In a related development, Dallas-based Comerica Inc. also disclosed a similar accounting adjustment. The bank is set to take a charge of $91 million in non-interest income due to the discontinuation of the index.
However, this is somewhat mitigated by a non-cash pretax benefit of $3 million in net interest income. Comerica expects to gradually earn back the charge over time, primarily in 2025 and 2026. The fourth quarter for Comerica will also include a $109 million charge from the Federal Deposit Insurance Corp.’s special assessment and a $25 million expense related to cost-cutting initiatives.
As the banking sector adapts to these changes, Bank of America’s stock experienced a slight downturn, dropping 1.9% on Monday. Both banks are scheduled to report their fourth-quarter earnings soon, which will further illuminate the impact of these accounting changes on their financial statements.
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Source: mpamag.com