At a time when Bank of America CEO Brian Moynihan is feeling ongoing pressure to improve the lender’s financial performance, a new report scores it last in that area once again.
Among the nation's biggest banks, the Charlotte-based lender ranks at the bottom of Bank Director magazine's latest bank-performance scorecard. The rankings, released late last week, are based on last year's profitability, capitalization and asset quality for 20 lenders with assets of $50 billion or more.
It marks the fourth year in a row Bank of America has been in last place among lenders with $50 billion or more in assets. In 2011, when the scorecard did not have separate rankings based on asset size, Bank of America was No. 127 among the 150 largest publicly traded U.S. banks and thrifts.
As in the previous year’s scorecard, the largest banks performed the worst in this year’s rankings. Citigroup and JPMorgan Chase & Co. ranked second-to-last and third-to-last, respectively. JPMorgan is the nation's largest bank by assets, followed by Bank of America, Citigroup and Wells Fargo.
Last year, Bank of America, Citigroup and JPMorgan recorded billions of dollars in legal expenses to resolve government probes. Such soaring litigation costs in the wake of the financial crisis have continued to be a major drag on big banks' profitability.
Bank of America has spent more than its peers on settlements and fines since the crisis. But last year was especially costly for the bank as it agreed to a $16.65 billion mortgage settlement – the largest settlement ever between the U.S. and a company.
Bank of America has said the accord eliminated its biggest remaining legal challenge stemming from the financial crisis. In the second quarter of last year, the bank recorded $4 billion in legal costs as it prepared for the settlement. In the second quarter of this year, its profits rose to $5.3 billion, up from profits of $2.3 billion a year ago when the legal costs weighed on its results.
Bank of America spokesman Jerry Dubrowski declined to comment on Bank Director's report.
This year's scorecard ranked the 300 biggest U.S. banks listed on the NASDAQ and New York Stock Exchange. Banks that ranked highly "are typically strong, well balanced banks that are built to last: profitable and well capitalized, with clean loan portfolios," the magazine says.
The annual scorecard issues separate rankings of lenders based on three asset groupings: $50 billion and up; $5 billion to $50 billion; and $1 billion to $5 billion.
Wells Fargo, which is based in San Francisco but maintains its largest employment hub in Charlotte, came in at No. 4 among banks with at least $50 billion in assets. The lender has also paid fines to settle government charges since the financial crisis.
Go here to read the report and see how banks headquartered in North Carolina ranked this year.