Monday, June 30, 2014

Ken Lewis gives $5 million to alma mater

Former Bank of America CEO Ken Lewis has given another gift to the nursing school at his alma mater, Georgia State University: $5 million.

It's the largest gift Lewis has made to the the Byrdine F. Lewis School of Nursing and Health Professions, the university said.

In 2003, the school was named for Lewis' mother after he gave $2.5 million that created an endowment to fund faculty positions, student scholarships and teaching laboratories. That was Lewis' second-largest gift to the school.

The late Byrdine Lewis worked as a bedside nurse for 46 years, much of it as a divorced mother supporting two children, according to the university.

“I know firsthand how hard nurses work and how important they are to their communities,” Lewis said in a university press release. “The many excellent caregivers, therapists and scientists who’ve earned degrees from Georgia State are making that legacy stronger every day. I’m proud of what they’re accomplishing, and I know my mother would be, too.”

Lewis was CEO of Charlotte-based Bank of America from 2001 to 2009, succeeding Hugh McColl Jr. Through various acquisitions, McColl had transformed North Carolina National Bank into a major U.S. financial institution.

Lewis resigned amid criticism about Bank of America's January 2009 purchase of Merrill Lynch and Merrill's mounting losses that shareholders claimed were not disclosed to them before they voted to approve the $50 billion purchase.

In March, the New York attorney general's office announced that Bank of America and Lewis agreed to a $25 million accord to settle claims that investors were not told about the losses before the vote.

Lewis, who is responsible for paying $10 million of the settlement, has also agreed to a ban against him serving as an officer or director of a public company for three years. Bank of America agreed to pay the remaining $15 million and to strengthen corporate governance in its board of directors.

Friday, June 27, 2014

Wells Fargo largest auto lender, report says

Wells Fargo has overtaken vehicle-finance giant Ally Financial to become the largest automobile lender among depository institutions, according to a report this week.

As of the end of the first quarter, San Francisco-based Wells Fargo had $52.6 billion in outstanding auto loans compared with Ally's $51.9 billion, according to the report by SNL Financial. From the first quarter last year, Wells Fargo's auto loans grew $5.4 billion.

Wells Fargo's gains have partially come from Ally’s loss of a preferred-lender arrangement with General Motors, the report said. Ally is seeking to diversify the manufacturers and dealers with which it does business after losing such arrangements with GM and Chrysler within the past year or so.

Ally, formerly the financing arm of General Motors Corp, said the SNL report does not capture all of the company's auto-lending activity in the first quarter, because it omits lease originations and originations from Ally's commercial services group. Ally's auto originations for the quarter totaled $74.9 billion when the other figures are factored in, the lender said.

Auto lending has been a bright spot for lenders at a time when they are coping with weak revenue growth in a low-interest-rate environment. But as lenders become more competitive to make auto loans, regulators have grown worried about risky practices.

On Wednesday, the Office of the Comptroller of the Currency noted in a report that there is a "loosening underwriting standards" and "increased layering of risk" in the indirect auto lending industry. In indirect auto lending, a lender provides financing through an auto dealer.

Walker & Dunlop opens Charlotte office

Commercial real estate finance firm Walker & Dunlop said this week that it has opened a Charlotte office.

The new location will originate loans and house credit operations for the company's commercial mortgage backed securities business.

"There is a huge volume of commercial real estate loans set to mature between 2015 and 2017 that present a great opportunity for me and our company," Charlotte-based vice president Brett McGuire said in a statement.

Thursday, June 26, 2014

Mayor says BofA layoffs don't indicate weakening Charlotte commitment

Yesterday, Bank of America issued layoff notices to 540 employees in Charlotte who work in the bank's division that handles troubled mortgages. Bank officials talked with Mayor Dan Clodfelter that morning to inform him of what was happening. Today, Clodfelter issued the following statement:

“It is always unfortunate when jobs are cut, regardless of the circumstances but I appreciate Bank of America’s willingness to offer assistance to the impacted employees. Based on my conversations with bank officials, I am confident that this restructuring doesn’t reflect any weakening of the bank’s longstanding commitment to Charlotte.”
Bank of America continues to employ about 15,000 workers in Charlotte, making it among the city's largest employers. The company is also a key contributor to civic and cultural causes.

Three Charlotte investment advisers among top in U.S.

Three Charlotte-based investment advisory firms ranked among the top 300 in the country, as chosen in a Financial Times report Thursday.

Carroll Financial Associates Inc., Horizon Investments and Novare Capital each made the list, which took into account firms' assets under management, growth rate, industry certifications and compliance.

Carroll Financial was founded in 1980 and serves investors ranging from retail to high net worth to institutional. Horizon Investments launched in 1995, with its office in Ballantyne. Novare Capital was founded in 1999 and now manages about $725 million.

Tuesday, June 24, 2014

Aquesta Bank opens second Cornelius branch

Cornelius-based Aquesta Bank said Tuesday that it has opened a second location in its headquarters town.

The new branch is in the Food Lion Shopping Center behind town hall. The space will include two offices Aquesta will rent out. A ribbon cutting will be held July 10.

Aquesta Bank has branches in Cornelius, Davidson and Mooresville. The bank is slated to open a new location in Huntersville this summer.

Monday, June 23, 2014

NewDominion Bank launches advisory board

Charlotte-based NewDominion Bank said Monday that it has launched an advisory board of local business leaders that will meet quarterly.

“Engaging key community business leaders and their insight is critical to our growth,” president and COO Marc Bogan said in a statement. “The guidance of these distinguished business leaders and professionals will be of great assistance to us as we strive to provide excellence to our clients.”

The inaugural team includes the following members:

  • John Bly, managing partner at LB&A, Certified Public Accountants PLLC 
  • Collin Brock, managing partner at Bloc Design 
  • Eric Kent, owner of Archadeck of Charlotte
  • Rochelle Rivas, managing partner and co-founder of The Darton Group 
  • Jennings Snider, chief financial officer of SYNCO Properties 
  • Mike Whitehead, founder and CEO of the Center for Intentional Leadership and Whitehead Associates 
  • Matt Wilson, president of Print Management Group
  • Ry Winston, partner at Collett 

VantageSouth, Yadkin Financial shareholders OK merger

Shareholders of VantageSouth Bancshares and Yadkin Financial Corp. have approved merging the companies to create North Carolina's largest community bank.

Shareholders approved the deal at annual meetings last week, the companies said Monday. Regulators have granted approvals for the $299 million stock deal, which is expected to be finalized by July 4.

The merger is expected to create a bank with approximately $4 billion in assets, ranking it seventh in deposits in North Carolina, behind No. 6 SunTrust.

The companies have said Yadkin Financial Corp. shareholders will own about 45.4 percent of stock in the combined company, and VantageSouth shareholders will own about 45.5 percent. Investors in a $46.9 million private placement of VantageSouth common stock are expected to own the remaining roughly 9.1 percent.

Elkin-based Yadkin Financial Corp., the parent holding company of Yadkin Bank, will keep its name. But the merged bank holding company will be headquartered in Raleigh, where VantageSouth is based.

Yadkin Bank and VantageSouth Bank have locations in the Charlotte metropolitan area, according to the latest federal data.

For a more in-depth look at the deal, see this Observer story from January.

Bank of America lowers cutoff in new rewards program

Bank of America announced a new rewards program Monday, its latest attempt to win more business from existing clients as lenders nationwide compete for the assets of affluent customers.

The Preferred Rewards program is part of CEO Brian Moynihan’s strategy to expand the bank’s relationship with its 8 million mass-affluent customers,  defined as those with $50,000 to $250,00 in assets, which Bank of America refers to as its “preferred banking” clients.

The new rewards program is open to clients with an average of at least $20,000 in Bank of America checking, savings or investment accounts. It will replace an older rewards program, Platinum Privileges, which requires clients to meet a higher threshold of at least $50,000 in assets to participate.

The bank said it is phasing out Platinum Privileges, which did not offer rewards for as many products as the new program will.

Preferred Rewards will apply to a variety of Bank of America products, and customers must have a Bank of America checking account to qualify. Rewards include points or cash back on credit cards, interest rate discounts on home equity loans or lines of credit and credits on loans for home purchases or finances.

The bank began testing the program in five states, including South Carolina, last year. It plans to roll out the program nationwide in phases throughout 2014, with a North Carolina launch set for around September.

The Charlotte-based bank says the new program is designed to reward clients for “everyday banking” activities.

“It’s rewarding (you) ... as you expand your relationship with us,” Aron Levine, head of preferred banking for Bank of America, said in an interview with the Observer.

“We’re putting (in) a broad umbrella program, which is unique in the industry. We’re really focused on what is your overall relationship with Bank of America.”

Greg McBride, chief financial analyst for, said the new program come at a time of intense competition among banks for mass-affluent households. It also comes at a time when big banks are challenged to grow revenues amid hurdles such as low interest rates and higher costs from regulations.

“Achieving growth in that type of environment is a lot easier if you’re able to retain existing customers and grow the relationship you have with them, rather than pinning all your hopes on bringing in new customers,” he said. “Affluent and mass-affluent households are the candidates for multiple products and services that banks desire.”

Moynihan, talking about the bank’s consumer banking segment at a conference in December, described its preferred banking customers as “our strongest growth opportunity.”

The bank wants to “deepen” its relationship with those customers, who generate more revenue for the bank as they buy more products, Moynihan said.

Bank of America’s new rewards program comes on top of other steps the bank has taken in recent years to serve mass-affluent clients. Since 2012, the bank has been adding specialists in its branches to steer those customers to mortgage, investing and other products and services.

Nationwide, it now has 2,100 specialists in roughly 1,150 branches, according to the bank. There are 59 of the specialists in the Charlotte metro area.

Dean Athanasia, president of preferred and small-business banking for Bank of America, said the bank plans to grow to 2,500 specialists nationwide by the end of 2014. Some of those additional specialists will be put in the Charlotte area, he said.

“You would see more in some of your key areas: SouthPark, Ballantyne, Myers Park,” he said.

Friday, June 20, 2014

BofA seeks CEO sit-down with U.S. attorney general

Bank of America has requested for its CEO to meet with the U.S. attorney general over a possible multibillion-dollar settlement involving troubled mortgage securities, a source familiar with the negotiations told the Observer Friday.

The proposal for CEO Brian Moynihan to meet with Attorney General Eric Holder is an attempt to reach a resolution in the matter. The Justice Department is seeking to extract a settlement from the bank over the sale to investors of securities backed by home loans that soured and contributed to the financial crisis.

The settlement would add to the billions of dollars the Charlotte-based bank has paid to resolve legal issues that have plagued it since the financial crisis.

The costs have stemmed largely from Bank of America’s purchase of investment bank Merrill Lynch & Co. in 2009 and its purchase of mortgage lender Countrywide Financial Corp. in 2008.

There is disagreement between Bank of America and the Justice Department over how much the bank would pay in cash versus homeowner relief as part of a settlement, the source said. Meanwhile, the Justice Department has been moving ahead with plans to file a civil lawsuit against the bank, according to the source.

Bank of America spokesman Lawrence Grayson declined to comment Friday.

Earlier this month, The Wall Street Journal reported that Bank of America was in talks to pay at least $12 billion to settle the civil probes by the Justice Department and various states into the bank's alleged handling of shoddy mortgages.

The Justice Department accord would be a "global" settlement that would resolve other outstanding mortgage-related civil probes, the source said, including a lawsuit filed last year by the U.S. attorney in Charlotte over "prime" mortgages.

A federal magistrate judge earlier this year recommended dismissal of that suit, but U.S. District Judge Max Cogburn on Thursday granted the Justice Department 30 days to file an amended version.

Also Thursday, Cogburn ruled that a related Securities and Exchange Commission lawsuit against the bank could go forward.

At a conference last month, Moynihan described the possible accord with the Justice Department as the last major legal settlement the bank has to resolve.

Thursday, June 19, 2014

Wells Fargo to help merchants track you

Our smartphones are impressive devices. Because of their wireless capabilities, they can let businesses know when we come into their store, restaurant, auto dealership, etc., enabling them to interact with us as we shop.

Enter Wells Fargo.

The San Francisco-based bank is developing mobile and analytic capabilities that would allow retailers to acknowledge customers and offer promotional coupons in real time, The Wall Street Journal reports this week. The technology would also give mall operators the ability to engage consumers electronically with loyalty programs, the paper reports.

Wells Fargo plans to offer the technology to retailers and mall operators in the second half of this year. According to the story, consumers would have to consent to being tracked, by downloading an app.

Why is Wells Fargo doing this? According to the story, many of the bank’s merchant customers are seeing a drop in foot traffic, in large part thanks to competition from Internet businesses. Wells Fargo's technology would be a competitive tool for retailers as they compete with online merchants, the story says.

Here's an excerpt from the story:

Consumers would be encouraged to download the retailer or mall app, which would offer a number of options, including the ability to search for goods, claim loyalty points, and receive discounts and other offers. The smartphone would then be able to send a signal to beacons located around the mall or store, and back-end systems managed by Wells Fargo would perform real-time analytics to suggest targeted discounts or other offers to the shopper.
Readers, what do you think? Are you willing to let stores know you are there, in exchange for coupons and other perks?

Merrill Lynch leader in Charlotte heading to new venture

Scott Hotham, a Charlotte-based managing director at Merrill Lynch, is leaving the bank to help build the new wealth management business at Cantor Fitzgerald.

The New York investment firm announced Thursday that Hotham will join as executive vice president and head of institutional client solutions and strategy. Before that, he was a managing director for the South Atlantic region, and the Carolinas before that.

In his new role at Cantor Fitzgerald Wealth Partners, Hotham will work out of Charlotte and New York.

"Cantor Fitzgerald Wealth Partners is the future of the wealth management business, and I'm incredibly excited to play an integral part in its growth," he said in a statement.

Wednesday, June 18, 2014

Bank of America declares same old one-penny dividend

Bank of America shareholders won't be getting a larger dividend this quarter.

The second quarter was supposed to be when Bank of America finally declared a larger dividend. Instead, the Charlotte bank announced Wednesday that common stockholders would get 1 cent per share, the same as they've gotten since the financial crisis.

As you may recall, Bank of America said back in March that it would finally increase the dividend to 5 cents per share beginning in the second quarter after getting approval from the Federal Reserve. But they soon discovered that they'd mistakenly calculated capital ratios related to securities from Merrill Lynch. The bank was forced to scrap the dividend plans and start over.

Bank of America has since sent a new plan to the Fed, but hasn't said what it is (other than that it is smaller than what they asked for before). The Federal Reserve has yet to announce its decision on it.

Last year, Bank of America declared its second-quarter dividend in April.

Babson Capital adds to team in Charlotte

Babson Capital has added three positions in Charlotte as it beefs up its retail sales team.

The hires come a few months after the company, which has about $200 billion in assets under management, launched two new mutual funds. One is targeting senior loans in below-investment-grade companies in one of its new funds. The other has a wider-ranging strategy in higher-yield fixed income and alternative investments.

Babson added nine people total between Charlotte and Boston to support the retail sales team.

Tuesday, June 17, 2014

Merrill Lynch call centers again get recognition

Bank of America Merrill Lynch's call centers, including one in Charlotte, have again been recognized by J.D. Power.

The bank's phone centers for corporate and commercial banking were again certified by J.D. Power's program. It marks the fifth year they've gotten the distinction.

The certification program involves ranking in the top 20 percent in customer service rankings and meeting a slate of 100 requirements around recruiting, training, employee incentives and other factors

North Carolina getting $21.5 million in SunTrust settlement

SunTrust is the latest bank to settle with a consortium of state and federal officials over mortgage servicing mistakes, agreeing to a deal Tuesday that's close to $1 billion.

North Carolina homeowners with SunTrust mortgages are due to receive $21.5 million in payments and loan modification relief, Attorney General Roy Cooper's office said.

A total of $550 million is going to states and the U.S. Housing and Urban Development as part of a settlement that's related to the $25 billion accord reached with Bank of America, Wells Fargo and three other big banks back in 2012.

SunTrust is paying the U.S. Department of Justice another $418 million in a separate but related settlement.

The governments allege that SunTrust took shortcuts in mortgage servicing, including mass production of foreclosure documents known as robo-signing.

Plexus Capital invests in Burlington supplement company

Charlotte-based Plexus Capital has invested $5.5 million into a Burlington nutrition supplement company.

Scivation received the investment in the form of a debt security with warrants. The company used the money to repurchase stock from inactive shareholders and add to capital, Plexus said.

The firm, founded in 2004, markets protein powders and other supplements, primarily under the "Xtend" brand name.

Plexus Capital is investing money raised as part of its $300 million third fund. The company typically makes subordinated debt investments in middle-market companies.

Monday, June 16, 2014

Wells Fargo approaching most valuable U.S. bank

Wells Fargo is on the verge of being the most valuable U.S. bank of all time, as its stock-market value approaches the record set by Citigroup in 2001, The Wall Street Journal reports.

San Francisco-based Wells Fargo, whose East Coast headquarters is in Charlotte, has a stock market value of about $269 billion. That's about $13 billion shy of Citigroup's record of $282.75 billion, according to the newspaper.

A rally in Wells Fargo's stock has been boosting its stock-market value, or market capitalization, which is calculated by multiplying the number of outstanding common shares by the current market price of a share.

Shares of Wells Fargo, the fourth-largest U.S. bank by assets, closed at $51.09 on Monday, up about 12% for the year. Larger rivals JPMorgan Chase & Co., Bank of America Corp. and Citigroup are all down in 2014.

Tough rules on risk-taking and a slowdown in trading are weighing on profits at investment banks, the newspaper reports. But Wells Fargo, which has never been a big trading firm, has focused on generating revenue from its bread-and-butter businesses of commercial and consumer lending and mortgages as rivals pulled away after the financial crisis, the paper says.

Here's an excerpt from the story:

All told, Wells Fargo made $36 billion worth of mortgage loans in the first quarter, with an industry-leading 16% market share, according to data provider Inside Mortgage Finance. It has about 6,200 branches, the most among U.S. lenders, and is the third-largest bank by deposits, one spot ahead of Citigroup.
In the past six years, Wells Fargo has added about 104,000 jobs, largely through its acquisition of Wachovia Corp., while Citigroup has cut about 120,000 as it eliminates businesses. The other megabanks have added smaller numbers of jobs over the same period.
As the story points out, Wells Fargo also faces numerous lawsuits -- which, as we all know, is not unusual for large banks these days.

For example, the bank is battling a civil case filed by the Federal Housing Administration lawsuit over home mortgage loans.

The bank is also defending itself in a lawsuit brought by the city of Los Angeles, which has accused it and other banks, including Bank of America, of giving minorities home loans they couldn't afford, causing a flood of foreclosures and a reduced tax base.

Bank of America joins NY effort to stop payday lending

Bank of America has become the first financial institution to use a tool developed by a New York regulator to crack down on online payday lending in that state, officials announced Monday.

The tool, created by the New York Department of Financial Services, is a database of companies that have faced actions from the department based on evidence of payday lending, the department said. Payday lending in all forms, including online, is illegal in New York.

The Charlotte-based bank will use the tool to identify and stop online payday lending in New York, in the latest move by officials in that state to do something about short-term lending over the Internet. A press release from the Department of Financial Services says Bank of America will use the database to, among other things, identify companies that might be involved in illegal lending.

Nationwide, the online payday lending industry has been under scrutiny by regulators, who say such lenders are attempting to skirt state bans on payday lending by offering loans over the Internet. As regulators across the country increasingly crack down on payday lenders, big banks that finance those businesses have also come under scrutiny.

"Our administration is continuing to aggressively combat online payday lending, and today we are urging the private sector to join us in protecting New Yorkers from this illegal activity," New York Governor Andrew Cuomo said in a statement. "I applaud Bank of America for stepping up as an industry leader in this area and doing the right thing to help safeguard New York’s consumers."

In an email to the Observer, Bank of America spokeswoman Anne Pace said the New York initiative provides the bank with another tool to help protect its customers from predatory lending practices in New York. The bank will use the database to spot and manage potentially problematic activity affecting customers who have deposits in the bank, she said.

Payday loan businesses are banned in North Carolina, but state officials say that hasn't prevented the products from being offered here.

Late last year, North Carolina Attorney General Roy Cooper filed suit against South Dakota-based payday lender Western Sky. In filing the suit, Cooper said more than 100 complaints had been logged with his office about the company.

Merrill Lynch fined $8M for mutual fund overcharges

Bank of America’s Merrill Lynch unit has been fined $8 million and ordered to pay $24.4 million in restitution to settle claims it overcharged thousands of charities and retirement accounts by failing to waive mutual fund fees, a regulator said Monday.

According to the regulator, the Financial Industry Regulatory Authority, the restitution for affected customers is in addition to $64.8 million Merrill has already repaid to harmed investors.

Merrill did not admit to or deny the charges, but it consented to the entry of FINRA's findings.

In offering shares for sale, some mutual funds waive upfront sales charges for retirement accounts and charities, according to FINRA.

Most of the mutual funds sold on Merrill’s retail platform offered waivers to retirement plan accounts, the regulator said. But at various times since at least January 2006, Merrill did not waive sales charges for some customers, according to FINRA.

That impacted approximately 41,000 small-business retirement plans and approximately 6,800 charities and retirement plan accounts for ministers and employees of public schools, FINRA said. Those customers either paid sales charges when buying certain shares or bought other share classes that unnecessarily subjected them to higher ongoing fees and expenses, according to the regulator.

Merrill learned in 2006 that its small-business retirement plan customers were overpaying but continued to sell them more costly shares and failed to report the issue to FINRA for more than five years, the regulator alleged.

In an email to the Observer, Merrill spokesman Bill Halldin said that following Bank of America’s 2009 purchase of Merrill, the bank found that certain Merrill clients were not given the fee waivers when they bought some mutual funds.

He said the bank notified FINRA about the findings and voluntarily began making refunds to clients who were affected.

FINRA is a Washington, D.C.-based private company that polices brokerages and exchanges. 

Earlier this month, in an unrelated action, FINRA said it fined Merrill $1 million over claims it provided inaccurate information about trades over an eight-year period.

Friday, June 13, 2014

Ousted CertusBank execs push for jury trial

The three ousted co-founders of CertusBank want to have their day in court.

Milton Jones, Walter Davis and Angela Webb -- who have sued the Greenville, S.C., bank over their firings earlier this year -- filed a motion in court Friday stating that they don't want their case sent into arbitration. They want to help restore their reputation by having the dispute out in public.

In case you need to be caught up, CertusBank was started as a Charlotte holding company by former Bank of America and Wachovia executives. Its business plan was to buy up failed banks and cobble them together into a regional multi-billion bank. But CertusBank soon began racking up losses, and earlier this year some shareholders began questioning what they considered to be lavish expenses, including private jet flights, corporate condos.

In April, Jones, Davis and Webb were fired. They soon sued over their firings, and defended the spending as necessary for the bank and approved by its board. The former executives called letters sent by the skeptical shareholders as libelous and tinged with racism. Jones, Davis and Webb are black.

And in their court document Friday, they use some of the same language:

"Will the Court allow Certus to skulk into arbitration to escape public scrutiny of Defendants’ concerted actions in wrongfully and falsely destroying Plaintiffs’ hard earned professional reputations via racist and professional occupation defamatory statements, or will this Court allow Plaintiffs a public forum to
rehabilitate their professional reputations through the sunlight of a jury trial?"

NewDominion Bank gets back into mortgage game

After several years without originating home loans, NewDominion Bank announced Friday that it has set up a mortgage division and brought on a local industry veteran to run it.

The Charlotte community bank said it has brought on Scott Jenkins as mortgage banking executive, running an operation that makes conventional, jumbo and government-program mortgages. Jenkins previously was founder and owner of Bridgewater Capital.

“Building a mortgage division in the city where I grew up is an exciting opportunity,” Jenkins said in a statement. “We are off to a fast paced start with our current team. Our main goal over the next 12 months is to expand our sales force and operational staff.”

Mortgages haven't been a part of NewDominion's product line for some time. Back in the mid-2000's, NewDominion had a mortgage operation run out of Raleigh. It was shuttered as the bank ran into trouble during the economic downturn. It had already gone out of operation when the current management team, led by CEO John Hipp, came on board in 2010.

Chief operating officer Marc Bogan said last year's $10 million capital raise helped provide the seed money to launch this new business line, which will diversify NewDominion's revenue stream.

Baird says Charlotte employment could triple

Financial services firm Robert W. Baird & Co. could triple its Charlotte-area headcount over the next five years, boosting the figure to 150, its chief executive said.

The firm employs has about 50 people spread across an office in SouthPark and an office in Davidson. Charlotte is an important hub for the firm, which plans to continue expanding here, CEO Paul Purcell told the Observer this week during a visit to Charlotte.

Purcell said Charlotte Douglas International, which he called "a world class airport," and a "good and improving" business climate in North and South Carolina are among the key reasons Robert W. Baird has offices in the Carolinas.

"We think Charlotte's going to be one of the top five growth areas in the country for the next 20 years," he said. "We're going to grow with it."

The SouthPark office opened in 2010. The Davidson office opened last year.

In Charlotte, the company has private wealth management, investment banking and fixed-income operations. The company's co-head of global investment banking, Brian McDonagh, is also based in Charlotte.

Robert W. Baird has five business segments. Its largest, private wealth management, gives financial advice to individuals. Purcell estimates that line of business will generate $550 million in revenue this year, or roughly half of the company's annual revenue.

Thursday, June 12, 2014

Pamlico Capital to buy South Dakota broadband networks

Charlotte-based private equity firm Pamlico Capital said Thursday it has entered into an agreement with Clarity Telecom to buy broadband networks in South Dakota from Wow Internet, Cable & Phone.

The networks in Rapid City and Sioux Falls will be bought for about $262 million in cash, Wow said in a press release.

The networks had roughly 52,700 customers who received at least one of Wow’s video, high-speed data or telephone services as of the end of March, according to the release. Last year, the networks generated revenue of approximately $81.1 million.

Clarity Telecom, which is backed by Pamlico, was formed to search for investments in rural broadband systems.

Clarity will continue to provide high-speed broadband, video and voice services to more than 50,000 residential and commercial customers in South Dakota after the deal closes, Pamlico and Clarity said.

Clarity’s management team is headquartered in Sikeston, Mo. Wow is based in Englewood, Colo.

Capitala issues bonds to invest in small businesses

Charlotte-based Capitala Finance Corp. announced Thursday that it has priced $100 million worth of notes that will be used to continue its investments in privately held small and middle-market businesses.

The notes are set to be listed on the New York Stock Exchange and will pay a 7.125 percent quarterly interest rate.

The announcement comes less than a year after the company completed an $80 million initial public offering. Capitala operates out of offices in the SouthPark area.

Wednesday, June 11, 2014

Pittenger bill to create business board wins committee OK

Rep. Robert Pittenger's office said Wednesday a House committee has approved legislation he co-sponsored to create an advisory board allowing small businesses input on financial regulations that could negatively affect them.

The House Financial Services Committee unanimously approved the legislation Wednesday morning, according to Pittenger’s office. The other sponsor is Denny Heck, a Democrat from Washington state.

Pittenger, a Republican whose district includes part of Mecklenburg County, has said the board is designed to advise the Consumer Financial Protection Bureau, a federal agency created by Congress in the wake of the financial crisis to strengthen protections for consumers.

The advisory board is needed because small businesses in the financial services sector have no “regular advocate” at the CFPB, Pittenger's office has said. That means new regulations "can be developed without considering how they negatively impact small business owners and employees."

On Wednesday, Pittenger's office said the legislation was amended to make permanent two existing advisory boards that report to the bureau. The two boards represent credit unions and community banks and were designed to weigh in on how proposed regulations would impact them, Pittenger's office said.

The legislation was introduced this year.

A vote by the full House is expected this summer.

Tuesday, June 10, 2014

BofA mortgage settlement talks said to have stalled

Talks have stalled between Bank of America and the Justice Department over a multibillion-dollar settlement involving mortgage-backed securities, The New York Times reported Tuesday night.

The Department of Justice settlement would cover securities for which the government believes the bank misrepresented their quality. Last week, The Wall Street Journal, citing people familiar with the negotiations, reported that the bank was in talks to pay at least $12 billion to settle probes by the Justice Department and a number of states over mortgages.

From The New York Times story:

The talks stalled on Monday after the bank’s latest offer — more than $12 billion to resolve state and federal investigations into its sale of mortgage investments that later imploded — fell far short of prosecutors’ demands, according to people briefed on the matter. The Justice Department, which had imposed a Monday evening deadline for the bank to deliver its near-final offer, has sought a settlement worth roughly $17 billion, which would be the largest payout by any bank to date.
A spokesman for Bank of America declined to comment. A spokesperson for the Justice Department could not be immediately reached for comment.

Bank of America has paid billions of dollars in settlements to resolve financial crisis-era legal issues. Last month, CEO Brian Moynihan called the Justice Department settlement the last big outstanding legal issue the Charlotte-based bank is facing.

Wells Fargo tops in NC for SBA loans

Wells Fargo has approved 94 SBA 7(a) loans in North Carolina so far in the current federal fiscal year, more than any other lender in the state, as the bank pushes to increase its SBA lending.

From Oct. 1 to the end of May, San Francisco-based Wells Fargo has approved 21 percent more loans than during the same period in the previous fiscal year, according to data released Monday by the U.S. Small Business Administration.

The increase comes as Wells Fargo is seeking to grow its SBA lending in the Carolinas and elsewhere, said Ron Hankins, Wells Fargo's business banking manager for the Charlotte metropolitan area.

Wells Fargo has been focused on making more SBA loans in the Charlotte region since it acquired Wachovia in 2008, Hankins said.

The lender has a team of three Charlotte-based SBA loan originators who help other Wells Fargo bankers in the region get approvals for SBA loans, Hankins said. Those bankers are increasingly turning to the SBA specialists when they have potential clients, which is a key factor driving the growth in Wells Fargo's SBA lending, he said.

Wells Fargo's 94 loans are more than the 30 loans approved by second-place VantageSouth Bank, which is part of Raleigh-based parent VantageSouth Bancshares. VantageSouth's loans were up 43 percent from the same period in the previous fiscal year.

The increase in SBA lending comes as banks everywhere are trying to grow revenues at a time when many businesses are waiting for the economy to pick up further before taking on more debt. In the Carolinas, Wells Fargo's lending to businesses of all sizes is roughly flat in the first six months of this calendar year compared with the same period last year, Hankins said.

With competition strong among banks to lend to business, some banks are making rates and terms for business loans more attractive, he said.

The 94 SBA loans Wells Fargo approved in North Carolina from Oct. 1 to May 31 total $24.9 million. That's down from $27.7 million in the same period in the previous federal fiscal year.

Wells Fargo was in second place for SBA loan approvals during the same period the previous fiscal year, behind first place Winston-Salem-based BB&T Corp.

The SBA updates its North Carolina loan-approval figures for the fiscal year around the start of each month.

The 7(a) loan is SBA’s primary program for helping existing small businesses and startups. Participating lenders make the loans, which SBA guarantees.

Thursday, June 5, 2014

Bank of North Carolina makes another acquisition

BNC Bancorp, the parent company of Bank of North Carolina, announced Thursday that it has agreed to buy Charleston-based Harbor National Bank in an all-stock deal worth $50.6 million.

Harbor has $306 million in assets and four branches in Charleston and Mount Pleasant, S.C. The deal will bring High Point-based BNC to a round $4 billion in assets.

Buying Harbor will also bring Bank of North Carolina into the top 10 in market share in the Charleston metro area.

Wednesday, June 4, 2014

Merrill Lynch fined $1M for inaccurate trade data

Bank of America's Merrill Lynch unit was fined $1 million by a U.S. regulator on Wednesday over claims it provided inaccurate information about trades over an eight-year period.

Merrill Lynch violated federal securities laws and rules by submitting the inaccurate data to various regulators from March 2006 to January 2014, the Financial Industry Regulatory Authority said. In addition, Merrill Lynch failed to have in place an adequate audit system to ensure compliance with federal securities laws, according to Finra.

Finra also said Wednesday it has fined and censured Barclays Capital and Goldman Sachs & Co. over similar allegations. Merrill, Barclays and Goldman did not admit or deny the charges but consented to the entry of Finra's findings, according to the regulator.

"We take our reporting obligations very seriously and are working to enhance our process," Bill Halldin, Merrill Lynch spokesman, said in email to the Observer.

Over the eight-year period, Merrill Lynch submitted at least 5,323 inaccurate "blue sheets" to regulators, including the Securities and Exchange Commission, according to Finra. The blue sheets provide regulators with "critical" information to spot suspicious trading activity and insider trading, Finra said.

Merrill Lynch's blue sheets failed to include customer names and addresses for trades made on the same day the customer opened a Merrill Lynch account, according to Finra. The blue sheets became inaccurate whenever a trade occurred in a new customer's account before the customer's data was fully entered into all of Merrill Lynch's databases, Finra said. That resulted in "no name" listed on the sheets associated with those trades. 

"Merrill Lynch's failure to submit accurate blue sheets had a negative impact on regulatory investigations into possible violations of securities laws, as suspicious trading often occurs shortly after a customer opens a securities account," Finra said.

Finra said Merrill Lynch has agreed to conduct a review of its policies, systems and procedures for compiling and submitting blue sheet data as well as for the auditing deficiencies the regulator said it found.

Wednesday's violations come after the New York Stock Exchange in 2006 censured Merrill Lynch and fined it $500,000 for failing to provide accurate blue sheet information and for failing to establish and maintain appropriate systems and procedures for accurate blue sheet reporting. Merrill Lynch did not admit or deny the charges in reaching a settlement with the NYSE.

The fines announced Wednesday are unrelated to a disclosure Bank of America made earlier this week that it sent incorrect information to Finra on trading volume in "dark pools," alternative trading systems where trading occurs away from traditional stock exchanges.

On Tuesday, Bloomberg reported that Bank of America initially told Finra that its Instinct X dark pool handled 428 million shares, making it the largest U.S. alternative trading system for the week of May 12-18.

Bank spokesman Zia Ahmed told Bloomberg that the bank made an error calculating the volume it sent to Finra and has submitted a correction that is expected to cut its volume in half.

Ahmed did not provide comment to the Observer on the dark pool miscalculation.

Wells Fargo donates to Anne Springs Close Greenway

Wells Fargo has given a $100,000 grant to the Anne Springs Close Greenway, the Fort Mill park in the midst of a massive fundraising campaign to improve the area and secure its financial future.

The greenway was one of 54 environmental nonprofits to get money from the San Francisco bank. Wells gave a total of $3 million.

“We are delighted to partner with Wells Fargo in our mission to preserve the natural features
and beauty of the Anne Springs Close Greenway,” greenway president Tim Patterson said in a statement. “Wells Fargo’s generosity demonstrates the bank’s commitment to environmental stewardship and the importance of nature to the health of the Charlotte region.”

Bank of America misstates dark pool data

Bank of America said it sent incorrect information to a U.S. regulator that has begun disclosing data on private stock trading activity in so-called “dark pools," according to news reports.

The regulator, the Financial Industry Regulatory Authority, on Monday published its first weekly report detailing trading activity on alternative trading systems. Finra said the weekly reports, by shedding light on trading volume in dark pools, will increase transparency and investor confidence in the stock market.

In the initial report, Bank of America’s Instinct X was the largest dark pool, ahead of markets run by Credit Suisse Group AG and Barclays Plc, according to a Bloomberg story. According to the initial report, Instinct X handled 428 million shares, making it the largest U.S. alternative trading system.

Bank of America spokesman Zia Ahmed told Bloomberg that the bank made an error calculating the volume it sent to Finra, the news agency reported Tuesday. The bank sent a correction to Finra and expects the adjustment to cut its volume roughly in half, Ahmed told Bloomberg.

Ahmed said the bank had no comment when reached by the Observer.

The disclosure of the bank's error comes after it reported in April that it miscalculated its capital ratios. That mistake resulted in Bank of America suspending plans to buy back shares and a long-awaited increase in its quarterly dividend, now at 1 cent a share.

Dark pools have received renewed attention and criticism since the publication this year of “Flash Boys” by Michael Lewis. Trading on the private platforms occurs away from traditional stock exchanges.

Monday, June 2, 2014

BNC Bancorp completes acquisition of Community First

The parent company of Bank of North Carolina said Monday it has completed its acquisition of the Chapel Hill-based parent company of Harrington Bank.

High Point-based BNC Bancorp announced the roughly $27 million deal to acquire Community First Financial Group in December. Harrington has about $225 million in assets, $165.4 million in loans and $194.7 million in deposits. The bank has three branches, all in Chapel Hill.

Bank of North Carolina said the deal will give it roughly $510 million in loans and $336 million in deposits in the Raleigh-Durham-Chapel Hill area.

The three branches will continue operating under the Harrington Bank name until system conversions are complete in September, BNC Bancorp said.

Bank of North Carolina has seven locations in the Charlotte metropolitan area and is the ninth largest bank in the region by deposits, according to the latest federal data.

In April, Bank of North Carolina announced it completed its acquisition of South Street Financial Corp., a $26 million deal that gives BNC Bancorp a deeper presence in the Charlotte area.

Bank of America unveils new version of mobile app

Bank of America has rolled out a new version of its mobile app, which the lender said has features requested by its customers.

According to the Charlotte-based bank, the latest version allows customers to:

–Request replacement debit or credit cards.

–Edit bill-pay information.

–Find routing and account numbers more readily.

–Schedule in-branch appointments.

–Add transfer recipients directly from mobile device contacts.

The new app has been available since late last week.

Bank of America said it has roughly 15 million mobile-banking customers.