BofA Stock Hits 2-Year Low on Mortgage Concerns

Bank of America Corp. (BAC) hit a two-year low in New York trading on concern that a stalling U.S. job market will drive up costs from bad mortgages.

The biggest U.S. lender by assets declined 45 cents, or 4 percent, to $10.83 in New York Stock Exchange composite trading at 4:15 p.m. The bank hasn’t closed at a lower price since May 2009. The stock sold for more than $55 in 2006 before the financial crisis took hold.

Chief Executive Officer Brian T. Moynihan, 51, has assured investors that costs tied to defective mortgages and improper foreclosures can be absorbed without selling new stock to raise capital. His task may be harder after the U.S. jobless rate rose to 9.1 percent and employers added the fewest workers in eight months during May, meaning more unemployed people may fall behind on loans.

“We’ve been getting consistent signals that we continue to see growth, but those signals recently have had some choppiness to them in terms of new unemployment claims,” Moynihan said during a May 24 investor conference.

Bank of America has declined about 29 percent in the past year of New York Stock Exchange composite trading, the worst performance on the 24-company KBW Bank Index. The lender was the only U.S. bank among the largest four that had its capital plan rejected by the Federal Reserve this year.

Moynihan told investors last week that new claims tied to bad mortgages tend to track the jobless rate, and he was pursuing ways to put housing liabilities behind the firm. The bank disclosed in January a $3 billion deal to settle some loan disputes with Fannie Mae and Freddie Mac and agreed in April to pay $1.6 billion to resolve claims with bond insurer Assured Guaranty Ltd.

Resolving Fights

Moynihan, who said last year the bank was engaged in “hand-to-hand combat” to fend off the claims, told investors this month that “there’s a point when fighting doesn’t have any value.”

Bank of America, the biggest servicer of U.S. mortgages, is among firms negotiating with state attorneys general to settle allegations that the banks seized homes during foreclosures by using legal shortcuts and falsified documents. The largest servicers are discussing a framework that may let them choose from a menu of options for helping borrowers, two people briefed on the talks said in May.

Costs to repurchase bad mortgages and settle with state attorneys general may total about $18 billion, Keith Horowitz of Citigroup Inc. wrote in a June 1 research note.

Adventist Health System, U.S. Bank Healthcare Division Partner for Health Care Growth

Adventist Health System obtained the services of U.S. Bank Healthcare Division, a division of U.S. Bank. The health care division closes as lead "Senior Credit Facility." Adventist Health System represents a  $1.75 billion deal.

An article has been posted at the Business Wire Website titled "U.S. Bank Healthcare Division Leads $1.75 Billion Senior Credit Facility for Adventist Health System."

I'm interested in this information because I'm 62 years old. Anything having to do with healthcare interests me. However, I have a special interest in the story because it seems Adventist Health System centers what they do on Christ -- their spiritual beliefs.

When I was in the workforce I was an executive vice president and CEO of a health insurance company. Of course we were "for-profit." Adventist is a not-for-profit organization.

When you run an insurance company you are dealing with premiums and claims and investments. In other words you always have money coming and going but you must always have a certain amount in reserve so you try and make the most from it that you can.

The difference with Adventist Health System is that they get rid of the middle man. They run their own health care facilities including inpatient and outpatient. That is what they concentrate on.

However, even though they aren't an insurance company per se, they still have to get their name out and invest funds. That is where U.S. Bank Healthcare Division comes in.

David P. Singleton, senior vice president is posted in the article as saying, "Their in-depth knowledge of our organization and of the industry is reflected in what they were able to deliver for us" when speaking of U.S. bank Healthcare Division

Adventist Health System serves four million patients annually. By working with an "expert" company that specializes in the laws of each state, investing and even presentation of product, Adventist can concentrate on doing what they do best and that is providing services as inexpensively as possible.