BofA (BAC) said Wednesday the Federal Reserve “indicated that it objected” to the bank’s plan to raise its dividend in the second half of 2011. The decision clearly surprised the bank, whose CEO Brian Moynihan has been saying the biggest U.S. bank by assets expected to boost payouts along with most of the other big banks.

BofA didn’t say specifically what the Fed’s objections were, and the bank is prohibited from disclosing the results of the Fed’s stress test, known as the Comprehensive Capital Analysis and Review. But the Charlotte, N.C.-based bank said it will try again.

“The corporation will continue to work with the Federal Reserve and intends to seek permission for a modest increase in its common dividend for the second half of 2011, through the submission of a revised comprehensive capital plan to the Federal Reserve,” BofA said.

It went on to explain that it spent last year trimming its balance sheet, adding to capital and holding lots of ready cash.

But in order to return more capital to shareholders, it may first need to do some shareholder-unfriendly things, such as raising more capital, to impress the Fed. That helps explain why the stock is now down 9% from its recent high last month.

Also on Fortune.com:

• Banks go dividend hiking
• BofA’s daft dividend talk
• Loss shows BofA still flailing

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