Bank Watch

Bank of America charged with discriminating against disabled homebuyers

2012-02-27T13:47:00.009-05:00

The U.S. Department of Housing and Urban Development announced Monday that it has charged Bank of America with discriminating against several homebuyers who rely on disability income.

The department alleges that Bank of America employees required home loan applicants who were disabled to provide notes from their doctors outlining their disability and predicting whether they thought the applicant would continue to be eligible for disability payments.

"Holding homebuyers with disabilities to a higher standard just because they rely on disability payments as a source of income is against the law," said John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity, in a statement. "Mortgage companies may verify income and have eligibility standards but they may not single out homebuyers with disabilities to delay or deny financing when they are otherwise eligible."

The investigation stems from three complaints in Wisconsin and Michigan during 2009 and 2010, according to the complaint. The homebuyers were initially denied a loan.

In one case, Bank of America apologized in a letter for requiring the note, the complaint states.

The housing department says that Bank of America's actions violated the Fair Housing Act, which prohibits placing higher burdens on people with disabilities for qualifying for loans. The case will now be handled by the U.S. Department of Justice, the complaint says.

The department seeks restitution for the homebuyers who made the complaints and a civil money penalty.

In a statement, Bank of America denied that it engaged in systemic discrimination and said it is the bank's policy to follow "all applicable fair lending laws and regulations." The bank said that the cases cited by the housing department involved inconsistencies in Federal Housing Administration and conventional underwriting standards.

The bank said all three ended up being approved for a loan.

Fifth Third launches new marketing campaign

2012-02-27T12:50:00.002-05:00

Fifth Third Bank announced Monday a new marketing campaign that revolves around curiosity and innovation.

“Curious people ask better questions, listen carefully, and find better answers,” said Larry Magnesen, Fifth Third's chief marketing officer, in a statement. “...Curiosity surfaced as an important value we wanted to affirm with our own employees: be curious about our customers’ needs, be curious about the way things could be made easier, and be curious about how we can innovate our products and services.”

"The Curious Bank" campaign is managed by agency Leo Burnett and will involve television, radio, print and online ads.

“Many banks seem tone deaf and out of touch with the world around them. Not Fifth Third,” said Rich Stoddart, president of Leo Burnett North America, in a statement. "Curiosity is ingrained in Fifth Third and its bankers"

Bank of America's last major marketing announcement came in 2007, when the bank launched its "Bank of Opportunity" campaign. The Charlotte bank is now shopping its ad account around.

Wells Fargo has centered its marketing around the image of a stagecoach, particularly on the East Coast after the acquisition of Charlotte-based Wachovia.

Study: More customers switching banks

2012-02-27T11:22:00.003-05:00

Consumers are increasingly ditching their banks as a result of fees, poor service and unmet expectations, according to a new survey from J.D. Power and Associates.

The market research firm's 2012 U.S. Bank Customer Switching and Acquisition Study, released today, found 9.6 percent of customers surveyed said they switched banks during the last year. That's up from 8.7 percent in 2011 and 7.7 percent the year before.

On the heels of Bank Transfer Day - and continued backlash over bank fees - smaller banks and credit unions are benefiting from an increased exodus from larger banks, according to the study, which examined the bank shopping and selection process.

"When banks announce the implementation of new fees, public reaction can be quite volatile and result in customers voting with their feet," Michael Beird, director of J.D. Power's banking services practice, said.

Acquisition of new customers by smaller lenders increased to 10.3 percent from 8.1 percent last year. The study found fees are the main reason customers shop for a new bank, with a third of customers of big banks and regional lenders citing fees as the main trigger for shopping around.

Among larger lenders, switching rates range from 10 percent to 11.3 percent, compared to a 0.9 percent defection rate for small banks and credit unions. That was down significantly from the 8.8 percent rate for those small lenders in 2011.

Customers are weighing more than just fees, J.D. Power found. Customer service is also a major factor, and new fees can act as the "straws that break the camel's back" when customers are already unimpressed by their bank's service experiences, Beird said.

As banks look to capture new customers, promotions and cash incentives are powerful tools, the study found. But just 32 percent of customers who selected a new bank because of promotions said they definitely would not switch banks again in the next year. By comparison, about half of customers who chose a new bank because of good service or positive recommendations said they definitely would not leave in the next year.

The 2012 study is based on a survey of more than 5,000 customers who shopped for a new bank account or primary lender in the past year. It was conducted in November and December and includes Charlotte-based Bank of America Corp., Wells Fargo & Co. and other lenders with a presence in the Carolinas. J.D. Power did not release switch rates specific to those banks.

BB&T directors will need to own more stock

2012-02-27T11:17:00.007-05:00

BB&T directors will be required to own more of the Winston-Salem bank's stock under a new policy disclosed in a securities filing Monday.

Previously, directors who aren't the bank executives were required to own 5,000 shares of common stock. Now, they will have to hold enough shares so that the value exceeds four times the average cash payment they receive for their service as director.

Directors generally receive about $80,000 in cash per year for their service, not counting stock and option awards, according to the bank's most recent proxy statement.

Recently, BB&T's stock has been trading about $30 per share. Under the new rules, a director would have to own about 10,650 shares.

For a director's new number of required shares to fall below the former standards, the stock's price would have to reach about $64 per share. BB&T's stock has never reached $50 per share.

At the bank's all-time high stock price, a director would have to own more than 7,000 shares under the new rules.

Directors will have five years to meet the new requirements, the securities filing says. A number -- but not all -- of them already meet the new standards, according to the proxy statement.

The former 5,000-share requirement was bumped up from 2,500 shares in 2010, and directors were given three years to comply.

Wells Fargo's policy is similar to BB&T's new requirement. Wells requires non-employee directors to own enough shares so that the value exceeds five times their cash compensation. The bank's directors receive an average of roughly $115,000, per the bank's proxy.

Bank of America's stock ownership requirements for non-employee directors require only that directors not sell any of their restricted stock awards, except for sales needed to pay taxes on the award, until they end their tenure on the board, according to the Charlotte bank's most recent proxy.

Morning roundup: Why no outrage for Walmart's debit card fee?

2012-02-27T09:17:00.000-05:00

Here's a look at what's news in banking and finance this Monday morning:

Bank of America took it on the chin after introducing a $5 debit card fee (later retracted). Walmart has prepaid debit cards, and charges a $3 fee to use them. Forbes magazine explores: Why no outrage there?
Billionaire investor Warren Buffett, who owns a sizable chunk of Wells Fargo, said big banks have been "victimized" by homeowners who refinanced loans before being evicted, Bloomberg reports. When the homeowner's refinancing gives them a cash payout larger than the costs of refinancing, "the evicted homeowner was the winner, and the victim was the lender," Buffett wrote in his annual letter.
The Federal Reserve continues to play an outsize role in big banks' fortunes, the Wall Street Journal says, both positive and negative. The central bank's interest rate policy cuts into the banks' margins, but the Fed could also give banks a boost next month when it releases the results of stress tests.
A less-well-known provision in the $25 billion mortgage settlement between states and big banks will give the banks a loss-share agreement with investors on more than $300 billion in junior liens the banks hold, Bloomberg reports.

Fifth Third establishes commercial banking center for western N.C.

2012-02-24T15:58:00.003-05:00

Fifth Third Bank has established a commercial banking center in Asheville, the company announced Friday, that will serve businesses across western North Carolina.

The Cincinnati-based bank has been actively expanding in North Carolina, including at a regional headquarters in uptown Charlotte.

The commercial banking office will be led by David Hammett, who previously worked as a market executive for RBC Bank. That bank is being acquired by PNC Financial Services.

Fifth Third also has commercial banking presences in Charlotte and Raleigh.

Asheville bank ordered to raise capital or find buyer

2012-02-24T15:40:00.003-05:00

The FDIC has ordered Asheville-based Pisgah Community Bank to raise capital or find a buyer as its capital levels "continue to deteriorate," according to a directive released Friday.

The bank, classified as "significantly undercapitalized," has been under an agreement with the FDIC since August 2010, but the capital plans the bank's management team has submitted have not been adequate, the FDIC said. The bank's condition has also gotten worse.

In the fourth quarter, the bank lost $3 million and its Tier 1 capital ratio remained below 3 percent, according to data from the FDIC.

"The bank’s management has not demonstrated the ability to return the Bank to a safe and sound condition," the new FDIC directive states.

The bank is now ordered to either find a buyer, sell new common stock, sell preferred stock, or receive direct contributions from the bank's directors or shareholders.

Wells Fargo report: Carolinas' economy improving

2012-02-24T15:28:00.003-05:00

The economic recovery is gaining steam in the Southeast as construction losses subside and sectors such as manufacturing improve, a new report from Wells Fargo & Co. found.

Wells economists' Regional Chartbook found activity picked up last year in the region, which has lagged other parts of the country due to fallout from the housing bust, particularly in Florida, Georgia and the Carolinas.

"While North Carolina did not get as overbuilt as many other parts of the country, the building boom got started a little later there, and activity topped out about a year after it did nationwide," the report said.

Yet a recovery in the region has finally taken hold, the economists said, citing strong industrial development activity in places like Raleigh and Charleston, S.C., and overall improvement in tourism, international trade, life sciences and manufacturing.

Population growth picked up last year in the Carolinas, too, as hiring increased and more retirees moved to the area. Overall, Charlotte has taken longer to bounce back than other Carolinas metros, with unemployment remaining high, particularly in surrounding counties, which saw massive job losses in manufacturing and construction.

The economists expect the recovery to continue this year. They expect stronger technology, life sciences, tourism and trade sectors, with negative real estate news decreasing.

Yet residential and commercial construction is "still a long way off from making a major positive contribution to economic growth," the report said.

NewDominion hires commercial relationship manager

2012-02-24T12:42:00.003-05:00

Charlotte-based NewDominion Bank announced Friday that it has hired Scott Shires to be its commercial relationship manager, where he will focus on bringing in new loan, deposit and treasury clients.

Shires has 19 years of banking experience in the Charlotte area, including stints at First Charter Bank and Wachovia, according to his LinkedIn page.

He attended Radford University.

Morning roundup: How many overdraft fees should a bank collect per day?

2012-02-24T08:35:00.002-05:00

Here's a look at what's news in banking and finance this morning:

How many overdraft fees should a bank collect from a single customer per day? The Huffington Post takes a look at the issue in light of the Consumer Financial Protection Bureau's new interest in overdraft fees. Bank of America caps the number at four, meaning it will take up to $140 in overdraft fees per day. BB&T set the limit at eight, which would add up to $280.
Speaking of overdraft fees, Forbes magazine says Bank of America, JPMorgan Chase and Wells Fargo in particular are due for more discomfort as the CFPB's probe begins.
Banks are hopeful that a rise in business spending could mean the start of an economic recovery, Reuters reports.
The banking lobby pushed regulators crafting the Volcker Rule to include restrictions on foreign firms in a bid to get foreign governments on their side, Bloomberg says.

Bank of America no longer selling many mortgages to Fannie Mae

2012-02-23T17:09:00.010-05:00

After a dispute over repurchase claims, Bank of America is no longer selling many of its mortgages to Fannie Mae, the bank disclosed Thursday in its year-end report.

As of this month, the bank will only sell Making Home Affordable Program refinance mortgages to Fannie Mae to be made into mortgage-backed securities, the bank said. No other mortgages will be sold to Fannie Mae.

The mortgage giant makes banks repurchase loans it determines were sold using incorrect data, known as rep and warranty claims. In its last quarterly report, the Charlotte bank disclosed that it did not agree with some of the determinations Fannie Mae had made.

Fannie Mae and Freddie Mac own about half of the nation's mortgages. Their purchases add liquidity to the mortgage market and allow banks to make more loans.

Bank of America spokesman Dan Frahm said the bank does not expect the decision to have a material impact on the business, and said the bank will use other sources of liquidity to continue to make loans.

BofA marketing expenses grew 12 percent last year

2012-02-23T16:48:00.002-05:00

Bank of America spent 12 percent more on marketing in 2011 than it had the year before, with expenses reaching $2.2 billion, according to the bank's 300-page year-end report filed Thursday afternoon.

That compares with $1.96 billion in 2010 and $1.93 billion the year before that.

The bank is the country's 17th-biggest ad spender, according to Ad Age. Last month, Bank of America put its ad account under review in a bid to rethink its marketing strategy, according to The New York Times and a number of other media outlets.

Bank of America's image took one of the biggest hits in corporate America in 2011, particularly after it announced and then retracted a plan to charge $5 for debit card use.

In its latest major re-marketing effort, the bank unveiled in 2007 an ad campaign revolving around the slogan "Bank of Opportunity."

In October 2011, the bank launched a series of TV ads promoting its local philanthropy, Reuters reported.

Bank of America freezing pension plan

2012-02-23T13:11:00.010-05:00

Bank of America is freezing its pension plan effective July 1, the bank said Thursday.

Instead, the Charlotte bank will begin contributing 2 to 3 percent of an employee's salary to his or her 401(k) in addition to the standard match of 5 percent of an employee's contributions.

Employees will retain all pension plan benefits they have earned to date, bank spokesman Scott Silvestri said.

Private-sector companies across America have been dropping pension plans over the past two decades as the costs of so-called "defined-benefit" plans ballooned. Many have switched to defined-contribution plans like 401(k) matches, as Bank of America has now done.

About 70 percent of the Fortune 100 companies have already made the switch, according to human resources consulting firm Towers Watson. During the recession, many companies began freezing or ending 401(k) matches.

Bank of America had about 282,000 full-time employees at the end of the year, down from about 288,000 at the end of 2010. About 15,000 are in Charlotte.

The bank has been aggressively seeking to cut costs through a program known as Project New BAC, named after the company's stock ticker.

Silvestri said he did not have an estimate on how much the change will save the company.

Here's WCNC's take on the issue.

Morning roundup: U.S. economy improving, Europe headed for recession

2012-02-23T10:16:00.004-05:00

Here's a look at today's banking and finance headlines:

Dallas Federal Reserve President Richard Fisher said the U.S. economy is improving and that another round of central bond buying isn't necessary, Reuters reports.
JPMorgan Chase & Co. has more than tripled its holdings of mortgage securities without U.S. government guarantees, representing a multibillion-dollar bet on on homeowners, Bloomberg reports.
The European Union lowered its growth forecast for the year and warned that the euro zone would fall into a "mild recession," the New York Times writes.
Stocks opened lower this morning as Hewlett-Packard announced its first-quarter revenue fell short and first-time jobless claims held steady, the Wall Street Journal reports. Technology and industrial sales led the U.S. markets lower.

Study: Americans working longer to fund retirement

2012-02-22T11:04:00.007-05:00

People are living longer, health care costs are rising - and Americans are considering major lifestyle changes to make sure they have enough money for retirement, according to a new study from Bank of America.

The latest Merrill Lynch Affluent Insights Survey, released today, shows three-quarters of affluent Americans - those with more than $250,000 to invest - would approach their money management differently if they knew they would live to be 100.

The top strategies include continuing to work at least part-time during retirement, re-evaluating savings and investment strategies and contributing more to a 401(k). A quarter of respondents said they would consider retiring closer to 85 than 65, the survey found.

The study also found age alone is less of a factor in determining when to retire. Instead, survey respondents cited feeling confident that they have enough money to live the way they want in retirement, among other factors.

"This notion of people living longer and the impact it has on them when they are thinking about retirement, it's an issue not just for us here at Bank of America, but it's really the driving force for all of America," said David Tyrie, head of personal wealth and retirement for Bank of America Merrill Lynch.

Respondents also said they would rather retire later than make changes to their current lifestyle - but if needed, many said they would trim daily expenses, limit vacation budgets and consider other changes, the survey found.

Customers' evolving attitudes and concerns are influencing the way Bank of America does business, Tyrie said. Financial advisers are offering more than just investment strategies, often providing advice on health care costs and retirement, he said.

The bank is also developing more resources for customers and broadening its array of products.

"It makes us listen real carefully," Tyrie said. "It makes us retool internally."

Morning roundup: Was Moynihan's pay fair?

2012-02-22T09:11:00.004-05:00

Here's a look at what's news in banking and finance this morning:

Bank of America CEO Brian Moynihan collected stock options worth about $6 million, disclosed last week. While investors might wish the pay was lower considering the bank's performance in 2011, The Motley Fool says the amount is significantly lower than the bank's peers are paying their executives, and says BofA made the right decision.
Bank of America's stock rebound continues to be the talk of the financial world on an almost daily basis. Bloomberg reports today that an investment firm CEO says it's not too late to get in on the bank's rise.
The Consumer Financial Protection Bureau is turning its attention to overdraft fees, requesting data from the country's largest institutions, the Wall Street Journal reports.
Four bank fees "you should never tolerate," according to the Christian Science Monitor: Monthly account fees, check cashing fees, account maintenance fees and minimum balance fees.
Wells Fargo is buying another loan portfolio from a European bank, this time an energy lending business from France's BNP Paribas, Reuters reports.
The much-discussed Volcker Rule could have the effect of reinstating the division between commercial banks and investment banks, a distinction broken down after the repeal of Glass-Steagall, The New York Times says.

BB&T declares 16 cent dividend

2012-02-21T16:31:00.003-05:00

BB&T declared Tuesday a 16 cents per common share dividend for the second quarter. The Winston-Salem bank will pay the dividend on May 1 to shareholders of record on April 6.

The dividend gives the bank's stock, which is trading near $30 per share, a yield of about 2 percent. That puts it relatively high relative to its peers.

Of major banks with a Charlotte presence, First Citizens is paying a higher dividend, at 30 cents. But since its stock is trading near $175 per share, that gives it a much smaller yield.

Other banks with in the area that are paying dividends:

SCBT: 17 cents
Wells Fargo: 12 cents
Fifth Third: 8 cents
SunTrust: 5 cents
Bank of America: 1 cent
Citizens South: 1 cent

Analysts: Wells Fargo a good fit for Ally

2012-02-21T11:47:00.002-05:00

Ally Financial is weighing a sale of all or part of its auto lending and banking businesses, Reuters reported last week - and some analysts are targeting Wells Fargo & Co. as a possible buyer.

A research note from Keefe, Bruyette & Woods today said Wells, which bought Charlotte’s Wachovia in 2008, is a “likely buyer” for Ally’s North American Auto Finance business. The San Francisco-based bank is one of the few large lenders with the interest and balance sheet to take down the entire business, KBW analysts said.

They believe Wells would be interested in acquiring the business because of Ally’s market share and Wells’ excess liquidity to buy assets, they said. Other lenders that might be interested in part or all of the business include JPMorgan and U.S. Bank, the analysts said.

"A purchase of the auto finance business would give Wells a much larger industry presence in a line of business where WFC already competes," the KBW report said. "... Overall, we believe that the market would view this as a good deal for Wells Fargo."

South Carolina homeowners to receive $190 million in settlement

2012-02-21T09:55:00.002-05:00

More than 15,000 South Carolina homeowners will receive about $190 million in foreclosure relief and other compensation from the blockbuster settlement between state attorneys general and the country's largest mortgage servicers.

$137.3 million will go toward principal reduction, short sale assistance and other foreclosure relief for underwater borrowers in default or at risk of default.
$36.5 million will help underwater borrowers current on their payments refinance at lower interest rates.
$16 million will go to homeowners who already lost their homes to foreclosure, in $2,000 chunks.

The figures come from the consortium of state attorneys general who negotiated the deal, posted on their website, NationalMortgageSettlement.com.

All told, the mortgage servicers -- including Bank of America and Wells Fargo -- will pay about $25 billion to absolve claims that they used incorrect and improper foreclosure and mortgage servicing practices.

About 28,000 North Carolinians will receive about $275 million from the settlement. The state will receive about $64 million, most of which will be used to provide housing counselors, legal assistance and expanded prosecution of financial crimes.

South Carolina had previously announced that the state's share would be about $33 million. The state has not yet broken down how it will use that money, as North Carolina has done.

Morning roundup: Fed offers little transparency on bank rules

2012-02-21T09:28:00.004-05:00

Here's a look at this morning's banking and finance news:

The Federal Reserve is rewriting the rules governing U.S. banks behind closed doors, the Wall Street Journal reports. Rather than discussing rules and voting in public, as is done at other agencies, the Fed is making big changes almost completely without public meetings, the Journal writes.
Neil Barofsky, former special inspector for TARP, tells Bloomberg the proposed Volcker rule, which would restrict trading by banks, will help financial stability.
It's bonus season for bankers - but some executives will likely be forced to return the payouts as claw-backs become more popular, CNBC reports.
The Greek debt deal could pave the way for widespread economic reforms, but markets have reacted cautiously so far, the Associated Press reports.

RBC Bank to PNC Bank conversion scheduled for March 2

2012-02-20T15:01:00.003-05:00

RBC Bank branches are scheduled to close for the final time at 4 p.m. Friday, March 2 -- the same day the sale of the Raleigh-based bank is expected to close. The branches will open as PNC Bank on Monday, March 5, the company has announced.

In June, PNC Financial Services of Pittsburgh announced it was acquring Raleigh-based RBC Bank. The Federal Reserve gave the $3.45 billion deal the go-ahead in December.

A number of the branches already have PNC signs, temporarily covered as Wells Fargo did before converting Wachovia branches.

RBC Bank has 424 branches in six Southeastern states. The bank controls about $1 billion in deposits at 18 Charlotte-area branches, according to the FDIC.

Roundup: Bank of America back?

2012-02-20T09:03:00.005-05:00

Here's a look at what's news on this Presidents Day bank holiday:

Is Bank of America "back from the dead" or "still a zombie"? A Bloomberg Businessweek editor discusses the bank's stock price this year, and concludes investors should still expect ups and downs.
Britain's Lloyds Banking Group is said to be demanding that executives repay their bonuses after unexpected losses turned up, The New York Times reports.
Spain's sovereign debt load could double from its position at the start of the European financial crisis, which could provide more woes for the continent, Bloomberg reports.

N.C. lays out how it will spend settlement money

2012-02-17T10:33:00.004-05:00

Most of the $338 million North Carolina is receiving as part of the blockbuster $25 billion mortgage servicing settlement announced last week will flow directly to underwater borrowers in the form of principal reduction and other foreclosure relief.

But each state government participating in the settlement will also receive a cash payment, and the states have wide latitude in deciding how to use it.

The state of North Carolina will receive $63.7 million from the settlement, about one-quarter of what the state's residents will get. Most of the money will be distributed to a number of state agencies for housing programs, an approach that homeowner advocates say puts North Carolina ahead of many of its peers.

$20 million to the N.C. Housing Finance Agency, who will distribute the money to independent housing counselors.
$12 million to independent legal assistance organizations.
$10 million to the state’s general fund, the money appropriated across state agencies in the annual budget.
$10 million to the State Bureau of Investigation and district attorneys’ offices for training in the prosecution of financial crimes.
$6.3 million to the public school system.
$5 million to the consumer protection division of the attorney general’s office, to investigate financial fraud and spread the word about the settlement.

States like Wisconsin and Missouri have already announced they are putting a much higher percentage of their take into the state's general fund, drawing criticism from political opponents who said more money should go to struggling homeowners. Observers of the deal in North Carolina said the state took a more balanced approach.

In North Carolina, the money to the general fund is intended to be restitution for the budget deficits spawned by the foreclosure crisis, as well as a standard reimbursement for attorney’s fees in negotiating the settlement, said Julia White, senior policy adviser in the state attorney general’s office.

A spokesman for N.C. House Speaker Rep. Thom Tillis, R-Mecklenburg, said it’s too early to speculate about what the money the state will receive will be used for. The office of State Senate Pro Tem Phil Berger gave a similar statement.

Morning roundup: BofA seeks to stop Moynihan deposition

2012-02-17T08:51:00.002-05:00

Here's a look at what's news in banking and finance this morning:

Bank of America has filed a motion in federal court to block a scheduled deposition of CEO Brian Moynihan in a lawsuit that alleges Countrywide misled investors as to the quality of its loans, Bloomberg reports.
Nearly 130 banks in 35 states have banded together to take on the country's biggest banks, pooling money for advertising, marketing and product offerings under a brand called Kasasa, CNN says.
Fed Chairman Ben Bernanke addressed the growing tension between regulators and community banks at a speech Thursday in Virginia, Bloomberg reports. Nearly one-third of small banks are under some type of order from federal regulators, up from 3 or 4 percent historically, and some banks say standards are applied inconsistently.
You are not a Wells Fargo employee. You are a team member, CEO John Stumpf consistently says, emphasizing it again in an interview with CNBC this morning, the Wall Street Journal relates. Stumpf also apologized for mistakes banks have made and says he reads letters from customers every day that "tears my heart out," he said.
The $25 billion settlement is done, but foreclosure abuse is still "rampant" across the country, experts tell Reuters -- including the register of deeds in Guilford County, N.C. (Reuters misspells the name of the county, but we'll cut them slack).

BofA's reputation suffered in 2011, Harris says

2012-02-16T15:30:00.001-05:00

Bank of America's reputation among consumers fell more than any other company's in 2011, according to an annual study from Harris Interactive. The Charlotte bank's performance capped a terrible year for corporate America -- and the financial industry in particular -- in the public's eye.

Harris Interactive determines a company's "Reputational Quotient" based on interviews with 17,000 people about their views of the company's service, financial performance, leadership and other measures. This year, Bank of America's index fell to 49.85, down from 59.83 last year.

A score below 50 represents that a company has "reached such a low point that their viability may be called into question," Harris executive vice president Robert Fronk said in a video explaining the results. Twelve companies have fallen below the point in the 13 years of the poll, and 10 of them -- like MCI, Enron and Fannie Mae -- have failed or been taken over by the government.

It is definitely possible for a company to rehab its image, Harris said. General Motors and Toyota have both dramatically improved in recent years.

While Bank of America received decent marks in financial performance, it suffered mightily in its "emotional appeal," which involves trust and respect.

"The general public believes that Bank of America has been more concerned with operational and financial recovery than with customers and rates the bank low in levels of trust, ethics, and customer service," the company said in a news release. "In order to rebuild their reputation, Bank of America will need to engage beyond this functional rebound."

It was a bad year for corporations' reputation in general. Only 20 percent said corporate America's reputation is positive. Financial firms were particularly buffeted.

Goldman Sachs and AIG joined Bank of America with sub-50 scores.

Apple took the top spot with a score that set an all-time high. Google finished second.

Bank of America bonds also on review for downgrade

2012-02-16T14:29:00.004-05:00

Moody's Investor Services announced Thursday that it is also putting Bank of America's covered bonds on review for downgrade, driven by Wednesday's decision to question the bank's long-term rating.

The covered bonds rating -- or corporate securities backed by a pool of loans -- was last downgraded Sept. 23, Moody's said. Should the review of the bank's long-term rating be lowered, the bonds would likely be downgraded one notch, to A1.

Moody's said it considers this type of investment to be highly exposed to market value risk. If the bank were to default, the loan pool might need to be liquidiated quickly.

On Wednesday, Moody's placed the long-term rating for Bank of America and a number of other big banks on review for a downgrade, citing continued difficulty in capital markets.

Moody's will be looking at "structural vulnerabilities in the business models of global investment banks," the agency said, including their interconnectedness with other firms and the possibility for sudden, unexpected losses like those that toppled some banks in 2008.

Joining the Charlotte bank were Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Royal Bank of Canada.

Bank of America could be downgraded up to one notch. Citigroup and JPMorgan could fall up to two notches.

A report from CreditSights earlier this week predicted the review. All three of the major credit ratings agencies downgraded Bank of America last year.

Read more here: http://obsbankwatch.blogspot.com/2012/02/moodys-could-downgrade-banks-credit.html#storylink=cpy

Morning roundup: Moody's places ratings of BofA, other lenders on review.

2012-02-16T09:31:00.002-05:00

Here's a look at this morning's banking and finance headlines:

Moody's Investors Service has placed the ratings of Bank of America, Citigroup, Goldman Sachs and other lenders on review for possible downgrades over questions of their long-term profitability, the Wall Street Journal reports.
Wall Street might be the main critic of the Volcker Rule, which prohibits banks from trading with their own money, but other companies - including Red Lobster and Macy's - have chimed in with their own objections to the rule, the New York Times writes.
Reuters columnist Felix Salmon discusses why Bank of America can't tell Merrill brokers what to do.
Foreclosures are on the rise again after activity froze in 2011, CNBC reports. According to a new report from RealtyTrac, one in every 624 U.S. households received a foreclosure filing in January, up 3 percent from the month before.
Stocks were little changed this morning amid better-than-expected housing starts and jobless claims, which countered continued concern about Greek debt, Bloomberg reports.

Mortgage settlement could be filed by next week

2012-02-15T15:16:00.003-05:00

The $25 billion settlement between states, federal agencies and the five largest U.S. mortgage servicers could be formally filed in federal court late this week or early next week, according to the N.C. attorney general's office.

While the basic framework of the deal was announced by the U.S. Department of Justice last week, the formal agreement will provide more details -- including what mechanisms the independent monitor will have to enforce it and what specific claims the banks are released from.

The agreement is being filed in the U.S. District Court for the District of Columbia, where its enforcement will be overseen by a federal judge and N.C. banking commissioner Joseph Smith, who is leaving his post to devote himself to the job.

Read more here: http://www.charlotteobserver.com/2012/02/15/3013359/smith-to-leave-state-bank-post.html#storylink=cpy

Carlisle & Gallagher increases revenue 48 percent, hires 350 last year

2012-02-15T11:09:00.004-05:00

Charlotte-based financial services firm Carlisle & Gallagher Consulting Group continued its steady growth in 2011, increasing revenue 48 percent, the company announced Wednesday. The nearly 10-year-old company also hired 350 new employees, bringing its nationwide total to 800.

The firm focuses exclusively on financial services companies, with seven of the 10 largest U.S. companies in the sector as clients, CEO Bob Gallagher said in an interview Wednesday.

In the first few years of operation, the company focused on helping banks integrate its acquisitions during a wave of consolidation in the industry. Now, Gallagher said the transitioning industry has helped drive his firm's growth, as banks focus on adapting to regulatory change, technological advancement and a more competitive landscape.

The company occupies two floors at 212 S. Tryon St., totaling 25,000 square feet. About 200 employees work in Charlotte.

The firm also has hubs in Dallas, Jacksonville, Fla., and Richmond, Va. Carlisle & Gallagher hires its employees regardless of where they live, with many working remotely, Gallagher said.

Study: Small banks better for small-biz loans

2012-02-15T10:25:00.003-05:00

Small-business owners looking for loans might have better luck at small banks, according to a new report from MultiFunding, a Pennsylvania firm that helps companies find the right lender.

The average branch of a large national bank manages $4.6 million in small-business loans, compared to $6.8 million for regional bank branches and $9.1 million for state banks, the study found.

Large national banks use about 4 percent of their domestic deposits for small business loans, while regional banks use 11 percent and state lenders use more than 14 percent.

Small banks are "simply more equipped to handle small-business loans," MultiFunding said.

But because large national banks own more than half of the country's 93,000 bank branches, many small-business owners are starting in the wrong place, which could ultimately have an effect on the number of jobs they're able to create, the firm said.

"We hope that small-business owners across America won't be tempted by the 'big brand' when exploring their loan options," MultiFunding said. "The stakes are too high, for them and for all of us."

Morning roundup: Love America? Buy Bank of America stock

2012-02-15T08:57:00.003-05:00

Here's a look at what's news in banking and finance this morning:

Do you love America? Then buy Bank of America stock, TheStreet.com says. The financial website points to the bank as a good way to play bullishness on progress in the U.S. economy. One guy who's apparently not in that camp, though, is billionaire hedge fund manager John Paulson, who sold his stakes in the Charlotte-based bank and Citigroup sometime in the fourth quarter, Forbes reports.
The Federal Reserve has approved Capital One's quest to buy ING, the online bank, to transform Capital One from a credit card business into the fifth-largest bank, Fox Business reports.
Legendary investor Warren Buffett increased his stake in Wells Fargo in the fourth quarter, the AP reports.
Goldman Sachs and Morgan Stanley joined the group of banks warning the Volcker Rule, as it stands, would hurt the economy and bank's clients, Bloomberg reports. Bank of America, Citigroup and JPMorgan Chase were already in that camp. At an investor conference Tuesday morning, Wells Fargo head of wealth, brokerage and retirement David Carroll also warned that the Volcker Rule would have unintended, harmful consequences.

Wells hired more than 1,400 financial advisers last year

2012-02-14T17:22:00.006-05:00

Wells Fargo hired 1,436 financial advisers last year, 52 percent of whom are trainees, said David Carroll, the bank's head of wealth, brokerage and retirement, at the Sterne Agee investor conference Tuesday morning.

"We've got a big committement to growing our own talent," the Charlotte-based banker said.

Carroll said that over the last few years, Wells has been able to keep its "regretted attrition," or employees the bank would like to keep who leave of their own accord, under 3 percent in his business. Last year, the figure was 1.6 percent, Carroll said.

But compared with the people who were lost, the bank's new hires are 40 percent more productive, Carroll said.

He said the bank is "disciplined" with its recruiting packages, and generally does not offer the most money.

"People are attracted to Wells Fargo for reasons other than the upfront economics," he said.

Moody's could downgrade banks credit ratings again, report says

2012-02-14T15:52:00.003-05:00

Moody's Investors Service, one of the three main credit ratings agencies, is expected to downgrade the debt ratings of Bank of America, Wells Fargo and a number of other banks, according to a report published by CreditSights and reported on by TheStreet.com.

The report cites comments on a Feb. 1 conference call by Moody's executives that some global banks could see two- or three-notch downgrades because of "Eurozone weakness" and uncertainty in capital markets.

Other banks cited were JPMorgan Chase, Citigroup, Goldman Sachs and Morgan Stanley.

All three credit ratings agencies downgraded Bank of America's credit rating last year.

N.C. banking commissioner stepping down to focus on settlement

2012-02-14T11:25:00.007-05:00

N.C. Commissioner of Banks Joseph Smith is stepping down from his post to focus on a new role for him announced last week: monitor of the $25 billion settlement between states, federal agencies and the country's largest mortgage servicers.

In that role, Smith, 62, will oversee banks to make sure they are complying with the terms of the agreement, and levy penalties if benchmarks are missed.

Smith's resignation is effective Thursday, the office of the N.C. Commissioner of Banks announced. Smith has been banking commissioner since 2002, and was appointed to another term last year. During his tenure, Smith's office has seen state-chartered banks grow to more than $250 billion in assets and issued enforcement actions that resulted in $30 million in restitution to consumers in the last four years.

“For a decade, Joe has served North Carolina as a staunch defender of consumer rights and a firm but fair regulator of banks and financial institutions,” Gov. Bev Perdue said in a statement. “He played a critical role in eliminating the abuses of payday lending, strengthening antipredatory lending and fighting abuses in mortgage lending.”

The state banking commissioner regulates state-chartered banks, mortgage lenders and other financial institutions.

Smith's role as monitor will last three years. He intends to remain in Raleigh, the statement says.

“I have enjoyed my tenure as commissioner of banks and have done my best to promote the strength and fairness of North Carolina’s financial markets,” Smith said in a statement. “I hope my efforts as monitor will contribute to the recovery of the mortgage market and the health of our economy.”

Chief Deputy Commissioner of Banks Ray Grace will serve as acting commissioner until a permanent replacement is named.

While debit rewards decline, credit card incentives on the rise

2012-02-14T09:59:00.002-05:00

Rewards for debit card use have declined in the wake of recent regulatory changes, but banks are increasingly making it more attractive to swipe a credit card, a survey from Bankrate.com found.

A much-discussed provision in the Dodd-Frank financial reform law capped the swipe fees merchants pay banks on debit card transactions, but did not set a limit for credit card use. As a result, credit card issuers modestly sweetened the rewards they offer to their customers.

Forty-eight percent of cards now offer 1 percent cash back from the first dollar of spending, up from 42 percent last year, Bankrate found.

"Unlike debit card rewards, which declined sharply over the past year, credit card rewards are still alive and well," said Greg McBride, senior financial analyst for Bankrate.com, in a statement. He said consumers who use their cards frequently and pay their balance in full at the end of the month is particularly attractive in this environment.

Morning roundup: Potential for growth in BofA stock?

2012-02-14T09:32:00.003-05:00

Here's a look at this morning's banking and finance news:

Bank of America shares have rallied this year, but one analyst cautions investors that there's reason to wait before jumping on board, the Wall Street Journal reports. Now that the mortgage picture seems a little clearer, the focus will turn to earnings, he says.
The Motley Fool is a little more optimistic, saying BofA has the biggest potential among its peers.
Top U.S. banks captured the biggest piece of global trading revenue in at least two years as European banks reduced risk, Bloomberg reports.
The New York Times details the California attorney general's role in negotiating the $25 billion foreclosure settlement with big banks announced last week. In the end, she walked away with much more than the state was slated to receive originally, the Times writes.
Markets opened lower this morning on data showing weaker-than-expected January retail sales, Reuters reports.

BofA sees big growth potential in health savings accounts

2012-02-13T10:36:00.004-05:00

Bank of America Corp. is seeing record growth in its health savings account business as health care costs continue to rise and employers shift more responsibility onto their workers, the bank said today.

Health savings accounts grew by more than a third in 2011, with 50,000 new accounts from existing corporate clients and new relationships with employers and individuals, the bank said. The products are the fastest-growing of the health benefits the Charlotte bank offers, part of a broader business that provides retirement and benefit plans.

"It comes down to, health care is the No. 1 or 2 financial concern for virtually every customer segment that we have," said Justin Raniszeski, health benefit solutions executive for Bank of America Merrill Lynch.

The bank has been in the business since 2005. Now, it has nearly 200,000 health savings account users with more than $300 million in account balances. The average balance has grown more than 10 percent since 2010 to $2,016, the bank said.

Health savings accounts, designed to work with high-deductible health plans, allow employees to make pretax contributions for medical expenses such as doctors visits and prescriptions. The accounts earn tax-free interest, can be carried over year to year and move with an employee when he changes jobs or retires.

Kevin Crain, the bank's head of institutional retirement and benefit services, said the accounts have become more popular as employers give more accountability to workers for their financial security, from 401(k)s to health benefit plans. Health savings accounts fit naturally with the bank's other services, he said, because corporate clients' financial concerns extend beyond just retirement accounts.

Raniszeski predicts the business will continue to grow.

"The reason we're excited about it is, I don't think we see those things changing," he said.

S.C. to get $33.8 million in mortgage settlement

2012-02-13T09:27:00.004-05:00

South Carolina will receive $33.8 million as part of the multi-billion-dollar settlement between states, federal agencies and the country's largest mortgage servicers, the S.C. attorney general's office says.

The much-anticipated $25 billion settlement with Bank of America Corp., Wells Fargo & Co., JPMorgan Chase & Co., Citigroup Inc., and Ally Financial Inc. was announced Thursday. It marked the largest federal-state joint settlement history.

North Carolina will receive $338 million in the deal, most of which will go to principal reduction for underwater borrowers in default or at risk of default.

South Carolina did not break down where most of the money the state and its residents will receive will go, but did say that in addition to a $32.8 million general share in the settlement, the state's banking regulator will get $1 million for foreclosure prevention and education.

Read more here: http://www.charlotteobserver.com/2012/02/10/2999436/338m-awaits-nc-in-loan-deal.html#storylink=misearch#storylink=cpy

Morning roundup: Volcker to formally defend rule bearing his name

2012-02-13T08:42:00.003-05:00

Here's a look at what's news in banking and finance after the weekend:

Former Fed chairman Paul Volcker is expected to file a comment letter defending the regulation bearing his name, arguing that critics are overlooking its good points, the Wall Street Journal reports.
Investment site Seeking Alpha says Bank of America stock is still undervalued "by most metrics," including price-to-book and price-to-cash. Fairholme Fund manager Bruce Berkowitz is also bullish on the bank, and on the financial sector in general this year, he related in an interview with Bloomberg.
A growing number of people are opting for "customized" mortgages, fixed rate loans with lengths different from the standard 30 or 15 years, The New York Times reports. The 20-year mortgage is becoming particularly popular.

Wells CFO says Wachovia acquisition has gone 'better than we thought'

2012-02-10T16:05:00.003-05:00

Wells Fargo's 2008 acquisition of Charlotte-based Wachovia has gone better than expected and has improved Wells' business model, Chief Financial Officer Tim Sloan said during a presentation at an investor conference on Thursday.

"We don't want to declare victory too early, but it's gone better than we thought," he said during the question-and-answer period of his presentation. "It's been a three-year process and cost us billions of dollars, but we think we've done it right."

Sloan said the acquisition improved the San Francisco-based bank's talent pool, and allowed it to pick the "best of the best." He also said it has allowed Wells to diversify its business model, in geography, customer base and in product line.

That, in turn, has boosted the bank's bottom line and improved its capital and liquidity, Sloan said.

Unlike in many acquisitions, Sloan said the Wells-Wachovia integration has avoided causing massive changes and problems for customers.

Morning roundup: $25 billion settlement is done. What's next?

2012-02-10T09:08:00.002-05:00

Here's a look at what's news in banking and finance this morning:

The big news yesterday was the long-awaited $25 billion settlement between states and the country's largest mortgage servicers. What's next? Bloomberg says banks like Bank of America still face years of litigation and billions more in costs. Reuters reports the settlement will be "too little, too late" for the hardest hit people. The Wall Street Journal says investors get a little relief.
People who use Citi's iPad and other digital apps have inadvertently been charged twice, The New York Times reports.
Smaller financial firms are decrying the Federal Reserve's decision to offer taxpayer-acquired AIG assets to a select group of banks, Bloomberg reports.

Morning roundup: Banks seal foreclosure deal

2012-02-09T09:42:00.004-05:00

Here's a look at this morning's banking and finance news:

The big story today is banks' long-anticipated foreclosure settlement with state attorneys general, set to be announced this morning. The Wall Street Journal details four key players in the multibillion-dollar deal.
Meanwhile, federal regulators plan to warn big banks - including Bank of America - that they intend to sue them over other mortgage-related actions, a sign that banks' mortgage woes aren't yet behind them, people familiar with the situation told the Journal.
Wall Street firms are making bets on troubled securities, a signal that some are anticipating a rebound, the New York Times reports.
Stock futures rose this morning as Greek politicians reached an austerity deal and U.S. jobless claims fell, Bloomberg reports.
But it's too early to assume markets have shifted to a long-term bullish trading environment, CNBC says.

Tree.com tries to speed sale of its home loan unit

2012-02-08T15:30:00.000-05:00

Tree.com, the Charlotte-based parent company of LendingTree and several other lead-generation sites, announced Wednesday that it has changed an agreement with Discover Financial to buy most of its home loan origination unit to help it close.

The two companies entered into an agreement in May 2011 for Discover to acquire most of the assets of Tree.com's Home Loan Center, as the Charlotte company hoped to focus on its core business. The companies hoped to have the sale closed by the end of the year. Tree.com shareholders approved the deal in August.

But the sale still hasn't gone through. Discover has already paid Tree.com $5 million in extension payments as the two companies work through the myriad closing details.

In Wednesday's announcement, the main change is to the payment structure. The deal is still worth $55.9 million.

Initially, Discover was to pay $35.9 million at closing, then $10 million on the one-year and two-year anniversary.

Now, Discover will pay $3 million on March 7, regardless of whether the deal is done. A total of $42.9 million will be due at closing and $10 million on the first anniversary.

Other terms of the closing were changed to allow more flexibility, but those changes were not disclosed.

The delay has not hurt Tree.com. With the wave of refinancings accompanying record-low interest rates, the home loan unit has been making a significant amount of money, boosting the company's bottom line.

Tree.com now says the companies are committed to closing the deal by mid-year.

Alliance Bank still 'very strong,' CEO says

2012-02-08T15:07:00.006-05:00

Despite the announcement of a consent order with the FDIC, Alliance Bank and Trust CEO Dan Ayscue said in an interview Wednesday that the bank remains "very strong" in capital and liquidity, and says the bank has already made a lot of progress toward meeting the terms of the agreement.

On Tuesday, the Gastonia-based bank announced in a securities filing that a recent agreement with the FDIC mandates the bank to review its management team, create a plan to resolve problem loans and maintain capital levels.

Ayscue said that he is not surprised that regulators are exercising increased oversight, but that the bank has already made progress in the past year and the consent order will help the bank improve more.

In the first quarter, the period regulators looked at, past-due loans made up 9 percent of the bank's total, according to the bank's quarterly securities filing. That ratio has now come down significantly, Ayscue said.

Read

"The quality of our loan portfolio has improved drastically over the last year," he said. "We have been doing a lot of work to get where we need to be."

more here: http://www.charlotteobserver.com/2012/02/08/2993428/alliance-bank-under-fdic-order.html#storylink=cpy

Morning roundup: State AG settlement inching closer, California back to the table

2012-02-08T08:56:00.002-05:00

Here's a look at what's news in banking and finance this morning:

The settlement between the largest U.S. mortgage servicers -- including Bank of America and Wells Fargo -- and a consortium of state attorneys general is inching closer, and California is back at the bargaining table after months of absence, The New York Times says. When the deal, expected to be as much as $25 billion, comes through, bank earnings shouldn't be majorly affected because they have already put aside money for the penalty, a Reuters analysis shows.
Bank of America, struggling to deal with the demand, is telling some customers looking to refinance their mortgages to wait up to 90 days to start an application, Bloomberg reports.
The total cost of mortgage problems and improper foreclosures has reached more than $72 billion for the largest U.S. mortgage servicers, Bloomberg reports. Bank of America alone counts for more than $40 billion.

Small business owners most optimistic since 2008, Wells Fargo says

2012-02-07T18:23:00.003-05:00

Small business owners are the most optimistic about their finances and hiring prospects than they've been since July 2008, according to a Wells Fargo-Gallup survey released Tuesday.

The results was compiled from telephone interviews with 600 small business owners between Jan. 9 and Jan. 13, and covers their expectations for the coming 12 months.

Among the survey's findings:

49 percent of owners expect revenues to increase, up from 37 percent in October.
22 percent expect the number of jobs at their business to increase, up from 15 percent.
The overall Small Business Index score increased to 15, from -3 in October.

The index based on the owner's opinion of the business's present condition remained negative, at -6, though that is up from -11 in October.

Morning roundup: Banks encouraging short sales

2012-02-07T09:28:00.002-05:00

Here's a look at this morning's banking and finance news:

Banks are offering cash incentives - some as much as $35,000 - to delinquent homeowners to sell their properties for less than they owe, Bloomberg reports. Lenders have found these short sales faster and easier than foreclosures, and they're encouraging them as part of a continued effort to move troubled mortgages off their books.
The Wall Street Journal examines whether big banks can be part of a "socially responsible investing" plan.
An emerging class of "shadow banks" could prompt a new wave of financial turmoil, Reuters reports. Now, watchdogs are focusing on hedge funds and money market funds that are engaging in unregulated financial activity.
A company that provided home foreclosure services to lenders has been indicted on forgery charges by a Missouri grand jury, the New York Times reports.
Stocks slipped as markets opened this morning amid mixed earnings reports and continued uncertainty over Greek debt talks, CNBC reports.

Expect more lawsuits against officers of failed banks

2012-02-06T15:24:00.003-05:00

Officers at failed banks may see a wave of lawsuits from the FDIC as the three-year period the regulatory body has to take action comes to a close for a number of banks, legal firm Bryan Cave's banking unit says.

Bank failures spiked in 2009, to 140 from 25 the year before. The three-year period the FDIC has to charge officers at those banks with negligence or other wrongdoing ends this year.

The most recent FDIC suit, against a failed California bank, came just days before that period came to an end, Bryan Cave points out. The FDIC has now sued officers and directors at about 20 failed banks.

In late December, the FDIC sued officers at The Bank of Asheville, claiming negligence in its rapid growth. Bryan Cave said that was an indication the regulatory body was becoming more aggressive.

Merrill Edge call centers lauded by J.D. Power

2012-02-06T15:09:00.002-05:00

Consumer ratings firm J.D. Power and Associates has named Bank of America Merrill Edge's call centers "An Outstanding Customer Service Experience," after reviewing the bank's services through its call center certification program.

Merrill Edge is Merrill Lynch's investment advice and platform for the "mass affluent" category of customer, or those with between $50,000 and $250,000 in investable assets. It offers its services over the phone through the call centers, known as the Merrill Edge Advisory Center, or in person at some banks by appointment.

J.D. Power's review looked at more than 100 practices and involved a random survey of customers. To earn the outstanding rating, the call center must fall within the top 20 percent of service scores.

Morning roundup: State AG settlement expected to wrap up this week

2012-02-06T08:44:00.003-05:00

Here's a look at what's news in banking and finance this morning:

The settlement between the largest mortgage servicers, state attorneys general and federal agencies is expected to wrap up this week, the Wall Street Journal reports. There is still uncertainty, though, about whether California will sign on.
The Berkeley, Calif., city council is considering taking its money out of Wells Fargo and putting it in a community bank. Time magazine wonders, should cities have a Bank Transfer Day of their own?
Bank of America had already been shrinking its balance sheet. But the Charlotte bank, and others with presences on Wall Street, are also shrinking physically, selling or subleasing hundreds of thousands of square feet of office space, the Wall Street Journal says.
Independent brokerages in the U.S. are increasingly closing this year as tough markets make it more difficult for them to raise capital, Bloomberg reports.

BB&T buys wholesale insurance brokerage

2012-02-03T17:57:00.003-05:00

BB&T announced Friday that it is purchasing a wholesale insurance brokerage in a $570 million cash deal.

The acquisition of two divisions from New Jersey-based Crump Group Inc. will make the Winston-Salem bank the country's biggest wholesale life insurance distributor. It will also boost the bank's commercial insurance business.

"The deal is a great strategic fit for BB&T, immediately increasing and diversifying our fee income while driving stronger revenues," CEO Kelly King said in a statement.

The purchase is expected to increase BB&T's annual revenue by $300 million. It is expected to close in the first quarter.

Morning roundup: Bank of America wins key lawsuit dismissal

2012-02-03T08:56:00.003-05:00

Here's a look at what's news in banking and finance this morning:

Bank of America won a dismissal in a lawsuit by Allstate against Countrywide, a key decision legal experts say gives the Charlotte bank a negotiating card in other suits, Bloomberg reports. Allstate claimed that BofA structured the Countrywide acquisition to strip it of its valuable assets while leaving a legal shell for other companies to sue. The judge found no evidence that the bank set out to defraud creditors.
The SEC has taken it easy on big banks like JPMorgan and Bank of America, The New York Times says. The newspaper's analysis of a number of cases shows that the commission has given the banks waiver of legal liability from certain laws aimed at curbing fraud, which puts them at an advantage.
One of Wall Street's biggest lobbying organizations is divided in how it feels about the proposed settlement between state attorneys general and the largest mortgage servicers, Bloomberg reports. That's because of a proposed provision that would give banks credit for reducing principal on mortgages that have been sold off as part of bonds, which would hurt investors.
Loan loss reserves that banks have been releasing, boosting earnings, are about dried up, the Wall Street Journal says. That could have an impact on banks' bottom lines going forward.
The FDIC is making progress in convincing the markets that big banks will be allowed to fail, a former IMF chief economist writes on the New York Times' Economix blog.

Bank of America program to teach wealthy kids financial skills

2012-02-02T13:37:00.006-05:00

Bank of America's wealth management arm announced today an expanded program that will teach children of wealthy families financial skills they will need to manage their inheritance.

The new features of the Financial Empowerment Program of U.S. Trust target "tech-savvy Generation X and Y young adults who are beneficiaries of wealth," teaching skills related to investing, estate planning, wealth management, and what to watch for during live events like marriage or buying a home.

The program is partly a response to a U.S. Trust survey that showed that only about a third of wealthy parents strongly agreed their kids will be able to handle the inheritance they are left.

Families can access the program through their U.S. Trust representative, who will deliver a customized program online, in one-on-one sessions or in family sessions.

Morning roundup: Wall Street and Facebook

2012-02-02T08:36:00.003-05:00

Here's a look at this morning's banking and finance news:

Facebook Inc. tapped six major Wall Street banks to manage its initial public offering - including Bank of America Merrill Lynch - suggesting the social network is taking a conventional approach, the Wall Street Journal reports.
There's plenty of buzz around Facebook's IPO, but wealthy investors aren't getting too excited, Bloomberg writes.
The FDIC is making progress in regulating the country's biggest banks, the New York Times' Economix blog says.
Bank of America lost about 75 percent of its market share in U.S. home mortgages since 2007, while Wells Fargo's presence almost doubled, according to Bloomberg Businessweek.
Likely GOP presidential nominee Mitt Romney is pulling in big money from private equity professionals, Fortune reports.

Edge Capital hires in Charlotte

2012-02-01T17:32:00.003-05:00

Edge Capital Partners, which recently established an office in Charlotte, has hired a client specialist here to bring the city's staffing level to two.

Paige Johnson, a Charlotte native who has worked at Lehman Brothers, Morgan Stanley and Oaktree Capital Management in New York, has returned to her hometown to join Edge Capital, the company said in a news release.

“We’re proud that with her outstanding experience Paige decided to join our team,” said Kendrick Mattox, a Partner and senior investment advisor who manages Edge’s office in Charlotte, in a news release.

Edge Capital manages investments for individuals, families and institutions around the country.

Officials: Financial fraud remains top priority

2012-02-01T16:15:00.003-05:00

Financial fraud continues to be a top priority as investors scramble to rebuild their portfolios amid a shaky economic recovery, authorities said today.

More than a dozen federal, state and local officials met in Charlotte to discuss fraud cases and trends - and share ideas on how to best combat them. The team, part of the year-old Securities and Financial Fraud Working Group, includes representatives from the U.S. Attorney's Office, Securities and Exchange Commission, FBI and other enforcement and regulatory agencies.

"There's less likelihood of things falling through the cracks when there is this kind of cooperation," said Anne Tompkins, U.S. Attorney for the Western District of North Carolina.

Recent highlights from the group include high-profile cases involving Ponzi schemes, mortgage fraud and other financial crimes. Going forward, members plan to focus on high-yield investment scams, corporate fraud, insider trading and other issues related to or resulting from the financial meltdown, Tompkins said.

Authorities have always been interested in those topics, they said during the meeting. But financial fraud is more important than ever these days, given the growing number of retirees - often targets of Ponzi schemes - in North Carolina and beyond, a troubled economy that has made scams easier to uncover and increasing awareness of such crimes, officials said.

"It is really in the public vernacular now," Tompkins said.

She said the group's goals include better cooperation among federal, state and local officials - which, in turn, means more resources to fight financial crimes - and a continued push to hold fraudsters accountable.

“That’s our focus,” Tompkins said. “That’s always our focus. We’re on it.”

BofA, Wells among world's top banking brands

2012-02-01T10:37:00.003-05:00

Charlotte's big banks have earned top spots in a new study measuring the value of bank brands.

Wells Fargo & Co. ranked No. 2 on brand valuation consultancy Brand Finance's international Banking 500 report, behind British lender HSBC. The San Francisco-based bank, which bought Charlotte's Wachovia in 2008, was the top U.S. bank on the list, with a brand valued at more than $23.2 billion, the study released this week found.

Bank of America Corp., which drew criticism last year over a series of PR missteps and a sinking stock price, remains one of the world's best banking brands, Brand Finance found. The Charlotte lender ranked No. 3 on the list, with a brand valued at $22.9 billion, though that was down from the No. 1 spot in 2011.

Overall, with the exception of London's HSBC, European banks performed "miserably" due to economic uncertainty and the Eurozone crisis, the firm said. Meanwhile, banks in emerging markets fared better - brands from Brazil, Russia, India and China now outnumber their European counterparts among the world's top 20 banking brands - and U.S. lenders held steady.

Brand Finance said Wells Fargo has delivered strong results but still faces a difficult future, given the lack of confidence in banking markets.

There are fears that the brand is too deeply connected to the U.S. economy, the firm said, citing its stagecoach logo. However, "in a time where the public trusts banks less and less, a saving grace for the company could be that it is perceived as trustworthy, working on behalf of Americans and not only concerned with profits," it said.

Of Bank of America, Brand Finance acknowledged big hurdles - but said if the bank can successfully integrate its Merrill Lynch brand and continue rehabilitating its wealth management business, then "no doubt it will become a great asset for the bank and make solid contributions to its bottom line."

First published in 2006, the Banking 500 measures the financial value of the world's top banking brands, based on the strength, risk and future potential of a brand relative to its competitors.

Morning roundup: Buffett helping Wells Fargo's investment bank

2012-02-01T09:15:00.003-05:00

Here's a look at what's news in banking and finance this morning:

Though Wells Fargo still has a small investment banking business, the bank's connections with billionaire investor Warren Buffett are pushing it business, Bloomberg says.
Wells Fargo and JPMorgan Chase are increasingly battling to pick up mid-market business clients as Bank of America scales back, the Financial Times reports.
One of President Barack Obama's nominees to the Federal Reserve board earned thousands of dollars in consulting fees from Bank of America and several other banks, financial disclosure forms show, Bloomberg reports.
Facebook is expected to file for its long-anticipated IPO today, The New York Times says. Sources tell the newspaper that Morgan Stanley will be the lead underwriter, with JPMorgan and Goldman Sachs also involved.
Richmond Fed President Jeffrey Lacker appears to be the regional president with one of the smallest net worths, according to financial disclosure forms released by all the branches Tuesday. Here's the New York Times' presentation of the forms. Another note: he's a Bank of America customer, with a checking account, mortgage and equity line of credit.

Federal-state dispute means two exams for N.C. credit unions

2012-01-31T14:05:00.001-05:00

A dispute between the federal and N.C. regulators who oversee credit unions means that all of North Carolina's state-chartered credit unions will now receive two full annual examinations.

Credit union associations decry that decision as burdensome and are pushing for a resolution.

When credit unions are examined, they are given a score known as a CAMEL rating, which looks at its capital, assets, management, earnings and liquidity. Federal credit unions, like Charlotte Metro Credit Union, are examined by the National Credit Union Administration. State-chartered institutions are examined by the N.C. Credit Union Division, which is supported by the NCUA.

In September, the State Employees Credit Union wanted to publicly release its CAMEL rating. Upon advice from the state attorney general's office, the N.C. Credit Union Division gave it authorization to do so.

But while not prohibited by state law, federal rules to prevent credit unions from releasing their examination scores.

"This is an unacceptable release of exempt records," NCUA regional director Herb Yolles wrote in a letter to the CEOs of North Carolina credit unions, dated Jan. 12. The only solution, he said, is for the NCUA to perform independent examinations on North Carolina's state-chartered credit unions.

The N.C. Credit Union League will be holding a special meeting on Wednesday to discuss how to resolve the issue and protect credit unions, league president John Radebaugh said. Examinations require credit unions to expend considerable time and resources.

"It's unacceptable that they have two separate exams now," he said. "It has nothing to do with safety and soundness."

There are 52 state-chartered credit unions that serve 2.1 million people. A number of them are based in Charlotte, including First Legacy Community Credit Union, Carolina Postal Credit Union and Blue Flame Credit Union.

Carolina Premier Bank buying two S.C. branches

2012-01-31T13:16:00.003-05:00

Charlotte-based Carolina Premier Bank announced today that it has agreed to buy two South Carolina branches in its first expansion into the state.

Pending regulatory approval, Carolina Premier would take over two branches from The Palmetto Bank, one in Rock Hill and one in Blacksburg. That would double the number of branches the bank operates.

Carolina Premier would assume all assets and liabilities of the two branches. The terms of the deal were not disclosed, but the bank said its assets after the deal would be about $250 million. Its assets currently are about $200 million.

Carolina Premier is a community bank serving individuals and businesses. It has two branches in south Charlotte, and is building a branch Uptown.

In the spring of 2011, it became a subsidiary of a Washington-based holding company in hopes of expansion.

In today's news release, CEO John Kreighbaum said the bank still has plans of becoming a regional bank in the Mid-Atlantic and Southeast regions, particularly the Washington, D.C., metro area.

Greenville, S.C.-based Palmetto Bancshares Inc., had previously announced its intentions to sell or consolidate four of its branches as part of its goal to return to profitability in 2012.

Rock Hill branch

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Blacksburg branch

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BNC Bancorp reverses 4Q results

2012-01-31T11:11:00.003-05:00

High Point-based BNC Bancorp posted a fourth-quarter profit of $797,000, or 8 cents per share, for common shareholders, it reported today.

That's up from a loss of $6.7 million, or 61 cents per diluted share, for the same period in 2010. The parent company of Bank of North Carolina, which opened its first Charlotte branch in recent weeks and is building a regional headquarters in SouthPark, also turned a profit for the year: $4.5 million for common shareholders, or 45 cents per share, down 18 percent from 2010.

Acquisitions played a big part in the growing company's results. BNC Bancorp incurred $723,000 of one-time expenses associated with merger and acquisition activities in the fourth quarter, for instance, it reported.

The company's assets grew 14 percent last year to $2.45 billion, due to organic growth in North Carolina and assets from the acquisitions of Blue Ridge Savings Bank and Regent Bank of South Carolina. The bank has been expanding in recent years with the help of a $35 million investment in June 2010 from New York private equity firm Aquiline Capital Partners, where former Wachovia chief executive Ken Thompson is a senior adviser.

Thompson now sits on BNC Bancorp's board of directors.

Loans and deposits grew last year and credit improved, though the company is still looking for improvement in its loan portfolio, CEO W. Swope Montgomery Jr. said.

Morning roundup: Small banks stronger than big banks?

2012-01-31T09:29:00.004-05:00

Here's a look at this morning's banking and finance news:

Analyst Chris Whalen says smaller banks are stronger than big banks, praising those that practice old-fashioned lending and avoid risky moves, the New York Times reports. Now, he's setting up an investment fund focused on small and midsized banks.
The Federal Reserve's forecast of nearly three more years of "exceptionally low" rates has left some economists scrambling to figure out what the Fed means, Reuters reports.
Stocks were climbing this morning after European countries agreed to tighter budget controls and Greece made progress on debt talks, Bloomberg writes.
The New York Times reports Wall Street bankers found an ally in their fight against the Volcker Rule, the piece of Dodd-Frank that prohibits banks from making risky bets with their own money, in Davos: foreign governments.
Finance industry gossip site DealBreaker is watching for more investment-bank layoffs at Bank of America this spring.

Will optimism curb market rally?

2012-01-30T16:30:00.003-05:00

Stock markets have posted gains so far this year, but investors should avoid getting too comfortable, a Robert W. Baird & Co. analyst said in a research note today.

Stocks have risen on the promise of continued support from the Federal Reserve, and "while stocks no longer benefit from the widespread pessimism and oversold conditions that were present at the mid-December lows," popular averages are gathering momentum, chief investment strategist Bruce Bittles said.

"Absent excessive optimism, the path of least resistance for stocks in the near term is higher," he said. But he cautioned that the S&P 500 is overbought after a big rally in the last few weeks, and a turn for the worse in Europe could prompt another sell-off.

Stocks fell today amid continued worries about European debt. Still, "sentiment has not yet become problematic, and with the improvements being seen in the broad market, truly excessive optimism may be necessary to raise a caution flag," Bittles said.

The analyst rated some sectors a "buy," including industrials and consumer staples. Financials earned a "hold" rating, though Bittles said trends in the sector are still improving.

Analysts call loan growth a 'bright spot' for large regional banks

2012-01-30T13:37:00.002-05:00

Loan growth in the fourth quarter was a "bright spot" at large regional banks like Wells Fargo and BB&T, analysts with Keefe, Bruyette and Woods said in a research note published today.

The 15 large regional banks under their coverage grew loans an average of 3 percent from the year before, and 2 percent from the quarter before, KBW said. Of the regional banks, 11 posted year-over-year loan growth, and 13 had quarterly loan growth.

Out of all 130 banks KBW follows, banks posted an average loan growth of 1 percent, with 55 percent having year-over-year growth and 64 with quarterly growth.

Analysts have called loan growth a key metric to determining whether the economic recovery is gaining traction.

Research firm says 610,000 switched banks because of Bank Transfer Day

2012-01-30T11:03:00.003-05:00

Javelin Strategy and Research says 5.6 million people changed their banking institutions in the last 90 days of 2011, with 11 percent -- or 610,000 people -- citing Bank Transfer Day as their reason.

Bank Transfer Day, which officially took place Nov. 5, was a social-media-driven backlash against big banks, and encouraged people to switch their deposits to a community bank or credit union.

The Credit Union National Association initially reported gaining 650,000 new members in October, but later drastically reduced the estimate to 214,000.

Javelin's online survey reached about 6,000 in December. The firm says the pool was selected to be representative in gender, age, income, and ethnicity.

The 610,000 who left because of Bank Transfer Day was a threefold increase over the number who left their banks for similar reasons in the previous 90 days, Javelin says.

More people -- 26 percent of those who switched banks -- did so because of fees, Javelin reported.

While Javelin reports the impact as measurable, it did not add up to a significant outflow for the big banks.

Bank of America, for example, reported in a fourth-quarter earnings conference call that account closings spiked 20 percent in the period after its failed debit-card fee announcement and Bank Transfer Day. But the Charlotte bank's average checking and savings account balances were down less than half a percent from the quarter before.

Charlotte firm named a top emerging investment adviser

2012-01-30T10:18:00.003-05:00

Charlotte-based Novare Capital Management has been named one of the top emerging Registered Investment Adviser in this month's Financial Planning Magazine.

The designation goes to firms whose assets under management have grown more than 30 percent since December 2008. Novare, founded in 2000, grew 113 percent between December 2008 and the end of 2010, according to the magazine's data, reaching $385 million in assets under management.

Novare now has $460 million under management spanning 190 families, the firm reports.

"We are very happy with our growth over the last few years, and the most important measure of success is seeing our clients' success and their confidence in our firm," managing director and co-founder Don Olmstead said in a statement.

Morning roundup: BofA Merrill Lynch has new leadership structure

2012-01-30T09:03:00.002-05:00

Here's a look at what's news in banking and finance this morning:

Bank of America's investment bank shook up its leadership Sunday night, naming Christian Meissner its sole head. Sources told the Wall Street Journal, which first had the news, that the move was a way for co-COO Tom Montag to simplify his part of the bank. Other co-COO David Darnell took similar actions in October.
The New York Times takes a look at the exposure to troubled European countries at five large U.S. banks. Collectively, the banks hold $80 billion in exposure, but hedges reduce that to $50 billion, the newspaper's analysis shows.
Banks are lobbying federal regulators in hopes of exempting much of their derivatives trading from the Volcker Rule, part of the Dodd-Frank financial reform law, that restricts proprietary trading, Bloomberg reports.
Rising bank stocks could be an indicator of economic recovery, but some analysts are skeptical that it can continue, the Wall Street Journal reports. Bank of America's stock is up more than 30 percent this year after losing 58 percent of its value in 2011.

N.C. bank expands in Charlotte

2012-01-27T11:46:00.004-05:00

A growing High Point bank has established its first branch in Charlotte and begun construction on a second, which will become its regional headquarters.

Bank of North Carolina opened a branch near Carmel Road and N.C. 51 about two weeks ago, shortly after work started on a 12,000-square-foot space in SouthPark. That location, which will be finished in October, will serve as the bank's southern region headquarters, regional executive Rob Ellenburg said.

"It's been really good to get that dirt turning and go from there," he said.

Bank of North Carolina, part of BNC Bancorp, has been expanding in recent years, adding new N.C. branches and buying a failed bank in Myrtle Beach. In June 2010, it landed a $35 million investment from New York private-equity firm Aquiline Capital Partners, where former Wachovia chief executive Ken Thompson is a senior adviser. Thompson now sits on BNC Bancorp's board of directors.

The new Charlotte branches join an existing commercial lending office on Fairview Road, which has eight employees, mostly commercial lenders, loan assistants and private bankers, Ellenburg said.

Bank of North Carolina, which has about $2.2 billion in assets, plans to grow further in the region, likely adding "spokes in the wheel" around the SouthPark location, he said.

The bank's other locations in the area include branches in Mooresville, Concord, Harrisburg and Salisbury.

Morning roundup: Arizona AG says Bank of America is hampering its investigation

2012-01-27T09:01:00.003-05:00

Here's a look at what's news in banking and finance this morning:

Arizona's attorney general's office says Bank of America is hampering its investigation into lending practices by requiring homeowners to agree not to criticize the company to get a mortgage modification, Bloomberg reports. The bank says that's not true.
Fortune magazine calls Bank of America the "turnaround challenge of the century."
Austerity is the buzzword among the world's bank executives at the World Economic Forum in Davos, Bloomberg says.
In a year in which hedge funds lost an average of 5 percent, the world's largest one gained 23 percent. The New York Times discusses its strategy.
Discover Financial says a Consumer Financial Protection Bureau probe into its marketing affected its profitability last quarter, Bloomberg reports.

Wells Fargo names community banking president for South Charlotte region

2012-01-26T16:40:00.005-05:00

Wells Fargo has named Leigha Smith its community banking president for the South Charlotte area.

Smith graduated from Appalachian State University and joined Wachovia in 1989 as a teller, advancing to her most recent role as Wells Fargo district manager for Cabarrus County.

She will now focus on sales and service at branches in southern Mecklenburg County, Union, Gaston, and Cleveland counties in North Carolina, as well as York and Lancaster counties in South Carolina.

“Leigha’s leadership abilities and experience are perfectly suited to continue the momentum we have built toward being the company of choice in Charlotte for employees and customers,” said Kendall Alley, Charlotte community banking regional president, in a statement.

Morning roundup: Forbes calls Wells Fargo "The Bank that Works"

2012-01-26T09:33:00.004-05:00

Here's a look at today's banking and finance headlines:

The Feb. 13 issue of Forbes features a cover story about Wells Fargo - declaring the San Francisco bank, which bought Charlotte's Wachovia in 2008, "The Bank that Works."
The Wall Street Journal offers a breakdown of how Mitt Romney's income compares to the biggest names on Wall Street. It shows he made more in investment income last year than top executives at big banks, including Bank of America.
Ben Bernanke has laid the groundwork for a third round of large-scale asset purchases if the economy worsens, with some analysts predicting the move will occur this spring, Bloomberg reports.
A "Buffett tax" on high-earning households is unlikely to be implemented before the November elections, the New York Times writes.
U.S. stocks are up this morning after news of an extended easy monetary policy from the Federal Reserve, strong corporate earnings and promising economic data, Reuters reports.

FINRA fines Merrill Lynch $1 million over 2009 bonus structure

2012-01-25T10:26:00.005-05:00

The Financial Industry Regulatory Authority announced Wednesday that it has fined a Merrill Lynch broker-dealer subsidiary $1 million over claims the company failed to mediate disputes with employees over bonuses.

FINRA is a private company that policies brokerages and exchanges. Merrill Lynch, Pierce, Fenner & Smith accepted the penalty without admitting or denying the claims, according to the settlement agreement.

In January 2009, after Bank of America acquired Merrill Lynch, the investment bank started a $2.8 billion bonus program to retain employees, but had them agree to waive their rights to arbitrate disagreements, according to FINRA. That breaks FINRA rules, the agency said.

Merrill also structured the bonus program as a loan from an affiliate instead of the firm itself. When some employees left the company, Merrill Lynch used New York state courts to seek repayment instead of arbitration, FINRA said.

"Merrill Lynch specifically designed this bonus program to bypass FINRA's rule requiring firms to arbitrate disputes with employees, and purposefully filed expedited collection actions in New York State courts and denied those registered representatives a forum to assert counterclaims," FINRA enforcement chief Brad Bennett said in a statement.

Ex-Panther's private equity group buys Wild Wing Cafe

2012-01-25T09:54:00.002-05:00

Axum Capital Partners, a Charlotte private equity firm co-owned by former Carolina Panther Muhsin Muhammad, announced Wednesday that it has bought a controlling stake in Wild Wing Cafe, the South Carolina-based chain of sports bar-restaurants.

Wild Wing Cafe has 32 restaurants in seven states, 11 of which are corporate owned, the rest franchised. Three are in Charlotte. Collectively, the system generated $100 million in revenue in 2011, Axum reported.

The terms of the deal were not disclosed, but it was financed by debt from Fifth Third Bank.

Axum Capital's other partners include Edna Morris, the former president of Red Lobster; Raymond C. Groth, who headed mergers and acquisitions for First Union/Wachovia; and Denis Ackah-Yensu, formerly of McColl Partners.

Morris will be the interim CEO of Wild Wing Cafe.

“Wild Wing Café provides Axum with a proven and well-run concept allowing for strong growth in existing and new markets,” Morris said in a statement. “Our experienced management team has over 120 years of restaurant experience. With Wild Wing’s broad demographic appeal, quality food and superior service, we believe that the concept will sustain and continue to strengthen its competitive position.”

Cecil and Dianne Crowley, who founded Wild Wing Cafe in 1990, will keep an ownership stake and serve on the company's board.

Morning roundup: Moynihan defends BofA's size

2012-01-25T08:40:00.005-05:00

Here's a look at what's news in banking and finance this morning:

In Switzerland, Bank of America CEO Brian Moynihan said his bank and other big banks reflect the economies they work in, MarketWatch reports. He also defended BofA's size, saying it's necessary to support customers in different economies.
Bank of America is warning investment bankers that they could see a 25 percent pay cut this year, in salary and bonus, Bloomberg says.
In the State of the Union address last night, President Barack Obama proposed mortgage legislation that would help underwater homeowners with privately owned mortgages to refinance into FHA-backed loans, The New York Times reports.
Bank lending was up in the fourth quarter, but what should we make of it? The Motley Fool ponders.
The new head of the Consumer Financial Protection Bureau said he supports exemptions to new regulations for small banks, Bloomberg reports. Richard Corday made the remarks on a conference call with trade group Independent Community Bankers of America.

Bank deposit interest rates post record decline

2012-01-24T17:40:00.003-05:00

Interest rates on bank deposits have been falling since August 2007 - the longest and steepest decline in the past 20 years, a banking research firm found.

Market Rates Insight, a California firm that analyzes bank pricing, reports rates have been declining for 53 consecutive months, during which the annual percentage yield fell 3.4 percent, or 85 percent in return value.

The second-longest period of declining rates occurred between November 2000 and July 2003, when the annual percentage yield fell about 2.9 percent. Historically, it has taken an average of two years for deposit rates to begin climbing again after a decline cycle, the firm found.

"The length and severity of the current decline cycle in deposit rates is an indication that the last recession was different than previous recessions in the past 20 years," Market Rates Insight executive vice president Dan Geller said.

Bank of America to test reward program based on spending history

2012-01-24T15:32:00.005-05:00

Bank of America will begin testing Wednesday a program that will give cash discounts to debit and credit card users who take advantage of deals offered them based on their spending history.

Known as BankAmeriDeals, the program hopes to "deepen relationships" with customers and help the bank acquire new ones, spokeswoman Tara Burke said.

The bank will determine deals for customers based on their spending history. It will let customers know what deals are available to him or her through its online banking site, and through text and mobile alerts.

The customer will then pay full price at the participating retailer, and get a cash payment at the end of the month.

The deals are negotiated with retailers through rewards company Cardlytics. Bank of America will not share customer data with the company, Burke said.

The trial starts with bank employees in North Carolina, South Carolina and Nevada on Wednesday. It will be available to all employees by late February, Burke said. It is unclear when the service will be made available to non-employees.

Bank of America CEO Brian Moynihan has cited deepening relationships with customers multiple times as the bank's strategy toward mitigating the impact of recently imposed swipe fee caps on debit card transactions. The bank has also increasingly touted its mobile and online banking.

Bank of Commerce posts $847,000 loss

2012-01-24T13:13:00.003-05:00

Charlotte-based Bank of Commerce reported its third consecutive quarterly loss in the fourth quarter, posting an $847,000 loss as the bank continued to set aside money to cover loan losses.

The loss compares with a $1.3 million loss in the same time period last year, and a $737,000 loss last quarter.

In 2011, the bank's assets shrunk 15 percent as it took losses on foreclosed properties, charged off bad loans and put aside money to cover loan losses. Bank of Commerce's full-year loss was $1.8 million, compared with $1 million in 2010.

“In 2011 we continued to work diligently on improving asset quality by charging down balances on loans where repayment may be partially or fully dependent on the sale of real estate," CEO Wes Sturges said in a statement. "We remain well capitalized and are positioned to serve the borrowing needs of our small business customer in 2012."

People feel less financially secure than last year, Bankrate says

2012-01-24T11:06:00.002-05:00

Americans feel slightly less financially secure than they did a year ago, with retirees among the groups feeling the most insecure, according to an index compiled by research firm Bankrate.com.

But the January results marked the second straight month Bankrate's financial security index increased.

Some results:

41 percent felt less secure in their savings than last year, with 14 percent feeling more secure.
20 percent felt their job security had increased, with 17 percent thinking it had decreased.
28 percent felt their overall financial security had decreased, 23 percent said it had increased.

"From last year to this year, nothing has really changed," said Robert Fragasso, CEO ofFragasso Financial Advisors in Pittsburgh, in a statement reported by Bankrate. "There has not been a tremendous amount of improvement in the economy; the economy has gone sideways. People are still apprehensive about the future and concerned with jobs. And they are definitely concerned with political inaction. The good news is that their feelings didn't get worse."

Bankrate's index is compiled from results of a survey conducted by Princeton Survey Research Associates International, which asks a sample of 1,000 adults five questions each month plus a "wild card" question that changes seasonally. The margin of error is plus or minus 3.9 percentage points.

Citizens South promotes new chief risk officer

2012-01-24T10:10:00.003-05:00

Citizens South Banking Corp. announced Monday that it has named Ira M. “Don” Flowe, Jr., as its new executive vice president and chief risk officer.

Flowe has worked at the Gastonia-based bank since 2004, and most recently served as senior vice president and commercial banking group manager, the bank said in a news release.

Citizens South reported Monday a loss of $2.3 million in the fourth quarter.

Morning roundup: Moynihan faces legal fallout from Merrill deal

2012-01-24T09:38:00.003-05:00

Here's a look at this morning's banking and finance headlines:

Bank of America CEO Brian Moynihan is expected to be deposed in coming months in a string of civil lawsuits involving the bank's handling of its takeover of Merrill Lynch & Co. in 2009, the Wall Street Journal reports. The depositions would be the first for Moynihan since replacing Ken Lewis, who engineered the Merrill deal.
Citigroup CEO Vikram Pandit is one of six co-chairs of the World Economic Forum's annual meeting in Davos, Switzerland - the first from a U.S. bank since JPMorgan Chase's Jamie Dimon in 2008, Bloomberg writes. He leads a delegation that includes top U.S. bank officials, including BofA's Moynihan.
U.S. stocks are trading at their cheapest levels since at least 1990, CNBC reports. That could mean a big increase in the markets this year, according to one research firm.
Stocks fell this morning amid continued concerns about Greece's debt crisis, Reuters reports.
Bank of America continues to be a winner in the markets, with shares rising 3 percent to $7.25 Monday. The Street weighs in on why - and whether the rally will continue.

Forgiving principal would cost Fannie, Freddie $100 billion

2012-01-23T15:45:00.008-05:00

The regulator of Fannie Mae and Freddie Mac says it would cost $100 billion to reduce the principal for its underwater homeowners to the value of their homes, according to a letter to a Congressman released Monday.

In November, Rep. Elijah Cummings, a Maryland Democrat and the ranking member of the Committee on Oversight and Government Reform, asked the Federal Housing Finance Agency to produce documents explaining why it doesn't use principal reduction as a method of foreclosure prevention.

“For too long now,” Cummings said in a public statement at the time, “we have heard superficial excuses about why principal reduction programs are not feasible at Fannie Mae and Freddie Mac, despite a growing chorus of economists and other experts who believe these programs serve the long-term interests of taxpayers."

Fannie and Freddie, government-sponsored entities created to add liquidity to the mortgage market, own more than 30 million mortgages, about half of the U.S. market.

In response, acting director Edward J. DeMarco cited several staff analyses to conclude that principal forgiveness costs the taxpayer more than principal forbearance, which defers payments and adds them to the balance of the loan.

As of June 30, GSEs had about 3 million underwater mortgages, DeMarco wrote. Reducing the principal of all those loans to the homes' value would cost $100 billion, which ultimately would come from taxpayers.

But of those 3 million mortgages, 80 percent of borrowers were current with their payments.

"Fannie Mae and Freddie Mac already offer a loan modification option that reduces monthly payments to an affordable rate using principal forbearance– the same monthly payment that would be in place with forgiveness - and this is most consistent with FHFA obligations as conservator," DeMarco wrote.

DeMarco noted that homeowners with privately owned mortgages are in worse shape: more likely to be underwater and more likely to be delinquent on payments.

Both Bank of America and Wells Fargo have said they offer principal reduction in some instances.

Morning roundup: Small banks charging swipe fees three times as high as big banks

2012-01-23T09:15:00.003-05:00

Here's a look at what's news in banking and finance after the weekend:

Some small banks are now charging merchants three times as much on debit card swipes than their big-bank brethren, the Wall Street Journal reports. The discrepancy is a result of the Dodd-Frank financial reform law's Durbin amendment, and big banks aren't happy.
A former Boston Red Sox catcher has won a case against his Merrill Lynch adviser, The New York Times reports. The ballplayer claimed the adviser put his money into unsuitable investments.
The surge in bank stocks (Bank of America, for example, is up nearly 30 percent year-to-date) might not last, a Reuters columnist says. Many banks core earnings were down in their fourth-quarter financial reports.
The IMF is urging European countries to increase the bailout funds that could be used to bolster the continent's ailing financial sector, The New York Times says.
A number of California-based start-ups are developing programs that would help banks better evaluate borrower candidates, Bloomberg reports, using more relevant data than FICO scores.

Bank of America shrinks for first time in a decade

2012-01-21T09:00:00.000-05:00

In 2011, Bank of America shrank for the first time in a decade.

By selling non-core assets, reducing debt and otherwise streamlining the business, the Charlotte-based bank reduced its total assets by 6 percent in 2011, according to financial statements released Thursday. That brought its assets to $2.13 trillion.

It marked the first time the bank's total assets had shrunk over the course of a year since 2001. In the intervening years, the bank nearly quadrupled in size.

In 2001, Bank of America's assets fell 3 percent, to $622 billion. Trying to stave off recession, the Federal Reserve cut interest rates almost a dozen times.

In the bank's annual report for that year, CEO Ken Lewis wrote that the bank used those falling interest rates to shed low-yielding assets as the yield curve steepened.

Foreclosure workshop coming to Charlotte

2012-01-20T14:21:00.003-05:00

More help is coming for homeowners struggling to make their mortgage payments.

The government's Making Home Affordable program, HOPE NOW alliance and NeighborWorks America are sponsoring a mortgage help event Tuesday uptown. The free workshop is open to all homeowners at risk of foreclosure, offering face-to-face meetings with counselors and mortgage specialists.

The event takes place from 11 a.m. to 7:30 p.m. Tuesday at the Charlotte Convention Center, 501 S. College St. Homeowners will have a chance to talk to nonprofit counselors about possible alternatives to foreclosure and meet with representatives from more than a dozen major mortgage lenders, including Bank of America Corp. and Wells Fargo & Co.

Homeowners will be seen on a first-come, first-served basis and should bring all related documents, including mortgage information and hardship letters. For more information, visit www.MakingHomeAffordable.gov or www.HOPENOW.com.

What's next for bank fees?

2012-01-20T11:36:00.002-05:00

Big banks have backtracked on plans to impose debit card fees, but fallout from the Durbin amendment - which caps the “swipe fees” merchants pay banks when customers pay with their debit cards - continues, a new report found.

Celent, a Boston-based financial research and consulting firm, says banks are still looking for ways to cut costs or raise revenue. (Bank of America said Thursday account closings spiked after it announced its controversial $5 debit card fee.) The top considerations: raising checking account maintenance fees, cutting debit card reward programs and imposing or raising fees on other products and services.

“It will take a better part of 2012 for the full effects of Durbin regulations to become clearer, but the early signs are that it won’t reach all of its intended outcomes,” Celent said in the report, a broader study of IT spending in banking.

The firm predicts more regulation and disputes with merchants to come, adding that “the fight and the story are far from over.”

Bank of America account closings spike, but impact small

2012-01-20T10:49:00.011-05:00

Bank of America account closings spiked after the Charlotte bank announced a controversial $5 debit card fee, but its checking and savings account balances appear largely unaffected.

Account closings were up 20 percent in the fourth quarter over the same time period in 2010, CEO Brian Moynihan told analysts during a conference call Thursday, as the bank became the target of criticism around the country.

Once the bank canceled plans for the fee, Moynihan said the closings slackened.

Despite the closings, average checking and savings account balances were down less than half a percent from the quarter before, to $204 billion, according to financial results released Thursday.

"Yes, we had some impact from the $5 debit fee. That's why we made the decision to reverse it," Moynihan said Thursday on the conference call. "Those impacts, in the scheme of things, will be manageable."

Total average and period-end deposits were down 1 percent from the quarter before, to about $1 trillion. The bank attributed it mainly to a decrease in high-interest time deposits like CDs. Deposits were still up from the fourth quarter 2010.

Morning roundup: Has BofA learned its lesson?

2012-01-20T09:24:00.003-05:00

Here's a look at this morning's banking and finance news:

As Bank of America reported fourth-quarter earnings, chief executive Brian Moynihan showed he has learned a few lessons, the Wall Street Journal writes. (Read about the bank's fourth-quarter profit here.)
A Motley Fool analyst offers another look at the bank's performance, posing the question, "Is Bank of America Back?" He's bullish on the bank, he writes on AOL's DailyFinance, but acknowledges hurdles remain.
Reuters examines top Justice Department officials' connections to big banks embroiled in the foreclosure crisis.
A weak year for investment banks suggests a new normal on Wall Street. The New York Times discusses whether it's a result of temporary pressure or permanent change.
Stock markets were set for a lower open on Friday amid weaker-than-expected quarterly results at Google Inc., American Express Co. and other companies, Bloomberg reports.

BB&T fourth-quarter profits up 88 percent

2012-01-19T13:47:00.006-05:00

BB&T's fourth-quarter profits were up 88 percent over the same time period last year, the Winston-Salem bank announced Thursday.

The bank beat analysts' estimates with $391 million net income attributable to shareholders -- 55 cents per share -- compared with $208 million in the fourth quarter last year, the increase driven by strong loan and deposit growth and a decrease in nonperforming assets.

For 2011, the bank earned $1.3 billion attributable to shareholders, up 58 percent from the year before.

"The year 2011 was an outstanding year for BB&T considering the challenges facing the economy and financial services industry," CEO Kelly S. King said in a statement. "We met essentially all of our strategic objectives, and are successfully emerging from the credit cycle."

Morning roundup: Bank of America ekes out small profit in 2011

2012-01-19T09:35:00.002-05:00

Here's a look at what's news in banking and finance this morning:

Bank of America reported earnings this morning, about $1.6 billion net income to shareholders in fourth quarter, and $85 million for the year. Here's the Wall Street Journal's early take. And here's The New York Times look.
New York Times columnist Nicholas Kristof ponders the question: Is banking bad?
Morgan Stanley reported a loss today, but it was smaller than estimated, Bloomberg reports.
The CEOs of JPMorgan Chase and Goldman Sachs say Wall Street will come back from a trading revenue drop in 2011. Analysts and other bankers doubt it, Bloomberg says. (Bank of America said in a call with analysts this morning that they expect trading to stay flat).

Bank of America dropped most branches in second half of 2011

2012-01-18T17:02:00.003-05:00

Bank of America had more net branch closings than any other bank in the second half of 2011, according to data compiled by SNL Financial.

The Charlotte-based bank closed 41 branches around the country, while opening five -- a net loss of 36. The bank still has more than 5,800 branches around the country, one of the largest branch networks, according to the most recent FDIC data.

Wells Fargo closed 34 branches while opening 16, for a net of 18 closings, SNL's data show. It has about 6,400 domestic offices, according to the FDIC.

Peer JPMorgan Chase was the leader in branch openings, launching 178 while closing 12 for a net of 166. CEO Jamie Dimon has publicly put faith in the branch network, and the bank plans to open dozens more in 2012. Closing in on Bank of America, it has more than 5,500 branches, according to the FDIC.

Overall, more branches closed than were opened in the second half of 2011. Indiana topped the list of states with the most net branch closings. Old National Bancorp, based in that state, was second overall, with a net loss of 33 branches.

North Carolina was in the middle of the road, losing a net seven branches. South Carolina ranked near the bottom, losing a net 17. The Southeast lost the most of any region in the U.S.

California gained the most, with a net 57 opened, leading the growing West Coast market.

BB&T in the running for second-largest Florida bank

2012-01-18T16:56:00.003-05:00

UPDATE: BankUnited now says it will stay independent, no longer seeking a buyer, Bloomberg reports.

BB&T has submitted a bid for Florida's second-largest bank, according to reports by The Wall Street Journal and Bloomberg.

BankUnited, based in Miami Lakes, has $11 billion in assets. It hasn't publicly said it is seeking a buyer, but sources told the two media outlets that it has sought bids.

Toronto-Dominion Bank has also submitted a bid, the Wall Street Journal stated. Pittsburgh-based PNC Financial Services Group considered a bid, but decided not to submit one.

BB&T, based in Winston-Salem, has been aggressively growing market share in Florida. In November, it announced an agreement to purchase Ft. Lauderdale-based BankAtlantic, taking on $2.1 billion in loans and $3.3 billion in deposits.

What earnings reports so far could mean for Bank of America

2012-01-18T13:00:00.000-05:00

A number of major banks, most notably JPMorgan Chase, Citigroup and Wells Fargo, have reported their fourth quarter and year-end earnings ahead of Bank of America's scheduled report Thursday.

Their results are a mixed bag for the Charlotte-based bank. Here's a look at three areas analysts are talking about.

Investment banking and trading. JPMorgan's investment bank took a hit year-over-year, both in investment banking fees and principal transactions en route to missing expectations. Citigroup, too, didn't fare well as capital market activity was weak. This could be a bad sign for Bank of America, whose investment bank can be a major profit driver.

Loan growth. Most banks posted some loan growth in the quarter, which clearly is a good sign for Bank of America. But Wells Fargo's loan growth from existing operations was a smaller part of its overall total, driven by an accounting gain and the purchase of several loan portfolios from troubled European banks. Bank of America is not in the position to buy growth, but could be in position to see organic loan growth like its peers.

Rep and warranty. This has been cited by analysts as a prime worry for Bank of America. Mortgage repurchase losses increased at JPMorgan Chase, and very slightly at Wells Fargo. Still, JPMorgan's losses were less than analysts at Keefe, Bruyette and Woods had predicted, leading them to reconsider their very dour initial outlook.

Morning roundup: More on big-bank earnings

2012-01-18T09:29:00.003-05:00

Here's a look at this morning's banking and finance headlines:

Bank of America's string of asset sales helped raise capital and shed risk - but the moves also might slash profits going forward, Bloomberg reports. Now, with fewer assets left to sell, CEO Brian Moynihan can't rule out selling shares or more crucial businesses if needed, the story says.

Another Bloomberg piece highlights a tidbit from Wells Fargo's conference call with analysts Tuesday: CEO John Stumpf "could care less" that his bank is overtaking rivals in investment banking and capital markets.

In the latest major earnings report, Goldman Sachs topped analysts' expectations despite significantly lower revenue and profit, the Wall Street Journal reports. Fourth-quarter profits fell nearly 60 percent from the year before, though earnings per share were well above analysts' estimates, partly due to cost-cutting.

Bank of America has nabbed a spot on another "Most Hated Companies" list - this time in a recent post by financial news site 24/7 Wall St.

The Democratic Party's decision to move President Barack Obama's acceptance speech to Charlotte's Bank of America Stadium is drawing some criticism from party activists over the big-bank ties, NBC reports. Conservative political site Townhall.com also questions the move, calling it "naked partisan money-grubbing in populist garb."

BofA simplifies trading fees, expands platform

2012-01-17T09:16:00.003-05:00

Bank of America Corp. has simplified pricing for its Merrill Edge self-directed investing platform, it announced this morning.

The Charlotte bank eliminated the four-tiered pricing structure, with all stock and exchange-traded fund trades now costing $6.95. Clients who have more than $25,000 in cash balances with Merrill Edge or Bank of America will continue to receive 30 free trades per month.

The company also eliminated account minimums and maintenance fees for self-directed accounts. Merrill Edge head Alok Prasad said in a news release about 75 percent of the bank's self-directed investing clients would see lower per-trade fees, and no client would see fees increase as a result of the change.

"One of our top goals is to listen to our clients and deliver solutions that help them meet their needs in a way that is easy to understand," he said. "Simplifying our pricing structure met a key client need, while also allowing us to take an industry-leading position."

Bank of America also introduced a new streaming trading platform that provides clients with real-time market analysis, among other features, and additional online investment choices.

The changes are part of an ongoing effort to serve investment clients: the bank last year doubled the number of its Merrill Edge Financial Solutions Advisors, who provide guidance to clients with less than $250,000 to invest, to more than 1,200 across the U.S.

Morning roundup: Wells Fargo posts record earnings, Bank of America chairman says he has confidence in CEO

2012-01-17T07:35:00.007-05:00

Here's a look at what's news in banking and finance after the long weekend:

Wells Fargo posted record earnings of $4.1 billion in the fourth quarter of 2011 and $15.9 billion for the full year, the company reported Tuesday morning.
At a conference in Abu Dhabi, Bank of America Chairman Chad Holliday said he fully supports CEO Brian Moynihan, Reuters reports.
The New York Times took a long look at Anne Finucane, Bank of America's chief strategy and marketing officer, and her attempts to reshape the bank's image.
Bank of America's earnings report on Thursday will be one of the two most important this week, TheStreet.com says, as it will give investors a look at "the troubled areas of the U.S. banking system." The other is Google.
European banks are using unusual accounting methods to help meet capital requirements set by their regulators, including taking paper losses on acquisitions made years earlier, the Wall Street Journal says.
“You know those big paydays on Wall Street?” Alan Johnson asks at cocktail parties, according to The New York Times. “I have something to do with them.”

Southern Shows president named Richmond Fed Charlotte office chairman

2012-01-13T17:32:00.003-05:00

Southern Shows Inc. President David Zimmerman has been named chairman of the Federal Reserve Bank of Richmond's Charlotte office.

He takes over the chairman's role -- a one-year term -- from Claude C. Lilly, dean of Clemson University's School of Business and Behavioral Science. Before that, Lilly had been dean of UNC-Charlotte's business school.

Zimmerman has served as a director of the Charlotte office since 2008. Southern Shows puts on large-scale events like the Southern Christmas Show.

The Richmond Fed also announced Friday that Christopher J. Estes, executive director of the North Carolina Housing Coalition, has been appointed to the Charlotte office's seven-member board of directors.

Morning roundup: Earnings season begins

2012-01-13T09:27:00.003-05:00

Here's a look at this morning's banking and finance news:

JPMorgan Chase & Co. reported a 23 percent drop in fourth-quarter profits as investment banking revenue fell and its mortgage business continued to lose value, the Wall Street Journal reports. It was the first major bank to report its earnings for the fourth quarter; Bank of America Corp. reports next Thursday.

Analysts say despite the decline in profits, JPMorgan's results "bode well" for the rest of the industry, Reuters writes.

The weak lending environment can't be blamed solely on the banks, CNBC reports.

An improving housing industry will boost the economy this year, according to a Fannie Mae forecast, Bloomberg reports. The forecast predicts sales of new and existing homes will increase 3.5 percent and housing starts will rise 16 percent.

Stocks fell this morning after reports that a downgrade of European credit ratings could come as soon as Friday, the AP reports.

Citizens South small business lending up 9 percent, U.S. Treasury reports

2012-01-12T13:59:00.004-05:00

Gastonia-based Citizens South Banking Corp. increased small business lending by 9 percent since mid-2010, the U.S. Treasury reported this week, making it one of the 78 percent of community banks that received money from the criticized federal Small Business Lending Fund to increase its lending.

About $4 billion was put into 332 banks and community development loan funds through the program. From a baseline of $35.9 billion in small business lending -- taken from the average lending in the fourth quarters leading up to June 30, 2010 -- the institutions have since increased their lending by $3.5 billion, a 10 percent increase.

The figures come from a Treasury report to Congress on the Small Business Lending Fund, which was created in 2010 to provide capital to community banks.

Critics have called the Small Business Lending Fund a flop. About $30 billion was authorized, but only $4 billion spent after few banks applied for the funding. And about half of the money spent was used by banks to pay off TARP, the Wall Street Journal reported in October.

Citizens South was one of the banks to do that. The bank said in September that it used lending fund money to pay off the $20.5 million it owed the government through TARP.

Having money from the fund incentivizes banks to increase their small business lending. When it entered the program, Citizens South said it would initially be making 4.84 percent dividend payments quarterly, but that could be reduced to 1 percent by the middle of 2012 should it increase small business lending by 10 percent or more.

According to this week's Treasury report, Citizens South's baseline small business lending level was $126.4 million. As of Sept. 30, it had increased 9.2 percent, to $138 million. The bank now has a dividend payment of 3.3 percent.

A Charlotte-based bank hasn't fared as well. Premara Financial Inc., the holding company for Carolina Premier Bank, has shrunk its small business lending by 9.2 percent. It has $6.2 million in Small Business Lending Fund money outstanding.

Other N.C. banks with lending fund money, with their percent change in small business lending:

First Bancorp, Troy. 2.7 percent
Live Oak Bancshares Inc., Wilmington. 4.2 percent.
Providence Bank, Rocky Mount. 20.7 percent.
Select Bancorp Inc., Greenville. 50.3 percent.
Union Bank & Trust Company, Oxford. 16.3 percent.

N.C. community development loan funds (unregulated financial institutions, generally nonprofit and reliant on grants) with SBLF money, with their percent change in small business lending:

Mountain BizCapital Inc., Asheville. 13.8 percent.

Morning roundup: Bank of America to rethink advertising

2012-01-12T09:01:00.004-05:00

Here's a look at what's news in banking and finance this morning:

Bank of America says it wants to rethink its advertising strategy, and has put its account in review, according to The New York Times. The last time this was done was in 2005.
JPMorgan Chase is likely to keep its distinction of being the country's most profitable bank when it reports earnings this week, but Wells Fargo is closing in, Bloomberg says. Profits at the San Francisco bank are at an all-time high.
As banks prepare for proxy season, experts expect investors to increasingly push for measures to cut executive pay, the Wall Street Journal reports.
Both U.S. and European banks are slicing their spending in Asia, mostly to control costs, Reuters says.
Republican presidential candidate Jon Huntsman could align himself with Democrats on bank regulation, The New York Times' Economix blog posits. The former Utah governor has made the strongest statements about limiting big banks.

Bank of America stock again tops Dow, crosses 20 percent for the year

2012-01-11T18:13:00.000-05:00

Bank of America's stock again was the top performer in the Dow Jones Industrial Average on Wednesday, gaining nearly 4 percent on a relatively sluggish day for the market.

The Charlotte-based bank has now seen its stock rise 23.5 percent so far this year. It closed Wednesday at $6.87.

The Dow was down slightly Wednesday, closing 13 points lower at 12,449.

Bank of America's stock was the worst performer in the Dow last year, falling 58 percent amid ongoing mortgage liability concerns and several hits to the company's image. Interestingly, Netflix -- which saw its stock fall about 60 percent amid financial troubles and a controversial decision to split its business that backfired -- has been the top performer in the S&P 500 this year, up about 33 percent.

Analysts have long been bullish about bank stocks, citing "cheap" price to earnings ratios and improving underlying fundamentals. But the financial sector saw steep drops last year as European worries troubled investors.

Financials overall have performed well so far this year, heading into fourth quarter earnings season which begins later this week.