CHARLOTTE, N.C. - Bank of America executives capped a tough week after facing tough questions from shareholders.
The bank held its annual shareholder meeting in Uptown Charlotte. Much of the talk from the bank and those in the audience centered on BofA's announcement last week that it had made a $4 billion accounting error. As a result, BofA rescinded plans to increase the dividend it pays stockholders.
Bank CEO Brian Moynihan called the error "disappointing," and said the bank is committed to finding out why it occurred and making sure it doesn't happen again.
That wasn't good enough for some shareholders, who asked pointed questions to the bank's executive team. Richard Davet blasted the board of directors and senior staff.
"It's $4 billion this time. What is it going to be next time?" Davet said. Asked if he has confidence in Bank of America's management team, Davet responded "not at all."
Other shareholders questioned the bank's investments in companies associated with the coal industry. The bank says it is reducing those investments. The bank also says its core businesses are profitable, with the exception of its mortgage business, which continues to run up billions of dollars in legal fees related to bad home loans made before the recession began. Brian Moynihan admitted those losses continue to be a problem.
"The real question is how do we get the earnings back to normal? That is all about getting the legacy (mortgage) costs out. If you look at the earnings in the first quarter, you can see the amount of earnings are normal and then you have the real estate business continuing to lose money," Moynihan said.
Banking industry analyst Mike Mayo asked multiple questions about the bank's operations. When the meeting ended he still had more.
"I'm very frustrated I did not get to ask all my questions," Mayo said. He also suggested that ongoing problems at Bank of America suggest it may simply be too big for any board to manage effectively.
The meeting did have one light moment. As one elderly shareholder blasted Moynihan repeatedly, another elderly woman stood and told the woman to "shut up." She then went on to tell Moynihan she 'loved' him. At that, Moynihan looked out over what had been a tough crowd and responded, "Well, that's one of you."