A new advocacy group is urging big banks to slash principal, halt foreclosures and otherwise help millions of underwater homeowners, the latest wave of backlash against the country's largest lenders.
The Home Defenders League, a national coalition of homeowners and community groups, kicked off its effort with a conference call today. The goal, organizers said, is to reboot the nation’s still-struggling housing market with the help of banks and politicians.
Top mortgage servicers, including Charlotte-based Bank of America Corp. and San Francisco’s Wells Fargo & Co., agreed in February to a $25 billion settlement with government officials over improper foreclosure practices. Under the terms, the lenders will reduce principal and modify loans for some homeowners, among other steps.
Bank of America began sending more than 200,000 letters this month offering principal reductions as part of the settlement, for instance. A bank spokesman today declined to comment on the Home Defenders League, saying he was unfamiliar with the group.
Coalition organizers said they want to help homeowners who qualify for assistance under the deal, as well as others who are struggling to stay in their homes. Among the group’s demands: that banks implement widespread principal reductions, allow people to stay in their homes after a foreclosure by paying rent and allow those homeowners a chance to buy back their homes at today’s market value.
“I know first-hand how hard it is to fight the millionaire banks and win,” homeowner activist Ruby Brown of Minnesota said. “But that’s what we’re doing.”
Thursday, May 31, 2012
Homeowner advocates seek mortgage modifications, other help
Report: Citigroup debt will underperform peers
Welcome to the morning roundup. Here's a look at today's banking and finance headlines.
Citi debt. A research report being published today says debt issued by Citigroup Inc. will perform worse over the next six months than bonds issued by the bank's peers, the Wall Street Journal reports. Fixed-income research company Gimme Credit says in the report that investors are underestimating the risks posed by the lender's push into emerging markets.
JPM. Bloomberg details how JPMorgan Chase & Co. CEO Jamie Dimon railed against higher capital requirements at the same
time his bank was making bets that led to the recent $2 billion loss. Sources say the bank would have been better off building more capital - the only "true protection" against losses.
More on Dimon. An MIT professor writes in the New York Times that it's difficult to rely on the Federal Reserve to regulate JPMorgan while its CEO continues to sit on the board of the New York Fed.
Additional stake. Morgan Stanley advised Citigroup on Thursday of its intention to buy an additional 14 percent stake in Morgan Stanley Smith Barney, CNBC reports. The Wall Street firm currently owns 51 percent of Morgan Stanley Smith Barney.
Private equity. Former General Electric CEO Jack Welch offers this take on private equity - which has become a hot-button issue in this year's political campaigns - in a Reuters column. He asks, "Mr. Vice-President, where in the world are you getting your ideas about private equity?"
Wednesday, May 30, 2012
Gay investors more confident than general population
Lesbian, gay, bisexual, and transgender investors are more confident in their retirement savings than the general population, according to a new Wells Fargo survey, despite some additional challenges.
Sixty-one percent of the LGBT population surveyed said they felt like they would have enough saved for retirement, compared with 53 percent of the general population.
Thirty-six percent of the LGBT community said they would have to work during retirement, compared with 41 percent of the general population.
The results come despite a lack of federal marriage or inheritance rights, Wells said.
The survey was conducted in conjunction with Wells Fargo's Accredited Domestic Partnership Advisor program, to educate financial planners about the special needs that come with domestic partnerships.
Countrywide whistleblower gets millions
Welcome to the morning roundup. Here's a look at what's news in banking and finance this morning.
BofA whistleblower gets millions. A former Countrywide home appraiser will get $14.5 million for blowing the whistle on the company's inflating home values to support bigger loans, Bloomberg reports. His info helped the Federal Housing Administration settle with the Charlotte bank for $1 billion, part of the broader $25 billion settlement announced earlier this year.
Wells Fargo in Memphis. Wells Fargo will give Memphis/Shelby County homeowners $4.5 million and the local governments $3 million in exchange for them dropping a discriminatory lending lawsuit against the San Francisco bank, CBS News reports. The bank has also set a goal of lending $425 million in the area over the next five years, including $125 million to low- and moderate-income people.
Moynihan speaks. Bank of America CEO Brian Moynihan will be speaking at the Sanford C. Bernstein investor conference in New York City this morning. We'll be tweeting and will have a report afterward.
Europe. The European Union has proposed a "banking union" that would mean the 17 countries in the euro zone would share the losses in bank failures, the Wall Street Journal says. Meanwhile, business confidence in the region is dismal.
Chinese banks. Don't expect branded ATMs or branches, but the Fed's approval of three Chinese banks to expand into the U.S. could heat up dealmaking between American and Chinese firms, TheStreet.com says.
Morgan Stanley in India. Morgan Stanley has gotten a license to begin commercial banking in India, the Wall Street Journal reports. That will allow the bank to compete with BofA and Goldman Sachs.
Tuesday, May 29, 2012
Citigroup dissolves panel overseeing toxic assets
Welcome to the morning roundup. Here's a look at what's news in banking and finance.
Toxic assets. Citigroup Inc. has dismantled a board committee created to police the disposal of toxic and unwanted assets, Bloomberg reports. About $200 billion of those assets remained when directors dissolved the Citi Holdings oversight panel last month. Analysts tell Bloomberg it's a risky move.
Housing strength? The spring season is expected to be the strongest in the housing market since the mortgage meltdown, Reuters says. Sales in April were up 10 percent from the year before, according to the National Association of Realtors, and pointed higher. Of course, the Case-Shiller price index released this morning was only up one-tenth of a percent from the period before, and down nearly 3 percent from last year.
Japan targets JPM. Japanese regulators have opened a probe into whether JPMorgan Chase leaked inside information while underwriting a Japanese glass company's IPO, the Wall Street Journal reports. The country's securities and exchange regulator has said it wants to fine an asset managmeent company for shorting Nippon Glass Sheet stock based on insider information.
Stock market retreat. The financial industry hoped the excitement surrounding Facebook's IPO would bring investors back to the stock market, the New York Times writes. Instead, investors are increasingly nervous to jump in: The portion of Americans invested in the stock market fell this year to its lowest level since the late 1990s, the Times reports.
Friday, May 25, 2012
BofA stock has first up week in two months
Bank of America's stock finished this week up 2 percent -- the first positive week after eight straight weekly declines.
The Charlotte bank closed Friday at $7.15, up a penny on the day. After jumping more than 60 percent at the beginning of the year, it began a steady decline in March that took it from $10 to a bottom of $6.89 last week.
Bank of America sells stake in Archstone
Bank of America announced Friday that it and Barclays Bank have agreed to sell their remaining interest in apartment developer Archstone to Lehman Brothers.
The two banks will receive $1.58 billion for their remaining 26.5 percent stake.
The two banks once held a controlling 53 percent stake in Archstone. The first stake was sold in January. Collectively, Bank of America and Barclays received $2.9 billion in the two deals.
The two banks earlier agreed to sell their piece of Archstone to Equity Residential. They will have to pay $80 million to Equity for breaking off the deal.
The deal is the latest in Bank of America's campaign to sell off non-core assets and slim down the company.
Fewer women among Wall Street's top ranks
Welcome to the morning roundup. Here's a look at what's news in banking and finance this morning.
Women on Wall Street. The percentage of women among the top ranks of the largest U.S. banks has fallen from 20 percent to 12 percent since 2007, Reuters says, the latest being JPMorgan Chase's chief investment office head Ina Drew. Another notable departure is Sallie Krawcheck at Bank of America, who left late last year.
Wells documents. Wells Fargo has given the SEC emails and documents related to mortgage-backed securities that the bank initially resisted handing over, the Wall Street Journal reports. The SEC is looking into the quality of the loans banks packaged and sold to investors. The subpoenas of Wells Fargo were part of 300 the agency has filed.
Lehman probe ends. The SEC has ended its probe into how Lehman Brothers represented itself ahead of its bankruptcy without finding conclusive evidence of fraud, Bloomberg reports. The decision ends a three-year investigation.
Shorting Facebook. Even as Goldman Sachs and JPMorgan prepared to help underwrite Facebook's IPO, they were also lending shares to hedge funds to short, the Wall Street Journal says. It's another example of the myriad conflicts of interest Wall Street banks face.
S.C. investments. The hedge fund that provided one of the worst returns for the South Carolina pension fund was also paid the most in fees, Bloomberg reports.
More risks at JPM. The chief investment office at JPMorgan Chase that posted losses exceeding $2 billion also includes a group that makes bets on distressed companies, the Wall Street Journal reports. The bank says it is funded with company debt and equity, not deposits, but it's still on shaky ground under the terms of the Volcker Rule.
Thursday, May 24, 2012
Tree.com sets date for home loan unit sale
After months of delay, Tree.com has set a date for the sale of its mortgage origination business to Discover Financial, the Charlotte company announced Thursday.
The deal, announced a year ago, is now set to close June 6.
Tree.com is the parent of LendingTree, a site that allows customers to get multiple offers on mortgage and other loans, and the company also owns a number of other lead generation businesses. The company launched its own mortgage originator, called the Home Loan Center, in 2002.
Under the terms of the deal renegotiated in February, Discover will pay $42.9 million at closing and $10 million on the first anniversary. It was already scheduled to pay $3 million on March 7.
Wells Fargo says Carolinas' customer service, cross-sell better than in Wachovia era
Wells Fargo says its customer service ratings and cross-selling in the North and South Carolina market have increased from where they were under Wachovia, community banking regional president Stan Kelly said at the bank's investor day this week.
He also said the bank's surveys show that Wells' customer service in the Carolinas has been better than in any region of the country for the past three years.
Wells bought ailing Charlotte-based Wachovia in 2008, and the San Francisco bank spent three years converting customers over to its platform. Kelly said customer service was of utmost importance.
Wachovia had led the nation in customer service from 2001 to 2008, Kelly said. Wells Fargo took the title the next year and has maintained it.
Presentation slides say that since the merger in the East region, retail customer households per branch have increased 13 percent, to 3,500; products per household are up 18 percent, to 5.5; and that products sold per full-time employee per day have increased 76 percent, to 7.
Bank of America selling more office space
Welcome to the morning roundup. Here's a look at what's news in banking and finance this morning.
BofA real estate sales. Bank of America is selling more of its office buildings, this time a 12-building complex in New Jersey, Bloomberg reports. The property is likely to get about $400 million. The Charlotte bank has already sold the Hearst Tower in uptown Charlotte and an office building in Boston.
Facebook warnings. Some banks that underwrote Facebook's initial public offering last week gave warnings to institutional investors that the social media company's revenue projections were falling, while retail investors got no heads up, according to the Wall Street Journal. Such charges form the basis of a lawsuit filed yesterday in federal court. The company's stock price has fallen by roughly a quarter since its debut Friday.
GS meeting. Goldman Sachs holds its annual meeting today, where regulatory reform is likely to be a hot topic. The New York Times is live-blogging it.
Mastercard fees. Mastercard has lost its appeal of a European ban on charging fees on cross-border transactions, Reuters reports. Visa Europe could be the next company affected.
Countrywide suit. AIG won't be able to pursue some claims against Countrywide in the insurer's $10 billion lawsuit on mortgage-backed securities, Bloomberg reports. It lost primarily based on statute of limitations rules.
Wednesday, May 23, 2012
Appeals court says homeowners can sue over denied loan modifications
Welcome to the morning roundup. Here's a look at what's news in banking and finance this morning.
Modification suits. A U.S. court of appeals has ruled that homeowners can sue banks they feel "unfairly" denied mortgage modifications, NBC Chicago says. The suit that led to the ruling was against Wells Fargo, which the plaintiff said made her jump through too many hoops.
Prepaid rules. The Consumer Financial Protection Bureau is set to unveil new rules for prepaid debit cards, which have exploded in popularity in recent years, the Wall Street Journal reports. The most prominent is expected to be about how fees are disclosed.
Facebook issues. Regulators are taking a look at how Morgan Stanley communicated with investors in advance of Facebook's IPO last week, The New York Times reports. Some believe the bank gave certain clients more information about diminished expectations for the debut. The Wall Street Journal tells a similar story.
Buybacks. Bank of America will buy back $330 million in loans from Freddie Mac after the mortgage lender said it found problems in how they were made, Bloomberg reports. BofA says most of them are current. The bank's current potential liability hit a high of $16.1 billion at the end of the first quarter.
Political JPM. Republicans in Congress are growing frustrated with JPMorgan Chase's $2 billion trading loss because it weakens their arguments against financial regulation, the Wall Street Journal reports. They're also still bitter that JPM gave more money to President Barack Obama and Democrats in the 2008 election.
Tuesday, May 22, 2012
Wells Fargo brand more valuable than Facebook
Wells Fargo's brand is worth more than that of Facebook, according to a new ranking from brand equity database BrandZ.
The San Francisco bank clocked in at No. 14, with a global brand worth nearly $40 billion -- tops among U.S. financial companies. Facebook jumped to No. 19, with a brand valued at $33 billion.
Having weathered the mortgage meltdown better than many of its peers, Wells Fargo has consistently ranked among the top bank brands. In February, Brand Finance named it the top world bank brand.
In its seventh year, the BrandZ report is based on its own index that takes into account consumer research data, earnings and other factors.
Facebook, which completed its long-anticipated initial public offering last week, had one of the largest leaps this year, moving up 16 spots. It was also tops in "buzz," a metric based on traditional and social media.
Here are the top 10 most valuable brands, per BrandZ:
- Apple
- IBM
- McDonald's
- Microsoft
- Coca-Cola
- Marlboro
- AT&T
- Verizon
- China Mobile
Moynihan: Bank of America not 'too big to manage'
When asked to defend the universal bank model Monday, Bank of America CEO Brian Moynihan said that the Charlotte bank is not "too big to manage," thanks in part to the streamlining the company has done over the past few years.
"Originally, the dialogue was about "too big to fail," Moynihan said at the Deutsche Bank Global Financial Services Investor Conference in New York City. "That's been taken out in terms of what Dodd-Frank says and the resolution plans we have."
Thus, the discussion has shifted as to whether the nation's huge full-service banks, like JPMorgan Chase and Citigroup, are too big to effectively oversee.
Moynihan said the bank has slimmed down, from nearly $2.37 trillion in assets in 2010 to now $2.18 trillion. That has involved sales of stakes in BlackRock, China Construction Bank and Santander.
"It's a narrower business," he said. "It's a safer enterprise."
He said the reason the bank is in the businesses it is in now is because customers want them to be, whether that be consumers, small and medium-sized businesses or global corporations.
Moynihan gave a similar answer when asked whether Bank of America could find itself in the position of JPMorgan Chase, which disclosed it lost at least $2 billion in risky bets in its corporate investment office.
Moynihan pointed out that BofA has nearly 90 percent of its money invested in government-guaranteed mortgage-backed securities or Treasuries, and very little in corporate debt -- which the bank is "very comfortable with." He also said the bank does not use "macro positions" to hedge like the ones that got JPM in trouble.
FNB United could sell up to 2 million shares
Asheboro-based FNB United Corp., which operates its banks under the name CommunityOne Bank, announced Tuesday that it is prepared up to sell up to 2 million common shares -- about $56 million at yesterday's close.
Sales, if there are any, will be "at-the-market" offerings, the bank said, meaning they will be sold incrementally at market prices, rather than in a large, underwritten sale.
Shares plummeted on the news, down nearly 30 percent as of 9:45 a.m.
The bank said it will use the money to build capital and for "general corporate purposes."
FNB United merged with the Bank of Granite last year, part of a $310 million recapitalization for the struggling banks. The bank also executed a 100-to-1 reverse stock split after its stock closed at 23 cents.
JPMorgan's peers say they don't make such risky bets
Welcome to the morning roundup. Here's a look at what's news in banking and finance this morning.
We're not JPM. JPMorgan Chase's competitors say they don't make the type of credit bets that landed the nation's largest bank by assets in hot water, according to Bloomberg. A look at JPM's chief investment office portfolio shows that it had higher concentrations in riskier assets than its peers. But at the same time, the Wall Street Journal says that Bank of America, Goldman Sachs and other banks have made between $500 million and $1 billion by making trades against JPMorgan's positions.
Safe bank. Wells Fargo is now the "safest bank," replacing JPMorgan, says 24/7 Wall St. Though Wells still has risk in the mortgage arena, it does not have proprietary bets or much overseas exposure, the column says.
FDIC sues banks. The FDIC has sued Bank of America, JPMorgan Chase and a number of other banks over mortgage-backed securities losses taken by two failed Illinois banks, Reuters reports. The government is seeking a combined $92 million.
Overseas expansion. Wells Fargo is doubling its asset management unit by expanding overseas, Bloomberg reports. European companies are shrinking as the debt crisis continues to hammer markets.
Friday, May 18, 2012
Investors awaiting Facebook IPO
Welcome to the morning roundup. Here's a look at what's news in banking and finance.
Facebook. Mark Zuckerberg's social network is the third biggest IPO in U.S. history. Trading is expected to begin at 11 a.m., and the New York Times is live blogging the market debut. The Times also has this graphic on other tech IPOs over the years.
Invest in FB? Facebook shares are priced at $38. Investors who can buy the stock at the offering price should take the opportunity, Jim Cramer of CNBC's Mad Money says. But he's "queasy" about the prospects of making money by doing anything other than selling it into the aftermarket, he said.
Market anticipation. Stocks rose early this morning after a shaky week, and Facebook's market debut could help improve investor sentiment, Reuters reports.
European debt. U.S. banks ramped up sales of protection against credit losses to holders of European debt in the last quarter of 2011, Bloomberg reports. Guarantees from U.S. lenders on government, bank and corporate debt in troubled European countries rose 10 percent from the quarter before.
JPM. The Wall Street Journal offers a behind-the-scenes look at JPMorgan Chase & Co.'s trading debacle. When CEO Jamie Dimon saw the details about the trades, sources told the Journal, "he couldn't breathe."
Thursday, May 17, 2012
Stocks poised for long-term growth, CEO says
The CEO of financial services firm Janney Montgomery Scott is bullish on U.S. stocks, despite the volatility that's likely in the coming months, he told the Observer this week.
"I believe for the long haul, U.S. equities are the place to be," said Tim Scheve, who was visiting the Philadelphia company's SouthPark office. "... We just need to get through the short-term macro issues."
So far this year, he said, the global economy is looking a lot like 2011 -- which looked like 2010. Trouble in Europe continues to drive market swings, and unrest is likely to continue into the fall as U.S. voters gear up for the presidential election, Scheve said.
But once that uncertainty is removed, stock markets should stabilize, he said. Long term, the U.S. is positioned for growth: Young people are graduating college and entering the workforce, companies' balance sheets are stronger and economic indicators are improving, he said.
The CEO also weighed in on his business, tips for investors and what's in store for big banks:
On the need for financial advice: Baby boomers are the first generation to really have to fund their retirement, given their longer life expectancies and their decreasing reliance on pensions and Social Security. And the recession has made them more skittish than ever. "The need for advice now is greater than it's ever been," Scheve said.
On Facebook: He doesn't recommend jumping in: "Like most tech IPOs, it's very, very hard to value," he said. It remains to be seen whether Facebook will be as successful as Google and Apple. Safer bets are companies with strong balance sheets and solid dividends. But Scheve wouldn't have recommended Google before its IPO, either -- and "I would have been wrong," he said.
On financials: More regulation is likely for big banks, especially after JPMorgan Chase & Co.'s massive trading loss, Scheve said. That's true regardless of who is elected this fall, as no candidate wants to be seen as pandering to Wall Street. Ultimately, big banks will look more and more like utilities -- which isn't necessarily a bad thing for shareholders, who won't see big growth but can expect steady performance and dividends.
On the backlash against banks: The populist sentiment is driven by high unemployment and social unrest, Scheve said. But it's important that activists and the broader public don't shun prosperity itself. "The way you solve economic issues is through economic growth," he said. "You don't want to demonize economic success."
Banks need more capital, ratings agency says
Welcome to the morning roundup. Here's a look at today's banking and finance news.
Bank capital. The world's biggest banks must raise a combined $566 billion to satisfy new capital requirements, according to Fitch Ratings, the New York Times reports. To meet their deadline, banks will likely cut shareholder dividends and take other measures to bolster capital, Fitch said.
London Whale. The Wall Street Journal takes a closer look at Bruno Iksil, the JPMorgan Chase & Co. trader who became known as the "London whale." He was known to pursue trades rivals thought were overly aggressive but often won big profits.
Investors worry. Financial advisers have been flooded with calls from concerned clients after JPMorgan revealed its $2 billion trading loss, Reuters writes. And they're not only worried about their shares - they also have questions about broader bank risk.
Stocks fall. U.S. stocks dipped this morning as investors worried about economic indicators and a possible downgrade of Spanish banks, Bloomberg reports.
Diversity MBA names Bank of America a top rating
Diversity MBA Magazine ranked Bank of America No. 2 in its list of "best places for diverse managers to work," the magazine announced this week.
The ranking looks at how the company has strategies for accountability, succession planning, representation, workplace inclusion, recruitment and board diversity that encourage women and minorities to advance.
Bank of America was edged out by Accenture, an Orlando-based consulting and technology firm.
Among financial companies, Capital One (No. 6), Fannie Mae (13), Citigroup (22), Goldman Sachs (32), and Mastercard (38) made the top 50.
No other Charlotte-area companies made the list.
Wednesday, May 16, 2012
North Carolinians feel Obama hasn't held banks accountable, poll says
A majority of North Carolinians feel President Barack Obama has not held banks accountable enough for their part in the the mortgage and foreclosure crisis, according to a poll released by activist group Campaign for a Fair Settlement on Wednesday.
Sixty percent say Obama has not done enough to hold banks accountable, while 32 percent say he has, the results show. The poll was conducted by nonpartisan Public Policy Polling, and surveyed 600 households.
"We think primarily the people are just angry that no one's been held accountable," said Kevin Rogers of Action N.C., a group that protested Bank of America at its shareholders meeting last week and a state affiliate of Campaign for a Fair Settlement. "We've seen all these banking executives go on and on and keep their jobs. People are hurting, and they just want to see someone held accountable."
The state is more evenly split on how they feel Obama has handled the crisis overall. Forty-six percent of North Carolinians disapprove of how Obama has handled the crisis, while 41 percent approve, the results show.
Seventy percent said they felt the crisis was due, at least in part, to "criminal actions" on Wall Street.
There was a significant split down party lines on the issues. Republicans were much more likely to blame "irresponsible homeowners," while Democrats tended to blame Wall Street banks.
The poll was one of several Campaign for a Fair Settlement conducted in swing states. The other states were Nevada, Arizona, Pennsylvania, and Florida.
Of those states, Obama's handling of the crisis had the highest approval rating in North Carolina.
Charlotte economy improving, but challenges remain, report says
The Charlotte area's economy will grow this year, but big gains in professional services, consumer industries and manufacturing will likely be offset by weakness in the government and finance sectors, according to a new report from PNC.
The bank's Charlotte Market Outlook, released today, found job growth has cooled this year but that the economic recovery is still inching forward. Rising auto sales nationally are contributing to production and hiring in local truck plants. And the area's transportation industry is benefiting from increased manufacturing output, PNC found.
Hiring will ramp up next year as the government and finance fields improve, the report said. But the unemployment rate will remain inflated, given the Charlotte region's strong population growth, which has led to a growing labor force. PNC expects the area's unemployment rate to end the year at 9.7 percent and fall to 9 percent by the end of 2013 -- still well above the area's pre-recession level.
Charlotte is expected to fare better than the national average in the long run, though, the bank said. The area continues to draw educated workers, and its population is younger than other parts of the country, positive signs for economic growth, PNC found.
Among the report's other findings:
- The Charlotte area's housing market is improving, with modest price increases likely by late 2012.
- Personal income is on pace with the rest of the country, with help from job growth and rising stocks. Yet the region continues to suffer from steep finance sector losses from 2008 to 2010. "We anticipate it will take another couple of years for the area to recover that lost ground," PNC said.
North Carolina gets fourth-most private equity investment
North Carolina companies received more than $10 billion in private equity investment last year, ranking the state fourth in deal value, according to new data from the Private Equity Growth Capital Council.
A total of fifty-six companies in the state received investments over the course of the year, though not all of them disclosed the value of the deal. Based on reported figures, North Carolina ranked behind only Texas, New York and California.
Twelve of the deals were in North Carolina's 12th congressional district, which includes much of Charlotte.
Nationwide, private equity companies invested more than $144 billion last year.
In releasing the data, council president Steve Judge gave a nod to the increased scrutiny private equity has received as Mitt Romney campaigns for the presidency. Romney co-founded Bain Capital, which helped companies like Sports Authority and Staples grow but also contributed to factory and business closings.
"Over the next several months, we expect the general election to amplify the conversation about private equity," Judge said in a statement, "but one thing is clear, private equity drives economic activity and growth across the U.S. economy."
This was the private equity council's second yearly report breaking down deals by location. Data was provided by Thomson Reuters and Pitchbook, a private equity deals database.
Fifth Third to sponsor Matt Kenseth's car
“Our organizations share many common values including a focus on teamwork and a desire to challenge the status quo to be the best at what we do," said Greg Carmichael, bank chief executive officer, in a statement.
"We are looking forward to working with the Roush Fenway Racing organization, and Matt Kenseth, to help drive our business and build the Fifth Third Bank brand.”
The bank is expected to sponsor a similar number of races in the following years.
Fifth Third is based in Cincinnati but entered the North Carolina market in 2007 with its purchase of Charlotte-based First Charter Corp. Roush Fenway Racing is based in Concord.
Bank of America has dropped at least 70 branches in 2012
Bank of America has closed or sold at least 70 branches so far this year, according to data compiled by SNL Financial, part of the bank's plans to shed 750 offices over the next few years.
The Charlotte bank closed a net 51 branches in the first quarter, CEO Brian Moynihan said during a conference call last month. Also in April, the bank announced it was selling 15 branches in Maine, and later sold about a half dozen in Iowa.
These were the first branch sales in more than a decade, SNL Financial said.
SNL suggests that the bank has an opportunity to close or unload branches in smaller or less affluent markets. According to SNL data, Bank of America has:
- $18 billion in deposits in cities with less than 150,000 people
- 28 branches and $706.5 million in deposits in metro areas with less than 30,000 people
- 377 branches and $17.8 billion in deposits in areas where the median income is less than $40,000
Wells Fargo wants $203 million overdraft judgement reversed
Welcome to the morning roundup. Here's a look at what's news in banking and finance.
Overdraft suit. Wells Fargo has asked a federal appeals court to nullify an order to pay $203 million to California customers after a lawsuit alleging the bank manipulated how charges were processed to boost overdraft fees, according to Bloomberg. A district court judge ruled in 2010 that the bank's practices were "unfair, deceptive and fraudulent."
More JPM. Copious ink continues to be spilled on JPMorgan Chase, which held its shareholder meeting Tuesday in Tampa. The Wall Street Journal parses out whether its risky trades were hedges or bets. A Washington Post columnist ponders what the right lesson from the bank's $2 billion trading loss should be. Businessweek says it's a reflection that Corporate America hasn't changed since the financial crisis. The Daily Beast says the fact that Dimon gets to keep both his CEO and chairman's roles and pay package is a reflection of an "unshakable hubris." A number of hedge funds run by former JPMorgan employees are profiting from the bank's bad trade, Fortune writes. And a Motley Fool writer collects the "10 smartest things" said about the debacle.
Foreclosure to homeownership. A "small but growing number" of people who lost their homes to foreclosure are making a quick return to homeownership, Reuters reports. Many of the new loans are backed by the federal government.
Naked shorting. Employees at both Merrill Lynch and Goldman Sachs traded emails discussing naked short selling in violation of compliance rules between 2005 and 2007, according to an Overstock.com Inc. court filing, Bloomberg reports. The retailer is accusing the two banks of manipulating its stock.
Euro zone improvement? Greek's economy might have grown for the first time since 2009 in the first quarter, the New York Times reports. The Euro zone has also avoided falling into recession. But it's too early to call it a turning point, the Times writes.
Stocks. U.S. markets were set to open higher this morning on better news from Europe, Reuters reports. But traders expect more volatility ahead.
Tuesday, May 15, 2012
Bank of America now paying as much as $30K after short sale
Bank of America announced Tuesday that it will now pay as much as $30,000 in relocation assistance after a short sale under a new nationwide program.
In the past, the bank had traditionally paid about $1,500 to $2,000 in assistance. In the new program, Bank of America will pay between $2,500 and $30,000.
“Bank of America is committed to providing alternatives to foreclosure whenever possible,” Bob Hora, home transition services executive, said in a statement. “This program can help customers make a planned transition from ownership when home retention options have been exhausted or they have made a decision not to keep the home.”
The Charlotte bank tested a similar program in Florida late last year, offering between $5,000 and $20,000, with mixed results.
Bank of America completed 30,000 short sales in the first quarter of this year, and 200,000 through 2010 and 2011.
To qualify for a payment, the homeowner must work with the bank to reach a preapproved sale price. The sale must be underway by the end of 2012 and close before Sept. 26, 2013. Some short sales already initiated may be eligible for the increased payment, the bank says.
SECU opening new branch on Providence Road
State Employees' Credit Union, the largest credit union in North Carolina, announced Tuesday that it is opening a new branch near the intersection of Providence Road and I-485 this week.
Dru Carter will manage the branch, which will be at 11225 Golf Links Drive.
SECU has about $25 billion in assets and more than 1.7 million members, according to data from the National Credit Union Administration. It currently has nine branches in Charlotte.
Quicken mortgage unit doubling in Charlotte
Quicken Loans Mortgage Services, which helps community banks and credit unions originate mortgages, announced Tuesday that it will hire 75 people by the end of the year and double its office space in Charlotte.
The new office, at 6135 Park South Drive, will have more than 20,000 square feet. The company, which currently employs 150, is expected to move in next month. Its previous office was at 1915 Rexford Road.
Hiring is expected to begin this summer. Fifty positions will be in Charlotte.
Quicken Loans Mortgage Services provides mortgages to community banks and credit unions so they don't have to hire mortgage origination staffs. The company currently works with 800 institutions, and hopes to reach 1,000 by the end of the year, with $1 billion in monthly loan volume.
JPMorgan dominates news ahead of shareholder meeting
Welcome to the morning roundup. Here's a look at what's news in banking and finance.
More JPM. JPMorgan Chase continues to dominate financial news ahead of its shareholder meeting today. Reuters says the $2 billion trading loss could cause more ratings downgrades. TheStreet.com says that "Bank of America is no JPMorgan" and says investors should not sell the Charlotte bank's stock based on JPM's losses. Bloomberg says JPM will try to claw back bonuses from traders who have left. And hedge funds are trying to make even more money as JPMorgan unwinds its derivative positions, Reuters reports.
NYC reports. The New York City Council will vote today on a proposal to require the 31 banks the city banks with -- including Bank of America and Wells Fargo -- to report on their efforts to provide services in poor areas, The New York Times reports. Cleveland and Philadelphia have long had similar laws.
Travel cards. Three new travel-focused credit cards -- two from Bank of America and the third from JPMorgan -- reflect consumer dissatisfaction with the current travel rewards offered, the Chicago Tribune says. They generally offer more points, but they don't yet have technology to work effectively overseas.
Bank stocks. Stocks, particularly in the banking sector, are pointed higher today as investors look for deals in beaten-down areas, Reuters reports.
Monday, May 14, 2012
Bank of America launches cash discount program for N.C. customers
Bank of America debit and credit card customers in North Carolina, South Carolina and Georgia are now able to sign up for a cash discount program the bank has been testing for the past few months.
Called BankAmeriDeals, the program begins by the bank determining deals for customers based on their spending history and telling them about it through the online banking site, text and mobile alerts.
Customers pay full price at the retailer, and get a percentage of what they spent in cash at the end of the month.
The Charlotte bank began testing the program with employees in Nevada and California in January, and it became available for all employees in February.
Customers in the three states can sign up for the program through the online banking site.
The program is meant to "deepen relationships" with customers and help draw in new card customers, the bank said at the time.
Ally's mortgage unit files Chapter 11
Welcome to the morning roundup. Here's a look at today's banking and finance headlines.
Bankruptcy. Ally Financial Inc.'s troubled mortgage unit, ResCap, filed for bankruptcy protection early Monday, the Wall Street Journal reports. The lender hopes to focus its efforts on its core auto-lending and online banking businesses, but it still faces significant risks.
JPMorgan. The fallout from JPMorgan Chase & Co.'s $2 billion trading loss continues. The executive who oversaw the trade is set to resign. And the debacle raises questions about whether federal regulators were "asleep at the wheel," Reuters writes.
Bank trading. The JPMorgan loss puts the spotlight on other big banks, the New York Times writes, saying even banks that focus mainly on "good, old-fashioned lending" participate in high-stakes trading. That's creating a headache for regulators crafting new rules to prevent another financial meltdown.
Stocks down. U.S. stock futures declined this morning on concerns over Greece, with Bank of America and other lenders falling, Bloomberg reports.
Friday, May 11, 2012
JPMorgan's trading loss could support case for tighter regulation
Welcome to the morning roundup. The big story this morning is JPMorgan Chase & Co.'s $2 billion trading loss, which the bank announced after the markets closed Thursday. Here's a look at related news.
Support for regulations? JPMorgan's massive trading loss could help make the case for tighter regulations, the New York Times writes. As the economy has recovered, banks have successfully fought for exceptions to new government rules, but JPMorgan's announcement marks "a crucial moment in the debate," one expert told the Times.
Dimon trips up. The Wall Street Journal examines what the misstep means for JPMorgan CEO Jamie Dimon, one of the nation's most successful bank executives in recent years, calling his acknowledgment Thursday a "rare blow."
Moby Dick. In another take, a Reuters columnist says JPMorgan's "Ahab has met his Moby Dick." Dimon has worked hard to build a bank strong enough to stay afloat in a shaky economy, but the $2 billion hedging hit will put his bank to the test.
Embracing risk. JPMorgan chief investment officer Ina Drew, head of the unit responsible for the $2 billion loss, has long embraced risk, Bloomberg reports. Her operation has been transformed under Dimon to make bigger speculative bets with the firm's own money, former employees told Bloomberg.
Thursday, May 10, 2012
McColl's firm sells stake in Charlotte company
Charlotte private equity firm Falfurrias Capital Partners has sold its controlling stake in Commercial Credit Group Inc., it announced today.
The firm co-founded by former Bank of America Corp. chief executive Hugh McColl Jr. sold the ownership interest to Lovell Minnick Partners, a global private equity firm. It acquired the stake in CCG, a Charlotte-based provider of equipment financing for the construction, fleet transportation and waste industries, in 2010.
"We were able to provide capital to CCG during a time when most investors were shying away from the commercial lending market," said Marc Oken, who launched Falfurrias with McColl in 2006. "Our growth capital, combined with management's leadership, enabled the company to take advantage of dislocations in the financial market and achieve outstanding growth and financial performance when most competitors were on the defense."
Oken, Bank of America's former chief financial officer, said his firm generally looks to invest in companies for four to seven years. CCG's need for more capital, plus significant interest from prospective buyers, allowed Falfurrias to provide an attractive return for investors and land a strong partner for the company, he said. McGuireWoods advised the firm in the deal.
Falfurrias has expanded its financial services portfolio in recent years. In November, it announced it had invested in Dorsey Wright & Associates, a Richmond-based provider of technical investment research and money management products.
Federal Reserve issues enforcement action against AB&T
The Federal Reserve disclosed Thursday an enforcement action against Gastonia-based AB&T Financial Corp., the parent company of Alliance Bank and Trust.
The Fed action also prohibits the bank from issuing new debt without approval, and reiterates the role of the bank's board in ensuring AB&T complies with the FDIC order.
CEO Dan Ayscue said the Federal Reserve action was expected after receiving the FDIC's consent order. He said the bank has not had any issues complying with the FDIC's order and recently sent in its first progress report.
"We're making good progress on that," he said. "We feel very good about 2012."
Mortgage monitor launches complaint-taking tool
Joseph Smith, the former N.C. banking commissioner who is now serving as monitor of the $25 billion mortgage servicing settlement, announced Thursday that his office has created an online tool to take complaints from consumer advocates.
While Smith will not have the ability to work on an individual's case, his office will use the information to find trends in how the banks under the settlement are operating, the monitor's office said in a statement.
“Lawyers, caseworkers and other consumer advocates are the eyes and ears on the ground who will know first, and know intimately, what kind of difference these payments, adjustments and programs are making," Smith said in a statement. "That’s why we’ve created this dedicated tool – to see what they’re seeing."
The settlement is between states, federal agencies and the five largest mortgage servicers in the U.S.: Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and Ally Financial.
Chinese banks given approval to expand in America
Welcome to the morning roundup. Here's a look at what's news in banking and finance this morning.
Chinese banks in America. Three state-owned Chinese banks were given the go-ahead by the Federal Reserve to expand in the U.S. on Wednesday, a move the Wall Street Journal calls a "landmark step" for the regulators. More immediately, the approvals will give Chinese companies operating overseas easier access to financing in their country's currency, but it could allow Chinese banks to acquire U.S. banks.
CEO ego. Bank CEOs have pushed against splitting the board chairman and chief executive role because of ego, Royal Bank of Canada CEO Gordon Nixon says, according to Bloomberg. For the record, his bank does have divided roles, as do Bank of America and Citigroup.
Florida foreclosures. The Florida Supreme Court is considering a case that will decide whether lenders who started foreclosure proceedings with incorrect or fraudulent documents will be able to withdraw the cases and refile them later, Reuters reports. If the decision, which could take eight months, goes against the banks, it could mean the lenders could not foreclose on tens of thousands of homes.
Fewer mortgage fees. New rules from the Consumer Financial Protection Bureau could mean that lenders would not be able to levy origination fees on new mortgages, The New York Times reports. They could also mean that lenders would be forced to offer a loan without the typical points associated, making it easier to compare offers.
Wednesday, May 9, 2012
Did Moynihan's pay really quadruple last year?
An oft-cited figure in today's Bank of America protests was that CEO Brian Moynihan had a more than four-fold raise last year, despite the company losing 58 percent of its stock price.
It's true, in a way. But Moynihan's pay actually decreased when you look at a more accurate representation of how the company rewarded his performance.
According to an SEC filing, Moynihan was paid $1.2 million in 2010, and $7.5 million in 2011. Those figures refer mostly to take-home pay, or cash and stock received in the calendar year. It also includes compensation granted for an earlier year not received until that year.
Bank of America also discloses its compensation decisions in its annual proxy document, or what the bank's board decides to award its executives based on the prior year's performance.
In that measure, the Charlotte bank reduced Moynihan's annual pay to $7 million for his work in 2011, down from $10 million for 2010. A piece of the award will pay out between March 2012 and March 2013, and a larger piece between March 2015 and December 2016, depending on how the bank's finances fare.
It'll still land Moynihan in the 1 percent, but it shows the bank's board did not think he deserved a raise this year.
Big crowds of shareholders, demonstrators expected for BofA meeting
Welcome to the morning roundup. In honor of Bank of America's annual shareholders meeting in Charlotte, here's a look at a few BofA-related stories from around the Internet.
Shareholders out? Corporate governance expert Eleanor Bloxham wonders in Fortune whether shareholders will be kept out of the BofA meeting. Some shareholders were kept outside of Wells Fargo and Peabody Energy's meetings because of admissions procedures - but "annual meetings are an important shareholder right," she writes.
What's in store. Reuters offers this preview of the annual meeting, highlighting the expected swarms of protests and shareholder votes ahead. Advocacy groups predict bigger crowds than in years past.
Test run. Protests before the shareholders meeting today are a glimpse of what's to come during the Democratic National Convention, the Huffington Post writes.
Moynihan tops list. Bank analyst Michael Mayo ranked BofA's Brian Moynihan the worst big-bank CEO in the U.S., based on the company's stock performance, Fortune writes. Since the CEO took the helm in early 2010, the bank's shares have fallen 42 percent, worse than other big lenders.
Mortgage delays. Borrowers looking to take advantage of low mortgage rates might face slow service and long delays, the Wall Street Journal reports. One homeowner who called BofA this year was told the company was "swamped with business" and would call him back in a few months, the story says.
Tuesday, May 8, 2012
VantageSouth hires in Salisbury after merger
VantageSouth, which entered Salisbury after acquiring the Community Bank of Rowan earlier this year, reported Tuesday that it has increased staffing by 43 percent in the two branches it operates in the city.
Though many banks shed jobs after a merger, this move comes as its parent company, Raleigh-based private equity group Piedmont Community Bank Holdings Inc., seeks to expand its banking presence. The bank has hired in numerous positions at VantageSouth, including upper management in Salisbury.
The parent company also bought a controlling stake in Cary's Crescent Financial Bancshares Inc. last year.
Last month, VantageSouth was named the state's top Small Business Administration lender.
Wells Fargo faces fair lending investigation
Wells Fargo & Co. is under investigation for potential violations of fair lending laws in its mortgage origination, the bank disclosed Tuesday in its quarterly report.
The U.S. Department of Justice has told the bank that it believes it can bring charges against Wells Fargo seeking monetary and civil damages, the bank said. Fair lending laws prohibit discrimination against minority homebuyers.
"We believe such claims should not be brought and continue seeking to demonstrate to the Department of Justice our compliance with fair lending laws," the bank stated in the report.
In December, Bank of America settled with the Department of Justice for $355 million over alleged fair lending violations. The justice department said that the Countrywide Financial Corp., which the Charlotte bank bought in 2008, steered black and Hispanic homebuyers into costlier mortgages and charged them higher fees.
Bank of America lays out who is eligible for principal reduction
More than 200,000 letters from Bank of America will begin landing in homeowners' mailboxes offering principal reduction under the terms of the $25 billion mortgage settlement announced in February, the bank said Tuesday.
If you fit the following criteria, be looking for a letter sometime before September. If you throw it out, you won't be eligible for the program, mortgage executive Ron Sturzenegger told CNBC.
- Owe more than the property is worth.
- Be at least 60 days behind on payments as of Jan. 31.
- Make a monthly payment of at least 25 percent gross household income.
- Have a loan owned and serviced by Bank of America, or serviced by Bank of America and owned by an investor who has given the bank permission to reduce principal. Fannie Mae, Freddie Mac and the FHA/VA have not.
BofA targets borrowers for mortgage reductions
Welcome to the morning roundup. Here's a look at today's banking and finance news.
Mortgage modifications. Bank of America has begun reaching out to more than 200,000 customers who might be eligible for mortgage principal reductions, CNBC reports. The letters to borrowers, announced earlier this year as part of the $25 billion mortgage settlement between big banks and government authorities, are arriving in homes this week.
Traders leaving. Top traders at Wall Street's biggest banks are jumping ship for hedge funds and investment firms, Bloomberg reports. Traders are citing better opportunities at those firms as banks slash or defer pay and reduce the amount they're willing to bet.
Facebook IPO. Hoodie- and sneaker-clad Facebook CEO Mark Zuckerberg met with well-dressed Wall Street bankers this week as he pitched the social network's stock offering to investors and analysts, the Wall Street Journal reports.
Markets down. Stocks opened lower this morning on continued concerns over Europe, Reuters reports.
Monday, May 7, 2012
Consumers still anxious about economy, index shows
A gauge of consumers' financial anxiety has stalled after nearly a year of improvement, suggesting worries about the economy continue.
Financial researcher Dan Geller's Money Anxiety Index stands at 89.7 this month, the same level as April, after falling for nearly a year before that. The index, which measures consumers' financial stress based on economic indicators, had fallen since June 2011, when it hit 99.5 - the highest level in 30 years. The index has ranged from a low of 40.3 in the mid-1960s to a high of 136 in the early 1980s.
Last month's jobs report, which showed fewer new jobs than in months past and more job-seekers dropping out of the hunt, was likely the main factor in halting the positive momentum, Geller said. If the index begins climbing again, that could have an effect on the presidential election this year, he said.
"No U.S. president ever won re-election to second term in the last 50 years while the Money Anxiety Index was rising during the re-election year," he said. "At the end of the day, people vote based on the economy - or more precisely, based on how anxious they are about their finances."
Waxhaw native named 'world's best student trader'
Peter Amos, a Wharton School student who graduated from Weddington High School, has been named the "World's Best Student Trader" after winning a NYSE Euronext competition in Amsterdam.
Amos competed against 18 other students picked from national contests around the world, tested on stress control, risk management, client handling and profitability, according to the NYSE. The competition is intended to simulate a trading desk.
For his victory, Amos will get two years of intensive counseling and training.
U.S. banks a cut above European banks, Buffett says
Welcome to the morning roundup. Here's a look at what's news in banking and finance.
Better than Europe. Legendary investor Warren Buffett says U.S. banks are a class apart from European banks, saying they have "liquidity coming out of their ears" and are in fine shape, Bloomberg reports. His company, Berkshire Hathaway, has more than $20 billion invested in American banks.
Virtual wallets. Merchants are under pressure from the big three credit card companies to upgrade their equipment to accept more secure "smart cards," and many are using the opportunity to also accept smartphone virtual wallets, The New York Times reports. Google is one of the biggest players in the smartphone wallet industry.
Angry Birds. The parent company of the popular smartphone game Angry Birds has drawn in more than $42 million in private equity funding, and speculation is that Rovio could soon go public, The New York Times says. An IPO would follow that of Facebook game maker Zynga.
Friday, May 4, 2012
NewDominion Bank launches mobile check deposit
Charlotte-based NewDominion Bank announced this week that it has begun offering mobile check deposit, a technology increasingly gaining popularity in the banking industry.
It allows customers to take a picture of both sides of a check and submitting it through a mobile app, rather than taking it into a branch to be deposited. The bank supports iPhone, iPad, Android and Blackberry.
Larger banks have generally offer this technology, but it is still relatively uncommon at community banks. A 2011 survey by the Independent Community Bankers of America reported that about 25 percent of small banks offered the so-called remote deposit capture.
BB&T also announced this week that it was rolling out the service.
Bank of America sells Hearst Tower
Bank of America has sold the Hearst Tower in uptown Charlotte to Parkway Properties Inc. in a $250 million deal, the real estate investment trust announced.
The bank had been marketing the 46-story building since February as it tries to streamline its operations. Bank of America will lease back 322,000 square feet, nearly a third of the Hearst Tower's office space, through March 2022 as part of the deal.
"The pending acquisition of Hearst Tower is a significant positive step as we continue to transform the company," Parkway Properties CEO Jim Heistand said in a statement. "It is a compelling real estate opportunity – a trophy building, with a stable tenant base, in a submarket with improving fundamentals, at an attractive basis."
Downgrade could force BofA to put up more collateral
Welcome to the morning roundup. Here's a look at what's news in banking and finance.
Downgrade damage. Bank of America could have to put up $5 billion more collateral if its debt rating is ratcheted down two notches, the bank reported in its quarterly filing, according to Forbes. Moody's has been reviewing major banks for the past few months, with the results expected soon.
Broker deal. Former Merrill Lynch brokers who say they are owed deferred compensation after leaving the company after its acquisition by Bank of America could get a settlement worth hundreds of millions of dollars, the Wall Street Journal reports. Bank attorneys have been meeting with representatives of the brokers.
AG review. New York and Delaware's attorneys general have announced an investigation into claims that several banks did not properly bundle loans into securities, Bloomberg reports. Investors say the errors make it more difficult for them to recover money on defaults.
Small fish may get bite of Facebook. As Facebook prepares for its IPO, executives are considering making more shares available to retail investors instead of big Wall Street banks, The New York Times reports. Smaller investors could end up getting 20 to 25 percent of the shares.
Thursday, May 3, 2012
BofA chooses new ad agency
Bank of America Corp. has selected a new advertising agency of record after an extensive review, part of an effort to rebuild its image in the face of "significant changes," the lender said Thursday.
The Charlotte bank chose ad giant WPP as its global agency of record. It also plans to ramp up creative assignments at Hill Holliday, the Boston firm where Bank of America marketing chief Anne Finucane once worked. That firm will retain marketing responsibility for Merrill Lynch Wealth Management and U.S. Trust.
Bank of America, the nation's second-largest bank by assets, launched an evaluation of its ad accounts in January as it sought to better communicate "the significant changes that have taken place at the company" as well as in the economy, it said. The move came on the heels of biting criticism from consumers, shareholders and politicians after a series of management missteps and a stock price plunge.
"We have fundamentally transformed into a stronger, more straightforward company that serves three groups of customers with distinct financial services," Finucane, the bank's global strategy and marketing officer, said in a statement. "These agencies ... will help us better communicate both the progress we've made as well as the value of our brand and our company to all of our stakeholder groups around the world and across all of our lines of business."
WPP, which already handles some work for the bank, will take over Bank of America's overall brand positioning, as well as branding and advertising for its consumer banking, global banking and markets and global commercial banking divisions. It replaces an account with BBDO Worldwide, which created the "Bank of Opportunity" campaign.
No word yet on what will replace the slogan. Last month, veteran ad executive Michael McDonald pitched the bank with an ad of his own in the Observer, suggesting it adopt the tagline "Bank of America: Living up to our name."
CFOs more optimistic on U.S. economy
Chief financial officers have a better outlook on the U.S. economy's chances for growth this year than they had in the fall, the latest survey from Bank of America Merill Lynch says.
About two-thirds of CFOs surveyed said they thought the economy would grow this year, up from 38 percent in the fall.
About half said their firms expect to add employees, and 64 percent said they would grow revenue.
The executives said the biggest threat to the economy is oil prices, cited by 65 percent, narrowly edging out "the effectiveness of U.S. government leaders."
Fed silent on bank concerns
Welcome to the morning roundup. Here's a look at today's banking and finance headlines.
Bank execs at the Fed. The Fed was largely silent Wednesday on bank bosses' concerns over proposed new regulations, the Wall Street Journal reports. Six big-bank CEOs, including BofA's Brian Moynihan, met with Fed governor Daniel Tarullo to discuss the recent stress tests and proposed rules.
Wells mortgages. Wells Fargo won the biggest home lending market share ever recorded as big-bank competitors pulled back, Bloomberg writes. The San Francisco bank made 34 percent of the mortgages originated in the first quarter, more than triple the share of the closest competitor.
Money laundering. HSBC's efforts to better police itself for suspicious money flows have failed to satisfy authorities, Reuters reports, citing confidential documents from investigations of the bank's U.S. operations. Those documents say the bank violated the Bank Secrecy Act and other anti-money laundering laws "on a massive scale."
Volcker Rule. The Volcker Rule, meant to curb risky trading, is on track for completion sooner than some bankers expected, despite lobbyists' efforts to delay it, the New York Times reports. The rule would ban banks from placing bets with their own money.
Wednesday, May 2, 2012
First Trust Bank profit up 34 percent
Charlotte-based First Trust Bank's profit rose 34 percent in the first quarter, reaching $831,000 as the bank cut expenses and set aside less money for loan losses.
“We are very pleased with the earnings performance and our improvement in asset quality in the first quarter," CEO Jim Bolt said in a statement. "First quarter results reflect continued improvement and positive trends in all areas."
Regional bank pay catching up to Wall Street
Welcome to the morning roundup. Here's a look at what's news in banking and finance:
Regional bank pay. Pay packages for execs at regional lenders are catching up to their counterparts on Wall Street, Bloomberg reports. The five largest regional bank CEOs earned 74 cents for every dollar paid to the six biggest U.S. banks, an increase from 38 cents in 2007. Capital One's CEO made $19.2 million last year, ahead of Goldman Sachs and second only to JPMorgan Chase's Jamie Dimon.
Coliseum Centre purchase. Goldman Sachs alums and the investment arm of Cargill Inc. have bought the Coliseum Centre, the nearly 1 million-square-foot office complex near the site of the old Charlotte Hornets arena in a $103.2 million deal, the Wall Street Journal reports in its "deal of the week" feature. The complex is 19 percent vacant, and many leases expire soon. About 70 percent of the deal is financed by a Bank of America mortgage, and the owners plan to sell in a few years.
No votes aren't revolt. The "no" votes on pay packages at Citigroup, Barclays and other firms aren't the start of a "corporate Arab Spring," The New York Times says. Attention is likely to die down, and the most that will happen are apologies, the Times writes.
Wells advantage. Wells Fargo's chief financial officer said his bank will be at a competitive advantage as regulators force larger banks to hold more capital, Bloomberg reports.
Cuts amid progress. Bank of America's expected cuts to its overseas operations come as the bank has made progress in international investment banking, the Wall Street Journal says.
Tuesday, May 1, 2012
99% Power attacks Charlotte's 'extraordinary event' decision
The 99% Power Coalition, a collection of protest groups who have announced their intention to bring hundreds of protesters to Charlotte for Bank of America's annual shareholder meeting next week, said the city's decision Monday to expand police powers during the event would not be intimidate them.
The powers were extended by the city manager's decision to declare the meeting an "extraordinary event," which comes from an ordinance developed for use during the DNC convention this fall. It gives police more latitude to search and arrest protesters carrying backpacks, coolers or markers.
“Invoking this draconian law is another example of our democracy being sold to the highest bidder," said
Julie Morgan, a local leader with Action NC, in a statement. "The City of Charlotte is protecting Bank of America’s bottom line. The Constitution and everyday people be damned."
“The one thing they got right is that this event will be extraordinary -- extraordinarily peaceful and powerful," said Marcella Robinson, executive director of Mortgage Fraud North Carolina, in a statement. "Bank of America does not need to be afraid of our magic markers or our stories.”
Wells Fargo launches online community for college planning
Wells Fargo announced Tuesday that it has launched an online community to allow high school students, parents and counselors ask and answer questions about paying for college.
Bank representatives will also be able to weigh in, and the site links to the Wells Fargo student loan application.
Student loan debt recently passed $1 trillion in the U.S., a rise some call a bubble.
Wells Fargo's online community is similar to one launched by Bank of America in 2007 for small business owners.
Wells Fargo among banks fined over complex ETF sales
The investment arms of Wells Fargo, Citigroup, Morgan Stanley and UBS were each fined for selling complex exchange-traded funds to customers without enough supervision and training, the Financial Industry Regulatory Authority announced Tuesday.
FINRA is a private company that polices brokerages and exchanges. None of the banks challenged the findings, nor did they admit wrongdoing.
Wells Fargo was fined $2.1 million and must pay $641,489 in restitution, the largest penalty of the four banks.
Exchange-traded funds, commonly known as ETFs, are traded like stocks and are designed to provide returns that track a benchmark or index.
The four banks sold more complex products called leveraged ETFs -- which use debt to multiply returns -- and inverse ETFs, which are profitable if the underlying index falls.
FINRA found that employees sold billions of dollars in these funds without adequate knowledge of their structure or risks, and sold some risky funds to investors who wanted a conservative investing profile.
"The added complexity of leveraged and inverse exchange-traded products makes it essential that brokerage firms have an adequate understanding of the products and sufficiently train their sales force before the products are offered to retail customers," FINRA enforcement chief Brad Bennett said in a statement. "Firms must conduct reasonable due diligence and ensure that their representatives have an understanding of these products."
Wells Fargo said similar problems affected customers at a number of firms as non-traditional ETFs became more popular at a volatile time in the markets.
"Wells Fargo Advisors cooperated fully with FINRA throughout this matter and is pleased to have reached this settlement," the bank said in a statement. "Wells Fargo Advisors has enhanced its policies and procedures and is confident that it has appropriate supervisory processes and training to meet our regulatory responsibilities and clients’ investment needs."
Fed criticizes big banks over stress tests
Welcome to the morning roundup. Here's a look at today's banking and finance news.
Stress tests. The Federal Reserve criticized how some of the largest U.S. banks calculated possible losses and planned dividends in the latest round of stress test, Bloomberg reported, citing people familiar with the process. Those comments will be part of feedback letters sent to the banks this week, covering everything from data collection to risk measurement, the sources said.
Fake euros. In Italy, enterprising counterfeiters are making "fake money, done well," the New York Times reports. A counterfeiting cottage industry there accounts for more than half of the 550,000 to 800,000 fake euro notes pulled from circulation annually by European central banks, the Times writes.
BofA layoffs. The Wall Street Journal has more on Bank of America's planned job cuts. Sources told the newspaper the Charlotte lender will eliminate 2,000 jobs from its investment banking, commercial banking and non-U.S. wealth-management divisions.
Fed policy. Two top Federal Reserve officials said they see no need for the central bank to ease monetary policy any further, Reuters reports. But the officials don't necessarily believe the Fed should quickly move to raise rates.
Park Sterling swings to profit
Charlotte-based Park Sterling Corp. posted its first quarterly profit in nearly two years for the first three months of 2012, the bank announced Tuesday.
The bank reported net income of $1.7 million, up from a $2.9 million loss in the same time period last year. Taking out merger-related expenses at the rapidly growing bank, Park Sterling earned $2.4 million in the first quarter this year.
It was the first profit since the second quarter of 2010, though earnings in the last few quarters have been weighed down by merger activity.
"Park Sterling's first quarter was marked by strong operating profitability and safeguarding of our balance sheet," CEO Jim Cherry said in a statement.
Park Sterling closed its acquisition of South Carolina-based Community Capital in November in a deal that effectively doubled the bank's assets. Cherry said the bank is continuing to look for acquisition targets, particularly in the Carolinas and Virginia.
The merger with Community Capital boosted Park Sterling's interest income for the quarter, and assets increased.
The bank's gross loan portfolio, however, shrunk 4 percent to $735.9 million as customers paid down debt and the bank chose not to match aggressive pricing from competitors, the bank said.
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