Charlotte is expected to add jobs at a faster pace than the U.S. as a whole next year, according to an economic forecast from PNC Financial Services Group.
The bank's economists said Charlotte's employment should grow 2.1 percent in 2013, more than the 1.4 percent they predict for the country overall and more than the 1.3 percent the city is slated to record this year.
"Over the long term, low business costs and a young, growing, educated population will enable Charlotte to outperform the U.S.," the economists write
Charlotte should see "strong gains" in professional services and consumer industries in the coming year, according to the forecast. Manufacturing growth should slow, but retail will increase based on expected population growth. The bank says finance and government employment should get its footing back as well.
The unemployment rate will decline, but stay stuck higher than the national average as population increases partially counteract job growth.
Monday, December 31, 2012
Charlotte is expected to add jobs at a faster pace than the U.S. as a whole next year, according to an economic forecast from PNC Financial Services Group.
The U.S. Department of Justice is moving slower than it had hoped on finding minority borrowers who were discriminated against by Countrywide, the Wall Street Journal reports this morning.
The department settled with Bank of America, which bought the subprime lender in 2008, for $335 million in December 2011, resolving claims that Countrywide steered black and Hispanic borrowers into loans with higher interest rates and fees. It was the largest fair-lending settlement in history.
Bank of America said at the time that it had discontinued Countrywide's improper practices, and said Bank of America policies were not at issue.
The $335 million was set aside to compensate the more than 200,000 victims of the alleged discrimination. The department hired Rust Consulting to track them down and ultimately administer the payments. It was hoped the first letters would go out in the summer of 2012.
But it took until just last month for those to be sent, the Department of Justice reported. And the Wall Street Journals says about 10 percent of those have already been sent back undelivered.
The department said at the time that it could take two years for payments to be issued. The Wall Street Journal says officials hoped it could be done sooner, but now aren't hopeful that will happen. A Department of Justice spokesman told the Journal that it still expects to meet the two-year goal.
Friday, December 21, 2012
About 80 North Carolinians who paid Payday Loan Debt Solutions for debt relief but didn't get help will be reimbursed following the first partnership between states and the Consumer Financial Protection Bureau, the state attorney general's office said Friday.
U.S. Rep. Patrick McHenry, a North Carolina Republican, has been tapped to head the House Financial Services Committee's oversight and investigations subcommittee in the next session of Congress.
The committee oversees numerous federal regulators, including the Securities and Exchange Commission and the U.S. Treasury. In the last session, it also conducted hearings looking into the collapse of MF Global
“Government regulators need proper oversight in order to avoid bureaucratic overreach," McHenry said in a statement. "I’m excited to exert greater influence over that process and look forward to ensuring that small businesses across Western North Carolina are able to access the capital they need to grow and expand.”
McHenry, who graduated from high school in Gastonia and now lives in Denver, N.C., will begin his fifth term in Congress when it convenes in January.
Thursday, December 20, 2012
Bank of America will close its branch on Main Street in the Gaston County town of Cherryville.
The bank said it decided to shut the branch down March 8 because of a decline in transactions caused by a shift to online and mobile banking.
The nearest branch is in Lincolnton, about 10 miles away. Bank of America has sent out letters to customers who use the Cherryville branch to give them a chance to get used to other locations.
It will be the second local Main Street branch to close that day. The bank's branch on Main Street in Rock Hill is also closing.
Bank of America CEO Brian Moynihan said in an interview with the Observer on Wednesday that even though the bank is closing branches to reflect customer habits, it is making those that remain bigger and with more specialists.
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Wednesday, December 19, 2012
BB&T said Wednesday that it has opened a branch on Rea Road by the Blakeney shopping center, bringing the Winston-Salem bank's total to 22 in Charlotte.
Tamra Goodson has been named the financial center leader.
“This is a growing and important market for us and we are pleased to expand BB&T’s presence in Charlotte," market president Wes Beckner said in a statement.
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Wells Fargo has bought a 35 percent stake in The Rock Creek Group, a fund of hedge funds based in Washington, D.C., to offer more investment options to its high-income asset management customers, the bank said.
Tuesday, December 18, 2012
North Carolina banks have half as much federal bailout money on their books as they did at the beginning of the year -- but still have $212 million in investments from the financial crisis-era program, according to data from financial services firm Keefe, Bruyette and Woods.
Ten of the state's banks remain in the Troubled Asset Relief Program, which the U.S. Treasury has actively tried to wind down this year.
At the beginning of the year, 22 banks had $409 million left, KBW said at the time.
Since then, a number of N.C. banks have had their TARP investments auctioned off to private investors, including Yadkin Valley Financial and Bank of North Carolina.
North Carolina banks that still have TARP:
- NewBridge Bancorp, Greensboro: $52 million
- FNB United Corp., Asheboro: $52 million
- Crescent Financial Corp., Cary: $25 million
- ECB Bancorp Inc., Engelhard: $18 million
- 1st FS Corporation, Hendersonville: $16 million
- Carolina Bank Holdings Inc., Greensboro: $16 million
- Bank of the Carolinas Corp., Mocksville: $13 million
- Uwharrie Capital Corp., Albemarle: $10 million
- Randolph Bank & Trust Co., Asheboro: $6 million
- AB&T Financial Corp., Gastonia: $4 million
Monday, December 17, 2012
Bank of America's stock price continued its recent rapid ascent
Monday, finishing up nearly 4 percent to close at $11 for the first time in a year
and a half.
Friday, December 14, 2012
As a lesson from the mortgage meltdown, lenders and the federal government shouldn't push homeownership as a universal goal, Bank of America CEO Brian Moynihan said at the Brookings Future of Homeownership Forum this morning in Washington D.C.
Instead, he said the focus should be on what makes the most sense in individual cases -- both for families now struggling to keep their homes and for people considering buying houses in the future.
"As we think about the future of the housing system, how does everything we have learned during the crisis and recovery apply?" Moynihan said, according to his prepared remarks. "It underscores the need to shape a system that keeps borrowers out of the situation of owning a home and not being able to afford it. It means shifting the conversation from what percentage of Americans own homes to what is the right solution at the right time for each individual or family."
Moynihan said the housing market recovery is now progressing. Home prices and demand are up, and delinquencies are declining. Thousands of borrowers have been able to get mortgage modifications to help them keep their homes.
But he said that re-default rates are still high. He noted that out of the bank's 270,000 employees, about 50,000 were dealing with delinquent mortgages.
Moynihan said that at this point, the problem is not a lack of programs to help people. It's the still-stagnant economy.
"Important to the housing recovery is letting the process continue to move forward," he said. "To help customers get to the right solution even if that means transitioning to rental."
"Now is our chance to reset. Now is our chance to move past recrimination and move toward solutions," he said. "Now is our chance to put lessons learned to use and put our housing finance system on a more sustainable path."
Thursday, December 13, 2012
Bank of America said Thursday that it is selling its stake in a joint private banking venture in Japan, another example of the bank shedding overseas business lines.
The Charlotte bank had 49 percent ownership of a private banking group managing investments for wealthy people in Japan known as Mitsubishi UFJ Merrill Lynch PB Securities. The 51 percent owner, Mitsubishi UFJ Financial Group, has agreed to buy out Bank of America's stake.
Bank of America said it would focus on corporate and investment banking in Japan.
“We see Japan as key to our long term success," said Jiro Seguchi, Bank of America Merrill Lynch’s Japan country executive, in a statement. "We are totally committed to serving our local and international client base in Japan by continuing to invest in our core businesses of corporate and investment banking and global markets.”
In August, Bank of America said it was selling Merrill Lynch's overseas wealth management business to Swiss private bank Julius Baer Group.
Bank of America has spent the last few years selling off businesses and assets that aren't core to its strategy.
Wednesday, December 12, 2012
Bank of America has sent out a new, tighter set of guidelines for its popular work-at-home program, known as "My Work," after reviewing how it's gone.
Last week, the Observer reported that the bank was finalizing changes meant to restrict the breadth of the program and letting employees know if they would be affected. The new slate of recommendations and restrictions isn't necessarily surprising.
Some company-wide restrictions include limiting work-at-home to employees in good standing in performance evaluations and current on training, according to a document obtained by the Observer. Bank of America will also indeed ask workers who spend a good deal of time working from home but maintain an office to enroll in "My Work" and give up the space.
Working from Starbucks or the like might not be OK. "Employees are to work from a quiet, safe, and ergonomic location -- free from distraction," according to the document, listing a home office, "My Work" center or bank flexible space as acceptable workplaces.
Managers will still have latitude to determine which job roles are suitable for "My Work" and which are not.
Other suggestions and requirements:
- New employees should work from an office "whenever possible."
- Employees will have to attend local company events and meetings in person.
- People in "My Work" will regularly talk with their managers about their in-person expectations.
The changes could affect several thousand employees in Charlotte.
Tuesday, December 11, 2012
Charlotte Metro Federal Credit Union said Tuesday that it increased its membership by 9,000 in the past year, the largest annual increase it has ever seen.
This year also marked the credit union's 50th anniversary. In October, Charlotte Metro announced a marketing campaign touting its growth and billing itself a better alternative to banks as the largest institutions weigh new and increased fees.
Charlotte Metro typically grows by 6,000 members in a year.
“Our heightened visibility during our 50th anniversary and a sense of dissatisfaction with banks drove this exceptional member growth,” CEO Bob Bruns said in a statement. “This increase was the intersection of our
50th anniversary branding and the public’s desire for change."
Bank of America has committed to donating 2,000 foreclosed properties over the next three years to Habitat for Humanity, which will renovate or rebuild homes on them.
The bank will also pay to demolish structures on the land should it be needed. The goal, Habitat said, is to boost affordable housing in low-income neighborhoods.
“The donation of these properties by Bank of America is a tremendous boost to our efforts to revitalize distressed communities all across the country,” Habitat CEO Jonathan Reckford said in a statement.
The donations could count toward the Charlotte bank's requirement in the $25 billion national mortgage servicing settlement announced earlier this year. Banks will generally get full dollar-for-dollar credit for tearing down homes or donating properties to charity.
Bank of America has the largest share of the settlement, at $11.8 billion.
Update: Bank spokesman Rick Simon said the bank does not intend to seek credit under the national mortgage settlement for these donations at this time. He said the bank plans to be able to meet its obligations through other actions.
A new wave of cyberattacks against large U.S. banks may be soon to come.
A group of hackers posted a warning online Monday that it would target Bank of America, SunTrust, PNC, and a number of other large banks as a protest.
That's exactly what happened in September, when Bank of America became the first affected in a string of website slowdowns attributed to "distributed denial of service" attacks, in which website servers are flooded by requests to slow down service for customers.
The Credit Union National Association reported Tuesday that it was a victim of a cyber attack it said targeted 30 companies and organizations on Monday. CUNA said no private data was compromised.
Industry publication Bank Info Security is launching a free webinar Wednesday called "The New Wave of DDoS Attacks: How to Prepare and Respond."
Bank of America customers around the country reported sporadic issues getting access to their online accounts on Monday, with some reports still trickling in Tuesday. A bank spokesman said the only issues Bank of America has received involved customers' browser settings.
Monday, December 10, 2012
Wells Fargo has added Greg Reiter, who is based in Charlotte, as a managing director and head of residential mortgage research in the bank's securities division, Wells said Monday.
He will be responsible for developing strategy in residential mortgage backed securities investment for institutional clients.
Reiter most recently worked for Freddie Mac, where he dealt with securitization strategy and investor outreach.
Bank of America said Monday that it has committed $20 million that will go toward loans for small businesses and homeowners impacted by Hurricane Sandy.
The money will flow through 13 Community Development Financial Institutions at a zero percent interest rate, and the bank will defer their principal payments. These institutions will make "low-cost" loans to people trying to rebuild.
The Charlotte bank had previously donated $1 million toward storm relief and put $2 million into a recovery loan fund.
Friday, December 7, 2012
The credit union trade associations in North and South Carolina are pondering merging into one.
The North Carolina Credit Union League and South Carolina Credit Union League have formed a joint task force that will convene in January to figure out what a consolidation would look like.
The credit union leagues advocate for their members at the state and federal government, keep them up to date with legal compliance issues and aid with professional development.
The change comes as South Carolina league CEO Steve Fowler plans for retirement at the end of next year. It also comes as smaller credit unions are consolidating as well.
"It seems to make sense to be more efficient on the trade association side, as well," North Carolina league CEO John Radebaugh said.
The two groups already share compliance staffs and use the same firm for accounting and human resources, he said.
A combination could find more efficiencies For example, instead of each sending a lobbyist to Washington, they could send just one to represent both states, Radebaugh said.
Alabama and Florida's credit union leagues have already merged. So have Arizona, Colorado and Wyoming's.
North Carolina credit unions have more than 3 million members and $37 billion in assets. South Carolina's credit unions have 1.4 million members and $10.6 billion in assets.
Thomasville-based Bank of North Carolina opened a Southern Region headquarters in SouthPark this week across from Piedmont Town Center, the Charlotte Chamber said.
The two-story, 13,000-square-foot building has offices, a drive-through teller window and ATM.
The project has been in the works for months.
“It’s a big step for us, and we’re really excited to make a splash in that area,” regional executive Rob Ellenburg told the Observer in February.
The expanding bank, whose parent company recently closed its acquisition of Charlotte-based commercial bank First Trust, also has a location on Carmel Road.
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Thursday, December 6, 2012
Charlotte-based Tree.com announced Thursday that it will issue a special $1-per-share dividend to stockholders later this month.
Though the company did not mention the "fiscal cliff," it's joining a growing number of companies issuing dividends to shareholders ahead of the automatic package of spending cuts and tax increases -- including a dividend tax hike -- set to kick in at the end of the year.
Charlotte's Cato Corp. announced earlier this week that it would issue a special dividend as well.
Tree is the parent company of online mortgage service LendingTree and other comparison sites.
The dividend will be payable Dec. 26. Judging by the current number of shares outstanding, it will cost the company $11.5 million.
We reported in today's paper that former Wachovia employees who were on long-term disability before the Charlotte bank was bought by Wells Fargo would be terminated by the bank at the end of the year. That means they would no longer eligible for the company's health insurance.
It's a complicated story and full of legal minutiae. But Renee Wilcox, 42, called the Observer today to share how this change will affect her.
Wilcox moved to Charlotte in 1992 and started work for Wachovia the same year. By 2000, she had become a junior trader.
But then she fell sick with a virus on the brain. Before long, she was in a wheelchair, paralyzed on her left side. She went on long-term disability, and paid for a supplemental insurance program with the bank.
She found out over the summer that she would be terminated from employment at the end of the year. Despite numerous phone calls, she hasn't been able to find a way to afford the health care she needs.
"I'm having a hard time finding insurance," she said. "Why couldn't I be grandfathered in?"
She's been able to enroll in Medicare, which helps. But it doesn't cover her expensive medications. That would run her another $700 a month. COBRA coverage from Wells Fargo is prohibitively expensive as well.
"I can't afford to pay $500 a month, plus my bills, on a fixed income," she said.
She's currently in accounting classes at Central Piedmont Community College, but is unsure whether she'll be able to find a job when she finishes. She can't drive, and frequently gets spasms.
She called the Observer hoping that someone might read her story and help her figure out a course of action to afford her medical expenses.
"I hate that I'm in this situation," she said. "I'd rather work."
A Charlotte family that has been aided by local activist groups is celebrating Thursday a mortgage modification from Bank of America that will keep them from their homes.
Gonzalo and Silvia Sanchez, along with teenage daughter Jessica, have lived in their University City home for more than 10 years. The couple has also spent considerable money on renovations to help Jessica, who is disabled, navigate the home. She has spina bifida and is unable to walk.
In the role, Doss will oversee auto, home, renters, life, umbrella, property and liability insurance to consumers and small businesses. She will report to Laura Schupbach, who heads Wells Fargo Insurance.
Doss will still run the bank's life insurance and disability management business. She was president of Wachovia Insurance Services before its merger with the San Francisco bank.
Wells Fargo is the fifth-largest insurance broker in the world.
Wednesday, December 5, 2012
Bank of America stock closed above $10 on Wednesday for the first time since July 2011, surging nearly 6 percent to close at $10.46.
The share price has now fully recovered from its slump in the late spring. After finishing 2011 as the worst performer in the Dow Jones Industrial Average, the Charlotte bank's stock climbed quickly in the first few months of the year. The bank's stock briefly topped $10 on March 26, but closed below the mark and soon fell below $7.
Bank of America shares are now up 88 percent on the year.
CEO Brian Moynihan appeared on CNBC and at an investors conference in New York on Tuesday to tout the bank's improvement in capital and efficiency.
Homeowners looking for help with their mortgages will be able to attend a free workshop at the Charlotte Convention Center beginning Thursday and running through Monday, sponsored by the Neighborhood Assistance Corporation of America.
The event will run from 8 a.m. to 8 p.m. those five days. Representatives from Bank of America, Wells Fargo, Chase, Citi, Fannie Mae, Freddie Mac and several others will be on hand to work with struggling borrowers.
Homeowners will also be able to sign up for an independent foreclosure review under the terms of a legal settlement.
NACA encourages people to register at its website and review the list of documents recommended to have on hand.
This is the third such event NACA has held in Charlotte. The organization said that one man, Junior Laguerre, was able to get his mortgage rate reduced from 6.5 percent to 2 percent, meaning his monthly payments fell from $1,249 to $587.
Wells Fargo will not evict families from their homes between Dec. 19 and Jan. 2 "in keeping with Wells Fargo values and the spirit of the holiday season," the bank said Wednesday.
Fannie Mae and Freddie Mac, the mortgage giants that own roughly half the nation's loans, both announced this week that they were halting evictions during the same period. Freddie Mac's period actually begins two days earlier, on Dec. 17.
Tuesday, December 4, 2012
Bank of America is hoping images of looser jowls and wrinkled brows will make people save more for retirement.
The investment bank has introduced a feature to its online retirement program that aims to encourage people to save by virtually aging the customers' photo to show what them what they'll look like when they're older.
Called Face Retirement, it's now a part of the Merrill Edge platform, which serves mass affluent customers.
“In a Stanford University experiment, people who saw age-enhanced images of themselves were more likely to save more for retirement, compared to those who weren't exposed to their future selves,” Merrill Edge head Alok Prasad said in a statement.
Monday, December 3, 2012
Would you take out a mortgage from Walmart? Turns out about one-third of you would at least think about it, according to a study from Charlotte-based Carlisle & Gallagher Consulting Group.
The company found that 80 percent of people would consider a mortgage from a non-bank. One-third would consider a mortgage from Walmart, and nearly half would take one from PayPal.
It's not as crazy as it sounds. Walmart has been steadily increasing its financial services offerings.
BNC Bancorp has closed its acquisition of Charlotte-based commercial bank First Trust.
The deal was announced in June, when it was valued at $35 million. By the time it closed, First Trust's stock had risen, valuing the deal at $38.1 million.
High Point-based BNC Bancorp is the parent company of Bank of North Carolina, which has several offices in Charlotte.
First Trust's offices in Charlotte and Mooresville will keep their name until February, when the two systems are merged, BNC said.
"The completion of this merger is a product of a lot of effort and great teamwork between the BNC and First Trust organizations," Bank of North Carolina president Rick Callicutt said in a statement. "The Charlotte area represents an attractive, growth-oriented market for us and this merger provides a strong presence in Charlotte and further establishes BNC's position as a Carolinas-focused financial institution."
Thursday, November 29, 2012
The Durham-based Center for Responsible Lending is urging Congress to pass an extension to a piece of legislation that keeps troubled homeowners from having to pay taxes on mortgage relief they are offered.
Generally, most debt discharged counts as taxable income. The Mortgage Forgiveness Debt Relief Act, passed in 2007, changed that for mortgage relief on principal residences, but the law is set to expire at the end of the year.
Wells Fargo has added retired PricewaterhouseCoopers partner Howard V. “Rick” Richardson to its board of directors, the bank disclosed in a securities filing Thursday.
Richardson served as PwC's finance and banking leader from 1996 to 2000, among numerous other positions at the firm. He is a Duke University graduate and received a master's degree from Boston University.
“Rick Richardson served PwC for over three decades in a wide range of leadership, audit, and business advisory positions, including as the lead engagement partner for several of PwC’s largest financial services clients,” CEO John Stumpf said in a statement. “Wells Fargo is very fortunate to add Mr. Richardson and his vast knowledge of the financial services industry to the board, and we welcome him to Wells Fargo.”
The move brings the board's membership back up to 16.
Bank of America could be planning to enter the much-discussed world of "social impact bonds," a financing arrangement that helps fund ambitious projects aimed at the public good.
The Charlotte bank has applied for a trademark on the phrase "Anything a Society Truly Wants Can be Financed and Achieved." Its trademark application goes on to say that it pertains to social impact bonds or "project financing for socially beneficial programs."
Essentially, social impact bonds allow different "investors" to put up money toward achieving a certain goal -- say, reducing homelessness or boosting the high school graduation rate. Investors make a return if the goal is reached.
New York City announced the country's first social impact bond program in August, financed by Goldman Sachs. Its goal is to reduce recidivism among young people at Rikers Island jail.
It works like this: Goldman provided a $10 million loan to MDRC, a nonprofit that will implement an education and counseling program at the jail. If recidivism falls by 10 percent, the New York City government will pay MDRC, which will in turn pay back Goldman. If recidivism falls further, Goldman's investors would make a profit.
Social impact bonds are already off the ground in Britain and Australia, and are also commonly known as a "Pay for Success" program. The White House said earlier this year that it would like the federal government to put $100 million toward these programs.
Bank of America did not provide any information on its plans.
Wednesday, November 28, 2012
Wells Fargo said Wednesday that the Securities and Exchange Commission team investigating the bank's mortgage-backed securities disclosures has recommended that Wells not face any penalties.
In its February annual report, Wells Fargo had disclosed that it has received a notice from the SEC that it was under investigation.
The bank was told last week that the investigation into disclosures on its offering documents had ended and no action was recommended, Wells said in a securities filing.
Wells Fargo settled similar allegations in a private lawsuit for $125 million last year.
More banks are planning some type of acquisition in the next year, with executives at 57 percent telling Bank Director magazine they would pull out their wallets in 2013. That's up from 52 percent last year.
Of those, nearly half say they want to buy a healthy bank, 21 percent just want branches and 17 percent want to buy a failed bank through an FDIC transaction.
Of course, only 2 percent say they plan to sell. Almost 90 percent say they have no intention of selling.
Count on Charlotte to play a role in that. We've had examples of all three of those types of acquisitions here in the area in the past year.
BNC Bancorp said in June it would by Charlotte commercial bank First Trust. Carolina Premier Bank bought two new branches in South Carolina in January. CertusBank and Bank of North Carolina each bought a failed bank. And banks like Park Sterling Bank, which bought Citizens South earlier this year, are still looking to grow.
Bank of America, however, is definitely not looking to expand, CEO Brian Moynihan told investors two weeks ago.
Tuesday, November 27, 2012
Wells Fargo customers in Charlotte will now be able to deposit checks using their smartphones as the bank rolls out the feature across the country.
Wells had tested it in 15 states over the past four months. More than 600,000 checks were deposited by phone in that time frame, the bank said.
“The exponential growth of mobile banking is fueling the thirst for more futuristic, easy-to-use
applications such as mobile deposit,” mobile and digital channel head Brian Pearce said in a statement. "Mobile deposit is a very popular service among our customer base. Customers love the added convenience of depositing checks while on the go.”
The feature can be found in the bank's iPhone and Android apps. Customers choose which account to send money to, plug in the check amount, and take a picture of its front and back.
The technology has grown increasingly prevalent over the past year. Wells was beat out by Bank of America, BB&T, and Charlotte-based NewDominion Bank, among others.
CNBC set up shop in Charlotte on Tuesday to declare the city the nation's second-best for stocks.
Since last November, Charlotte's publicly traded companies have returned an average of 21 percent, Brian Sullivan and the "Street Signs" crew calculated. The financial news network specifically pointed out Bank of America, Lowe's, SPX, Carlisle Cos., Family Dollar and Sonic Automotive as top performers.
Broadcasting from the NASCAR Hall of Fame, Sullivan invoked gold-finding Conrad Reed and called Charlotte the "once sleepy" town that has become "Wall Street South" with "one of the most spectacular skylines in the South." CNBC also made sure to point out the kindness of a woman in a Piggly Wiggly T-shirt who offered them coffee.
Carlisle CEO David Roberts talked about shutting down factories in China and opening them in the U.S. Small business owners also got a plug, Charlotte financial adviser Larry Carroll talked fiscal cliff, and Speedway Motorsports president Marcus Smith discussed Nascar's impact on the economy.
Philadelphia came in No. 3, by the way. The top city should be unveiled tomorrow.
Here's a sampling of Sullivan's tweets from his visit:
Local resident Dottie offering to bring us some coffee as she walked by our taping. ____ folk are so nice. twitter.com/SullyCNBC/stat…
— Brian Sullivan (@SullyCNBC) November 27, 2012
In this town you can apparently take buses a REALLY long way twitter.com/SullyCNBC/stat…
— Brian Sullivan (@SullyCNBC) November 27, 2012
Love this twitter.com/SullyCNBC/stat…
— Brian Sullivan (@SullyCNBC) November 27, 2012
Monday, November 26, 2012
Bank of America's stock price could be set for a steeper skid than any other big bank should Congress fail to reach an agreement on the so-called "fiscal cliff" by the end of the year, analysts with Guggenheim Securities say today.
- Bank of America has fallen farther than its peers the last few times the industry slid.
- While bank stocks have fallen slightly in the last few months, Bank of America's stock has actually increased.
Charlotte-based LendingTree and its parent company Tree.com announced that a settlement has been reached in the company's patent infringement lawsuit against QuinStreet, Inc..
QuinStreet, which operates GuideToLenders.com and HSH.com, will now license LendingTree's technology and no longer question its patent, according to a news release.
LendingTree owns a patent it claims gives it the right to a system that allows people to fill out a single loan application online and have different mortgage companies bid on their business.
The company sued a number of other firms that later started similar loan-matching websites in 2010, and settled with Leadpoint last year. Suits are still pending against Zillow, Adchemy, and Nextag, which all operate similar systems. A trial is scheduled for 2014.
LendingTree has found itself on the other end of patent suits in recent years. In 2010, it paid Source Search Technologies LLC about $9.5 million to settle claims that LendingTree infringed on SST's online transaction patents.
Friday, November 23, 2012
Last Thanksgiving, Bank of America's stock price was near the lowest it had been all year. It had just ceded its title as largest U.S. bank by assets, and was still licking its wounds after a public debacle over a proposed debit-card fee.
The Charlotte bank finds its position a bit brighter this year, and certainly has plenty to be thankful for. But it also has a lot still to do, financially and in terms of winning back the public's favor.
Here are five things the bank is thankful for, and five things Bank of America or the public aren't grateful for.
1) Stock performance. Bank of America's stock has gone from worst to first in the Dow Jones Industrial Average, having gained more than 77 percent so far this year. Sure, it's still under $10, but it now has "buy" ratings from several investment firms. It's up more than 8 percent just in the last week.
2) Capital standing. In deciding how much extra capital the world's largest banks would be required to keep on their books, international regulators cut Bank of America a bit of a break earlier this month. Apparently recognizing the slimming the bank has done, the regulators put Bank of America in a lower tier than its peers JPMorgan Chase and Citigroup.
The Charlotte bank -- subject to change -- would be required to hold only a 1.5 percent extra cushion instead of 2.5 percent. According to the bank's calculations, Bank of America would already comply with all the new requirements not going into effect until the end of the decade. That makes it much more likely the bank will be able to increase its penny-per-share dividend in the coming year.
3) No Bank Transfer Day momentum. After that ill-fated debit card fee, a group of anti-bank activists started an online movement exhorting people to leave banks and join credit unions that gained a lot of national attention. After initially claiming success, it seems the movement has had little to no negative impact on the bank. Bank of America had 1 percent more deposits at the end of the third quarter than it did a year ago, at more than $1 trillion.
4) Technology adoption. Bank of America's customers seem to be gravitating toward its mobile banking platform, which remains one of the biggest in the country. The bank now boasts 11.5 million mobile customers, and is still signing up 50,000 a week. It's also now trying to get a product into small business owners' hands.
5) Moynihan's support. At a time when Citigroup's CEO was forced out and JPMorgan Chase's is still somewhat on the hot seat, the financial community seems to at least tepidly buy in to Bank of America CEO Brian Moynihan's strategy. He may not be President Obama's favorite banker anymore, but investment firm analysts have cited Moynihan's moves as a reason to buy the stock. Hey, he even got an endorsement from Bono.
1) Job losses. You can hardly sing the bank's financial praises without recognizing the hundreds of families the bank has wounded in Charlotte and elsewhere to get there. Bank of America has about 16,000 fewer employees (or 6 percent) today than it did a year ago, and still has more people to lay off.
2) Litigation. There's seemingly no end in sight to the lawsuits being filed against the bank, primarily over allegedly fraudulent information given to firms that bought its mortgage-backed securities. Another was just filed on Wednesday. Its multi-billion settlement of claims the bank lied to shareholders before buying Merrill Lynch wiped out its earnings in the past quarter. Libor-rigging lawsuits could cost the bank more than $4 billion, and Countrywide is still deemed one of the worst business deals of all time.
3) Bad loans. Bank of America still manages more than 900,000 severely (60+ days) delinquent loans, per the bank's last quarterly report. And the bank will be under a good deal more scrutiny in the coming months about how the bank services them as part of the national mortgage servicing settlement.
4) Protests. The bank remains one of the biggest targets for protesters because of its size and the fact that it's responsible for one of the most maligned subprime lenders after buying Countrywide. A group temporarily shut down four Charlotte branches last week while protesting the bank's coal financing. Bank of America also became the victim of a cyberattack that spread to a number of other banks a few weeks ago.
5) Regulations. The banking industry had put a lot of money into helping Mitt Romney and Republicans win election -- which obviously proved unsuccessful. A Republican administration presumably would have weakened the increasingly active Consumer Financial Protection Bureau and been more receptive to scaling back parts of the Dodd-Frank financial reform law that the industry deemed particularly onerous. With Democratic star and outspoken anti-bank figure Elizabeth Warren joining the U.S. Senate, the regulatory environment could get less friendly for the Charlotte bank.
Tuesday, November 20, 2012
The national mortgage settlement progress report yesterday came with an eye-popping number: $26 billion in total homeowner relief.
In reality, they're probably closer to half that.
As we noted, the banks don't get full credit for every form of homeowner help they provide. Take Bank of America. Here's what was reported from them yesterday:
- First-lien principal reduction: $889 million
- Forbearance forgiveness: $231 million
- Second-lien modifications and extinguishments: $2.355 billion
- Short sales completed: $7.435 billion
- Deficiency waivers: $549.9 million
- Borrower transition funds: $66.9 million
- Refinance relief: $53 million
In a quarterly report earlier this year, Wells Fargo disclosed how some of these programs will be credited. Here's what Bank of America's figures look like weighted. Assumptions I've made appear below.
- First-lien principal reduction: $889 million x 100% credit = $889 million (1)
- Forbearance forgiveness: $231 million x 40% credit = $92.4 million
- Second-lien modifications and extinguishments: $2.355 billion x 50% = $1.178 billion (2)
- Short sales completed: $7.435 billion = ($7.435b * .60 * 20%) + ($7.435b * .40 * 100%) = $3.866 billion (3)
- Deficiency waivers: $549.9 million x 10% = $55 million
- Borrower transition funds: $66.9 million = ($66.9m * .60 * 45%) + ($66.9m * .40 * 100%) = $44.9 million (4)
- Refinance relief: $53 million * (unknown) = $53 million
Total: $6.2 billion (approximately)
(1) First-lien principal reduction only gets full credit if the loan-to-value ratio on the home is less than 175 percent. Otherwise, the amount over that gets only 50 percent credit.
(2) Second-lien modifications get different credit depending on how delinquent the loan is and how troubled the borrower's situation is overall. I chose the middle-ground number because of what the bank had already disclosed.
(3) Short sales can be credited between 20 percent and 100 percent depending on who owns the loan and takes the loss. Bank of America has said that 60 percent of its relief is going to investor-owned portfolios, and the rest bank held.
(4) The transition funds are credited similarly to the short sales.
Granted, this is an extremely rough estimation. It's impossible to know exactly where the banks stand until monitor Joseph Smith and his professional firms do the work of crediting everything. The banks also get extra credit for offering relief in the first year of the settlement, as opposed to years two and three.
But the banks' true standing is clearly well behind the large numbers reported yesterday. Still, Bank of America has three years to give about $9 billion in total homeowner relief, so it's making progress.
If you apply the same formula to the whole pie, you get a much more realistic $12.6 billion. About half of what was reported yesterday.
About those short sales
More than half of the relief has come in the form of short-sales, which force the borrower from their home. That seems counter-intuitive to the settlement's stated goal of keeping people in their homes.
The settlement's architects defended the volume of short sales Monday.
"Short sales are very important for the market," Colorado attorney general John Suthers said. "Get (the homes) back on the market, get them purchased by those who can afford to live in them."
By the end of the period, a maximum 40 percent of the total relief can be from short sales.
Principal reduction (either first- or second-lien) must be 60 percent. First-lien must be 30 percent.
FNB United, the Asheboro-based parent of CommunityOne Bank, reported losing $4.7 million in the third quarter, an improvement over a $13.9 million loss it posted in the same time period last year
The bank said it worked off $15 million in problem assets in the quarter, reducing its total by 9 percent. FNB is also cutting costs by closing some branches and reviewing its vendors.
FNB United has been rebuilding after its marriage with Bank of Graniate and recapitalization last year as both banks were deeply troubled.
Monday, November 19, 2012
The analysts at investment firm Stifel Nicolaus upgraded Bank of America shares to a "buy" Monday -- and the bank's shares were up 4 percent by mid-day.
The report says the Charlotte bank will be able to increase its earnings by a greater percentage than its peers once the effects of Bank of America's massive cost-cutting program are finally felt. The bank plans to ultimately cut $8 billion off its annual expenses through streamlining and about 30,000 job cuts.
Stifel also said it liked the bank's capital position and expects a dividend increase.
"BAC is actually better positioned for the current environment than many banks that have already bled the loan loss reserves dry, have little exposure to mortgage origination and debt underwriting in the low interest rate environment, and have no material expense reductions on the horizon," the analysts wrote.
The analysts set a target price of $11 per share. It's currently around $9.50.
Bank of America announced Monday that Linda Lee Stanley will become the bank's commercial banking market executive for North Carolina and South Carolina.
The unit provides services like treasury management and credit to middle-market businesses earning between $50 million and $2 billion in annual revenue.
Previously, Stanley had been a senior client manager for Bank of America Merrill Lynch in the Southeast, primarily serving middle-market energy companies.
Friday, November 16, 2012
Greenville, S.C.-based CertusBank will assume the deposits and assets of a failed Georgia bank, the FDIC announced Friday.
CertusBank, which has about $2 billion in assets and 31 offices, is run by former Bank of America and Wachovia executives. It has a corporate office in SouthPark.
Branches of Hometown Community Bank of Braselton, Ga., will open as CertusBank branches Monday. CertusBank had previously bought three other failed banks in South Carolina and Georgia.
Wells Fargo will hold a number of interviews for mortgage underwriter positions later this month in Charlotte, the bank said Friday.
The event will be held at the Charlotte Marriott Executive Park near I-77 and Tyvola Road. People interested must schedule an interview by applying for positions online with the requisition numbers 3682567 or 3682470.
Thursday, November 15, 2012
George K. Baum & Co., a Kansas City-based investment bank, announced Thursday that it has opened an office in Charlotte specializing in public finance.
It will be led by David Adams, a newly appointed senior voice president for the Southeast, who has extensive experience in education finance. He's led financing for schools including Davidson College, N.C. State University, UNC-Wilmington and High Point University.
The firm has office space in 112 Tryon Plaza, according to its website.
In September, fellow investment bank Banks Street Partners said it was opening a Charlotte office.
Albemarle-based Uwharrie Capital Corp. plans to issue new preferred stock this quarter that will be used to pay back its federal bailout money it received from the Troubled Asset Relief Program, the bank said Thursday in a quarterly report to shareholders.
"If we are going to be paying dividends on preferred stock we would prefer to pay them to you and your neighbors," CEO Roger Dick wrote in a letter. His bank had received $10.5 million.
"An important benefit of refinancing the Treasury’s preferred stock is that instead of the dividend going out of our communities to Washington, it will directly benefit local market residents, creating our own economic 'stimulus' if you will."
The U.S. Treasury said Wednesday that it would auction off the TARP investment remaining in Charlotte-based Bank of Commerce and Lincolnton-based Carolina Trust Bank.
The Securities and Exchange Commission has received 67 whistleblower complaints from North Carolina in the past year, the regulator said in its annual report released Thursday.
That tied the state for 10th-most in complaint volume, with Arizona. South Carolina was the source of 21 complaints. The SEC received a total of 3,001 complaints.
The regulator's Office of the Whistleblower is a requirement under the Dodd-Frank financial reform law. The law also allows the government to pay the whistleblower a percentage of any penalty extracted from the company. The first whistleblower payment was $50,000.
The largest category of complaints were about corporate disclosures and financials, with 18 percent of the total. Fraud came in second with 15.5 percent.
The largest number of complaints, 435, came from California. New York was second, with 236.
U2 frontman Bono and Bank of America frontman Brian Moynihan shared a stage as "two rock stars" earlier this week at Georgetown University.
And the CEO got a bit of praise from the Irish rock legend, calling him a "very special man" and "a gentleman in a world where that quality isn't always on tap."
"I certainly can't partner with Bono in a studio, but I can partner with him to make the lives of millions better around the world," Moynihan said.
You can watch the event here. Here's a copy of Moynihan's prepared remarks.
Wednesday, November 14, 2012
Bank of America said Wednesday that it has now offered $15.8 billion in relief to more than 160,000 households as part of the national mortgage servicing settlement announced early this year.
Of that, about $4.75 billion was in first-lien mortgage principal forgiveness, senior vice president Eric Telljohann said on a conference call with reporters. The most relief, at $7.4 billion, remains through short sales, though he said that mix should change over the next few months.
The bank also said it is in "effective compliance" with the hundreds of new servicing rules it agreed to as part of the settlement, which includes a "single point of contact" system for homeowners behind on their mortgages. Each contact is responsible for 70 to 75 mortgages, Telljohann said in a Q&A session.
In the last few months, the Charlotte bank has sent letters to hundreds of thousands of homeowners offering relief.
"That momentum is not slowing down, and in fact, it's accelerating," Telljohann said.
It is unclear, however, where the bank stands in its $11.8 billion commitment as part of the settlement because not all forms of relief are given full dollar-for-dollar credit.
Bank of America, Wells Fargo, Citigroup, JPMorgan Chase and Ally Financial were required to file their latest progress reports Wednesday on foreclosure prevention efforts to the monitor of the mortgage settlement, Joseph Smith.
Smith, the former N.C. banking commissioner, is expected to review the filings and release a report by early next week.
Fifth Third Bank announced Wednesday that it is jumping into the prepaid debit card market, joining an increasingly crowded field of banks and retailers targeting lower-income customers who don't want a traditional checking account.
The Access 360° card has a fee schedule in line with the rest of the industry. There is a $7 monthly service fee, which is cut to $4 if the customer puts at least $500 on the card per month. Customers do not need to pay to reload the card. A $25 deposit is required to get a card.
Tuesday, November 13, 2012
Bank of America, Wells Fargo and the three other banks part of the $25 billion national mortgage settlement are scheduled to file a progress report Wednesday on what aid they've given homeowners so far.
Mortgage settlement monitor Joseph Smith, formerly the N.C. banking commissioner, will then analyze the reports and is likely to release the results next week.
The last report was released in August, and showed that progress on helping North Carolina homeowners had been slow. It also showed that Bank of America had yet to offer principal reduction to any of its homeowners by the end of June.
The Charlotte bank has since announced several programs offering principal reduction.
Bank of America is expected to release some of its data to the public Wednesday afternoon.
Called "Mobile Pay on Demand," the system allows businesses to accept payments through their smartphone or iPad through a secure card reader that plugs in and free app.
The company will not charge monthly fees. Businesses will pay 2.7 percent per swipe. The service will be available starting Dec. 3.
“In today’s economic environment, small businesses are looking for secure, easy and portable ways to confidently accept payments beyond cash, and promote their business to a broader customer base,” said Tom Bell, CEO of Bank of America Merchant Services. “We are making it even easier for small business owners to accept secure payments anywhere."
Bank of America Merchant Services is a privately held company jointly owned by the Charlotte bank and First Data Corp.
Square, which processes about $8 billion in annual payments, has about 5,000 customers in the Charlotte area. PayPal, Intuit, Groupon and Google also have products in the space.
Thursday, November 8, 2012
Park Sterling Bank announced Thursday that it has named Bank of America's Judy Wishnek as its new Charlotte market president.
Wishnek will be responsible for commercial banking in the Charlotte region for Charlotte-based Park Sterling. She had been a business banking market manager for Bank of America. Before that, she was an executive at Wachovia and PNC Bank.
“We are delighted to have Judy join our management team," CEO Jim Cherry said in a statement. "In addition to proven leadership, banking experience, and market knowledge, she brings a demonstrated commitment to community service and involvement."
Wednesday, November 7, 2012
Bank of America shares, along with most other Wall Street stocks, opened considerably lower Wednesday as investors reacted to the election results.
Unsuccessful Republican candidate Mitt Romney had pledged to roll back a number of the provisions of the Dodd-Frank financial reform law, which the banking industry has spent considerable effort fighting. A Republican victory was also expected to considerably weaken the fledgling Consumer Financial Protection Bureau.
On top of that, Democrat Elizabeth Warren, one of Wall Street's chief critics, won her Senate race against incumbent Scott Brown.
Bank of America shares were down more than 5 percent. Wells Fargo fell 3 percent. All 30 companies in the Dow Jones Industrial Average were down as of 11 a.m.
Tuesday, November 6, 2012
Bank of America has extended its automatic fee-waivers in states hit by superstorm Sandy through Wednesday.
The Charlotte bank said it will refund overdraft, debit card replacement, early CD withdrawal, cash advance and late payment fees for customers in the following areas:
- New Hampshire
- New Jersey
- New York
- Rhode Island
- Washington D.C.
- West Virginia
Monday, November 5, 2012
In its first full quarter since selling its mortgage origination business, Charlotte-based Tree.com posted a profit of $4.4 million, two-thirds less than the same time period a year ago.
The company is best known for its LendingTree mortgage website, but also operates sites listing colleges and home improvement services.
Tree.com sold its mortgage origination business last quarter to Discover Financial for nearly $26 million as the company seeks to return to a strictly lead-generation business.
The company said that without taking its discontinued mortgage business into account, its financial performance has been improving.
"Tree delivered another great quarter. This was our first full quarter as a pure-play performance marketing company and we grew both top- and bottom-line," CEO Doug Lebda said in a statement. "We continue to leverage our brands to drive consumers to our sites and provide quality leads to our clients."
Charlotte-based First Trust Bank reported net income of $929,000 in the third quarter, 35 percent less than the $1.42 million profit it posted in the same time period last year.
But the bank's percentage of bad loans continued to fall, hitting 5.6 percent of total assets from 8.7 percent at the end of last year.
High Point-based BNC Bancorp announced in June that it would acquire First Trust Bank in a cash and stock deal. It is scheduled to close in the fourth quarter.
Friday, November 2, 2012
Bank of America chief financial officer Bruce Thompson told investors Friday that he expects the volume of litigation filed against the bank to soon "quiet down."
He said that the majority of lawsuits faced by the Charlotte bank come in the mortgage realm and deal with loans made between 2005 and 2008. Federal suits on mortgage issues must be filed within three years, Thompson said, and state suits have a six-year window.
"You clearly expect, for us, for litigation to continue to quiet down," Thompson told investors at the BancAnalysts Association of Boston Conference. "We continue to work very hard to put these legacy issues behind us."
Thompson also tried to impress upon investors that the bank was in a position to increase its revenue going forward. After acknowledging that he frequently hears that investors worry that the shrinking Bank of America has less ability to make money, Thompson said that taking out one-time accounting charges, Bank of America brought in slightly more money in the third quarter than it had the year before.
"We're at a point where you should judge us on how we're doing going forward," Thompson said.
Charlotte-based Park Sterling Corp. announced Friday that it earned $620,000 in the third quarter, or 2 cents per share, and said it would use its better financial performance to buy back a significant percentage of its stock.
The bank's third quarter performance compares with a loss of $1.4 million in the same quarter a year ago. CEO Jim Cherry said in a statement that the difference came from setting aside less for bad loans and mortgage banking income.
Park Sterling also completed its merger with Citizens South Banking Corp. in the quarter.
The bank now has authorization from its board to buy back 2.2 million common shares, or 5 percent of its outstanding shares, over the next two years.
"This new share repurchase authorization reflects the confidence our board of directors has in Park Sterling's financial position and growth outlook, as well as their commitment to enhancing shareholder value," Cherry said in a statement.
Thursday, November 1, 2012
Bank of America could be forced to hold an extra 1.5 percent of top-quality capital as a systemically important financial institution, global regulators announced Thursday. That's significantly less than the 2.5 percent surcharge the bank could have faced.
Essentially, this additional capital buffer is an attempt to provide more of a cushion against losses in the event of another global financial crisis. Regulators have been devising the plan for about a year. The numbers will be revised again next year, and won't begin to phase in until 2016.
JPMorgan Chase and Citigroup are among four global banks facing the top capital charge of 2.5 percent. Some analysts had expected Bank of America to fall in that category.
The bank had not released an estimate for where it thought it would fall, and did not comment on the decision Thursday.
As it stands, Bank of America would already comply with all its new capital requirements. The bank has been shedding assets and business lines over the past several years, and reported a Tier 1 common capital ratio of 8.97 percent at the end of the third quarter.
Bank of America's stock rose more than 4.5 percent Thursday, to $9.74. It had edged up slightly higher in after-hours trading, as of 5 p.m.
Every chance they get, investors quiz Wells Fargo executives on just how much longer the bank can make so much money in the mortgage business.
BB&T announced Thursday that it will double its banking presence in Texas, adding 30 branches in four cities next year.
The expansion will be in Dallas/Ft. Worth, Houston, San Antonio and Austin, the bank said. The new branches still must be approved by regulators.
"The BB&T brand is gaining great traction in Texas, and our success with the community bank has been truly phenomenal," BB&T Texas region president Kay St. John said in a statement. "These four cities are densely rich commercial and small business markets representing many of the highest potential growth areas within BB&T's entire footprint."
The Winston-Salem bank will look to occupy vacant office space rather than build new branches. The $40 million investment is expected to add 150 jobs.
BB&T's deposits in Texas have grown nearly 70 percent in the last three years, the bank said. It now has $1.65 billion in loans in the state as well, and about 200 community banking employees at 27 branches.
The bank entered Texas through its 2009 acquisition of Colonial Bank.
BB&T has about 1,200 employees in Texas overall, including auto loan call centers and offices and insurance operations.
Wednesday, October 31, 2012
Bank of America and Wells Fargo have each announced they are donating $1 million toward Hurricane Sandy relief.
Bank of America's donation includes $500,000 to the American Red Cross hurricane fund. The other half will be given to national, regional and local nonprofits, the bank said.
The Charlotte bank is also refunding some overdraft fees and ATM fees incurred by customers because of the storm. Other customers affected can get credit line increases or avoid early withdrawal penalties on CDs.
“We have customers and employees throughout the hardest hit region and their safety is our main consideration,” CEO Brian Moynihan said in a statement. “As we do what we can to help them through this, we also are doing our part to help get relief to communities affected."
Wells Fargo is giving $250,000 to the American Red Cross and will divide the remaining $750,000 among nonprofits as needed, the bank said. Wells will also collect Red Cross donations at its ATMs.
The bank is also expanding its mobile deposit service into the affected states and is waiving late fees for credit cards and loans, as well as ATM fees, for affected customers.
Financial markets reopened Wednesday morning, and the Dow average was largely unchanged by midday.
Bank of America also reopened branches in Connecticut, Massachusetts, Rhode Island, Maine, New Hampshire, Maryland, Pennsylvania, Delaware, Virginia, Washington D.C. and upstate New York.
Tuesday, October 30, 2012
U.S. financial markets are closed again Tuesday, the longest shut-down due to weather since 1888, Bloomberg reports.
Many traders and other bankers in the Northeast are staying home as flooding subsides and the region takes stock of the damage.
Bank of America branches in all or parts of 10 states and the District of Columbia are closed. A number of Merrill Lynch Wealth Management offices are closed as well.