Bank of America Plans No New Branch Closings

Story updated with WCNC News Channel 36's retraction and additional Bank of America comment.

CHARLOTTE, N.C. ( TheStreet) -- A local news station retracted its earlier report that Bank of America ( BAC) was planning 600 additional branch closings, according to an updated article published today.

In a second report, WCNC News Channel 36 apologized for the error and said there were "no new branches shutting down just the original 600 reported back in March."

Earlier this year Bank of American announced that it would shutter 10 percent, or 600 branches nationwide as part of a consolidation.

The erroneous report followed a significant trimming of senior executive ranks as part of his "Project New BAC" program to streamline operations and drastically cut expenses, Bank of America ( BAC) CEO Brian Moynihan has plans to split the company's banking operations into consumer and commercial units, which will include up to 600 branch closings, according to Charlotte, N.C.-based WCNC News Channel 36.

Bank of America has 5,900 existing "banking centers," according to a Securities and Exchange Commission filing.
Brian Moynihan keeps cutting.

Moynihan said in a statement on Tuesday that "de-layering and simplifying at the scale in which we operate requires difficult decisions," and that "only by streamlining and focusing our resources behind our customers will we truly deliver on the promise of what we have built."

Following the late-Tuesday firings of Sallie Krawcheck, the company's head of global wealth management and headed the consumer banking unit, Bank of America's shares rose 7% on Wednesday, to close at $7.48.

Even before the expense reduction announcements on Tuesday and the WCNC report on Wednesday, analysts were projecting significant cost cutting for Bank of America over the next two years.

"We continue to consolidate the number of banking centers nationwide, as customers, continue to use self-service channels," a Bank of America spokeswoman told TheStreet. "We're very deliberate in how we build-out our branch network and believe we're in the markets where we need to be."

Guggenheim Securities analyst Marty Mosby on Wednesday reiterated his "Buy" rating on Bank of America's shares, with an $11 price target, saying that "Moynihan is basically organizing BAC into a bank organization instead of a business line orientation," and that following the company's announced plan for 3,500 layoffs, "it is important for management to lead the way in demonstrating that everyone is going to have to change in order to accomplish this directive."

Deutsche Bank analyst Matt O'Connor has a "Hold" rating on Bank of America, with a $7.50 price target, and on Wednesday lowered his 2012 earnings estimate for Bank of America by 57%, to 57 cents a share from $1.35 a share, while loweing his 2012 EPS estimate to $1.06 from $1.75. The analyst expects "given higher estimated putback charges and weaker capital markets revenue."

O'Connor based his lower projections for 2012 and 2013 on "expectations for higher mortgage-related charges and lower net interest margins." The analyst added that his firm assumes "$12b of mortgage putback/related hits and $5b of mortgage servicing and other litigation costs" during the second half of this year and in 2012.

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-- Written by Philip van Doorn in Jupiter, Fla.

To contact the writer, click here: Philip van Doorn.

To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn.
Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.

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