Bank of America

(BAC) - Get Report

said Wednesday its board approved a $3.75 billion stock buyback plan.

The bank is authorized to buy back up to 75 million shares of common stock over the next 12 to 18 months. The authorization replaces an earlier authorization from January of last year, which permitted the bank to buy back 200 million of its shares.

BofA earlier this week reported a 41% slide in profits vs. the year-ago quarter, boosting its provision for loan losses in its consumer and commercial portfolios tied to housing, including home equity, residential mortgage and homebuilders. Anton Schutz, president of Rochester, New York-based Mendon Capital Advisors, thinks buying back shares now is unwise.

"I know they want to scare the short sellers, but this is a time you need to conserve capital," he said. Schutz, who invests exclusively in financial services firms, owns no BofA shares, in part because the bank has not been protective of its capital.

BofA also said it would maintain its 64-cents-a-share quarterly dividend, payable Sept. 26.

BofA shares, down nearly 40% over the past year, were up 3.9% to $33.62 Wednesday.