9/27/2010

Bank of America corporate buildings


Bank of America corporate buildings


Bank of America Plaza, Atlanta, Georgia.
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9/26/2010

Consumer


Consumer

Global Consumer and Small Business Banking (GC&SBB) is the largest division in the company, and deals primarily with consumer banking and credit card issuance. The acquisition of FleetBoston and MBNA significantly expanded its size and range of services, resulting in about 51% of the company's total revenue in 2005. It competes directly with the retail banking divisions of Citigroupand JPMorgan Chase. The GC&SBB organization includes over 6,100 retail branches and over 18,700 ATMs across the United States.

Bank of America is a member of the Global ATM Alliance, a joint venture of several major international banks that allows customers of the banks to use their ATM card or check card at another bank within the Global ATM Alliance with no ATM access fees when traveling internationally. Other participating banks are Barclays (United Kingdom), BNP Paribas (France),China Construction Bank (China), Deutsche Bank (Germany), Santander Serfin (Mexico), Scotiabank(Canada) and Westpac (Australia and New Zealand).[81] This feature is restricted to withdrawals using a debit card, though credit card withdrawals are still subject to cash advance fees and foreign currency conversion fees. Additionally, some foreign ATMs use Smart Card technology and may not accept non-Smart Cards.

Bank of America offers banking and brokerage products as a result of the acquisition of Merrill Lynch. Savings programs such as "Add it Up"[82] and "Keep the Change" have been well received and are a reflection of the product development banks have taken during the 2008recession.

Bank of America, N.A is a nationally chartered bank, regulated by the Office of the Comptroller of the Currency, Department of the Treasury.
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9/24/2010

Bank of America divisions


Bank of America divisions

Bank of America ATM
Bank of America branch in Washington, D.C.
Bank of America generates 90% of its revenues in its domestic market and continues to buy businesses in the US. The core of Bank of America's strategy is to be the number one bank in its domestic market. It has achieved this through key acquisitions.
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9/22/2010

Bonus settlement


Bonus settlement

On August 3, 2009, Bank of America agreed to pay a $33 million fine, without admission or denial of charges, to the U.S. Securities and Exchange Commission (SEC) over the non-disclosure of an agreement to pay up to $5.8 billion of bonuses at Merrill. The bank approved the bonuses before the merger but did not disclose them to its shareholders when the shareholders were considering approving the Merrill acquisition, in December 2008. The issue was originally investigated by New York State Attorney General Andrew Cuomo, who commented after the suit and announced settlement that "the timing of the bonuses, as well as the disclosures relating to them, constituted a 'surprising fit of corporate irresponsibility'" and "our investigation of these and other matters pursuant to New York's Martin Act will continue." Congressman Kucinich commented at the same time that "This may not be the last fine that Bank of America pays for how it handled its merger of Merrill Lynch."[66] A federal judge, Jed Rakoff, in an unusual action, refused to approve the settlement on August 5.[67] A first hearing before the judge on August 10 was at times heated, and he was "sharply critic[al]" of the bonuses. David Rosenfeld represented the SEC, and Lewis J. Liman, son of Arthur L. Liman, represented the bank. The actual amount of bonuses paid was $3.6 billion, of which $850 million was "guaranteed" and the rest was shared amongst 39,000 workers who received average payments of $91,000; 696 people received more than $1 million in bonuses; at least one person received a more than $33 million bonus.[68]

On September 14, the judge rejected the settlement and told the parties to prepare for trial to begin no later than February 1, 2010. "The judge focused much of his criticism on the fact that the fine in the case would be paid by the bank's shareholders, who were the ones that were supposed to have been injured by the lack of disclosure. 'It is quite something else for the very management that is accused of having lied to its shareholders to determine how much of those victims’ money should be used to make the case against the management go away,' the judge wrote. ... The proposed settlement, the judge continued, 'suggests a rather cynical relationship between the parties: the S.E.C. gets to claim that it is exposing wrongdoing on the part of the Bank of America in a high-profile merger; the bank's management gets to claim that they have been coerced into an onerous settlement by overzealous regulators. And all this is done at the expense, not only of the shareholders, but also of the truth.'"[69]

While ultimately deferring to the SEC, in February, 2010, Judge Rakoff approved a revised settlement with a $150 million fine "reluctantly", calling the accord "half-baked justice at best" and "inadequate and misguided." Addressing one of the concerns he raised in September, the fine will be "distributed only to Bank of America shareholders harmed by the non-disclosures, or 'legacy shareholders,' [and it's also] an improvement on the prior $33 million while still 'paltry,' according to the judge." Case: SEC v. Bank of America Corp., 09-cv-06829, United States District Court for the Southern District of New York.[70]

Investigations also were held on this issue in the United States House Committee on Oversight and Government Reform[69], under chairmanEdolphus Towns (D-NY)[71] and in its investigative Domestic Policy Subcommittee under Kucinich.[72]
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9/20/2010

Acquisition of Merrill Lynch


Acquisition of Merrill Lynch

On September 14, 2008, Bank of America announced its intentions to purchase Merrill Lynch & Co., Inc. in an all-stock deal worth approximately $50 billion. Merrill Lynch was at the time within days of collapse, and the acquisition effectively saved Merrill frombankruptcy.[51] Around the same time Bank of America was reportedly also in talks to purchase Lehman Brothers, however a lack of government guarantees caused the bank to abandon talks with Lehman.[52] Lehman Brothers filed for bankruptcy the same day Bank of America announced its plans to acquire Merrill Lynch.[53] This acquisition made Bank of America the largest financial services company in the world.[54] Temasek Holdings, the largest shareholder of Merrill Lynch & Co., Inc., briefly became one of the largest shareholders of Bank of America,[55], with a 3% stake. However, taking a loss Reuters estimated at $3 billion, the Singapore sovereign wealth fund sold its whole stake in Bank of America in the first quarter of 2009.[56]

Shareholders of both companies approved the acquisition on December 5, 2008, and the deal closed January 1, 2009.[57] Bank of America had planned to retain various members of Thain's management team after the merger.[58] However, after Thain was removed from his position, most of his allies left. The departure of Nelson Chai, who had been named Asia-Pacific president, left just one of Thain's hires in place, Tom Montag as head of sales and trading.[59]

The Bank, in its January 16, 2009 earnings release, revealed massive losses at Merrill Lynch in the fourth quarter, which necessitated an infusion of money that had previously been negotiated[60] with the government as part of the government-persuaded deal for the Bank to acquire Merrill. Merrill recorded an operating loss of $21.5 billion in the quarter, mainly in its sales and trading operations, led by Tom Montag. The Bank also disclosed it tried to abandon the deal in December after the extent of Merrill's trading losses surfaced, but was compelled to complete the merger by the U.S. government. The Bank's stock price sank to $7.18, its lowest level in 17 years, after announcing earnings and the Merrill mishap. The market capitalization of Bank of America, including Merrill Lynch, was then $45 billion, less than the $50 billion it offered for Merrill just four months earlier, and down $108 billion from the merger announcement.

Bank of America CEO Kenneth Lewis testified before Congress[12] that he had some misgivings about the acquisition of Merrill Lynch, and that federal officials pressured him to proceed with the deal or face losing his job and endangering the bank's relationship with federal regulators.[61]

Lewis' statement is backed up in internal emails subpoenaed by Republican lawmakers on the House Oversight Committee.[62] In one of the emails, Richmond Federal Reserve President Jeffrey Lacker threatened that if the acquisition did not go through, and later Bank of America were forced to request federal assistance, the management of Bank of America would be "gone". Other emails, read by Congressman Dennis Kucinich during the course of Lewis' testimony, state that Mr. Lewis had foreseen the outrage from his shareholders that the purchase of Merrill would cause, and asked government regulators to issue a letter stating that the government had ordered him to complete the deal to acquire Merrill. Lewis, for his part, states he didn't recall requesting such a letter.

The acquisition made Bank of America the number one underwriter of global high-yield debt, the third largest underwriter of global equity and the ninth largest adviser on global mergers and acquisitions.[63] As the credit crisis eased, losses at Merrill Lynch subsided, and the subsidiary generated 3.7 billion of Bank of America's 4.2 billion in profit by the end of Q1 2009, and over 25% in the Q3 2009.[64][65]
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9/18/2010

Acquisition of Countrywide Financial




Acquisition of Countrywide Financial

On August 23, 2007 the company announced a $2 billion repurchase agreement for Countrywide Financial. This purchase of preferred stockwas arranged to provide a return on investment of 7.25% per annum and provided the option to purchase common stock at a price of $18 per share.[43]

On January 11, 2008, Bank of America announced they would buy Countrywide Financial for $4.1 billion.[44] In March 2008, it was reported that the FBI was investigating Countrywide for possible fraud relating to home loans and mortgages.[45] This news did not stop the acquisition, which was completed in July 2008,[46] giving the bank a substantial market share of the mortgage business, and access to Countrywide's resources for servicing mortgages.[47] The acquisition was seen as preventing a potential bankruptcy for Countrywide. Countrywide, however, denied that it was close to bankruptcy. Countrywide provided mortgage servicing for nine million mortgages valued atUS$1.4 trillion as of December 31, 2007.[48]

This purchase made Bank of America Corporation the leading mortgage originator and servicer in the U.S. , controlling 20–25% of the home loan market.[49] The deal was structured to merge Countrywide with the Red Oak Merger Corporation, which Bank of America created as an independent subsidiary. It has been suggested that the deal was structured this way to prevent a potential bankruptcy stemming from large losses in Countrywide hurting the parent organization by keeping Countrywide bankruptcy remote.[50] Countrywide Financial has changed its name to Bank of America Home Loans.
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9/16/2010

In 2001, Bank of America CEO and chairman Hugh McColl stepped down and named Ken Lewis as his successor.


History since 2001



In 2001, Bank of America CEO and chairman Hugh McColl stepped down and named Ken Lewis as his successor.

In 2004, Bank of America announced it would purchase Boston-based bank FleetBoston Financial for $47 billion in cash and stock.[38] By merging with Bank of America, all of its banks and branches were given the Bank of America logo. At the time of merger, FleetBoston was the seventh largest bank in United States with $197 billion in assets, over 20 million customers and revenue of $12 billion.[38] Hundreds of FleetBoston workers lost their jobs or were demoted, according to the Boston Globe.

On 30 June 2005, Bank of America announced it would purchase credit card giant MBNA for $35 billion in cash and stock. The Federal Reserve Board gave final approval to the merger on 15 December 2005, and the merger closed on 1 January 2006. The acquisition of MBNA provided Bank of America a leading credit card issuer at home and abroad. The combined Bank of America Card Services organization, including the former MBNA, had more than 40 million U.S. accounts and nearly $140 billion in outstanding balances. Under Bank of America the operation was renamed FIA Card Services.
Footprint of Bank of America locations


In May 2006, Bank of America and Banco Itaú (Investimentos Itaú S.A.) entered into an acquisition agreement through which Itaú agreed to acquire BankBoston's operations in Brazil and was granted an exclusive right to purchase Bank of America's operations in Chile andUruguay. A deal was signed in August 2006 under which Itaú agreed to purchase Bank of America's operations in Chile and Uruguay. Prior to the transaction, BankBoston's Brazilian operations included asset management, private banking, a credit card portfolio, and small, middle-market, and large corporate segments. It had 66 branches and 203,000 clients in Brazil. BankBoston in Chile had 44 branches and 58,000 clients and in Uruguay it had 15 branches. In addition, there was a credit card company, OCA, in Uruguay, which had 23 branches. BankBoston N.A. in Uruguay, together with OCA, jointly served 372,000 clients. While the BankBoston name and trademarks were not part of the transaction, as part of the sale agreement, they cannot be used by Bank of America in Brazil, Chile or Uruguay following the transactions. Hence, the BankBoston name has disappeared from Brazil, Chile and Uruguay. The Itaú stock received by Bank of America in the transactions has allowed Bank of America's stake in Itaú to reach 11.51%. Banco de Boston de Brazil had been founded in 1947.

On 20 November 2006, Bank of America announced the purchase of The United States Trust Company for $3.3 billion, from the Charles Schwab Corporation. US Trust had about $100 billion of assets under management and over 150 years of experience. The deal closed 1 July 2007.[39]

On September 14, 2007, Bank of America won approval from the Federal Reserve to acquire LaSalle Bank Corporation from Netherlands'sABN AMRO for $21 billion. With this combination Bank of America will have 1.7 trillion in assets. A Dutch court blocked the sale until it was later approved in July. The acquisition was completed on October 1, 2007.

The deal increased Bank of America's presence in Illinois, Michigan, and Indiana by 411 branches, 17,000 commercial bank clients, 1.4 million retail customers, and 1,500 ATMs. Bank of America has become the largest bank in the Chicago market with 197 offices and 14% of the deposit share, surpassing JPMorgan Chase.

LaSalle Bank and LaSalle Bank Midwest branches adopted the Bank of America name on 5 May 2008.[40]

Ken Lewis resigned as of December 31, 2009, in part due to controversy and legal investigations concerning the purchase of Merrill Lynch, andBrian Moynihan became President and CEO effective January 1, 2010. After Moynihan assumed control, credit card charge offs and delinquencies declined in January. Bank of America also repaid the US$45 billion it had received from the Troubled Assets Relief Program.[41][42]
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