Monday, April 30, 2012

Banks book profits by boosting mortgage margins

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

Mortgage gains. Banks like Wells Fargo and Bank of America are booking large mortgage banking profits on the surge in foreclosures by being reluctant to cut prices or loosen underwriting standards, the Wall Street Journal reports. Essentially, they "charge more and do less," as Guy Cecala of Inside Mortgage Finance put it, spreading the yield between mortgage-backed securities and mortgage rates.

May Day. The Occupy Wall Street movement is using tomorrow's May Day to reinvigorate their protests, planning to target Union Square and the Bank of America building in New York City, Bloomberg says. Occupiers began planning for the day in January. If their projections are correct, it will be the largest single demonstration since Zuccotti Park was cleared by police in November, the Daily Beast says.

Noisy earnings. Once again, bank earnings were bogged down in debt valuation adjustments and other accounting charges. TheStreet.com tries to parse what they all mean.

Free checking for life. A San Francisco man has been granted free checking for life from Bank of America, Forbes reports. He initially opened a checking account with Virginia Commonwealth Bank in Arlington, Va., in 1971. At the time, that bank was offering free checking for life. After bank consolidation, the bank came to be owned by BofA, which imposed fees. The man was able to argue successfully that he should keep the promotion.

Analyst showdown. Two well-known Bank of America analysts are publicly arguing over their rating of the Charlotte bank's stock. Dick Bove, a frequent CNBC contributor and outspoken bank proponent, issued a research report criticizing Mike Mayo (known for being bearish on banks) for his sell rating on BofA. The Wall Street Journal hashes it out.

Friday, April 27, 2012

VantageSouth named top SBA lender

VantageSouth, the N.C. bank that recently merged with Community Bank of Rowan, has been named the No. 1 Small Business Administration lender in the state, it announced this week.

The bank's SBA loan volume edged out other lenders across the state in the first five months of the agency's fiscal year, VantageSouth said. The government-guaranteed SBA loans are aimed at helping small businesses that might otherwise have difficulty securing financing with reasonable terms.

"We are able to fill the gap many small business owners find themselves trapped in between the small banks and the 'mega' banks," VantageSouth President Steve Jones said in a news release this week.

VantageSouth expanded into Salisbury after its parent company, Raleigh-based Piedmont Community Bank Holdings Inc., merged it with Community Bank of Rowan. It has five branches across the state.

Wells Fargo to buy brokerage services firm

Welcome to the morning roundup. Here's a look at today's banking and finance news.

Wells acquisition. Wells Fargo & Co. has agreed to buy Merlin Securities LLC, a prime brokerage that serves hedge funds and other clients with as much as $2 billion in assets, Bloomberg reports. The deal, the San Francisco bank's first foray into prime brokerage services, is part of a plan to bolster the investment bank acquired when Wells bought Charlotte's Wachovia in 2008, Bloomberg writes.

Goldman probe. Authorities are looking deeper into the potential involvement of Goldman Sachs Group Inc. employees in a high-profile insider trading ring, the Wall Street Journal reports.

Executive pay. CNBC takes a look at whether CEO bonuses are wrecking the wider economy.

Economic slowdown. The U.S. economy grew at an annual rate of 2.2 percent in the first quarter, slower than the 3 percent rate the quarter before, the New York Times reports. Still, the number represents what economists say is a sustainable pace of recovery.

Thursday, April 26, 2012

BofA report: Consumers delaying retirement

Americans are working harder to get their finances back on track, but many still expect to retire later than they planned, a new survey from Bank of America Corp. found.

The latest Merrill Edge Report, a semi-annual study of consumers with $50,000 to $250,000 in investable assets, found 57 percent expect to retire later than they planned a year ago. That's up from 47 percent in November, when the bank conducted its last survey.

Balancing short- and long-term financial needs continues to be one of the greatest challenges for those "mass affluent" customers, the study found. About a third of respondents acknowledged tapping into their long-term savings to meet short-term needs, more than in the last report.

Yet long-term issues pose the greatest concern: Consumers said they were most worried about the rising cost of health care, followed by saving enough to last through retirement and being about to afford the lifestyle they want during retirement.

"It's no surprise that we see this group delaying retirement and pushing it back further and further," Dean Athanasia, preferred and small business executive at Bank of America, said during a conference call today.

Workers are changing their habits as a result of their concerns, cutting back on entertainment and personal luxuries, trimming everyday expenses and keeping their cars longer than planned, the report found. But those measures are offset, in part, by other expenses: More than half of respondents said they paid or expect to pay more to send their children to college than anticipated, for instance.

Merrill Edge offers investment guidance and investing platforms for small businesses and mass affluent customers. The bank uses data from its Merrill Edge reports to help shape products and services and better understand customers' financial needs.

"Clients are not worried about returns; they are worried about how to reach their goals," Merrill Edge executive Alok Prasad said. "Investment returns are a mechanism to close the gap."

Banks seek high fees from low-income customers

Welcome to the morning roundup. Here's a look at today's banking and finance headlines.

Bank fees. More big banks, including Wells Fargo & Co., are targeting low-income customers with offers for products that can carry high fees, such as prepaid debit cards and check-cashing options, the New York Times reports. Banks say they can offer the products at competitive prices; some regulators and consumer advocates worry banks are just pushing them for the fees.

Ally earnings. Ally Financial Inc., the government-owned lender with a presence in Charlotte, posted a $310 million profit in the first quarter on solid auto-financing results and improving mortgage operations, the Wall Street Journal reports. That's up from a loss in the fourth quarter.

Euro trouble. The European crisis is weighing on earnings at some of Europe's top banks, Reuters writes. Spanish bank Santander, for instance, said first-quarter profits fell by nearly a quarter after it set aside more than $4 billion to cover rising loan defaults.

Stocks fall. Markets are down this morning as jobless claims edged higher than forecast and big companies' earnings missed analysts' estimates, Bloomberg reports.




Wednesday, April 25, 2012

Advocacy group: Private equity creates jobs

A national private equity advocacy group is featuring a company with N.C. ties in a new campaign to improve the industry's image.

The Private Equity Growth Capital Council's "Private Equity at Work" initiative seeks to spread the word about the industry and its contributions to the U.S. economy. A video posted on the campaign's website highlights lithium producer Rockwood Holdings Inc., which is building a new plant in Kings Mountain with the help of private equity firm KKR & Co.

The plant is part of a massive expansion that will create hundreds of jobs and position the company as the leading global provider of lithium compounds for electric and hybrid vehicles, the PEGCC said.

The Washington, D.C., advocacy group's campaign comes at a time when private equity is making headlines - most notably as opponents of presumptive GOP presidential nominee Mitt Romney have criticized him for his wealth and for business failures that occurred on his watch at Bain Capital.

"There is a real lack of understanding about private equity - what it does, how it works and who benefits from it," PEGCC CEO Steve Judge said. "The Rockwood Holdings case study ... shows how private equity strengthens companies, creates jobs and drives economic activity and growth."

About 360 private equity-backed companies, employing nearly 164,000 people, are headquartered in North Carolina, according to the group's data. In the last decade, the industry has invested about $47.2 billion in N.C.-based companies, it said.

Small banks can't repay bailout loans

Welcome to the morning roundup. Here's a look at today's banking and finance news.

TARP. More than 350 small banks can't afford to repay their government bailout loans, a top watchdog will warn in a report today, according to the Wall Street Journal. The relief program's special inspector general said those banks, which have about $15 billion in outstanding TARP loans, face a "significant challenge" in raising money to pay them back.

Trouble abroad. The U.K. slipped back into recession as its economy shrank in the first quarter, marking its first double-dip recession since the 1970s, Bloomberg reports.

Wall Street pay. Forbes has more on CEO pay, following Citi shareholders' rejection of the bank's executive compensation plan. It details how execs are paid - and how their banks have performed relative to peers and the broader market.

Stocks climbing. Markets moved higher this morning after strong results from Apple, Reuters reports.

Tuesday, April 24, 2012

Big protests expected at Wells Fargo meeting

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

Annual meeting. Wells Fargo & Co.'s annual shareholder meeting is today in San Francisco, and the bank is bracing for thousands of protesters, including community and environmental groups, the Wall Street Journal reports.

Say on pay. Citigroup shareholders' rejection of the bank's executive pay last week is a wake-up call to Wall Street, a column in the Journal says. Say-on-pay votes are still ahead for Wells Fargo and Charlotte-based Bank of America Corp.

First to go? In another financial meltdown, Wall Street giant Morgan Stanley would be "the first to go," an investment expert tells CNBC. Yet some say shorting the stock would be misguided.

Bank moves. JPMorgan Chase & Co. has appointed Jeff Urwin as head of investment banking operations in the Asia-Pacific region, the New York Times reports.

Stock markets. Stocks were set for a weak start this morning after big losses the day before and more trouble in Europe, Reuters reports.

Monday, April 23, 2012

Rule change helps small banks

Welcome to the morning roundup. Here's a look at today's banking and finance headlines.

Help for small banks. The JOBS Act includes a provision that raises the number of shareholders small banks can have before being required to register with the SEC, the Wall Street Journal reports. The act, meant to boost hiring by reducing regulations, will allow small banks to have 2,000 shareholders before registering - meaning they can attract new investors without worrying about new rules.

Housing system fix. Republican and Democratic lawmakers agree they want to wind down Fannie Mae and Freddie Mac - but it is unlikely Congress will soon tackle the task, Reuters reports. Fannie and Freddie now support about 60 percent of all new U.S. home loans.

Bank moves. UBS has hired Bank of America's James Forbes as a vice chairman as it revamps its U.S. investment bank, Bloomberg writes. That adds to a series of recruits from Merrill Lynch.

Chinese banks. China's banks are light on capital after a government-prompted lending spree, the New York Times reports. Within the last year, seven of the country's biggest banks tapped the markets for more than $51 billion in new funds.

Stocks slump. Stocks continued to fall Monday on trouble in Europe and other economic concerns, CNBC reports.

Friday, April 20, 2012

Bank of America among banks scrutinized for overdraft marketing

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


Overdraft marketing. Bank of America and eight other banks are being scrutinized by the Consumer Financial Protection Bureau over how they market overdraft protection on their checking accounts, Bloomberg reports. The Dodd Frank financial reform law already tweaked the rules on the products, requiring customers to actively opt-in instead of being automatically enrolled. Besides marketing, the CFPB is also looking at the size of the overdraft fee, which generally is about $35.

Student loans. To pay back tens of thousands in student debt, more grads are putting off marriage and children to get their finances in order, the Wall Street Journal reports. At the same time, default rates on private student loans are twice their prerecession levels.

Short sales. Bank of America is allowing more short sales than any other bank, according to data from RealtyTrac, Bloomberg says. Total U.S. short sales are up more than 30 percent from a year ago, and are expected to set a record.

Volcker delay. The Federal Reserve and other agencies confirmed Thursday that Wall Street will have two years to comply with Volcker Rule provisions, which largely bank proprietary trading, The New York Times reports. The rule technically takes effect July 21, and some banks worried they wouldn't be given enough time to comply.

Thursday, April 19, 2012

Customers still hate fees, but like their branches, ATMs

Though people definitely aren't happy with bank fees, they like their branches and ATMs, according to a new study released Thursday by J.D. Power and Associates.


Overall, customers are slightly more happy with their banks than they were a year ago.

The firm's overall bank customer satisfaction index increased one point on a 1,000-point scale this year, to 753.

Happiness with fees took the biggest hit, J.D. Power said, particularly monthly maintenance fees. ATM and debit card fees aren't popular, but they weren't as big a drag on the results.

“The negative reaction to fees reflects customers’ irritation about paying for something they didn’t have to pay for in the past,” director of banking services Michael Beird said in a statement. “It also reflects a lack of their complete understanding about what they’re getting for those fees.”

Banks have been able to counteract the effect of fees, at least in this survey, by making their branches and ATMs more pleasant.

Customers are more attracted to branch and ATM locations, appearance and hours of operation, J.D. Power said. More than three-quarters of people are now greeted upon entering a branch, and ATMs are viewed as more reliable and user friendly.

The survey is based on 52,000 interviews with bank customers in January and February.

A morning full of earnings results

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


BofA earnings. Bank of America announced its earnings this morning, revealing another quarter of noisy results. Its 3 cents per share profit was skewed by $4.8 billion accounting valuation loss. But to be fair, the bank recorded $6.2 billion in gains on similar accounting adjustments in the third quarter last year. ZeroHedge says the "scariest" part of the release is a warning about $34 billion in long-term debt maturities in the next quarter.

Fifth Third, BB&T earnings jump. Both Winston-Salem's BB&T (from CharlotteObserver.com) and Cincinnati's Fifth Third Bank (from Reuters) reported a jump in earnings.

Morgan Stanley falls. Investment bank Morgan Stanley fell to a loss in the first quarter, the Wall Street Journal reports, primarily driven by accounting losses. Other metrics were more positive, like trading revenue.

Wednesday, April 18, 2012

Working at a big bank: "Survival of the well-connected"?

Working at Bank of America Corp. is like struggling to survive in "a vast ocean," one employee wrote in a letter to the Observer this week.

The person, who asked not to be identified, wrote a fictional account from the perspective of a new employee learning the ropes at the Charlotte bank. When the worker notices scores of bankers chatting at a coffee shop, for instance, his mentor tells him getting ahead is all about networking.

"Sounds like survival of the fittest," the worker says.

"Survival of the well-connected is how I will put it," the mentor replies.

A bank spokesman today declined to comment on the employee's account.

The bank worker wrote that that culture results in people ending up in the wrong jobs. It fuels a constant rotation of managers and sometimes prompts leadership to promote "a whole bunch of people ... indiscriminately, because they have no real clue who is doing the job and who is not," only to later demote those employees.

"There is no career plan," he said. "Only a survival plan."

The bank is also constantly reorganizing - about every other month - the employee wrote.

"When someone is put in a new role, they will go through a learning process and become proficient to start performing their job well," he said. "However, it also means that they will make decisions, and there is a risk that they may make mistakes. To prevent them from making mistakes, the bank will proactively reorganize them to new roles before they get up to speed in their current job."

Another gripe involves the bank's pay-for-performance compensation. Instead of evaluating workers' actual performance, managers make guesses mid-year on whether they think employees will achieve their goals by the end of the year, the employee wrote.

“Performance review is something like Santa Claus and the Tooth Fairy,” he said. “Everyone knows it is not real, but we happily continue telling our children anyway.”

What do you think? Do his complaints ring true? Are his observations typical of most large corporate workplaces, or do they highlight issues distinctive to one of Charlotte’s biggest employers?

Phony news release claims BofA's name

A news release circulating this morning - purportedly from Bank of America Corp. - that details the Charlotte lender's troubles is bogus, the bank said.

The release, which carries BofA's familiar blue-and-red logo, announces that the bank has launched a new campaign called "Your Bank of America" to "reach out to the American public for guidelines on how banking should happen." It links to a website that jabs at the bank on various issues, from its stock price decline to its environmental practices.

"We may not have all the answers," the release says in a quote attributed to chief executive Brian Moynihan, "but we're confident that those answers exist."

Bank spokesman Scott Silvestri said the announcement and website are not affiliated with the bank.

It's not clear who is behind the effort. No group has taken credit on the website or publicly, and no one answered at a phone number listed in the news release.

The website details some of the bank's troubles and offers visitors the chance to create their own advertising campaign, where they can choose from several "spokespeople" - including a foreclosed home - to help share their message.

"The Your Bank of America campaign has been designed in a spirit of honesty and transparency," the release says. "Leveling with the American people about the current status of the institution's finances is seen as a necessary first step .... "

PNC beats Wall Street estimates with $766 million in profit

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


PNC earnings. PNC Financial Services Group, which entered the N.C. market with the acquisition of RBC Bank last month, posted net income to shareholders of $766 million in the first quarter, less than the same time period the year before, the company announced this morning. Still, the company beat Wall Street estimates, and its numbers were weighed down by conversion costs. Revenue was up 3 percent.

More BofA sales. Bank of America is exploring the sale of its foreign wealth management unit because it is not profitable enough, The New York Times says. Though the Charlotte bank's total wealth management business manages about $2 trillion, only about $90 billion is overseas -- which means it is unable to generate significant returns for the bank.

Krawcheck joins gold board. Sallie Krawcheck, the former Bank of America executive who left the bank in a management shakeup last fall, has joined the board of Gold Bullion International, the company announced this morning. "I saw the value of the GBI model and philosophy as soon as I was introduced to the company and its management," Krawcheck said in a press release. "Creating a seamless platform and democratizing the ownership of physical gold and precious metals is much overdue and another important tool for investors."

Bad loans. Bank of America, which reports its earnings tomorrow morning, is expected to re-classify about $2 billion in home-equity loans as nonperforming, even if some of them are still accruing, Bloomberg reports. The Charlotte bank would be joining its peers after new guidance from regulators.

Predatory loans. An advocacy group is claiming that certain short-term, high interest and fee loans offered by Wells Fargo and U.S. Bank are predatory, Minnesota Public Radio reports. The loans are structured like payday loans. Bank of America told MPR that it doesn't offer this type of loan.

Tuesday, April 17, 2012

Tree.com's losses deepen after trademark review

After reviewing the value of the LendingTree name, Tree.com reported that its losses were deeper than initially reported for the year 2011.


Under the revised numbers, the Charlotte company lost $59.5 million over the year. In February, Tree.com reported 2011 losses of $45.8 million.

The losses associated with the trademark are non-cash charges. The initial results included a $5.9 million markdown. After the review, it jumped to $29 million.

The new numbers came out in a securities filing and annual report released Tuesday. The trademark review delayed the issuance of the annual report.

The company's stock (Nasdaq: TREE) was up nearly 3 percent today.

Tree.com's fourth quarter was still considered a success as the company transforms back into a purely lead generation company from its foray into its own lending.

The company maintained the same predictions for 2012: earnings between $3 million and $4 million from its core business.

Bank of Commerce boosts first-quarter profit

Charlotte-based Bank of Commerce earned $48,000 for shareholders in the first quarter of 2012, the bank announced Tuesday, up 25 percent from the same time period last year.


The bank's total deposits, loans and assets declined in the quarter.

"We not only recorded a profit for the first quarter, but we continued to strengthen our balance sheet both by selling foreclosed properties and by reducing our non-accruing assets," CEO Wes Sturges said in a statement.

"Though our loans outstanding decreased during the quarter, we are now seeing increased demand for credit from our clients and this should result in positive loan growth going forward."

The results reverse three consecutive quarters of losses. In the fourth quarter, the bank lost $847,000 as it continued to set aside money for loan losses.

Bank of Commerce serves independently owned small businesses in the Charlotte area.

Goldman beats earnings expectations

Welcome to the morning roundup. Here's a look at today's banking and finance news.

Goldman beats expectations. Goldman Sachs Group Inc. reported higher-than-expected earnings and boosted its dividend, Reuters reports. The bank said its results were due to aggressive cost-cutting and strong investment banking and trading revenues.

BofA real estate. Charlotte's Bank of America Corp. has reached a deal to sell one of its Manhattan office buildings, the Wall Street Journal reports, citing people familiar with the matter. The bank is selling the 31-story 222 Broadway building to an investment group for about $230 million and will lease back part of the building, the people said. BofA announced plans to sell 222 Broadway and two towers in uptown Charlotte in February.


CEO pay widens gap. JPMorgan Chase & Co. CEO Jamie Dimon earned 67 times the average amount set aside for his investment bankers and traders, Bloomberg writes. That's the widest gap among firms that report divisional pay.

Tax day debate. Two French economists studying earnings in the U.S. propose tax rates on the rich that are much higher than those outlined in the Buffett Rule, the New York Times reports. They say the rule, a 30 percent minimum tax on earnings above $1 million, wouldn't do much to correct the income gap - adding to the political debate over taxes.

Monday, April 16, 2012

Latino Community Credit Union opens new Charlotte branch

Latino Community Credit Union, a Durham-based bilingual lender, is celebrating its new Charlotte branch April 24 with an opening ceremony and traveling art exhibit.

The event, which marks the grand opening of the credit union's relocated branch in east Charlotte, features guest speaker Mel Watt, the congressman representing North Carolina's 12th district, and a free art exhibit showcasing the work of Latino artists from across the state.

LCCU chief executive Luis Pastor said the new branch will help the credit union better serve its Mecklenburg customers. The full-service location offers auto, consumer and mortgage loans, free financial education workshops and other services.

"Our goal is to help as many families as possible to integrate into the U.S. financial system and build wealth for themselves, their families and their communities," Pastor said.

Time: Ceremony begins at 11 a.m. Evening with the Artists, part of the Artist Studio Project's RaĆ­ces/Roots traveling art show, takes place from 5-7 p.m.
Place: LCCU's new Charlotte branch, 3130 Milton Road.
Details: Event is free and open to the public. For more information, visit http://latinoccu.org/.

Mortgage modifications beginning to help more

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


Mods are helping. About seven in 10 homeowners who received loan modifications or other mortgage help in the first three quarters of 2011 are still current on their mortgages, the Boston Globe reports. The Office of the Comptroller of the Currency says that the success rate has been steadily improving as mod programs have become more "substantive than symbolic."

Hawaii takes on banks. Hawaii's attorney general has filed suit against seven major banks -- including Bank of America -- claiming they are targeting elderly credit card customers, misleading them to sell them worthless credit payment protection plans, Courthouse News Service reports.

Differing takes. Were JPMorgan and Wells Fargo's earnings good or bad? The New York Times and the Wall Street Journal have differing takes. The Times paints the results as positive, with its rival taking the opposite stand. TheStreet.com explains the differences.

Selling in China. U.S. banks have been steadily selling off their investments in Chinese banks, the Wall Street Journal reports, as the banks seek to raise capital and cash. Bank of America now has only a 1 percent stake in CCB, and Goldman Sachs has now announced it will be reducing its position in Industrial & Commercial Bank of China Ltd.

Citigroup earnings. Citigroup Inc. posted net income of $2.9 billion in the first quarter, down 2 percent from the year before but beating Wall Street's estimates, The New York Times reports.

Friday, April 13, 2012

Yadkin Valley Bank prepares to auction off TARP money

Yadkin Valley Financial Corp. announced Friday that it is preparing for the federal government to auction off its federal bailout investments. While that would mean the Elkin-based bank will exit the TARP program, it also would likely mean the government would take a loss.


The bank bailout essentially involved the government buying shares of preferred stock, valued at $1,000 a piece. Yadkin Valley received $49 million, which it has yet to begin paying back.

The Treasury said last month that it is looking to speed its exit from the politically unpopular program. A number of other banks have already auctioned off their TARP investments. In a securities filing Friday, Yadkin Valley sets out terms for it to be included in such an auction.

No date has been set for the auction, and the bank said it is not a sure thing.

"We are filing at this time given the current activity we've seen from Treasury regarding TARP shares," CEO Joe Towell said in a statement. "This allows us to be ready should an opportunity be made available to us."

The bank operates 34 branches across the Piedmont and mountain region of North Carolina and in York and Cherokee counties in South Carolina. It operates American Community Bank branches in the Charlotte area.

Law firm hires four banking attorneys from Womble Carlyle

Bradley Arant Boult Cummings LLP has hired four banking and financial services attorneys for its Charlotte office, the law firm said Friday.


Partners Patricia Gordon and Jolie Amie Tenholder, associate Cybil J. Abrao and staff attorney Marian Lucius Bowers all joined the firm, which has offices in four states and Washington D.C. All four previously had worked for Womble Carlyle Sandridge & Rice, LLP.

“Growing our banking and financial services practice and the Charlotte office are key priorities for the firm,” Chairman Beau Grenier said in a statement. “We are pleased to welcome such a talented group of attorneys to Bradley Arant Boult Cummings. Each will add significantly to what we offer clients.”

Bank earnings season begins with solid results from Wells, JPMorgan

Welcome to the morning roundup. Here's a look at today's banking and finance headlines.

Bank earnings. First-quarter results are out for Wells Fargo & Co. and JPMorgan Chase & Co. today, two lenders widely expected to be among the industry's top performers. Wells delivered another round of record-setting results. JPMorgan's earnings slipped, but the bank beat analysts' expectations and saw a surprise increase in revenue, the Wall Street Journal reports.

Wall Street and wine. Two investment bankers have ditched more conventional investment opportunities for wine, Bloomberg writes. They are looking to raise as much as $50 million for The Wine Trust, the only private-equity structured wine investment fund in the U.S., which buys both physical wine and futures.

Moynihan to testify. A New York judge ruled that Bank of America Corp. CEO Brian Moynihan must testify in a lawsuit brought by MBIA Inc., Reuters reports. The bond insurer claims the bank fraudulently induced it to insure risky mortgage-backed securities.

Markets down. Stock futures fell this morning on concerns over Spain's borrowing costs, China's growth and banks' earnings, CNBC reports.

Thursday, April 12, 2012

SEC sues Raleigh woman in scheme targeting African-American churchgoers

The Securities and Exchange Commission announced Thursday that it has sued a Raleigh-area woman and her business partner for their roles in a scheme that allegedly swindled African-American churchgoers out of $11 million.


Wendy Jean Connor, 43, was the chief operating officer of City Capital Corp., which was led by 29-year-old "Social Capitalist" Ephren W. Taylor, II and was determined to be a Ponzi scheme, according to the SEC's complaint.

Taylor touted himself as the youngest black CEO of a public company and appeared on numerous television shows and in the media.

His company sold promissory notes pledging a 12 percent to 20 percent return, telling investors the money would be used to fund small businesses like laundromats, juice bars, gas stations and sweepstakes parlors. He traveled around to churches promoting his investments as a way to give back the community and make a healthy return.

Instead, Taylor used the majority of the money to publish and promote his books, hire consultants and fund his wife's singing career, the SEC says.

“Ephren Taylor professed to be in the business of socially-conscious investing. Instead, he was in the business of promoting Ephren Taylor,” David Woodcock, director of the SEC’s Fort Worth Regional Office, said in a statement.

“He preyed upon investors’ faith and their desire to help others, convincing them that they could earn healthy returns while also helping their communities.”

The company never generated any profits, instead relying on new investors to pay back old ones, the SEC found.

Connor began running the company's daily operations in early 2009. It shut down in late 2010.

Goldman to pay $22M penalty

Welcome to the morning roundup. Here's a look at today's banking and finance news.

Goldman penalty. Goldman Sachs will pay $22 million to settle allegations by federal regulators that the bank did not have adequate policies to prevent research from being passed inappropriately to preferred clients, Reuters reports. People familiar with the matter told the news agency U.S. securities regulators are preparing to announce the deal.

New trading platform. Asset manager BlackRock Inc. plans to launch a trading platform that would let the firm and its peers trade bonds directly with one another, bypassing investment banks, the Wall Street Journal reports. Charlotte-based Bank of America once owned a large chunk of BlackRock; it shed its remaining stake last year as it worked to streamline operations.

Fight over mortgage claims. JPMorgan Chase & Co. CEO Jamie Dimon said investors demanding the bank buy back soured loans or pay them for losses on mortgage securities "face a long and difficult road," Bloomberg reports. The claimants lining up include holders of $95 billion of bonds represented by the law firm that won $8.5 billion last year from BofA.

Lesson learned? Wall Street's reaction to Greg Smith's resignation from Goldman Sachs - via an op-ed in the New York Times last month - suggests an important management lesson is being missed, Fortune writes.

Wednesday, April 11, 2012

Bank of America rearranges business segments

Bank of America reported in a securities filing that it is rearranging its business segments, including combining its deposits and credit card units into one.


Before, the Charlotte bank had six segments:
  • Deposits
  • Card Services
  • Consumer Real Estate Services
  • Global Commercial Banking
  • Global Banking & Markets
  • Global Wealth and Investment Management
Now it has five:

  • Consumer and Business Banking, which includes deposits, card services and the business banking part of the former Global Commercial Banking.
  • Consumer Real Estate Services
  • Global Banking
  • Global Markets
  • Global Wealth and Investment Management
Here's how they ranked by net income for 2011, under the new classifications as reported Wednesday:

Consumer and Business Banking: $7.5 billion

Global Banking: $6 billion
Global Wealth and Investment Management: $1.7 billion
Global Markets: $1 billion
Consumer Real Estate Services: loss of $19.5 billion
All other: $4.8 billion

N.C. banks in Treasury program increase small business lending $124 million

Seven North Carolina community banks participating in a U.S. Treasury program have increased their lending to small companies by $124.4 million so far, the Treasury said Wednesday.


The Small Business Lending Fund, created in mid-2010, put about$4 billion was put into 332 banks and community development loan funds around the country. Critics call it a flop since $30 billion was authorized. About half of it was used to pay off TARP.

North Carolina's seven banks have about $115 million in SBLF money outstanding. Before receiving the money, their small business lending totaled about $813 million. Now, it is at $937 million -- a 15 percent increase.

Here's how each bank has performed:
  • Citizens South Banking Corp., Gastonia: Up 16 percent, to $137 million
  • Premara Financial Inc., Charlotte: Down 0.1 percent, to $51 million.
  • Providence Bank, Rocky Mount: Up 18 percent, to $34 million.
  • First Bancorp, Troy: Up 3 percent, to $508 million.
  • Select Bancorp Inc., Greenville: Up 59 percent, to $46 million.
  • Union Bank and Trust Co., Oxford: Up 16 percent, to $45 million.
  • Live Oak Bancshares Inc., Wilmington: Up 117 percent, to $116 million.

Advertising exec pitches BofA...with ad of his own

A veteran advertising executive wants a hand in Bank of America Corp.'s next advertising campaign - and he's trying an unusual pitch to win over the Charlotte lender.

Michael McDonald, 80, of Atlanta wrote an "open memo" to chief executive Brian Moynihan and marketing head Anne Finucane outlining his plan to reshape the bank's image. He has been trying to reach the executives since the bank said in January it was rethinking how it advertises to consumers, he said, and decided to take out an ad of his own when those efforts fell short.

"Brian: Here's the pledge that B of A should make to everyone it touches today and in the future; one that you should make sure is always kept," the ad in today's Observer says. "Bank of America: Living up to our name."

McDonald has spent nearly six decades in advertising, he told the Observer this week. The Atlanta agency he launched in 1969, McDonald & Little, was once the largest in the Southeast, running campaigns for banks, sports franchises, fast-food chains and other companies.

It closed in the 1980s, a few years after it was sold. Later, McDonald launched The McDonald Group, and he continues to consult with clients on marketing strategy and branding, he said.

So why BofA? Why now?

"As an American, I feel it is important that an institution like Bank of America - which symbolizes, by its name and size, American banking - be brought back to its full strength and its reputation be restored," McDonald said. "That's a motivation."

He and a longtime associate felt they had the talent to tackle the bank's "thorny" image troubles and create a rallying point for employees and customers, he said. But despite industry contacts from decades past, they couldn't get their ideas in front of the bank's top executives.

Bank of America did not provide an official statement in response to McDonald's campaign. But a source with knowledge of the situation said someone from the bank's marketing department reached out to him this afternoon.

McDonald said he hopes his latest effort is provocative enough to suggest a conversation is worthwhile. As for whether he thinks Moynihan will come knocking once he reads the bank's hometown paper, "Hope springs eternal," McDonald said.

"I'm 80, and my associate is 84. We think we're at the top of our game."

In a twist, Bank of America repeatedly sues itself

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


BofA suing itself. In an unusual twist, Bank of America has sued itself in foreclosure cases at least 11 times in just one Florida county since late March, the Huffington Post reports. The bank says this happens on properties with two mortgages, with Bank of America servicing one on behalf of an investor and owning the other. Experts call it "classic robo foreclosure."

Subprime lending returns. As banks and other lenders have mostly dug out from losses on bad loans, they're again beginning to lend to subprime borrowers, The New York Times reports. These mostly include credit cards and auto loans.

Broker bonuses back. Bonuses paid to recruit securities brokers are back near their all-time highs, Reuters reports. Morgan Stanley, UBS AG, Wells Fargo & Co. and Bank of America are offering top brokers as much as three times their previous year commissions and fees.

Smaller profits could drop markets. A drop in first-quarter profits at the largest U.S. banks could put a halt to the stock market rally that has boosted bank shares this year, Bloomberg reports. Earnings season begins Friday with JPMorgan and Wells Fargo.

Speedy short sales. Bank of America is set to try a program in which Florida short sales are approved within 20 days, the Tampa Bay Times reports. Currently, it can take as long as six months. The Charlotte bank services about a quarter-million delinquent mortgages in the beleaguered state.

Tuesday, April 10, 2012

Capital Bank posts $5.3 million profit

The company founded by former Bank of America executives to buy up troubled banks posted a profit of $5.3 million in 2011, the bank said Monday.


Capital Bank Corp. is based in Raleigh, and is a subsidiary of Capital Bank Financial Corp. It was founded in 2009 by Gene Taylor and Chris Marshall. At that point, it was called North American Financial Holdings.

The company has bought seven banks in the past two years, including last month's announcement that it is acquiring Southern Community Financial Corp.

Capital Bank has 143 branches in five states.

Bank enforcement actions decline

The number of banks and thrifts hit with "severe enforcement actions" from regulators has fallen drastically in the last two years, according to a new analysis from SNL Financial.

Twenty-four lenders received enforcement actions - including prompt corrective action directives, cease and desist orders and formal agreements with regulators - in February, down from 29 the month before, the Charlottesville, Va.-based financial information firm reported.

That's well below the levels seen through the worst of the recession: Newly issued severe enforcement actions peaked in the first half of 2010, with 221 in the first quarter and 220 in the second. Yet despite the decrease, more than 1,000 banks and thrifts - nearly 14 percent of the industry - are still operating under such actions issued after 2007, SNL found.

Among the severe enforcement actions counted in February: the formal agreements between Charlotte's Bank of America Corp., Wells Fargo & Co. and other lenders with the Office of the Comptroller of the Currency related to the $25 billion mortgage settlement between big banks and government officials.

Big banks face more rules on mortgages

Welcome to the morning roundup. Here's a look at today's banking and finance headlines:

Mortgage servicing rules. The new Consumer Financial Protection Bureau might soon require mortgage servicers, including Charlotte's Bank of America Corp. and Wells Fargo & Co., to reach out more to delinquent borrowers, warn them about changes in their interest rate and even apply monthly payments the same day, the Wall Street Journal reports. The regulator said it plans to propose the new rules by this summer and finish them by early next year.

Bank capital. Ben Bernanke said banks need to have more capital to make sure the financial system is stable, Reuters reports. The Federal Reserve chairman said during a conference Monday that regulators were taking steps to force financial institutions to hold more capital.

Stock market correction. U.S. stocks might face a steeper correction going forward, a market strategist tells CNBC. Others predict the bull market will continue, despite last week's disappointing job data.

Dimon's dancing. JPMorgan Chase & Co. CEO Jamie Dimon might run the nation's largest bank by assets - but he's "a terrible dancer," Bloomberg writes. That's according to his wife, Judy Dimon, who made the comment at a gala Monday night.

Monday, April 9, 2012

N.C. advocate calls for prepaid debit card reform

Durham-based consumer advocate Reinvestment Partners released a report Monday calling for better consumer protections on prepaid debit cards.

The report states that even as the prepaid cards have grown in popularity, the fees and charges associated have become more disparate.

“Until all prepaid cards are safe, affordable, and fully functional they will still be a less-than-optimal substitute for a regular checking account," Reinvestment Partners research director Adam Rust said in a statement. "The reformed prepaid card will give consumers the services they need while protecting them from excessive fees, high-cost credit, and confusing disclosures.”

The organization is asking for a simple one-page disclosure form that lists the likely costs for users and all possible fees. It also lists eight principles that should be mandated:

  1. Prepaid cards do not come with either a line of credit or an overdraft capability.
  2. Costs less than regular checking. Fees provide value proportional to their costs.
  3. Full functionality equivalent to services of a traditional checking account.
  4. Offers widespread access to surcharge-free ATMs.
  5. Offers a suite of consumer protections that are equivalent to those provided for checking accounts.
  6. Comes with a standardized set of transparent and simple disclosures.
  7. Help the previously banked or the never-banked to gain access to other financial services
  8. Provide a means for a consumer to rebuild their credit.

Banks hope first quarter results will boost stocks

Welcome to the morning roundup. Here's a look at what's news in banking and finance after the Easter weekend.


Earnings season coming. First-quarter earnings season kicks off Friday with Wells Fargo and JPMorgan Chase, and bank stock are looking to add more fuel to their growth so far this year, the Wall Street Journal says. Profit looks to finally begin increasing, though some of that will be due to reserve releases. Bank of America and Citigroup, in particular, will be in the spotlight, The New York Times reports, as the Charlotte bank hopes to continue its stock surge and Citigroup tries to turn things around after a negative stress test result.

Banking without branches. Bank of America doesn't have any branches in Ohio or Kentucky, but that's not stopping the bank from trying to expand its middle-market lending in the Cincinnati area. The Cincinnati Enquirer has a Q&A with the man charged with growing that category.

Voldemort trades. A JPMorgan trader's activity has renewed questions about whether banks are taking too many risks with federally insured or subsidized money, Bloomberg reports. His transactions have been large enough to move indices, and resemble so-called "prop trading" the Volcker Rule seeks to ban. The trader has earned the nickname Voldemort, of Harry Potter fame.

Credit reactivation rewards. Bank of America is apparently offering some customers $25 to start using their credit card after a period of inactivity, banking and finance blog NetBanker says.

Friday, April 6, 2012

Judge approves mortgage settlement

Welcome to the morning roundup. Here's a look at this morning's banking and finance news:

Foreclosure settlement. A federal judge has signed off on the $25 billion foreclosure settlement between big banks and government officials, the Wall Street Journal reports. The judge's approval sets in motion the settlement, which was announced in February and filed in court in March.

Earnings ahead. As companies' first-quarter earnings start to roll out, investors will assess whether slower growth is priced into the stock market - or if disappointing results will spark a larger market decline, Reuters writes. Bank earnings season begins next week, as Wells Fargo & Co. and JPMorgan Chase & Co. release their first-quarter results.

Big losses for the wealthy. The world's 20 wealthiest people lost a combined $9.1 billion this week as worries over the European debt crisis drove the S&P 500 to its largest decline of 2012, Bloomberg reports. Mexico's Carlos Slim, the richest person in the world, saw his fortune slide $1.5 billion during the week.

Tax haven crackdowns. Regulators are forcing the world's tax havens to clean up their acts, the New York Times reports. That creates an opportunity for the banking industry, with some saying the changes will enable financial institutions to sell more wealth management products and enter markets that had previously been off-limits.

Thursday, April 5, 2012

Former Cape Fear Bank directors face lawsuit

Former directors and executives at the failed Cape Fear Bank in Wilmington were sued this week by the FDIC, claiming they failed to properly manage risk and did not heed regulators' warnings.


The FDIC seeks to recover $11.2 million in losses on 23 commercial real estate and development loans they approved between 2006 and 2009. The suit states that the directors and officers took on five new branches without a plan to monitor them, and were "enticed by the 'bubble' in the real estate sector" to grow more concentrated in high risk loans.

The bank failed in April 2009 under the weight of loan losses, costing the deposit insurance fund more than $141 million.

The suit says the bank's directors and officers were "ill-equipped" to manage the risk, and ignored warnings from regulators.

"Instead, they continued to choose short-term profits over prudent lending, betting that the demand for real estate in the bank’s chosen markets would continue indefinitely," the suit states.

The FDIC has sued former directors at several dozen failed banks, a signal that the regulator has become more aggressive.

JPMorgan exec earns more than BofA counterpart

Executive pay. JPMorgan Chase & Co.'s investment banking head made more in 2011 than his counterpart at Bank of America, Bloomberg reports. Jes Staley earned $16 million, ahead of Bank of America co-chief operating officer Thomas Montag, after the executives pulled in the same amount in 2010.

Wall Street wealth. It's difficult to become one of the world's wealthiest individuals by working on Wall Street, the New York Times writes. But even before the financial crisis, Wall Street rarely made anyone the richest of the rich.

Too many rules? The Wall Street Journal examines the balance between regulation and innovation. Bankers argue government rules go too far, stifling economic growth, while opponents say too many banks are still too big to fail.

Credit ratings.
Morgan Stanley CEO James Gorman is in talks with Moody's in an attempt to maintain the company's credit ratings and hold off a downgrade, people familiar with the matter told the Financial Times.

Wednesday, April 4, 2012

BofA's new small business bankers in place in Charlotte

Bank of America's dozen new small business bankers in Charlotte are now in place, said Bill Gibson, market manager for small business banking in metro Charlotte and upstate South Carolina, on Wednesday.


The bank announced this week that it had hired 45 across the Carolinas, including 12 in Charlotte, as part of its push into small business lending.

About 75 percent of the new bankers were hired from outside the Charlotte bank. Some came from community banks, though the majority were from larger institutions, Gibson said. Most have more than 10 years of experience.

Each will serve about 250 small businesses.

"The overwhelming segment of their time is spent with the small business owners," Gibson said. "That's the most important thing we do is spending time with the small business and acting in an advisory role."

Most of the bankers began work in the fourth quarter of 2011. Gibson said the data are now beginning to show an uptick in small business lending and customers locally.

Outlaw barred from credit union employment

The National Credit Union Administration announced Tuesday that it has barred a former Granite Falls credit union employee from future depository institution employment.


Joyce Ann Outlaw, 51, was convicted in July on several counts of embezzlement and forgery and was sentenced to three years of probation, state records show. She worked at a Hickory-based Shuford Federal Credit Union location in Granite Falls.

Violating the NCUA order carries possible prison time and up to a $1 million fine.

Shuford has about $24 million in assets and 4,300 members, according to the NCUA. It was chartered in 1967.

Outlaw was unable to be reached for comment.

BofA named world's second-greenest bank

Bank of America Corp. has placed second on Bloomberg Markets magazine's ranking of the world's greenest banks.

Support for solar power earned the Charlotte lender the No. 2 spot this year, behind Madrid-based Banco Santander SA, Bloomberg said. The study of 48 big banks, published in the magazine's May issue, examines how much the companies invest and lend to clean energy efforts and their own steps to reduce environmental impact and energy consumption.

Bloomberg bases its results on data from public documents, company filings and websites.

Two landmark solar projects helped seal the deal for Bank of America, Bloomberg reported. The nation's second-largest bank stepped up to help finance a $1 billion effort to install solar panels on 160,000 U.S. military base homes after a government loan guarantee fell through.

The bank also provided a $1.4 billion loan to San Francisco's Prologis Inc. for solar systems on warehouse roofs, Bloomberg said.

Beyond those deals, Bank of America advanced its ongoing environmental business initiative last year, delivering nearly $3.7 billion in lending, investing and advisory services, it said in a news release today. The company also announced a new goal to cut global greenhouse gas emissions 15 percent by 2015 - a move that, combined with previous reductions, will slash those emissions by more than 30 percent from their 2004 levels.

"Our clients operate globally, and rewarding business opportunities are abundant in the new energy economy," chief executive Brian Moynihan said in the news release. "Because we have set ambitious business objectives and strong sustainability goals of our own, we can help deliver value to clients."

Bank of America was one of just three U.S. banks to crack Bloomberg Markets' top 20 greenest banks. New York-based Citigroup Inc. ranked fourth, while Goldman Sachs Group Inc. placed 18th.

Average Wall Street salary rose in 2011

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


Wall Street salaries rise. The average salary for a Wall Street worker rose in 2011, a survey from eFinancialCareers.com says, according to Bloomberg. About 54 percent reported a rise in salary -- not including bonus -- and 40 percent said there was no change. Employees at banks like Bank of America and Goldman Sachs saw an average 3 percent raise, while hedge fund workers and boutique firms fared much better. When bonuses are taken into account, however, average pay fell.

BK to face Countrywide suit. Bank of New York Mellon will have to face a lawsuit over its position as trustee for mortgage-backed securities sold by Countrywide, a judge ruled Tuesday, Reuters reports. The lawsuits claim that the bank did not do its job in making sure the securities marketed by the company later acquired by Bank of America were properly documented.

U.S. to name risky non-banks. The federal government will soon name its "systemically important" non-bank financial institutions, MarketWatch reports. These firms, which could include companies like GE Capital, would be subject to tighter oversight and reporting requirements.

JPMorgan to be penalized for Lehman failure. U.S. regulators are expected to penalize JPMorgan Chase for its actions leading up to Lehman Brothers' failure in 2008, The New York Times reports. JPM, a major lender to the investment bank, improperly took into account customer money in valuing Lehman, leading it to overextend credit.

Tuesday, April 3, 2012

Bank of America hires 45 small business bankers in the Carolinas

Bank of America announced Tuesday that it has hired 45 small business bankers in North and South Carolina, part of its broader push to increase services and lending for small companies.


Twelve of the new small business bankers are in the Charlotte area, part of a total of 32 hires in North Carolina. Eight are in the Triangle, and five in the Triad.

Thirteen small business bankers were hired in South Carolina, four in the Charleston area, and three each in Columbia and Greenville-Spartanburg.

In late 2010, Bank of America CEO Brian Moynihan pledged to the White House to increase lending to small businesses, and later announced that the bank would hire 1,000 small business bankers by mid-2012. As of last week, the bank had hired more than 700 of them.

The Charlotte bank also said Tuesday that it has hired 45 bankers in Georgia, including 35 in the Atlanta area.

Foreclosures stall after $25 billion settlement

Welcome to the morning roundup. Here's a look at today's banking and finance news:

Foreclosures stall. New data show newly started foreclosures and foreclosure sales dropped sharply in February, CNBC reports. That came as a surprise to experts who expected both measures to rise after the $25 billion mortgage settlement between big banks and government officials - and some say the stall could lead to an overall drop in home sales.

JPMorgan banker resigns. London banker Ian Hannam, JPMorgan's global chairman of equity capital markets, resigned to fight a $720,000 fine from a British regulator for passing on inside information, Reuters writes. He had been at the firm for two decades.

Rocky start. Citigroup Inc. and Morgan Stanley announced plans to combine their brokerage units in January 2009, but it's been a slow start, the Wall Street Journal reports. Brokers are operating on old computer systems, and Morgan Stanley Smith Barney has failed to meet some targets amid turbulent market conditions.

Stocks flat. U.S. stocks were flat this morning after a rally, Bloomberg reports. Analysts say it will be easier for data to disappoint markets this week after big gains in recent days.

Monday, April 2, 2012

AB&T Financial to be late filing annual report

AB&T Financial Corp., which operates Alliance Bank and Trust in Gastonia, said in a securities filing Monday that it would not be able to file its annual report on time.


The filing states that despite progress, the bank and its auditors would need more time to prepare financial statements for its year-end report. The filing says that the bank will not report a significant change in results of operations.

In February, the FDIC announced a consent order with the bank, in which Alliance would have to review its management team, make a plan to resolve problem loans and keep capital levels high. CEO Dan Ayscue said at the time that the bank remains "very strong."

BofA funding grants for housing-related nonprofits

Bank of America Corp. is inviting nonprofit groups working to address the nation's continued housing troubles to apply for grants.

The Charlotte lender's charitable foundation is committing $15 million to housing-related programs and services, including foreclosure counseling, neighborhood stabilization and affordable housing efforts, the bank said today.

Bank of America has long supported programs targeting housing, jobs and hunger, "three areas critical to helping strengthen local economies and stimulate the economic recovery," it said. Since 2010, for instance, it has given more than $50 million in grants and other investments to nonprofits providing homeowner retention programs, transitional services and revitalization efforts in low- and moderate-income communities.

The nation's second-largest bank by assets - which continues to struggle with mortgage-related troubles inherited from its 2008 purchase of Countrywide Financial Corp. - is taking other steps to help homeowners: It has modified more than 1 million loans since January 2008, for instance, and has participated in more than 800 mortgage outreach events since January 2009.

Last month, Bank of America said it would reduce the amount owed by as many as 200,000 underwater homeowners as part of the foreclosure settlement between government officials and the nation's largest mortgage servicers announced earlier this year.



Bank of America is accepting grant applications today through April 30. For more information or to apply, visit www.bankofamerica.com/foundation.
Read more here: http://www.charlotteobserver.com/2012/03/10/3085082/bofa-to-help-up-to-200000.html#storylink=misearch#storylink=cp

Tree.com will be late filing annual report

Tree.com Inc., the Charlotte-based parent of sites like LendingTree, will be late in filing its annual report, the company said in an SEC filing.


The company said it has not yet finished determining the value of its trademarks, which have already taken a significant hit.

In its preliminary fourth-quarter earnings announcement, Tree.com reported a $5.6 million trademark asset write-down, primarily based on the value of the LendingTree name. That number could still grow, the company now says.

The company posted a loss of $45.8 million for 2011.

Tree.com representatives declined further comment. The company hopes to have the report filed by April 16. The traditional deadline is 90 days after the start of the year.

Eight banks could face fines over mortgage servicing

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


Fed could fine banks over foreclosures. The Federal Reserve could end up fining eight banks that didn't take part in the $25 billion mortgage servicing settlement, The New York Times reports. The February settlement, which involved Bank of America and Wells Fargo, settled some claims over improper foreclosures and robosigning. Originally, there had been talk of other banks -- like SunTrust and PNC -- joining in. Now, banks in that category could face fines.

Regulators want cutback on leveraged loans. Federal regulators are telling banks and private equity groups to pull back on leveraged loans -- a risky, high-yield type of loan used in recapitalizations or buyouts, the Washington Post reports. Bank of America and Wells Fargo are among the biggest players in that business.

IPOs down worldwide, up in U.S. The amount raised by initial public offerings worldwide was down 43 percent in the first quarter of 2012 from the same time period the year before, the Wall Street Journal reports. But in the U.S., the amount was actually up by more than half, making bankers optimistic.

Government keeping bank secrets. The U.S. government is being maddeningly slow in complying with public records requests related to Wall Street banks, a financial author writes in a column published by Bloomberg.

Foreclosure impact hard to measure. While statistics are published every month on the number of bank-owned homes, the "shadow inventory" of homes stalled in the foreclosure process makes the true impact hard to measure, the Associated Press reports.

Wells Fargo formally launches boutique firm for super-rich

Wells Fargo formally launched today Abbot Downing, a boutique wealth management firm for families with at least $50 million in assets.


The bank announced plans for the firm, which will merge Wells Fargo Family Wealth, Lowry Hill and the legacy Wachovia Calibre business, in November.

There will be offices in Charlotte, Raleigh and Winston-Salem. The mid-Atlantic region, which also includes Washington, D.C., will have about 70 employees, said Joe Freeman, who will head Abbot Downing in the region.

Abbot Downing will be defined by personal service, Freeman said. Each financial adviser will serve only 10 to 15 families.