Analyst: S&P downgrades fair but incomplete

S&P's new bank ratings - which hit Bank of America, Wells Fargo and other top U.S. banks with downgrades Tuesday - are fair, analyst Dick Bove says.

But investors shouldn't panic: "While the rating agency's effort is clearly very impressive, the problem for investors is that these downgrades create the impression that there has been a decline in banking quality," the Rochdale Securities analyst wrote in a research note. "This is not the agency's intention. The ratings reflect a change in the way that the agency thinks about banking quality."

In other words, Standard & Poor's felt its older ratings were "simply too positive," Bove said.

S&P fears a double-dip recession in Europe and additional problems in the U.S. housing market, plus increased regulatory pressure that could mean lower bank earnings, he said. Meanwhile, it anticipates more stability in newly industrialized nations and a resulting power shift from west to east.

Bove agrees, for the most part. But he chides the agency for not placing top U.S. banks, including Bank of America, on watch for upgrades.

"It completely ignored the meaningful improvement these banks have demonstrated over the past few years, both in their balance sheets and income statements," he wrote. "To lower the ratings on an industry where all of the key metrics are rising may make sense if it is simply to adjust the ratings to the market reality. However, to fail to indicate that the industry's fundamentals have changed dramatically creates a misimpression that hopefully equity investors will figure out.

"Banking is improving, not weakening."

NCUA suing Wachovia over mortgage-backed securities

The federal agency that supervises credit unions is suing former Charlotte bank Wachovia, claiming the bank misrepresented mortgage-backed securities it sold to credit unions that later failed.

The National Credit Union Administration claims Wachovia, which has since been taken over by Wells Fargo, misstated the risk associated with millions in residential mortgage-backed securities sold to U.S. Central Federal Credit Union and Western Corporate Federal Credit Union.

U.S. Central and Western each bought $44 million in such securities from Wachovia. U.S. Central also bought $112 million in securities from a third-party that was underwritten by Wachovia.

“NCUA continues to do everything within our authority to seek maximum recoveries and ensure that those who caused the problems in wholesale credit unions pay for the losses incurred by retail credit unions,” said NCUA Board Chairman Debbie Matz in a statement. “By filing these suits, we intend to hold responsible parties accountable for their actions.”

A Wells Fargo spokesman says the bank will defend itself against the claims, according to media reports.

The suit, filed in federal court in Kansas, is part of an ongoing drive to recoup money lost on soured mortgage backed securities. The NCUA has previously filed suit against JP Morgan Chase and Goldman Sachs with similar allegations. Citigroup and Deutsche Bank Securities have settled with the agency.

Morning roundup: Central banks move on global liquidity

Here's a look at what's news in banking and finance this morning:

• A handful of central banks announced a move to ease global liquidity this morning, which should make it easier for banks to get money.


• Bank of America's stock has continued to fall in recent days. It's nearing the $5 mark, which CNN says is a dangerous threshold.


• Wells Fargo has expanded its lead as the largest bank by market capitalization, the San Francisco Business Times explores.


• A significant number of smaller banks are cutting jobs to trim expenses (though total bank employment still grew), the Wall Street Journal reports.


• While U.S. banks faced ratings downgrades, several Chinese banks were boosted on the belief that the Chinese government would step in should there be economic stress, Bloomberg says.

Morning roundup: Secret Fed loans benefit banks

Here's a look at the banking and finance headlines this morning:

• Bloomberg examines how banks benefited from secret Fed loans during the financial crisis.
  


• Massachusetts lawmaker Barney Frank announced Monday he will not seek re-election next year. The New York Times looks closer at his "war of words with Wall Street."
  


• Stock markets opened flat this morning after a rally Monday, Reuters reports.
  


• Banks are spending billions on new tech gadgets, but they're finding it difficult to change consumers' habits, the Wall Street Journal writes.
  


• Bank of America was The Street's featured banking winner in trading Monday.

More big-bank layoffs coming?

Bank of America Corp., which has begun eliminating 30,000 positions as part of a company-wide efficiency initiative, isn't the only big bank that's slashing jobs.

Local rival Wells Fargo & Co., the San Francisco-based bank that bought Charlotte's Wachovia in 2008, plans to cut technology and operations jobs by the end of the year, Reuters reported recently. The cuts are part of an effort to trim more than $1.5 billion of quarterly operating expenses.

According to the news agency, a server management group that employs about 500 will cut 25 workers and eliminate 30 unfilled positions - and more tech cuts might be in store later.

Wells Fargo spokesmen did not immediately confirm the number of looming job cuts or whether those would occur in Charlotte. Last year, the bank launched an efficiency initiative called Project Compass, though it has not said how many jobs would be eliminated as part of that program.

Stifel Nicolaus raises outlook on Wells Fargo

Analysts with financial services firm Stifel Nicolaus have raised their fourth quarter earnings outlook for Wells Fargo, making it the only large cap bank they cover that they believe will outperform the third quarter.

The Monday research note raises the earnings per share estimate to 75 cents from 72 cents. The San Francisco-based bank earned 72 cents per share in the third quarter.

The change is due to a better outlook for mortgage banking income based on the average unclosed pipeline through the past year, the note says. That should outweigh lost revenue from provisions of the Dodd-Frank financial reform law.

"WFC is the only large cap bank under our coverage in which we and the consensus believe it can overcome the sequential-quarter negative ramifications of the lost debit interchange fees from the implementation of the Durbin Amendment," the note reads.

Morning roundup: New details on the big bank bailout

Here's a look at what's news in banking and finance after the holiday weekend:

• New details of the Federal Reserve's 2008 bailout of big banks shows that the banks took more money than anyone knew, Bloomberg reports. Bank of America was the second-biggest borrower from the Fed, and Wells Fargo fourth, Bloomberg's data shows.


• A new study shows that Wall Street workers could see a 30 percent decline in their yearly pay, the Wall Street Journal says.


• The New York Times has the tale of how the "Occupy" movement was branded.


• After a particularly dismal week, stocks are set to jump sharply this morning, Reuters reports.

Morning roundup: Banks to suspend some foreclosure activity for the holidays

We hope everyone had a great Thanksgiving. Things are a little slow because of the holiday, but here's some banking and finance news:

• Banks say they are suspending some foreclosure activity and evictions around the holidays, the San Francisco Chronicle says.


• The cap on swipe fees on debit transactions hasn't paid off for some small merchants as they had hoped, the Wall Street Journal reports.


• Bank of America Merrill Lynch analysts told their clients in a research note that a breakup of the euro zone is a possibility, which would bring significant shocks to the market, Dow Jones Newswires reports.


• Wells Fargo angered the city of Asheville when it cut down a treasured cypress oak, the Citizen-Times reports. The bank might make restitution.

Bank of North Carolina consolidating four Blue Ridge branches

The Bank of North Carolina announced Wednesday that it's closing four of its newly acquired Blue Ridge Savings Bank branches. One of them is in Gaston County.

The Thomasville-based bank took over 10 Blue Ridge Savings Bank branches when that bank was closed by the FDIC in October.

The four branches to be closed are in Stanley, Fletcher, West Asheville and Greer, S.C.

Bank of North Carolina has branches in Concord, Harrisburg and Mooresville.

Investment firm makes big offer for BofA shares

IPIC Group Ltd., a Delaware-based private investment firm, has offered to buy as many as 500 million outstanding common shares of Bank of America Corp. for $6 per share, it announced this week.

If successful, the $3 billion deal would make the group the Charlotte-based bank's largest institutional shareholder.

IPIC said in a news release it would pay for the shares after the offer expires Dec. 23. If 500 million shares have not been tendered by then, the offer will be extended until March 30, the firm said.

The offer represents a premium on the Charlotte-based bank's stock, which is trading around $5.15 this morning, down 4 percent from Tuesday's close and down more than 60 percent for the year.

IPIC has not asked the bank's board of directors to approve the deal. It's not clear who runs the investment firm. Its website lists a New York mailing address and says IPIC is a "newly formed private investment firm organized in Delaware for the sole purpose of making the Offer."

KBW predicts stress tests will lead BofA to further improve capital

The new round of federal stress tests will likely push Bank of America to further improve its capital position, investment firm Keefe, Bruyette & Woods predicted in a research note Wednesday.

Big banks will have to submit their stress tests and capital plans to the Federal Reserve by Jan. 9, and will hear back by March 15, under the terms released Tuesday. The stress scenarios are more stringent than in years past, and include unemployment reaching 13 percent and home prices falling 21 percent.

KBW says the result for Bank of America, which it terms a "weaker" bank likely to "screen poorly," will be more asset sales and capital retention that will ultimately reduce earnings. The analysts said they do not expect the Charlotte bank to be forced to raise capital, though.

Bank of America has already shed a number of non-core assets in the last few quarters.

Wells Fargo will also face more stringent stress tests. KBW said the main scrutiny that bank will face will be on any future plans to raise its dividend.

Morning roundup: Stress test for big banks

Here's a look at banking and finance headlines this morning:

• Regulators will publish full results next year of their "stress test" of top U.S. banks, including Bank of America Corp. and Wells Fargo & Co., to help reassure investors, the Wall Street Journal reports.

• A bank executive offers a new defense for his role in the financial crisis, the New York Times writes: "My regulator told me to do it."
  

• Despite big banks' move to eliminate planned debit card fees, the proposed charges continue to rankle customers, SmartMoney blog Pay Dirt says.

• Forbes has more from analyst Dick Bove on why Bank of America is "fine," despite this week's story about a warning from regulators to get stronger.
  

• Seeking Alpha poses a question: If Bank of America had no need to raise additional capital, as the company indicated earlier this year, why does it keep raising capital?
  

Bank earnings reach another new high, FDIC says

Bank earnings reached a total of $35.3 billion in the third quarter, the ninth-straight quarter that banks have posted a year-over-year increase, the FDIC said in its quarterly banking profile.

That's up from $23.8 billion in the third quarter last year.

The report looks at banks and savings instutitions whose deposits are insured by the FDIC. More than 60 percent of them reported quarterly net income increases, the report states.

A decrease in loan-loss provisions again drove the profit growth. But, absent accounting gains posted by a few big banks, revenue declined.

"We continue to see income growth that reflects improving asset quality and lower loss provisions," FDIC Acting Chairman Martin J. Gruenberg said in a press release. "U.S. banks have come a long way from the depths of the financial crisis. Bank balance sheets are stronger in a number of ways, and the industry is generally profitable, but the recovery is by no means complete."

The FDIC report only looks at the federally insured components of large banks, not the overall holding companies. Bank of America, for example, has fluctuated between profits and losses over the last several quarters, but the Bank of America National Association, which takes deposits, has steadily posted profits, call reports show.

Promontory will review BofA's mortgage practices

The Office of the Comptroller of the Currency released an interim report Tuesday detailing the methodology of the forthcoming review of foreclosure practices at a number lending institutions mandated by a settlement with federal regulators.

The OCC also released the engagement letters outlining the agreement between several big banks and the firms that will review them.

Bank of America's review will be conducted by Promontory Financial Group, a Washington, D.C.- based consulting firm that the bank has engaged on numerous occasions. One of the more recent was to help design Project New BAC, the company-wide cost-cutting initiative, several media outlets reported at the time.

In the engagement letter posted by the OCC (PDF), the firm's past engagements with Bank of America were redacted. The letter also states that Promontory does not have another relationship with the bank at this time.

Promontory will also conduct the review for Wells Fargo. That bank has also regularly engaged the firm.

The terms of the agreements require that Promontory act independently, with no direction from bank executives. The consulting firm will bill the banks monthly depending on how many workers it uses.

The review will include foreclosures in the works in 2009 or 2010. Eligible mortgage holders can request a review. For information on how to do that, visit IndependentForeclosureReview.com.

The settlement spurring the review came after a multi-agency inquiry into questionable foreclosure practices like robo-signing. The banks did not admit or deny wrongdoing as part of the settlements.

Across the board, the OCC said that improvements to foreclosure processes and oversight are farthest along, but that most of the work will be done in 2012.

Morning roundup: Regulators warn Bank of America

Here's a look at what's news in business and finance this morning:

• Regulators have warned Bank of America that it needs to get stronger or face enforcement actions, the Wall Street Journal is reporting.


• Bank of America is challenging Fannie Mae on its stance on loan buybacks, Bloomberg says.


• Experts say credit card companies will be the most aggressive they've ever been this holiday season, USA Today reports.


• More than 200,000 Wall Street jobs have been eliminated this year, according to data Bloomberg has compiled.

Bank of America stock closes at lowest since March 2009

Bank of America's stock fell 5 percent Monday before closing at $5.49 a share, the lowest it's closed since March 2009.

The beating came on a day the market as a whole struggled after news that the congressional supercommittee failed to reach a debt-reduction deal. The Dow Jones Industrial Average fell nearly 250 points, or about 2 percent.

Bank of America's decline was the largest percentage-wise of the large cap banks.

The Charlotte-based bank's shares have fallen more than 60 percent since reaching a year-to-date peak in mid-January.

BofA reaches hiring goal to serve 'preferred' customers; new products start in S.C.

Bank of America announced Monday that it has reached its goal of doubling its number of Merrill Edge advisors, who serve customers with $50,000 to $250,000 in investable assets.

There are now about 1,200 "financial solutions advisors" around the country. Some of the hires were in Charlotte, but the recent hiring of 280 in Texas and Florida put the Charlotte-based bank over their goal, according to a statement.

The bank also announced that it had extended its Platinum Privileges program to eight more states, including South Carolina.

The benefits rolled out to North Carolina customers in September. In essence, they give customers with at least $50,000 in deposits or investments higher rates on some savings products, discounts on services and fee waivers.

Morning roundup: Are bank stocks a good bet?

Here's a look at today's banking and finance news:

• Investing blog Seeking Alpha examines why the major U.S. banks are still "a very bad bet."

• Analyst Dick Bove tells CNBC U.S. banks could actually benefit from the European debt crisis.

• Overall, U.S. markets have remained resilient amid negative reports from Europe - but that could change this week, the New York Times reports.
  

• After years of shunning Wall Street analysts, BofA investor Warren Buffett is inviting a few to his company's annual meeting, the Wall Street Journal reports.

• CNNMoney wonders, "Are big banks really changing their ways?"

What do you think about this morning's headlines? Are bank stocks a good investment? Will the overall markets falter as investor worries mount?

Bank of America's dividend remains at 1 cent per share

As expected, Bank of America announced Friday that its dividend will remain at 1 cent per share in the fourth quarter, the same level it's been since late 2008.

The Charlotte bank asked regulators earlier this year to approve a dividend hike long demanded by its shareholders, but was denied.

The latest dividend will be paid out Dec. 23 to stockholders on record as of Dec. 2.

Morning roundup: Big bank layoffs 'more serious than you think'

Here's a look at what's news in banking and finance this morning:

• Bank of America is touting its increased lending to small businesses, the LA Times reports.


• Forbes says the layoffs starting at Bank of America and other big banks are "more serious than you think."


• Business Insider has a piece about a monk who left BofA to advise Occupy Wall Street.


• How does a loan lose all of its value and more? The New York Times lays out how a Bank of America commercial mortgage-backed security did just that.


• Reuters explores the cultural gap between Wall Street and the Occupy protestors.

When you hear about layoffs at Bank of America, what do you think? Are you glad the bank is slimming down, sad about people losing their jobs -- or some of both?

Bank of America announces first terms of stock swap

Bank of America annouced Thursday that it has agreed to issue about 185 million shares of common stock and nearly $1 billion in senior debt as part of a swap for preferred stock and junior debt announced earlier this month.

The bank will redeem preferred stock valued at $590 million and trust preferred securities valued at $2.1 billion. The move will increase Tier 1 common capital by about $1.88 billion, the bank said in a securities filing.

Based on the stock's market price in recent days, the bank used about $2.1 billion in common stock and notes to retire securities and preferred stock with par value of about $2.7 billion.

In a securities filing earlier this month, Bank of America said it would consider issuing up to 400 million new shares and $3 billion in senior notes. A spokesman said Thursday the process is ongoing.

HelpWithMyBank.com could be dangerous, OCC warns

A number of websites have sprung up in recent weeks to serve people who wish to switch banks. At least one of them, though, could damage your computer, the Office of the Comptroller of the Currency warns.

HelpWithMyBank.com is attempting to "masquerade" as the legitmate government website HelpWithMyBank.gov, run by the OCC.

Logging on to the dot-com site appears to redirect to the government site, but could expose users to malware, the OCC warned in a public statement today.

Community banks push bill that would loosen regulations

Saying smaller banks have been disproportionately burdened by ever-increasing regulations, the Independent Community Bankers of America is pushing a bill that would loosen some of them.


Known as the Communities First Act in the U.S. House, its advocates say it will free up small banks to do more local lending. It's sponsored by U.S. Rep. Blaine Luetkemeyer, R-Missouri, and has 53 cosponsors, including Republicans Renee Ellmers, Walter Jones, and Democrats Mike McIntyre and Heath Shuler in North Carolina.


"Rather than a top-down program, the Communities First Act was crafted from the bottom up with input from community bankers who know what will work on Main Street,” ICBA president Sal Marranca told a House subcommittee. "CFA provides appropriate tiering of regulation and relief for smaller, low-risk institutions so they can better serve their communities.”


Among other provisions, the bill would shorten the "call report" banks file every quarter detailing their financial performance, keep community banks from having to hold money in escrow for mortgages on their books and cut the requirement to issue privacy notices every year even if no change has been made.

The Credit Union National Association also supports the bill.

Morning roundup: 80 could be the new retirement age

Here's a look at what's news in business and finance this morning:

• Fitch Ratings warned yesterday that troubles in Europe could spread to U.S. banks. Marketplace lays out how that could happen.


• USA Today asks, could bank branches wither away?


• Many Americans now say they will have to work until age 80 to afford to retire comfortably, a survey from Wells Fargo shows, the Los Angeles Times reports.


• European banks are coming up with risky deals to be able to keep borrowing from the central bank, the Wall Street Journal reports.


• A former IMF chief economist writes in The New York Times that breaking up the country's biggest banks is not a "fringe idea to be brushed off."

What do you think about the Wells Fargo survey? Is 80 unreasonable or a sign of the times?

Wells Fargo publishes Charlotte community celebration video

Wells Fargo recently posted a video highlighting the community celebration it held in Charlotte late last month to mark the conversion from Wachovia.

The video also touches on the "Charlotte Rocks" program, which benefits Charlotte-Mecklenburg schools.

The music is kind of catchy, too. Check it out.

Morning roundup: BofA staying the course?

Here's a look at the banking and finance headlines this morning:

• Bank of America Corp. CEO Brian Moynihan is expected to tell his board the bank is on the right track during a three-day strategy meeting this week, the Wall Street Journal reports.
  

• Questions arose about the future of Occupy Wall Street after a police raid evicted protesters from a Manhattan park, the New York Times writes.

• Stocks fell this morning as worries the European debt crisis poses dangers to the global economy intensified, Reuters reports.

• A fake Google+ account under Bank of America's brand name posted a series of mocking updates last week. The Huffington Post says it looks bad for BofA, but worse for Google.

• Job cuts at Bank of America continue: Bloomberg reports the lender cut part of its top-ranked Merrill Lynch & Co. equities division in Europe and reduced its sales and trading team in Dubai by 40 percent.

What do you think about this morning's news? Will Occupy Wall Street wither? Should Bank of America stay the course?

Cunningham & Co. plans to double in size

Mortgage banking firm Cunningham & Co. plans to double its home mortgage origination business to $1 billion over the next few years after being bought by a capital markets firm.

The Greensboro-based company has five offices in the Charlotte area. As part of the growth, it will also add a servicing platform and will sell mortgages directly to government sponsored entitites.

The company also plans to hire more employees at all of its offices.

Florida-based Capital Markets Cooperative announced late last month that it will acquire Cunningham & Co. Capital Markets Cooperative helps mortgage banks enter secondary markets.

"There is a fundamental shift taking place in the residential mortgage industry. We have a unique opportunity to combine our mortgage expertise and industry reputation with the capital markets expertise and access to capital of Capital Markets Cooperative," CEO Hank Cunningham said in a statement. "The timing makes perfect sense to take our relationship with CMC to the next level, while maintaining our name, management team and employee base."

As larger banks like Bank of America have curtailed their correspondent lending practices, mortgage industry analysts have expected an increase in the number of smaller companies expanding their origination and servicing businesses.

McColl's private equity firm adds investment

Charlotte private equity firm Falfurrias Capital Partners continues investing in familiar territory.

The firm founded by former Bank of America Corp. chief executive Hugh McColl Jr. and former chief financial officer Marc Oken has invested in a Richmond financial services company, part of a broader strategy to target investments in the finance industry, in announced today.

Dorsey Wright & Associates, which provides technical investment research and money management products, accepted Falfurrias as an investor because the partnership will yield more resources, access to a broader network of industry contacts and new opportunities for growth, the firms said in a statement.

"My partners and I have spent most of our careers in the financial services industry, so it didn't take long for us to realize that Dorsey Wright & Associates is truly a special company," McColl said. "We believe that combining the proven business model of DWA with our capital, financial services industry relationships and operational expertise will position the company for continued success."

Falfurrias will own the firm, but DWA's Tom Dorsey will continue in his role as president.

The Charlotte private equity firm, founded in 2006, has been growing its financial services portfolio in recent years. It has investments in Charlotte-based Commercial Credit Group, which provides equipment financing for the construction, fleet transportation and waste industries, and bank holding company North American Financial Holdings.

Falfurrias, named for a favorite hunting ground in Texas, has also branched out: It bought the Bojangles' fast-food chain in 2007, overseeing rapid growth there before selling the company in August to a Boston investment firm.

Anti-coal protesters arrested outside Bank of America headquarters

A half-dozen protesters were arrested Tuesday morning outside the Bank of America corporate headquarters building while demonstrating against the bank's financing of coal projects.

(Update 11 a.m.: Rainforest Action Network now says eight protestors were arrested. The Observer is still waiting for confirmation.)

The protesters were affiliated with the local chapter of the Rainforest Action Network. Here's RAN's coverge of its event, including numerous photos and links.

Just after 7 a.m., several protesters scaled flagpoles in front of the headquarters building and dropped a large banner that read "Not with our money," a nod to loans made largely from deposits. Two people were arrested after that, said Jimmy Tyson, a volunteer media coordinator for the movement.

Police then arrested four protesters who had formed a human barricade in front of one of the headquarters' entrances, Tyson said. They were taken away in police cars amid chants of "Bank of America, bank of coal."

The Observer is still waiting to get more details from the police on the arrests.

Beka Stecky, a protestor who lives in Charlotte, said the demonstrations are about pushing Bank of America to stop financing coal operations. A press release issued by the movement says that in the last two years, the bank has financed $4.3 billion in coal projects.

A bank spokeswoman had yet to respond as of 10 a.m.

Stecky said the protesters want the bank to do more in financing wind energy and other renewable energy sources.

After the arrests, a group of protesters moved across the intersection of Trade and Tryon, holding signs and chanting.

(Photos shot by Andrew Dunn)

Morning roundup: Is the media too obsessed with Occupy Wall Street?

Here's a look at what's news in banking and finance this morning:

• In local news, Bank of America will become the sole ATM provider at the Charlotte airport, the Observer says.


• For people who still use Google+, apparently Bank of America got "brandjacked," the Inquirer reports.


• Reuters says Bank of America's sale of most of its stake in a Chinese construction bank marks the end of an era.


• Warren Buffett has been adding to his stake in Wells Fargo, Barron's reports.


• The New York Times says farewell to the hotel business center.


• Finally, the Observer opinion page asks if the media is too obsessed with Occupy Wall Street.

What do you think? Is the media playing up the Occupy movement too much?

Bill would allow states to cap interest rates on credit cards, loans

A bill introduced in the U.S. Senate last week would allow individual states to set a limit on interest rates banks could charge on credit cards and loans.

Known as the "Empowering States’ Rights to Protect Consumers Act," the bill was sponsored by U.S. Sen. Sheldon Whitehouse, D-RI. Among several co-sponsors is U.S. Dick Durbin, the Democrat from Illinois known for being vocal on banking issues. Most notably, his name adorns the amendment to the Dodd-Frank financial reform law that caps swipe fees on debit transactions.

“It’s time to stop Wall Street banks and their credit card subsidiaries from taking advantage of struggling families in Rhode Island and across the nation,” Whitehouse said in a statement. “This legislation would restore historic, long-standing states’ rights to protect consumers from improperly high interest rates.”

The American Bankers Association has yet to issue a public statement on the bill. The Credit Union National Association says the bill has little chance of moving forward.

Morning roundup: Are banks quietly adding new fees?

Here's what's happening this morning in banking and finance news:

• Debit card fees might be no more, but major banks - including Charlotte's Bank of America - are quietly ramping up other consumer fees, the New York Times reports.
  

• As concerns mount over the euro-zone crisis, some U.S. banks are releasing more information about their exposure, the Wall Street Journal writes.

• Seeking Alpha examines whether financial stocks are a good bet right now and why Citigroup might be better off than its peers.

• Enough with the big-bank bashing, investment advisor Jim Ulland writes in the Minneapolis Star Tribune.

• Gold traders are the most bullish in at least seven years, Bloomberg reports.
  

How well did credit unions really do?

Last week, the Credit Union National Association published survey data showing significant gains by its members on last Saturday's Bank Transfer Day and in the month prior.

But how well did they really do? American Banker has a piece today examining whether their claims may have been exaggerated.

It cites potential problems with the survey methodology and Federal Reserve data that doesn't show significant outflows from banks.

CUNA, for its part, defended its results.

Finance execs: Long road to recovery

Top officials from the Robert W. Baird & Co. financial services firm were in Charlotte last week with some insight on big banks, the broader economy and how investors can stay afloat in a challenging market.

Chief executive Paul Purcell, who has expanded the Milwaukee wealth management, capital markets, asset management and private equity firm to more than 100 offices worldwide, said Charlotte is an important hub. Baird's SouthPark office, which opened three years ago, has already benefited from top-notch financial services talent and a strong cultural fit, he said.

Purcell said he feels good about the local economy - activity in the Carolinas is heating up, and the region remains a good place to live - and its major players. Despite Bank of America's ongoing mortgage woes, for instance, the Charlotte bank is "phenomenal" and will ultimately be OK, he said.

Still, Purcell and chief investment strategist Bruce Bittles acknowledged the broader economic picture remains murky, with anemic growth and a continued push among consumers and companies to shed debt.

Bittles said the economic difficulties will stretch at least into next year, partly because of the uncertainty surrounding the presidential election. He doesn't expect another recession, but "it's still going to be dicey," he said.

For the economy to improve, Bittles thinks a few things need to happen, policy-wise, including simplifying the tax code, capping government spending and creating a strong energy policy.

Meanwhile, he offers a few tips for investors:

• Maintain a strong asset-allocation strategy. Bittles recommends the average investor put 50 percent in stock and 35 percent in high-quality government bonds, with the rest in cash and gold.
• Focus on three areas, at least for now: energy, utilities and consumer staples.
• Beware of the banks: Financial stocks will continue to struggle because they remain "under the political nightstick" and don't yet have a strong handle on their liabilities. Bittles thinks better government policies, though, will lift all boats - maybe banks specifically, he said.
  

Morning roundup: Is BofA a good investment?

Here's what's news in banking and finance this morning:

• Bank of America's volatile stock price has investors wondering whether it's a good opportunity - or "a dying company." MarketWatch explains.

• Reuters contributor Christopher Whalen: Is Bank of America preparing for a Chapter 11?

• One research firm finds a 65 percent chance of a banking crisis this month following a Greek default and a run on the Italian banking system, CNBC reports.
  

• Some bankers are blasting celebrity chef Mario Batali's attack on their industry, Bloomberg writes.

• There won't be a lasting economic recovery unless investors start rooting for banks, InvestorPlace says.

What do you think? Should people start rooting for banks to help boost the broader economy, or does the financial sector deserve the continued criticism?

Citizens South repurchases warrant from Treasury

Citizens South Banking Corp. announced Thursday that it has repurchased a warrant to buy common stock issued to the U.S. Treasury as part of the Troubled Asset Relief Program in December 2008.

In September, the Gastonia-based bank repaid the Treasury the $20.5 million it received in exchange for preferred shares. Warrants are commonly issued as part of preferred stock sales as a sweetener.

The Treasury had received a right to buy 428,870 shares at a price of $7.17. In 2008, Citizens South stock had traded above that price, but it steadily declined. It was at just under $4 on Thursday afternoon.

The bank repurchased the warrant for $225,157.

Citizens South looks to expand footprint

Gastonia-based Citizens South Banking Corp. is looking to broaden its footprint in Western North Carolina and upstate South Carolina, executives will tell investors at a financial services conference in Florida on Thursday.

The $1.1 billion-in-assets bank will also pursue taking over more failed banks.

The presentation to investors was included in a filing with the Securities and Exchange Commission.

Citizens South has taken over two failed banks -- Bank of Hiawassee and New Horizons, both in northern Georgia -- in the past two years with loan loss guarantees with the FDIC.

The bank hopes to continue to do so. It also wants to pursue traditional mergers in a consolidating industry.

Wells Fargo launches group to serve REITs

Wells Fargo announced Thursday a new finance group to serve publicly traded real estate investment trusts, or securities that invest in real estate.

The REIT Finance Group will be led by Rex Rudy, who is based in Charlotte and was previously managing director of real estate syndicated finance. Its principal offices will be in Charlotte, Chicago and Los Angeles.

The group will provide banking services, loans and lines of credit to REITs.

Bank of America giving $500,000 for Veterans Day

In honor of Veterans Day, Bank of America is giving $500,000 to Service Nation: Mission Serve. The organization seeks to join military members and civilians in service and volunteerism.

Through Service Nation, the bank and its employees are also taking part in the Honor Cards program, in which people pledge to volunteer in honor of veterans or serving veterans and their families.

A number of Charlotte volunteer opportunities are listed on the website, including mentoring with Hands On Charlotte and volunteering with the National Military Family Association.

Morning roundup: Occupy Oakland makes unusual deposit, Sweden's bank regulations a model

Here's a look at what's news in banking and finance this morning:

• Days after picketing and breaking windows at a Wells Fargo bank, Occupy Oakland protestors deposited $20,000 in ... Wells Fargo. The San Jose Mercury News has the details.


• Bank of America has dropped plans for a program that would allow debit card customers to decide to proceed with a transaction that would put their account in the red and pay a $35 fee, the Boston Globe reports. Without specifically opting in, the transaction would be denied.


• Goldman Sachs and Morgan Stanley are considering accounting changes that could dramatically impact their financial statements, the Wall Street Journal reports.


• Foreclosure activity was the highest in seven months, the AP reports.


• Sweden's treatment of banks should be a model for the world, Bloomberg says.

Take a look at that last story from Bloomberg and tell us what you think. Are stricter standards and tighter regulation the answer for banks?

Bank Transfer Day a success for credit unions; what's next?

Bank Transfer Day was a resounding success for credit unions around the country, according to data compiled by the Credit Union National Association.

Credit unions gained 40,000 new members and $80 million in new savings deposits on Saturday, a day when many credit union branches are closed. That brought the total for the month prior up to near 700,000 new members, driven by the social media campaign to leave big banks and join local institutions.

Credit unions also reported $90 million in new loans made Saturday.

So what's next?

CUNA also compiled statements made by credit unions around the country (including comments made to the Observer). Several say that credit unions might step up their marketing efforts to keep the momentum going.

While obviously hopeful that the trend will continue, industry observers expect at least some kind of slowdown.

Morning roundup: Debt abroad and at home

Here's what's happening in banking and finance news this morning:

• Fear persists in Europe, despite the potential for change in some troubled countries, the New York Times reports.

• Paul Volcker, who gave his name to a new regulation on bank trading, says the Volcker rule is too long and complicated, Reuters writes.
  

• The Wall Street Journal's personal finance blog poses a question: Should young investors borrow money to invest in the stock market?

• The Occupy Wall Street movement doesn't appear to be going away, Market Intelligence Center says. Should big banks worry?

• A financial planner explains in the New York Times how he lost his house during the mortgage crisis.
  

Wells Fargo gives $100,000 to Charlotte nonprofits

Wells Fargo announced that it has given $100,000 to Charlotte nonprofits in recent weeks to mark the North Carolina conversion of Wachovia branches.

Receiving money:

• The Second Harvest Food Bank of Metrolina: $34,000


• The Greater Carolinas Chapter of the American Red Cross: $24,000


• The Autism Foundation of the Carolinas: $19,000


• Classroom Central: $14,000


• Goodwill Industries of Southern Piedmont: $9,000

The nonprofits were chosen by vote of Wachovia customers and employees in August and September.

Last year, Wells Fargo and Wachovia gave $219 million to nonprofits around the country.

Consumer credit extended by commercial banks down slightly

The amount of consumer credit extended by commercial banks remained relatively flat in September, down $1 billion to about $1.077 trillion from $1.078 trillion in August, according to data released by the Federal Reserve.

Revolving credit, which includes credit cards, was down $1.8 billion, to $584 billion in the non-seasonally adjusted data.

But nonrevolving credit, which includes car loans, was up $1 billion, to $493.6 billion.

Mortgages and other real-estate backed loans are not part of this measurement.

Morning roundup: Walmart benefiting from bank backlash

Here's a look at what's news in banking and finance this morning:

• A surprising business that's benefiting from the outrage against big banks? Walmart. Its financial products are gaining popularity, the New York Times reports.


• Bloomberg has a preliminary list of what "capital surcharges" international regulators will impose on the world's biggest banks, meaning capital percentage points they will need above minimum requirements. Bank of America is not in the top rung.


• U.S. Sen. Dick Durbin, D-Ill., says he's ready to "battle" the big banks, according to The State Column.


• Bank errors are causing people to face higher mortgage rates than expected, The Motley Fool says.

What do you think about Walmart benefiting from the backlash against banks?

Morning roundup: Bank transfers and the global economy

A look at what's going on in banking news this morning:

• Small banks poached customers from larger competitors over the weekend as part of "Bank Transfer Day" - but big banks don't seem too worried, the Wall Street Journal reports.

• TheStreet examines bank transfers and "why Bank of America really killed its card fee."

• Bank of America is considering further reducing its stake in China Construction Bank Corp., Reuters reports.
  

• Do big banks rule the global economy? The New York Times' Economix blog explains how a large portion of control resides with a small core of financial institutions.

• Time profiles the 22-year-old who led the charge against BofA's debit fee.
  

Morning roundup: Why BofA always gets "skewered"

Here's what's happening in banking and finance news this morning:

• Bank of America had trading losses on 20 days in the third quarter, led by a $119 million drop on one day, the biggest since 2008, Bloomberg reports.
  

• One analyst says issuing new common shares would do little to address a $45 billion capital shortfall at Bank of America, according to TheStreet.com.

• Banks' decision to back off debit fees seems like a win for consumers - but it might just encourage a less transparent way for banks to find new revenue, Fortune writes.
  

• The Motley Fool's Rick Aristotle Munarriz discusses why Bank of America "will always be the one that gets skewered" when times get tough.

• MF Global might have disguised its debt levels to investors for the past two years, the Wall Street Journal reports.
  

Two senators push for bank account fee disclosure forms

Two senators are calling on banks to use a standardized form to disclose their fees on checking accounts.

U.S. Sens. Dick Durbin, D-Ill., and Jack Reed, D-R.I., published a statement Thursday pushing for more fee transparency, saying consumers are now at risk for hidden fees after big banks like Bank of America and Wells Fargo decided to forego debit card fees.

Take a look at the sample disclosure form here (PDF, begins on pg. 3). The senators teamed up with The Pew Charitable Trusts to create the form.

“We saw this week that the consumers of America have had enough," Durbin said in a statement. "Today we’re calling all of the nation’s financial institutions to adopt a one-page, easy-to-read model disclosure listing the fees and key terms for their checking accounts. Giving consumers information clear, upfront and accurate information about the fees that they will be charged will allow consumers to shop around and make sound financial decisions.”

The two also sent a letter to Raj Date, acting director of the fledgling Consumer Financial Protection Bureau, asking him to require such a form be posted on banks' websites.

The banks said the debit fees were a response to caps on "swipe fees" merchants pay on every debit card transaction as part of the Dodd Frank financial reform law, a provision introduced by Durbin.

Bank Transfer Day gaining national attention

Bank Transfer Day, a social media-driven exhortation to leave big banks and join credit unions, is scheduled for Saturday and is gaining national attention.

Created by an art gallery owner in California, the movement has recruited nearly 75,000 people who have RSVP'd to the group's event on Facebook.

Charlotte Metro Federal Credit Union has been Tweeting in support of the movement, and credit unions around the country have reported a rise in interest related to it.

The movement was created to oppose what it deems unethical practices by big banks and to support local institutions. It picked the Nov. 5 date to coincide with Guy Fawkes Day, the notorious failed bombing of the British House of Lords in 1605. Bank Transfer Day's organizer says it wants to put a new meaning to the date.

Bank Transfer Day leaders have been very careful to say that they are not affiliated with the Occupy Wall Street movement and similar demonstrations around the country. Bank Transfer Day does not condone actions taken by Occupy demonstrators. But the movement has enjoyed overlap in support from Occupy enthusiasts.

While a little wind has been taken out of its sails as big banks scrapped their plans for a debit card fee, organizers are pressing forward.

"In light of the recent announcements that many corporate-level banks have rescinded the new debit card fee policies, Bank Transfer Day would like to remind supporters that this consumer action was inspired not from the fee itself, but the principle behind it," the group's founder writes on the official Facebook page, saying the moves are too little too late. "When a company chooses to target a section of the population it views as weak, it's our duty as citizens to stand up in solidarity."

Is anyone in Charlotte participating?

BB&T buys Calif. insurance company

In its second announced acquisition this week, BB&T Corp. said Thursday that its insurance arm would buy a California-based employee benefits consulting and administration firm.

The deal with Precept Group closed Tuesday and added 140 employees to BB&T's insurance unit.

"This acquisition positions us as a leader in this space at the most opportune time imaginable," insurance services chairman Wade Reece said in a statement.

Precept focuses on save money in human resources through greater efficiency and improving employee health at companies with between 50 and 50,000 employees. As health care costs rise and regulatations strengthen, this is ever more important, BB&T says.

Though Winston-Salem-based BB&T does not have any bank branches in California, it entered the insurance market there in 2008 when it bought San Diego-based UnionBanc Insurance Services. It is the sixth-largest insurance broker in the U.S.

On Tuesday, the bank announced it would buy BankAtlantic, based in South Florida, gaining 78 branches and $3.3 billion in deposits.

Morning roundup: lawsuits, fees and taxes

Here's a look at this morning's banking and finance news:

• A judge ruled that Illinois can move forward with a lawsuit alleging Wells Fargo & Co. steered minority borrowers into risky mortgages at the height of the housing bubble, the Wall Street Journal reports.

• Fees won't fly with customers, so banks are turning to wealth management to help boost revenue, according to InvestmentNews.

• While Bank of America's decision to eliminate its $5 debit card fee is a win for customers, the bank will likely try to find new ways to regain fees on customers such as creating promotions to encourage customers to use credit cards, Forbes writes.
  

• A study released today found 280 of the biggest publicly traded American companies faced federal income tax bills equal to 18.5 percent of their profits during the last three years, lower than the official corporate tax rate and lower than competitors in many other countries, the New York Times reports.
  

• Global stocks rose on a European Central Bank rate cut, signs Greece might avoid a referendum on a euro-zone bailout package and a government report showing jobless claims in the U.S. fell slightly, the Wall Street Journal reports.
  

Bank analyst calls dropped debit card fees a win for 'the Socialists'

Consumers largely celebrated Bank of America's decision Tuesday to drop its planned $5 debit fee. Bank analysts, not so much.

In a note distributed Wednesday, analyst Richard Bove of Rochdale Securities called the fact that several major banks have cancelled plans to institute fees a win for "the Socialists" and the product of an irrational discussion.

"The public furor over the debit card issue has been overwhelming," Bove writes. "As usual, the issues have not been explored appropriately by the Congress, press, or the public. The concept to 'get the banks' was in full bloom over this issue and no thought of rational discussion was, or will be, considered."

The banks pointed to the cap on "swipe fees" paid by merchants on debit card transactions as part of the Dodd Frank financial reform law as the impetus for the debit card fees. Bank of America said it would lose $2 billion annually.

Bove notes that he is not aware of any retailer giving rebates for using debit cards or otherwise passing savings on to customers.

"It is giving a $12 billion windfall profit to the retailing industry at the expense of the banks," Bove writes.

Bove also takes on the argument that debit cards are using only the consumer's money and there shouldn't be a charge for getting it back. He says that wrongly assumes that there is no cost to running a bank and that banks are making so much money on deposit balances that other service should be free.

The part Bove says is Socialist is the idea of government setting prices for the private industry.

"Is it now public policy that the Congress will intervene in any industry that it deems appropriate to set product prices?" Bove asks. "Will Congress set the price of gasoline below the cost of producing it? How about food prices?"

Where do you come down in the debate?

Morning roundup: Reactions to BofA dropping debit card fee

Here's a look at what's news in banking and finance:

• Bank of America made hundreds of headlines by announcing it would drop its much-derided $5 debit card fee. The Seattle Times says the bank finally got a clue. The Star-Ledger says its the right move. And a New York Times blog wonders whether this is a signal that consumers are gaining more power.


• Bank of America is foreclosing on a Texas home that no longer exists after it was wiped out by a hurricane, the Houston Chronicle says.


• The cost to protect against corporate default, including for Bank of America, jumped as investors worry the Europe bailout plan could fail, Bloomberg reports.


• Banks around the world are cutting personnel costs, by far their biggest expense, the Wall Street Journal reports.


• The leader of the world's largest bond fund says banks haven't done enough to raise capital levels, Reuters reports.

So, what's your take on Bank of America cancelling the debit fee? Is it enough to help restore the bank's image?

Homeowners able to request independent foreclosure review

Homeowners foreclosed on by Bank of America, Wells Fargo, Wachovia and a number of other mortgage servicers will be able to request an independent foreclosure review, federal regulators announced Tuesday.

If errors are found, the homeowner is eligible to receive compensation. The process is part of an agreement between regulators and the mortgage servicers made in April.

For more information, including a full list of servicers participating in the review, go to IndependentForeclosureReview.com.

To qualify, the foreclosed property must be the person's primary residence and the foreclosure must have been active between Jan. 1, 2009 and Dec. 31, 2010.

Does this affect you? Call the Observer at 704-358-5235 or email adunn@charlotteobserver.com.

Morning roundup: Should BofA have kept fees hidden?

Here's what's happening this morning in financial news:

• Bank of America Corp. is "in a tight spot" on debit fees as other banks scrap similar plans, Bloomberg reports.

• U.S. stocks are sliding this morning - led by banks - as Greece's plans for a referendum on its bailout package sparked worries worldwide, the Wall Street Journal writes.

• The Atlantic's Daniel Indiviglio makes a case for the danger of transparency, wondering if Bank of America would have been better off creating new hidden fees.

• Big U.S. banks have increased their sales of insurance against credit losses to holders of European debt, boosting the risk of payouts in the event of defaults, Bloomberg writes.

• Social media users posted more negative opinions than positive about Bank of America and other large banks over the last year, according to a new report from Amplicate.

What do you think? Will this morning's market slide continue? And do you think Bank of America would have fared better with the public if it hadn't been so transparent about its planned $5 debit card fee?

BB&T expands in South Florida

BB&T is growing.

The Winston-Salem-based bank announced Tuesday that it is acquiring BankAtlantic, a Ft. Lauderdale-based bank, for $301 million.

BB&T will take on 78 branches, $2.1 billion in loans and $3.3 billion in deposits, according to a news release.

The move marks a strategic expansion for a bank that continues to get larger, though executives are hesitant to say they're in expansion mode.

"We've been growing throughout the whole downturn," Chief Financial Officer Daryl Bible said.

He called the BankAtlantic acquisition a strategic move in a region where the bank had only a 14th-largest market share. BB&T will now have the sixth largest market share in the Miami market.

"We're really still focused on growing organically," Bible said. "We look at anything within our footprint or contiguous marketplace."

As of June 30, BB&T was the 18th largest bank by assets in the United States, with $159 billion. It has since grown to $168 billion in assets. It has the third-largest market share in the Charlotte area.

BankAtlantic has struggled through the economic downturn. Though it made a $23.4 million profit in the second quarter, it lost money in the 15 quarters before that. In mid-October, BankAtlantic completed a 5 to 1 reverse stock split.

But BB&T will not be acquiring any nonperforming or distressed assets as part of the deal, the company said.

"This appears to be a relatively low-risk transaction, which makes sense from a strategic standpoint," bank analyst Christopher Mutascio of Stifel Nicolaus wrote in a research note.

Bible said he did not know when the deal would close. It still needs regulatory approval, but Bible said regulators did not make any objections when BB&T put in its bid.

He said conversion costs would not be material in any given quarter.