Federal-state dispute means two exams for N.C. credit unions

A dispute between the federal and N.C. regulators who oversee credit unions means that all of North Carolina's state-chartered credit unions will now receive two full annual examinations.

Credit union associations decry that decision as burdensome and are pushing for a resolution.

When credit unions are examined, they are given a score known as a CAMEL rating, which looks at its capital, assets, management, earnings and liquidity. Federal credit unions, like Charlotte Metro Credit Union, are examined by the National Credit Union Administration. State-chartered institutions are examined by the N.C. Credit Union Division, which is supported by the NCUA.

In September, the State Employees Credit Union wanted to publicly release its CAMEL rating. Upon advice from the state attorney general's office, the N.C. Credit Union Division gave it authorization to do so.

But while not prohibited by state law, federal rules to prevent credit unions from releasing their examination scores.

"This is an unacceptable release of exempt records," NCUA regional director Herb Yolles wrote in a letter to the CEOs of North Carolina credit unions, dated Jan. 12. The only solution, he said, is for the NCUA to perform independent examinations on North Carolina's state-chartered credit unions.

The N.C. Credit Union League will be holding a special meeting on Wednesday to discuss how to resolve the issue and protect credit unions, league president John Radebaugh said. Examinations require credit unions to expend considerable time and resources.

"It's unacceptable that they have two separate exams now," he said. "It has nothing to do with safety and soundness."

There are 52 state-chartered credit unions that serve 2.1 million people. A number of them are based in Charlotte, including First Legacy Community Credit Union, Carolina Postal Credit Union and Blue Flame Credit Union.

Carolina Premier Bank buying two S.C. branches

Charlotte-based Carolina Premier Bank announced today that it has agreed to buy two South Carolina branches in its first expansion into the state.

Pending regulatory approval, Carolina Premier would take over two branches from The Palmetto Bank, one in Rock Hill and one in Blacksburg. That would double the number of branches the bank operates.

Carolina Premier would assume all assets and liabilities of the two branches. The terms of the deal were not disclosed, but the bank said its assets after the deal would be about $250 million. Its assets currently are about $200 million.

Carolina Premier is a community bank serving individuals and businesses. It has two branches in south Charlotte, and is building a branch Uptown.

In the spring of 2011, it became a subsidiary of a Washington-based holding company in hopes of expansion.

In today's news release, CEO John Kreighbaum said the bank still has plans of becoming a regional bank in the Mid-Atlantic and Southeast regions, particularly the Washington, D.C., metro area.

Greenville, S.C.-based Palmetto Bancshares Inc., had previously announced its intentions to sell or consolidate four of its branches as part of its goal to return to profitability in 2012.

Rock Hill branch

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Blacksburg branch

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BNC Bancorp reverses 4Q results

High Point-based BNC Bancorp posted a fourth-quarter profit of $797,000, or 8 cents per share, for common shareholders, it reported today.

That's up from a loss of $6.7 million, or 61 cents per diluted share, for the same period in 2010. The parent company of Bank of North Carolina, which opened its first Charlotte branch in recent weeks and is building a regional headquarters in SouthPark, also turned a profit for the year: $4.5 million for common shareholders, or 45 cents per share, down 18 percent from 2010.

Acquisitions played a big part in the growing company's results. BNC Bancorp incurred $723,000 of one-time expenses associated with merger and acquisition activities in the fourth quarter, for instance, it reported.

The company's assets grew 14 percent last year to $2.45 billion, due to organic growth in North Carolina and assets from the acquisitions of Blue Ridge Savings Bank and Regent Bank of South Carolina. The bank has been expanding in recent years with the help of a $35 million investment in June 2010 from New York private equity firm Aquiline Capital Partners, where former Wachovia chief executive Ken Thompson is a senior adviser.

Thompson now sits on BNC Bancorp's board of directors.

Loans and deposits grew last year and credit improved, though the company is still looking for improvement in its loan portfolio, CEO W. Swope Montgomery Jr. said.

Morning roundup: Small banks stronger than big banks?

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

• Analyst Chris Whalen says smaller banks are stronger than big banks, praising those that practice old-fashioned lending and avoid risky moves, the New York Times reports. Now, he's setting up an investment fund focused on small and midsized banks.
• The Federal Reserve's forecast of nearly three more years of "exceptionally low" rates has left some economists scrambling to figure out what the Fed means, Reuters reports.
• Stocks were climbing this morning after European countries agreed to tighter budget controls and Greece made progress on debt talks, Bloomberg writes.
• The New York Times reports Wall Street bankers found an ally in their fight against the Volcker Rule, the piece of Dodd-Frank that prohibits banks from making risky bets with their own money, in Davos: foreign governments.
• Finance industry gossip site DealBreaker is watching for more investment-bank layoffs at Bank of America this spring.
  

Will optimism curb market rally?

Stock markets have posted gains so far this year, but investors should avoid getting too comfortable, a Robert W. Baird & Co. analyst said in a research note today.

Stocks have risen on the promise of continued support from the Federal Reserve, and "while stocks no longer benefit from the widespread pessimism and oversold conditions that were present at the mid-December lows," popular averages are gathering momentum, chief investment strategist Bruce Bittles said.

"Absent excessive optimism, the path of least resistance for stocks in the near term is higher," he said. But he cautioned that the S&P 500 is overbought after a big rally in the last few weeks, and a turn for the worse in Europe could prompt another sell-off.

Stocks fell today amid continued worries about European debt. Still, "sentiment has not yet become problematic, and with the improvements being seen in the broad market, truly excessive optimism may be necessary to raise a caution flag," Bittles said.

The analyst rated some sectors a "buy," including industrials and consumer staples. Financials earned a "hold" rating, though Bittles said trends in the sector are still improving.

Analysts call loan growth a 'bright spot' for large regional banks

Loan growth in the fourth quarter was a "bright spot" at large regional banks like Wells Fargo and BB&T, analysts with Keefe, Bruyette and Woods said in a research note published today.

The 15 large regional banks under their coverage grew loans an average of 3 percent from the year before, and 2 percent from the quarter before, KBW said. Of the regional banks, 11 posted year-over-year loan growth, and 13 had quarterly loan growth.

Out of all 130 banks KBW follows, banks posted an average loan growth of 1 percent, with 55 percent having year-over-year growth and 64 with quarterly growth.

Analysts have called loan growth a key metric to determining whether the economic recovery is gaining traction.

Research firm says 610,000 switched banks because of Bank Transfer Day

Javelin Strategy and Research says 5.6 million people changed their banking institutions in the last 90 days of 2011, with 11 percent -- or 610,000 people -- citing Bank Transfer Day as their reason.

Bank Transfer Day, which officially took place Nov. 5, was a social-media-driven backlash against big banks, and encouraged people to switch their deposits to a community bank or credit union.

The Credit Union National Association initially reported gaining 650,000 new members in October, but later drastically reduced the estimate to 214,000.

Javelin's online survey reached about 6,000 in December. The firm says the pool was selected to be representative in gender, age, income, and ethnicity.

The 610,000 who left because of Bank Transfer Day was a threefold increase over the number who left their banks for similar reasons in the previous 90 days, Javelin says.

More people -- 26 percent of those who switched banks -- did so because of fees, Javelin reported.

While Javelin reports the impact as measurable, it did not add up to a significant outflow for the big banks.

Bank of America, for example, reported in a fourth-quarter earnings conference call that account closings spiked 20 percent in the period after its failed debit-card fee announcement and Bank Transfer Day. But the Charlotte bank's average checking and savings account balances were down less than half a percent from the quarter before.

Charlotte firm named a top emerging investment adviser

Charlotte-based Novare Capital Management has been named one of the top emerging Registered Investment Adviser in this month's Financial Planning Magazine.

The designation goes to firms whose assets under management have grown more than 30 percent since December 2008. Novare, founded in 2000, grew 113 percent between December 2008 and the end of 2010, according to the magazine's data, reaching $385 million in assets under management.

Novare now has $460 million under management spanning 190 families, the firm reports.

"We are very happy with our growth over the last few years, and the most important measure of success is seeing our clients' success and their confidence in our firm," managing director and co-founder Don Olmstead said in a statement.

Morning roundup: BofA Merrill Lynch has new leadership structure

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

• Bank of America's investment bank shook up its leadership Sunday night, naming Christian Meissner its sole head. Sources told the Wall Street Journal, which first had the news, that the move was a way for co-COO Tom Montag to simplify his part of the bank. Other co-COO David Darnell took similar actions in October.
• The New York Times takes a look at the exposure to troubled European countries at five large U.S. banks. Collectively, the banks hold $80 billion in exposure, but hedges reduce that to $50 billion, the newspaper's analysis shows.
• Banks are lobbying federal regulators in hopes of exempting much of their derivatives trading from the Volcker Rule, part of the Dodd-Frank financial reform law, that restricts proprietary trading, Bloomberg reports.
• Rising bank stocks could be an indicator of economic recovery, but some analysts are skeptical that it can continue, the Wall Street Journal reports. Bank of America's stock is up more than 30 percent this year after losing 58 percent of its value in 2011.

N.C. bank expands in Charlotte

A growing High Point bank has established its first branch in Charlotte and begun construction on a second, which will become its regional headquarters.

Bank of North Carolina opened a branch near Carmel Road and N.C. 51 about two weeks ago, shortly after work started on a 12,000-square-foot space in SouthPark. That location, which will be finished in October, will serve as the bank's southern region headquarters, regional executive Rob Ellenburg said.

"It's been really good to get that dirt turning and go from there," he said.

Bank of North Carolina, part of BNC Bancorp, has been expanding in recent years, adding new N.C. branches and buying a failed bank in Myrtle Beach. In June 2010, it landed a $35 million investment from New York private-equity firm Aquiline Capital Partners, where former Wachovia chief executive Ken Thompson is a senior adviser. Thompson now sits on BNC Bancorp's board of directors.

The new Charlotte branches join an existing commercial lending office on Fairview Road, which has eight employees, mostly commercial lenders, loan assistants and private bankers, Ellenburg said.

Bank of North Carolina, which has about $2.2 billion in assets, plans to grow further in the region, likely adding "spokes in the wheel" around the SouthPark location, he said.

The bank's other locations in the area include branches in Mooresville, Concord, Harrisburg and Salisbury.

Morning roundup: Arizona AG says Bank of America is hampering its investigation

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

• Arizona's attorney general's office says Bank of America is hampering its investigation into lending practices by requiring homeowners to agree not to criticize the company to get a mortgage modification, Bloomberg reports. The bank says that's not true.
• Fortune magazine calls Bank of America the "turnaround challenge of the century."
• Austerity is the buzzword among the world's bank executives at the World Economic Forum in Davos, Bloomberg says.
• In a year in which hedge funds lost an average of 5 percent, the world's largest one gained 23 percent. The New York Times discusses its strategy.
• Discover Financial says a Consumer Financial Protection Bureau probe into its marketing affected its profitability last quarter, Bloomberg reports.

Wells Fargo names community banking president for South Charlotte region

Wells Fargo has named Leigha Smith its community banking president for the South Charlotte area.

Smith graduated from Appalachian State University and joined Wachovia in 1989 as a teller, advancing to her most recent role as Wells Fargo district manager for Cabarrus County.

She will now focus on sales and service at branches in southern Mecklenburg County, Union, Gaston, and Cleveland counties in North Carolina, as well as York and Lancaster counties in South Carolina.

“Leigha’s leadership abilities and experience are perfectly suited to continue the momentum we have built toward being the company of choice in Charlotte for employees and customers,” said Kendall Alley, Charlotte community banking regional president, in a statement.

Morning roundup: Forbes calls Wells Fargo "The Bank that Works"

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

• The Feb. 13 issue of Forbes features a cover story about Wells Fargo - declaring the San Francisco bank, which bought Charlotte's Wachovia in 2008, "The Bank that Works."
• The Wall Street Journal offers a breakdown of how Mitt Romney's income compares to the biggest names on Wall Street. It shows he made more in investment income last year than top executives at big banks, including Bank of America.
• Ben Bernanke has laid the groundwork for a third round of large-scale asset purchases if the economy worsens, with some analysts predicting the move will occur this spring, Bloomberg reports.
• A "Buffett tax" on high-earning households is unlikely to be implemented before the November elections, the New York Times writes.
• U.S. stocks are up this morning after news of an extended easy monetary policy from the Federal Reserve, strong corporate earnings and promising economic data, Reuters reports.
  

FINRA fines Merrill Lynch $1 million over 2009 bonus structure

The Financial Industry Regulatory Authority announced Wednesday that it has fined a Merrill Lynch broker-dealer subsidiary $1 million over claims the company failed to mediate disputes with employees over bonuses.

FINRA is a private company that policies brokerages and exchanges. Merrill Lynch, Pierce, Fenner & Smith accepted the penalty without admitting or denying the claims, according to the settlement agreement.

In January 2009, after Bank of America acquired Merrill Lynch, the investment bank started a $2.8 billion bonus program to retain employees, but had them agree to waive their rights to arbitrate disagreements, according to FINRA. That breaks FINRA rules, the agency said.

Merrill also structured the bonus program as a loan from an affiliate instead of the firm itself. When some employees left the company, Merrill Lynch used New York state courts to seek repayment instead of arbitration, FINRA said.

"Merrill Lynch specifically designed this bonus program to bypass FINRA's rule requiring firms to arbitrate disputes with employees, and purposefully filed expedited collection actions in New York State courts and denied those registered representatives a forum to assert counterclaims," FINRA enforcement chief Brad Bennett said in a statement.

Ex-Panther's private equity group buys Wild Wing Cafe

Axum Capital Partners, a Charlotte private equity firm co-owned by former Carolina Panther Muhsin Muhammad, announced Wednesday that it has bought a controlling stake in Wild Wing Cafe, the South Carolina-based chain of sports bar-restaurants.

Wild Wing Cafe has 32 restaurants in seven states, 11 of which are corporate owned, the rest franchised. Three are in Charlotte. Collectively, the system generated $100 million in revenue in 2011, Axum reported.

The terms of the deal were not disclosed, but it was financed by debt from Fifth Third Bank.

Axum Capital's other partners include Edna Morris, the former president of Red Lobster; Raymond C. Groth, who headed mergers and acquisitions for First Union/Wachovia; and Denis Ackah-Yensu, formerly of McColl Partners.

Morris will be the interim CEO of Wild Wing Cafe.

“Wild Wing Café provides Axum with a proven and well-run concept allowing for strong growth in existing and new markets,” Morris said in a statement. “Our experienced management team has over 120 years of restaurant experience. With Wild Wing’s broad demographic appeal, quality food and superior service, we believe that the concept will sustain and continue to strengthen its competitive position.”

Cecil and Dianne Crowley, who founded Wild Wing Cafe in 1990, will keep an ownership stake and serve on the company's board.

Morning roundup: Moynihan defends BofA's size

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

• In Switzerland, Bank of America CEO Brian Moynihan said his bank and other big banks reflect the economies they work in, MarketWatch reports. He also defended BofA's size, saying it's necessary to support customers in different economies.
• Bank of America is warning investment bankers that they could see a 25 percent pay cut this year, in salary and bonus, Bloomberg says.
• In the State of the Union address last night, President Barack Obama proposed mortgage legislation that would help underwater homeowners with privately owned mortgages to refinance into FHA-backed loans, The New York Times reports.
• Bank lending was up in the fourth quarter, but what should we make of it? The Motley Fool ponders.
• The new head of the Consumer Financial Protection Bureau said he supports exemptions to new regulations for small banks, Bloomberg reports. Richard Corday made the remarks on a conference call with trade group Independent Community Bankers of America.

Bank deposit interest rates post record decline

Interest rates on bank deposits have been falling since August 2007 - the longest and steepest decline in the past 20 years, a banking research firm found.

Market Rates Insight, a California firm that analyzes bank pricing, reports rates have been declining for 53 consecutive months, during which the annual percentage yield fell 3.4 percent, or 85 percent in return value.

The second-longest period of declining rates occurred between November 2000 and July 2003, when the annual percentage yield fell about 2.9 percent. Historically, it has taken an average of two years for deposit rates to begin climbing again after a decline cycle, the firm found.

"The length and severity of the current decline cycle in deposit rates is an indication that the last recession was different than previous recessions in the past 20 years," Market Rates Insight executive vice president Dan Geller said.

Bank of America to test reward program based on spending history

Bank of America will begin testing Wednesday a program that will give cash discounts to debit and credit card users who take advantage of deals offered them based on their spending history.

Known as BankAmeriDeals, the program hopes to "deepen relationships" with customers and help the bank acquire new ones, spokeswoman Tara Burke said.

The bank will determine deals for customers based on their spending history. It will let customers know what deals are available to him or her through its online banking site, and through text and mobile alerts.

The customer will then pay full price at the participating retailer, and get a cash payment at the end of the month.

The deals are negotiated with retailers through rewards company Cardlytics. Bank of America will not share customer data with the company, Burke said.

The trial starts with bank employees in North Carolina, South Carolina and Nevada on Wednesday. It will be available to all employees by late February, Burke said. It is unclear when the service will be made available to non-employees.

Bank of America CEO Brian Moynihan has cited deepening relationships with customers multiple times as the bank's strategy toward mitigating the impact of recently imposed swipe fee caps on debit card transactions. The bank has also increasingly touted its mobile and online banking.

Bank of Commerce posts $847,000 loss

Charlotte-based Bank of Commerce reported its third consecutive quarterly loss in the fourth quarter, posting an $847,000 loss as the bank continued to set aside money to cover loan losses.

The loss compares with a $1.3 million loss in the same time period last year, and a $737,000 loss last quarter.

In 2011, the bank's assets shrunk 15 percent as it took losses on foreclosed properties, charged off bad loans and put aside money to cover loan losses. Bank of Commerce's full-year loss was $1.8 million, compared with $1 million in 2010.

“In 2011 we continued to work diligently on improving asset quality by charging down balances on loans where repayment may be partially or fully dependent on the sale of real estate," CEO Wes Sturges said in a statement. "We remain well capitalized and are positioned to serve the borrowing needs of our small business customer in 2012."

People feel less financially secure than last year, Bankrate says

Americans feel slightly less financially secure than they did a year ago, with retirees among the groups feeling the most insecure, according to an index compiled by research firm Bankrate.com.

But the January results marked the second straight month Bankrate's financial security index increased.

Some results:

• 41 percent felt less secure in their savings than last year, with 14 percent feeling more secure.
• 20 percent felt their job security had increased, with 17 percent thinking it had decreased.
• 28 percent felt their overall financial security had decreased, 23 percent said it had increased.

"From last year to this year, nothing has really changed," said Robert Fragasso, CEO ofFragasso Financial Advisors in Pittsburgh, in a statement reported by Bankrate. "There has not been a tremendous amount of improvement in the economy; the economy has gone sideways. People are still apprehensive about the future and concerned with jobs. And they are definitely concerned with political inaction. The good news is that their feelings didn't get worse."

Bankrate's index is compiled from results of a survey conducted by Princeton Survey Research Associates International, which asks a sample of 1,000 adults five questions each month plus a "wild card" question that changes seasonally. The margin of error is plus or minus 3.9 percentage points.

Citizens South promotes new chief risk officer

Citizens South Banking Corp. announced Monday that it has named Ira M. “Don” Flowe, Jr., as its new executive vice president and chief risk officer.

Flowe has worked at the Gastonia-based bank since 2004, and most recently served as senior vice president and commercial banking group manager, the bank said in a news release.

Citizens South reported Monday a loss of $2.3 million in the fourth quarter.

Morning roundup: Moynihan faces legal fallout from Merrill deal

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

• Bank of America CEO Brian Moynihan is expected to be deposed in coming months in a string of civil lawsuits involving the bank's handling of its takeover of Merrill Lynch & Co. in 2009, the Wall Street Journal reports. The depositions would be the first for Moynihan since replacing Ken Lewis, who engineered the Merrill deal.
• Citigroup CEO Vikram Pandit is one of six co-chairs of the World Economic Forum's annual meeting in Davos, Switzerland - the first from a U.S. bank since JPMorgan Chase's Jamie Dimon in 2008, Bloomberg writes. He leads a delegation that includes top U.S. bank officials, including BofA's Moynihan.
• U.S. stocks are trading at their cheapest levels since at least 1990, CNBC reports. That could mean a big increase in the markets this year, according to one research firm.
• Stocks fell this morning amid continued concerns about Greece's debt crisis, Reuters reports.
• Bank of America continues to be a winner in the markets, with shares rising 3 percent to $7.25 Monday. The Street weighs in on why - and whether the rally will continue.
  

Forgiving principal would cost Fannie, Freddie $100 billion

The regulator of Fannie Mae and Freddie Mac says it would cost $100 billion to reduce the principal for its underwater homeowners to the value of their homes, according to a letter to a Congressman released Monday.

In November, Rep. Elijah Cummings, a Maryland Democrat and the ranking member of the Committee on Oversight and Government Reform, asked the Federal Housing Finance Agency to produce documents explaining why it doesn't use principal reduction as a method of foreclosure prevention.

“For too long now,” Cummings said in a public statement at the time, “we have heard superficial excuses about why principal reduction programs are not feasible at Fannie Mae and Freddie Mac, despite a growing chorus of economists and other experts who believe these programs serve the long-term interests of taxpayers."

Fannie and Freddie, government-sponsored entities created to add liquidity to the mortgage market, own more than 30 million mortgages, about half of the U.S. market.

In response, acting director Edward J. DeMarco cited several staff analyses to conclude that principal forgiveness costs the taxpayer more than principal forbearance, which defers payments and adds them to the balance of the loan.

As of June 30, GSEs had about 3 million underwater mortgages, DeMarco wrote. Reducing the principal of all those loans to the homes' value would cost $100 billion, which ultimately would come from taxpayers.

But of those 3 million mortgages, 80 percent of borrowers were current with their payments.

"Fannie Mae and Freddie Mac already offer a loan modification option that reduces monthly payments to an affordable rate using principal forbearance– the same monthly payment that would be in place with forgiveness - and this is most consistent with FHFA obligations as conservator," DeMarco wrote.

DeMarco noted that homeowners with privately owned mortgages are in worse shape: more likely to be underwater and more likely to be delinquent on payments.

Both Bank of America and Wells Fargo have said they offer principal reduction in some instances.

Morning roundup: Small banks charging swipe fees three times as high as big banks

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

• Some small banks are now charging merchants three times as much on debit card swipes than their big-bank brethren, the Wall Street Journal reports. The discrepancy is a result of the Dodd-Frank financial reform law's Durbin amendment, and big banks aren't happy.
• A former Boston Red Sox catcher has won a case against his Merrill Lynch adviser, The New York Times reports. The ballplayer claimed the adviser put his money into unsuitable investments.
• The surge in bank stocks (Bank of America, for example, is up nearly 30 percent year-to-date) might not last, a Reuters columnist says. Many banks core earnings were down in their fourth-quarter financial reports.
• The IMF is urging European countries to increase the bailout funds that could be used to bolster the continent's ailing financial sector, The New York Times says.
• A number of California-based start-ups are developing programs that would help banks better evaluate borrower candidates, Bloomberg reports, using more relevant data than FICO scores.

Bank of America shrinks for first time in a decade

In 2011, Bank of America shrank for the first time in a decade.

By selling non-core assets, reducing debt and otherwise streamlining the business, the Charlotte-based bank reduced its total assets by 6 percent in 2011, according to financial statements released Thursday. That brought its assets to $2.13 trillion.

It marked the first time the bank's total assets had shrunk over the course of a year since 2001. In the intervening years, the bank nearly quadrupled in size.

In 2001, Bank of America's assets fell 3 percent, to $622 billion. Trying to stave off recession, the Federal Reserve cut interest rates almost a dozen times.

In the bank's annual report for that year, CEO Ken Lewis wrote that the bank used those falling interest rates to shed low-yielding assets as the yield curve steepened.

Foreclosure workshop coming to Charlotte

More help is coming for homeowners struggling to make their mortgage payments.

The government's Making Home Affordable program, HOPE NOW alliance and NeighborWorks America are sponsoring a mortgage help event Tuesday uptown. The free workshop is open to all homeowners at risk of foreclosure, offering face-to-face meetings with counselors and mortgage specialists.

The event takes place from 11 a.m. to 7:30 p.m. Tuesday at the Charlotte Convention Center, 501 S. College St. Homeowners will have a chance to talk to nonprofit counselors about possible alternatives to foreclosure and meet with representatives from more than a dozen major mortgage lenders, including Bank of America Corp. and Wells Fargo & Co.

Homeowners will be seen on a first-come, first-served basis and should bring all related documents, including mortgage information and hardship letters. For more information, visit www.MakingHomeAffordable.gov or www.HOPENOW.com.

What's next for bank fees?

Big banks have backtracked on plans to impose debit card fees, but fallout from the Durbin amendment - which caps the “swipe fees” merchants pay banks when customers pay with their debit cards - continues, a new report found.

Celent, a Boston-based financial research and consulting firm, says banks are still looking for ways to cut costs or raise revenue. (Bank of America said Thursday account closings spiked after it announced its controversial $5 debit card fee.) The top considerations: raising checking account maintenance fees, cutting debit card reward programs and imposing or raising fees on other products and services.

“It will take a better part of 2012 for the full effects of Durbin regulations to become clearer, but the early signs are that it won’t reach all of its intended outcomes,” Celent said in the report, a broader study of IT spending in banking.

The firm predicts more regulation and disputes with merchants to come, adding that “the fight and the story are far from over.”

Bank of America account closings spike, but impact small

Bank of America account closings spiked after the Charlotte bank announced a controversial $5 debit card fee, but its checking and savings account balances appear largely unaffected.

Account closings were up 20 percent in the fourth quarter over the same time period in 2010, CEO Brian Moynihan told analysts during a conference call Thursday, as the bank became the target of criticism around the country.

Once the bank canceled plans for the fee, Moynihan said the closings slackened.

Despite the closings, average checking and savings account balances were down less than half a percent from the quarter before, to $204 billion, according to financial results released Thursday.

"Yes, we had some impact from the $5 debit fee. That's why we made the decision to reverse it," Moynihan said Thursday on the conference call. "Those impacts, in the scheme of things, will be manageable."

Total average and period-end deposits were down 1 percent from the quarter before, to about $1 trillion. The bank attributed it mainly to a decrease in high-interest time deposits like CDs. Deposits were still up from the fourth quarter 2010.

Morning roundup: Has BofA learned its lesson?

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

• As Bank of America reported fourth-quarter earnings, chief executive Brian Moynihan showed he has learned a few lessons, the Wall Street Journal writes. (Read about the bank's fourth-quarter profit here.)
• A Motley Fool analyst offers another look at the bank's performance, posing the question, "Is Bank of America Back?" He's bullish on the bank, he writes on AOL's DailyFinance, but acknowledges hurdles remain.
• Reuters examines top Justice Department officials' connections to big banks embroiled in the foreclosure crisis.
• A weak year for investment banks suggests a new normal on Wall Street. The New York Times discusses whether it's a result of temporary pressure or permanent change.
• Stock markets were set for a lower open on Friday amid weaker-than-expected quarterly results at Google Inc., American Express Co. and other companies, Bloomberg reports.
  

BB&T fourth-quarter profits up 88 percent

BB&T's fourth-quarter profits were up 88 percent over the same time period last year, the Winston-Salem bank announced Thursday.

The bank beat analysts' estimates with $391 million net income attributable to shareholders -- 55 cents per share -- compared with $208 million in the fourth quarter last year, the increase driven by strong loan and deposit growth and a decrease in nonperforming assets.

For 2011, the bank earned $1.3 billion attributable to shareholders, up 58 percent from the year before.

"The year 2011 was an outstanding year for BB&T considering the challenges facing the economy and financial services industry," CEO Kelly S. King said in a statement. "We met essentially all of our strategic objectives, and are successfully emerging from the credit cycle."

Morning roundup: Bank of America ekes out small profit in 2011

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

• Bank of America reported earnings this morning, about $1.6 billion net income to shareholders in fourth quarter, and $85 million for the year. Here's the Wall Street Journal's early take. And here's The New York Times look.
• New York Times columnist Nicholas Kristof ponders the question: Is banking bad?
• Morgan Stanley reported a loss today, but it was smaller than estimated, Bloomberg reports.
• The CEOs of JPMorgan Chase and Goldman Sachs say Wall Street will come back from a trading revenue drop in 2011. Analysts and other bankers doubt it, Bloomberg says. (Bank of America said in a call with analysts this morning that they expect trading to stay flat).

Bank of America dropped most branches in second half of 2011

Bank of America had more net branch closings than any other bank in the second half of 2011, according to data compiled by SNL Financial.

The Charlotte-based bank closed 41 branches around the country, while opening five -- a net loss of 36. The bank still has more than 5,800 branches around the country, one of the largest branch networks, according to the most recent FDIC data.

Wells Fargo closed 34 branches while opening 16, for a net of 18 closings, SNL's data show. It has about 6,400 domestic offices, according to the FDIC.

Peer JPMorgan Chase was the leader in branch openings, launching 178 while closing 12 for a net of 166. CEO Jamie Dimon has publicly put faith in the branch network, and the bank plans to open dozens more in 2012. Closing in on Bank of America, it has more than 5,500 branches, according to the FDIC.

Overall, more branches closed than were opened in the second half of 2011. Indiana topped the list of states with the most net branch closings. Old National Bancorp, based in that state, was second overall, with a net loss of 33 branches.

North Carolina was in the middle of the road, losing a net seven branches. South Carolina ranked near the bottom, losing a net 17. The Southeast lost the most of any region in the U.S.

California gained the most, with a net 57 opened, leading the growing West Coast market.

BB&T in the running for second-largest Florida bank

UPDATE: BankUnited now says it will stay independent, no longer seeking a buyer, Bloomberg reports.

BB&T has submitted a bid for Florida's second-largest bank, according to reports by The Wall Street Journal and Bloomberg.

BankUnited, based in Miami Lakes, has $11 billion in assets. It hasn't publicly said it is seeking a buyer, but sources told the two media outlets that it has sought bids.

Toronto-Dominion Bank has also submitted a bid, the Wall Street Journal stated. Pittsburgh-based PNC Financial Services Group considered a bid, but decided not to submit one.

BB&T, based in Winston-Salem, has been aggressively growing market share in Florida. In November, it announced an agreement to purchase Ft. Lauderdale-based BankAtlantic, taking on $2.1 billion in loans and $3.3 billion in deposits.

What earnings reports so far could mean for Bank of America

A number of major banks, most notably JPMorgan Chase, Citigroup and Wells Fargo, have reported their fourth quarter and year-end earnings ahead of Bank of America's scheduled report Thursday.

Their results are a mixed bag for the Charlotte-based bank. Here's a look at three areas analysts are talking about.

Investment banking and trading. JPMorgan's investment bank took a hit year-over-year, both in investment banking fees and principal transactions en route to missing expectations. Citigroup, too, didn't fare well as capital market activity was weak. This could be a bad sign for Bank of America, whose investment bank can be a major profit driver.

Loan growth. Most banks posted some loan growth in the quarter, which clearly is a good sign for Bank of America. But Wells Fargo's loan growth from existing operations was a smaller part of its overall total, driven by an accounting gain and the purchase of several loan portfolios from troubled European banks. Bank of America is not in the position to buy growth, but could be in position to see organic loan growth like its peers.

Rep and warranty. This has been cited by analysts as a prime worry for Bank of America. Mortgage repurchase losses increased at JPMorgan Chase, and very slightly at Wells Fargo. Still, JPMorgan's losses were less than analysts at Keefe, Bruyette and Woods had predicted, leading them to reconsider their very dour initial outlook.

Morning roundup: More on big-bank earnings

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

• Bank of America's string of asset sales helped raise capital and shed risk - but the moves also might slash profits going forward, Bloomberg reports. Now, with fewer assets left to sell, CEO Brian Moynihan can't rule out selling shares or more crucial businesses if needed, the story says.


• Another Bloomberg piece highlights a tidbit from Wells Fargo's conference call with analysts Tuesday: CEO John Stumpf "could care less" that his bank is overtaking rivals in investment banking and capital markets.


• In the latest major earnings report, Goldman Sachs topped analysts' expectations despite significantly lower revenue and profit, the Wall Street Journal reports. Fourth-quarter profits fell nearly 60 percent from the year before, though earnings per share were well above analysts' estimates, partly due to cost-cutting.


• Bank of America has nabbed a spot on another "Most Hated Companies" list - this time in a recent post by financial news site 24/7 Wall St.


• The Democratic Party's decision to move President Barack Obama's acceptance speech to Charlotte's Bank of America Stadium is drawing some criticism from party activists over the big-bank ties, NBC reports. Conservative political site Townhall.com also questions the move, calling it "naked partisan money-grubbing in populist garb."

BofA simplifies trading fees, expands platform

Bank of America Corp. has simplified pricing for its Merrill Edge self-directed investing platform, it announced this morning.

The Charlotte bank eliminated the four-tiered pricing structure, with all stock and exchange-traded fund trades now costing $6.95. Clients who have more than $25,000 in cash balances with Merrill Edge or Bank of America will continue to receive 30 free trades per month.

The company also eliminated account minimums and maintenance fees for self-directed accounts. Merrill Edge head Alok Prasad said in a news release about 75 percent of the bank's self-directed investing clients would see lower per-trade fees, and no client would see fees increase as a result of the change.

"One of our top goals is to listen to our clients and deliver solutions that help them meet their needs in a way that is easy to understand," he said. "Simplifying our pricing structure met a key client need, while also allowing us to take an industry-leading position."

Bank of America also introduced a new streaming trading platform that provides clients with real-time market analysis, among other features, and additional online investment choices.

The changes are part of an ongoing effort to serve investment clients: the bank last year doubled the number of its Merrill Edge Financial Solutions Advisors, who provide guidance to clients with less than $250,000 to invest, to more than 1,200 across the U.S.

Morning roundup: Wells Fargo posts record earnings, Bank of America chairman says he has confidence in CEO

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

• Wells Fargo posted record earnings of $4.1 billion in the fourth quarter of 2011 and $15.9 billion for the full year, the company reported Tuesday morning.
• At a conference in Abu Dhabi, Bank of America Chairman Chad Holliday said he fully supports CEO Brian Moynihan, Reuters reports.
  
• The New York Times took a long look at Anne Finucane, Bank of America's chief strategy and marketing officer, and her attempts to reshape the bank's image.
• Bank of America's earnings report on Thursday will be one of the two most important this week, TheStreet.com says, as it will give investors a look at "the troubled areas of the U.S. banking system." The other is Google.
• European banks are using unusual accounting methods to help meet capital requirements set by their regulators, including taking paper losses on acquisitions made years earlier, the Wall Street Journal says.
• “You know those big paydays on Wall Street?” Alan Johnson asks at cocktail parties, according to The New York Times. “I have something to do with them.”

Southern Shows president named Richmond Fed Charlotte office chairman

Southern Shows Inc. President David Zimmerman has been named chairman of the Federal Reserve Bank of Richmond's Charlotte office.

He takes over the chairman's role -- a one-year term -- from Claude C. Lilly, dean of Clemson University's School of Business and Behavioral Science. Before that, Lilly had been dean of UNC-Charlotte's business school.

Zimmerman has served as a director of the Charlotte office since 2008. Southern Shows puts on large-scale events like the Southern Christmas Show.

The Richmond Fed also announced Friday that Christopher J. Estes, executive director of the North Carolina Housing Coalition, has been appointed to the Charlotte office's seven-member board of directors.

Morning roundup: Earnings season begins

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

• JPMorgan Chase & Co. reported a 23 percent drop in fourth-quarter profits as investment banking revenue fell and its mortgage business continued to lose value, the Wall Street Journal reports. It was the first major bank to report its earnings for the fourth quarter; Bank of America Corp. reports next Thursday.

• Analysts say despite the decline in profits, JPMorgan's results "bode well" for the rest of the industry, Reuters writes.
  

• The weak lending environment can't be blamed solely on the banks, CNBC reports.

• An improving housing industry will boost the economy this year, according to a Fannie Mae forecast, Bloomberg reports. The forecast predicts sales of new and existing homes will increase 3.5 percent and housing starts will rise 16 percent.

• Stocks fell this morning after reports that a downgrade of European credit ratings could come as soon as Friday, the AP reports.
  

Citizens South small business lending up 9 percent, U.S. Treasury reports

Gastonia-based Citizens South Banking Corp. increased small business lending by 9 percent since mid-2010, the U.S. Treasury reported this week, making it one of the 78 percent of community banks that received money from the criticized federal Small Business Lending Fund to increase its lending.

About $4 billion was put into 332 banks and community development loan funds through the program. From a baseline of $35.9 billion in small business lending -- taken from the average lending in the fourth quarters leading up to June 30, 2010 -- the institutions have since increased their lending by $3.5 billion, a 10 percent increase.

The figures come from a Treasury report to Congress on the Small Business Lending Fund, which was created in 2010 to provide capital to community banks.

Critics have called the Small Business Lending Fund a flop. About $30 billion was authorized, but only $4 billion spent after few banks applied for the funding. And about half of the money spent was used by banks to pay off TARP, the Wall Street Journal reported in October.

Citizens South was one of the banks to do that. The bank said in September that it used lending fund money to pay off the $20.5 million it owed the government through TARP.

Having money from the fund incentivizes banks to increase their small business lending. When it entered the program, Citizens South said it would initially be making 4.84 percent dividend payments quarterly, but that could be reduced to 1 percent by the middle of 2012 should it increase small business lending by 10 percent or more.

According to this week's Treasury report, Citizens South's baseline small business lending level was $126.4 million. As of Sept. 30, it had increased 9.2 percent, to $138 million. The bank now has a dividend payment of 3.3 percent.

A Charlotte-based bank hasn't fared as well. Premara Financial Inc., the holding company for Carolina Premier Bank, has shrunk its small business lending by 9.2 percent. It has $6.2 million in Small Business Lending Fund money outstanding.

Other N.C. banks with lending fund money, with their percent change in small business lending:

• First Bancorp, Troy. 2.7 percent
• Live Oak Bancshares Inc., Wilmington. 4.2 percent.
• Providence Bank, Rocky Mount. 20.7 percent.
• Select Bancorp Inc., Greenville. 50.3 percent.
• Union Bank & Trust Company, Oxford. 16.3 percent.

N.C. community development loan funds (unregulated financial institutions, generally nonprofit and reliant on grants) with SBLF money, with their percent change in small business lending:

• Mountain BizCapital Inc., Asheville. 13.8 percent.

Morning roundup: Bank of America to rethink advertising

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

• Bank of America says it wants to rethink its advertising strategy, and has put its account in review, according to The New York Times. The last time this was done was in 2005.
• JPMorgan Chase is likely to keep its distinction of being the country's most profitable bank when it reports earnings this week, but Wells Fargo is closing in, Bloomberg says. Profits at the San Francisco bank are at an all-time high.
• As banks prepare for proxy season, experts expect investors to increasingly push for measures to cut executive pay, the Wall Street Journal reports.
• Both U.S. and European banks are slicing their spending in Asia, mostly to control costs, Reuters says.
• Republican presidential candidate Jon Huntsman could align himself with Democrats on bank regulation, The New York Times' Economix blog posits. The former Utah governor has made the strongest statements about limiting big banks.

Bank of America stock again tops Dow, crosses 20 percent for the year

Bank of America's stock again was the top performer in the Dow Jones Industrial Average on Wednesday, gaining nearly 4 percent on a relatively sluggish day for the market.

The Charlotte-based bank has now seen its stock rise 23.5 percent so far this year. It closed Wednesday at $6.87.

The Dow was down slightly Wednesday, closing 13 points lower at 12,449.

Bank of America's stock was the worst performer in the Dow last year, falling 58 percent amid ongoing mortgage liability concerns and several hits to the company's image. Interestingly, Netflix -- which saw its stock fall about 60 percent amid financial troubles and a controversial decision to split its business that backfired -- has been the top performer in the S&P 500 this year, up about 33 percent.

Analysts have long been bullish about bank stocks, citing "cheap" price to earnings ratios and improving underlying fundamentals. But the financial sector saw steep drops last year as European worries troubled investors.

Financials overall have performed well so far this year, heading into fourth quarter earnings season which begins later this week.

Morgan Keegan acquisition will bolster Raymond James presence in Charlotte

The long-awaited sale of Morgan Keegan, the brokerage and investment banking arm of Regions Financial, to Raymond James Financial Inc. was announced Wednesday in a $930 million deal.

The sale will add slightly to Raymond James' presence in Charlotte. Morgan Keegan had one location in the city, part of Regions' Charlotte headquarters near South Park. Raymond James currently has more than a half dozen in Charlotte, serving personal investors and investment banking clients.

The deal is expected to close in the first quarter.

Charlotte financial services law office hires two

The Charlotte office of national business law firm Dykema announced Tuesday that it has hired two new financial services lawyers.

Melinda S. Blundell and Thomas H. O’Donnell, Jr., both came from Moore & Van Allen, PLLC. They specialize in corporate finance, securities and mergers and acquisitions, according to announcement from the law firm.

Dykema's office in Charlotte -- its first in the Southeast -- was founded in August by financial services attorney Donald Lampe. At the time, Lampe said the office was looking to grow.

The announcement brings the total number of lawyers in the Charlotte office to four.

Don't expect debt valuation accounting gains in fourth quarter

Remember those accounting gains that helped Bank of America and other large banks in their third quarter earning reports? Don't expect them this time.

The big banks begin reporting fourth quarter earnings this week. Bank of America reports next Thursday, two days after Wells Fargo.

Last time, Bank of America booked a $1.7 billion pretax gain on debit valuation adjustments, and $4.5 billion gain on fair value adjustments for structured liabilities. In essence, these gains come from the deterioration in the bank's creditworthiness since the value of protecting its own debt is greater, and the value of its debt declines.

But in the fourth quarter, analysts with Barclays Capital expect such gains to turn into "modest" losses for Bank of America, according to a research report published this week.

The analysts also predict Citigroup's valuation adjustments to turn negative, and expect JP Morgan Chase to at least not post significant gains.

Morning roundup: More firms "too big to fail"?

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

• Global regulators might expand the definition of "too big to fail," imposing capital rules on more domestic financial firms, Bloomberg reports. Regulators say they expect framework to be in place for "domestically systemically important banks" by the end of the year.
• Reuters explains the "January effect" - a phenomenon where traders sell stock at the end of the year for tax reasons and then begin buying again in January, often favoring small companies - and says it might be a good time to add bargain-priced small caps to your portfolio.
• Rivals are scrutinizing Republican front-runner Mitt Romney's record at Bain Capital - and as a result, the private equity industry has also come under attack, with critics accusing such firms of slashing jobs, the New York Times reports.
• Bank of America has named David Killingback head of mergers advisory for its Asia-Pacific region, part of an overhaul of senior management at the Charlotte company's investment bank in the area, Bloomberg reports.
• U.S. stocks opened lower this morning on concerns of a weakening European economy, the Wall Street Journal writes. Financials and energy stocks led the decline.
  

Federal regulators, state AGs and banks to meet this week

Federal agencies, state attorneys general and bank attorneys are set to gather in Washington, D.C., this week to again try to hammer out details of a potential multi-billion-dollar settlement with the country's largest mortgage servicers, according to a person familiar with the matter.

The deal is close but not imminent, the person said. A number of small issues remain on all sides, and a deal would need numerous levels of approval.

The settlement, would resolve potential government action over improper foreclosure practices, including "robo-signing" at Bank of America, Wells Fargo, and three other mortgage servicers. The dollar figure would likely fall in the range of $20 billion to $25 billion, according to multiple reports.

Treasury e-mails shed light on Countrywide, crisis

Our story this week that detailed a series of e-mails Treasury Department officials exchanged in the turbulent months before Bank of America acquired Countrywide has generated a lot of reader response.

Some said the messages, which mention the mortgage lender's troubles, imminent economic crisis and rumors that regulators pushed Bank of America into the transaction, reinforced their belief that the government had a hand in the acquisition. Others said they wished the e-mails revealed more new information about how the deal - which has resulted in ongoing losses and lawsuits for Charlotte's biggest bank - came together.

Still others just wanted to see the documents for themselves. Here's the link. Feel free to take a look and weigh in here with your own insight.

No bank failures in 2012...yet

It's been more than three years since the financial meltdown, but regulators are still shuttering small banks around the country.

Last year ended with 92 bank failures, down from 157 in 2010 as banks continue to work through the bad debt they they racked up during the recession, according to a new report from financial information firm SNL Financial. This year began a little brighter: Regulators didn't close any banks on Friday, resulting in a failure-free first week of the year, the firm said.

Check out SNL's map of bank and thrift failures since 2008 and other interesting data here (only registered users can see the full report). Bank failures peaked in 2010; 140 banks were shuttered in 2009, and 25 failed in 2008, the first full year of the recession.

Morning roundup: Romney win in November could help banks

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

• A group of analysts is saying that a Mitt Romney victory over President Obama in November could help big banks' stock prices, Bloomberg reports.
• The Justice Department is reaching out to smaller national banks to see if they would be interested in joining the $20 billion to $25 billion settlement over robosigning and other mortgage malpractices being finalized with the five largest servicers, Reuters says.
• Big banks are now banding together to find ways to protect themselves from cyber attacks, the Wall Street Journal reports.
• While investment banking bonuses are expected to be the lowest since 2008, the pay-to-revenue ratio might still tick higher, the New York Times says.

Bank of America tops in Dow index through first week

Sure, it's only been a week, but Bank of America's stock has performed the best out of the Dow Jones Industrial Average so far this year.

Shares in the Charlotte-based bank, which fared the worst in the 30-company average last year, have increased nearly 13 percent in the first five trading days of the year. Shares closed at $6.27 on Monday, its fourth increase in five days.

The Dow index has grown just more than 1 percent.

Of course, in the first week of trading last year, the bank's shares gained nearly 7 percent. It would go on to fall 58 percent as the bank struggled with legal claims stemming from the mortgage crisis.

Wells Fargo names former General Mills CEO new lead director

Wells Fargo announced Monday that its board has named Stephen W. Sanger, a former CEO of General Mills, its new lead director.

Sanger, 65, has served on the board since 2003. He made $305,667 in 2010 -- including $129,000 in cash -- in the position, according to securities filings.

He takes over for Philip J. Quigley, 69, who had served as lead director since the position was created in January 2009 as a nod to the company's stated desire for independent board leadership. Wells Fargo CEO John Stumpf is the board chairman.

The lead director's responsibilities include assisting the chairman, approving meeting agendas and calling special meetings of the board.

Quigley will remain on the board.

Activist groups launch anti-Bank of America blog in advance of annual meeting

Two activist groups have launched an anti-Bank of America blog to put pressure on the Charlotte-based bank in advance of its annual shareholder meeting in May.

Environmentalist group Rainforest Action Network and pro-labor New Bottom Line announced Monday a new site called "Bankrupting America," which the groups hope to use to chronicle wrongdoing by the second-largest U.S. bank by assets.

The two groups hope the blog will pressure the bank to pay more in taxes, revitalize the economy and stop funding coal projects, according to a news release.

Eight people were arrested outside Bank of America's corporate headquarters in November during a Rainforest Action Network protest.

BofA workshop to provide free mortgage help

Bank of America is offering help for struggling homeowners this week at a three-day mortgage outreach event in Charlotte.

The workshop takes place from 8 a.m. to 8 p.m. Thursday through Saturday at the Hilton Charlotte Center City, 222 E. Third St. The bank has identified nearly 11,000 customers within 100 miles of Charlotte who might benefit, it said.

During the event, customers having trouble with their mortgage payments can discuss their situation and any loan assistance options available with a home loan specialist. Local nonprofits and housing counselors will also be there to help, the bank said.

This week’s workshop is Charlotte-based Bank of America’s latest effort to help mortgage customers; the bank recently opened a customer assistance center in Charlotte where homeowners can meet face-to-face with mortgage specialists year-round. The event comes a month after Wells Fargo & Co. invited more than 10,000 Carolinas customers to a similar workshop in Charlotte.

Homeowners are encouraged to schedule an appointment in advance, though walk-ins are welcome. To register or to learn more, visit www.bankofamerica.com/homeownerevent.

Morning roundup: Bank of America cutting jobs in Asia

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

• Bank of America Merrill Lynch has laid off its co-head of mergers and acquisitions for Asia, the Wall Street Journal reports. The move comes as the investment bank is shedding about 20 percent of its managing directors on the continent as the "outlook sours," Reuters says.


• Some banks are charging customers fees of $50 for not maintaining minimum balances, which some analysts call unprecedented, the Boston Globe reports.


• An international organization of bank regulators said it would allow some leeway on liquidity - that despite efforts to push big banks to boost capital and short-term liquidity, that did not mean lenders would never be allowed to dip below required levels, the New York Times writes.


• A Bloomberg op-ed says it's important to encourage "the right kind of greed" among banks. The piece lays out a few ways to balance natural greed with capital requirements so that greed can lead to productive risk-taking and competition.


• Lower-income customers might have fewer banking options as a result of government regulations aimed at controlling bank fees, the Christian Science Monitor writes. The article says 30 million consumers make up the "world of the unbanked and underbanked."

Wells Fargo named top bank stock for 2012 by Stifel analysts

Wells Fargo was named the top bank stock to buy in 2012 by analysts at investment firm Stifel Nicolaus, citing strong profitability and low price to earnings ratio.

"We think Wells will be on the offensive," analyst Chris Mutascio said during the firm's bank stock outlook conference call. He cited excess liquidity, high capital base and cost savings as a means to gain market share in small- and middle-market commercial lending.

Mutascio said the most value will likely be found in the space between the large "money center" banks -- those like Bank of America and JP Morgan, which will be weighed down by slow capital markets -- and regionals. Those include banks like Wells and U.S. Bancorp.

"That's where we find value here in the near term," he said.

N.C. banks have $400 million in TARP outstanding

Three years after the U.S. government's bank bailout, nearly two-dozen North Carolina-based banks still have $409 million in TARP money on their books.

In late 2008, the government began purchasing $204.9 billion of preferred stock and warrants in 707 banks through TARP's Capital Purchase Program. Through Thursday, the Treasury had received $211 billion in repayments and interest and dividends.

But it still has $16.8 billion outstanding from 372 banks, according to research from financial services firm Keefe, Bruyette and Woods.

Birmingham, Ala., based Regions Financial Corp. has the most outstanding TARP money, with $3.5 billion. The bank has a modest presence in Charlotte.

Among North Carolina-based banks, Greensboro's NewBridge Bancorp has the most, at $52 million.

The rest are as follows, per KBW's data:

• FNB United, Asheboro: $52 million (though this is being converted to common stock at a discount as part of the bank's recapitalization and merger)
• Yadkin Valley Financial Corporation, Elkin: $49 million
• Southern Community Financial Corp., Winston-Salem: $43 million
• BNC Bancorp (Bank of North Carolina), Thomasville: $31 million
• Peoples Bancorp of North Carolina Inc., Newton: $25 million
• Crescent Financial Corp., Cary: $25 million
• ECB Bancorp Inc., Engelhard: $18 million
• F & M Financial Corp., Salisbury: $17 million
• 1st Financial Services Corp., Hendersonville: $16 million
• Carolina Bank Holdings Inc., Greensboro: $16 million
• Bank of the Carolinas, Mocksville: $13 million
• Uwharrie Capital Corp., Albemarle: $10 million
• Oak Ridge Financial Services Inc., Oak Ridge: $8 million
• The Little Bank Inc., Kinston: $8 million
• Randolph Bank & Trust Co., Asheboro: $6 million
• KS Bancorp Inc., Smithfield: $4 million
• Carolina Trust Bank Inc., Lincolnton: $4 million
• AB&T Financial Corp., Gastonia: $4 million
• Sound Banking Co., Morehead City: $3 million
• Bank of Commerce, Charlotte: $3 million
• The Bank of Currituck, Moyock: $2 million

CFPB launches mortgage complaint system

Two days after President Barack Obama's controversial appointment of director Richard Cordray, the Consumer Financial Protection Bureau has launched a system to collect mortgage complaints from consumers.

Once the complaint is processed and sent to the financial institution that made the loan, the bank will have 15 days to respond.

This is the second complaint system to be launched. A credit card system was created last year. As the year progresses, complaint systems for non-banks -- such as debt collectors and payday lenders -- will be created.

Morning roundup: Wells Fargo settles with Maryland attorney general

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

• In a settlement with Maryland's attorney general, Wells Fargo agreed to make loan modifications and pay $1 million to adjustable-rate mortgage customers of former Charlotte bank Wachovia and Golden West, the Baltimore Sun reports.
• As an underwriter, Bank of America has a "risky but potentially lucrative role" in a rights issue from Italian bank UniCredit, the Wall Street Journal says. A rights issue is a means of raising capital by allowing existing shareholders to buy more stock at a discount. But should demand lag, Bank of America Merrill Lynch could be stuck with a tab.
• The bondholder group -- which includes BlackRock and Pimco -- that landed an $8.5 billion settlement from Bank of America over mortgage-backed securities last year now says it will seek a settlement with Wells Fargo, Bloomberg reports.
• Wall Street is set to gain today after more strong jobs numbers, Reuters says.

Bank of America's stock jumps 8.6 percent, largest gain in months

Bank of America's stock jumped 8.6 percent Thursday on a good day for bank stocks as rumors swirled about a possible new federal home refinancing program.

The stock closed at $6.31, up 50 cents from the day before. It marked the largest one-day surge since Oct. 18, when the stock gained 10.1 percent.

The KBW Bank Index finished up 2 percent.

Rumors abounded Thursday that the Obama administration might launch a new loan refinancing program for government-sponsored entity mortgages. The Labor Department also reported positive job numbers.

Wells Fargo: Charlotte should see stronger job growth in 2012

After a year of high unemployment and job losses, Charlotte's economy is poised for "much stronger job and personal income growth" in 2012, according to a report issued today by Wells Fargo economists.

The report states that Charlotte is likely to add jobs at a higher-than-average pace, buoyed by recent announcements from companies like Chiquita, Electrolux, Husqvarna, Time Warner Cable and Capgemini. Wells Fargo cites a "young and highly educated workforce" as an advantage.

"The relocation and expansion activities over the next few months combined with the Democratic National Convention in the latter part of the year should ensure that the Queen City will begin a more rapid and sustained recovery in the year ahead," the report says.

Bank of North Carolina "needs to improve" community investment, FDIC says

Bank of North Carolina "needs to improve" its community investments, the FDIC noted as part of a federally mandated examination.

The Thomasville-based bank received a satisfactory score on its Community Reinvestment Act examination overall, but showed a "poor level of qualified community development investments and grants," "poor responsiveness to credit and community economic development needs," and "rarely uses innovative and/or complex investments to support community development initiatives," the report -- made public this month -- says.

The Community Reinvestment Act, passed in 1977, requires banks to demonstrate they are investing and lending equitably in the communities where they take deposits. Banks are examined every few years.

Bank of North Carolina has been expanding of late, announcing or closing three deals in recent weeks. The bank operates around North and South Carolina. It has a lending office in Charlotte, though full-service branches are coming soon.

In the CRA exam, the bank scored well in lending, with a "high satisfactory" rating. A large percentage of its loans -- 82 percent in 2010 -- were in the communities they draw deposits from, and loan distribution reflected the demographics of the community, the report states.

But the bank had few qualified community investments, defined as investments or grants that promote affordable housing, low- and moderate-income community services, economic development, or community revitalization. Bank of North Carolina's qualified investments consisted of about $1.4 million in assets -- 0.07 percent of its total -- made up mostly of mortgage-backed securities from low- to moderate-income borrowers.

Morning roundup: Politics and bank stocks

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

• Stock market predictions abound this time of year, but continued economic uncertainty and market volatility mean what happens this year is anybody's guess, Reuters writes.


• Despite the headwinds still facing the markets, many analysts remain bullish about 2012. CNBC explains why.


• Some investors are finding high yields from trust preferreds at battered banks, including Charlotte's Bank of America, Bloomberg reports.


• Republican presidential candidate Ron Paul's views on the U.S. banking system make sense, though his remedies are vague, an economist writes in the New York Times.


• Bank of America, Goldman Sachs and other big banks might see shares fall as Republican candidates step up their anti-bank rhetoric in an attempt to challenge front-runner Mitt Romney, a Forbes contributor writes.

Obama set to name Cordray to CFPB through recess appointment

President Barack Obama is set to name Richard Cordray to lead the new federal consumer financial protection bureau through a recess appointment, a tactic that a Charlotte-based banking lawyer sets up another partisan battle.

"I think it was a calculated political move on the part of the president of the United States to score points with his base and create a problem with Republicans who would challenge it," said Don Lampe, an attorney with Dykema's office in Charlotte.

The Consumer Financial Protection Bureau, created as part of the Dodd-Frank financial reform law as a watchdog for financial products like mortgages and credit cards, had gone without a permanent director in the face of opposition from Republicans.

Lampe said he expects in the coming hours for Republicans to make public statements questioning the president's constitutional authority to make such an appointment and calling it overreaching.

Liberal group ThinkProgress has already published a blog post explaining why it believes Obama had the authority to make the pick.

The naming of a director will affect non-banks -- like mortgage lenders and payday lenders -- more than deposit-taking institutions, Lampe said, due to the structure of the law. Banks are generally already subject to oversight from the bureau.

UPDATE: In a tweet, U.S. Rep. David Price, D-N.C., praisedObama's move, saying "Americans deserve a strong CFPB even if Senate GOP objects."

UPDATE: From the American Bankers Association -- "The controversial nature of today's recess appointment reinforces the banking industry's concerns about the Bureau's structure and lack of accountability. It puts the Bureau's future actions in constitutional jeopardy, threatening its work, complicating compliance efforts of banks and further undermining the entity's authority and credibility." Read more.

Morning roundup: Big banks to lead stock market rally?

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

• Analysts say the six biggest U.S. banks, including Charlotte's Bank of America, could post an average profit increase of 57 percent this year, Bloomberg reports. Though last year, analysts predicted the lenders' profits would jump 32 percent in 2011 - and that proved significantly off base.


• CNBC has high hopes for the overall market in 2012, saying most strategists agree that after last year's flat finish, there's nowhere to go but up.


• Today, though, Euro-zone worries are back after a big rally Tuesday, driving stocks lower as they opened, Reuters reports.


• A New York Times op-ed makes the case for bringing back "boring banks," saying banks should shed risky, complicated practices.


• Some banks are trying to woo customers back, offering credit cards to more borrowers and discounts on closing costs for mortgage refinancing, The Motley Fool writes

Bank of North Carolina closes purchase of S.C. bank

Thomasville-based Bank of North Carolina announced Tuesday that it has completed its acquisition of South Carolina-based Regent Bank, effective on the last day of 2011.

The $10 million deal marks the first entry into the Greenville, S.C. market. In the state, the bank operates as BNC Bank.

The bank closed on its acquisition of Blue Ridge Savings Bank in the fourth quarter, and announced it was purchasing Durham-based KeySource Financial.

Stocks strong as 2012 starts, but will rally continue?

Stocks began the new year with big gains, and that could continue, a Robert W. Baird & Co. investment expert said in a research note today, citing "mildly bullish" economic indicators that could boost markets.

Chief investment strategist Bruce Bittles pointed to a few signs of economic improvement - falling jobless claims, rising contracts to buy new homes and climbing consumer confidence - but acknowledged challenges remain in the broader U.S. economy. Economic growth will likely remain sluggish, due in part to the European debt crisis, and corporate profits could slow, he said.

Still, stocks entered the year with conservative valuations, and investor expectations are low, meaning there is room for an upside surprise, he said.

For now, the strategist sees strength in consumer staples, rating the sector a "buy." Utilities, health care, industrials and consumer discretionary stocks seem to be improving, he said. Bittles rates financials, meanwhile, as the weakest sector, suggesting there's still a long road ahead for many investors.

January is typically a strong month for stocks. So it remains to be seen whether the uptick on the first trading day of the year becomes a trend.