"You Don't Sing Me Love Songs …"
The next time John Gerspach wants some cooperation from net interest margin, he might want to show up with flowers.
The Citigroup Inc. chief financial officer on Monday dismissed the idea that NIM is always on his mind, telling analysts on the company's first-quarter conference call that he is focused foremost on Citi's strategy of managing down higher-risk assets, even when that means sacrificing margin.
"I'm probably going to disappoint a whole bunch of NIM-ites out there. I don't wake up in the morning and actively worry about what's going on with my NIM specifically," he said.
This did not stop Bank of America Merrill Lynch analyst Guy Moszkowski from inquiring about Gerspach's forecast for NIM. "I don't want to beat the horse to death. I appreciate that you don't wake up in the morning thinking about this. But last quarter, you gave us a near-term outlook and you came in just about exactly in line with that near-term outlook this quarter, so I guess I should ask the question again: Over the next quarter or two, what should we expect in terms of the directionality there?"
Gerspach's response included an answer — second-quarter NIM pressure on par with the decline experienced in the first quarter — and a clarification: "I do think about NIM every day," the CFO offered. "I just don't wake up thinking about it."
Taxing the Street
It hasn't been a good seven days for Bank of America Corp.
Not only did its $2 billion profit miss the mark with analysts, due to larger-than-expected mortgage-related costs, but it was also crowned the second-worst company in America, after BP, by
The Charlotte, N.C., banking company was among the major corporations targeted by liberal advocacy group MoveOn, which coordinated protests around the country on Monday — tax day — to decry unfair tax policies. (Citigroup Inc. was also a target.)
American Banker arrived at a protest in front of the bank's New York office a little late, after most of the crowd had left. But one lingering participant, Helga Moor, a part-time English teacher at New York City College of Technology, made time to talk and expressed remorse over the degradation of the financial industry.
"Bankers used to be the most respected members of society, staid bankers," said Moor, who carried a sign that read "Make Them Pay." "Now being a banker is a dirty word."
Moor specified that not all banks are bad. She likes her bank, the union-owned Amalgamated Bank.
Man on a Lending Mission
Rich Bradshaw, who helped developed the Small Business Administration lending unit at The South Financial Group, is taking his expertise north.
Bradshaw this week was named head of U.S. SBA lending at TD Bank, which splits its headquarters between Cherry Hill, N.J., and Portland, Maine. But Bradshaw himself will be in Greenville, S.C., where TD Bank said his mission is to make the company, a unit of Toronto Dominion Bank, "a top SBA lender in every state it does business."
The company is counting on Bradshaw's track record. During his time at The South Financial Group, the bank was No. 1 in SBA lending in South Carolina, and ranked fourth in North Carolina. Before that, Bradshaw was president of UPS Capital Business Credit in Atlanta, which under his direction tripled SBA origination volume, and went from being the 45th-largest SBA lender to the No. 9 lender during the SBA's 2008 fiscal year.
Word Count on the Stumpf Speech
On Wednesday, along with record earnings, Wells Fargo unveiled its new CFO on his first analyst call.
Tim Sloan's dexterity with Wells' numbers drew favorable reviews from analysts like RBC Capital Markets' Joe Morford after the call. Unresolved, however, is whether Sloan will take over the role of Wells' public-speaker-in-chief from his predecessor, Howard Atkins.
Wells' executive dynamic has been on display quarterly since the company's reestablishment of live analyst calls last year. Atkins tended to run the show when it came to the Q&A section of the call, with Stumpf generally reserving comment for strategic matters and color. One crude measure of the former CFO's prominence is word count: During the company's fourth-quarter earnings call, he spoke 2,491 words to Stumpf's 1,921, according to the Q&A transcript.
On Wednesday, however, Stumpf did most of the talking with analysts, outspeaking his new CFO by a margin of 2,654 words to 2,044.
There was, however, one topic on which Stumpf didn't have much to say: Atkins. Why the CFO left the firm "still comes up a lot in my discussions," CLSA analyst Mike Mayo said before asking for more information.
"Mike, that is so yesterday," Stumpf responded, wrapping up the issue in only 31 words. "I mean we've got a terrific CFO, we're moving forward, I can't be happier with how things are going here and we're looking to the future."
