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Bank of America Corporation (BAC)

  • Thu, Aug. 20, 3:50 PM
    • "The timing of the meeting (Sept. 22) is hurried in the midst of a sudden change in CFO, without a full year of financials, and without a clean full-year Fed stress test," says CLSA's Mike Mayo. He notes this "special" meeting is off-cycle from the spring annual meeting season when proxies are typically reviewed, thus reducing the degree of attention.
    • "Further, the move by the board that unilaterally reversed a prior shareholder vote could taint the industry and arm critics who argue that the industry cannot govern itself."
    • Mayo's sentiments aren't surprising or even unusual, but for even better entertainment purposes, they come alongside his annotated version of Bank of America's (BAC -3.9%) proxy.
    • Previously: Two big tests on tap for BofA's Moynihan (Aug. 19)
    | Thu, Aug. 20, 3:50 PM | 64 Comments
  • Wed, Aug. 19, 10:09 AM
    • A shareholder vote set for Sept. 22 will decide whether Brian Moynihan can keep both the CEO and chairman titles at Bank of America (BAC -0.8%), and one week later the bank's resubmission of its capital plan to the Fed is due.
    • "If they fail this time, I'd call for his head," says Cougar Capital's Buzzy Geduld, an owner of 2.5M shares of the stock. "At the very minimum, you split the CEO and chairman roles."
    • Moynihan is deeply involved in the resubmission, reports Bloomberg, leading weekly steering meetings on the project. The bank is spending hundreds of millions overhauling data systems, rebuilding databases, and enhancing controls.
    • One worry: Regulators haven't specified what they want from the bank, leaving the executive team in the dark about exactly what will get a thumbs up.
    • Scoreboard: BofA is lower by 1.1% YTD versus the 5.5% gain for the 24-company KBW Bank Index. The stock is higher by 17% since Moynihan took over in 2010 versus an 84% gain for the KBW.
    • In other news, the bank today named co-heads of its healthcare investment banking team in the Americas, with one of the new bosses being poached from Credit Suisse.
    | Wed, Aug. 19, 10:09 AM | 41 Comments
  • Mon, Aug. 3, 3:54 PM
    • Bank of America (NYSE:BAC) has hired away Richard Peacock from Goldman Sachs (NYSE:GS), to join its M&A group as a managing director, according to a memo obtained by The Wall Street Journal.
    • He'll join in October after a standard leave. Peacock most recently was head of Goldman's consumer investment-banking division.
    • Consumer and retail M&A has been picking up this year, up 52% Y/Y in the first half.
    | Mon, Aug. 3, 3:54 PM | 6 Comments
  • Fri, Jul. 31, 5:37 PM
    • Bank of America (NYSE:BAC) is likely to put shareholders to a vote this year to decide whether CEO Brian Moynihan keeps his title as chairman of the board, Reuters reports.
    • The bank had said that a vote wouldn't take place any later than its 2016 annual meeting, but didn't set specifics. Today's proxy filing sets a special meeting that a source says will come this year.
    • The date isn't set in pen yet because the SEC must review the proxy first, the source said.
    | Fri, Jul. 31, 5:37 PM | 50 Comments
  • Mon, Jul. 27, 6:57 PM
    • Some of the biggest and best known U.S. businesses join the Obama administration in trying to build momentum for a deal at the climate change summit in Paris later this year.
    • A dozen publicly traded companies - AA, AAPL, MSFT, BAC, BRK.B, KO, GM, GS, GOOG, PEP, UPS and WMT - committed to support a “strong" outcome in Paris, and made new pledges to take a variety of steps to tackle climate change.
    • For example, Alcoa says it will reduce absolute greenhouse gas emissions in the U.S. by 50% by 2025, and BRK plans to retire 75% of its coal-fueled generating capacity in Nevada by 2019.
    • In addition to company-specific goals, the White House says today's announcements total at least $140B in new low-carbon investment and more than 1,600 MW of new renewable energy.
    | Mon, Jul. 27, 6:57 PM | 381 Comments
  • Mon, Jul. 27, 10:25 AM
    • Bank of America (BAC -1.6%) looks to build its bonafides with the climate change crowd, boosting its current environmental business initiative to $125B from $50B in low-carbon business by 2025.
    • Today's announcement will be highlighted at a White House event in advance of climate change talks set for Paris later this year.
    • The bank has put $39B to work financing low-carbon activities since 2007, including $12B in 2014 alone. The IRR on these investments isn't available in the press release, but keeping D.C. happy has a value one can't put a price on.
    • Source: Press Release
    | Mon, Jul. 27, 10:25 AM | 18 Comments
  • Fri, Jul. 24, 3:31 PM
    • Goldman's (GS -1.8%) Q2 results confirmed the team's expectation of positive revisions to 2016 consensus EPS. Zions (ZION -0.7%) has "multiple catalysts" to reach improve profitability goals and EPS growth over the next three years.
    • Guggenheim's four key investment themes: 1) Names levered to improving M&A, with Goldman being the best idea, followed by Morgan Stanley (MS -1.3%); 2) Restructuring stories, with Zions the best idea, but First Horizon (FHN -1%), Ally Financial (ALLY -1.8%), and BofA (BAC -1.6%) also worth looking at; 3) Idiosyncratic growth stories like MasterCard (MA +0.7%), Visa (V +4.5%), Synchrony Financial (SYF -2.4%), and Signature Bank (SBNY -0.8%); 4) Names with a distinct M&A catalyst in the regionals group like BB&T (BBT -1.5%), CIT Group (CIT -1.6%), and Springleaf (LEAF -1.4%).
    • Mixed results from credit card companies affirm the team's preference for SYF, but the risk/reward at AmEx (AXP -1.4%) is improving. AmEx, CapOne (COF -13%), and Discover (DFS -2.7%) results show the boosted competition they face form the banks, which is slowing growth, and lifting marketing and rewards costs.
    • Source: Barron's
    • Previously: Capital One tumbles after earnings miss and trio of downgrades (July 24)
    | Fri, Jul. 24, 3:31 PM | 10 Comments
  • Fri, Jul. 24, 3:22 PM
    • Bank of America (BAC -1.4%) General Counsel Gary Lynch - set to turn 65 - has had enough after a busy four years. He's added the title of vice chairman as he moves into a more advisory role, and the bank is interviewing successors.
    • Lynch came to BofA in 2011 from the SEC, and was charged with overseeing the legal issues cropping up from the bubble and financial crisis.
    • The Lynch transition comes just days after the BofA fired its CFO and shuffled some other management positions.
    • Source: Reuters
    • A few weeks back, JPMorgan's legal chief Stephen Cutler also moved on from that position, and added the title of vice chairman.
    | Fri, Jul. 24, 3:22 PM | 16 Comments
  • Thu, Jul. 23, 12:14 PM
    • "Many management changes show lack of stability at the top, and some of these changes also seem to result in overlapping responsibilities, which can reduce accountability rather than enhance it,” writes Mike Mayo, still giving Bank of America (BAC -1.7%) a sell rating after the C-suite shakeup.
    • When Paul Donofrio replaces Bruce Thompson as CFO on Aug. 1, he'll become the fourth finance chief to serve at BofA in Brian Moynihan became CEO in 2010. "There must have been some kind of strain between Brian and Bruce for him to step down at age 50,” says analyst Charles Peabody. "You've had five years of declining revenues, and Brian is undoubtedly feeling the heat to grow this thing.”
    • JPMorgan's Vivek Juneja worries Thompson is exiting right in the middle of dealing with two key capital-related issues with the Fed, and wonders if it wouldn't have made more sense to make the change after these were settled.
    • Previously: WSJ: CFO Thompson out at Bank of America (July 22)
    | Thu, Jul. 23, 12:14 PM | 20 Comments
  • Thu, Jul. 23, 11:18 AM
    • Bank of America (NYSE:BAC) declares $0.05/share quarterly dividend, in line with previous.
    • Forward yield 1.09%
    • Payable Sept. 25; for shareholders of record Sept. 4; ex-div Sept. 2.
    | Thu, Jul. 23, 11:18 AM | 15 Comments
  • Wed, Jul. 22, 6:36 PM
    • An executive shuffle at Bank of America (NYSE:BAC) has CFO Bruce Thompson -- a potential heir apparent for Brian Moynihan's CEO job -- leaving the bank, The Wall Street Journal reports.
    • Paul Donofrio will take his place. The Journal referred to an internal memo that was expected to go to the bank's employees this evening.
    • Donofrio had been moved to head the consumer bank and wealth management operation earlier this year. David Darnell, head of wealth management, is retiring and will be succeeded by Moynihan ally Terry Laughlin.
    • Laughlin, for his part, had been overseeing the bank's stress-test resubmission to the Fed. Andrea Smith is being promoted to a new position, chief administrative officer, and will eventually assume control of the stress-test role.
    • After hours: BAC -0.1%.
    | Wed, Jul. 22, 6:36 PM | 22 Comments
  • Mon, Jul. 20, 2:55 PM
    • JPMorgan (JPM +0.4%) faces the largest capital "surcharge" or 4.5% of its risk-weighted assets, with the other seven lenders falling in the 1-3.5% range.
    • Citigroup's (NYSE:C) surcharge is 3.5%, BofA (NYSE:BAC), Goldman Sachs (NYSE:GS), and Morgan Stanley (NYSE:MS) 3%, Wells Fargo (NYSE:WFC) 2%, State Street (NYSE:STT) 1.5%, and Bank of New York Mellon (NYSE:BK) 1%. Taken together, the group's capital cushion will more than $200B larger than if the surcharge was not implemented.
    • The surcharges will begin to be implemented on January 1, and fully phased in by January 2019. JPMorgan has taken steps to boost its capital levels, and Fed officials indicate the bank is about $12.5B shy of the full surcharge, reports the WSJ.
    • The other lenders currently have the necessary capital.
    • This new requirement comes on top of the existing base 7% common-equity capital standard necessary for most banks.
    • Federal Reserve press release
    | Mon, Jul. 20, 2:55 PM | 12 Comments
  • Mon, Jul. 20, 12:45 PM
    • With Q2 results for the nation's largest banks now all in, Dick Bove says the key takeaway is operating earnings - which eliminates taxes, and the impact from loan losses and reserve releases - are not just growing, they're jumping. By his calculation, the operating earnings for BAC, C, JPM, and WFC are up 23% for the last twelve months compared to the previous period.
    • Asset quality is far better nowadays as well, he says, noting the new regulatory regime has forced lenders to hold a higher amount of government-guaranteed paper on their books. "The addition of capital, cash, and government-backed securities means that the book value of these companies is very real. Yet, at least two of the big banks sell at a discount to this value."
    • More bullish points: The most onerous and costly of the new regulations are already out there, litigation - while continuing - won't be nearly as expensive going forward, M&A is on the rise, and trading activity is coming back.
    • Most importantly, says Bove, is that investment psychology is shifting. "The attitude that banks are utilities that can never show earnings gains is disappearing. The view that bank asset values are overstated is gone or should be gone. The view that the government has multiple new ways to attack these companies is also disappearing."
    | Mon, Jul. 20, 12:45 PM | 18 Comments
  • Fri, Jul. 17, 3:18 PM
    • " If Bank of America (BAC +0.9%) continues to make progress on cost initiatives and takes advantage of recent franchise investments, we believe the potential earnings upside is greater than at other large banks that are already operating more efficiently," says Argus analyst Stephen Biggar, upgrading to Buy with $20 price target.
    • Acknowledging weakish revenues in most segments in Q2, Biggar notes the bank made progress in its underlying lending business, saw better credit quality, notched improvement in LAS, suffered lower legal costs, and achieved higher capital levels.
    • A lot of noise is made about cutbacks, but the bank is investing in its business, hiring financial advisers, sales staff, and bankers.
    • Previously: Costs/mobile banking in focus on BofA earnings call (July 15)
    • Previously: Bank of America +2.5% after earnings beat (July 15)
    • Previously: Bank of America beats by $0.05, beats on revenue (July 15)
    | Fri, Jul. 17, 3:18 PM | 19 Comments
  • Wed, Jul. 15, 9:58 AM
    • Consumers continue to shift  away from branches toward self-service, says Bank of America (BAC +2.7%) CFO Bruce Thompson. CEO Brian Moynihan says to expect more branch cuts over time, but warns about upsetting clients if closings are pushed too hard.
    • Full-time equivalent employees at BofA of 216,679 fell from 219,658 at the end of Q1 and 233,201 one year ago. Branch count of 4,789 fell from 4,835 at the end of Q1 and 5,023 one year ago. ATM count of 15,992 stands against 15,903 at the end of Q1 and 15,973 one year ago.
    • The "application of technology" is allowing the cutting of some workers, says Moynihan, while at the same time the bank is hiring "customer-facing" employees. "We continue to work expenses," he says.
    • Earnings call webcast and presentation
    • Live coverage from The Charlotte Observer's Deon Roberts
    • Previously: Bank of America +2.5% after earnings beat (July 15)
    • Previously: Bank of America beats by $0.05, beats on revenue (July 15)
    | Wed, Jul. 15, 9:58 AM | 8 Comments
  • Wed, Jul. 15, 7:16 AM
    • Q2 net income (after adjustment) of $4.6B or $0.41 per share vs. $2.3B and $0.19 one year ago. The year-ago result included significant litigation expense related to the mortgage settlement.
    • Adjusted net interest income of $10B vs. $10.4B one year ago.
    • Noninterest income of $11.6B slips $105M from a year ago.
    • Excluding those litigation costs, noninterest expense of $13.6B still fell 6% Y/Y.
    • Consumer Banking net income of $1.7B vs. $1.63B a year ago. Mortgage originations of $16B vs. $11.1B. 1.3M new consumer credit cards issued, the highest number since Q3 of 2008. Mobile banking customers up to 17.6M, with 13% of all deposits done by mobile vs. 10% a year ago.
    • Global Wealth and Investment Management net income of $690M vs. $726M a year ago. Average loans and leases of $130.3M vs. $118.5M. AUM of $930M vs. $879M. Total client balances of $2.52B vs. $2.478B.
    • Global Banking net income of $1.25B vs. $1.44B a year ago.
    • Global Markets net income of $993M vs. $1.1B a year ago. FICC revenue slips 9%, roughly inline with what was likely expected.
    • Legacy Assets and Servicing period-end loans and leases of $30B vs. $36B a year ago. 60+ days delinquent first mortgages serviced by LAS fell to 132K, off 50% from a year ago.
    • CET 1 ratio of 10.3% flat from last quarter. Tangible book value per share of $15.02 vs. $14.79.
    • Conference call at 8:30 ET
    • Previously: Bank of America beats by $0.05, beats on revenue (July 15)
    • BAC +2.5% premarket
    | Wed, Jul. 15, 7:16 AM | 20 Comments
Company Description
Bank of America Corporation is a bank holding and a financial holding company. Through its subsidiaries, it provides banking and non-banking financial services and products throughout the United States and in selected international markets.