Bank of America CorporationNYSE
Bank Of America: Diamonds Are Forever
Fairlight Capital • 107 Comments
Fairlight Capital • 107 Comments
Sep. 22, 2015, 10:18 AM
Sep. 22, 2015, 9:22 AM
- The Canada Pension Plan Investment Board says it's voted to strip Bank of America (NYSE:BAC) CEO Brian Moynihan of his chairman's role. With 103M shares, or roughly 1% of BofA, the Canada Plan is the largest shareholder so far to declare its intentions.
- Source: Reuters
- The bank's three largest investors - Vanguard, State Street, and BlackRock - haven't tipped which way they'll vote, but they are expected to support Moynihan, and their support is likely the reason Moynihan even has a fighting chance today.
- Previously: NYC to vote against Moynihan at Bank of America (Sept. 18)
- Previously: South Korea SWF dissents against Moynihan (Sept. 15)
- Previously: Bloomberg: Odds are on Moynihan winning chairman vote (Sept. 11)
Sep. 22, 2015, 2:21 AM
- Bank of America (NYSE:BAC) CEO Brian Moynihan faces one of the toughest tests of his career today when shareholders decide whether to strip him of his role as chairman of the board.
- The bank argues that it needs the flexibility to grant him one or both titles, but opponents say the two roles should be separated to allow for greater oversight.
- The vote is expected to be close and BofA says it will honor the outcome.
Sep. 20, 2015, 11:03 AM
- HP (NYSE:HPQ) recently announced that it would cut around 30K jobs, but despite its size, the corporate layoffs are not the largest of the recent past.
- According to outplacement firm Challenger, Gray & Christmas, the following list can claim that distinction.
- IBM (NYSE:IBM) layoffs: 60K - July 1993
- Citigroup (NYSE:C) layoffs: 50K - November 2008
- Sears (NASDAQ:SHLD) layoffs: 50K - January 1993
- General Motors (NYSE:GM) layoffs: 47K - February 2009
- AT&T (NYSE:T) layoffs: 40K - January 1996
- Ford (NYSE:F) layoffs: 35K - January 2002
- Kmart (SHLD) layoffs: 35K - January 2003
- Circuit City layoffs: 34K - January 2009
- Boeing (NYSE:BA) layoffs: 31K -September 2001
- Bank of America (NYSE:BAC) layoffs: 30K - September 2011
Sep. 18, 2015, 9:01 AM
- New York City's $165B pension funds hold 25.2M shares of Bank of America (NYSE:BAC), putting them in about the top 60 shareholders. Overseen by New York Comptroller Scott Stringer, they will vote on Sept. 22 to strip CEO Brian Moynihan of his chairman title.
- NYC joins other heavyweights like the California Public Employees' Retirement System and the California State Teachers' Retirement System in lining up against Moynihan for what's expected to be a very close vote.
Sep. 17, 2015, 2:37 PM
- It'll be at least a little while longer until banks and insurers get the higher rates they are hoping will boost sluggish profits, as the Fed holds its fire this month.
- The "dots" however are still projecting at least one rate hike before year-end.
- The SPDR KBW Regional Banking ETF (KRE -1.4%), and the SPDR KBW Bank ETF (KBE -1.2%).
- BofA (BAC -1.7%), Wells Fargo (WFC -1.2%), Regions (RF -2%), KeyCorp (KEY -1.8%), BB&T (BBT -1.7%), Fifth Third (FITB -2.4%), MetLife (MET -2.2%), Prudential Financial (PRU -1.9%), Schwab (SCHW -2.2%), Ameritrade (AMTD -2%), E*&Trade (ETFC -1.2%).
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, BTO, IAT, SEF, IYG, FXO, FNCL, KBWB, FINU, QABA, KRU, KBWR, RWW, RYF, PSCF, FINZ, KRS
Sep. 17, 2015, 8:59 AM
- Bank of America (NYSE:BAC) CEO Brian Moynihan's prepared presentation is mostly familiar material to anyone who's followed the bank - where things stood when he took over, and the improvement since.
- Presentation slides
- Notable is the $1.15T deposit base - its value will be more visible when rates rise, says Moynihan. The FOMC decision comes later today.
- Taking questions, Moynihan says he expects FICC revenue to fall 5-6% in Q3, about the same as what Ciit's John Gerspach hinted at in his presentation yesterday.
- The topic of the vote on whether Moynihan can keep both the CEO and chairman title did not come up.
Sep. 16, 2015, 12:39 PM
- Merger-and-acquisition volume in 2016-17 should be $3.3T-$4.5T, says Guggenheim, up from its previous forecast of $2.7T-$4.5T. The current drivers of M&A are likely to remain in place; macroeconomic conditions may remain uneven; and several specific factors may compel consolidation in certain industries. Health care, media, and telecom activity has been robust, and should stay so. Activity in energy should increase, but banking M&A should stay subdued.
- The winners? U.S. bulge bracket and boutique firms have gained market share at the expense of European and other non-U.S. companies. Showing the most market share gains is Goldman Sachs (NYSE:GS), followed by Morgan Stanley (NYSE:MS), JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC), and Citigroup (NYSE:C). Goldman remains Guggenheim's Best Idea, and BofA and Ciit remain buys, partly thanks to the M&A thesis.
Sep. 15, 2015, 3:07 PM
- Korea Investment Corp. first invested $2B in Merrill Lynch in 2008, later bought more stock in Bank of America (NYSE:BAC), and now is among the top 10 shareholders with a stake valued at roughly $1.2B (ouch).
- Not only is the fund voting against the proposal to keep Brian Moynihan in both the chairman and CEO roles, it has contacted a number of U.S. institutional owners of BofA to work and communicate regularly on shareholder issues.
- Among the changes sought by KIC are "a more realistic business vision," and "a more tangible succession plan."
- Source: WSJ
Sep. 11, 2015, 7:22 AM
- BlackRock, Vanguard and other institutions among Bank of America's (NYSE:BAC) top-10 shareholders typically side with management in keeping the CEO and chairman's roles combined, according to their proxy guidelines.
- "The very real risk of disruption from separating the roles is not worth the theoretical benefits that may come,” says public-company advisory attorney Avrohom Kess.
- CLSA's Mike Mayo concedes it's a tough battle for anyone like him who thinks the BofA proposal should be decline. "The big funds generally think a combined CEO-chairman is fine. I’d say this is an exception to the rule, given the poor oversight at Bank of America’s board.”
- Previously: Buffett: Still a fan of IBM and Moynihan (Sept. 8)
- Previously: Bank of America makes its own vote push (Sept. 8)
Sep. 10, 2015, 10:01 AM
- Citigroup boosts Aflac (AFL +0.6%) to Buy from Neutral.
- Bank of America (BAC -0.3%) is lifted to Outperform from Market Perform at Wells Fargo.
- BlackRock (BLK +0.6%) is upgraded to Outperform at Credit Suisse. The $382 price target is 28% above last night's close.
- Goldman lifts Lincoln National (LNC) to Buy from Neutral.
- Bankwell Financial Group (BWFG +0.6%) is boosted to Outperform at KBW.
- Previously: Goldman pulls sell recommendations on campus housing REITs (Sept. 10)
Sep. 8, 2015, 11:55 AM
- "I've still got money left to buy," says Warren Buffett (BRK.A, BRK.B), appearing on CNBC. "I never go below $20B in cash."
- On the Fed: "I've never made a decision based on what the Fed is going to do or not do." However, he puts on his FOMC hat and says he wouldn't be very aggressive on rate hikes. The economy, Buffett says, is growing at a steady, but not booming rate.
- On IBM: He purchased more shares in Q3.
- On BAC: Buffett would vote in favor of CEO Brian Moynihan retaining the chairman role. He's done a "first-class job," says The Oracle.
Sep. 8, 2015, 10:46 AM
- While the potential for even higher capital requirements hang over the big banks, the ROE/valuation impact should be lower for Bank of America (BAC +1.8%) than for peers, says Nomura's Steven Chubak, upgrading to Buy from Neutral.
- Last week's decision to exclude Advanced models from the CCAR calculations was a big win, says Chubak, as BAC's advanced risk-weighted-assets meaningfully exceed Standardized.
- Previously: BofA approved to use own calculations for capital (Sept. 3)
- Jefferies reiterates its Buy rating and $21 price target after meeting with CEO Brian Moynihan. noting the continued focus on managing core expenses.
- "The earnings trajectory has improved and should continue to, if the macro delivers and rates provide the kicker," says analyst Ken Usdin. "We like BAC due to its path to improved profitability, demonstrated cost control, and cleaner capital return story."
Sep. 8, 2015, 10:40 AM
- A lot of investors and proxy firms are making headlines arguing for a vote against Bank of America (BAC +2%) CEO Brian Moynihan retaining the chairman's role, but the bank is mounting its own campaign in favor of the dual role.
- BofA head of strategy and marketing, general counsel Gary Lynch, and lead independent director Jack Bovender have been meeting with big investors both by phone and in New York to make their case. The bank is also paying $150K plus expenses to two outside firms to make phone calls to individual investors.
- The bank argues that taking the chairman role from Moynihan at this time - just as earnings are beginning to improve and the bank has seemingly overcome its stress test flubs - would be a distraction and throw BofA back into uncertainty. Those close to the matter say Moynihan hasn't given any indication of whether he would exit the CEO spot should he lose the chairman vote.
- Source: WSJ
- Previously: Proxy adviser ISS: Strip chairman role from BofA chief Moynihan (Sept. 4)
Sep. 4, 2015, 7:00 PM
- Influential proxy adviser Institutional Shareholder Services has joined the choir urging shareholders at Bank of America (BAC -1.8%) to strip CEO Brian Moynihan of his chairman's title.
- With shareholders objecting since Moynihan got the additional title last year, the company promised a vote that was then moved sooner, to Sept. 22.
- On Tuesday, the country's two biggest pension funds urged separating the roles at BofA, due to "inherent conflicts." Mike Mayo noted that letting Moynihan serve in both roles could bring more regulatory scrutiny.
Sep. 3, 2015, 4:31 PM
- Under the "advanced approaches framework" approved today by the Fed and OCC, Bank of America (NYSE:BAC) beginning in Q4 will be able to use its own risk weightings instead of standardized weightings when calculating risk-based capital requirements. This "framework" applies only to global banks with at least $250B in assets or at least $10B in foreign exposure.
- Before Bank of America (or any bank) can use this framework, it had to conduct a satisfactory "parallel run" using the framework.