BAC%20Ponders%20Retreat - Wall Street Journal FRONT PAGE...

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Wall Street Journal FRONT PAGE JANUARY 13, 2012 Bank of America Ponders Retreat by Dan Fitzpatrick and Joann S. Lublin Bank of America Corp. has told U.S. regulators that it is willing to retreat from some parts of the country if its financial problems deepen, according to people familiar with the situation. Bank of America Chief Executive Brian Moynihan is under pressure to improve the bank's performance. Executives at the Charlotte, N.C., financial giant put the potential move on a list of emergency scenarios submitted to the Federal Reserve last year, these people said. While people close to Bank of America insist that no retreat is imminent, even the possibility of selling branches and losing customers it spent huge sums to lure underscores the depth of its problems. WSJ's Andrew Dowell has details of a proposal by Bank of America to retreat from parts of the U.S. if its financial troubles continue. Among the 7,400 U.S. banks and savings institutions, Bank of America, J.P. Morgan Chase & Co. and Wells Fargo & Co. are the only coast-to-coast giants. For the past 20 years, Bank of America and predecessor NationsBank Corp. relentlessly acquired other financial institutions in a form of manifest destiny that shook the U.S. banking industry. The 1998 takeover of BankAmerica Corp., of San Francisco, and 2004 purchase of FleetBoston Financial Corp., Boston, left the combined bank with sizable muscle in nearly every large metropolitan area in the country. Over the course of its long expansion, Bank of America, currently the country's second-largest bank by assets, pushed its way into every nook and cranny of the financial system. But in doing so the bank left itself more exposed than any major bank to the severe economic downturn of 2008-2009, the weak recovery since and a litany of mortgage-related lawsuits. Bank of America stumbled at a time when the entire U.S. banking industry was going through its worst crisis since the 1930s, prompting a federal bailout of many of the nation's largest financial institutions. Still, some of Bank of America's worst wounds, particularly its 2008 purchase of Countrywide Financial Corp., were self- inflicted. Its share price has tumbled 55% in the past year, the worst performance of any major U.S. bank. In the third quarter, J.P. Morgan leapfrogged Bank of America to become the biggest U.S. bank by assets. Bank of America Chief Executive Brian Moynihan put a possible geographic retrenchment on the list submitted in the middle of last year to Fed officials. Also on the list is a potential sale of a separate class of shares tied to the performance of Merrill Lynch & Co., the securities firm owned by Bank of America, according to people familiar with the matter. Merrill was sinking when Bank of America swooped in to buy the firm in 2008, but has since turned itself around. The Fed, which acts as the company's primary regulator, asked for documentation about contingency plans last year in response to uncertainty about a U.S. recovery and the downward swing in
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This note was uploaded on 01/26/2012 for the course FIN 4620 taught by Professor Patriciarobertson during the Spring '12 term at Kennesaw.

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BAC%20Ponders%20Retreat - Wall Street Journal FRONT PAGE...

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