BofA ending support for Windows phone app

(Note: This post has been updated with a comment from Bank of America.)

Bank of America is cutting off support for its Windows phone app, according to a message on the Charlotte-based lender's webpage for the app.

Below is a screenshot I took of the page, which says the support will end in March:

The bank sent me the following comment when I asked what was behind the decision:

"We’re committed to giving Bank of America customers a variety of ways they can manage their finances conveniently through mobile and online banking. As we evaluate our platforms, we’ll continue to support those which our customers utilize the most. Windows phone customers will still be able to access their account by using bankofamerica.com on their device."

According to a story posted Wednesday by USA Today, the news comes just after JPMorgan Chase & Co. last week announced that it will no longer offer a banking app for Windows mobile devices. Chase Bank customers took to social media to protest the decision, according to a separate USA Today story.

Here are some excerpts from USA Today's story on Wednesday:

The timing is a bit curious since it comes just a week after Microsoft unveiled its upcoming Windows 10 operating system, which will allow the same apps run on phones, computers and tablets.

The move leaves investors that relied on the Bank of America app on their Windows Phone to check their balances and deposit checks to use a browser on their phones. Consumers continue to show their preference of apps versus mobile browsing on their mobile devices.

Wells Fargo appears to still be supporting its mobile app for smartphones that run Microsoft’s Windows operating system. Below is a screenshot I took Wednesday night of Wells Fargo's webpage for the app:

Moynihan tops among CEOs for corporate jet costs, report says

Bank of America CEO Brian Moynihan is No. 1 in a ranking of U.S. chief executives whose use of corporate jets costs their companies the most.

Fortune magazine, citing data from research firm Equilar, reported the finding this week. Moynihan's corporate jet use was valued at $448,251 in fiscal 2013, which puts him among the five "most expensive CEOs to fly around," the magazine said.

Moynihan

The figure does not include the value of Moynihan's corporate jet use for personal reasons, an amount the Charlotte-based bank does not disclose.

Under an agreement with Bank of America, Moynihan reimburses the bank for non-business flights on the lender's corporate aircraft, the bank said in its 2014 proxy statement.

Bank of America spokesman Lawrence Grayson declined to comment on Equilar's ranking when I contacted him Wednesday.

For comparison's sake, Moynihan's corporate jet use was valued at $477,060 in fiscal 2012, according to a proxy statement.

Yadkin Financial profit jumps following merger

Raleigh-based Yadkin Financial Corp., parent company of North Carolina's biggest community bank, announced this week that it earned $14.7 million for shareholders in the fourth quarter — after a merger last year doubled Yadkin's size.

Yadkin, parent of Yadkin Bank, reported profit of $14.7 million in the fourth quarter, an increase of 745 percent from the same quarter a year earlier.

That sizable gain follows the bank's merger in July with Raleigh-based VantageSouth Bancshares, a deal that created the state's biggest community bank.

Yadkin reported total assets of $4.3 billion as of Dec. 31. That's double the $2.1 billion in assets it reported for Dec. 31, 2013, before the merger with VantageSouth.

The fourth quarter was the second quarter for the combined company. In the wake of the merger, Yadkin is now seeking to cut costs by eliminating redundancies that often result when two companies are combined, CEO Scott Custer said Tuesday.

"We are very focused on reducing costs throughout the company," Custer told me in an interview. "That being said, key markets like Charlotte are places where we will continue to make appropriate investment, both in people and in distribution, that makes sense for us."

In the Charlotte metro area, Yadkin Financial has about 260 employees and about a dozen branches.

Custer said the company has been adding bankers in the Charlotte region. "Clearly, Charlotte's an area we will continue to try and invest in in appropriate ways," he said.

In the fourth quarter, Yadkin Financial achieved "robust" annualized net loan growth of 10 percent, Custer said in the company's earnings press release.

That came as Yadkin's Small Business Administration lending operation, which is headquartered in Charlotte, posted $2.9 million in income for the fourth quarter — the highest quarterly SBA-lending income in the company's history.

The merger, a deal worth $299 million, created a bank with a footprint stretching from Wilmington to the Triangle to Charlotte.

Yadkin had been based in Elkin before the merger. Under the deal, the merged bank holding company kept the Yadkin name but made Raleigh its headquarters.

Consumers 'addicted' to mobile banking, report says

Smart phone screen sizes that keep on growing are among the factors driving Americans to do more of their banking on mobile devices, according to a report released Tuesday.

Americans are "addicted" to mobile banking, which is "hyper accelerating," says the report by Charlotte-based Carlisle & Gallagher Consulting Group, a firm that serves the financial services industry.

The report says bigger smart phones and the emergence of the so-called "phablet" — a smart phone that's not quite as big as a tablet device — are helping to boost the adoption of mobile banking.

According to the report, 46 percent of U.S. consumers are more likely to do their banking on mobile devices thanks to those devices getting larger. Also, one in six consumers surveyed said mobile banking is an important reason to buy a large-screen smart phone or a phablet.

Another key finding in the report: 55 percent of consumers are accessing their mobile accounts two to three times a week or more.

Byl Cameron

The report underscores the ongoing adoption of mobile banking, a trend that has banks re-examining the role of branches. Some banks, such as Bank of America and Wells Fargo, have begun experimenting with smaller branches at a time when consumers are able to do more transactions on their own with the swipe of a finger on their smart phone or other mobile device.

"Mobile is utterly changing the landscape of how people do banking," Byl Cameron, who led the study, told me Monday, as he gave me a sneak peek at the report. He said mobile banking is the "technology story of the day for banks.”

The report's findings are based on online surveys of 1,005 consumers across the U.S. and phone interviews of executives with the 20 largest U.S. financial institutions. The surveys and interviews were conducted in September.

The study, funded by Carlisle & Gallagher, is the firm's first ever on mobile banking.

Here are some highlights from the report:

•  Depositing checks with mobile devices is gaining popularity, with more than 60 percent of phablet and smart phone users depositing checks remotely.

• Customers prefer to conduct mobile banking on all of their mobile devices. Those who have what the report calls a "three-device lifestyle" said they interchangeably use their laptops, tablets and smart phones for the most frequent mobile banking activities.

• Checking balances, transferring funds and paying bills are the three most-frequently conducted mobile banking activities on mobile devices.

• All of the survey's respondents said they expect to buy more mobile devices by 2016. Specifically for banking, 81 percent expect to use a laptop in 2016, 62 percent a smart phone, 44 percent a tablet and 11 percent a phablet.

• Phablets will dominate approximately 30 percent of the mobile device market share by 2020 and become the dominant device for mobile banking, Carlisle & Gallagher predicts. It also predicts that tablets will decline in popularity, especially as a device on which to do banking. The report found that 68 percent of consumers do not use tablets today for banking. 

Below are more findings, in charts and graphs, from the report (click on them for a larger version):

Philadelphia councilman seeks to ban deposits with BofA

Bank of America is getting some negative vibes in the city of brotherly love.

A member of Philadelphia's city council is seeking to ban the city from depositing its funds with Charlotte-based Bank of America and New York-based Citigroup, The Philadelphia Inquirer reports.

According to the Inquirer, the move comes after the city in 2013 filed suit in federal court against nine major banks, including Bank of America and Citigroup, in connection with their manipulation of the London Interbank Offered Rate, or Libor, which artificially suppressed the city's returns on interest-rate swap agreements.

On Thursday, Councilman James Kenney introduced a bill that would not permit the city to give its deposits to the two banks. Here's an excerpt from the story:

According to Kenney's bill, municipal entities such as Philadelphia "were paid lower amounts during the life of their swaps, and they were subjected to huge — and sometimes devastating — financial penalties when they terminated the investments, which were artificially inflated by defendants' misconduct." 

Citigroup and Bank of America "are the two worst actors in the whole game," Kenney said. "To park citizen money in those banks while we're in a bad-swaps deal seems stupid."

The bill does not affect other types of business with the banks, the story says.

I reached out to Bank of America and Citigroup for comment. A Citigroup spokesman said the company had no comment. Here's what a Bank of America spokeswoman said in an email:

Given we have not received any correspondence from the City of Philadelphia relating to this bill, we'd prefer not to comment.

Aquesta Bank profit rises 3.6 percent

The parent company of Cornelius-based Aquesta Bank said Friday its fourth-quarter profit was 3.6 percent higher than the same quarter a year earlier, as the community bank grew its loans and deposits.

The bank recorded profit of $374,000, or 15 cents per share. That was up from $361,000, or 14 cents per share, a year ago, Aquesta Financial Holdings said.

Jim Engel

Also Friday, Aquesta reported its full-year results for 2014, which were better than its 2013 results.

In 2014, it made $1.71 million in profit, or 67 cents per share, up from $1.47 million, or 57 cents per share, in 2013.

Aquesta was established in August 2006. Its strategy is to be the dominant community bank in the Lake Norman area, where all of its six branches are currently located.

Last year, it opened two branches: one in Huntersville and its second in Cornelius.

In November, Aquesta President said Jim Engel said the bank has no plans for additional branches at least until 2017.

When the bank does start adding branches, it will likely eye three main sites, he said: the area west of Lake Norman, Huntersville and a yet-to-be-determined area in south Charlotte.

At the end of December, Aquesta had $263.2 million in assets, up from $233.9 million at the end of December 2013. The bank grew its total loans to $172.3 million from $130.3 million over the same period. It grew its total core deposits to $119.8 million from $97.7 million.

In addition to its banking business, Aquesta operates an independent insurance agency that represents multiple carriers of business and personal lines of property and casualty insurance.

Moynihan: BofA's cybersecurity unit can spend as much as it needs

Underscoring the rising focus on cybersecurity at large financial institutions, Bank of America’s CEO said Wednesday the bank’s cybersecurity operation can spend as much as it needs to protect the lender and its customers.

“I go to bed every night feeling comfortable that that group has all the money (it needs),” Brian Moynihan said in a Bloomberg Television interview from Davos, Switzerland, where he has been attending the World Economic Forum this week. “They never have to ask.”

“The only place in the company that doesn’t have a budget constraint is that area,” he said. “Why would I take my judgment and say, ‘You could do this cheaper?’”

(For those interested in watching the video above, Moynihan's comments about what the bank is spending on cybersecurity come roughly five minutes in.)

Moynihan said the Charlotte bank, the second-largest in the U.S. by assets, spends more than $400 million a year on cybersecurity. “And it's going north of that.”

His comments come at a time of growing concern among major U.S. companies about cyberattacks. In November, Sony Pictures became the victim of a destructive online attack. Before that incident, recent data breaches affecting Target, Home Depot and other large retailers made national headlines.

Banks large and small say their cybersecurity costs are rising. Wells Fargo CEO John Stumpf, speaking last week to analysts on an earnings conference call, said the San Francisco-based lender is “spending more on cyber today.”

One ongoing area of concern for banks are so-called “distributed denial of service” attacks. In such attacks, criminals overwhelm a bank’s computer or telecommunications networks with large amounts of data requests, which can slow or block customer access to online accounts.

In its latest annual report, Bank of America says its websites have been subject to “a series” of denial of service incidents. Those incidents have not resulted in unauthorized access to Bank of America or customer information, according to the report. But the report says the bank believes such incidents may continue.

The bank’s cybersecurity group is “judicious” in how it spends money on cybersecurity, Moynihan said.

“But the reality is you’ve got to be willing to do what it takes at this point.”

Moynihan: Swiss currency decision a boon for BofA

The end of the cap on the Swiss franc is leading to major losses for some banks — but it's been a good thing for Charlotte-based Bank of America, its CEO told CNBC Tuesday.

New York-based Citigroup, Germany-based Deutsche Bank AG and England-based Barclays Plc are said to have suffered $400 million in cumulative losses following the Swiss central bank’s decision to abandon the cap on the franc's value against the euro, Bloomberg reported Monday. Those losses may be followed by others in coming days, according to the news agency.

But Bank of America CEO Brian Moynihan told CNBC that his bank has benefited from the Swiss currency shock that rocked markets and companies last week.

"We made money in the last few days and we helped our customers," Moynihan said in the CNBC interview in Davos, Switzerland, where he's attending the World Economic Forum, the annual gathering of financial and political elites from across the world. "It hasn't been a big impact on us but it caught everybody by surprise."

Here are more excerpts from CNBC's story on the interview:

Moynihan said that his bank made money in the currency markets and trading in the wake of Thursday's announcement that the Swiss franc would no longer be pegged to the euro. 

He said the Swiss National Bank decision was good even though it caused some "dislocation in the system." 

"The volatility helps activity, and if you keep your exposures low, any activity actually helps generate revenue," he said. "We were fine, and we look forward to letting the economy adjust."

Why bankers will be watching the State of the Union

My prediction of the day: More bankers than normal will be tuned in to tonight's State of the Union address.

Here's why:

During the address, President Barack Obama is expected to propose a fee — some people are referring to it as a "bank tax" — on the largest U.S. financial institutions, a group that includes Bank of America and Wells Fargo.

Specifically, the proposal calls for a 0.07 percent fee on the liabilities of the roughly 100 U.S. financial institutions that have assets of more than $50 billion each.

According to a fact sheet released by the Obama administration over the weekend, the fee is designed to make it more costly for the institutions to finance their activities by borrowing heavily. That, in turn, would reduce the probability of major defaults that can ripple through the economy, the administration says.

If the idea sounds familiar, it's because Obama proposed a similar tax in 2010, when the financial crisis was fresher on the minds of many Americans than it is today. That proposal, designed to recover taxpayer funds used to bail out big banks, went nowhere.

To be sure, the odds of this new proposal going anywhere are long. I mean, there's that whole Republican-controlled-Congress variable you've got to factor in to the equation.

And you can bet that the banks, which already lament post-financial crisis regulations as being too costly, will lobby hard against the proposal if it seems to start gaining any traction.

In a Forbes column, Tim Worstall writes that the tax is founded on a good idea. But, he writes, its chances of passing would be improved if it were presented as an premium charged to banks in exchange for an insurance backstop from the federal government.

"It’s not a tax: it’s an insurance premium and if the banks don’t want to pay it they can not have these liabilities and thus not need the insurance," he writes.

"Put that way Obama’s proposal might actually have a chance. ... Call it a change to the FDIC’s insurance premiums and attain the same goal that way."

For another view, here's what investment bank Keefe, Bruyette & Woods said about the fee in a report Monday:

We view this as political posturing and not a serious policy proposal. In our view, chances of this proposal passing are low. 

Instead we think it is part of the administration's effort to draw contrasts with congressional Republicans and make it look like the White House is against Wall Street, while Republicans are defenders of the industry. We view this to energize the President's political base.

And here's what the Financial Services Forum, a Washington, D.C.-based group whose members are the CEOs of 18 large financial services institutions that do business in the U.S., has to say about the proposal. The statement below is from forum President Rob Nichols:

We urge policymakers to reject this tax targeting a small group of companies and instead focus on achieving broad-based, pro-growth tax reform that ensures our economic recovery continues.

As the largest financial institutions continue to simplify, reduce risk and leverage, build capital, provide the credit to keep the economy growing, and make the necessary investments to protect customers from cyber threats, it would be counterproductive to layer on one more way to make it more difficult to achieve those public goals.

McHenry moves up on banking panel, Pittenger reappointed

Rep. Patrick McHenry, of Lincoln County, has been named vice chairman of the House Financial Services Committee, while Rep. Robert Pittenger, of Charlotte, has been reappointed to the committee.

The appointment is a move up on the committee for McHenry, who has served on it since his first term in 2005.

In addition to the vice chairman position, McHenry will be a member of the Capital Markets and Government Sponsored Enterprises Subcommittee and the Oversight and Investigations Subcommittee.

Pittenger was named to the committee in 2012, the year he was elected to his first term. He was sworn in for his second term earlier this month.

Pittenger is also on the Financial Institutions and Consumer Credit Subcommittee and the Monetary Policy and Trade Subcommittee.

The two Republicans are among three Charlotte-area lawmakers on the committee. Mick Mulvaney, a Republican from Indian Land, is the third.

BofA: 800,000 customers signed up for Apple Pay

Bank of America says about 800,000 of its customers have enrolled in Apple Pay, nearly three months after the Charlotte-based bank began making the service available.

The disclosure was tucked inside last week's press release for Bank of America's fourth-quarter earnings. To put that number in some perspective, Bank of America says it has approximately 17 million mobile users, of which 800,000 is only about 5 percent.

Apple's new mobile payments system allows shoppers to use their iPhones to make purchases at participating stores. The system, whose adoption is being closely watched by the payments industry, debuted in October.

Since then, some banks have scrambled to give their customers access to the service, at a time when consumers are expecting to do more and more on their mobile phones. Wells Fargo has even been promoting Apple Pay in advertisements in Charlotte.

(You can see which banks are participating in Apple Pay at this page on Apple's website. The list has only 39 banks, a number that took me by surprise as I was expecting perhaps more by now.)

According to a post earlier this month on appleinsider.com, major credit unions have been slow to sign on with Apple Pay. Of the top 10 banks in the U.S., only two — Bank of New York Mellon and HSBC — haven't joined Apple Pay, according to appleinsider.com.

Bank of America's roll-out of the service hasn't been snag-free.

The same week Apple Pay launched, Bank of America disclosed that some of its customers were double-billed for purchases they made with the service.

Richmond Fed announces appointments to Charlotte branch

The Federal Reserve Bank of Richmond this week announced five appointments to the Charlotte branch's seven-member board of directors. All of the appointments are effective as of the start of this year.

A NEW CHAIR: The branch's board of directors elected Elizabeth Fleming, president of Converse College in Spartanburg, chair of the board. She has served as a director since 2013.

Fleming replaces David Zimmerman, president of Charlotte-based Southern Shows, whose term on the board ended.

NEW DIRECTORS: The Board of Governors of the Federal Reserve and the board of directors of the Federal Reserve Bank of Richmond have also appointed four directors to the Charlotte branch's board. They are:

• Michael Crapps, CEO of Lexington, S.C.-based First Community Bank, for a term of two years.
• Claude Demby, vice president of business development for Durham-based Cree, was re-appointed for a term of three years.
• Paul Szurek, chief financial officer of Asheville-based Biltmore Farms, was re-appointed for a term of three years.
• Mark Williamson, CEO of High Point Bank and Trust, for a term of one year.

DEPARTING DIRECTORS: Two directors are leaving the Charlotte branch's board. They are:

• Robert Hill, CEO of Columbia, S.C.-based South State Corp. and South State Bank. Hill served on the Charlotte branch board since 2011. He's now going to serve a three-year term on the Federal Reserve Bank of Richmond's board. That appointment took effect Jan. 1.
• John Kreighbaum, former CEO of Ballantyne-based Carolina Premier Bank Kreighbaum served on the Charlotte branch's board since 2009. (Kreighbaum announced his resignation from Carolina Premier Bank in August.)

The Charlotte's branch's territory covers North and South Carolina.

BofA moves compliance team after regulator pressure, Reuters reports

Bank of America, under pressure from its U.S. regulator, has shifted its compliance group from its legal department to its risk-oversight group, news agency Reuters reported late Wednesday, citing a source familiar with the matter.

According to Reuters, the move comes as federal regulators have warned big banks to adopt more ethical internal cultures or face being broken up so they are easier to manage.

Officials with the Office of the Comptroller of the Currency, which in September finalized "heightened expectations" guidelines for how big banks manage their risks, discussed the matter with Bank of America last month, according to Reuters.

Not long after that meeting, Bank of America decided to shift its compliance group to its risk-control area, Reuters reported.

Here's an excerpt from the story: 

The OCC pressed for the move out of a belief that the legal group was focused on minimizing the application of rules, the source said.

Bank of America spokesman Dan Frahm said that it had combined compliance and risk to align all risk management oversight under the bank's Chief Risk Officer Geoffrey Greener.

He said it was part of the bank's efforts to simplify how it operates after largely resolving legacy issues related to the financial crisis.

Reuters said its source spoke on condition of anonymity and cited a lack of authorization to speak publicly on the matter.

In April, Bank of America announced it had named Greener, who had been responsible for making sure the Charlotte-based bank met regulatory capital requirements, its new chief risk officer. Greener replaced Chief Risk Officer Terry Laughlin, who was named to a new post, strategic initiatives president.

At the time, the bank said Laughlin, in the new role, will oversee an initiative called Simplify and Improve, which is designed to further simplify the company.

NewDominion hires exec to help it grow in Gaston County

NewDominion Bank has hired its first-ever market executive for Gaston County, as the Charlotte-based lender pushes ahead with its strategy to become a dominant community bank in the metropolitan area.

NewDominion said this week it has hired longtime banker Dan Boyd for the market executive role. Boyd is expected to initially focus on small-business and affluent clients in Gaston County, then later oversee branches when those are added.

The move gives NewDominion, founded in 2005, a presence in a new market at a time when the bank’s growth remains constrained by a consent order state and federal regulators imposed in 2010 after the real estate bubble burst.

NewDominion has been working to satisfy the consent order, which it was placed under after large losses on development loans.

Last year, the bank raised more than $10 million to help meet the order’s requirement that it boost capital levels. NewDominion has said it needs about $10 million in additional capital to fully satisfy the order, which puts certain restrictions on the bank, such as how much loan growth it can have.

Before hiring Boyd, NewDominion did not have immediate plans for a market executive in Gaston County. The bank created the position because it didn’t want to pass up the opportunity to hire a banker of Boyd’s talent and experience, said NewDominion President Marc Bogan.

Boyd has more than 31 years of experience in banking, according to NewDominion. He most recently worked for Charlotte-based community lender Park Sterling Bank as its regional market president for Gaston, Lincoln and Cleveland counties. He also was chief operating officer for Gastonia-based Citizens South Bank, which Park Sterling acquired in 2012.

Being in Gaston County gives NewDominion more balance and diversification in the Charlotte metro area and fits with the bank’s strategy to expand its presence in the region, Bogan said.

Boyd, who also will serve as NewDominion’s commercial relationship manager for Gaston County, will work from NewDominion’s headquarters in midtown Charlotte until the bank opens a loan production office in Gaston County in the second half of this year, Bogan said.

NewDominion is planning to expand to about 10 branches in the metro area, but has said it will need to raise more capital to fulfill those plans. It currently has two branches: one at its headquarters, the other in Iredell County.

Bogan said the bank’s goal is to have 1 percent to 2 percent market share in the Charlotte metro area, which would make it a $2 billion-asset bank.

The privately held bank currently has about $285 million in assets. Its market share in the metro area is 0.12percent, according to the latest federal data from June.