Report: BofA, Wells score higher for credit-card satisfaction

Bank of America and Wells Fargo have improved their satisfaction scores among credit-card customers, but the two lenders again scored below the industry average, according to a J.D. Power and Associates study released Thursday.

Charlotte-based Bank of America earned a score of 766 in this year's study, up from its score of 749 last year. San Francisco-based Wells Fargo earned 773 points, up from 757 last year.

American Express and Discover tied for first place with scores of 819.

Miller

Despite scoring higher compared with last year, Bank of America and Wells Fargo scored below the 778 average for the industry. In last year's study, the two lenders also earned scores below the industry average.

The study, which is in its eighth year, scored 10 credit-card issuers on six factors: interaction; card terms; billing and payment; rewards; benefits and services; and problem resolution. The study is based on a 1,000-point scale.

At 778, the industry's average score is at the highest it's ever been in the history of the study. In an interview Thursday, Jim Miller, senior director of banking services at J.D. Power, told me customer satisfaction with credit cards has been rising since the recession.

"Part of it is the economy is improving and customers are feeling better about their personal financial situation, and people feel better about their credit cards when they can pay it off and stay current on their payments," he said.

The rise in satisfaction comes as credit-card issuers are fiercely competing with one another, he said. He said the increase in competition comes as credit-card holders are charging less to their cards than before the recession.

The rising competition also comes as credit-card issuers seek to issue cards to "credit-worthy" borrowers, he said. He said that's a change from before the recession, when issuers were more open to giving cards to subprime borrowers, too.

"There’s not a big pool of credit-worthy consumers that don’t have a credit card" today, he said. "So in order to grow your business, at least from the number of cards that you have, you’ve got to take it away from someone else."

Lenders are seeking to grow their credit card business at a time when some other revenue sources, such as their mortgage businesses, have declined, Miller said. For example, lenders' refinancing business has fallen since mortgage rates began rising last year.

Miller pointed out that credit cards are a fairly steady revenue source for lenders.

"They are putting a lot of focus on their credit-card operations and trying to grow that business," he said.

For consumers, all this competition has benefits, Miller said. For example, issuers are using reward programs to make their credit cards more attractive, he said.

But, he said, issuers still face challenges, even when they have rewards that customers like.

“You might have a great rewards program today -- and somebody comes out with one tomorrow that surpasses that," he said.

BB&T names new president

Winston-Salem BB&T Corp. said Wednesday its former head of community banking for the Charlotte region has been named president of the holding company's banking subsidiary.

Ricky Brown's appointment to president of Branch Banking and Trust Co. is effective immediately, the company said.

He replaces Rob Greene, who retired this year after serving as president since BB&T's 1995 merger with Winston-Salem's Southern National Corp.

Brown joined BB&T in 1977. He has held various positions within the company, including regional president for the Charlotte metropolitan area.

Since 2004, Brown has served as president of community banking for BB&T Corp., a position he will continue to hold, the company said.

Brown reports to BB&T Corp. CEO Kelly King.

"I am pleased the board is recognizing Ricky's superior leadership and 37 years of outstanding performance with this well-deserved promotion," King said in a statement.

Carolina Premier Bank CEO resigns

John Kreighbaum, CEO of Ballantyne-based Carolina Premier Bank, said Tuesday he is stepping down as head of the lender he helped launch in 2007.

Kreighbaum, 67, said the move is effective immediately. In an interview Tuesday with the Observer, he said the decision was voluntary.

“When I started forming the bank, I had anticipated that it would take a couple of years to get it open, which it did, and then I had planned to spend about seven years, no more than seven years," at its helm, he said.

"I made this decision," he said.

Chuck Davis, the bank's chairman, said Tuesday the resignation surprised the board.

"We just found out today, Davis said. "I think he just wants to go do something else."

Caryn Johnson, chief operating officer, has been named interim chief executive, Davis said.

Kreighbaum declined to discuss what his next move might be, other than he plans to remain in the banking industry.

Carolina Premier Bank reported $252,000 in profit in the first quarter, up from $202,000 in the same quarter last year.

"The bank's doing phenomenal and in great shape, Davis said.

Wells Fargo unveils new disaster vehicle

Wells Fargo is getting ready for the next natural disaster, unveiling a heavy-duty vehicle designed to provide mortgage assistance to people in need.

So far, the lender has only one so-called Mobile Response Unit, which was unveiled Tuesday in Fort Mill and will be stored in the nearby Winston-Salem area.

Why unveil it in Fort Mill?

That's where Wells Fargo has a large mortgage-servicing operation. Since the vehicle is supposed to provide mortgage aid, the company chose Fort Mill to show it off. The bank has about 2,500 employees in its Fort Mill mortgage operation, by the way.

The 75-foot vehicle allows the bank to go to areas affected by a disaster within "just a few days," the San Francisco-based bank says. The bank said the vehicle can respond to disasters nationwide.

You might recall that, in the University City area in December, Wells Fargo showed off new trucks that also can be driven into disaster areas. The bank tells me that those trucks were mobile automated teller machines designed to let customers access cash in the wake of a disaster.

The new vehicle, meanwhile, does not have an ATM. It is designed to provide specific help to Wells Fargo's mortgage customers. For example, Wells Fargo says the vehicle will enable it to process insurance-claim checks in disaster areas. When it's not deployed in a disaster, the vehicle can be used to provide financial literacy in communities, the bank said.

Among other things, it has private offices, a kitchen and a bathroom.

Wells Fargo said SPEVCO, which is based in Pfafftown, N.C., helped construct the vehicle.

Below are photos that Wells Fargo provided us of the vehicle.

BofA may relocate HQ in 5 years, analyst speculates

Bank of America may move its headquarters to the Boston region in the next five years, speculates an analyst who covers the bank.

Dick Bove, an analyst at Rafferty Capital Markets, said the bank’s promotion of New York-based Thomas Montag to sole chief operating is the latest evidence that a power shift is happening away from executives based in Charlotte, The Wall Street Journal reports.

A Bank of America spokesman declined to comment and CEO Brian Moynihan has said in the past that he doesn't plan to move the bank's headquarters.

This week, Moynihan announced that Charlotte-based co-chief operating officer David Darnell is becoming vice chairman and relocating to Tampa, Fla., under a new organizational structure.

Darnell, who worked for Bank of America predecessors NCNB and NationsBank, is one of the bank’s most senior Charlotte-based executives. He will continue to report to Moynihan and lead global wealth and investment management and business banking.

Montag joined the bank in its 2009 Merrill Lynch acquisition.

Bove said the bank’s top executives are now coming from FleetBoston Financial, which Bank of America acquired in 2004.

Moynihan, who came from Boston-based Fleet, still maintains a home there.

“First in past periods, Bank of America’s leadership team was solidly based in Charlotte," Bove said. "No matter how many acquisitions the company made nor how many changes in its name, this bank was run by a solid core of North Carolina National Bank executives – the so-called North Carolina mafia."

On Thursday, Bank of America said it will pay $16.65 billion in a settlement with the U.S. government and various states over soured mortgage bonds.

SunTrust explains need for more space in new HQs

Yesterday, I reported on SunTrust Bank's decision to increase the number of floors it plans to lease at its new regional headquarters in SouthPark.

For those who didn't see the story, SunTrust has announced it will lease space on four floors (original plans called for three) in the building, which is part of the mixed-use Sharon Square project. SunTrust plans to move into the space this fall, exact date not yet announced.

The bank couldn't make Bill Peele,  president of the bank's Mecklenburg/South Carolina region, available for comment yesterday, but I caught up with him this morning to find out why the bank needs more space in the building.

Peele

Basically, Peele said, the extra space is needed for all the additional bankers SunTrust has been adding in the Charlotte region.

Among other things, he pointed to the recent relocation of SunTrust's Mid-Atlantic corporate banking operation from Richmond, Va., to Charlotte.

SunTrust has also been adding personnel in Charlotte for its wholesale banking and private wealth management operations, he said.

All of that has created the need for SunTrust to take on more square footage in the Sharon Square building than it originally planned, he said.

"We were running out of space in really all of buildings," he said.

(It's worth noting that it's unclear whether SunTrust's overall employment in the Charlotte region has been rising or falling, as the bank does not provide employment figures by market. The company as a whole had 26,281 full-time equivalent employees as of the end of last year, down by 497 compared with the end of 2012.)

As you might recall, SunTrust plans to vacate some of the buildings it occupies in Charlotte as it consolidates those operations into the new headquarters. The bank is completely pulling out of space it has been leasing in two places and relocating those operations to Sharon Square: 6836 Morrison Blvd., where Peele and other functions have been based, and Piedmont Town Center, where it has a capital markets trading operation.

The bank is also relocating some personnel -- in commercial banking, as well as other areas -- from a building it owns at 101 S. Kings Drive to the new headquarters, Peele said. Some personnel and the branch will remain at the Kings Drive site and the bank will continue to own the building, he said.

All told, SunTrust will occupy the entire second, third and fourth floors of the five-story Sharon Square building and part of the first floor, where a branch is already in operation.

Atlanta-based SunTrust is the fifth-largest bank by market share in the Charlotte region.

While part of the move to Sharon Square is designed to boost visibility for the regional lender as it seeks to grow market share, Peele said the move is motivated by more than that. By housing certain functions under the same roof, such as commercial banking and wealth management, it helps the bank better serve those clients and meet more of their needs, he said.

“This whole thing was not about expense saving, but really about synergy," he said.

BofA ranks highest for small-business online experience

Bank of America has placed first on a scorecard of major lenders' online platforms for small businesses, the second year in a row the Charlotte bank has won the top spot.

The scorecard, by Web analytics company Keynote, examines the experience of small-businesses banking online -- via desktop computers, tablets and mobile devices. Keynote provided the Observer an early look at the results, which are expected to be widely distributed this week.

The annual scorecard, in its ninth year, ranks the seven largest U.S. banks for their online offerings to business with annual revenues of roughly less than $1 million each. Banks are scored in four categories: functionality; ease of use; privacy and security; and quality and availability.

Online banking has become one of the most competitive areas for lenders as they try to differentiate themselves to customers, Keynote said in a press release. Banks are especially competitive when it comes to small-business banking, a market that is "robust" and growing rapidly, the firm said.

One way banks have improved the experience for small-business customers is by integrating their small-business platforms with their platforms for regular consumers, allowing small-business customers to view their business and personal accounts with greater ease, Susan Foulds, Keynote's lead analyst for the scorecards, said in an interview with the Observer.

Some banks have not always gotten it right when it comes digital offerings to small businesses, Foulds said.

“It’s been a struggle for the banks on what to offer their small-business users," she said. "Either it was extremely consumer-focused or, at the other end of the spectrum, platforms for larger business and corporate treasury platforms where it would really take a finance degree to be able to maneuver through that.

"They are now striking the right balance, or many of the banks are.”

San Francisco-based Wells Fargo placed second, unchanged from its ranking last year.

Keynote did not provide rankings for the other banks it analyzed: Capital One Financial Corp., Citigroup, JPMorgan Chase & Co., PNC Financial Services Group and U.S. Bancorp.

CertusBank names Poelker CEO, chairman

John Poelker

CertusBank said Wednesday that John Poelker has been named CEO and president of the Greenville, S.C.-based bank and that his role has been expanded to include chairman of the bank's board of directors.

In April, Poelker had been named interim CEO and president after the troubled bank's top executives were fired as Certus battled rising losses and shareholder questions over expenses.

“The transition in the management of our company over the last few months has gone very smoothly, and our board and our teammates have greatly appreciated John’s leadership and guidance throughout the process,” Douglas Johnson, a member of CertusHoldings' board of directors, said in a statement.

“His appointment as the leader of CertusBank marks an important point in our company’s path forward. We are making steady progress in addressing CertusBank’s structural and financial challenges and are delighted to formalize and expand John’s role.”

CertusHoldings is the parent company of CertusBank.

The fired executives -- Walter Davis, Milton Jones and Angela Webb, all of whom are black -- were ousted after shareholders expressed worries about what they perceived as exorbitant expenses for a bank that posted large losses each quarter.

The three sued the bank in April, alleging a hedge fund manager sought to defame them with racist comments and convinced a majority of the bank's board members to fire them. Certus maintains that it lost confidence in the executives' ability to effectively manage the bank's operations and that the firings had nothing to do with race.

Also Wednesday, the bank said shareholders re-elected five CertusHoldings board members and elected six new members during the company's annual meeting last week in New York.

The new board members:

• Bruce Campbell, principal of ALCO Partners
• Howard Hoffmann, managing partner of De Novo Perspectives
• Andrew Jones, founder of North Star Partners
• Nooruddin "Rudy" Karsan, general manager of IBM Kenexa Smarter Workforce
• Bradford Kopp, a financial services industry adviser
• L. Spencer Wells, partner at Drivetrain

Since 2005, Poelker has served as president of The Poelker Consultancy, an Atlanta-based firm that serves financial services organizations, according to Certus' April press release announcing Poelker's interim appointment.

Poelker has other experience in the banking industry, according to Certus. He has served as chief financial officer of Atlanta-based State Bank Financial Corp. and CEO of Myrtle Beach, S.C.-based Beach First National Bank, among other roles in the industry.

Grant Thornton names Charlotte exec to lead new practice

Ilieva Ageenko

Chicago-based accounting firm Grant Thornton said Tuesday it has launched a new practice that will advise financial services companies and be led by an executive in Charlotte.

The Financial Services Advisory Model Risk Management practice will help clients identify and manage risks associated with financial and economic models, Grant Thornton said. The company said it has hired Ilieva Ageenko, who previously worked for Bank of America in Charlotte, to lead the practice.

As an executive with Bank of America, Ageenko's work included loss forecasting in connection with the Federal Reserve's annual evaluation of how banks would fare in an economic downturn and their plans to return capital to shareholders.

Grant Thornton employs roughly 288 people in the Charlotte region.

Earlier this year, the privately held firm announced the promotion of Mike McGuire, its Charlotte-based chief operating officer, to CEO.

First Citizens seeks to dismiss merger lawsuits

Raleigh-based First Citizens BancShares is seeking to dismiss two lawsuits stemming from the merger it proposed in June with Columbia, S.C.-based First Citizens Bancorp.

The city of Providence, R.I., has filed both lawsuits on behalf of itself and other shareholders.

In the first lawsuit, the city wants to make invalid a change that First Citizens BancShares announced to its bylaws the same day it announced the planned merger.

The bylaws change requires certain types of legal actions against the company to be filed in North Carolina courts, unless First Citizens BancShares approves otherwise. Legal actions covered by that requirement include claims that the bank's directors, officers and employees breached fiduciary duties.

In the second lawsuit, the city is challenging the merger itself. The city claims, among other things, that Raleigh-based First Citizens' board of directors structured the merger so that it primarily benefits Columbia-based First Citizens, enriches the Holding family and increases the family's controlling interest in the Columbia bank, according to regulatory filings.

Frank Holding Jr., chairman and CEO of the Raleigh bank, is also a shareholder of the Columbia bank. Members of the Holding family own approximately 48.5 percent of the outstanding shares of the Columbia bank's common stock, according to regulatory filings.

Under terms of the deal, each share of the Columbia bank's common stock can be converted to the right to receive 4 shares of the Raleigh bank's Class A common stock and $50 in cash. Alternatively, each share of the Columbia bank can be converted to the right to receive 3.58 shares of the Raleigh bank's Class A common stock and 0.42 shares of its Class B common stock.

The merger is expected to close in the fourth quarter. It is expected to create the largest family-controlled bank in the U.S. and the sixth-largest bank headquartered in the Southeast.

A First Citizens BancShares spokesman said the bank does not comment on pending litigation.

BofA wins Fed OK for resubmitted capital plan

Bank of America has won approval from the Federal Reserve to raise its quarterly common stock dividend to 5 cents after it had to scrap the same plan earlier this year following a math error.

On Wednesday, the Charlotte bank said the Fed has approved its resubmitted capital plan. The resubmitted plan does not call for a stock buy-back, unlike the bank's original plan approved by the Fed in March.

In March, the Fed OK'd the bank's plan to raise its dividend, which had been stuck at 1 cent since the financial crisis, as well as buy back $4 billion in common stock.

But in April, the bank said it was suspending those plans after the bank discovered it had been miscalculating its capital ratios.

"This marks the first increase in Bank of America’s quarterly common stock dividend in seven years and reflects the significant progress the company has made to strengthen the balance sheet and build capital and liquidity," Bank of America said in a press release.

Since the financial crisis, the biggest U.S. banks must receive approval from the Fed to return capital to shareholders such as through higher dividends or buying back stocks.

CertusBank losses more than double

Troubled CertusBank more than doubled its losses in the second quarter compared with the same period a year ago, a worsening it attributed to expenses stemming from restructuring under its interim CEO.

John Poelker was appointed interim CEO and president of the Greenville, S.C.-based bank earlier this year after its top executives were fired as the bank battled rising losses and shareholder questions over expenses.

Certus posted a loss of $15 million in the second quarter, up from a loss of $7.1 million in the same period last year and a loss of $9 million in the first quarter, according to Federal Deposit Insurance Corp. data released this week.

In a statement, the bank said restructuring efforts -- including the exiting of certain businesses, downsizing and "fine-tuning" core operations -- resulted in second-quarter expenses that are expected to be non-recurring. The statement also said Certus is realigning its focus to a more traditional community banking model.

The bank, whose headquarters were once in Charlotte, continues to deal with legal and public relations headaches in the wake of the firings of its executives. On Thursday, former presidents of the Greenville branch of the NAACP held a press conference about the firings and what they described as a business community in Greenville that does not offer adequate opportunities for blacks.
   
The executives sued the bank in April, alleging a hedge fund manager convinced a majority of the bank's board members to fire them. The executives -- Walter Davis, Milton Jones and Angela Webb, all of whom are black -- claim the hedge fund manager, Benjamin Weinger, set out on a campaign to defame them with racial statements.

Certus maintains that the decision to fire the executives was based on a review of their performance at the bank. In a statement, the bank said it lost confidence in the executives' ability to effectively manage the bank's operations and that the firings had nothing to do with race.

The lawsuit is pending in federal court in Greenville.

The firings came after shareholders expressed worries about what they perceived as exorbitant expenses for a bank that posted large losses each quarter. A letter from Weinger to shareholders cited millions of dollars spent on, among other things, private jet flights, Carolina Panthers tickets and flashy technology at the bank's headquarters.