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BAC Dividend Hike on Hold After Stress Test Shows "Weakness"

By , Contributing Writer, Money Morning -

BAC dividend

Results of the U.S. Federal Reserve's so-called stress test were released Wednesday - and Bank of America Corp. (NYSE: BAC) passed only provisionally. As such, a long-awaited boost to the BAC dividend remains on hold.

In total, 28 U.S.-based banks passed the Fed's annual regulatory test.

Here's a look at BofA's stress test miss - plus 10 notable dividend hikes and share buybacks announced by banks that fared better this time...

Bank of America (NYSE: BAC), the Department of Justice, and Subprime Auto Loans

By , Chief Investment Strategist, Money Morning • @ShahGilani_TW -

BAC

Bank of America Corp. (NYSE: BAC) is in tentative talks with the U.S. Department of Justice to pay between $16 billion to $17 billion for its part in selling shoddy mortgages, being a Too Big to Fail bank that wasn't allowed to fail but now has to pay the piper.

Today, I'm going to tell you the story behind this, and a story about subprime auto loans.

And along the way you'll even get stock pick…

Dividend Investing News: Bank of America Hikes Payout by 400%, plus 25 More Increases

By , Contributing Writer, Money Morning -

dividend investing

Bank of America Corp.'s (NYSE: BAC) 400% quarterly dividend boost dominated dividend investing news last week.

BofA announced Wednesday it will raise its quarterly dividend for the first time in seven years to $0.05 a share, up from $0.01, with its Sept. 26 distribution.

Fifty-two other companies sweetened their payouts last week. Here are 25 of the top dividend-paying stocks that raised payouts during the week ending Aug. 8, 2014...

Dow Jones Today Sheds 75 Points on Russia Concerns, Plus BAC Fine, DSKY Debut

By , Behavioral Trading Specialist, Money Morning -

Dow Jones today

Dow Jones today, Aug. 7, 2014: U.S. stocks fell sharply in the final hour of trading Thursday despite declining jobless claims in the U.S. economy.

The ongoing standoff between the West and Russia continues to offset confidence in the U.S. economy. This morning, Moscow banned most food imports from Western nations in response to heightened economic sanctions.

Here are the top stories today…

Bank of America (NYSE: BAC) Stock Mostly Flat as BofA Nears $16.5 Billion Settlement

By , Contributing Writer, Money Morning -

BAC stock

Bank of America Corp. (NYSE: BAC) stock rose slightly Thursday morning by 1% to $15.44 on news the bank is near a more than $16.5 billion settlement over mortgage-backed securities that helped ignite the 2008 financial crisis, but BAC stock has since given back those gains in afternoon trading.

Here’s a look at the events leading up to what could be the largest federal settlement to date in the history of corporate America…

Bank of America (NYSE: BAC) Rounds Out Big Bank Earnings – Here's What We Know

By , Contributing Writer, Money Morning -

Bank of America Corp. (NYSE: BAC) reported Q2 earnings Wednesday that were dragged down by mounting litigation costs in addition to a decline in mortgage originations.

Second-quarter earnings from big banks have so far mostly surpassed estimates, but investor reactions have been mixed.

Wednesday also brought numbers from some major regional banks. Let’s first look at how BofA fared and how reported Q2 earnings affected BAC stock today…

Why the U.S. is Suing Bank of America (NYSE: BAC)

By , Contributing Writer, Money Morning -

Long after the disco era, Bank of America Corp. (NYSE: BAC) was still singing "Do the Hustle."

So the federal government alleges.

U.S. regulators maintain BofA, the second biggest U.S. bank by assets, and its partner in crime, its Countrywide Financial Corp. unit, burdened taxpayers with hordes of losses by misrepresenting the quality of home loans they sold to Fannie Mae and Freddie Mac.

In federal court in Manhattan on Wednesday, the Justice Department slapped BofA with the suit, seeking damages of at least $1 billion claiming mortgage fraud.

Filed under the False Claims Act, the lawsuit also threatens to impose steep fines and could provide for three times the damages suffered by Fannie and Freddie, a penalty that could swell to more than $3 billion.

The complaint claims that in 2007, ailing Countrywide, saddled with revenue shortfalls as the subprime mortgage markets came tumbling down, did away with background checks on loan quality in a process streamlining effort dubbed "the Hustle," short for the acronym HSSL-High Speed Swim Lane. According to Countrywide documents, the program's mantra was "move forward, never backward."

Meanwhile, the bank gave surety to Fannie and Freddie that it was strengthening its underwriting guidelines.

The move by the U.S. government is seen as a means to help it foot the hefty costs linked to the 2008 bailout of Fannie and Freddie.

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Thanks to the Fed, It's All Proceeding According to "The Plan"

By , Chief Investment Strategist, Money Morning • @ShahGilani_TW -

If you've been reading the headlines, you know Bank of America Corp. (NYSE:BAC) is in trouble. It could be in really big trouble.

Thank goodness they're so big!

Thank goodness all the big banks in America are all much bigger now than they were a few years ago, before the financial crisis brought them to their knees, by their own doing, of course.

Don't you just love it when a plan comes together?

Yeah, it's all part of "The Plan" to eliminate pesky banking competition.

Let me show you how nicely it's working...

The Fed's 100-Year Plan

The Plan was hatched a long time ago. Back in 1913, as a matter of fact.

That's when Congress devised the Federal Reserve System for eliminating competition and making sure U.S. taxpayers would be the lender of last resort to big bankers.

It has taken a while, 100 years, in fact. But it is working.

The first sign it was working came in the 1980s and '90s, when the savings and loans got into serious trouble playing the greed game.

They weren't covered by the Federal Reserve System. So they were shut down, or rolled up by government-backed insiders (Congress' puppet-masters), and later sold to big banks for sweet profits.

Anyway, they're gone. No more pesky competition from S&L associations.

Now look who's next on the chopping block...



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Stock Market Today: This Stock's Dip Could Be Promising

By , Money Morning -

The stock market today opened flat as positive housing data was weighed down by somewhat mixed earnings.

Here's our market roundup and one stock that's soaring today.

  • Housing starts reach four-year high- The housing market continues to show signs of recovery as the rate of home building in September grew to levels not seen since July 2008. Housing starts rose to an annual pace of 872,000 homes, up 15% from August. Builders also filed for permits at an annual rate of 894,000 homes, up 11.6% from last month and 45.1% year-over-year. Demand for housing will continue to be helped by the Federal Reserve's pledge to keep interest rates near historic levels and the implementation of QE3. Housing prices have rebounded from their nadirs in part because foreclosures are at five-year lows and because the number of U.S. households grew 2% in 2011, its largest rise in 10 years. "There is going to be a continued housing recovery over the next few years," said Larry Seay, chief financial officer at Meritage Homes Corp. (NYSE: MTH) in Scottsdale, AZ, at an investor conference. "Pent-up demand that has built up from people deferring household formation is going to help buoy the recovery. High affordability not only with house prices being very low, but also interest rates being as low as they've been in decades, and all that translating into an improved buyer confidence."
  • Bank of America Corp (NYSE: BAC) delivers a mixed bag- Charlotte, NC-based Bank of America barley managed to squeeze out a profit for the third quarter after $1.6 billion in litigation charges ate away at its earnings. The financial giant earned $340 million - a little more than zero cents per share. That was better than analysts' average estimate of a loss of 7 cents per share, but well below last year's third-quarter profit of $6.2 billion, or 56 cents per share. Revenue also fell, slumping to $20.4 billion from $28.5 billion a year ago, missing expectations. A day after Citigroup CEO Vikram Pandit abruptly resigned, Bank of America's CEO Brian Moynihan sounded confident about his bank's future. "We are doing more business with our customers and clients, deposits are up, mortgage originations are up," he said. "Our strategy is taking hold even as we work through a challenging economy and continue to clean up legacy issues." BAC stock is up 0.6% in early trading.
Here's one stock that beat earnings and is poised for future success.

Read More…

Bank of America (NYSE: BAC) May Never Fully Recover

By , Contributing Writer, Money Morning -

Bank of America (NYSE: BAC) has been working hard to regain its profitability and stature, but a better-than-expected earnings report isn't enough.

On Thursday the company reported earnings of 3 cents a share. Revenue came in light at $22.28 billion.

Although analysts were looking for 12 cents a share, several weighed in saying that a $4.8 billion charge known as debt valuation adjustment (DVA) complicated the earnings report. Some say BofA actually beat core earnings expectations.

Evercore analyst Andrew Marquardt wrote, "Our initial view of core is closer to 26 cents."

Return on average equity of 11.05% beat fourth-quarter results, but was less than the 15.41% return the bank posted for the first quarter a year ago. BAC succeeded in reducing its credit-loss provisions to $2.42 billion from $3.81 billion in the fourth quarter.

"You had very favorable tailwinds in the fixed-income markets and so trading revenues are very strong for this universe right now," Charles Peabody, an analyst at Portales Partners LLC in New York, said in a Bloomberg Radio interview. "There's no question the earnings that are being reported are very good -- the question is the sustainability."

Despite beating estimates with its first-quarter earnings, BofA has struggled more than its counterparts in the wake of the financial crisis. The damage may be too much to allow the bank to grow to as big as it once was.



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Here is What's Wrong With Bank of America (NYSE: BAC)

By , Chief Investment Strategist, Money Map Report -


If you have a mortgage with Bank of America (NYSE: BAC) and want to refinance, don't bother.

You are not worth the bank's time. Or at least I wasn't.

That's what I learned first-hand last week when I called Bank of America to refinance a home mortgage I've had with them for years.

My jaw practically hit the floor when Alejandro from BofA's mortgage department told me this over the phone.

"Because of excessively high demand," Alejandro said, "we can't accept your refinancing application. But we can take a reservation and have an agent call you in 90 to 120 days."

Huh?...You can't be serious.

I really have to wait three or four months to even apply for a lower interest rate when I've been an existing customer for years?

Yeah, I bet, I thought to myself...

They'll call me when interest rates are much higher or when BofA works its way through its part of the $25 billion robo-signing settlement reached over its abuses in the foreclosure process.

Of course, all of this is after BofA received $45 billion in taxpayer bailout funding.

And after they reportedly shifted the risks associated with $75 trillion in derivatives from its investment banking and trading units to BofA's depository arm, a unit flush with FDIC-insured deposits.

But that is another story for another day.

How Bank of America Treats its Customers

Suspecting something wasn't quite right, I made a second call to BofA to inquire about a new loan.

Not ten minutes later I was put through immediately to an underwriter who was all too happy to help a new, unknown prospect - a.k.a. me - take on more debt. Imagine that.

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