Bank of America Corp.

Bank of America Corp. (BofA) is one of the largest commercial banks in the United States by deposits and market capitalization. It suffered from the collapse of the U.S. sub-prime mortgage market but it has also become a financial leader on climate change and related environmental issues.
In September of 2008, BofA agreed to acquire Merrill Lynch in a $50 billion deal that would create a global financial-services company, renamed Bank of America Merrill Lynch. Under the terms of the transaction, BofA exchanged 0.8595 shares of its common stock for each Merrill Lynch common share. BofA, along with a handful of other financial institutions, abandoned takeover talks with Lehman Brothers, putting the last nail in Lehman's coffin and forcing Lehman Brothers to declare bankruptcy.
On Jan. 16, 2009, the U.S. Treasury agreed to invest $20 billion in BofA, for which it received preferred shares paying 8 percent. Treasury, the FDIC and the Fed would also partially insure $118 billion in troubled assets, mostly belonging to Merrill. In return, BofA had to give the government another $4 billion of preferred stock plus warrants.
In October of 2008, BofA said it was ready to spend up to $8.4 billion to restructure the troubled mortgage loan portfolio of the mortgage lender Countrywide Financial, which it had recently acquired. The bank said in a statement the program was designed to help borrowers who financed their homes with high-risk subprime loans serviced by Countrywide.
In August of 2011, it was announced that famed investor Warren Buffett's company Berkshire Hathaway would invest $5bn (£3.1bn) in Bank of America. News of the decision sent Bank of America's shares more than 25 percent higher.
In September of 2011, Moody's downgraded Bank of America Corp., Wells Fargo & Co. and Citigroup Inc.
The Justice Department on Dec. 21, 2011 announced a $335 million settlement with Bank of America Corp. over alleged discriminatory lending practices by its Countrywide Financial Corp. unit during the build up to the financial crisis of 2008. The settlement, the largest residential settlement of its kind in DOJ history, involved more than 200,000 qualified African-American and Hispanic borrowers and loans made to them between 2004 and 2008.
In May of 2019 Bank of America said it would close 16 of its bank branches in the Chicago area, saying the move would help finance growth plans elsewhere in the market.
==Sale of Mortgage Collection Rights==
It became known in January of 2013 that Bank of America was in talks to sell mortgage servicing rights on more than $300 billion of loans.
Word was later that Bank of America looked to further reduce its portfolio and sell collection rights on at least another $100 billion of mortgages.
U.S. bank also announced about $11.6 billion of settlements with government mortgage finance company Fannie Mae to end allegations the bank improperly sold mortgages that later soured, and to resolve questions about foreclosure delays.
==Background==
BofA has evolved through aggressive acquisition over the past decade to become a dominant financial powerhouse in the U.S. and abroad. BofA is the U.S.'s biggest retail bank by branches, with over 6,100 locations in 30 states following buy-ups closed in 2007.
BofA first became the country's largest bank by customers and accounts in 2003 when it paid $48 billion for FleetBoston Financial. It became the largest credit card issuer after snapping up MBNA for $35 billion in 2005. And although BofA still trails Citigroup in assets, it overtook its rival in market capitalization for the first time ever after Citigroup announced a massive earnings write down late last year.. 
== Key People ==
Following an Apr. 29, 2009 shareholder meeting and an extended vote count, Ken Lewis was out as chairman, though he remained president and chief executive, as shareholders narrowly approved a resolution requiring an independent chairman. Walter E. Massey, a longtime board member and president emeritus of Morehouse College in Atlanta, was elected chairman. All 18 board members, including Lewis, were reelected.
In 2010, Brian Moynihan, who joined Bank of America in 2004 following the merger with FleetBoston Financial, became the bank's fifth CEO.
==2007 Performance==
BofA took a major financial hit in 2007 through its $2 billion investment in Countrywide Financial, America's largest mortgage company, which was also heavily exposed to the slumping sub-prime mortgage market. According to its 2007 annual report, BofA's revenue declined almost 8 percent to $68.1 billion from $73.8 billion one year prior. And although assets rose over that period from $1.46 trillion to $1.72 trillion due to acquisitions, BofA's return on equity (ROE) plummeted more than 30 percent from 16.27 percent in 2006 to just 11.08 percent in 2007.
==Environmental Highlights==
Although a forgettable year for its shareholders, 2007 was nonetheless something of a green-letter year for BofA's growing environmental status. BofA first broke through as the U.S. financial-industry leader in reducing greenhouse gas (GHG) emissions in 2004. Then the bank announced it worked with the Rainforest Action Network (RAN) to both reduce its own GHG output and tighten investments in projects that destroy unique environments. BofA joined the Pew Center Environmental Leadership Council in late 2006.
In 2008, BofA decided to phase out financing for companies practicing mountaintop removal coal mining, a destructive and controversial method of coal extraction. 
The bank announced in March 2007 that it would finance $20 billion in "environmentally-sustainable business activity" over the next 10 years, committing $18 billion to help customers finance new green technology and the remainder to cutting its own corporate GHG emissions. 
Bank of America also announced in mid-2007 that it would invest $25 million in the British company Climate Exchange, which operated several global trading platforms for climate-based instruments like carbon offsets. It also agreed to purchase 500,000 tons of carbon-emission permits from the Chicago Climate Exchange over three years. But BofA backed out of both those two deals in early 2008, saying it did not need the partnership to achieve its aims.
In February of 2010, the U.S. Securities and Exchange Commission (SEC) said it had filed a motion seeking court approval of a proposed settlement whereby Bank of America Corp. would pay $150 million and strengthen its corporate governance and disclosure practices to settle SEC charges that the company failed to properly disclose employee bonuses and financial losses at Merrill Lynch before shareholders approved the merger of the companies in December 2008.
*Bank of America ousted John Thain as head of global banking, securities and wealth management in January 2009 when BofA discovered surprise losses at the brokerage from mortgages and toxic debt. Thain engineered the sale of 95-year-old Merrill Lynch & Co. to Bank of America Corp. He was replaced by BofA General Counsel Brian Moynihan.
*In April 2008, BofA put more pressure on the U.S. environmental marketplace by adopting lending guidelines called the Carbon Principles, aimed at encouraging utilities to explore financing alternatives to coal-fired power. The principles were devised earlier in 2008 by J.P. Morgan Chase, Citigroup and Morgan Stanley and are expected to increase the use natural gas as a coal alternative for power generation.
==References==
Category:Banks
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