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Charlotte Area News

BofA dividends will have to wait

Bank of America shareholders on Wednesday approved Chad Holliday Jr. as its new chairman. Holiday is a former CEO of DuPont. He joined the bank's board just seven months ago. He replaces Walter Massey, who had to step down because he reached the board's mandatory retirement age of 72. Although the bank reported a first-quarter profit of $2.8 billion, CEO Brian Moynihan says it'll be a while before shareholders can expect dividends again. WFAE's Greg Collard reports. Moynihan was generally optimistic at today's annual shareholder's meeting. Or maybe cautiously optimistic is a better way to put it. Moynihan told shareholders that the bank must experience several quarters of profitability before dividends are paid again. Moynihan also wants to be sure the economy shows consistent improvement, and he said the bank needs to accumulate enough capital to satisfy regulators. "Now what I want to tell you though, is as we accumulate this capital, it's not going anywhere. We're not buying anything. It's sitting there waiting to be used the right way when the economy is completely stabilized." When that happens, Moynihan says BofA will pay dividends or pay back stock. Dividends haven't been paid in nearly 2 years. Until then, Bank of America commonly paid about dividends of about $2 a share. The meeting was a sharp contrast from last year, when former shareholders stripped former CEO Ken Lewis of his role as chairman of the board. There were only 50 or so protesters outside. One of them was North Carolina AFL-CIO President James Andrews. "Stop the greed," Andrews yelled, referring in part to home foreclosures. But inside, Moynihan had a lot of support from activists who have been critical of the bank in the past. Evelyn Davis, a shareholder who's gained a reputation as a gadfly, even complimented Moynihan for how he ran the meeting. Then, in an awkward moment, she told him he looks like her first husband. Moynihan quickly cut her off.