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Oct. 18, 2007: Lewis rejects a suggestion that the bank might form a joint venture or make an acquisition to gain people with more experience and calls a 32 percent decline in third-quarter profits “not acceptable.”
“I’ve had all the fun I can stand in investment banking,” Lewis says during a conference call. “So to get bigger is not something I really want to do.”
Jan. 11, 2008: Bank of America agrees to buy Countrywide for about $4 billion. Lewis says the purchase is “a one-time opportunity.” The bank’s shares drop 2 percent, or 80 cents, to $38.50 and set a four-year low of $37.16.
Jan. 15, 2008: Lewis says Bank of America has “never been an investment-banking wannabe,” adding that he regrets his previous comment that he’d had all the “fun” he could stand in investment banking because it created misperceptions about the unit. “Where we choose to compete, we will win,” he says at a meeting with reporters.
Jan. 22, 2008: Bank of America reports earnings dropped 95 percent in the fourth quarter of 2007 after at least $5.28 billion of mortgage-related writedowns. Lewis says profits will likely rebound more than 20 percent in 2008, above $4 per share, up from $3.30 in 2007.
Jan. 24, 2008: Bank of America sells $12 billion of preferred shares. The lender is rebuilding its capital after spending $24.3 billion to acquire U.S. Trust Corp. and LaSalle Bank in 2007 and agreeing this month to buy Countrywide.
June 2, 2008: Lewis says the Countrywide purchase is “compelling” because it will provide gains even if U.S. home prices drop by 25 percent in the next two years. “We’re OK,” Lewis says. “We think the upside is pretty nice.” Shares fall 43 cents, or 1.3 percent, to $33.58.
July 1, 2008: Bank of America completes its purchase of Countrywide, becoming the country’s No. 1 home lender, with control of one of every four home loans. The bank paid Countrywide shareholders about $2.5 billion, or 37 percent less than the $4 billion in stock it agreed to in January.
July 21, 2008: Bank of America’s second-quarter earnings beat analysts’ estimates. The lender says Countrywide will add to profit in 2008 and that there are no plans to cut the dividend, then yielding 8.8 percent and paying 64 cents a share. “We aren’t in denial,” Lewis says. “We have a ray of optimism now we haven’t had for a few quarters.”
Sept. 14, 2008: Bank of America agrees to buy Merrill Lynch for about $50 billion, or $29 a share.
Sept. 15, 2008: Lewis says on a conference call Merrill Lynch is an “ideal long-term fit” for Bank of America.
“I like it again,” Lewis says, referring to investment banking. The shares fall $7.19, or 21 percent, to $26.55.
Sept. 19, 2008: Lewis says Merrill Lynch will make the bank the “strongest and most stable financial services institution in the world.” Bank of America advances $6.90, or 23 percent, to $37.48.
Oct. 2, 2008: Bank of America names Thain, who engineered the sale of Merrill, to head corporate and investment banking and wealth management units at the combined firms.
“I am delighted that John has agreed to join Bank of America,” Lewis says in a statement. “His experience and expertise will be invaluable as we put our two companies together and move forward as the premier financial services company in the world.”
Oct. 6, 2008: Bank of America announces plans to cut its dividend to 32 cents from 64 cents and to sell $10 billion in common shares after third-quarter earnings fall 68 percent.
“We’ve seen in the last 45 days things worsening in the economy and a view that the recession is going to be a little deeper than we thought,” Lewis says on a conference call. “It’s going to take some more time and some more pain.”
Oct. 7, 2008: Bank of America sells common shares for $22 each, 8 percent less than the day’s closing price. The shares fall 26 percent, the biggest drop in at least 28 years, since Bloomberg started tracking data.
Oct. 30, 2008: Bank of America agrees to sell $15 billion in preferred and common shares and Merrill Lynch will sell $10 billion in shares to the U.S. Treasury under the government rescue plan.
Nov. 20, 2008: Lewis says the U.S. is “drowning in debt” and that both lenders and borrowers are responsible. He criticizes Treasury Department efforts to revive the economy, and tells reporters after a speech to the Executives’ Club of Chicago. “I just don’t see anything coming out of there.”
Nov. 26, 2008: Lewis writes a letter to Bank of America employees, saying the lender is “one of the strongest and most stable major banks in the world.” He says that the federal capital injection represented “funds that we did not need and did not seek,” and that the funds were accepted “as part of a broad plan to stabilize the financial markets generally.”
Dec. 5, 2008: Bank of America shareholders approve the purchase of Merrill. Asked by a shareholder whether he would agree to work for $1 a year for the next three years, Lewis replies, “No.”
Dec. 12, 2008: Bank of America says it plans to cut as much as 12 percent of its workforce, or 35,000 jobs, over next three years.
Dec. 15, 2008: Bank of America will need to raise more capital to offset rising loan losses, and the shares may drop to $9, says analyst Paul Miller of Friedman, Billings, Ramsey Group Inc.
Jan. 5, 2009: Merrill Lynch brokerage head Bob McCann announces plans to leave the company.
Jan. 6, 2009: Lewis recommends that he and other senior executives not receive bonuses after five straight quarters of declining profit.
“This was a difficult decision because we have worked hard and made progress on many projects that will create value for our company in future years,” Lewis says in a memo. “Nonetheless, we are a pay-for-performance company.”
The bank plans to sell up to $2.8 billion of China Construction, a sale that would represent 13 percent of its stake, according to sales documents.
Jan. 8, 2009: Greg Fleming, Bank of America investment banking head and president of Merrill Lynch, announces plans to leave the bank to teach at Yale Law School. At least four senior Merrill executives have quit following the acquisition.
Jan. 16, 2009: Merrill Lynch posts a fourth-quarter net loss of $15.3 billion and Bank of America reports a fourth-quarter loss of $1.79 billion, its first quarterly loss since 1991. The dividend is slashed to 1 cent. Shares fall 14 percent, or $1.14, to $7.18.
The U.S. government says it will invest $20 billion in the bank and guarantee $118 billion in assets to support the lender’s acquisition of Merrill.
“We just thought it was in the best interest of our company and our stockholders and the country to move forward with the original terms and timing,” Lewis says, referring to the Merrill purchase.
“We are happy that John Thain has assumed a major role at Bank of America,” Lewis says in a conference call. “John is in charge of Global Corporate Investment Banking as well as Global Wealth and Investment Management, both of which will incorporate most of Merrill’s businesses.”
Jan. 20, 2009: Lewis and five Bank of America directors buy more than 500,000 shares for at least $3 million. Lewis purchases 200,000 shares at prices ranging from $5.98 to $6.06.
Jan. 21, 2009: Thain buys 84,600 shares of Bank of America at $5.71 each for a total of $483,066 a day before resigning, according to a regulatory filing. The bank shares gain 31 percent to $6.68.
Jan. 22, 2009: Lewis ousts Thain as CEO three weeks after the takeover of Merrill is completed. The bank falls 15 percent, or 97 cents, to $5.71.
Jan. 25, 2009: Thain says in a memo to Merrill executives that paying $1.2 million to renovate his office a year ago was a “mistake” and that he plans to reimburse the company. Thain also says Bank of America learned about Merrill’s losses “when we did,” and that year-end bonuses paid to Merrill employees for 2008 “were determined together with Bank of America.” Scott Silvestri, a spokesman for Bank of America, says Merrill made the bonus decisions on its own.
Jan. 28, 2009: Lewis gets the backing of the bank’s board of directors. “The board today during their regular meeting expressed support for Kenneth Lewis and the Bank of America management team, noting their experience in managing through challenging environments and in assimilating mergers,” said lead independent director Temple Sloan in a statement supplied by
Originally posted by hoagy1199
Just remember, B of A is NOT an FDIC bank. I bailed out of them years ago simply because of the nickle and dime surcharges.
Can't say I'll be sorry to see them go.