Bank of the Carolinas drops from Nasdaq

The stock of Mocksville-based Bank of the Carolinas has been dropped from the Nasdaq after the bank failed to maintain the minimum value of shares the exchange requires, the company said Wednesday.

Companies on the Nasdaq are required to have a collective market value of their shares of $5 million. The bank received notice that it had fallen below that threshold in August, and was given 180 days to comply, according to a securities filing.

At its most recent close, Bank of the Carolinas had a market capitalization of $1.75 million.

"Clearly we are disappointed that trading in our stock on Nasdaq has been suspended," Bank of the Carolinas CEO Stephen R. Talbert said in a statement. "Due to market conditions, we are not in a position to satisfy Nasdaq's continued listing requirements at this time. However, we remain committed to strengthening our company and focusing on the needs of our customers."

The bank has decided not to appeal the decision. Its stock will officially drop off the exchange March 5.

The stock will likely then be listed on the OTC Pink market. Bank of the Carolinas will seek to be quoted on the OTC Bulletin Board.

The bank has branches in Concord and Harrisburg. Earlier this month, the bank reported losing $29.2 million in full-year 2011.

Tearing down homes will count toward mortgage settlement

Wells Fargo's year-end report filed yesterday with the SEC provides the most complete details of how banks will be able to meet their commitments in the $25 billion mortgage servicing settlement reached earlier this month.

Among the more interesting items: Banks will get credit toward their totals for tearing down homes and forgoing lawsuits against underwater borrowers who lost their homes to foreclosure.

Banks will also receive extra credit for forgiving principal in the next 12 months. All actions must be taken in the next three years.

Each bank involved in the settlement has a certain amount of principal reduction and other foreclosure relief they are required to provide. Bank of America will provide $7.6 billion in relief, part of its $11.8 billion total. Wells Fargo will provide $3.4 billion in relief, part of its $5.3 billion total.

Not each dollar spent or forgiven will get full credit toward the banks' total. Wells Fargo broke down some of the partial-credit percentages, which also revealed some of the options the banks have.

An incomplete list:

Principal forgiveness. Banks will receive 100 percent credit for principal forgiveness where the borrower's loan-to-value ratio is less than 175 percent. Any principal forgiveness at a higher ratio will receive 50 percent credit.

Deficiency balance waivers. Banks will receive 10 percent credit for waiving their right to sue borrowers who have lost their homes to foreclosure, but the value of the home did not pay off their debts. Such suits are called deficiency judgments.

Transitional payments. Banks will receive full credit for any "transitional payments" given to borrowers in conjunction with a short sale or deed-in-lieu. These programs are sometimes known as "cash for keys." If an investor owns the loan, though, the bank receives only 45 percent credit.

Anti-blight. Banks will receive full credit for money spent tearing down homes. The bank will also receive full credit for donating properties to nonprofits.

A full list can be found on page 75 and 76 of Wells Fargo's annual report to shareholders.

Even though the formal settlement has yet to be filed in federal court, banks will receive credit for actions taken beginning March 1.

RBC customers irritated by account number switch

As the sale of RBC Bank to PNC Financial Services nears its closing, a number of RBC customers are irritated that their account numbers will be switched in the conversion.

That means customers who have direct depositing into their RBC accounts, or direct debiting for bill paying, will have to change the information they used to set up those deposits and withdrawals.

Customers who use the Online Banking feature will not have to change anything, PNC spokeswoman Terri Wilson said. Also PNC will still process direct deposits or debits from their old accounts for the time being.

The sale closing is scheduled for Friday. RBC banks will open as PNC on Monday.

For more information on the conversion, click here.

Study: Bank deposits grew in 2011

Consumers are still stockpiling money in their bank accounts, a new analysis from a banking research firm found.

In the last three months of 2011, consumers added $250 billion to their domestic bank accounts - nearly $3 billion per day - according to the report from Market Rates Insight, a California company that analyzes bank pricing.

For the year, domestic deposits in FDIC-insured lenders grew by $882 billion. The increase is due in part to consumers moving money from term accounts such as CDs to their more liquid checking and savings accounts, the firm found.

CD balances fell by $157 billion last year, for instance, while checking, savings and money market balances grew by more than $1 trillion.

"More consumers are risk averse and prefer the safety and security of FDIC-insured deposits," Dan Geller, Market Rates Insight's executive vice president, said.

Charlotte-based Wells Fargo exec joins top leadership team

Wells Fargo announced Wednesday that it has named David M. Julian, who is based in Charlotte, to be the bank's new chief auditor.

His appointment makes him only the second person who reports directly to CEO John Stumpf to be based in Charlotte. Previously, only David Carroll, head of wealth, brokerage and retirement, was in the city.

Julian, 50, will take over for Kevin McCabe, who has served as chief auditor since 2002 and will be retiring at the end of June.

Julian joined Wachovia in 1997 and most recently had been head of market and institutional risk. He had also served as chief auditor and chief operating officer for finance at Wachovia.

Charlotte lost clout in the banking industry when Wachovia was acquired by San Francisco-based Wells Fargo in 2008. Fifteen of the top 16 Wachovia executives had been based in the Queen City. After the merger, only one top executive of the combined bank -- Carroll -- was in Charlotte.

Most of Wells Fargo's executives continue to be based in San Francisco.

Most customers with less than $100,000 unprofitable, JPMorgan says

Welcome to the morning roundup, a look at what's news in banking and finance.

Customers with less than $100,000 unprofitable. A JPMorgan Chase executive said Tuesday that under new regulations, about 70 percent of customers with less than $100,000 in deposits and investments will be unprofitable for big banks, Bloomberg reports. Those regulations include swipe fee caps on debit card transactions and limits on overdraft fees.

Wells could face SEC suits. Wells Fargo was one of a handful of companies who received so-called "Wells notices" warning them that they could face suits from the Securities and Exchange Commission over the sale of mortgage-backed securities, the Wall Street Journal says. The SEC will look to see if the banks did not disclose weakness in the underlying loan portfolios.

BofA gifts vacant houses. Bank of America has agreed to donate 75 vacant properties to the city of Kansas City, plus nearly $1 million to renovate them or tear them down, the Kansas City Star reports. The city worked toward a deal to help revitalize a depressed area of town. Bank of America has done similar deals with Cleveland, Detroit and Chicago.

Dividends could return. Analysts predict that dividends and share buybacks at financial companies -- which shrunk in the past few years -- could make a major comeback this year, Seeking Alpha says. JPMorgan and Goldman Sachs appear to be in the best position to do so.

Wall Street bonuses down. Bonuses at Wall Street securities firms likely fell 14 percent in 2011, hitting the lowest level since 2008, according to a report from the New York City comptroller's office, the Wall Street Journal reports. The New York firms paid about $19.7 billion

in cash, down from $22.8 billion the year before. The figures were calculated using personal income tax data.

Credit card debt rising in Charlotte, report finds

Credit card debt in the Charlotte area and across the state rose in 2011, with both levels remaining well above the national average, according to a new report from TransUnion.

The global credit information company found Charlotte-area borrowers owed about $6,300, on average, in the fourth quarter of 2011, up 5 percent from the same period the year before. Statewide, the average borrower owed about $5,800, up 2 percent from 2010.

North Carolina's debt was fourth-highest in the U.S., ranking behind Alaska, Colorado and Connecticut, TransUnion's quarterly analysis of credit-active U.S. consumers showed. Nationally, by comparison, the average credit card borrower owed about $5,200.

More N.C. borrowers are falling behind, too, the report found. The state's delinquency rate - the ratio of borrowers 90 or more days past due - climbed in 2011 to 0.85 percent from 0.78 percent the year before.

That bucked the national trend: The U.S. credit card delinquency rate fell 5 percent to 0.78, well below historical norms, as riskier loans continued to work through the system and consumers worked harder to manage debt, TransUnion found.

The firm predicts delinquency rates will climb in coming months as a result of broader economic concerns but will fall gradually by the end of the year.

While Charlotte credit card debt has climbed recently, TransUnion's data show it has fallen since the recession began. In the fourth quarter of 2007, for instance, the average Charlotte-area borrower owed nearly $6,800, the firm found.

Ray Grace nominated to be new state banking commissioner

Ray Grace, the North Carolina chief deputy banking commissioner who has filled the top job for the past week after Joseph Smith announced he was stepping down, has been nominated to fill the role permanently, Gov. Bev Perdue announced Tuesday.

Smith announced on Feb. 14 he would leave the post he had filled for nearly a decade to focus on a new role: monitor of the $25 billion settlement between state attorneys general and the country's largest banks.

"Ray has helped guide the state’s financial system through the toughest economic times that many of us have ever seen," Perdue said in a statement. "With more than 35 years of experience at the Office of the Commissioner of Banks, he comes to this job uniquely qualified and able to seamlessly step into this critical role."

Grace joined the Office of the Commissioner of Banks in 1974 and was named chief deputy in 2010.

He must still be confirmed by the General Assembly.

Court blocks BB&T acquisition of BankAtlantic

A Delaware court has blocked BB&T's acquisition of most of Florida-based BankAtlantic, disapproving of the deal's structure.

In November, the Winston-Salem bank said it was buying BankAtlantic for $301 million and taking on $2.1 billion in loans and $3.3 billion in deposits. The purchase would have bumped BB&T into the No. 6 slot in the Miami metro area.

But as part of the deal, BB&T would not take on any distressed assets -- or $260 million of trust preferred securities. The Delaware judge ruled that any deal would have to include that class of securities.

In a research note, bank analyst Marty Mosby of Guggenheim Securities said he does not expect BB&T to significantly up its offer to include those securities. Mosby said he does expect the bank to continue to eye acquisitions in South Florida.

BankAtlantic could still appeal the ruling.

Banks' 2011 profit highest in five years

Commercial banks made an aggregate $26.3 billion in the fourth quarter of 2011, up 23 percent from the year before and marking the 10th straight quarter of improvement, according to data released Tuesday from the FDIC.

That pushed the banks' full-year profit to $119.5 billion -- the highest it has been since 2006.

"The industry is now in a much better position to support the economy through expanded lending," FDIC acting chairman Martin Gruenberg said in a statement. "However, levels of troubled assets and 'problem' banks are still high. And while the economy is showing signs of improvement, downside risks remain a concern."

More than 60 percent of banks reported improvement from last year, and less than 20 percent reported losses.

The results mark a slowly improving loan environment. Banks charged off less bad loans, and new delinquent loans dropped as well.

The number of "problem" institutions on the FDIC's watch list dropped to 813 from 844, and 92 banks failed compared with 157 in 2010.

Morning roundup: Lenders slower to foreclose on high-end homes

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

• Banks are slower to foreclose on costlier homes, a Wall Street Journal analysis found, meaning high-end homeowners are able to remain in their houses - without making payments - far longer than others.
• The New York Times calls for "important changes" to the Volcker Rule, which limits risky trading practices at banks. Among them: specificity and "clear, stiff penalties" for banks involved in proprietary trading.
• Broadening our definition of money is key to understanding the financial meltdown, CNBC's John Carney writes. Mortgage-backed securities, for instance, were a form of financial system currency.
• JPMorgan Chase & Co. has remained strong because of CEO Jamie Dimon's ability to steer clear of the housing bust - but now the bank, which surpassed Charlotte's Bank of America Corp. last year as the nation's largest lender by assets, appears to be lagging its rivals, Fortune reports.
  
• U.S. stocks were flat this morning after a steep drop in American durable-goods orders, a sign of weakening confidence in the economic recovery, Bloomberg reports.
  

Bank of America charged with discriminating against disabled homebuyers

The U.S. Department of Housing and Urban Development announced Monday that it has charged Bank of America with discriminating against several homebuyers who rely on disability income.

The department alleges that Bank of America employees required home loan applicants who were disabled to provide notes from their doctors outlining their disability and predicting whether they thought the applicant would continue to be eligible for disability payments.

"Holding homebuyers with disabilities to a higher standard just because they rely on disability payments as a source of income is against the law," said John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity, in a statement. "Mortgage companies may verify income and have eligibility standards but they may not single out homebuyers with disabilities to delay or deny financing when they are otherwise eligible."

The investigation stems from three complaints in Wisconsin and Michigan during 2009 and 2010, according to the complaint. The homebuyers were initially denied a loan.

In one case, Bank of America apologized in a letter for requiring the note, the complaint states.

The housing department says that Bank of America's actions violated the Fair Housing Act, which prohibits placing higher burdens on people with disabilities for qualifying for loans. The case will now be handled by the U.S. Department of Justice, the complaint says.

The department seeks restitution for the homebuyers who made the complaints and a civil money penalty.

In a statement, Bank of America denied that it engaged in systemic discrimination and said it is the bank's policy to follow "all applicable fair lending laws and regulations." The bank said that the cases cited by the housing department involved inconsistencies in Federal Housing Administration and conventional underwriting standards.

The bank said all three ended up being approved for a loan.

Fifth Third launches new marketing campaign

Fifth Third Bank announced Monday a new marketing campaign that revolves around curiosity and innovation.

“Curious people ask better questions, listen carefully, and find better answers,” said Larry Magnesen, Fifth Third's chief marketing officer, in a statement. “...Curiosity surfaced as an important value we wanted to affirm with our own employees: be curious about our customers’ needs, be curious about the way things could be made easier, and be curious about how we can innovate our products and services.”

"The Curious Bank" campaign is managed by agency Leo Burnett and will involve television, radio, print and online ads.

“Many banks seem tone deaf and out of touch with the world around them. Not Fifth Third,” said Rich Stoddart, president of Leo Burnett North America, in a statement. "Curiosity is ingrained in Fifth Third and its bankers"

Bank of America's last major marketing announcement came in 2007, when the bank launched its "Bank of Opportunity" campaign. The Charlotte bank is now shopping its ad account around.

Wells Fargo has centered its marketing around the image of a stagecoach, particularly on the East Coast after the acquisition of Charlotte-based Wachovia.

Study: More customers switching banks

Consumers are increasingly ditching their banks as a result of fees, poor service and unmet expectations, according to a new survey from J.D. Power and Associates.

The market research firm's 2012 U.S. Bank Customer Switching and Acquisition Study, released today, found 9.6 percent of customers surveyed said they switched banks during the last year. That's up from 8.7 percent in 2011 and 7.7 percent the year before.

On the heels of Bank Transfer Day - and continued backlash over bank fees - smaller banks and credit unions are benefiting from an increased exodus from larger banks, according to the study, which examined the bank shopping and selection process.

"When banks announce the implementation of new fees, public reaction can be quite volatile and result in customers voting with their feet," Michael Beird, director of J.D. Power's banking services practice, said.

Acquisition of new customers by smaller lenders increased to 10.3 percent from 8.1 percent last year. The study found fees are the main reason customers shop for a new bank, with a third of customers of big banks and regional lenders citing fees as the main trigger for shopping around.

Among larger lenders, switching rates range from 10 percent to 11.3 percent, compared to a 0.9 percent defection rate for small banks and credit unions. That was down significantly from the 8.8 percent rate for those small lenders in 2011.

Customers are weighing more than just fees, J.D. Power found. Customer service is also a major factor, and new fees can act as the "straws that break the camel's back" when customers are already unimpressed by their bank's service experiences, Beird said.

As banks look to capture new customers, promotions and cash incentives are powerful tools, the study found. But just 32 percent of customers who selected a new bank because of promotions said they definitely would not switch banks again in the next year. By comparison, about half of customers who chose a new bank because of good service or positive recommendations said they definitely would not leave in the next year.

The 2012 study is based on a survey of more than 5,000 customers who shopped for a new bank account or primary lender in the past year. It was conducted in November and December and includes Charlotte-based Bank of America Corp., Wells Fargo & Co. and other lenders with a presence in the Carolinas. J.D. Power did not release switch rates specific to those banks.

BB&T directors will need to own more stock

BB&T directors will be required to own more of the Winston-Salem bank's stock under a new policy disclosed in a securities filing Monday.

Previously, directors who aren't the bank executives were required to own 5,000 shares of common stock. Now, they will have to hold enough shares so that the value exceeds four times the average cash payment they receive for their service as director.

Directors generally receive about $80,000 in cash per year for their service, not counting stock and option awards, according to the bank's most recent proxy statement.

Recently, BB&T's stock has been trading about $30 per share. Under the new rules, a director would have to own about 10,650 shares.

For a director's new number of required shares to fall below the former standards, the stock's price would have to reach about $64 per share. BB&T's stock has never reached $50 per share.

At the bank's all-time high stock price, a director would have to own more than 7,000 shares under the new rules.

Directors will have five years to meet the new requirements, the securities filing says. A number -- but not all -- of them already meet the new standards, according to the proxy statement.

The former 5,000-share requirement was bumped up from 2,500 shares in 2010, and directors were given three years to comply.

Wells Fargo's policy is similar to BB&T's new requirement. Wells requires non-employee directors to own enough shares so that the value exceeds five times their cash compensation. The bank's directors receive an average of roughly $115,000, per the bank's proxy.

Bank of America's stock ownership requirements for non-employee directors require only that directors not sell any of their restricted stock awards, except for sales needed to pay taxes on the award, until they end their tenure on the board, according to the Charlotte bank's most recent proxy.

Morning roundup: Why no outrage for Walmart's debit card fee?

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

• Bank of America took it on the chin after introducing a $5 debit card fee (later retracted). Walmart has prepaid debit cards, and charges a $3 fee to use them. Forbes magazine explores: Why no outrage there?
• Billionaire investor Warren Buffett, who owns a sizable chunk of Wells Fargo, said big banks have been "victimized" by homeowners who refinanced loans before being evicted, Bloomberg reports. When the homeowner's refinancing gives them a cash payout larger than the costs of refinancing, "the evicted homeowner was the winner, and the victim was the lender," Buffett wrote in his annual letter.
• The Federal Reserve continues to play an outsize role in big banks' fortunes, the Wall Street Journal says, both positive and negative. The central bank's interest rate policy cuts into the banks' margins, but the Fed could also give banks a boost next month when it releases the results of stress tests.
• A less-well-known provision in the $25 billion mortgage settlement between states and big banks will give the banks a loss-share agreement with investors on more than $300 billion in junior liens the banks hold, Bloomberg reports.

Fifth Third establishes commercial banking center for western N.C.

Fifth Third Bank has established a commercial banking center in Asheville, the company announced Friday, that will serve businesses across western North Carolina.

The Cincinnati-based bank has been actively expanding in North Carolina, including at a regional headquarters in uptown Charlotte.

The commercial banking office will be led by David Hammett, who previously worked as a market executive for RBC Bank. That bank is being acquired by PNC Financial Services.

Fifth Third also has commercial banking presences in Charlotte and Raleigh.

Asheville bank ordered to raise capital or find buyer

The FDIC has ordered Asheville-based Pisgah Community Bank to raise capital or find a buyer as its capital levels "continue to deteriorate," according to a directive released Friday.

The bank, classified as "significantly undercapitalized," has been under an agreement with the FDIC since August 2010, but the capital plans the bank's management team has submitted have not been adequate, the FDIC said. The bank's condition has also gotten worse.

In the fourth quarter, the bank lost $3 million and its Tier 1 capital ratio remained below 3 percent, according to data from the FDIC.

"The bank’s management has not demonstrated the ability to return the Bank to a safe and sound condition," the new FDIC directive states.

The bank is now ordered to either find a buyer, sell new common stock, sell preferred stock, or receive direct contributions from the bank's directors or shareholders.

Wells Fargo report: Carolinas' economy improving

The economic recovery is gaining steam in the Southeast as construction losses subside and sectors such as manufacturing improve, a new report from Wells Fargo & Co. found.

Wells economists' Regional Chartbook found activity picked up last year in the region, which has lagged other parts of the country due to fallout from the housing bust, particularly in Florida, Georgia and the Carolinas.

"While North Carolina did not get as overbuilt as many other parts of the country, the building boom got started a little later there, and activity topped out about a year after it did nationwide," the report said.

Yet a recovery in the region has finally taken hold, the economists said, citing strong industrial development activity in places like Raleigh and Charleston, S.C., and overall improvement in tourism, international trade, life sciences and manufacturing.

Population growth picked up last year in the Carolinas, too, as hiring increased and more retirees moved to the area. Overall, Charlotte has taken longer to bounce back than other Carolinas metros, with unemployment remaining high, particularly in surrounding counties, which saw massive job losses in manufacturing and construction.

The economists expect the recovery to continue this year. They expect stronger technology, life sciences, tourism and trade sectors, with negative real estate news decreasing.

Yet residential and commercial construction is "still a long way off from making a major positive contribution to economic growth," the report said.

NewDominion hires commercial relationship manager

Charlotte-based NewDominion Bank announced Friday that it has hired Scott Shires to be its commercial relationship manager, where he will focus on bringing in new loan, deposit and treasury clients.

Shires has 19 years of banking experience in the Charlotte area, including stints at First Charter Bank and Wachovia, according to his LinkedIn page.

He attended Radford University.

Morning roundup: How many overdraft fees should a bank collect per day?

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

• How many overdraft fees should a bank collect from a single customer per day? The Huffington Post takes a look at the issue in light of the Consumer Financial Protection Bureau's new interest in overdraft fees. Bank of America caps the number at four, meaning it will take up to $140 in overdraft fees per day. BB&T set the limit at eight, which would add up to $280.
• Speaking of overdraft fees, Forbes magazine says Bank of America, JPMorgan Chase and Wells Fargo in particular are due for more discomfort as the CFPB's probe begins.
• Banks are hopeful that a rise in business spending could mean the start of an economic recovery, Reuters reports.
• The banking lobby pushed regulators crafting the Volcker Rule to include restrictions on foreign firms in a bid to get foreign governments on their side, Bloomberg says.

Bank of America no longer selling many mortgages to Fannie Mae

After a dispute over repurchase claims, Bank of America is no longer selling many of its mortgages to Fannie Mae, the bank disclosed Thursday in its year-end report.

As of this month, the bank will only sell Making Home Affordable Program refinance mortgages to Fannie Mae to be made into mortgage-backed securities, the bank said. No other mortgages will be sold to Fannie Mae.

The mortgage giant makes banks repurchase loans it determines were sold using incorrect data, known as rep and warranty claims. In its last quarterly report, the Charlotte bank disclosed that it did not agree with some of the determinations Fannie Mae had made.

Fannie Mae and Freddie Mac own about half of the nation's mortgages. Their purchases add liquidity to the mortgage market and allow banks to make more loans.

Bank of America spokesman Dan Frahm said the bank does not expect the decision to have a material impact on the business, and said the bank will use other sources of liquidity to continue to make loans.

BofA marketing expenses grew 12 percent last year

Bank of America spent 12 percent more on marketing in 2011 than it had the year before, with expenses reaching $2.2 billion, according to the bank's 300-page year-end report filed Thursday afternoon.

That compares with $1.96 billion in 2010 and $1.93 billion the year before that.

The bank is the country's 17th-biggest ad spender, according to Ad Age. Last month, Bank of America put its ad account under review in a bid to rethink its marketing strategy, according to The New York Times and a number of other media outlets.

Bank of America's image took one of the biggest hits in corporate America in 2011, particularly after it announced and then retracted a plan to charge $5 for debit card use.

In its latest major re-marketing effort, the bank unveiled in 2007 an ad campaign revolving around the slogan "Bank of Opportunity."

In October 2011, the bank launched a series of TV ads promoting its local philanthropy, Reuters reported.

Bank of America freezing pension plan

Bank of America is freezing its pension plan effective July 1, the bank said Thursday.

Instead, the Charlotte bank will begin contributing 2 to 3 percent of an employee's salary to his or her 401(k) in addition to the standard match of 5 percent of an employee's contributions.

Employees will retain all pension plan benefits they have earned to date, bank spokesman Scott Silvestri said.

Private-sector companies across America have been dropping pension plans over the past two decades as the costs of so-called "defined-benefit" plans ballooned. Many have switched to defined-contribution plans like 401(k) matches, as Bank of America has now done.

About 70 percent of the Fortune 100 companies have already made the switch, according to human resources consulting firm Towers Watson. During the recession, many companies began freezing or ending 401(k) matches.

Bank of America had about 282,000 full-time employees at the end of the year, down from about 288,000 at the end of 2010. About 15,000 are in Charlotte.

The bank has been aggressively seeking to cut costs through a program known as Project New BAC, named after the company's stock ticker.

Silvestri said he did not have an estimate on how much the change will save the company.

Here's WCNC's take on the issue.

Morning roundup: U.S. economy improving, Europe headed for recession

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

• Dallas Federal Reserve President Richard Fisher said the U.S. economy is improving and that another round of central bond buying isn't necessary, Reuters reports.
• JPMorgan Chase & Co. has more than tripled its holdings of mortgage securities without U.S. government guarantees, representing a multibillion-dollar bet on on homeowners, Bloomberg reports.
  
• The European Union lowered its growth forecast for the year and warned that the euro zone would fall into a "mild recession," the New York Times writes.
• Stocks opened lower this morning as Hewlett-Packard announced its first-quarter revenue fell short and first-time jobless claims held steady, the Wall Street Journal reports. Technology and industrial sales led the U.S. markets lower.

Study: Americans working longer to fund retirement

People are living longer, health care costs are rising - and Americans are considering major lifestyle changes to make sure they have enough money for retirement, according to a new study from Bank of America.

The latest Merrill Lynch Affluent Insights Survey, released today, shows three-quarters of affluent Americans - those with more than $250,000 to invest - would approach their money management differently if they knew they would live to be 100.

The top strategies include continuing to work at least part-time during retirement, re-evaluating savings and investment strategies and contributing more to a 401(k). A quarter of respondents said they would consider retiring closer to 85 than 65, the survey found.

The study also found age alone is less of a factor in determining when to retire. Instead, survey respondents cited feeling confident that they have enough money to live the way they want in retirement, among other factors.

"This notion of people living longer and the impact it has on them when they are thinking about retirement, it's an issue not just for us here at Bank of America, but it's really the driving force for all of America," said David Tyrie, head of personal wealth and retirement for Bank of America Merrill Lynch.

Respondents also said they would rather retire later than make changes to their current lifestyle - but if needed, many said they would trim daily expenses, limit vacation budgets and consider other changes, the survey found.

Customers' evolving attitudes and concerns are influencing the way Bank of America does business, Tyrie said. Financial advisers are offering more than just investment strategies, often providing advice on health care costs and retirement, he said.

The bank is also developing more resources for customers and broadening its array of products.

"It makes us listen real carefully," Tyrie said. "It makes us retool internally."

Morning roundup: Was Moynihan's pay fair?

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

• Bank of America CEO Brian Moynihan collected stock options worth about $6 million, disclosed last week. While investors might wish the pay was lower considering the bank's performance in 2011, The Motley Fool says the amount is significantly lower than the bank's peers are paying their executives, and says BofA made the right decision.
• Bank of America's stock rebound continues to be the talk of the financial world on an almost daily basis. Bloomberg reports today that an investment firm CEO says it's not too late to get in on the bank's rise.
• The Consumer Financial Protection Bureau is turning its attention to overdraft fees, requesting data from the country's largest institutions, the Wall Street Journal reports.
• Four bank fees "you should never tolerate," according to the Christian Science Monitor: Monthly account fees, check cashing fees, account maintenance fees and minimum balance fees.
• Wells Fargo is buying another loan portfolio from a European bank, this time an energy lending business from France's BNP Paribas, Reuters reports.
• The much-discussed Volcker Rule could have the effect of reinstating the division between commercial banks and investment banks, a distinction broken down after the repeal of Glass-Steagall, The New York Times says.

BB&T declares 16 cent dividend

BB&T declared Tuesday a 16 cents per common share dividend for the second quarter. The Winston-Salem bank will pay the dividend on May 1 to shareholders of record on April 9.

The dividend gives the bank's stock, which is trading near $30 per share, a yield of about 2 percent. That puts it relatively high relative to its peers.

Of major banks with a Charlotte presence, First Citizens is paying a higher dividend, at 30 cents. But since its stock is trading near $175 per share, that gives it a much smaller yield.

Other banks with in the area that are paying dividends:

• SCBT: 17 cents
• Wells Fargo: 12 cents
• Fifth Third: 8 cents
• SunTrust: 5 cents
• Bank of America: 1 cent
• Citizens South: 1 cent

Analysts: Wells Fargo a good fit for Ally

Ally Financial is weighing a sale of all or part of its auto lending and banking businesses, Reuters reported last week - and some analysts are targeting Wells Fargo & Co. as a possible buyer.

A research note from Keefe, Bruyette & Woods today said Wells, which bought Charlotte’s Wachovia in 2008, is a “likely buyer” for Ally’s North American Auto Finance business. The San Francisco-based bank is one of the few large lenders with the interest and balance sheet to take down the entire business, KBW analysts said.

They believe Wells would be interested in acquiring the business because of Ally’s market share and Wells’ excess liquidity to buy assets, they said. Other lenders that might be interested in part or all of the business include JPMorgan and U.S. Bank, the analysts said.

"A purchase of the auto finance business would give Wells a much larger industry presence in a line of business where WFC already competes," the KBW report said. "... Overall, we believe that the market would view this as a good deal for Wells Fargo."

South Carolina homeowners to receive $190 million in settlement

More than 15,000 South Carolina homeowners will receive about $190 million in foreclosure relief and other compensation from the blockbuster settlement between state attorneys general and the country's largest mortgage servicers.

• $137.3 million will go toward principal reduction, short sale assistance and other foreclosure relief for underwater borrowers in default or at risk of default.
• $36.5 million will help underwater borrowers current on their payments refinance at lower interest rates.
• $16 million will go to homeowners who already lost their homes to foreclosure, in $2,000 chunks.

The figures come from the consortium of state attorneys general who negotiated the deal, posted on their website, NationalMortgageSettlement.com.

All told, the mortgage servicers -- including Bank of America and Wells Fargo -- will pay about $25 billion to absolve claims that they used incorrect and improper foreclosure and mortgage servicing practices.

About 28,000 North Carolinians will receive about $275 million from the settlement. The state will receive about $64 million, most of which will be used to provide housing counselors, legal assistance and expanded prosecution of financial crimes.

South Carolina had previously announced that the state's share would be about $33 million. The state has not yet broken down how it will use that money, as North Carolina has done.

Morning roundup: Fed offers little transparency on bank rules

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

• The Federal Reserve is rewriting the rules governing U.S. banks behind closed doors, the Wall Street Journal reports. Rather than discussing rules and voting in public, as is done at other agencies, the Fed is making big changes almost completely without public meetings, the Journal writes.
• Neil Barofsky, former special inspector for TARP, tells Bloomberg the proposed Volcker rule, which would restrict trading by banks, will help financial stability.
• It's bonus season for bankers - but some executives will likely be forced to return the payouts as claw-backs become more popular, CNBC reports.
• The Greek debt deal could pave the way for widespread economic reforms, but markets have reacted cautiously so far, the Associated Press reports.
  

RBC Bank to PNC Bank conversion scheduled for March 2

RBC Bank branches are scheduled to close for the final time at 4 p.m. Friday, March 2 -- the same day the sale of the Raleigh-based bank is expected to close. The branches will open as PNC Bank on Monday, March 5, the company has announced.

In June, PNC Financial Services of Pittsburgh announced it was acquring Raleigh-based RBC Bank. The Federal Reserve gave the $3.45 billion deal the go-ahead in December.

A number of the branches already have PNC signs, temporarily covered as Wells Fargo did before converting Wachovia branches.

RBC Bank has 424 branches in six Southeastern states. The bank controls about $1 billion in deposits at 18 Charlotte-area branches, according to the FDIC.

Roundup: Bank of America back?

Here's a look at what's news on this Presidents Day bank holiday:

• Is Bank of America "back from the dead" or "still a zombie"? A Bloomberg Businessweek editor discusses the bank's stock price this year, and concludes investors should still expect ups and downs.
• Britain's Lloyds Banking Group is said to be demanding that executives repay their bonuses after unexpected losses turned up, The New York Times reports.
• Spain's sovereign debt load could double from its position at the start of the European financial crisis, which could provide more woes for the continent, Bloomberg reports.

N.C. lays out how it will spend settlement money

Most of the $338 million North Carolina is receiving as part of the blockbuster $25 billion mortgage servicing settlement announced last week will flow directly to underwater borrowers in the form of principal reduction and other foreclosure relief.

But each state government participating in the settlement will also receive a cash payment, and the states have wide latitude in deciding how to use it.

The state of North Carolina will receive $63.7 million from the settlement, about one-quarter of what the state's residents will get. Most of the money will be distributed to a number of state agencies for housing programs, an approach that homeowner advocates say puts North Carolina ahead of many of its peers.

• $20 million to the N.C. Housing Finance Agency, who will distribute the money to independent housing counselors.
• $12 million to independent legal assistance organizations.
• $10 million to the state’s general fund, the money appropriated across state agencies in the annual budget.
• $10 million to the State Bureau of Investigation and district attorneys’ offices for training in the prosecution of financial crimes.
• $6.3 million to the public school system.
• $5 million to the consumer protection division of the attorney general’s office, to investigate financial fraud and spread the word about the settlement.

States like Wisconsin and Missouri have already announced they are putting a much higher percentage of their take into the state's general fund, drawing criticism from political opponents who said more money should go to struggling homeowners. Observers of the deal in North Carolina said the state took a more balanced approach.

In North Carolina, the money to the general fund is intended to be restitution for the budget deficits spawned by the foreclosure crisis, as well as a standard reimbursement for attorney’s fees in negotiating the settlement, said Julia White, senior policy adviser in the state attorney general’s office.

A spokesman for N.C. House Speaker Rep. Thom Tillis, R-Mecklenburg, said it’s too early to speculate about what the money the state will receive will be used for. The office of State Senate Pro Tem Phil Berger gave a similar statement.

Morning roundup: BofA seeks to stop Moynihan deposition

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

• Bank of America has filed a motion in federal court to block a scheduled deposition of CEO Brian Moynihan in a lawsuit that alleges Countrywide misled investors as to the quality of its loans, Bloomberg reports.
• Nearly 130 banks in 35 states have banded together to take on the country's biggest banks, pooling money for advertising, marketing and product offerings under a brand called Kasasa, CNN says.
• Fed Chairman Ben Bernanke addressed the growing tension between regulators and community banks at a speech Thursday in Virginia, Bloomberg reports. Nearly one-third of small banks are under some type of order from federal regulators, up from 3 or 4 percent historically, and some banks say standards are applied inconsistently.
• You are not a Wells Fargo employee. You are a team member, CEO John Stumpf consistently says, emphasizing it again in an interview with CNBC this morning, the Wall Street Journal relates. Stumpf also apologized for mistakes banks have made and says he reads letters from customers every day that "tears my heart out," he said.
• The $25 billion settlement is done, but foreclosure abuse is still "rampant" across the country, experts tell Reuters -- including the register of deeds in Guilford County, N.C. (Reuters misspells the name of the county, but we'll cut them slack).

BofA's reputation suffered in 2011, Harris says

Bank of America's reputation among consumers fell more than any other company's in 2011, according to an annual study from Harris Interactive. The Charlotte bank's performance capped a terrible year for corporate America -- and the financial industry in particular -- in the public's eye.

Harris Interactive determines a company's "Reputational Quotient" based on interviews with 17,000 people about their views of the company's service, financial performance, leadership and other measures. This year, Bank of America's index fell to 49.85, down from 59.83 last year.

A score below 50 represents that a company has "reached such a low point that their viability may be called into question," Harris executive vice president Robert Fronk said in a video explaining the results. Twelve companies have fallen below the point in the 13 years of the poll, and 10 of them -- like MCI, Enron and Fannie Mae -- have failed or been taken over by the government.

It is definitely possible for a company to rehab its image, Harris said. General Motors and Toyota have both dramatically improved in recent years.

While Bank of America received decent marks in financial performance, it suffered mightily in its "emotional appeal," which involves trust and respect.

"The general public believes that Bank of America has been more concerned with operational and financial recovery than with customers and rates the bank low in levels of trust, ethics, and customer service," the company said in a news release. "In order to rebuild their reputation, Bank of America will need to engage beyond this functional rebound."

It was a bad year for corporations' reputation in general. Only 20 percent said corporate America's reputation is positive. Financial firms were particularly buffeted.

Goldman Sachs and AIG joined Bank of America with sub-50 scores.

Apple took the top spot with a score that set an all-time high. Google finished second.

Bank of America bonds also on review for downgrade

Moody's Investor Services announced Thursday that it is also putting Bank of America's covered bonds on review for downgrade, driven by Wednesday's decision to question the bank's long-term rating.

The covered bonds rating -- or corporate securities backed by a pool of loans -- was last downgraded Sept. 23, Moody's said. Should the review of the bank's long-term rating be lowered, the bonds would likely be downgraded one notch, to A1.

Moody's said it considers this type of investment to be highly exposed to market value risk. If the bank were to default, the loan pool might need to be liquidiated quickly.

On Wednesday, Moody's placed the long-term rating for Bank of America and a number of other big banks on review for a downgrade, citing continued difficulty in capital markets.

Moody's will be looking at "structural vulnerabilities in the business models of global investment banks," the agency said, including their interconnectedness with other firms and the possibility for sudden, unexpected losses like those that toppled some banks in 2008.

Joining the Charlotte bank were Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Royal Bank of Canada.

Bank of America could be downgraded up to one notch. Citigroup and JPMorgan could fall up to two notches.

A report from CreditSights earlier this week predicted the review. All three of the major credit ratings agencies downgraded Bank of America last year.

Read more here: http://obsbankwatch.blogspot.com/2012/02/moodys-could-downgrade-banks-credit.html#storylink=cpy

Morning roundup: Moody's places ratings of BofA, other lenders on review.

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

• Moody's Investors Service has placed the ratings of Bank of America, Citigroup, Goldman Sachs and other lenders on review for possible downgrades over questions of their long-term profitability, the Wall Street Journal reports.
• Wall Street might be the main critic of the Volcker Rule, which prohibits banks from trading with their own money, but other companies - including Red Lobster and Macy's - have chimed in with their own objections to the rule, the New York Times writes.
  
• Reuters columnist Felix Salmon discusses why Bank of America can't tell Merrill brokers what to do.
• Foreclosures are on the rise again after activity froze in 2011, CNBC reports. According to a new report from RealtyTrac, one in every 624 U.S. households received a foreclosure filing in January, up 3 percent from the month before.
• Stocks were little changed this morning amid better-than-expected housing starts and jobless claims, which countered continued concern about Greek debt, Bloomberg reports.
  

Mortgage settlement could be filed by next week

The $25 billion settlement between states, federal agencies and the five largest U.S. mortgage servicers could be formally filed in federal court late this week or early next week, according to the N.C. attorney general's office.

While the basic framework of the deal was announced by the U.S. Department of Justice last week, the formal agreement will provide more details -- including what mechanisms the independent monitor will have to enforce it and what specific claims the banks are released from.

The agreement is being filed in the U.S. District Court for the District of Columbia, where its enforcement will be overseen by a federal judge and N.C. banking commissioner Joseph Smith, who is leaving his post to devote himself to the job.

Read more here: http://www.charlotteobserver.com/2012/02/15/3013359/smith-to-leave-state-bank-post.html#storylink=cpy

Carlisle & Gallagher increases revenue 48 percent, hires 350 last year

Charlotte-based financial services firm Carlisle & Gallagher Consulting Group continued its steady growth in 2011, increasing revenue 48 percent, the company announced Wednesday. The nearly 10-year-old company also hired 350 new employees, bringing its nationwide total to 800.

The firm focuses exclusively on financial services companies, with seven of the 10 largest U.S. companies in the sector as clients, CEO Bob Gallagher said in an interview Wednesday.

In the first few years of operation, the company focused on helping banks integrate its acquisitions during a wave of consolidation in the industry. Now, Gallagher said the transitioning industry has helped drive his firm's growth, as banks focus on adapting to regulatory change, technological advancement and a more competitive landscape.

The company occupies two floors at 212 S. Tryon St., totaling 25,000 square feet. About 200 employees work in Charlotte.

The firm also has hubs in Dallas, Jacksonville, Fla., and Richmond, Va. Carlisle & Gallagher hires its employees regardless of where they live, with many working remotely, Gallagher said.

Study: Small banks better for small-biz loans

Small-business owners looking for loans might have better luck at small banks, according to a new report from MultiFunding, a Pennsylvania firm that helps companies find the right lender.

The average branch of a large national bank manages $4.6 million in small-business loans, compared to $6.8 million for regional bank branches and $9.1 million for state banks, the study found.

Large national banks use about 4 percent of their domestic deposits for small business loans, while regional banks use 11 percent and state lenders use more than 14 percent.

Small banks are "simply more equipped to handle small-business loans," MultiFunding said.

But because large national banks own more than half of the country's 93,000 bank branches, many small-business owners are starting in the wrong place, which could ultimately have an effect on the number of jobs they're able to create, the firm said.

"We hope that small-business owners across America won't be tempted by the 'big brand' when exploring their loan options," MultiFunding said. "The stakes are too high, for them and for all of us."

Morning roundup: Love America? Buy Bank of America stock

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

• Do you love America? Then buy Bank of America stock, TheStreet.com says. The financial website points to the bank as a good way to play bullishness on progress in the U.S. economy. One guy who's apparently not in that camp, though, is billionaire hedge fund manager John Paulson, who sold his stakes in the Charlotte-based bank and Citigroup sometime in the fourth quarter, Forbes reports.
• The Federal Reserve has approved Capital One's quest to buy ING, the online bank, to transform Capital One from a credit card business into the fifth-largest bank, Fox Business reports.
• Legendary investor Warren Buffett increased his stake in Wells Fargo in the fourth quarter, the AP reports.
• Goldman Sachs and Morgan Stanley joined the group of banks warning the Volcker Rule, as it stands, would hurt the economy and bank's clients, Bloomberg reports. Bank of America, Citigroup and JPMorgan Chase were already in that camp. At an investor conference Tuesday morning, Wells Fargo head of wealth, brokerage and retirement David Carroll also warned that the Volcker Rule would have unintended, harmful consequences.

Wells hired more than 1,400 financial advisers last year

Wells Fargo hired 1,436 financial advisers last year, 52 percent of whom are trainees, said David Carroll, the bank's head of wealth, brokerage and retirement, at the Sterne Agee investor conference Tuesday morning.

"We've got a big committement to growing our own talent," the Charlotte-based banker said.

Carroll said that over the last few years, Wells has been able to keep its "regretted attrition," or employees the bank would like to keep who leave of their own accord, under 3 percent in his business. Last year, the figure was 1.6 percent, Carroll said.

But compared with the people who were lost, the bank's new hires are 40 percent more productive, Carroll said.

He said the bank is "disciplined" with its recruiting packages, and generally does not offer the most money.

"People are attracted to Wells Fargo for reasons other than the upfront economics," he said.

Moody's could downgrade banks credit ratings again, report says

Moody's Investors Service, one of the three main credit ratings agencies, is expected to downgrade the debt ratings of Bank of America, Wells Fargo and a number of other banks, according to a report published by CreditSights and reported on by TheStreet.com.

The report cites comments on a Feb. 1 conference call by Moody's executives that some global banks could see two- or three-notch downgrades because of "Eurozone weakness" and uncertainty in capital markets.

Other banks cited were JPMorgan Chase, Citigroup, Goldman Sachs and Morgan Stanley.

All three credit ratings agencies downgraded Bank of America's credit rating last year.

N.C. banking commissioner stepping down to focus on settlement

N.C. Commissioner of Banks Joseph Smith is stepping down from his post to focus on a new role for him announced last week: monitor of the $25 billion settlement between states, federal agencies and the country's largest mortgage servicers.

In that role, Smith, 62, will oversee banks to make sure they are complying with the terms of the agreement, and levy penalties if benchmarks are missed.

Smith's resignation is effective Thursday, the office of the N.C. Commissioner of Banks announced. Smith has been banking commissioner since 2002, and was appointed to another term last year. During his tenure, Smith's office has seen state-chartered banks grow to more than $250 billion in assets and issued enforcement actions that resulted in $30 million in restitution to consumers in the last four years.

“For a decade, Joe has served North Carolina as a staunch defender of consumer rights and a firm but fair regulator of banks and financial institutions,” Gov. Bev Perdue said in a statement. “He played a critical role in eliminating the abuses of payday lending, strengthening antipredatory lending and fighting abuses in mortgage lending.”

The state banking commissioner regulates state-chartered banks, mortgage lenders and other financial institutions.

Smith's role as monitor will last three years. He intends to remain in Raleigh, the statement says.

“I have enjoyed my tenure as commissioner of banks and have done my best to promote the strength and fairness of North Carolina’s financial markets,” Smith said in a statement. “I hope my efforts as monitor will contribute to the recovery of the mortgage market and the health of our economy.”

Chief Deputy Commissioner of Banks Ray Grace will serve as acting commissioner until a permanent replacement is named.

While debit rewards decline, credit card incentives on the rise

Rewards for debit card use have declined in the wake of recent regulatory changes, but banks are increasingly making it more attractive to swipe a credit card, a survey from Bankrate.com found.

A much-discussed provision in the Dodd-Frank financial reform law capped the swipe fees merchants pay banks on debit card transactions, but did not set a limit for credit card use. As a result, credit card issuers modestly sweetened the rewards they offer to their customers.

Forty-eight percent of cards now offer 1 percent cash back from the first dollar of spending, up from 42 percent last year, Bankrate found.

"Unlike debit card rewards, which declined sharply over the past year, credit card rewards are still alive and well," said Greg McBride, senior financial analyst for Bankrate.com, in a statement. He said consumers who use their cards frequently and pay their balance in full at the end of the month is particularly attractive in this environment.

Morning roundup: Potential for growth in BofA stock?

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

• Bank of America shares have rallied this year, but one analyst cautions investors that there's reason to wait before jumping on board, the Wall Street Journal reports. Now that the mortgage picture seems a little clearer, the focus will turn to earnings, he says.
  
• The Motley Fool is a little more optimistic, saying BofA has the biggest potential among its peers.
  
• Top U.S. banks captured the biggest piece of global trading revenue in at least two years as European banks reduced risk, Bloomberg reports.
• The New York Times details the California attorney general's role in negotiating the $25 billion foreclosure settlement with big banks announced last week. In the end, she walked away with much more than the state was slated to receive originally, the Times writes.
• Markets opened lower this morning on data showing weaker-than-expected January retail sales, Reuters reports.

BofA sees big growth potential in health savings accounts

Bank of America Corp. is seeing record growth in its health savings account business as health care costs continue to rise and employers shift more responsibility onto their workers, the bank said today.

Health savings accounts grew by more than a third in 2011, with 50,000 new accounts from existing corporate clients and new relationships with employers and individuals, the bank said. The products are the fastest-growing of the health benefits the Charlotte bank offers, part of a broader business that provides retirement and benefit plans.

"It comes down to, health care is the No. 1 or 2 financial concern for virtually every customer segment that we have," said Justin Raniszeski, health benefit solutions executive for Bank of America Merrill Lynch.

The bank has been in the business since 2005. Now, it has nearly 200,000 health savings account users with more than $300 million in account balances. The average balance has grown more than 10 percent since 2010 to $2,016, the bank said.

Health savings accounts, designed to work with high-deductible health plans, allow employees to make pretax contributions for medical expenses such as doctors visits and prescriptions. The accounts earn tax-free interest, can be carried over year to year and move with an employee when he changes jobs or retires.

Kevin Crain, the bank's head of institutional retirement and benefit services, said the accounts have become more popular as employers give more accountability to workers for their financial security, from 401(k)s to health benefit plans. Health savings accounts fit naturally with the bank's other services, he said, because corporate clients' financial concerns extend beyond just retirement accounts.

Raniszeski predicts the business will continue to grow.

"The reason we're excited about it is, I don't think we see those things changing," he said.

S.C. to get $33.8 million in mortgage settlement

South Carolina will receive $33.8 million as part of the multi-billion-dollar settlement between states, federal agencies and the country's largest mortgage servicers, the S.C. attorney general's office says.

The much-anticipated $25 billion settlement with Bank of America Corp., Wells Fargo & Co., JPMorgan Chase & Co., Citigroup Inc., and Ally Financial Inc. was announced Thursday. It marked the largest federal-state joint settlement history.

North Carolina will receive $338 million in the deal, most of which will go to principal reduction for underwater borrowers in default or at risk of default.

South Carolina did not break down where most of the money the state and its residents will receive will go, but did say that in addition to a $32.8 million general share in the settlement, the state's banking regulator will get $1 million for foreclosure prevention and education.

Read more here: http://www.charlotteobserver.com/2012/02/10/2999436/338m-awaits-nc-in-loan-deal.html#storylink=misearch#storylink=cpy

Morning roundup: Volcker to formally defend rule bearing his name

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

• Former Fed chairman Paul Volcker is expected to file a comment letter defending the regulation bearing his name, arguing that critics are overlooking its good points, the Wall Street Journal reports.
• Investment site Seeking Alpha says Bank of America stock is still undervalued "by most metrics," including price-to-book and price-to-cash. Fairholme Fund manager Bruce Berkowitz is also bullish on the bank, and on the financial sector in general this year, he related in an interview with Bloomberg.
• A growing number of people are opting for "customized" mortgages, fixed rate loans with lengths different from the standard 30 or 15 years, The New York Times reports. The 20-year mortgage is becoming particularly popular.

Wells CFO says Wachovia acquisition has gone 'better than we thought'

Wells Fargo's 2008 acquisition of Charlotte-based Wachovia has gone better than expected and has improved Wells' business model, Chief Financial Officer Tim Sloan said during a presentation at an investor conference on Thursday.

"We don't want to declare victory too early, but it's gone better than we thought," he said during the question-and-answer period of his presentation. "It's been a three-year process and cost us billions of dollars, but we think we've done it right."

Sloan said the acquisition improved the San Francisco-based bank's talent pool, and allowed it to pick the "best of the best." He also said it has allowed Wells to diversify its business model, in geography, customer base and in product line.

That, in turn, has boosted the bank's bottom line and improved its capital and liquidity, Sloan said.

Unlike in many acquisitions, Sloan said the Wells-Wachovia integration has avoided causing massive changes and problems for customers.

Morning roundup: $25 billion settlement is done. What's next?

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

• The big news yesterday was the long-awaited $25 billion settlement between states and the country's largest mortgage servicers. What's next? Bloomberg says banks like Bank of America still face years of litigation and billions more in costs. Reuters reports the settlement will be "too little, too late" for the hardest hit people. The Wall Street Journal says investors get a little relief.
• People who use Citi's iPad and other digital apps have inadvertently been charged twice, The New York Times reports.
• Smaller financial firms are decrying the Federal Reserve's decision to offer taxpayer-acquired AIG assets to a select group of banks, Bloomberg reports.

Morning roundup: Banks seal foreclosure deal

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

• The big story today is banks' long-anticipated foreclosure settlement with state attorneys general, set to be announced this morning. The Wall Street Journal details four key players in the multibillion-dollar deal.
• Meanwhile, federal regulators plan to warn big banks - including Bank of America - that they intend to sue them over other mortgage-related actions, a sign that banks' mortgage woes aren't yet behind them, people familiar with the situation told the Journal.
  
• Wall Street firms are making bets on troubled securities, a signal that some are anticipating a rebound, the New York Times reports.
• Stock futures rose this morning as Greek politicians reached an austerity deal and U.S. jobless claims fell, Bloomberg reports.
• But it's too early to assume markets have shifted to a long-term bullish trading environment, CNBC says.

Tree.com tries to speed sale of its home loan unit

Tree.com, the Charlotte-based parent company of LendingTree and several other lead-generation sites, announced Wednesday that it has changed an agreement with Discover Financial to buy most of its home loan origination unit to help it close.

The two companies entered into an agreement in May 2011 for Discover to acquire most of the assets of Tree.com's Home Loan Center, as the Charlotte company hoped to focus on its core business. The companies hoped to have the sale closed by the end of the year. Tree.com shareholders approved the deal in August.

But the sale still hasn't gone through. Discover has already paid Tree.com $5 million in extension payments as the two companies work through the myriad closing details.

In Wednesday's announcement, the main change is to the payment structure. The deal is still worth $55.9 million.

Initially, Discover was to pay $35.9 million at closing, then $10 million on the one-year and two-year anniversary.

Now, Discover will pay $3 million on March 7, regardless of whether the deal is done. A total of $42.9 million will be due at closing and $10 million on the first anniversary.

Other terms of the closing were changed to allow more flexibility, but those changes were not disclosed.

The delay has not hurt Tree.com. With the wave of refinancings accompanying record-low interest rates, the home loan unit has been making a significant amount of money, boosting the company's bottom line.

Tree.com now says the companies are committed to closing the deal by mid-year.

Alliance Bank still 'very strong,' CEO says

Despite the announcement of a consent order with the FDIC, Alliance Bank and Trust CEO Dan Ayscue said in an interview Wednesday that the bank remains "very strong" in capital and liquidity, and says the bank has already made a lot of progress toward meeting the terms of the agreement.

On Tuesday, the Gastonia-based bank announced in a securities filing that a recent agreement with the FDIC mandates the bank to review its management team, create a plan to resolve problem loans and maintain capital levels.

Ayscue said that he is not surprised that regulators are exercising increased oversight, but that the bank has already made progress in the past year and the consent order will help the bank improve more.

In the first quarter, the period regulators looked at, past-due loans made up 9 percent of the bank's total, according to the bank's quarterly securities filing. That ratio has now come down significantly, Ayscue said.

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"The quality of our loan portfolio has improved drastically over the last year," he said. "We have been doing a lot of work to get where we need to be."

more here: http://www.charlotteobserver.com/2012/02/08/2993428/alliance-bank-under-fdic-order.html#storylink=cpy

Morning roundup: State AG settlement inching closer, California back to the table

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

• The settlement between the largest U.S. mortgage servicers -- including Bank of America and Wells Fargo -- and a consortium of state attorneys general is inching closer, and California is back at the bargaining table after months of absence, The New York Times says. When the deal, expected to be as much as $25 billion, comes through, bank earnings shouldn't be majorly affected because they have already put aside money for the penalty, a Reuters analysis shows.
• Bank of America, struggling to deal with the demand, is telling some customers looking to refinance their mortgages to wait up to 90 days to start an application, Bloomberg reports.
• The total cost of mortgage problems and improper foreclosures has reached more than $72 billion for the largest U.S. mortgage servicers, Bloomberg reports. Bank of America alone counts for more than $40 billion.

Small business owners most optimistic since 2008, Wells Fargo says

Small business owners are the most optimistic about their finances and hiring prospects than they've been since July 2008, according to a Wells Fargo-Gallup survey released Tuesday.

The results was compiled from telephone interviews with 600 small business owners between Jan. 9 and Jan. 13, and covers their expectations for the coming 12 months.

Among the survey's findings:

• 49 percent of owners expect revenues to increase, up from 37 percent in October.
• 22 percent expect the number of jobs at their business to increase, up from 15 percent.
• The overall Small Business Index score increased to 15, from -3 in October.

The index based on the owner's opinion of the business's present condition remained negative, at -6, though that is up from -11 in October.

Morning roundup: Banks encouraging short sales

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

• Banks are offering cash incentives - some as much as $35,000 - to delinquent homeowners to sell their properties for less than they owe, Bloomberg reports. Lenders have found these short sales faster and easier than foreclosures, and they're encouraging them as part of a continued effort to move troubled mortgages off their books.
• The Wall Street Journal examines whether big banks can be part of a "socially responsible investing" plan.
• An emerging class of "shadow banks" could prompt a new wave of financial turmoil, Reuters reports. Now, watchdogs are focusing on hedge funds and money market funds that are engaging in unregulated financial activity.
• A company that provided home foreclosure services to lenders has been indicted on forgery charges by a Missouri grand jury, the New York Times reports.
• Stocks slipped as markets opened this morning amid mixed earnings reports and continued uncertainty over Greek debt talks, CNBC reports.
  

Expect more lawsuits against officers of failed banks

Officers at failed banks may see a wave of lawsuits from the FDIC as the three-year period the regulatory body has to take action comes to a close for a number of banks, legal firm Bryan Cave's banking unit says.

Bank failures spiked in 2009, to 140 from 25 the year before. The three-year period the FDIC has to charge officers at those banks with negligence or other wrongdoing ends this year.

The most recent FDIC suit, against a failed California bank, came just days before that period came to an end, Bryan Cave points out. The FDIC has now sued officers and directors at about 20 failed banks.

In late December, the FDIC sued officers at The Bank of Asheville, claiming negligence in its rapid growth. Bryan Cave said that was an indication the regulatory body was becoming more aggressive.

Merrill Edge call centers lauded by J.D. Power

Consumer ratings firm J.D. Power and Associates has named Bank of America Merrill Edge's call centers "An Outstanding Customer Service Experience," after reviewing the bank's services through its call center certification program.

Merrill Edge is Merrill Lynch's investment advice and platform for the "mass affluent" category of customer, or those with between $50,000 and $250,000 in investable assets. It offers its services over the phone through the call centers, known as the Merrill Edge Advisory Center, or in person at some banks by appointment.

J.D. Power's review looked at more than 100 practices and involved a random survey of customers. To earn the outstanding rating, the call center must fall within the top 20 percent of service scores.