BofA CEO Moynihan Gets A Grilling
Brian Moynihan, Bank of America CEO Large investors anxious about Bank of America's plunging stock price got a chance to grill CEO Brian Moynihan in a conference call this afternoon. The answers they got didn't do much for the price of the bank's stock, which closed down 10 percent. "Damage control" about sums up Brian Moynihan's activity the last three days as Bank of America's stock plummeted 20 percent on Monday, then rebounded on Tuesday and dropped again. Moynihan sent a letter to employees Monday night hoping to reassure them. Yesterday he fielded questions from big investors. The main concern: Can Bank of America survive another downturn? To which Moynihan - through a speaker phone - said, "Yes." "Based on our view of the future - the risk and what we've accrued - we feel very comfortable," said Moynihan. As long as the future doesn't include something really bad like a four-year recession, he added. To make the point, Moynihan noted Bank of America has twice the level of capital it had when he took over in January 2010. But if the bank's executives are so confident, why aren't they buying up big chunks of its stock at the current bargain price? "My entire net worth is tied up in BofA stock," said Moynihan. "So we believe in the stock and you'll see us buy the stock when we're free and clear to do it." Moynihan added the bank has some financial reporting restrictions and the market is a little too volatile for executives to be buying lots of stock right now. "Just know that anybody who gets paid much at Bank of America gets at least half in stock," said Moynihan. So how would he rate his performance as CEO? "I think my performance with the management team, in terms of transforming the company, has been strong," said Moynihan. "I think our performance on the share performance has not been strong." Bank of America shares have lost half their value so far this year - worse than its other big competitors. Moynihan says some of that is out of his control, and much of it is tied to Countrywide's disastrous mortgage portfolio and the expensive lawsuits it has spawned. "So why not restructure the Countrywide business under Chapter 11?," another investor asked. Moynihan said he couldn't comment, but that the path Bank of America has chosen for dealing with Countrywide is best for shareholders. Those shareholders had a closing price of $6.77 Wednesday. Once upon a better time - before the acquisition of Countrywide and the financial crisis of 2008, Bank of America stock traded closer to $40 a share.