On Air Now

Upcoming Shows

Program Schedule »

Listen

Listen Live Now » 1330 AM Sheboygan, WI

Weather

Current Conditions(Sheboygan,WI 53081)

More Weather »
58° Feels Like: 58°
Wind: SSW 7 mph Past 24 hrs - Precip: 0”
Current Radar for Zip

Today

Isolated Thunderstorms 72°

Tonight

Scattered Thunderstorms 65°

Tomorrow

Partly Cloudy 84°

Alerts

BofA told Fed it could sell branches in emergency: source

By Rick Rothacker

(Reuters) - Bank of America Corp told Federal Reserve officials in June that it could shed branches in some parts of the country if it needed to raise capital in an emergency, a person familiar with the matter said.

The proposal was part of a series of options provided to the Fed, including issuing a tracking stock for its Merrill Lynch operations. The fact that the bank proposed selling branches doesn't mean it's a desirable move or highly probable, the person said.

Bank of America Chief Executive Officer Brian Moynihan has been under pressure to raise capital to absorb mortgage-related losses and meet new international standards. The second largest U.S. bank received government bailouts during the financial crisis and emerged as one of weaker institutions in its aftermath.

Since June, Moynihan has taken a number of steps to boost capital levels, including selling nearly $15 billion in China Construction Bank Corp shares and swapping preferred shares for common stock. The bank has said a measure of capital against risk-weighted assets improved to at least 9.25 percent at the end of December, up from 8.65 percent at the end of September.

The bank will provide more details when it reports fourth-quarter earnings on Thursday.

Bank of America spokesman Jerry Dubrowski declined to comment on the bank's interaction with regulators. "We've made significant progress over the last two years to streamline the company, eliminate complexity and strengthen our balance sheet," he said.

The Wall Street Journal first reported on Thursday the possibility that Bank of America could shed branches in an emergency.

Bank of America, which had 5,715 branches at the end of September, has already said it plans to shutter about 750 locations over the next few years as part of a broad cost-cutting initiative. Wells Fargo & Co has about 6,300 branches, while JPMorgan Chase & Co said on Friday that it has about 5,500.

Dubrowski said the bank routinely analyzes its bank branch network on a market-by-market basis. The bank could increase branches in some cities, and decrease them in others, he said.

Bank of America became the first coast-to-coast U.S. consumer bank through a series of acquisitions in the 1980s and 1990s. But its more recent deals, especially the 2008 purchase of Countrywide Financial under Moynihan's predecessor, Ken Lewis, have proven troublesome. The subprime mortgage lender saddled the bank with billions of dollars in bad loans as well as lawsuits related to soured mortgage-backed securities.

The bank's shares fell nearly 60 percent last year amid concerns about the company's capital position, but are up 19 percent this year. The shares closed Friday at $6.61, down 2.7 percent.

(Reporting By Rick Rothacker in Charlotte, North Carolina; Additional reporting by Kavyanjali Kaushik in Bangalore; Editing by Kim Coghill and Carol Bishopric)

Comments