Good morning. Good morning. I'm Chad Holliday, and I serve as a member of your Board of Directors and also currently serve as the Non-Executive Chairman of the Board. It's my pleasure to welcome you to this year's annual meeting. Brian Moynihan, our Chief Executive Officer, that will lead the meeting today is on my right. Lauren Mogensen, our Corporate Secretary, is sitting down front, and she'll be working with us on tabulation in a few minutes. As you came in the room, you have a packet. In that packet are rules of engagement, and those rules are effective right now. I'm pleased to declare this meeting of the stockholders of Bank of America open for business. There are nine items that we'll consider today for shareholder vote.
There'll be a chance to go through each one of those items. Brian will take us through that, and you can make comments about those items at that point in time. At the completion, we will have a tabulation of the vote, and we'll announce the vote at that point in time. After that, there's a general question and answer period. If you have questions on any other subjects, there will be ample time to address that as you go through. It's my honor now first to introduce you to the Board of Directors that you'll have a chance to vote on. If our whole Board could stand up and face our shareholders so they can take a look at us. I won't go through all their bios and their qualifications to serve, but you have those in the proxy.
Two of our Directors could not be here today, Linda Hudson and Dave Yost, due to some prior commitments, but they're very much involved in what we're going forward with. As I think about how to start this meeting today, I went back to the spring of this year, about the time of the Final Four college basketball tournament. When those things started, I started hearing this catchy music around a commercial. They had this same thing, all the different topics, they had this same thing. They said, "Before this, there was that, and before that, there was this, and before that, there was something else." Has anybody heard any of those commercials? If you haven't, we sure wasted a lot of money.
If you'll allow me to build on that theme, before Bank of America had a rock-solid balance sheet, before those very difficult decisions had to be made to divest non-core businesses to shore up that balance sheet, before massive litigation was resolved that stretched back over decades, before 250,000-plus teammates changed not only what they did, but how they did it to make this bank more successful, a management team led by our Chief Executive Officer created a strategy three and a half years ago to simplify this institution and focus on growing our business with existing customers. It's because that strategy has executed well, it was the right strategy. I could talk about all those things from a takeoff on our own commercial. If I had to describe where we are today, the best analogy I can use, if you'll allow me, is a train.
If I go back three and a half years ago, our train was off the tracks. Whether it was just off the tracks and upright or laying on its side is probably a judgment call, but it wasn't good. What I can report to you today from your Board of Directors, the train's on the tracks, all wheels are touching, we're moving forward, and we have learned from the past. We know risk management is critical. What I hear more in the Board every day and from management every day is we're going to learn from the risk experience we have in ourselves and other institutions and be sure we never forget that as we go forward. This train is starting to gain momentum. It's starting to move. Not nearly as fast as it needs to at some point in time.
What we can promise you, we're going to move a little faster today than we did yesterday and a little faster tomorrow than we did today. If we keep doing that one step at a time, we're going to have the great company you expect. I'm glad to introduce the chief engineer of our train, Brian, to lead us in the meeting. Brian, it's all yours.
Thanks. Thank you, Chad. Thank you. I'm glad that you watched the commercials and got it all straight in terms of the pattern there, but thank you for those comments. I, too, want to thank everyone for joining us here today for our 2013 Annual Meeting of Stockholders. Let me remind you by hitting some of the basics. My remarks may include some forward-looking statements about our future financial performance. These forward-looking statements are subject to risks and uncertainties. If you look in our 10-K for 2012, it describes factors that may cause actual results to differ materially. Before we move on to the official business of today's meeting, I'd like to share a few comments along the dimensions that Chad talked about. As Chad talked about, three years ago, we set on a course to create a stronger company. We've done that.
We've become more straightforward at the same time. We made progress along several fronts that show that. First, we strengthened our balance sheet to give us a platform for growth. We've doubled our capital, brought our liquidity up by almost three times and reduced our long-term debt by half. Recently, the Federal Reserve's 2013 capital analysis and the exam around that confirmed the strength we have. Now, as we said we would do last year, we're beginning to return excess capital to you, our shareholders, in the form of share repurchases. The second thing we've done is streamline the company. We streamlined the company to focus on the businesses that matter to our customers and clients. We divested more than 29 core operations. We've reduced costs and become more efficient through the project we call New BAC.
Third, we've begun to continue to put behind us the legacy mortgage issues. Well, let's start from the beginning. Over the last few years, we've helped 1.8 million, that's 1.8 million customers, and we have about 6 million mortgage customers, avoid foreclosure. We've reduced the size of our delinquent mortgage portfolio by more than half from its peak and resolved a significant amount of litigation related to the mortgage business that we acquired a few years ago. The work is not done. There's more work to do. We continue to focus on our customers who need assistance with their mortgages. If anybody here today needs assistance, please tell us and we'll make sure that we take care of you.
As a result of progress we've made in the mortgage area, one of the things is the cost of that work is beginning to come down, and we can shift those resources to help get to the next stage of the company, which is drive growth for you, the shareholders. As we put the foundation in place over the last few years, we're better positioned than ever to have the core businesses we have, serving people, companies, and institutional investors shine through. As Chad said, our core strategy is for the customer bases we have today to continue to deliver to them the products and services that are second to none. As I said to you three years ago, we have 3 groups of customers, people, companies, and institutional investors. We focus on them.
We focus on helping them live their financial lives through the power of connecting everything we can do in our company. That's our purpose. That's why we're here. That's why 260,000 people come to work every day. How are we doing this? Well, if you think about individual customers, people like you and me, we continue to make products and services much more accessible. We've enhanced not only what we do in our branches or our stores, as we call them, but we also enhanced what we do in our ATMs. We've enhanced what we do in our mobile banking platform, which serves 12 million plus customers, our online platform, which serves 30 million customers, and our Merrill Edge platform for investors, which serves many customers. To help people who want to have a face-to-face interaction, we've increased the number of specialists we have across our franchise.
Mortgage loan officers, we've nearly doubled. Small business bankers, 3 or 4 times increase over the last couple of years. Financial solutions advisors, people working with customers about their investments in our stores, we've increased dramatically. As a result, what you're seeing is that work come through. Growth in deposits, growth in credit card accounts originated the highest number this quarter we've done in a long time, and growth to record levels of assets under management and revenues from that. Over the last 5 quarters, we've provided over $100 billion in mortgage loans to our customers, directly to our customers, with one-third of those being to low and moderate income customers. In addition, our industry-leading platforms in the wealth management business, Merrill Lynch Wealth Management and U.S. Trust, continue to make great strides and deliver on our market-leading capabilities. That's our people. That's our individual customer base.
We're moving to our companies. We continue to do the same thing there, connecting products and services that are second to none for those clients to help them grow within our country and around the world. The hard work of the team is producing growth in commercial loans. That is good for our company in terms of shareholders, but also in terms of the economy and helping America grow. Our lending to small business, first quarter this year to first quarter last year, the originations of small business loans is up 30%. Small business is a core part of what we do, and we continue to drive that every day. If you move to our larger companies, our capabilities in capital markets, investment banking continue to be second in the world in terms of market share.
Our bankers have helped our companies engage in some of the largest transactions you've heard about this year. We've done a lot for our companies. We move to our third customer base, investors. We serve investors through the capabilities of sales and trading in over 100 countries. We do that through research we provide on over 3,000 firms. We provide our investors with the capabilities to provide capital to our companies. Our research team is one of the best in the world, as recognized in all the rankings around the world. We have a sales trading team that's continued to produce strong revenue performance, strong profit performance with very disciplined risk management. That brings us to our communities. In addition to what we do for those three groups of customers, we do everything we can in the communities we live and work.
We do this through our charitable works, our philanthropy, and we do this through our volunteering. You can see above you some of the things that we do in this area. We do this by addressing the most critical needs that affect us, our clients and customers, and all of you, locally and globally. Issues like hunger relief, financial education, our recently announced partnership with Khan Academy. The support we have for our military veterans, especially those returning from theaters of war, as they are now. For the environment. As part of our environmental commitment last year, right after we met with you, we doubled down, or more than doubled down. Increased our commitment from $20 billion to $70 billion around providing financing and capabilities for alternative energy projects and research.
We step back, and I'd like to emphasize a few thoughts before we get into the meeting. We at Bank of America are very optimistic about what lies ahead for our company. We spent three years putting in place a solid foundation. Many issues that have been weighing us down are now behind us. We have a clear strategy for growth, and our results are beginning to reflect the strength, earnings position, and capabilities of the company. Most of all, what we're proud of as a management team, your management team is very proud of, is that 260,000 people come to work every day to help live our purpose, to help our customers and clients with their financial lives through the power of all the connections we can bring them.
We're all here to deliver for our shareholders, and for that, we can now move to the core meeting and take your questions. Let's talk about the core meeting. As Chad said, you have received copies of our rules. I'm going to remind you of a few of the basics. We're going to have two question and answer sessions. Question and answer session one will be around the proposal in the proxy statement, the floor proposal. The second question and answer session will follow the general meeting. If your remarks concern an item that's going to be voted on, let us hear from you at the first Q&A session. If there are remarks about other questions or comments or other things, hold them to the second Q&A session. Stockholders presenting proposals that are properly submitted before the meeting will have up to four minutes to discuss their proposal.
Stockholders wishing to comment on those proposals will be limited to two minutes. When your allocated time is up, in fairness to all the other shareholders, you're going to hear a chime. That'll be a signal that your time has expired. If I could ask you to please address your comments to me, and then I'll refer them to the management team or others that may have an answer if I can't give you the answer. The other thing I'd ask you is if you have personal financial matters to discuss, we have colleagues in the back that can take those offline, as we say, and make sure that we do a good job for you. The use of electronic devices is not permitted. Recording, pictures, video, blogging, all the other types of things that go on in modern society are all prohibited. I guess I'd say as to communications.
Let's just say that. The rest of the stuff, you can do what you want. If you don't follow rules of conduct, you will be asked to leave the meeting in fairness to everybody else. Gary Lynch is our General Counsel, is here. Gary. If there's any clarification you need, he'll be happy to answer your questions. All right. Let's get to the official meeting. As we prepare to consider today's proposals, I would like to ask Lauren Mogensen, our Corporate Secretary, to bring us the Secretary's report. Lauren?
Good morning, everybody. Thank you, Brian. Notice of today's meeting and the related proxy statement or a notice of internet availability of these materials were mailed beginning March 28, 2013, to all stockholders of record as of March 13, 2013. Proof of the mailing will be filed with the records of this meeting. Rebecca Fenner of Computershare Trust Company has been appointed Inspector of Elections and has signed the oath as required by law. She has advised me that holders of shares representing at least 76% of the eligible votes are present in person or represented by proxy, which constitutes a quorum. In addition, the Inspector of Election has a list of those stockholders who are entitled to vote at this meeting, and that list will be kept open during the meeting for inspection for any stockholder, for any purpose germane to the meeting. Thanks, Brian.
Thank you, Lauren. I accordingly declare that a quorum is present and that this meeting is duly convened for the purposes of the nine items of the business of property before the meeting. We're now ready to consider the eight items up for stockholder vote, as listed in the proxy statement and the one floor proposal. For the proposals listed in the proxy, most of you have already submitted your proxy to vote, and you do not need to do it again. Of course, unless you want to change your vote. If you want to change your vote, please indicate on the ballot that you're revoking your proxy, if you'll do that for us. If you want a ballot for the proposals that are listed in the proxy statement, those eight proposals, please raise your hand now. There's one here. Any other ballots?
There's a couple right in the middle here. One over to the left. Any other ballots? Okay. There's one in the back there.
Let me clarify something. You said if people want to comment on the mail-in proposals. What about things on the ballot? They're not allowed to comment before people vote on A through G?
Yeah. You can make comments on anything that's on the ballot. Yes. If you'd like to make a vote Yes, you can.
Sorry. On page eight of the proxy.
Okay. If you'd like to vote on the one floor proposal that was not in the proxy statement, this is going to be different. A ballot is included in your mission package, so you should have that in the package you came in with. We'll collect the ballots before the polls close. I'd like to recognize the Bank of America teammates who are serving as proxies and have them stand for you. They are Mick Ancrum. Mick runs our corporate operational risk management team. Candice Browning, she heads the research team I talked about earlier that's one of the best in the world for our Bank of America Merrill Lynch. Thank you, Mick and Candice, for agreeing to serve as proxies. With that, I'll now present the items for stockholder consideration. First, let's work on the management proposals.
As stated in the proxy statement, the board of directors recommends a vote for each of the management proposals. First, proxy item one, to elect our director nominees. Second, proxy item two, to adopt an advisory vote to approve executive compensation. Third, proxy item three, to ratify selection of PricewaterhouseCoopers as the company's independent registered public accounting firm for 2013. The five stockholder proposals included in our proxy statement and a floor proposal will now be presented to you. As I stated earlier, each representative will have four minutes to present their statement in support of their proposal. A chime will sound when your time is concluded. If a representative fails to come forward and introduce a proposal, the proposal will not be eligible for consideration, will be not included in the vote tabulations.
As stated in the proxy statement, the board of directors recommends a vote against each of these stockholder proposals. The first stockholder proposal was submitted by Amalgamated Bank LongView Large Cap 500 Index Fund and relates to report on political contributions. Scott Drazel is here on behalf of the proponent to present the proposal. Mr. Drazel. Pardon? Okay. Let's get the proposals out, and then we can talk about anything you'd like. Yes, sir. Scott.
Great. Thank you, Mr. Moynihan.
Thank you.
Good morning, everybody. I'm Scott Drazel with Amalgamated Bank's LongView Funds. We are a manager of about $12 billion in assets for various employee benefit funds, all of whom have a long-term view on shareholder value and are long-term investors in Bank of America. As part of that long-term view, we actively engage companies in our portfolio to encourage good governance practices that we believe will promote sustainable growth over the long time or in the long term. For us, the key aspect of good governance, as our chair noted at the opening, is good risk oversight, and we believe our resolution speaks to one of those core matters. We are asking the board to adopt a very clear policy that the board will review all corporate assets spent in the political arena and fully disclose those assets to us as investors. We support participation in the political arena.
We believe there can be benefits to the extent that that political spending is aligned with the long-term strategy for shareholder value growth that has been outlined to us as investors. We also recognize as diversified investors, that there are also risks in political participation, legal, reputational, regulatory, and so forth. We rely on our board to monitor those risks, and we believe it's an important check that spending be fully disclosed to investors, especially since the spending is coming from the corporate treasury. I would note very quickly that we saw in the opposition statement that the company does have some type of a policy for board review. We don't see that it includes spending on 501(c)(4)s or super PACs, for example. Does the board receive that information?
Can that policy be disclosed to us investors? Why not disclose that to us as well? I'd like to conclude with two quick notes. One, we've worked with a wide number of companies on this issue. We note that Bank of America is a laggard in this industry on this issue. Peers such as JPMorgan Chase, Goldman Sachs, Wells Fargo, all disclose significantly more than Bank of America is disclosing. We encourage the board to proactively catch up, if I can say. The second point is that we do actively engage companies in our portfolio. We think it's our responsibility as investors. We happen to hold $30 million worth of investments in Bank of America. Bank of America this year happens to be the only company that did not respond to any request for a discussion on this issue, which is a grave disappointment to us.
Small cap companies with much more slim communication strategies were much more active. Bank of America is very alone in not responding to any requests. We would encourage the board as well to adopt a more constructive approach to shareholder communications. We think it could benefit the board and benefit our company going forward as well. Thank you very much for the support. We encourage a vote yes.
Thank you, Mr. Drazel. The next proposal relates to proxy access and was submitted by Mr. John Harrington. Mr. Harrington is here to present his proposal. Mr. Harrington.
Thank you, Mr. Chairman. Fellow share owners, my first Bank of America meeting was about 40 years ago in San Francisco in Masonic Auditorium. I questioned President Clausen as to why Bank of America was loaning money to the white minority government of South Africa and asked him if he didn't believe that it was immoral to support apartheid. He said that the bank policy was to lend money to any creditworthy customer, government or otherwise. Since that time, unfortunately, the bank has made little headway in becoming a more ethical or moral financial institution. In 2008, our bank, along with other U.S. financial institutions, were responsible for almost bringing down the entire global and U.S. economy based upon excessive materialistic self-interest. Our government responded by bailing out the banks, adopting the Dodd-Frank Act, which passed the ball to weak-kneed regulators to carry the heavy load.
Because regulators and corporate lobbyists are pretty much the same people within the Beltway, thanks to the revolving door between regulators and the regulated, the SEC purposely wrote a bad proxy access rule that was overturned by the court. Thanks to the Chamber of Commerce, shareholders, as owners or principals of this bank, still have no ability to nominate our agents. Not only do you as board members and fiduciaries fail to represent the diversity of. Knowing that this corporate nomination process is a rigged system and a sham representing the same kind of electoral system as the old Soviet Union and present-day Chinese Communist one-party state, where you nominate yourselves and set your own pay, I thought I would write you an appropriate poem for this occasion.
The name of the poem is "Bank of America: Too Big to Fail, Too Small to Stand, But Just Right to Crawl." In 2008, Secretary Paulson and the Treasury gave us a gift, for this, there was no need to follow thrift. The government eventually gave us $125 billion, saying that this would make us look like a million. Our management team bought us Countrywide, nothing could turn the tide. We kept buying, however, this time Lynch, for about $40 billion, saying success was a cinch. You neglected to inform investors of pay, as our pals willingly gave Lynch executives millions away. Even Jed Rakoff was alarmed that our bank could get off so unharmed. Most elementary notions of justice and morality. Certainly, our bank wasn't hindered by such formality.
I shouldn't forget to say that we also gave $11.9 billion pay for so-called putbacks to Fannie Mae, not to mention prior settlement claims our bank did pay of $3.5 billion more to Fannie Mae. That all goes to prove, since we bought the Countrywide move, our $100 billion loss of value and stock astray, plus another $40 billion in legal settlements to pay. Our illustrious board has diluted our stock, has remained totally in shock as our stock has fallen 70%, so many of us must rent. Perhaps it's time to consider board representation and look at directors' presentation. They all appear to me to represent the 1%, of which most Americans clearly resent. Our president admitted to the commission that neglected to admit a necessary omission. Without a culture of duty, obligation, and morality, how can a bank represent our citizens' plurality?
More important, however, is that shareholders have a say about our board's nomination and pay. I think it's about time that our directors get in line, as owners, we can only advise, I think it would be wise. We at least use a precatory vote, an advisory vote, it's time I think we use it. I quote. Thank you very much.
Thank you, Mr. Harrington. The next proposal relates to the service on multiple boards of directors and was submitted by Kenneth Steiner. John Harrington is here to present the proposal. Mr. Harrington.
You're so lucky this morning to have me twice up. I can't believe it. It's such an honor for me. The proponent, Ken Steiner of Great Neck, New York. You see the resolve section in your proxy material. I will not repeat that. However, I have a short statement. Adoption of this proposal would deter our directors, hopefully, from accepting further director assignment that would rob them of adequate time to deal with the complex and troubling problems of our company. Adoption would also deter our nomination committee from seeking new directors who would not have adequate time for effective oversight. You see, many directors serve on many boards, and they really don't have time to put up with a lot of the issues that they seem to have a problem with.
This proposal would also be evaluated in the context of our company's overall corporate governance, as reported in 2012. GMI Ratings, The Corporate Library, an independent investment research firm, said our company has struggled. Oh, yeah, that's surprising. For a long list of ongoing legal problems. In recent years, our company completed a number of controversial acquisitions, paid out billions in executive bonuses, accepted $35 billion in emergency funding from the U.S. government. I think he's a little low on that one. Allowed our former CEO to walk away with $83 million in severance pay. Come on, you guys. I mean, $83 million. Jeez. Based on these examples of our company's need to improve in corporate governance, please vote to protect shareholder value. Thank you, Mr. Chairman and members of the board.
Thank you, Mr. Harrington. The next proposal was submitted by Mr. Steven Johnson and Ms. Martha Thompson. It relates to political contributions. Sally Thomas is here on behalf of the proponent to present the proposal. Ms. Thomas.
Good morning. I'm representing shareholders Marnie Thompson and Stephen Johnson of Greensboro, who are also members of Responsible Wealth. We are also submitting proposals that are similar to this to various groups or being presented to various groups by us and others this year at Target, Chevron, 3M, EQT, and Exxon. As of 2012, a growing number of 64 companies had some type of explicit prohibition in place regarding political spending. We believe Bank of America wishes and intends to be a good corporate citizen, and we believe the bank, because of its strong industry leadership, has a real opportunity to be a leader in the area of good governance and specifically in the area of political giving. To date, however, Bank of America is lagging considerably in this regard.
In the annual CPA-Zicklin Index, which ranks companies within the S&P 100 on 25 indicators related to political spending disclosure, policies, compliance, and oversight, Bank of America received only 15 points out of a possible 100 points. The company's lack of accountability and transparency is particularly concerning in light of its high and growing level of involvement in politics. Since 2002, Bank of America's political action committee and employees have given $16.84 million to federal candidates for public office. There's additional information in the proxy. This influx of corporate cash into elections since the Citizens United decision is deeply unpopular among the U.S. public. In February of 2010, an ABC News poll found that 80% opposed Citizens United, noting, quote, "The bipartisan nature of these views is striking in these largely partisan times." End quote.
In 2012, The New York Times called Bank of America one of the most demonized corporations in America. We believe that our proposal will help protect the company against the possible damage to its reputation and to further negative publicity that could come from spending corporate funds to influence electoral politics. The bank's good name is its most important asset. As shareholders, we recognize that there are instances when the company does need to engage in public policy process. Our proposal does not seek to constrain the company's ability to lobby elected officials once they are elected on specific issues relevant to the company. Rather, this proposal seeks to address the use of company funds to influence the outcomes of elections, including referenda.
We believe Bank of America owes it to its shareholders and to the general public to undertake this study and to strongly consider refraining from any political giving. We urge you to vote yes on proposal number seven. Thank you.
Thank you, Ms. Thomas. The next proposal relates to mortgage servicing and was submitted by the Neighborhood Economic Development Advocacy Project. Josh Zinner is here on behalf of the proponent to present the proposal. Mr. Zinner.
Thank you. I'm Josh Zinner of NEDAP. We have a proposal that we're introducing that asks the board to do an independent audit to determine whether the company is violating fair housing and fair lending laws in the way that it's doing mortgage servicing. NEDAP is a Bank of America shareholder, and we work with community groups in New York City on financial justice issues. We run a statewide coalition of 160 non-profit groups called New Yorkers for Responsible Lending. Many of the groups work directly with homeowners all over the state. As a shareholder, we are deeply concerned with the persistent and fundamental problems with Bank of America's servicing practices. This is especially problematic because Bank of America is the nation's second-largest mortgage servicer, servicing $1.21 trillion in home loans.
With all due respect, Mr. Moynihan, we're here to tell you that the situation on the ground in communities with Bank of America's mortgage servicing is very different than how you're portraying it here to shareholders. Advocates and homeowners all over the city, state, and country are experiencing systematic problems with Bank of America servicing that is causing serious harm for families and communities. Especially given the size of Bank of America's servicing portfolio, this is having a huge impact on communities. The problems include interminable delays in processing loan modification applications and giving answers, repeatedly losing documents, wrongful denials of loan modifications, dual tracking, and generally giving borrowers the runaround, leading many to lose their homes. The experience of many homeowners is a Kafkaesque experience in dealing with Bank of America servicing, which often ends badly. Again, these reports are not just in New York, but nationally.
This is from advocates. For homeowners on the ground who don't have a voice, the situation is far worse. Unfortunately, many of these abuses seem to be concentrated in communities of color, which raises great concerns about the impact of Bank of America's practices on these communities. This is particularly so due to the servicing portfolio of the Countrywide loans, many of which were problematic loans in communities of color. On Monday, the New York Attorney General announced that it was bringing an action against Bank of America for widespread violations of the national mortgage settlement announced last year. We have had reports from all over the country of wide violations of the settlement. The action that the New York Attorney General is bringing is based on hundreds of complaints that were filed from all over New York State about long delays in the process.
This is just one example of the legal exposure of the company due to its continuing failures in mortgage servicing. Under the settlements with state and federal regulators in 2012 and 2013 related to abuses by Bank of America and other banks in their mortgage servicing and foreclosure practices, Bank of America is supposed to provide principal reduction relief in a non-discriminatory manner. Despite this, counselors and advocates working on the ground in communities of color in New York and around the country report seeing very few, if any, principal reduction modifications by Bank of America in these communities. The National Fair Housing Alliance filed a case last year against Bank of America after an undercover investigation alleging a violation of fair housing laws in its handling of foreclosed properties. This brings me to the resolution at hand.
It's critical that the board get an independent review to ensure that Bank of America is complying with fair lending laws in the way that it does mortgage servicing. This is particularly so given the widespread evidence that Bank of America's servicing and foreclosure practices continue to expose it to extraordinary risks. This includes legal risk of potential losses from claims that Bank of America's practices continue to harm Black and Latino communities disproportionately. The reputational risk that Bank of America faces as a result of these potentially discriminatory practices. I just need a minute to finish, Mr. Moynihan.
Take a few seconds.
It's critical that an independent review is run so that there is transparency for shareholders.
Thank you.
That the company can address these issues. Further, given the recent failures of risk management and oversight at Bank of America, which, for example, caused the company to settle a claim last year with federal regulators
The board has a heightened responsibility to be proactive in representing the marketplace. That board is monitoring the performance and management-
Okay, sir. We gave you-
Let me just finish.
Okay.
In closing, we're deeply concerned as shareholders about the legal and reputational risks of Bank of America's mortgage practices, particularly in communities of color. This is particularly an even massive taxpayer bailout of Bank of America.
Sir.
Bank of America, I'm getting to that. Bank of America has a legal and moral obligation to serve the interest, not harm the communities to which it serves.
Okay, sir.
This is especially so given the size of Bank of America's servicing portfolio and the impact these practices have on communities around the country. Shareholders deserve to know whether the company complies with the law. For these reasons, we are asking shareholders to support this resolution.
Thank you.
I'd like to.
Thank you
Just one again, a Black driver, Floyd, and his daughter talking about their experience.
Sure. We'll take that. We help any individual. Thank you. I remind people stick to the timeframe, because we've got a lot of people who want to speak today, and it's only fair to your colleagues to do that. Mr. William Barclay has submitted a qualifying floor proposal on climate change risk mitigation. Mr. Ben Collins is here on behalf of the proponent to present the proposal. Mr. Collins.
Thank you. Good morning. My name is Ben Collins. I'm a campaigner with the Rainforest Action Network. I represent William Barclay, a shareholder in Bank of America, and move the floor proposal on climate change on his behalf. Our resolution requests that the board of directors report to shareholders on the greenhouse gas emissions associated with Bank of America's lending, investing, and financing activities, also known as its financed emissions. The resolution also asks the board to disclose the bank's plans to reduce these emissions and its associated exposure to climate change risks. We are concerned that a lack of a strategic response to climate change undermining the bank's reputation, exposing share owners to unnecessary risks, and harming both the climate and human health. From a risk perspective, climate change brings looming regulatory and legislative uncertainty.
Climate disruption, meanwhile, puts any property or industry with weather dependency at risk, including agriculture, forestry, or any business in a flood zone or water-scarce region. It will be critical for Bank of America to consider these new public policy uncertainties and extreme weather trends when evaluating risks. As Superstorm Sandy and the flooding happening right now in Western North Carolina illustrate, climate disruption has put an end to weather as usual. The bank, therefore, cannot afford to continue with business as usual. The rationale for lending to carbon-intensive clients, such as companies in the coal industry, depends upon the assumption that companies will continue to be able to emit greenhouse gas pollution for free. According to a recent report by HSBC Bank, carbon constraints post-2020 could reduce valuations of coal assets by as much as 44%.
If this analysis is correct, coal-dependent companies will soon be unable to generate the revenues necessary to service their debt obligations to Bank of America and other creditors, putting share owners at risk. It is time for the bank to address its climate risks on a comprehensive rather than sector-by-sector basis. We ask the company to make a strategic review of climate change risks and the impact it will have on the bank's financing portfolio. We also request that the bank integrate these assessed risks into its business practices by committing to disclose and reduce its financed emissions. In short, we ask for evidence that the board is addressing the imminent financial and environmental risks for the bank from climate change and taking action to mitigate them now before it is too late for share owners, the climate, and our communities.
I have introduced this resolution using the language of risk and by speaking primarily to the concerns of the bank and its shareholders. The bank faces not just a financial imperative to address climate change, but a moral imperative to do so. The environmental and public health costs of business as usual for the bank on climate are immense. Barbara Gottlieb and Reverend Nancy Allison will speak to these concerns in their remarks. Thank you, Mr. Chairman. I urge shareholders to vote yes on the floor proposal using the yellow ballot provided in your folders.
Thank you, Mr. Collins. We're now going to accept questions or comments on these nine proposals only, and then we'll get to the general Q&A session. Right now. Okay. You don't need to form a line to ask questions. Simply raise your number card, and we'll recognize the number. Move to the end of your aisle. One of our teammates will hold a microphone. State your name, the proposal, what you're going to speak about, and as I noted earlier, please limit your comments to two minutes. Again, a chime's going to remind you that your time is up. At the conclusion of this question and answer session, we will announce the preliminary voting results and conclude the formal business in about a half hour. I'm going to open after that to general Q&A for the whole rest of the session. With that, let's start with questions.
I can see hands up now, and I know you have to leave at 11 o'clock. Number 59, we'll start with you.
government thinks it's more important than this meeting. Am I allowed to hold that?
He'll hold it for you. Just go ahead and speak. We can hear you.
My name is Judy Connick. I am a shareholder in Bank of America. It started out as Suburban Bank and Trust back in the '40s. I am urging people to vote against any member of this board of directors, including the chairman. I have worked hard for many years, saving and investing, to be able to follow a tradition established by my parents to help family members when needed. Your dishonest and misguided policies around Merrill Lynch have made that no longer possible. You have cost me close to $60,000 in lost dividends. You have cost me to liquidate major assets that would have gone to my family to help them when needed and cost me over a million and a half dollars.
I can no longer make contributions to a 529 account for my great nieces and nephews, nor help with school expenses, tuition, medical expenses, camps, rent, et cetera. When one of my nephews bought a house a number of years ago, I was able to give him the money towards the down payment. How do you justify accepting any money and a bonus, yet pay $ millions to settle in misguided policies about Merrill Lynch? If you remember last year, I made comments about the warlords of Washington who came in a crisis and worked for $1 a year. That included Mr. Chrysler, who made most of the tanks for World War II. I asked you to do that. Instead, you have put your hands in our pockets and taken more money out of it. How much for the ML settlement will a shareholder receive?
What I'm trying to find out is will I receive $0.01 a share or less, or even that a month from you? What are you prepared to do? I don't understand why you can accept a bonus and still keep putting your hands in our pockets and taking money out of our pockets. Why haven't you raised the dividend instead of My question again is how much per share will a shareholder receive, if anything? When will that happen?
Why would you accept a bonus if-
Let me get the question. Gary, do you want to try to answer the question on this Merrill securities litigation settlement in terms of what the payment is?
I don't know the exact payment that will be made. A plan of distribution will be devised and approved by the court. You'll receive communication on that in the relatively near future.
You're anticipating it being a $0.01 on a $12 dividend?
I don't want to put a number on it when I don't know the number.
Yeah. It's going to be dealt with in terms of the amount of money and the distribution, which you'll get a plan that will tell you exactly what you'll get per share in the mail as they finalize settlement. Number 94, please.
Sir, may I respond to you?
What I was saying is, Gary will follow up and get you-
You're saying my way is overall too late.
Okay.
My other question, the primary one has to do with the shareholder, how much money we're going to get, which is probably going to be nothing. The other one, chair, is having to do with your saying you are obviously a -
Ma'am, you've had your two minutes. We can come back to you. Number 94.
Okay, great.
Mr. Chairman, my name is Joe Baker. I'm from Southaven, Mississippi. My family and I hold about 14,000 shares of common and preferred stock. My wife and I just returned from Arkansas last week. By the way, the global warming resulted in record late snowfall in Arkansas and a number of other states, which I think points out that the global warming agenda has been greatly overstated in terms of political statements passing for scientific evidence. We're invested in Bank of America because we need the dividend income for our retirement. I have confidence in Bank of America leadership and where you and Ken Lewis have taken us. I would suggest strongly that we back away from financial commitments to poorly documented political causes like climate change. Thank you, sir.
Okay. Other comments? Let's go with number 32 here. No, keep going.
Okay.
I'm Nancy Ellett Allison, pastor of Holy Covenant United Church of Christ here in Charlotte, North Carolina. I speak in reference to the floor resolution on greenhouse gas emissions. I'm grateful for the ways in which Bank of America has been a good corporate citizen to the city of Charlotte, making meaningful investments across social issues and throughout the community. You've stewarded your role here well. I join with many others to now invite you to be a good steward of all God's creation. It is time to further your strategic responses to our life-killing climate change and to set aggressive new emission reduction goals beyond your current 2015 goals.
Five years ago, B of A leadership created a policy statement of concern about mountaintop removal, saying, "We will phase out financing of companies whose predominant method of extracting coal is through mountaintop removal." Yet in 2012, with over $3 billion of coal investments, B of A is still the number one financer for companies who engage in the destruction of creation through mountaintop removal and the pollution of the earth through burning dirty coal. It is morally wrong to wreck the climate and morally wrong to profit from that wreckage. This resolution invites you to respond to this issue with the same urgency that you have used to fight your way out of economic crisis.
The climate changes we are already experiencing, snows in Arkansas in the spring, severe drought across America, flooding across the Catawba, and catastrophic wreckage of our coast cost us money as well as lives, homes, and hope. This is an economic issue with moral implications for the leaders of Bank of America. Your slogan, "Life is better when we're connected." Life is best
When our connections are just, sustainable, and nourishing.
Thank you. Other comments on the proposals? Remember that we'll have a general Q&A later. Number 79, back in the left-hand corner, please.
Thank you, Mr. Moynihan. My name is Kevin Stein. I'm with the California Reinvestment Coalition. I stand in support of the NEDAP resolution calling for a fair lending audit. We do want to thank you sincerely for our ongoing dialogue on these issues and for the large investments the bank has made to try and fix foreclosure problems. At the same time, we remain concerned that servicing is not what it should be. I think more work to be done is how you put it in your introductory remarks. In our latest survey of housing counselors in California, we find apparent violations of the national mortgage settlement by Bank of America and other banks.
We're disappointed to see that dual track continues to be a problem with Bank of America, and that in the first federal case of which we're aware, looking at our brand-new Homeowner Bill of Rights, Bank of America appeared to be not in compliance with our state law on dual track. In our survey, we also note from counselors and legal service lawyers concerns with fair lending and inequal access to relief by Bank of America and other banks. In particular, disabled borrowers report difficulty in getting accommodations to navigate the complex process. Widows who are not listed on the underlying loan have difficulty communicating with the bank trying to keep their home. Limited English proficient borrowers have no idea about communications they're receiving and difficulty in communicating with the bank to try and save their homes as well.
We heard a while back of counselors reporting consumers had Bank of America letters saying, "You're entitled to relief," but they couldn't understand the letters because they're in English. Bank of America agreed, we commend you for translating certain documents, we think more needs to be done. In California, we have 7 million limited English proficient borrowers, 2 million of whom don't speak English or Spanish. We're concerned that there's not equal access to relief. We urge you to support this important fair lending audit. We urge you to translate documents and provide language capacity in the 5 biggest languages spoken in California. I'd like to leave you a copy of our latest survey, I'd like to invite you to come out.
Sure. You can give the survey. They'll bring it up. Thank you. Next, 266.
Hi, good morning, Mr. Moynihan.
Hi.
My name is Barbara Gottlieb. I'm speaking in support of the floor resolution on climate change. I want to thank the authors of this resolution. It's really urgent that Bank of America reduce the carbon footprint of the loans it makes, specifically its loans to the coal industry and coal-fired utilities, because coal combustion is the largest single contributor to climate change. I'm the director of environmental and health for an organization called Physicians for Social Responsibility, a national organization of physicians, nurses, other health providers, and public health professionals working to address the greatest threats to human life and survival. Climate change is one of those threats. I have with me a letter signed by 2,817 PSR members from across the country, including 58 from North Carolina, calling on the bank to take responsibility for its coal loans and phase them out.
Those loans threaten human health and ultimately survival. I'd like to mention briefly just two of the many, many health consequences that come from climate change. The first is heat waves. Heat is actually the biggest killer among all the forms of extreme weather caused by climate change. Heat waves can cause heat stroke, which causes symptoms of convulsions, coma, and can lead to death. In the Chicago heat wave of 1999, 750 people died just in the city of Chicago. We're likely to see more of these killer heat waves as climate change intensifies. Rising temperatures from climate change also increase ozone, the most widespread air pollutant in the United States. It provokes asthma attacks. We're in the midst of an epidemic in this country.
It aggravates lung diseases, scars lung tissue, and can even affect the unborn, slowing the development of the fetus in the womb and increasing rates of low birth weight babies. These are serious issues for Charlotte with your bad air quality, and they're worsened by burning coal. We encourage you to review your loans on coal, increase your portfolio of loans to clean, safe, renewable energy. It's the only way we can live, literally.
Thank you. 374, right behind you. Fred.
My name is David Hotchkiss. I own 2,500 shares of Bank of America, and I made the money by being stationed in Iraq, and that's why I invested my money. The woman on the climate change, she is definitely wrong. More people die each year from cold than from heat. 50,000 in Europe last year. I say, Bank of America, you're better off keeping the loans going, keeping the economy going, and that's what will get the 99% better.
Thank you. Next question. Next, 85 over here on the left.
Hello, good morning. My name is Alexa Speas-Munichu. I'm here from NEDAP, an economic justice resource and advocacy center in New York City. We're shareholders, I'm also representing family shares in Bank of America. I'd like to speak in support of resolutions four and seven, the lobbying disclosure resolutions. I think everyone in this room knows that risky derivatives contracts engaged in by Bank of America and the other big banks were a huge contributor to the financial crisis. Those led to new laws and new regulations that are intended to stop another crisis like that from occurring. Recently, Bank of America has been in the news for lobbying the House Committee on Agriculture around derivatives and for other lobbying around financial reform to weaken the derivatives rules. This strategy really could have serious reputational risks for the bank.
Seeking to undermine rules that were put in place in response to the bank's irresponsible and risky behavior undermines the public trust in the bank and also goes against our wishes as shareholders for the bank to engage in responsible behavior. Thank you.
Thanks. Other questions, comments? 138 back in the center.
Thank you. I have to apologize in the beginning, this is not in verse. I thought that was a lovely presentation. I'm speaking in support of Resolution Eight. I'm Alan Fisher, Executive Director of the California Reinvestment Coalition, a coalition of more than 300 nonprofit groups in California working around financial issues. I just wanted to follow my colleague Kevin with a couple other quick points about our survey, which was with 84 counselors and legal services group. The good news is B of A is not the worst. Last year, that's what the counselors said. We're pleased that there's progress. However, sort of left-handed that might be. Just two quick things, I think. One is on timelines. As Attorney General Schneiderman has said he's concerned about, more than half of the counselors say that B of A is not meeting the deadlines.
Secondly, in terms of single point of contact, almost half say that the person they talk with is not knowledgeable or accessible. The other point that might be useful to you is that they also say that having just one person sometimes is problematic. They can't reach them. If it's a person who decides they're not interested in the situation, then they're up a creek without a paddle. I think this independent review is really needed. I see that consumer real estate losses dropped by $13 billion last year. I think that that's really positive as a shareholder. I continue to be concerned about the level of staffing and organization in terms of responding to these issues, which have great reputational risk and legal costs. I also wanted to speak in favor of Propositions Four and Seven.
Our experiences in Sacramento are that the Bank of America lobbyist is really over the top in opposing anything that's to the benefit of neighborhoods, including the Homeowner Bill of Rights last year. Thank you.
Other questions or comments on the proposals? I don't see any more. I think now it's time to conclude the Q&A period for items of business presented for the meeting. I now declare the polls open for each of the nine items of the business for consideration at today's meetings. We're going to proceed to collect your ballots. The polls are about to close. If you have a ballot, please raise them up and we'll collect them from you. There's a few more over here. Any more ballots? There's a couple way in the back. Any more ballots? The polls are now closed, and this concludes the official business of today's meeting. The preliminary results of the voting are now available. Lauren, would you please report the preliminary results of the vote?
Our Inspector of Elections reports the following preliminary results. All of the management proposals received majority support and have been approved. For these proposals, all 13 director nominees have been elected to the board of directors by a majority of the votes cast. The advisory vote on executive compensation has been approved with approximately 93% of the votes cast in favor, and the appointment of PricewaterhouseCoopers has been ratified. None of the stockholder proposals received the required majority support. Final results will be reported in an 8-K filing with the Securities and Exchange Commission within four days of today's meeting. Thank you.
Thank you, Lauren. Thank you everyone for participating. With the announcement of these preliminary votes, there is no other business to come before this meeting. I'm going to entertain a motion to adjourn the meeting.
I move to adjourn.
All in favor of adjourning the official meeting say aye.
Aye.
Thank you for being here, and thank you for your support. We've now adjourned the official meeting, and now we'll move to the general question and answer session. Now that we completed the business, we're going to move this session, but please remember the guidelines still apply and that the rules of conduct that you've been given in your materials still apply today. If you have personal financial matters about your personal accounts or someone else's personal accounts you're representing, I would ask you that you raise your hand and we'll get you to the customer service representatives right away to take care of that. You're going to have two minutes. Remember, two minutes. It'll show you on the screen. The chime will come on, the mic will cut off. You don't need to form a line. Raise your cards. We'll call on you.
Go out to the center of your aisle when I call your number, our teammate will hold a microphone, we'll go through the questions. Let's start over here, number 55.
Good morning. My name is Justin Danhof. I'm representing the National Center for Public Policy Research. We're a free market think tank and a company shareholder. Mr. Moynihan, it's been reported that Bank of America decided not to renew its membership in the American Legislative Exchange Council, that's known as ALEC, in 2013 due to "budget constraints." This decision was made after a concerted effort by radical organizations such as Color of Change, the Occupy Wall Street movement, and Greenpeace that sought to defund ALEC by intimidating its corporate members.
Spreading propaganda and lies about ALEC's work. These organizations claim that ALEC's work to promote state-level voter ID laws was somehow a racist attempt to suppress voters. They used those falsehoods to make continued corporate membership in ALEC uncomfortable. ALEC stopped working on voter ID months before you dropped your membership, my organization has picked up the slack, we're not going to be silenced. By the way, voter ID laws enjoy wide public support, polling consistently above 70% approval. Approval for these laws is nearly universal, as a majority of Republicans, Democrats, Independents, African Americans, Hispanics, young, old, men, and women all support voter ID laws. When Bank of America worked with ALEC as a member of its Commerce, Insurance, and Economic Development Task Force, it helped to advance freedom and prosperity for all Americans.
By siding with the radicals at Color of Change and Occupy, you have given our company's corporate clout to extremists to demonize conservative and free market causes. First, can you explain how efforts to advance free market capitalism, an economic system that has lifted more people out of poverty than any in world history, was somehow shot due to budget constraints, yet the company has committed to now $70 billion to provide financing for environmentally friendly projects? Would you give your rationale for deciding to award $100 million in grants, i.e., free shareholder money, to groups that promote avoiding fossil fuels in the name of fighting global warming, even though the global warming theory scientists admit that no temperature increase has happened in the past 17 years? Can you provide a list of organizations that get that money? Thank you.
I think in terms of the decisions we make, we make them in the best interest of all the communities we serve, customers and clients, what they need us to do, the teammates that work here, the shareholders, and then the communities we serve. We balance all that in everything we do. You'll find that we're members of organizations and not members of other organizations based on that. Sir, each one of those specific things, we can follow up with you on specifics if the team wants to do that. From a general standpoint, we make the decision based on all the criteria we should. 44.
Good morning. My name is Amanda Starbuck, and I'm with Rainforest Action Network and a shareholder of Bank of America. I'm here today, along with others in this room, because climate change is the single biggest environmental threat facing our planet. We've already heard this morning about some of the headline extreme weather last year, Superstorm Sandy, and with the wildfires in the Rocky Mountains, the droughts in the Midwest. Let's also remember that impacts were felt everywhere. Last year, more than 69,000 local heat records were set. I heard your comments at the beginning about how proud you are of your multi-billion-dollar commitment to the environment, and I agree this is a priority. You have good people on your team who are working on these initiatives. Here's the problem.
The scale of the climate challenge that we face means we need a fast transition from fossil fuels to cleaner energy generation. Bank of America is the leading underwriter of the U.S. coal industry, which is the single largest source of U.S. climate emissions. That means that the bank is actually underwriting the climate change that you are also trying to tackle. The bank must look at energy holistically, how we generate power, and where our energy sources come from. One might say it's not the place of a bank to take a moral judgment on who we do business with. When you already have an environmental commitment, that is a false question. The sad truth is that it's not possible for a bank to be both number 1 in addressing climate change and number 1 in financing the fossil fuel sector.
These two goals are incompatible. My question for you, Brian Moynihan, and the Bank of America board of directors, is which will you choose? Will you prioritize addressing climate change and a safe world for future generations, or will you choose to prioritize funding the coal industry and climate chaos?
I think, Amanda, you've heard the comments of the person who just spoke before you. There's obviously a lot of public debate and public policy about this. All I can tell you is what we do, and we make those decisions based on a rational view of what our customers and clients are doing and the various constituencies. To help everyone understand what we do, I'm going to ask Cathy Bessant, who's the head of our environmental effort in the company, to talk about what we do inside our company and what we do externally to help in our minds to do the things we think we should do. Kathy, why don't you explain what we do with the $70 billion initiative?
If they can't hold it, I won't hold it. Thanks, Brian. Couple of things. First of all, we couldn't take more seriously our understanding of the importance of environmental sustainability and our commitment to supporting and moving new energy forward. We have a great track record of doing that. As part of the completion of our $20 billion commitment, which by the way, we completed four years ahead of schedule in 2012, as part of that, we financed over $9.5 billion in energy efficiency projects and $6.8 billion in new energy, solar, wind, geothermal, really sustainable forms of energy. In terms of our role as a financier and advancing the capital markets to support new energy, our leadership, I think, has been quite clear. The important parts of our new $50 billion commitment continue in that tradition.
They focus on, of course, energy efficiency and new energy creation, but also on transportation and the role that it plays, as well as on water and waste, two new additional components of our focus. We've supported that financing commitment also with a huge set of operational goals. We were the first bank to come out with a very aggressive goal in the reduction of our own greenhouse gas emissions, just as one example. We've already reduced those greenhouse gas emissions by 18%, doubling our original goal of 9%, have added another 15% to that goal. By the time we get to 2015, or hopefully sooner, we will have reduced our own greenhouse gas emissions by well over 30% from our base.
Whether it's our own operational activities, our commitment to finance the sector, or our belief that energy sustainability is a huge and pressing issue, you won't find a more seriously minded set of people and management team and board dedicated to doing that.
Thank you. Next question. 373.
My name is David Hayes, and I attend the University of Tennessee. As a few of you may know, Mr. Chad Holliday also graduated from the same school for his undergrad degree. Mr. Holliday, I'm going to direct this towards you. Last December, you returned back to campus to receive an honorary degree from UT. I'm sure once you stepped on campus, you started reminiscing about the good times you had and all the good people you met from across Tennessee and across Appalachia and across the U.S. As you accepted your award from your alma mater, you must have been cognizant of the protest happening right outside the walls. You must have remembered me, a student who approached you minutes before you stepped on stage, asking you to leave Bank of America to stop funding the coal industry, and more importantly, stop funding mountaintop removal.
Now, Mr. Holliday, I was taught you could be either one of two things. You could be part of the problem or part of the solution. To myself, 106 students in over 70 colleges across the nation, we believe that you are part of the problem right now. Why? We are aware of the things the coal industry and the mountaintop removal persist, and we are aware of all the harmful impacts of the coal industry. To your own classmates who you might have had classrooms with, who you are living in the dorms with, who live across Appalachia and across the U.S., if they're aware of the negative impacts, they believe you yourself are part of the problem, and also Bank of America is part of the problem.
No matter how many green, responsible companies you finance, you will never make it right with the destruction to not only people's lives, but to the environment. My question is, Mr. Holliday, Bank of America, how do you plan on becoming part of the solution when you are part of the problem for so many lives in Appalachia?
Right. I think, sir, it was Mark, right? David, sorry. David, I think the complexity of the issue and how do you manage it when you're not directly involved in the process or commitments, I think speak for themselves. Chad and all the boards of directors, our governance committee, hear how we work on these issues, how we balance the fact we have clients and customers, the fact there's difference of opinions and different policies. I won't have Kathy repeat it, but we just went through what our response is, what we do internally, what we do financing the change, does it have to go on? The innovation of that, I think speaks for itself. Chad is a leader in this field, and I think he helps lead us as anybody else. Number 156. Straight back, Brian.
Bill Bell from Charlotte, North Carolina. I'd like to thank management and the Board of Directors for the job y'all are doing. This last year we had an increase in the tax rate on dividends. They went up a third from 15% to 20%. A lot of companies are just increasing their dividends to cover that increase that you're having to pay to the government. I think that y'all have done such a great job, and I think that you're limiting retirees and people that like to have dividend stocks. Wall Street today talks about the latest rally was because of dividends, high-paying dividend stocks, and maybe I'm still remembering those days when you had 5%, which those were pretty nice days.
I just think that when you're buying back your stock, which y'all have done and everyone approves of, if you would balance buying the stock with increasing the dividend a slight bit each time that you can. I think it'll increase the price of the stock. Congratulations for the appreciation last year, and I'd like to see it happen again this year. Thank you.
That makes two of us, sir. We just thought it clear on dividends. We take that into account, as we go through the so-called CCAR process for the next year, we'll have to take that into account. The Board will take that into account as we get there. We understand the issue. It's not like-minded people, including all the directors and others that own stock, have a view they'd like to have both. Right now, the best course of action for our company was to buy the stock back at the price they're at, and that's why you're seeing some response. Number 56.
Hi, thank you for having me. My name is Rabbi Margie Klein, and I am a rabbi in the Boston area. I am here to talk about Bank of America's environmental responsibility. Last Friday, I preached at my synagogue the scriptural reading at the end of Leviticus, in which God says, "The earth is mine, and you are only temporary residents with me." One child asked, "If we are just borrowing the Earth, why do grown-ups keep thinking that it's their right to destroy it so that there will be nothing good left for us when it's our turn to take care of it?" I found this to be a heartbreaking question. Looking out at this room, I am sure all of us care about our children, and I am sure that we all want to leave them a legacy of clean air and clean water and a stable climate.
Yet, I am also sure that it can feel very far away from here. I am sure that all that can feel very far away from your choices today. Shouldn't these problems be solved by someone else? I think the answer is no. As Rabbi Abraham Joshua Heschel said, "In a free society, some are guilty, but all are responsible." If we have the power to prevent harm, we are responsible to do so. You, as the shareholders of Bank of America, have the opportunity and thus the responsibility to use your power to help create a sustainable future. I conclude with a spiritual song in Appalachia. Let the life I lead
Speak for me. Let the life I lead speak for me. When I come to the end of this road, and I lay down my heavy load. Let the life that I lived speak for me.
Thank you, Rabbi. Number 380, let's just go.
Hi, my name is Lorella Scarbrough, and I live in southern West Virginia in a very heavy coal-producing county. In 2009, bank executives from Bank of America visited southern West Virginia and an active mountaintop removal site, and they also did a flyover. They met with some local residents and listened to our stories, myself included. A month later, Bank of America released a policy, their policy on mountaintop removal, which reads, "Bank of America is particularly concerned about surface mining through mountaintop removal in central Appalachia. We will phase out financing of companies whose predominant method of extraction is mountaintop removal." My question is, what companies have you or are you in the process of phasing out whose predominant method of extracting coal is from mountaintop removal?
This statement may sound great to people who don't live in a heavy coal-producing area, for those of us who live at ground zero for mountaintop removal, we knew when it was said that it wasn't worth the paper it was written on. It was worthless. Today, mountaintop removal is still going on above my home, the home where I raised my children, and it has not stopped. I'm asking Bank of America, what have you done? What do you plan to do in order to stop the destruction in the community? There are 21 peer-reviewed health studies that prove that living in the shadow of a mountaintop removal site is very detrimental to our health. I want everyone in this room, all the shareholders and the executives to understand, we don't live where they mine coal. They mine coal where we live.
The destruction of our communities, our air, and our water needs to stop. Bank of America is culpable in the destruction of the second-most biodiverse rainforest on the face of the planet. We need it to stop.
Thank you for your comments. Next, 374, way in the back.
I have a question.
The answer is we have the policies. They're available on our websites and stuff. We adhere to them.
Well, how come you won't answer my question?
374. Ma'am, the client relationships. We wouldn't disclose yours. We're not going to disclose others. Number 374.
David Hotchkiss again. Like I said before, the best way for Bank of America to go forward is keep making loans, get the 99% working. We have 10% real unemployment. Keep us working. I would say give us a dividend. If all these people want social causes, the best, most effective way, Jim Cramer said, with the tobacco companies is invest in the company, take the dividends, stick those into your social causes. Thank you.
Let's go back to the back. Number 379.
Good morning, Mr. Moynihan and shareholders. My name is Ashish Fernandes from Greenpeace. I come from India, a country where coal was supposed to rescue millions from grinding poverty. Decades of coal exploitation has done nothing to alleviate poverty in India or deliver cheap electricity to millions who still live in darkness. What coal has done, however, is ruin the health of millions, destroyed forests, displaced hundreds of thousands from their lands. BofA has invested in Coal India Limited, the world's largest coal miner, responsible for egregious environmental and human rights abuses. The moral and ethical arguments against coal are many and incontestable. You've heard them here. For those not moved by morals and ethics, there are also very real financial risks that you should consider.
Despite the hype, there is significant doubt that India's extractable coal reserves will last more than 20 years more, even as what coal remains gets more expensive. In contrast, the renewable sector is growing fast in India. Wind power is now cheaper than new coal. Within five years, solar photovoltaic will be as well. This is from analysts like KPMG and PwC, not from Greenpeace. There's also growing opposition to new coal projects. That's from Greenpeace. These two factors pose a very real financial risk to the coal sector and all those who invest in it. The government is now planning to divest another 10% of its stake in Coal India. BofA is rumored to be one of the potential underwriters, just like you were in 2010.
My question to you, Mr. Moynihan, is will Bank of America bid to be an underwriter on the upcoming Coal India share sale? If so, how do you justify a continued involvement in a company with a record of environmental and human rights violations, especially given the real financial risks in the Indian coal sector?
Thank you for your comment. Our team will take a look at that if they have a chance to or asked to look at it as part of our business. Number 41.
Mr. Chairman, I'm Jim Plunkett from Portland, Oregon. In the Pacific Northwest, we face five proposed new coal export terminals. These terminals would increase global coal exports by 150 million tons a year. The financing of these terminals is all directly related to the Bank of America. If these are built, we're locking ourselves in to extreme climate change. I'm a climate activist. When I visit my elected representatives, they tell me they're surprised how many comments they get on climate and how often it's mentioned in their town halls. I worry that our government isn't going to act soon enough to keep us from passing the tipping point for carbon in the atmosphere.
I expect the bank's management had some sympathy with my view last week. Spokesperson Brittany Sheehan said that the bank followed the famous all of the above energy policy and then asked, "Does society really want financial institutions deciding what fuels are used?" We need the Bank of America to help us get this country off fossil fuels, to keep the coal in the ground. I'm lucky to have this opportunity to express myself here in this forum in Charlotte on behalf of the Pacific Northwest. The bank is lucky to be in a position of power and control. We'd like the bank to show you understand the urgency of our situation by not financing coal.
Thank you for your comments. Let's go over here, 64.
Good morning. My name is Shola Olatoye. I'm actually not here to speak about climate change. I work for an organization called Enterprise Community Partners. We are a 31-year-old affordable housing organization. More than two-thirds of this country, folks who are at low and moderate income are housing insecure. Jim Rouse founded us 30 years ago to help ensure that everyone received a safe, fit, and affordable home. Bank of America has been a critical partner in that work. We have created over 300,000 units of housing across this country. Bank of America has been a critical investor, philanthropic supporter, and thought partner in that work. I have the pleasure of running our New York office, our largest office, where we build and preserve over 35,000 units of housing and manage about 20,000 units of that housing.
While the challenges of community development and housing have changed from the urban disinvestment of the '70s and '80s to now serving the very low-income people and particularly in our region, rebuilding after Hurricane Sandy, Bank of America has been a continued partner through that. Right after the storm, our local Bank of America partners called us and asked what they could do. I think that's an example of the kind of partnership that we've had the pleasure to have over our relationship together. Your resources have helped us rehab a 70-unit building in Coney Island that was greatly affected by the storm. You've helped us build a 75-unit building in Brooklyn for formerly homeless families. The sort of commitment to the critical needs of our community and those ever-changing needs is something that we value and look forward to the continued partnership together.
Thank you for the opportunity. Thank you.
Thank you. The management team and the board are committed to continue those efforts, I thank you for recognizing. Let's go to 100. You got a nice voice, stay away from the microphone.
Sorry.
There's people out there in the web that are listening to you, too.
Good morning. My name is Les Anderson. I'm from Longview, Washington, the site of a proposed mega coal terminal. Firstly, let me say that BOA services all my commercial accounts and has for many years. My concerns as a businessman and investor for over 40 years are some disturbing projects BOA has as investments. Investments need to be done with care. What are the risk factors? What are the histories of the parties involved? They need to prove their worthiness in order to have our monies to invest in their venture. Ambre Energy, in association with Arch Coal, Peabody, and Kinder Morgan, desire to mine and transport billions of U.S. coal to Asia. Some of these entities have a record of failure and losses and little or no experience in the risky boom and bust business of coal exports to Asia.
In addition, there are human tolls to all of us. Pulmonary disease, genetic mutations in children, birth defects. These happen now. Coal power plants emit at least 1.6 tons of climate-changing gases per ton of coal burned, the leading global warming contributor, harming our atmosphere, poisoning our oceans, rivers with mercury, lead, and other heavy metals. These projects will slow down the recovery of the economies over the areas where export terminals are projected, blocking our commercial traffic, emergency services, while destroying northwest fisheries, increasing our healthcare costs, higher taxes for railroads and bridge improvements. Disturbing our community. A continuation of this counterproductive venture would demonstrate deliberate indifference to shareholders' values. Coal is not new energy forward. My question is, will you commit to the environment, include your commitment to environment, include a withdrawal of your investments in these coal-to-Asia projects, even as it is with the existing customers?
Mr. Moynihan, I have a couple documents I'd like to move to the forward, if that would be okay.
Let's give them to our teammate there, and he'll bring them up.
Thank you so much.
We consider all our transactional work, which is lending. You keep using the word investing. We don't have equity investments anywhere. That's part of cleaning up the balance sheet. They all run through the same policy, so I can assure you that everything goes through the same viewpoint of who we do business with and why. Let's go to 65 over here.
Good afternoon, Mr. Moynihan. On behalf of the Urban League of Central Carolinas and representing the National Urban League, where President Marc Morial serves, I want to first thank Bank of America for your partnership with us, especially throughout our country. Over 2.5 million people are served directly through partnerships with organizations such as yours to provide individuals with education, workforce, and entrepreneurship.
Charlotte. There's wealth gaps. We obviously see that there are issues in education, housing, and as I learned more and more today, climate change. What I do see is a great opportunity for Bank of America, and that is to really highlight more often your philanthropic work. To use a local example, Charles Bowman and his Bank of America team have invested in the Urban League of Central Carolinas right here in Charlotte, and they were part of a group that invested close to $650,000 into our workforce programs. When they made that investment, we were able to train over 300 individuals who this past year earned $7.49 million in salaries. That means that for every dollar you invested, $11.50 went right back out into the community.
That's an investment to be proud of, especially since so many of these individuals were veterans, displaced workers, single parents, and so forth. I think that these are the types of stories that need to be embedded more in your daily message, and they should actually encourage others to give more. I really do believe that your philanthropic model is one that you should
Thank you. One of the things that I've grown to appreciate in ways that make me proud, everywhere in the country. We have 100 Charles Bowmans across the country in markets doing this work everywhere. Importantly, we have 260,000 teammates who do 1 million plus, 1.5 million volunteer hours a year. We're shooting to get 2 million this year. In all of the communities, including here in Charlotte and around the country, it is very important that we do the things we do, and we're proud of that. I'm proud of the team for doing it, and I'm proud of the management team for allowing people to take the time and do the right thing. 265.
Thank you, Mr. Chairman. My name is Larry Shirley. I am with the Nicholas Institute for Environmental Policy Solutions at Duke University. On behalf of Duke University, I want to thank you for supporting research for the identification of solutions to serious environmental problems, in particular, climate change. At Duke University, we partnered with the bank for the last four years, looking for options that could be deployed to help tackle and reduce emissions in coal plants. These technologies and policies to reduce CO2 in these plants are particularly critical if we want to get a real foothold in addressing climate change. I want to commend the bank for its commitment to tackle pressing environmental challenges through such things as their environmental business initiative. The provision of financing for companies like, one example is a company that is putting solar energy systems in 120,000 homes occupied primarily by military families.
Just as one example, providing financing for energy efficiency and affordable housing. These kinds of initiatives need capital to go forward, the bank's funding of $70 billion in this area is critical in that regard. Finally, in a long career in energy, one of the things I have always found is if you want to look and see whether an organization is truly committed to reducing climate change and affecting energy efficiency, you look to what they are doing in their own house. The bank's commitment to 30% reduction in its own carbon footprint and its progress to date in meeting that is exemplary, and I applaud the bank for those efforts. Thank you.
Thank you. All right. Let us go way back in the back. 46, way back in the corner.
Thank you, Mr. President. My name is Thomas Wilkins. First, congratulations on your 11.06% Tier 1 capital ratio, second highest among your peers.
Thank you.
I have a short question.
Sure.
Do I understand correctly that the 2013 capital analysis by the Federal Reserve Board restricts dividends for you but permits stock buybacks? If this understanding is correct, what does Bank of America have to do to get Federal Reserve approval? Thank you.
I think to say the word restricts probably has it a little bit juxtaposed. We go in and ask as part of the capital submission, which is a submission that says, assume you hit a stress situation worse than 2008, effectively nearly the Great Depression, without any warning. Can you return capital as if you went through that scenario? You take the stress test, you reduce your capital by the stress test, you look at the forward a couple years' earnings, and then you make a calculation whether you can return capital. This year, we were able to return capital. When you make the calculation and ask for the capital, you have to say, what are you going to do with the capital? We asked for share buybacks because we thought that was the best way to drive shareholder value.
When we get to next year, we'll again have the choice of what we ask for, then we have to get it approved. This year, they approved $5 billion of common equity buybacks, the Federal Reserve and the OCC and the other examiners approved $5.5 billion of preferred redemptions, both of which we plan to do this year. Next year, we'll ask again. It's not a restriction, it's sort of what we ask for. We are trying to balance the fact that our shares trade at a discount to what we think the appropriate value is. The fact that, as one of your colleagues said earlier, we issued a lot more shares in the crisis than we had planned to have outstanding at this time.
Getting those shares back is important to help improve the returns for you as shareholders, with the dividend question, we'll balance that again next year. The number one issue for us is to continue to get the recurring earnings stream back to the normal level that it should be. As we do that, then I think we can look for a different balance in the future. Thank you. 118.
Hi, and thank you. My name is Sarah Banky, and I live here in Charlotte in the Mountain Island Lake community. I'm a mom and a cancer survivor. I can see the Riverbend Coal-Fired Power Plant from my house. Thankfully, Riverbend has just closed, ending 84 years of toxic air pollution, but the water pollution continues. 3.2 million cubic yards of coal ash sit on the shores of Mountain Island Lake, the drinking water for 860,000 people and probably the drinking water being consumed here today. This coal waste is contained in two unlined lagoons covering 71 acres, held back by 80-foot high earthen dams. The same kind of dams that failed in Kingston, Tennessee, and wiped homes off their foundations and dumped so much coal ash into the Clinch and Emory rivers that four years and $1 billion later, they still can't get it all cleaned up.
Arsenic-laden water flows directly from these ponds into Mountain Island Lake. Multiple studies from the Catawba Riverkeeper and Duke University show high levels of arsenic throughout the lake. Arsenic is a known carcinogen. Recently, leaks were discovered in the bases of the dams.
Next.
These leaks are unpermitted, illegal, and hazardous to our health. This is a legacy coal is leaving behind in our community right here in Charlotte. It's Bank of America's legacy too. You're able to profit from financing dirty energy while people like me are left to bear the risk of living near millions of tons of toxic coal ash. Bank of America has a policy to consider the human rights and environmental impacts of its loans on local communities in developing countries. When will you extend this policy to address the impacts of your loans on people like me here in Charlotte?
Thank you for your comments, we'll take that into account. 173 in the back in the center.
Thank you. I'm Rabbi Jonathan Freirich from Temple Beth El here in Charlotte. A story for a change from the Talmud. An old man continued to plant a carob tree as crowds of people raced to welcome the Messiah. A scholar noticed the elder's efforts and stopped and asked him, "Good sir, carob trees take 70 years to bear edible fruit. You'll never benefit from your work today. The Messiah's here. Leave your fruitless task, literally, and come with us to celebrate the new world." The gentleman sat down his shovel and answered the young scholar, "Maybe the Messiah's here, maybe not. I came into this world, there were carobs to eat. With or without the Messiah, my great-grandchildren should have carobs, too." The scholar bowed his head in respect, nodded at the planter's wisdom, and went along his way.
In a world where considering what happens months or years in the future is counter-cultural because it goes past too many quarterly reports, I want a bank that looks to build a world that all of us can live in. Clients, investors, customers, we need livable communities without poisoned water and air. As a B of A customer and investor, I want our bank to be known as a visionary leader towards a world that we can all share. We don't have to look seven decades into the future to see the negative impact of coal extraction and usage. It's not a complicated question. Can any of us argue it is good financial or environmental thinking that investment in coal constitutes a good strategic plan?
Should B of A not declare itself a leader and grab hold of a shareholder, customer, and client base that hopes and plans to live on this planet, hopefully in 70 years?
Thank you. Let's go over here. Actually, 382, right. Just turn around there.
I'm Patricia Moore. This is my first time to speak at a Bank of America meeting. Thank you for your time. I've lived in Charlotte all my life. Counting my grandchildren, my family's been here for five generations. We're mostly hardworking, law-abiding folks. I enjoy gardening, reading, time with family. I really don't want to be here today. Bank of America is the number one funder of coal, you know the impact of coal. We're suffering the worst air quality in the nation. Areas of our mountains look like the moon. Nothing grows. Water is undrinkable. People suffer dire health effects. Though Bank of America is the number one funder of coal, the size of these loans is small compared to the size of the bank. Bank of America can decide to stop funding coal tomorrow.
My question is, why do community leaders at the bank, such as yourself, decide to fund coal, which brings illness and sometimes even death to our communities, and those who peacefully protest Bank of America's funding of coal are arrested?
Ma'am, thank you for your comments. Next.
I'm one of those people, and I would like to say.
Thank you for your comments. Next, over here, 240.
Thank you, Brian. My name is Jim Knotts. I'm a combat veteran, and I also have the privilege of leading an organization called Operation Homefront. We are a nonprofit partner of the bank, and we provide emergency financial assistance to our service members and their families and also to our returning wounded heroes. I've had the privilege of learning about the bank and learning about the bank through how it does its business, but I also learn just as much about the organization by how it gives back.
Bank of America has been a partner with us for more than 7 years, helping us to provide emergency assistance for the most basic of needs: rent, utilities, and food for our military families. Bank of America has helped us provide transitional housing for our wounded heroes so their families can be together during their recovery and as they make the transition out of the military. The bank has helped us provide permanent housing through the home donation. The bank is committed to hiring veterans and their spouses, the bank has even partnered with some companies that are installing solar panels on military housing in locations around the world to help protect our environment.
I am remembering the event where we opened a transitional housing operation in California, I was surrounded by a sea of red T-shirts, and those are the Bank of America employees, many of them veterans themselves, who came out to help welcome home these wounded heroes. I would just like to say thank you for the bank and its commitment, its partnership in helping our military service members and their families.
Thank you. As many of you know, we've got work to do with the change in the strength of the military in terms of numbers of people, I'm proud of what the team has done. Andrea Smith was recognized on behalf of our company at the White House the other day in terms of all the work we've done along the lines you said, we'll continue to do. It's been very important, I urge everyone to get involved and help here. Let's go to 45.
Hi, Brian.
Bruce, sorry.
I'm Bruce Marks, the CEO of NACA. NACA is the largest housing counseling organization in the country. Let's talk about the purchase program and re-lending going forward. One thing I want to start out with, we have a $10 billion commitment from Bank of America, $10 billion on one mortgage product. No down payment, no closing costs, no fees. You don't look at credit score, we make housing as a right. Everybody who goes through that program, because they don't consider the credit score and the interest rate today is 30-year fixed, 3.25%, the best mortgage in America, it's stabilizing neighborhoods throughout the country. We want to say thank you to Bank of America for that $10 billion commitment on the best mortgage in America.
The question is, Brian, what are your plans for lending to low and moderate-income people going forward as the crisis reduces and people are looking to buy properties again? We're concerned about the new regulations that are going to make lending to low and moderate-income people more difficult, what is your opinion on that? Thank you for your commitment.
Thank you, Bruce. Bruce, as you know, six weeks ago, I was with you and a bunch of your colleagues where I got to hold class at Harvard and got to tell you things for an hour, which was particularly, after 25 years of working with Bruce, it was the first time I got to speak for a half hour, 45 minutes without being interrupted. That's it. 100,000 mortgages units, numbers of people getting mortgages in the first quarter, 30% still goes low to moderate income. Our commitment to that product set, that segment is there. We do have to, as I said that day, I'll say today, by the way, everybody is aware of this.
We do have to be careful that in the new regulations that we keep a balance for the first home buyers and other people. As I said before, we just got to keep that in balance. I think you agree with that. I think other people agree that people can have different views of what balance means, and we might have something different from you. I think it's important that as people recover, that we are able to actually get homeownership in a balanced way, in a sustainable way. That's the point that David Darnell made a few weeks ago at another one of these housing we were sponsoring, trying to get the debate going.
The issue that we've seen, despite everything that we know, is that we've got to make sure people can really stay in their home and keep the payments, and that's the number 1 key thing. Let's go back to 42, way in the back.
My name's Bonnie McKinley. I have invested much in this question. Complete Amtrak fare, three and a half days on board in upright position, coach seating, all spent to ask you the following question. I come from Oregon, where we are placed in the middle of five coal terminal proposals. To our east, the Powder River Basin, the origin of this strip mine's coal. If the plans of Arch and Peabody are realized, megatons of coal will roll through the open and forested lands of Montana, Idaho, and Washington. Mile-and-a-half long trains of uncovered coal will emerge to parallel the Columbia River on roads to proposed terminals in Oregon and Washington. Monstrous ocean-going ships will take that Powder River fuel to the coal-fired plants of Asia. There, we will supply energy-hungry nations with all the pollution and carbon needed to further imperil our special planet.
I bring you my question with the expectation that you honor it with deep attention and honesty. My question: How will you courageously, personally use your skills and unique position in the world to end Bank of America's financial involvement with Arch and Peabody Coal companies? "Life is better when we're connected," is your slogan. Life is really better when we realize we're connected to our fellow species, our atmosphere, and our oceans.
Thank you for investing your time and energy. Look, I've got your question, I've got your point. We'll take that into consideration. Thank you. Number 61.
Good morning. My name is Edward Yuri. My question pertains to Bank of America's funding of Peabody Energy. Peabody has partnered with SSA Marine to create an infrastructure for coal export in the Pacific Northwest. They've proposed to build Gateway Pacific to be the largest coal shipping terminal in North America, right next to my town, Bellingham, Washington. They plan to ship 1 billion tons of coal from the Powder River Basin to China at a rate of 48 million tons per year through Gateway Pacific alone, which would require an average of nine trains per day to meet this output. That's 18 crossings each way. I'd like to draw the attention of the shareholders to the fact that B of A has underwritten $hundreds of millions in loans for Peabody in the last few years since the proposal of this project.
This demonstrates severe lack of foresight and irresponsible lending practices. I'll tell you why. This project is enormously unpopular. There is massive organized resistance to it. 124,000 comments were submitted by the public, requesting over 100 unique impacts to be assessed during the environmental impact scoping process. The likely impacts of the project are devastating on every conceivable level to local economies, regional ecology, agriculture, human health and safety, as well as the aquatic ecosystem of Puget Sound, which our fishing industry depends on. It appears highly possible that permission to build the terminal will be denied. If the project goes through, we can anticipate backlash from the millions of people and businesses situated along the rail route, who will be aggravated every day by mile-long trains.
Be sure they'll be seeking a way to vent their frustration. They will know that Bank of America was complicit in this. By the way, China has announced plans to cap their coal use by 2015, which means that the demand Peabody expects could cease to exist. Do you consider these factors to be risks or liabilities? What will you do if the building permit for Gateway Pacific is denied? Would this outcome influence your future lending decisions?
We'll take all that into consideration. Is there another comments on a different topic that we want to make sure we get to? We're now moving into 2 hours. Does anyone have a comment other than climate change and other than and we'll get them all. I'm not saying that, but if you have other comments, let's diversify a little bit and we'll come back. 376.
Hi, Mr. Moynihan. Thank you for taking my question. My name is Brent Edwards, and I am, I guess, selfishly here representing myself. First a comment and then a question. My comment, I sympathize with those people who depend on dividends for their retirement. I do applaud the board's decision for 2013 to buy back preferred stock, which should add, seems like maybe about $0.01 a share to the net income per quarter. As well as buy back stock since right now it's under your net book value. I applaud that decision, at least for 2013. I think that adds shareholder value for all of us.
Sure.
My question is, I'm going to have to paraphrase because I don't remember exactly, but it goes back a couple of years ago. You did an interview with a magazine, Financial Times, somebody. You had mentioned that you felt that during more normal economic times, I believe is the phrase you used, Bank of America, you thought could in the future earn approximately $30 billion, $35 billion a year. My question is, do you still feel that way? Secondly, does normal economic times mean legacy issues behind us as well as a normal interest rate environment? Thank you.
Sir, a couple things. One is you got to pre-tax, post-tax just to make sure. The $35 billion was a pre-tax number. If you look at our street estimates and look at them going out, as we normalize, we will earn closer to what we should earn. If you just look at the line of business we reported in the first quarter, the results show that we earned $1.3 billion or $1.4 billion in three of the businesses. We earned $700 million in the fourth business. There are two units that lost $1.3 billion and about $700 million. Both those units are in the process of being completely rerun and all have to do with the legacy mortgage issues.
The business called CRES, which is our home loans business, which is dominated by LAS, which is our legacy mortgage issues, and our other, which was litigation cost in the first quarter. As you think about that, you can see the earnings stream and the businesses. They're the ongoing businesses, and our job is to bring that $1.3 billion loss in CRES to zero and then to positive. First thing is let's get it to zero, and that's what we're busy working on. All right, any other questions other than climate change? We'll get them all. I just want to make sure that we Okay, 383.
Good morning. I'm June Blotnick, director of CleanAir Carolina, a Charlotte-based nonprofit working to reduce sources of pollution that impact air quality and damage human health. I'm here today to deliver a letter from Medical Advocates for Healthy Air, a statewide organization which calls on Bank of America to phase out its lending to the coal industry and take the lead in financing the transition to a low-carbon economy. While we applaud the positive benefits of your environmental initiatives, your loans to coal companies offset those benefits exponentially. This letter is signed by pediatricians, pulmonologists, family practice doctors, emergency physicians, school nurses, and others who provide healthcare to children and adults in our state impacted by coal generation. The side effects of your coal lending include an estimated 13,000 children born each year in North Carolina alone with neurological deficits caused by their mothers eating mercury-contaminated fish during pregnancy.
The main source of mercury pollution is coal-fired power plants. In 2010, North Carolina's electric sector ranked eighth in the country for industrial toxic air pollution, emitting more than 14.6 million pounds of harmful chemicals. Other side effects of your continued coal lending include damages to the respiratory and cardiovascular systems of those exposed to air pollution and an increase in premature deaths. North Carolina is home to 195,000 children who struggle with asthma. As medical and health professionals, we urge you to consider the impact of your lending on public health and demonstrate your leadership by adopting a meaningful policy that shifts your energy financing to clean, renewable power generation. It's time to listen to your doctors. I have a copy of the letter.
I'll give it to Sol, there. We'll have it. Thank you. Other questions? It's 309.
Good morning. My name is Miran Fesajaya, and I'll be a student at Davidson College in the fall. As a first-generation Charlottean and American, I've seen firsthand how the terrible repercussions of your investments in the coal industry have plagued low-income communities of color the hardest. Suffering the plight of respiratory diseases, uninsured and economically disadvantaged, these citizens deserve better. According to a 2012 report published by the National Association for the Advancement of Colored People, the 6 million people living within three miles of the 378 plants across the U.S. have an average per capita income of $18,400 per year, and 39% of them are people of color. Even in nearby West Virginia, people have been silenced and marginalized for years for the sake of profit by way of mountaintop removal sites.
In your campaigns, you claim to donate generously as a leading corporate philanthropist to NGOs giving back to communities. What good are these contributions if you fail to address your key role as a source to so many of these communities' problems, including increased foreclosures, bankruptcy, and illnesses? As a bank that prides itself on convenience for its customers, please explain to me the convenience of cancer, asthma, and other sicknesses on the working poor. Life is better when we're connected? Who is this we that you're marketing to? Who exactly does we include? Mr. Moynihan, you owe it to your customers, shareholders, and those afflicted by your heinous investments and business practices to divest from the coal industry. Thank you.
Next question, 138.
Alan Fisher, California Reinvestment Coalition shareholder. Thank you for allowing my question. My question comes from our concern about payday lending. In California, more than a million people are caught in these debt traps from the storefronts, let alone Wells Fargo and U.S. Bank. I know that you stopped financing one payday lender, but this is really about the others. I think this is an industry that's in trouble and is likely to go under the Comptroller of the Currency's guidelines for bank payday lending. The Consumer Financial Protection Bureau's report that very clearly says how damaging payday is. I think there's a financial risk to Bank of America if it continues to finance these. My question to you is, do you plan to stop financing payday lenders?
I think you're speaking to the wrong people. We don't do it. Next question, 302.
Excuse me. Thank you, Mr. Moynihan. My name is Professor Steven Norris. I teach at Warren Wilson College in Asheville. I teach environmental justice, civil rights, and nonviolence. I have been looking around this room all morning seeing this slogan that says, "Life's better when we're connected." Listening to the testimony and the questions of various people in the audience, I feel an incredible sense of disconnection here between various people and with the bank. My friend Pat Moore a little while ago mentioned how she attempts to get connections, and which I have done too, by allowing ourselves to be arrested confronting this bank. I have done it three times. Just to make sure that you think I don't play favorites, I've also been arrested at TD Bank, which is the largest financer of the Keystone XL Pipeline.
My question to you is, how do we get the connections which your advertising says you are trying to create if the only way I can feel connected and feel like maybe I'll be listened to, maybe Rainforest Action Network will be listened to, maybe Greenpeace will be listened to, maybe some of the other environmental organizations that are present here and out in the country generally may get listened to, is by being arrested? It's a dramatic step to take. I have students who get arrested. I had one student who spent a month sitting in a tree a couple of summers ago on a mountaintop removal site to prevent that site from being blown up. That's the extremes to which people are having to go these days in order to get the connection, which you advertise is one of your primary values. Thank you.
Just to be clear, I met with Rainforest representatives in California, and Cathy was there in their offices last week. 57.
Good morning. My name is Vanessa Green, and I am from Boston, a home turf for you, Mr. Moynihan, and of course, for your bank. I'm here today to prompt Bank of America's Boston-based leadership team to think critically about the current climate emergency and your personal responsibility as active, influential members of Boston's social, economic, and political communities to propel and accelerate America's energy transition away from coal-fired power and toward a low-carbon, renewable energy economy. Ultimately, your responsibility to stop and prevent the worst of the worst community quality of life impacts. Boston is a proper sister city home for one of the most powerful banks in America, a city of incredible wealth and privilege, of innovation and problem-solving, academic, medical, legal, financial, and faith-based prowess.
I personally felt privileged on March 20th, 2013, to be part of a delegation that delivered a letter to you, Mr. Moynihan, requesting your leadership on our climate and energy survival, signed by 50 of Boston's top minds concerned about and responding to our coal dependence. I want to emphasize their enthusiasm of these forward-thinking folks around the intent of the letter and how very real, expanding, and responsible the wealth of support and knowledge is in Boston available to your leadership team as you conduct finance emissions assessments and ramp up implementation of your sustainability initiative. I urge you to recognize that exactly because you are in positions of unique culpability and influence, you have a special responsibility to continuously strategize and problem solve around your coal energy financing and its destructive impact.
I remind you that our climate emergency does currently demand your response in a way similar to how you would respond to a growing hole in a raft that you're in adrift at sea. You will drown unless you get creative. We are all in that raft with you, counting on you as the clock ticks. My question for you is, beyond funding ad campaigns, academic and corporate talks, and arts and cultural projects, how is Bank of America's Boston leadership team recognizing and strategically leveraging the wealth of knowledge available to them, and how can you escalate your demonstration of ingenuity and innovation as you problem solve your financial relationships with companies engaged in coal extraction, transport, and burning?
I think Kathy spoke to the $70 billion. I think that's a fairly sizable commitment, and she'll be happy to talk to you afterwards and figure out how we can engage the team. They've all gone. You've gone. Anybody not spoken yet that's out there? 375.
You will hold it. Okay. Good morning. My name is Stephanie Pistello. I had some prepared remarks, but I'm just going to throw them aside because most of what I had to say has already been said by a lot of people. First, I'd like to thank you as an artist for the bank's investment and support of so many wonderful programs. I guess my question is, at this point, aren't you all tired of hearing about us ask you over and over and over and over again to please stop investing in coal?
I absolutely love and respect and thank you as a Kentuckian, as a seventh-generation Appalachian, as a granddaughter of a coal miner, as a cousin of a miner who is working right now, for investing in renewables, for doubling down on that, for new opportunities, for a brighter future, for us to continue to be the leader in generating electricity in our country. We are desperate for something new. We see the writing on the wall. Coal is going to be gone. In this life's better room, we're connected. Unfortunately, our connection right now is killing us. It is killing us. There are children dying every day living in proximity to these mountaintop removal mines. That's my beef, mountaintop removal. Please, please, I beg of you, will you really, truly stop investing in supporting companies that practice this form of extraction?
For the sake of life and health, this blood is on your hands through these transactions. Please, will you, please, will you stop supporting companies that practice mountaintop removal coal mining? Thank you.
Thank you. Let's see. Anybody else not spoken yet? 234.
Good morning. This is not brouhaha. It is serious. It is not enough to support business with no consideration of the detrimental effect that that business has on the environment and the communities we call home. Your reputation and character has become tainted by your choice to enable and facilitate destruction of a national treasure, the Appalachian Mountains and its people. Let's face it, that includes the backyard of one of your former employees, literally. I'm Kathy Selvidge, and I began my banking career at the White County National Bank, located in far southwest Virginia, that your predecessors acquired. I remained through Sovran and NationsBank, and you continue to occupy the same space in Norton, Virginia, located in a county where at least 35% of the entire land mass has been destroyed. While I know that corporations are not humans, corporate decisions are made by people.
Their shares are purchased and held by people. I believe that even in the hardest of hearts, fallow ground can be found.
Your stockholders might be willing to accept a little less profit and take the rest in the pride derived from the investment in the construction of an Appalachian community, not in its destruction. Would you be willing to ask them and reveal the results to the nation at large? Lastly, I want to say that I invite everyone in this room to go to Google Earth, take a virtual tour over Wise County, my home, and ask yourself this question: how would you like it if that happened to your home? Then decide what it is you need to do about it. Thank you.
Thank you. 360.
I'm Robert Stepp, a private individual shareholder of Bank of America. I'd like to ask you to address more along the lines of what plans the bank has for its future business growth. Some time ago, it seemed as though the bank decided that it wanted to separate itself from, say, investment banking and commercial banking because of the potential conflicts. The bank still owns a major brokerage company, and two days ago, there was a settlement made, which was very much in the bank's favor, with MBIA. They're an insurance company. Part of this settlement gave the Bank of America the right to acquire, I think, around 4.5% or 5% of the company. Could you please just bring us back to the bank and its future and the views that the bank management and board have as to which way it intends to go?
Thank you.
Sure. Let me hit the technical question about the MBIA. That was a complete financial matter that was part of the negotiations, the process. You should not think that that's a strategic holding in our company, as is all the equity holdings that we've been going from $60 billion a few years ago and liquidating over time as part of the way we generate our capital. Now let's talk about growth. Where does growth come from in the context of the United States, where 80% of our business is, in the context outside the United States. Inside the United States, our best opportunities for growth are to supply four or five key products to people. The core group, banking accounts, debit cards, credit cards, home finance, and car loans. Our job is just to do that and do that and do that. You can see the growth coming.
You can see our residential mortgage production grew by 57% first quarter 2012 to first quarter 2013. You can see our loans to small businesses, which we hit on that segment, grew dramatically. When you go to companies, it's the same thing. It's how they lend to hire people, employ people, and everything else. It's how they, what we call cash management, which is move their accounts payable and receivable around for them, and ultimately, it's capital markets, M&A advice, and things like that. It's an integrated business for each of our segments. Our core growth strategy is to drive penetration of products that we've only brought into fold across that platform and just keep doing it and doing it and doing. You're seeing that happen across the platform.
That will provide superior returns because it's better economics for you as shareholders, we'll build capital and give it back to you in terms of dividends and stock buybacks over time. It's a fairly straightforward method. 269.
Hello, my name is Camila Bustos, and I'm an undergraduate at Brown University. I'm here representing the Brown Divest Coal Campaign, which is calling on the university to divest its investments for the 15 largest mining and burning coal companies in the United States. We believe that our endowment should reflect our commitment to sustainability and social justice, that we should not be invested in an industry as outdated and destructive as coal. The campaign, which you will hear about in the May corporation meeting, has collected over 3,200 petitions from students, professors, alums, staff members. We count with the support of Senator Sheldon Whitehouse, have received media coverage from NPR, BuzzFeed, Forbes magazine, The Guardian, and The Boston Globe.
We're part of a national movement of over 300 college campuses that are taking a stand against climate change, want to reduce the climate footprint of our investments. As students, personally as an environmental science student, we know that connection between carbon dioxide emissions and global climate change is undeniable, public health impacts, displacement of climate refugees due to rising sea levels, and intensification of extreme weather events. Apathy towards an issue of this urgency is irresponsible and highly immoral. Today, Mr. Moynihan, I want to ask you not only as Bank of America CEO, but also as Brown alum.
Given that our generation, my generation, is increasingly conscious about climate change and the urgency to address this issue, how do you expect the bank to recruit talented graduates who are interested to work in a bank whose policies are more consistent ethically and less involved in financing coal?
I'm well aware of your efforts and President Paxson sent out the notices and I understand we'll get briefed at it at the May board meeting, I'm not exactly familiar with it. You're going to a great school. Take advantage of it, and you are. I'll take a look at that when we see it, but I think we've recruited Brown. We've had great recruiting there this year, and have a number of students coming to work for us, and we'll continue to do that. 33.
My name is Allie Wilton, I am a second-year student at Harvard. I'm 20 years old.
That's not as good a school as Brown, you know that. We got you 2 to 1 here, you got it.
Okay. I'm 20 years old, My future, like that of every other young person, will likely be defined by global warming. Am I going to inherit a stable planet like that which your parents left you? Am I going to inherit an economy crippled by climate disaster and an agricultural system collapsing from drought and weather disruption? Our society has to make that decision through our actions over the next decade, I'm too young to ever get the chance to be the decision-maker. That responsibility belongs to your generation. That responsibility belongs to you and your bank. Right now, I fear that your company is making the wrong choices in the energy market. While I appreciate the new attention directed towards renewables, Bank of America is providing exceptional funding, more than any other American bank, to the coal industry.
By sustaining mountaintop removal coal mining and extending the lifetimes of existing coal-fired power plants, Bank of America is facilitating the extraction and combustion of coal that science clearly indicates must be kept in the ground. I am here to tell you that Harvard students are tremendously concerned about climate change and the coal industry's abuse of human rights, and we do not want to work for companies like Bank of America that are funding our destruction. We and students at 80 other universities have pledged to disrupt your recruitment sessions on our campuses until you stop financing the coal industry. How can you guarantee to young people like me that working for Bank of America will no longer worsen the climate crisis?
Thank you for your comments. Again, we continue to recruit at your university, we welcome your comments. As I said, the team will consider them in terms of what we do going forward. It is a great school, just all kidding aside. It looks like we got one more, maybe two more. 342.
Hello, my name is Carly Devery, and I'm a resident of Bellingham, Washington. I've lived in the Pacific Northwest all of my life and proudly call it home. The Puget Sound in particular boasts spectacular views framed by mountain ranges on both the east and the west for over 100 miles. Additionally, the sound is full of economically valuable and sensitive resources, such as salmon. North America's largest coal export terminal, Gateway Pacific, is proposed to be built at Cherry Point, a few miles north of my home in Bellingham. Not only would the terminal completely tarnish the Puget Sound, but it will also negatively impact the world's climate. The coal to be exported from Cherry Point will be extracted and transported via open rail cars from the Powder River Basin in Wyoming and Montana. Peabody Energy, financed by Bank of America, is the company behind the coal operations.
The total coal reserve in the Powder River Basin, if burned, will contribute to 1% of the world's carbon budget. Now, 1% may seem like nothing, but this one project will single-handedly increase the intensity of climate change. Mr. Moynihan, how do you rationalize financing companies like Peabody Energy when only one of their activities contributes to 1% of the carbon budget? Do you not believe in the carbon budget's role in climate change, or are you ignoring the entire problem for short-term gain? Thank you very much.
Thank you. I think we've got one last question, one last comment, 249.
I have a couple questions. My name is Brenda Cochran Wilson. On the coal thing, I was listening to everybody talk, and I was thinking that now that they found a cure for AIDS, maybe the money that has been going to that could go to clean coal research and make a difference. My second question is, can I talk to someone about my finances before I leave?
Sure. I think we're done. We will make sure that one of the teammates come back there, the customer service representatives are in back, and they'll take care of you right away, okay?
Thank you.
All right. Thank you everyone for your time and attention. I now, on behalf of Chad Holliday, our Chairman of the Board, the rest of our board of directors, thank you for your time and attention, and thank you for attending the meeting. We look forward to seeing you next year.