Friday, May 30, 2014

SunTrust names Charlotte wealth management head

SunTrust Banks said it has a new head for its Charlotte office that provides wealth-management services to affluent athletes and entertainers.

John Hondros has been promoted to managing director of the Charlotte and Daytona Beach, Fla., offices of the Atlanta-based bank's Sports and Entertainment Specialty Group, SunTrust said.

Hondros is based in Charlotte and has been with SunTrust since 2004. Most recently, he was a client adviser and senior vice president for the bank.

The specialty group is a division of the bank's private-wealth-management business. The group provides a range of services to the music, sports and film industries, from mortgage and aircraft financing to investment advice and retirement planning, according to SunTrust's website.

In the Charlotte area, the specialty group's offices are in SouthPark and Mooresville. According to SunTrust, the group employs 10 people in North Carolina. A breakdown for Charlotte was not immediately available.

The group's other hubs are in Atlanta; Nashville, Tenn.; Boston; Los Angeles; San Diego; and San Francisco.

It's not unique for banks to have wealth management teams focused on specialty areas. Bank of America's Merrill Lynch unit, for example, has teams that also cater to athletes and entertainers.

Wealth management has been an area of growth for banks at a time when other sources of revenue, such as mortgage lending, have been declining. Bank of America’s overall wealth-management business earned $3 billion in 2013, the most in the company’s history.

In recent months, banks and investment firms in the Charlotte area have been staffing up to serve the baby boom generation as it hits retirement age. The hiring also comes as the number of millionaires in Charlotte is poised to grow: A Nielsen Co. study in May of last year predicted that the number of millionaire households in Charlotte would rise by 18 percent in the next five years.

Thursday, May 29, 2014

Report: S.C. among worst states for affordable banking

South Carolina is among the worst states when it comes to affordable banking, according to a report released Wednesday.

GOBankingRates ranked South Carolina No. 8 on its list of the 10 worst states for affordable banking. North Carolina ranks 39th and is considered "average" for affordability, the report said.

The website said the rankings are based on, among other things, deposit account interest rates, average checking and savings fees and the number of banks and credit unions in a state.

No. 1 Arizona, followed by Washington, D.C., Connecticut, Nevada, South Dakota, California and Indiana, ranked lower than South Carolina. Delaware was in ninth place and Wisconsin 10th.

Here's what the report said about South Carolina:

Average annual checking account rate: 0.109 percent
Average annual savings account rate: 0.103 percent
Average minimum checking account balance requirement: $3,672
Average minimum savings account balance requirement: $2,095
Number of financial institutions: 209
Average non-sufficient-funds returned check fee: $31
Average automated teller machine/debit fee: $3
Average monthly savings account maintenance fee: $4
Average monthly checking account maintenance fee: $14

The report also ranked the top 10 best states for affordable banking. Here's the list, ordered from first place to 10th:

1. Arkansas
2. Iowa
3. Oklahoma
4. Massachusetts
5. Missouri
6. Nebraska
7. Louisiana
8. Kansas
9. Rhode Island
10. Tennessee

Wednesday, May 28, 2014

Wells Fargo CFO: Spring housing market not living up to expectations

Wells Fargo is seeing higher demand for home loans in the second quarter of this year compared with the first quarter, but the appetite for mortgages appears to be falling short of expectations for the traditionally busy spring homebuying season, Chief Financial Officer John Shrewsberry said at a conference in New York on Wednesday.

The lender's mortgage "pipeline" -- loans that are in the works but have not yet been closed -- is up from the first quarter "but probably not as strong as we might have imagined it being given that this is the beginning of the so-called summer selling season, or spring selling season, when people tend to sell their homes," Shrewsberry said.

Despite the lower-than-expected demand, Shrewsberry described Wells Fargo's mortgage business as "still good."

"It's still registering appropriate profitability. But we might have imagined that there would be been more of it a quarter ago," he said.

Wells Fargo, like other mortgage lenders, is looking for a pickup in mortgage activity. Compared with a year ago, lenders nationwide are coping with lower demand for mortgages, largely as a result of less desire from borrowers to refinance since mortgage rates began rising last year.

In a report last month, the Mortgage Bankers Association said applications for mortgages to purchase homes are about 16 percent below year-ago levels and applications to refinance are about 70 percent below where they were a year ago.

Wells Fargo and other banks, including Charlotte-based Bank of America, have slashed thousands of employees in their mortgage units as fewer borrowers refinance.

Wells Fargo, the largest U.S. mortgage lender, is often seen as a bellwether for the housing market. Last month, during a first-quarter earnings conference call with analysts, executives at the San Francisco bank said they were optimistic about prospects for the spring housing market.

During the first quarter, Wells Fargo reported that it originated $36 billion in mortgages, down from $109 billion the same period a year earlier.

Tuesday, May 27, 2014

Bank of America's slashes list of corporate, investment banking clients

Bank of America has cut its list of corporate and investment banking clients by more than half in the last three years, part of the Charlotte bank's strategy to focus on the largest and most profitable companies.

A list numbering nearly 12,000 in 2010 has been cut to about 5,500. Three-quarters come from the investment banking side or need both corporate and investment banking services, according to a presentation Tuesday from Christian Meissner, head of global corporate and investment banking for Bank of America.

In that time, the average profit per client has more than doubled, to more than $2 million.

The client culling hasn't hurt the bank's revenue, however. Bank of America was tops in investment banking fees in 2013, at $6.4 billion, edging out JPMorgan Chase.

Thursday, May 22, 2014

SEC reportedly probing Merrill Lynch for anti-money laundering violations

The U.S. Securities and Exchange Commission is investigating Bank of America Corp's Merrill Lynch brokerage over whether it is doing enough to learn about its clients' identities, sources have told Reuters.

The SEC is also investigating another brokerage, Charles Schwab, in a similar probe, the news outlet reported.

The regulator is looking into whether the brokerages missed red flags that could indicate attempts to move money illicitly or to feed proceeds from drug trafficking and other crimes into the financial system by failing to adequately know their customers, Reuters reported, citing sources.

Reuters, citing sources, reported that the investigation so far has uncovered that Schwab and Merrill accepted shell companies and individuals with fake addresses as clients. In both cases, some of the accounts, whose ownership the brokerages did not adequately investigate, were eventually linked to drug cartels, the sources said.

The investigation is the latest sign that a crackdown on money laundering is expanding, the news outlet reported. The probes are part of an SEC sweep of the brokerage industry to make sure brokerages are not breaking anti-money laundering rules.

Spokesmen for the SEC and Merrill declined to comment. A Schwab spokeswoman said the company does not comment on investigations by regulators but takes its due-diligence responsibilities regarding clients very seriously.

It's unclear what penalties the SEC might seek or whether any individuals or other financial institutions might be charged.

Wednesday, May 21, 2014

Bank of America, others gag homeowners in settlements

Bank of America is among lenders that are increasingly demanding that homeowners promise not to insult them publicly after the terms of their underwater mortgages are eased, Reuters reports, citing consumer lawyers.

The gag orders and bans on suing are appearing when borrowers use litigation to settle foreclosure and loan modification cases, the Reuters story says. Consumer lawyers say the gag orders and bans are also popping up when mortgage servicers modify loans outside of the courts in what are known as "ordinary loan modifications."

The concern, lawyers say, is the clauses can hurt borrowers who later have issues with their mortgage collector by preventing them from complaining publicly or suing. 

Bank of America spokesman Rick Simon said the Charlotte-based bank doesn't include non-disparagement clauses and releases of claims in the course of ordinary loan modifications, only in ones involving negotiated legal settlements, according to the story. Waivers don't preclude customers from filing suits on post-settlement issues, he said.

Consumer lawyers are overstating the importance of the clauses, attorneys for lenders and mortgage servicers say, according to the story. Banks don't want to be sued again for the issues resolved in the settlement, but they realize they may be sued if they are responsible for a future wrong, said Martin Bryce, a partner with Ballard Spahr in Philadelphia who specializes in consumer finance and banking.

By the way, here's Bank of America's full response to the Reuters story: 

We do not include non-disparagement clauses or releases of claims in normal modification agreements.

Non-disparagement and related confidentiality clauses may be part of negotiated settlements that provide additional consideration to the customer.

Any waiver of future claims only applies to matters that occurred up to the time of the settlement and does not preclude the customer from filing suits on post-settlement issues.

Tuesday, May 20, 2014

U.S. to sell CommunityOne shares bought in bailout

Charlotte-based CommunityOne Bancorp is one step closer to exiting the U.S. government's financial crisis-era bailout program after the lender said Monday the U.S. Treasury Department will sell about 1.1 million of its shares.

CommunityOne is the last bank based in the Charlotte area still in the Troubled Asset Relief Program, known as TARP.

In 2009, the bank, then known as FNB United Corp., sold the Treasury Department $51.5 million in preferred stock under the Troubled Asset Relief Program. As part of the bank's recapitalization two years later, the Treasury Department converted the preferred stock to common stock at a 75 percent discount.

The Treasury Department said Tuesday it is selling the shares for $9.35 per share, the price at which the stock closed Monday. The Treasury Department is expected to receive $10.1 million from the sale.

After the sale, the Treasury Department will no longer own common shares of CommunityOne but will continue to hold rights to purchase 22,072 shares of the bank's common stock.

FNB United Corp.'s name was changed to CommunityOne Bancorp last year after it completed the merger of its two banks, Granite Falls-based Bank of Granite and CommunityOne Bank, as part of an effort to help it return to profitability.

The lender has struggled to be profitable since the financial crisis. But that is changing: It posted a profit in the first three months of this year, its third profitable quarter in a row.

CommunityOne Bank has $2 billion in assets and 50 branches in North Carolina, including in the Charlotte metropolitan area.

It’s not unusual for the Treasury Department to sell TARP investments for less than the original value as it unwinds the program. According to the government, it has made a profit on the bailout program overall. On Tuesday, it said it has recovered more than $273 billion from TARP’s bank bailout programs compared with the $245 billion initially invested.

Friday, May 16, 2014

Bank of America leads in consumer deposits

Bank of America has more deposits in personal or family accounts than any other bank, new federal filings show.

For the first time, banks of more than $1 billion in assets were required to disclose in the first quarter what portion of their deposits come from individuals and families, as opposed to commercial accounts. SNL Financial analysed the recent federal filings to compare how the biggest banks stack up.

Charlotte-based Bank of America came in with about $464 billion in deposits from accounts intended for individuals, households or families. That's more than a third of the $1.13 trillion in total deposits at the bank.

Wells Fargo was No. 2 with about $412 billion, SNL found. The bank has about $1.09 trillion in deposits

The data doesn't include time deposits, also known as CDs.

The new disclosures provide the clearest picture yet of how big banks are reaching Main Street consumers.

SNL and the Observer have tried to approximate the data in the past by stripping out deposits held at "megabranches" that typically house large corporate deposits. Bank of America has typically been the bank with the most overall deposits. But after taking out the megabranches, Wells Fargo regularly came in as having the most Main Street deposits. The same holds true in Mecklenburg County.

Thursday, May 15, 2014

Economist: U.S. banks could fare better in next recession

There could be another global recession in the next 24 months, and banks with large exposure to foreign markets will be more in jeopardy during a downturn than those with less exposure, an economist said Thursday in Charlotte.

David Levy, chairman of the Jerome Levy Forecasting Center, who spoke at a luncheon for the Charlotte Economics Club, said there's a threat of a recession from overseas economies. What could help trigger a recession, he said, is a slowdown in investments in factories and port facilities as countries see flattening growth in exports.

"It's kind of a slow-motion train wreck. I'm not sure if the locomotive yet has made contact with the brick wall that it's going to hit. But it is close," said Levy, a New York resident.

Another recession could cause U.S. unemployment to rise by "several percentage points," he said. But U.S. banks could fare much better than banks in other countries in the next downturn, he said.

"One of the great things the U.S. banking system has going for it is it is much less international than the European banks. The European banks have enormous external exposure."

Levy has been talking about the possibility of another global recession for years. In 2010, he was putting the chances of one starting within a year or so at around 60 percent, according to this piece on

TIAA-CREF leases new office building in Charlotte

Retirement giant TIAA-CREF confirmed Thursday that it has leased a new office building near its existing campus in the University City area.

The New York company, which keeps its largest employee base in Charlotte, said it has leased space in Three Resource Square. The building has about 96,000 square feet available, according to Trinity Partners.

Spokesman John McCool confirmed the company had leased in the building but declined to comment on the need for additional space.

News of the lease was first reported by the Charlotte Business Journal.

Wednesday, May 14, 2014

Three from Charlotte make EY entrepreneur list

Two local finance industry leaders and an equipment management company president have made been named finalists in EY's entrepreneur of the year competition.

EY (that's the new brand for the Ernst & Young accounting firm) picked a total of 24 across the Southeast to move on to the next round.

Finalists from Charlotte:

  • Keith Luedeman, CEO of
  • Brian Simpson, CEO of CommunityOne Bancorp
  • Brent Howison, president of The Remi Group
Winners will be announced June 26 at the InterContinental Buckhead Hotel in Atlanta.

Bank of America CFO says little on capital error

Bank of America's chief financial officer on Wednesday fielded questions Wednesday about bank's recent revelation that it miscalculated its capital ratios but did not provide new details on the mistake.

Bruce Thompson spoke at a conference in London hosted by British bank Barclays. After giving a brief overview of the bank's performance in the first three months of this year, he was asked by an analyst how the miscalculation happened.

Thompson's explanation was similar to the one he and Bank of America officials provided at the bank's annual shareholders meeting in Charlotte last week. Among other things, Thompson said it was discovered by the bank and the finding was "escalated" to its board and regulators.

The bank disclosed the error April 28, saying that for years it had incorrectly accounted for a type of debt inherited in its 2009 Merrill Lynch acquisition. The mistake meant the bank had over-reported capital levels by about $4 billion. The miscalculation caused the bank to suspend a planned increase in its quarterly dividend from 1 cent to 5 cents.

As part of the annual stress testing process, the Fed in March had approved the bank's plan to raise its dividend and to buy back $4 billion in common stock. Bank of America has said its revised capital plan will return less capital to shareholders, but it has not provided additional details. The bank has until May 27 to resubmit the plan to the Federal Reserve.

"We're obviously working through that effort now," Thompson said.

IKOR opening office in Charlotte

Pennsylvania-based patient advocacy company IKOR has opened an office in Charlotte and has begun contacting financial professionals in the city to offer its services.

IKOR helps the elderly, injured and disabled come up with a care plan and makes sure it is carried out. Founder Patricia Maisano said the company often works with financial advisors who are putting together estate plans and investment plans for their clients.

The new office is on Mallard Creek Road.

Tuesday, May 13, 2014

Bank of the Ozarks to open Cornelius branch Monday

Bank of the Ozarks on Monday will open its new Cornelius branch, the bank's second full-service branch in the Charlotte metropolitan area, said Cindy Wolfe, president for the bank's Charlotte region.

Construction began last year on the one-story branch, at 19811 W. Catawba Ave. It is opening 14 months after the Little Rock, Ark.-based lender opened its first full-service branch in the Charlotte area, at 4200 Park Road.

Wolfe said the Cornelius branch is 3,700 square feet. Tom Dutton, a Bank of the Ozarks commercial loan officer, will head the office, Wolfe said.

Last year, David Goodrum, owner of Cornelius-based J.D. Goodrum, which built the branch, said the construction value of the project is roughly $1.5 million.

The Cornelius branch is the latest addition to the bank's growing number of North Carolina branches.

Since the financial crisis, Bank of the Ozarks has snapped up failing banks and been one of the most active bidders for such institutions. In 2010, it acquired failed lender Woodlands Bank, of Bluffton, S.C. That deal gave the bank the Wilmington branch, its first full-service branch in North Carolina.

Before that, Bank of the Ozarks had a loan-production office in Charlotte since 2001. That loan-production office is now in the new Park Road branch.

Bank of the Ozarks further grew in North Carolina last year with its purchase of First National Bank of Shelby in July for $68.5 million. The deal gave Bank of the Ozarks branches in Cleveland, Gaston, Lincoln and Rutherford counties.

Wolfe said Tuesday that the bank is considering opening more branches in the Charlotte region, but no locations have been determined.

Falfurrias buys online training company

Charlotte-based Falfurrias Capital Partners said Tuesday that it has bought a controlling stake in American Safety Council, a company that provides online training on workplace safety, medicine, and in other industries where regulations drive ongoing learning.

It's the private equity firm's first investment in the space. Falfurrias was founded by former Bank of America CEO Hugh McColl and former chief financial officer Marc Oken. The company said it has been looking to invest in the e-Learning industry.

“There’s a macrotrend toward moving education on all fronts toward the Internet," Oken told the Observer. ""We know it’s a good growth industry."

For example, one of American Safety Council's core products is online driving remedial programs. Instead of sitting in a class with a certified instructor, people can complete an eight-hour course on their computer.

The investment in American Safety Council is part of Falfurrias's $127 million second fund, which closed in September. It is now 44 percent committed, Oken said.

Thursday, May 8, 2014

Uwharrie Capital profit narrows

Albemarle-based Uwharrie Capital Corp. said Thursday that it earned $537,000 in the first quarter, down about 30 percent from the same time period a year ago.

The profit narrowed as mortgage refinance volume declined precipitously across the industry. Uwharrie said mortgage refinances benefited the bank to the tune of $840,000 in last year's first quarter. The bank also sold a piece of property for a $229,000 gain last year.

“Our first quarter earnings reflect a more sustainable source of earnings from a stronger balance sheet," CEO Roger Dick said in a statement. "Asset quality, capital and operating expenses all improved since year end." to buy back $10 million in stock

Charlotte-based, the parent company of online mortgage comparison tool LendingTree, announced Thursday that it's board has approved another $10 million in common stock repurchases.

That comes on top of an earlier $10 million buy-back authorization. The company has bought back $2 million so far under that program. did not say when and how quickly it would buy back the shares. The company has about 11.3 million shares outstanding and $89.5 million in cash on hand.

Shares closed at $23.86 on Thursday, significantly below its 52-week high of $35.05.

Wednesday, May 7, 2014

Wells names new Charlotte-based head of corporate trust services

Wells Fargo said Wednesday it has brought on Troy Kilpatrick to head its corporate trust services division. He will be based in Charlotte.

Kilpatrick comes to the bank from BNY Mellon, replacing the recently retired Brian Bartlett. As head of corporate trust services, Kilpatrick will oversee 2,000 employees servicing $2.5 trillion in unpaid principal.

The group works with public and private entities that issue debt securities.

Wells Fargo's Stan Kelly to retire

Wells Fargo announced Wednesday that its lead regional president for the Carolinas, Stan Kelly, will retire over the summer after a three-decade career with the bank.

Kelly is responsible for retail and small business banking across North and South Carolina, a region that encompasses 5,000 employees and 450 branches.

He joined Wachovia as a personal banker in Winston-Salem, and later led operations in Forsyth County, Raleigh and in Wachovia Wealth Management. Kelly continues to work out of the Charlotte and Winston-Salem offices.

“When I think about the definition of a great community banker, I think about Stan Kelly,” Carrie Tolstedt, head of community banking for Wells Fargo, said in a statement.

Kelly was a key figure in the integration of Wells Fargo and Wachovia, the Charlotte bank Wells bought in 2009.

Wells Fargo is conducting a "thorough search" for a replacement.

Quotes from BofA's shareholders meeting

Bank of America held its annual shareholders meeting in Charlotte Wednesday. And, as usual, CEO Brian Moynihan got an earful from attendees, who confronted him about the bank's 1-cent quarterly dividend, its miscalculation of capital ratios and other issues.

At one point, two shareholders even got into a shouting match with each other.

Here is some of what was said in the meeting:

“You’ve cost me close to $12,000 of annual income. I’ve had to liquidate a good portion of my assets, which makes it very difficult when two young boys ask me for $600, which I’ve always provided, so they can play baseball this summer and I have to tell them that I don’t have the cash available. So when you talk about what the story is and how good this place is, you need to go back far enough and really comment on the lies by your predecessor, the lies by you.”
- Shareholder Judy Koenick, criticizing Moynihan about the dividend and share price not being as high as in past years

"Within 24-ish hours."
- Bank of America Chief Financial Officer Bruce Thompson on how long it took the bank to report the capital ratios mistake to its board of directors

"Where was the breakdown in controls? ... Is this just a big mishap?"
- Bank of America analyst Mike Mayo, asking about the capital ratios error

"I still believe, very firmly, this bank is not too big to manage."
- Bank of America Chairman "Chad" Holliday

"I can't predict at this point what the outcome will be for shareholders."
- Thompson on what the bank's plans will be for buying back shares and raising its dividend, after its capital plans were suspended because of the capital ratios miscalculation

"This was an error that we made and we found."
- Moynihan on the miscalculation

"You are a credit to the Irish! You are the finest CEO in America!"
- Shareholder Peggy McMahon, speaking to Moynihan

"I own over 500 shares of Bank of America stock and get a check for about $5. That's a penny per stock. People who own stock were told this was temporary. It's obviously not. How invested are you in America? You don't value investors with a dividend."
- A 13-year-old shareholder, speaking to Moynihan

"One of the tough things we've had to do is to size our company down based on the revenue streams and profit ... (in order to do) a great job for our customers. And it has an impact that no person could ever want to have, which is people lose their jobs. ... It's one of the toughest things I have to do."
- Moynihan on the jobs the bank has slashed to lower its expenses by billions of dollars a year 

Wells Fargo lowers estimate for legal losses

Wells Fargo said Wednesday it could spend as much as $911 million above what it has already set aside for legal costs, a decline from its previous projection of $951 million.

The San Francisco-based bank made the disclosure in a filing with the Securities and Exchange Commission.

The new figure reflects an estimate as of the end of the first quarter. The prior estimate was as of the end of last year.

Banks maintain litigation reserves to cover potential legal costs. In quarterly securities filings, banks disclose their estimated potential legal costs above and beyond what is in the reserves. An increase in the estimate signals a bank perceives heightened legal risks. A decrease indicates lower risk.

In Wednesday's securities filing, the bank also said it has reached a settlement with the employee retirement system of the city of Farmington Hills in Michigan. In a class-action complaint, the retirement system claimed Wells Fargo made risky investments on behalf of the system, which suffered losses as a result. The settlement, reached last month, needs court approval, Wells Fargo said.

Tuesday, May 6, 2014

CertusBank lays out leadership team

Greenville, S.C.-based CertusBank announced Tuesday that it has put together a new leadership team that will make the bank more "agile" as it continues to work past a public dispute between investors and management.

The new lineup combines or eliminates some senior executive positions, the bank said.

Here are the new senior roles that will report to interim CEO John Poelker:

• Core Banking: Kelly Owens
• Mortgage: Gary Suess
• Small Business Finance: John Handmaker
• Operations: Meril Thornton
• Risk and Credit: Mark Abrams
• Finance and Accounting: Chris Speaks
• Investments and Treasury: Len Davenport
• Legal: Thomas Simpson

Another executive, audit head Deborah Ledford, will report directly to the bank's board.

The management announcement is one of the first moves Poelker has made since being installed atop the bank, which originated in 2010 in Charlotte-based Blue Ridge Holdings Inc. with a charter to buy failed banks.

CertusBank's co-founders were ousted by the bank's board after some investors questioned spending at the bank. One accusation levied by hedge fund manager Benjamin Weinger was that the bank had too many senior management positions.

Three of the bank's co-founders, Milton Jones, Walter Davis and Angela Webb, have sued CertusBank and Weinger, accusing them of libel.

Thursday, May 1, 2014

Park Sterling completes purchase of Provident Community Bancshares

Park Sterling Corp., the largest regional bank based in Charlotte, said Thursday it has completed its purchase of 80-year-old Provident Community Bancshares of Rock Hill.

Under the deal's terms, Park Sterling will pay $1.4 million in cash to Provident shareholders, or roughly 78 cents a share.

The deal also calls for Park Sterling to pay the U.S. Treasury $5.1 million to redeem preferred stock stemming from the Troubled Asset Relief Program, known as TARP. The $5.1 million figure is a 45 percent discount from what the government was owed.

Park Sterling said the branches it has acquired from Provident are expected to continue doing business as Provident Community Bank until they are converted, a process expected to be finished by the third quarter.

Park Sterling, which reported $2 billion in assets in a first-quarter securities filing, said the merger boosted its assets to $2.3 billion. In the first quarter, the bank reported having 43 locations across the Carolinas and Georgia and a loan-production office in the Richmond, Va., region. On Thursday, it reported 54 locations in the same areas.