3 Questions Bank of America Needs to Answer

NEW YORK (TheStreet) -- Now that the company's survival seems assured, Bank of America (BAC) CEO Brian Moynihan is on the hot seat, as investors wonder how the company will grow its revenue and earnings.

Over the past few years, Bank of America has been rightly concerned with shoring up its capital by shrinking its balance sheet, while cutting expenses and working through its legacy mortgage expenses from former CEO Ken Lewis's disastrous decision to by Countrywide Financial in 2008. The company must also worry about meeting the Basel III capital requirements, which won't be fully phased-in until the end of 2018, although there is plenty of market and regulatory pressure to meet the full requirements years earlier.

Bank of America CEO Moynihan must testify about the bank's integration of Countrywide Financial by May 18

Bank of America reported a Basel I Tier 1 common equity ratio of 10.78% as of March 31. The Basel III requirement is for large bank holding companies to have Tier 1 common equity ratios of at least 7 %, along with an additional buffer of up to 3.5% for "systemically important financial institutions."

Guggenheim Securities analyst Marty Mosby estimated in late April that Bank of America's Basel III Tier 1 common equity ratio would have been "at around 7.8%" as of March 31, rising to an estimated 8.5% by the end of 2012. Assuming that Bank of America would face an additional SIFI capital requirement of 2.5%, the company will be "about 1% shy" of its full Basel III requirement at the end of this year.

"As a result," said Mosby, "we expect BAC to continue to accumulate capital and de-risk the balance sheet over the next year and delay any potential raise in dividends until 2013 or 2014."