BB&T buys Calif. insurance company

In its second announced acquisition this week, BB&T Corp. said Thursday that its insurance arm would buy a California-based employee benefits consulting and administration firm.

The deal with Precept Group closed Tuesday and added 140 employees to BB&T's insurance unit.

"This acquisition positions us as a leader in this space at the most opportune time imaginable," insurance services chairman Wade Reece said in a statement.

Precept focuses on save money in human resources through greater efficiency and improving employee health at companies with between 50 and 50,000 employees. As health care costs rise and regulatations strengthen, this is ever more important, BB&T says.

Though Winston-Salem-based BB&T does not have any bank branches in California, it entered the insurance market there in 2008 when it bought San Diego-based UnionBanc Insurance Services. It is the sixth-largest insurance broker in the U.S.

On Tuesday, the bank announced it would buy BankAtlantic, based in South Florida, gaining 78 branches and $3.3 billion in deposits.

Morning roundup: lawsuits, fees and taxes

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

• A judge ruled that Illinois can move forward with a lawsuit alleging Wells Fargo & Co. steered minority borrowers into risky mortgages at the height of the housing bubble, the Wall Street Journal reports.

• Fees won't fly with customers, so banks are turning to wealth management to help boost revenue, according to InvestmentNews.

• While Bank of America's decision to eliminate its $5 debit card fee is a win for customers, the bank will likely try to find new ways to regain fees on customers such as creating promotions to encourage customers to use credit cards, Forbes writes.
  

• A study released today found 280 of the biggest publicly traded American companies faced federal income tax bills equal to 18.5 percent of their profits during the last three years, lower than the official corporate tax rate and lower than competitors in many other countries, the New York Times reports.
  

• Global stocks rose on a European Central Bank rate cut, signs Greece might avoid a referendum on a euro-zone bailout package and a government report showing jobless claims in the U.S. fell slightly, the Wall Street Journal reports.
  

Bank analyst calls dropped debit card fees a win for 'the Socialists'

Consumers largely celebrated Bank of America's decision Tuesday to drop its planned $5 debit fee. Bank analysts, not so much.

In a note distributed Wednesday, analyst Richard Bove of Rochdale Securities called the fact that several major banks have cancelled plans to institute fees a win for "the Socialists" and the product of an irrational discussion.

"The public furor over the debit card issue has been overwhelming," Bove writes. "As usual, the issues have not been explored appropriately by the Congress, press, or the public. The concept to 'get the banks' was in full bloom over this issue and no thought of rational discussion was, or will be, considered."

The banks pointed to the cap on "swipe fees" paid by merchants on debit card transactions as part of the Dodd Frank financial reform law as the impetus for the debit card fees. Bank of America said it would lose $2 billion annually.

Bove notes that he is not aware of any retailer giving rebates for using debit cards or otherwise passing savings on to customers.

"It is giving a $12 billion windfall profit to the retailing industry at the expense of the banks," Bove writes.

Bove also takes on the argument that debit cards are using only the consumer's money and there shouldn't be a charge for getting it back. He says that wrongly assumes that there is no cost to running a bank and that banks are making so much money on deposit balances that other service should be free.

The part Bove says is Socialist is the idea of government setting prices for the private industry.

"Is it now public policy that the Congress will intervene in any industry that it deems appropriate to set product prices?" Bove asks. "Will Congress set the price of gasoline below the cost of producing it? How about food prices?"

Where do you come down in the debate?

Morning roundup: Reactions to BofA dropping debit card fee

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

• Bank of America made hundreds of headlines by announcing it would drop its much-derided $5 debit card fee. The Seattle Times says the bank finally got a clue. The Star-Ledger says its the right move. And a New York Times blog wonders whether this is a signal that consumers are gaining more power.


• Bank of America is foreclosing on a Texas home that no longer exists after it was wiped out by a hurricane, the Houston Chronicle says.


• The cost to protect against corporate default, including for Bank of America, jumped as investors worry the Europe bailout plan could fail, Bloomberg reports.


• Banks around the world are cutting personnel costs, by far their biggest expense, the Wall Street Journal reports.


• The leader of the world's largest bond fund says banks haven't done enough to raise capital levels, Reuters reports.

So, what's your take on Bank of America cancelling the debit fee? Is it enough to help restore the bank's image?

Homeowners able to request independent foreclosure review

Homeowners foreclosed on by Bank of America, Wells Fargo, Wachovia and a number of other mortgage servicers will be able to request an independent foreclosure review, federal regulators announced Tuesday.

If errors are found, the homeowner is eligible to receive compensation. The process is part of an agreement between regulators and the mortgage servicers made in April.

For more information, including a full list of servicers participating in the review, go to IndependentForeclosureReview.com.

To qualify, the foreclosed property must be the person's primary residence and the foreclosure must have been active between Jan. 1, 2009 and Dec. 31, 2010.

Does this affect you? Call the Observer at 704-358-5235 or email adunn@charlotteobserver.com.

Morning roundup: Should BofA have kept fees hidden?

Here's what's happening this morning in financial news:

• Bank of America Corp. is "in a tight spot" on debit fees as other banks scrap similar plans, Bloomberg reports.

• U.S. stocks are sliding this morning - led by banks - as Greece's plans for a referendum on its bailout package sparked worries worldwide, the Wall Street Journal writes.

• The Atlantic's Daniel Indiviglio makes a case for the danger of transparency, wondering if Bank of America would have been better off creating new hidden fees.

• Big U.S. banks have increased their sales of insurance against credit losses to holders of European debt, boosting the risk of payouts in the event of defaults, Bloomberg writes.

• Social media users posted more negative opinions than positive about Bank of America and other large banks over the last year, according to a new report from Amplicate.

What do you think? Will this morning's market slide continue? And do you think Bank of America would have fared better with the public if it hadn't been so transparent about its planned $5 debit card fee?

BB&T expands in South Florida

BB&T is growing.

The Winston-Salem-based bank announced Tuesday that it is acquiring BankAtlantic, a Ft. Lauderdale-based bank, for $301 million.

BB&T will take on 78 branches, $2.1 billion in loans and $3.3 billion in deposits, according to a news release.

The move marks a strategic expansion for a bank that continues to get larger, though executives are hesitant to say they're in expansion mode.

"We've been growing throughout the whole downturn," Chief Financial Officer Daryl Bible said.

He called the BankAtlantic acquisition a strategic move in a region where the bank had only a 14th-largest market share. BB&T will now have the sixth largest market share in the Miami market.

"We're really still focused on growing organically," Bible said. "We look at anything within our footprint or contiguous marketplace."

As of June 30, BB&T was the 18th largest bank by assets in the United States, with $159 billion. It has since grown to $168 billion in assets. It has the third-largest market share in the Charlotte area.

BankAtlantic has struggled through the economic downturn. Though it made a $23.4 million profit in the second quarter, it lost money in the 15 quarters before that. In mid-October, BankAtlantic completed a 5 to 1 reverse stock split.

But BB&T will not be acquiring any nonperforming or distressed assets as part of the deal, the company said.

"This appears to be a relatively low-risk transaction, which makes sense from a strategic standpoint," bank analyst Christopher Mutascio of Stifel Nicolaus wrote in a research note.

Bible said he did not know when the deal would close. It still needs regulatory approval, but Bible said regulators did not make any objections when BB&T put in its bid.

He said conversion costs would not be material in any given quarter.