CommunityOne exits consent order, completes merger

CommunityOne Bank is no longer under a consent order with federal regulators, and has completed its merger with the Bank of Granite, the bank's parent company announced Monday.

FNB United, based in Asheboro, had been working to combine the two banks since they were pushed together in a 2011 recapitalization meant to save the two struggling banks. Executives have focused on using the $310 million to clean up the balance sheet.

The combination gained speed earlier this year when Granite Falls-based Bank of Granite got out from under its consent order, which had been issued in 2009 as capital levels plunged. Regulators gave the merger final approval in May.

CommunityOne's consent order was issued in June 2010. With its termination, the bank is classified as well-capitalized, the bank said.

The merger of CommunityOne and Bank of Granite was formally completed just after midnight Saturday. Bank of Granite's branches are now operated as CommunityOne. Branches were consolidated in Boone, Cornelius, Hickory, Statesville and Wilkesboro.

"We are excited that the merger is complete," CEO Brian Simpson said in a statement. "This transaction was the last step in our goal to successfully integrate CommunityOne and Granite, and is critical to our return to profitability during the second half of the year. We are also pleased that the OCC terminated the Consent Order. This action is confirmation that we are improving our financial condition and positioning our franchise to better serve our customers throughout our footprint."

CommunityOne now has 55 branches across central and western North Carolina. Bank of Granite had two Charlotte branches, uptown and in SouthPark.

Ray Grace confirmed as N.C. banking commissioner

Ray Grace has been confirmed as banking commissioner for North Carolina.

A joint resolution for his confirmation cleared the state's House of Representatives Wednesday and was ratified Thursday.

Grace was named acting banking commissioner after Joseph Smith, in February 2012, resigned to oversee the roughly $25 billion national mortgage settlement.

For more information on the resolution, click here.

BB&T unveils 'concise' disclosures for accounts

BB&T is providing customers with streamlined disclosures for its accounts and fees, patterning the breakdowns on a template recommended two years ago by The Pew Charitable Trusts, the Winston-Salem-based bank said Thursday.

In doing so, the bank joins others that have changed their forms after a 2011 report by the Philadelphia-based think tank found that the median length of banks' disclosures for checking account policies and fees was 111 pages. Pew, which said it reviewed checking accounts offered online by the 10 biggest banks in the U.S., also found that banks' disclosures for accounts and fees were not in a concise and easy-to-understand format.

On its website, Pew lists seven financial institutions that it "commends ... for voluntarily adopting our disclosure box." At the time this blog posting was published, BB&T was not on the list, but Raleigh-based State Employees' Credit Union was. No other North Carolina-based banks made the list.

Bank of America in August introduced disclosures that it said are based on Pew's recommendations.

Donna Goodrich, deposit services manager for BB&T, said in a statement Thursday that the bank's new disclosures are a "concise resource designed to help consumers thoroughly understand each deposit product we offer, avoid fees and compare our products to others in the market."

SunTrust wants more branches in Charlotte region

At a time when many banks are shuttering branches across the country, SunTrust Banks is considering putting more in the Charlotte area.

SunTrust acquired branches in Charlotte — and in other parts of North Carolina — after it bought Memphis, Tenn.-based National Commerce Financial Corp., parent company of Central Carolina Bank, in 2004.

Since then, SunTrust has failed to grow its deposits enough to rank higher than sixth place in the city of Charlotte and fifth place in North Carolina, according to Federal Deposit Insurance Corp. data.

In an interview with the Observer this week, Bill Peele, president of the Atlanta bank's Mecklenburg/South Carolina region since 2011, said he wants to grow the bank's market share in the Charlotte area. To that end, the bank could use additional branches in some pockets of the region, he said.

Specifically, SunTrust is eyeing sites in the Lake Norman area and just across the South Carolina border, he said.

SunTrust already has branches in the Lake Norman region, including in the towns of Huntersville and Mooresville, but "we actually could use a few more up there," Peele said.

"Then we'd like to head over the border to South Carolina into York and Lancaster (counties)," he said.

"There are some markets that we're not in that are growing ... that we'd like to be in."

Peele wouldn't say exactly how many branches the bank wants to add. But as for the city of Charlotte, the bank has enough branches there, he said.

In Mecklenburg County, SunTrust has 19 branches, according to federal data. Bank of America, with 39, has the most in the county.

SunTrust has 0.37 percent of the deposits in the county, putting it behind Raleigh-based First Citizens Bank, which is at No. 5 with 0.49 percent. SunTrust's deposits in the county total $712.4 million.

It's unclear when SunTrust might open more branches in the Charlotte region. Peele said SunTrust, like other banks, must watch expenses while trying to grow revenue.

Last year, SunTrust's net income available to shareholders was $1.9 billion, or $3.59 per average diluted common share, up from $495 million, or 94 cents per share, in 2011.

SunTrust said its assets totaled $172.4 billion as of March 31.

Ray Grace confirmation vote could come today

Ray Grace might be confirmed Tuesday as banking commissioner for North Carolina.

The state House of Representatives has scheduled a vote on a joint resolution for his confirmation, which has cleared the Senate.

Grace was named acting banking commissioner after Joseph Smith, in February 2012, resigned to oversee the roughly $25 billion national mortgage settlement.

Bank of America joins group pushing tax reform

Bank of America is one of 42 companies that have banded together into an organization lobbying for corporate tax reform, according to an announcement from the group Tuesday.

The Alliance for Competitive Taxation will push for lowering the corporate tax rate to 25 percent, from the 35 percent it is now. They'll advocate for it to be paid for by eliminating some tax breaks, without specifying yet what those are. Their goal is to create jobs and allow American companies to "compete in today's global economy," as the alliance puts it.

The issue has been reinvigorated in recent weeks by the debate over Apple Inc.'s use of overseas subsidiaries to keep profits from being taxed in the U.S. If money is kept offshore, and not brought back to the U.S., it isn't taxed by the federal government. Bank of America, for example, has $17.2 billion in foreign earnings kept overseas, the Observer found last week.

No other Charlotte companies appear on the list backing the Alliance for Competitve Taxation. The group did not disclose how much money each business put in. It has yet to record any lobbying expenses, according to public records.

Bank of America $8.5B settlement hearing begins

Bank of America’s acquisition of Countrywide Financial Corp. has turned out to be the purchase that’s kept on giving — more litigation, that is.

But the bank could soon find out whether it will finally get to put to rest a big piece of unfinished legal business stemming from its ill-fated purchase of the lender whose mortgage loans contributed to the financial crisis.

On Monday in New York Supreme Court, a hearing began on a proposed $8.5 billion Bank of America settlement with those who invested in bonds backed by Countrywide loans.

While Bank of America is a frequent target of lawsuits — as most large companies are — and has already agreed to billions of dollars in settlements since the economic downturn, investors and analysts have been following the $8.5 billion settlement.

“This is clearly the largest single litigation item, or potential litigation cost, at Bank of America that we know about,” David Hilder, an analyst for Drexel Hamilton, said.

If the settled were approved, it would mean the Charlotte-based bank gets to bury one more very costly headache that surfaced since the downturn. Bank of America’s success at moving past such expensive liabilities is important for shareholders who have been concerned about the bank’s earnings being held back by settlements struck since the Great Recession.

“It would be recognized as a big win for Bank of America," Dan Marchon, an analyst for Raymond James & Associates, told the Observer.

A rejection of the settlement by the judge, Barbara Kapnick, analysts say, would create uncertainty over how much Bank of America might end up paying to satisfy the investors.

"If the settlement is tossed out ... resolution of the matter could be much more expensive for the bank," Mark Palmer, an analyst with BTIG Research, wrote Monday.

Marchon said a rejection of the settlement would be viewed as a negative for Bank of America.

“How negative depends on the reasoning and guidance that we get with the dismissal,” he said.

In addition to the $8.5 billion cash settlement, Bank of America, in its latest annual report, said that it expects to pay roughly $100 million in attorneys fees and other costs related to the case.

The settlement was reached with 22 institutional investors who accuse Countrywide of, among other things, originating home loans that did not comply with the company’s own underwriting guidelines.

The Bank of New York Mellon is the trustee seeking approval of the settlement, which dates to June 2011.

It’s unclear when a ruling might be handed down, although it is expected to take weeks.

The settlement has its objectors. American International Group is among those opposed to it.

In court papers, AIG has said the settlement "is a fraction of the $108 billion in losses" to investors.

Bank of America, when contacted by the Observer Monday, declined to comment.

The start of the hearing comes a month after Bank of America agreed to pay $1.6 billion in cash to MBIA as part of a settlement over mortgage-backed securities tied to Countrywide.

Bank of America shares fell 0.81 percent Friday to $13.55.

Hilder, of Drexel Hamilton, said it’s too early to say how approval of the $8.5 billion settlement could affect Bank of America’s stock.

“The stock could go up by a significant amount if this is finally approved, and then we would look back and say, ‘Wow. The market was more worried about failure to get approval than I had thought.’”

At $8.5 billion, the settlement is twice what Bank of America earned in 2012.