BofA, which repaid $45 billion in TARP funds in December 2009, needed to raise $3 billion in capital and record the gains by the end of this year. Regulators intend that money to help build the bank's equity, giving it a stronger footing after it leaves the TARP.
If Bank of America, the biggest U.S. bank, fails to satisfy the Federal Reserve Board that it has added enough cash to its books through asset sales, it will have to issue additional common shares, diluting its per-share earnings.
The remainder of the $3 billion is expected to derive from tax gains related to holding a smaller slice of BlackRock, the sources added. Another option, as the bank mentioned in its third-quarter filing, would be to issue stock to certain employees in lieu of year-end cash awards.