this amendment'.
The developments were reported in an annual regulatory filing Tuesday by the firm. The fresh estimate of litigation expenses, which concerns costs that aren’t covered by reserves as of December 31, compares with $5.1bn at the end of the third quarter.
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