Wed, Feb. 18, 2:49 PM
- The financial sector had begun to turn around a dismal start to the year as February brought forth a string of hawkish Fed heads suggesting a June rate hike, but the XLF is lower by 0.8% after just-released FOMC minutes suggest markets and the hawks are getting ahead of themselves. KBE -1.7%, KRE -2%
- The TBTFs: BofA (BAC -2.2%), JPMorgan (JPM -1.4%), Wells Fargo (WFC -1.6%), Ciitgroup (C -0.8%)
- The regionals: Regions Financial (RF -1.6%), KeyCorp (KEY -1.6%), PNC Financial (PNC -1.3%), BB&T (BBT -1.5%), Fifth Third (FITB -1.6%), SunTrust (STI -1.7%), First Niagara (FNFG -2.1%), M&T (MTB -1.9%), U.S. Bancorp (USB -1.3%), First Horizon (FHN -2.7%).
- Online brokerage: Schwab (SCHW -2.3%), E*Trade (ETFC -1.7%), Ameritrade (AMTD -1.1%), Interactive Brokers (IBKR -0.9%).
- Previously: FOMC minutes: June rate hike not a slam dunk yet (Feb. 18)
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, IAI, SEF, IYG, FXO, FNCL, KBWB, QABA, FINU, KCE, KRU, RWW, KBWR, RYF, KBWC, FINZ, KRS
Tue, Feb. 17, 7:52 PM
- Bank of America (NYSE:BAC) CEO Brian Moynihan reportedly took a 7% pay cut in 2014 to $13M, down from a personal record $14M a year earlier.
- Moynihan received $11.5M in stock-based compensation, down from $12.5M for 2013, while his base salary remained unchanged at $1.5M.
- The payout for shows BofA’s board at least kept the CEO’s paycheck moving in the same direction as the company’s bottom line, which plunged 58% in 2014, weighed down by the costs of the DoJ settlement and other litigation; the bank’s profit did increase across most major units, including consumer and business banking and global markets.
Wed, Feb. 11, 10:24 AM
- Not this stuff again, one imagines Bank of America (BAC -0.9%) shareholders saying.
- According to the WSJ, BofA's U.S. banking subsidiary for years has helped finance transactions from the bank's European investment bank arm which, among other things, helped hedge funds avoid taxes on stock dividends. According to the Journal, BofA has made about $1B in revenue from "dividend arbitrage" since the financial crisis.
- The practice - which drew the attention of regulators both for reputational risk as well as the need to wall off insured deposits from risky trades - has ended, says a bank spokesman.
Tue, Feb. 10, 4:23 PM
Tue, Feb. 10, 11:51 AM
- Among the upside catalysts for Citigroup (C +0.4%) - says Deutshce in its upgrade of the stock to Buy from Hold - will be the approval of $4B in share repurchases in this spring's CCAR.
- Citi's plans to buy back stock and boost the dividend have been rejected by the Fed twice in the last three years, and CEO Michael Corbat has staked his job on approval this year.
- Another catalyst, says Deutsche, will be the sale or IPO of OneMain Financial.
- Turning back to the CCAR, Detusche expects the largest increases in capital returns to be at Citi, Bank of America (BAC +0.6%), Regions Financial (RF +0.3%), Morgan Stanley (MS +1.1%), SunTrust (STI +0.1%), and Citizens Financial (CFG +1.9%). Total payout ratios at the larger regional lenders should be 79% this year, up 1000 basis points from 2014.
- Previously: Bank pair trade from Deutsche (Feb. 10)
- Presenting at the Credit Suisse conference, CEO of U.S. Consumer & Commerical Banking and Citi Mortgage Jane Fraser touts the banks laser focus for retail on this country's largest 7 markets.
- Presentation slides
- Previously: Citi looks to boost mortgage business with Zillow tie-up (Feb. 10)
Fri, Feb. 6, 9:50 AM
- Financials have been mercilessly pounded in 2015 as hopes for higher interest rates looked like they might be dashed yet again, but today's blowout jobs number - firmly putting a June rate hike on the table - has brought in the dip-buyers.
- The major averages are flat, but the XLF is up 1.4%. The Regional Bank ETF (KRE +2%) and the Bank ETF (KBE +2.1%) are doing even better.
- Among the yield-starved banking names: Bank of America (BAC +3.1%), JPMorgan (JPM +2.6%), Citigroup (C +2%), Regions Financial (RF +4%), KeyCorp (KEY +3%), PNC Financial (PNC +2.9%), SunTrust (STI +2.3%), Zions (ZION +3.6%), Synovus (SNV +2.3%).
- Insurers: MetLife (MET +2%), Prudential (PRU +3.2%), Lincoln National (LNC +4.6%). AIG (AIG +1.5%).
- Trust banks: BNY Mellon (BK +2.7%) State Street (STT +1.9%), Northern Trust (NTRS +2.3%).
- Online brokers (currently getting killed on money-market fee rebates): Schwab (SCHW +4.5%), TD Ameritrade (AMTD +3.5%), E*Trade (ETFC +2.1%).
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, KIE, IAT, IAI, SEF, IYG, IAK, FXO, FNCL, KBWB, QABA, FINU, KRU, RWW, KBWR, RYF, KBWP, KBWI, PSCF, FINZ, KRS
Wed, Feb. 4, 11:08 AM
- Bank of America (BAC) confirms plans to lay off 202 mortgage servicing workers in Norfolk, Virginia by March 29.
- The continued cuts in Legacy Asset Servicing come as the numbers of bad mortgages being serviced by the bank continue to dwindle. At its peak, LAS had over 42K workers servicing troubled mortgages, but more than half of those positions have been eliminated.
- The bank's overall headcount at year-end was 223.7K vs. a peak of more than 290K in 2011.
Tue, Feb. 3, 1:54 PM
- "The jury’s conclusion that this was a massive and intentional fraud was amply supported by the evidence," says federal judge Jed Rakoff, denying Bank of America's (BAC +2.4%) appeal for a new trial over a Countrywide mortgage-lending program known charmingly known as "Hustle."
- A jury two years ago found the bank liable to the tune of $1.27B.
- No check will be written yet, as the denial clears the way for BofA to file another motion in appeals court, potentially setting up another long battle with the DOJ.
- The case is perhaps most interesting as most bank's typically settle these affairs well before they get in front of a jury, but BofA decided to let this one play out.
- Previously: BofA ordered to pay $1.3B in "hustle" case (July 30, 2014)
Tue, Feb. 3, 10:24 AM
- A.J. Murphy is returning to the role of co-head of global leveraged finance at Bank of America (NYSE:BAC) one year after exiting to join Goldman Sachs.
- It's not yet clear if she will be required to take six months of "gardening leave" - time off between jobs to safeguard sensitive deal info and client relationships. In an unusual move, BofA COO Thomas Montag waived this when she left to join Goldman last year.
Mon, Feb. 2, 8:31 AM
- "Sometimes you must take two steps back in order to go ten steps forward," says Bruce Berkowitz, talking about Bank of America (NYSE:BAC) - his 2nd largest position - in Fairholme Fund's annual report.
- "Intermediaries might seem like ideal clients, but history shows that they are more adversary than friend," says Berkowitz, clapping his hands over the disposal of the bank's profitable wholesale mortgage business, and expecting continued shrinkage of non-core assets.
- BofA's balance sheet, he adds, is set up for a growing economy and a rising-rate environment, with every increase of 100 basis points potentially boosting revenue by $3.7B.
- Previously: Berkowitz sticks with AIG (Feb. 2)
- Previously: Berkowitz added to Frannie holdings (Feb. 2)
Thu, Jan. 29, 1:16 PM
- Bank of America (BAC +1.2%) continues to pare back its branch network, selling 18 locations in North Florida and South Georgia to Moultrie-based Ameris Bancorp (ABCB +8.1%).
- Ameris, meanwhile, has a big gain following this morning's earnings miss, and the report also included the BofA acquisitions along with an agreement for $50M to buy Merchants & Southern Banks of Florida, with another 12 branches, assets of $473M, loans of $214M, and deposits of $336M.
- Previously: Ameris Bancorp misses by $0.05, misses on revenue (Jan. 29)
Thu, Jan. 29, 11:47 AM
- "We certainly recognize all the headwinds, notably on the regulatory capital side, but low-hanging fruit on capital efficiency actions should drive some ROE improvement," says the team of David Trone and Pankaj Chitrakar, and they expect better CCAR outcomes for at least a few of the names (including Citi, one would think) in a few weeks.
- As for operating results, whether they come in good or not so good this year hinges on whether the Fed hikes or not. That forecast sounds a lot like 2014, 2013, and 2012, but the two note the likelihood of higher rates appears far higher this year.
- They maintain Buy ratings on Citigroup (C +0.1%), Morgan Stanley (MS +1%), Goldman Sachs (GS +1%), Bank of America (BAC +0.7%), and JPMorgan (JPM +1.1%), with Citi, Goldman, and Morgan Stanley their top picks.
- Previously: Financials go on sale in January (Jan. 24)
Sat, Jan. 24, 4:48 PM
- The financial sector is off to a worse start to the year than even the energy names, with the XLF down 3.9% YTD vs. the XLE's 3.2% decline. The S&P 500 is roughly flat. The SPDR KBW Bank ETF (NYSEARCA:KBE) is off 7.5%, and the Regional Bank ETF (NYSEARCA:KRE) is lower by 6.9%.
- Q4 earnings results haven't been wonderful, but financial names had been savaged well before those reports started coming out. Instead there's a difficult regulatory regime that won't quit, and - for now - it's looking like "wait'll next year" for the rising interest rates that were supposed to drive profit margins higher. The 10-year/2-year spread - already pretty low at 150 basis points to start the year - has narrowed to 137 bps.
- A partial roll call of banks: Bank of America (NYSE:BAC) -12.1% YTD, Citigroup (NYSE:C) -10.1%, JPMorgan (NYSE:JPM) -9.4%, Morgan Stanley (NYSE:MS) -9.4%, Regions Financial (NYSE:RF) -14.7%, KeyCorp (NYSE:KEY) -4.5%, PNC Financial (NYSE:PNC) -5.4%, Bank of New York (NYSE:BK) -9.1%, Capital One (NYSE:COF) -6%, Discover (NYSE:DFS) -13.6%.
- Other spread-starved sector names: MetLife (NYSE:MET) -9.8%, AIG (NYSE:AIG) -8%, Prudential (NYSE:PRU) -10.8%, Schwab (NYSE:SCHW) -9.9%.
- Some of what's working in financials: Blackstone (NYSE:BX) +6.7%, E*Trade (NASDAQ:ETFC) +1.2%, WisdomTree (NASDAQ:WETF) +12.3%, Legg Mason +2.8%.
Fri, Jan. 23, 3:06 PM
- It's something Bank of America (BAC -1.6%) hasn't done in more than a decade, writes Deon Roberts - opening a branch in a new market.
- This week, the bank cut the ribbon on a branch in Denver, its first in that state, and BofA says there's more to come. In addition, the bank plans to open its first branch in Minnesota in Q2. It will come in Minneapolis and be followed by other branches in the Twin Cities area over the next two years.
- The moves are particularly noteworthy as BofA is rapidly closing branches in other U.S. markets, but CEO Brian Moynihan is making a point of having retail locations in major markets where the bank is already serving customers and businesses through its U.S. Trust and Merrill Lynch units. “We’ll go to other markets largely just to complete the footprint,” says Moynihan. "You've got to complete the franchise."
Thu, Jan. 22, 12:35 PM
- Mercilessly sold since the year turned, banks are putting in a rare session of outperformance, helped along by some earnings beats from regional lenders and the return of animal spirits in M&A with RBC's purchase of City National (CYN +18.6%) for $5.4B.
- The XLF +1.4% vs. the S&P's 0.6% gain today, and the regional bank ETF (NYSEARCA:KRE) is higher by 3.1%.
- Among today's reporters putting in big gains are KeyCorp (KEY +5.5%), BB&T (BBT +2.4%), and Huntington Bancshares (HBAN +2.6%), though Flagstar Bancorp (FBC -4.8%) missed estimates.
- Others: Regions Financial (RF +3.9%), PNC Financial (PNC +1.6%), Synovus (SNV +3.2%), M&T Bank (MTB +3%), Hudson City (HCBK +3.1%), First Horizon (FHN +2.7%), and First Republic (FRC +4.9%).
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, IAI, SEF, IYG, FXO, FNCL, KBWB, QABA, FINU, KRU, RWW, KBWR, RYF, PSCF, FINZ, KRS
- Among the TBTFs, Citigroup (C +2.7%) and Bank of America (BAC +2.5%) are leading the way.
Wed, Jan. 21, 12:19 PM
- Bank of America (NYSE:BAC) hired Tim Watson in 2010 to lead its Canadian energy and power investment banking operation, but those services aren't in great demand at the moment thanks to the crash in oil prices, and he's left the firm, reports Bloomberg.
- Previously: Unexpected rate cut for Canada (Jan. 21)
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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