In the aftermath of the financial crisis, Brian Moynihan gets the credit for “methodically overhauling and streamlining the bloated and nearly crippled” Bank of America Corp., the country’s second-largest financial institution.
Moynihan came to BofA in 2004 when the Charlotte, N.C.-based company bought FleetBoston Financial in Boston, becoming president of B of A’s global wealth and investment management division before taking the top post at Merrill Lynch. In 2010, Moynihan was named B of A’s chairman and CEO, replacing Ken Lewis.
After eight years of restructuring and then growing organically, B of A is logging solid earnings and being rewarded by investors, including its biggest shareholder Warren Buffett, who last year told CNBC’s “Squawk Box” that B of A was his favorite bank stock.
“Bank of America has done a sensational job under Brian Moynihan,” Buffett said. “Brian had all kinds of problems when he came in. I mean, they were not of his own doing, but he had a ton of problems. And he had a lot of rocks to turn over, and it cost a lot of money. And he just set out step by step to bring the bank back. He has really done a job.”
This past quarter was no exception. BofA earned 62 cents per share in the first quarter, outpacing the Zacks Consensus Estimate of 59 cents — and 38% higher than the prior-year quarter. Net income across all business lines improved as the company posted revenue growth in many segments, at the same time lowering overall operating expenses and maintaining strong credit quality.
BofA’s growth has been “responsible” because it’s based on a sustainable foundation, Moynihan said in the company’s earnings call with analysts.
“We did that by investing in our people and our communities and by driving operational excellence,” he said. “You can see that comes through once again with the predictable earnings for our shareholders. This quarter’s results are the 13th quarter in a row, reporting positive operating leverage in our year-over-year basis.”
Over the past year BofA has added 1,500 primary relationship bankers, while reducing overall headcount by 2,600, just over 1%, Moynihan said. Over the next four years, the company plans to open 500 new centers and redesign more than 1,500 centers, add 5,000 new client-facing professionals, open 600 Merrill Edge offices and expand the financial center footprint – all for its aim to have a “full franchise” of both retail and commercial business banking and wealth management lines throughout its national footprint.
B of A’s employees are also benefitting from the positive earnings, as nearly all received bonuses and share grants due to the “success of our company from tax reform,” he said. Employees have also benefitted from B of A’s increase in its minimum starting wage, its extended bereavement and parental leave policies, among other improvements.
“This is a record quarter and we did it by driving responsible growth,” Moynihan said.
Brian Moynihan, Chairman & CEO, Bank of America Corp.
Headquarters: Charlotte, NC
Education: Brown University (B.A.), Notre Dame Law School (J.D.)
First joined company: 2004
Positions prior to being named CEO: President of global wealth and investment management; CEO of Merrill Lynch
Named CEO: 2010