This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Moynihan Mum On Dividend Makes Bank of America Shareholders Angry

Bank of America story updated from 10:34 a.m. with additional details throughout.

NEW YORK (TheStreet) -- Bank of America (BAC - Get Report) investors looking for details from Brian Moynihan Wednesday about whether the company will seek a dividend increase or share buyback were disappointed, as the CEO declined to provide any new information on what the bank is seeking from the Federal Reserve.

Bank of America shares were falling 1% to $15.07 with declines accelerating after Moynihan began speaking at 10 a.m. at a conference hosted by Sanford Bernstein in New York. Shares gained 3.4% Tuesday as the Charlotte, N.C.-based institution submitted a revised capital plan to the Fed after discovering a $4 billion error in April. The Fed had approved the bank's request to raise its quarterly dividend by $0.05 per share and buy up to $4 billion of its own stock before the bank discovered the error, which had gone undetected since it acquired Merrill Lynch at the start of 2009.

In Wednesday's comments, Moynihan said that while M&A activity has picked up markedly in 2014, trading activity has been "somewhat more muted" with lower volatility. "It's been tough," he added.

The downbeat comments on trading come after Citigroup (C) CFO John Gerspach said Tuesday at a Deutsche Bank conference that he expects trading revenues from equities and fixed income to decline by 20-25% in the second quarter compared to the second quarter of 2013.

Asked about his progress resolving mortgage-related disputes, Moynihan said the major unresolved issue is a Department of Justice investigation tied to residential mortgage backed securities (RMBS).

Bank of America's latest quarterly filing states:

We are subject to inquiries and investigations, and may be subject to penalties and fines by the U.S. Department of Justice (DOJ), state Attorneys General and other members of the RMBS Working Group of the Financial Fraud Enforcement Task Force (collectively, the Governmental Authorities), regarding our residential mortgage-backed securities (RMBS) and other mortgage-related matters. We are also a party to civil litigation proceedings brought by the DOJ and certain other Governmental Authorities regarding our RMBS. We continue to cooperate with and have had discussions about a potential resolution of these matters with certain Governmental Authorities.

Federal Housing Finance Authority acting inspector Michael P. Stephens general alluded to the investigation, which also involves his office, at a conference last week. A similar investigation of JPMorgan Chase (JPM) cost the bank $13 billion.

Moynihan also implied that a mysterious $2.4 billion the bank added to its legal reserve in the first quarter was related to the DOJ proceedings.

"That's really the one that's left out there," he said, noting the bank "put money up last quarter," into its legal reserve. Moynihan added there is "unpredictability on it we just have to get through."

>>>Read More:

Bank of America Tries to Bounce Back From $4B Capital Blunder
Billions More in Mortgage Penalties Coming: Federal Regulator
Bank of America Exec Preaches Gospel of 'Too Big to Fail' Banking
Bank of America Adds $2.4B to Legal Reserve, Won't Say Why


Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
BAC $16.36 0.00%
AAPL $113.29 0.00%
FB $91.01 0.00%
GOOG $630.38 0.00%
TSLA $248.48 0.00%


Chart of I:DJI
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 +1.21 0.06%
NASDAQ 4,828.3250 +15.6170 0.32%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs