As Bank of America Corp. shares tested new lows Tuesday, the Charlotte bank fired back at a blogger who suggested the bank needs billions more in capital to account for mortgage losses and other write-downs.

After falling as far as $6.01, the Charlotte bank’s stock closed at $6.30, down 1.8 percent on a day when most stocks climbed. It’s the lowest the stock has been since March 2009.

Investors are worried about the bank’s mortgage-related liabilities, its capital holdings and the effect of a sluggish economy on its businesses. The shares of the nation’s biggest bank have fallen 35 percent this month and 53 percent for the year.

“The stock is getting hammered because the market doesn’t know where the bottom is on the mortgage market,” said William Isaac, who headed the Federal Deposit Insurance Corp. during the 1980s banking crisis.

Bank of America chief executive Brian Moynihan has said his bank doesn’t need to issue new shares to raise capital, but analysts and other observers continue to debate whether the bank has a big enough cushion to absorb future losses and meet new international standards.

On Tuesday, Bank of America fired back after blogger Henry Blodget, citing the work mostly of other analysts and bloggers, asserted that the bank might need $100 billion to $200 billion more in capital. Blodget is the former Merrill Lynch & Co. analyst who was barred from the securities industry in 2003 by the Securities and Exchange Commission to settle allegations that he issued fraudulent research.

“Mr. Blodget is making exaggerated and unwarranted claims, which is what the SEC stated publicly when he was permanently banned from the securities industry in 2003,” bank spokesman Jerry Dubrowski said.

Dubrowski said Blodget’s estimates of the bank’s exposure to the debt of foreign countries was off by a factor of 10, that his commercial real estate figure was off by a factor of four and that his accounting recommendations “would be prohibited by generally acceptable accounting practices.”

Meanwhile, Rochdale Securities analyst Dick Bove said in a Bloomberg TV interview that the bank has sufficient capital. “Bank of America has so much cash on its balance sheet that it could pay back all of its short-term debt and a big chunk of its long-term debt,” Bove said. “There’s no reason for the bank to have to go out and raise capital whatsoever.”

Selling Chinese bank shares

Some investors are also concerned about Bank of America’s plans to sell a smaller than expected portion of the shares it owns in China Construction bank, potentially diminishing the amount of capital it can raise. Bank of America owns 10 percent of CCB’s shares and can sell off most of them this month. But CCB President Zhang Jianguo told reporters in Hong Kong the bank has agreed to keep half of the investment.

In a research note Tuesday, Sanford C. Bernstein analyst John McDonald said a partial sale of CCB stock would be sufficient to boost Bank of America’s capital ratios under new international standards. That’s because the bank simply needs to reduce the investment to below 10 percent to meet guidelines that allow it to count the shares toward its regulatory capital.

In the note, McDonald said he thinks the bank can digest significantly higher mortgage-related costs, but that it will take several quarters for the bank to reassure investors about its capital holdings as legal settlements and court cases play out. “We don’t see a quick fix to the market’s lack of confidence in BAC’s capital ratios,” McDonald wrote.

Isaac, the former FDIC chairman, said he doesn’t think Bank of America will need government aid, as it did in the 2008-2009 crisis. He also credited the bank with acquiring troubled companies such as mortgage Countrywide Financial when the country needed it. “I have a lot of faith in Bank of America’s abilities to deal with its problems,” said Isaac, now a senior managing director of FTI Consulting and chairman of Fifth Third Bancorp.

Also Tuesday, rising uncertainty drove the cost to protect debt issued by Bank of America to a record level before the cost declined slightly for the day, according to Bloomberg News. The cost to protect corporate debt from losses climbs when investor confidence declines.

By Rick Rothacker,