Fri, Sep. 11, 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)
Thu, Sep. 10, 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)
Tue, Sep. 8, 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.
Tue, Sep. 8, 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."
Tue, Sep. 8, 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)
Fri, Sep. 4, 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.
Thu, Sep. 3, 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.
- Press release
Thu, Sep. 3, 12:10 PM
- "Do I need higher rates to buy Bank of America (BAC +1.6%)," ask Morgan Stanley's Betsy Graseck and Manan Gosalia. "No," they say, at least not at the current stock price.
- Forgetting higher rates, accelerating loan growth coupled with strong fee growth should lift revenues 3-5% Y/Y in 2016-17. Assuming a flat core expense ratio of 60% means another $0.07-$0.21 to EPS, or $2 to the stock price. And expense management - which BofA continues to work hard on - could mean even more upside to earnings.
Tue, Sep. 1, 8:05 AM
- The country's two largest pension funds - the California Public Employees' Retirement System and the California State Teachers' Retirement System - will vote against a measure allowing CEO Brian Moynihan to retain the chairman spot at Bank of America (NYSE:BAC).
- The two roles have "inherent conflicts" requiring them to remain separate and independent, say the funds in a letter to the bank's lead independent director Jack Bovender. The funds also note continuing underperformance of the stock price since Moynihan took the CEO role in 2010, struggles with the annual stress tests, and "sub-par engagement" with investors. “Given these missteps, we do not believe now is the time to reduce oversight of management by combining the roles of CEO and chair.”
- Source: Bloomberg
- Continuing his campaign against allowing Moynihan to serve in the two roles, Mike Mayo brings a megaphone onto CNBC. A "yes" vote on Sept. 22 - allowing Moynihan to retain both spots - could put a regulatory target on the industry's back (surely he means another regulatory target).
- Previously: WSJ: Labor group urges vote against Moynihan as chairman (Aug. 28)
- Previously: Mayo unloads on BofA over chairman/CEO vote (Aug. 20)
Mon, Aug. 31, 11:10 AM
- Sell-side dip buyers rushed into Bank of America (BAC -0.9%) last week with five analyst upgrades. Notching three upgrades each were Abercrombie & Fitch (ANF +2.6%) and Regions Financial (RF -0.9%) - Regions also scored an upgrade to Strong Buy this morning from Raymond James.
- KBW's Christopher Mutascio - who upgraded BofA to Outperform with $20 price target - had been waiting for a pullback to get aggressive. He's pleased some of the banking sector's momo investors - in because they were sure rates were headed higher - have vacated.
- Also upgrading Bank of America: UBS to Buy, with $20 PT up from $18; Macquarie to Neutral; Baird to Buy with $18 PT; Bernstein to Outperform with $19 PT.
- Source: StreetInsider
Fri, Aug. 28, 12:51 PM
- CtW is an advocate for union-affiliated pension funds holding roughly 21M shares (0.2% of the total) of Bank of America (BAC -0.5%), and plans sending a letter to shareholders today arguing for an independent chairman.
- The board, says CtW, showed "a shocking lack of awareness" towards shareholders for making CEO Brian Moynihan chairman in the first place.
- The vote is set for Sept. 22.
- Previously: Mayo unloads on BofA over chairman/CEO vote (Aug. 20)
- Previously: Two big tests on tap for BofA's Moynihan (Aug. 19)
Fri, Aug. 28, 11:10 AM
- There's plenty of precedent for the recent market action, says Morgan Stanley's Adam Parker, noting the market has dropped more than 5% 16 times since March 2009, and each time has moved on to new highs.
- His half-glass view is that the economy is in the middle of its longest expansion ever, and a less-active Fed, a nervous consumer maybe saving more, a lower oil price, and a flattish dollar all argue for continued expansion.
- Morgan's top ideas to buy on the pullback: AGN, AMZN, AAPL, AVGO, BAC, BKU, DAL, GILD, GOOG, GOOGL, HLT, JPM, KR, LEN, LMCK, MGA, MBLY, NWL, QCOM, SABR, CRM, SBAC, SBUX, BX, TMO, VRSK, WWAV, XL.
Thu, Aug. 27, 10:06 AM
- A rare growth business for Wall Street banks has been loans backed by investment portfolios, but with margin calls being issued this week, profits could take a hit if clients pull back from borrowing.
- Morgan Stanley (MS +1.6%) had $25.3B in securities-based loans outstanding as of June 30, up 37% year-over-year. Bank of America (BAC +0.2%) had $38.6B of the loans, up 14.2%. Wells Fargo (WFC +1.1%) had $59.3B, up 16%.
- The amounts are small compared to overall bank lending, but change comes at the margin, and the largest brokerage firms have reported higher securities-based loan balances each quarter for more than two years.
- Look for profits at bank wealth-management units to decline in coming quarters, says Portales Partners' Charles Peabody, in part thanks to declines in securities lending.
- Source: WSJ
Wed, Aug. 26, 7:22 PM
- Fidelity Investments is shopping around for better terms for a very popular and highly rated cash-back credit card, as it considers dropping American Express (NYSE:AXP) and Bank of America (NYSE:BAC) as its partners, Bloomberg reports.
- Visa (NYSE:V) and MasterCard (NYSE:MA) are wooing the No. 2 mutual fund provider, hoping to replace American Express on the Fidelity Investment Rewards American Express card, which routes 2% of purchases into a variety of brokerage, cash-management and savings accounts.
- A breakup would be the most recent blow to growth for AmEx, which is already splitting with Costco and JetBlue on their partner cards. Global Network Services -- where other banks issue AmEx-branded cards -- is the fastest-growing part of spending on AmEx's network.
- Co-branded cards now account for about 30% of all transactions.
- After hours: AXP -0.4%; BAC +0.2%; V +0.4%; MA +0.3%.
Tue, Aug. 25, 11:23 AM
- "Like the basketball player LeBron James, [JPMorgan Chase] is good at both offense and defense,” CLSA analysts Mike Mayo and Chris Spahr write as they upgrade JPM shares to Buy from Outperform with a $78 price target.
- For defense, JPMorgan (JPM +4.3%) has "a balance sheet that is the most resilient since it has been in its current form, the most stable earnings of U.S. global banks for the past decade, and a dividend level vs. the 10-year that implies stock outperformance 85% of the time," CLSA says.
- For offense, JPM "is a unique self-help story given tailwinds from expense savings" and has "historically gained market share in tougher environments."
- Banking shares are broadly higher but the upgrade seems to be giving JPM an extra boost; three analyst upgrades appear to be helping Bank of America (BAC +5.2%) in similar fashion.
Tue, Aug. 25, 9:15 AM
- Bank of America (NYSE:BAC) +6.3% premarket as the stock market is poised for an early rebound from yesterday's losses and BAC shares are upgraded to Outperform from Market Perform with a $19 price target at Bernstein.
- The selloff provides a more attractive entry point to recovering a "franchise with longer term potential to benefit from higher rates, improved operating leverage, and expanding capital return," the firm writes.
- BAC also is upgraded to Outperform from Neutral at Baird, which says steady growth in tangible book value should drive appreciation for the shares until the interest rate and growth outlook improves, and upgraded to Neutral from Underperform at Macquarie.
- Earlier: BofA upgraded at KBW, which sees cheap bank with limited China exposure (Aug. 25)
BAC vs. ETF Alternatives
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.
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