Too big to fell

It’s been trimmed, but BofA still towers over the Financial 100, where its sheer size makes it a sequoia surrounded by saplings.
By Erin Dunn

BB&T Corp.’s name might soon appear on a sports venue in downtown Charlotte, not far from Bank of America Stadium and the banking behemoth’s 60-story headquarters. That Winston-Salem-based BB&T has naming rights to a ballpark the local minor-league team hopes to build and BofA’s emblem is on the home of the NFL’s Carolina Panthers seems only fitting. Though they’re first and second on this year’s Financial 100, our yearly ranking of the largest North Carolina-based banks, thrifts and credit unions, their relative size sets them leagues apart.

Despite all its setbacks, BofA generated more than 11 times the revenue BB&T did last year. In fact, the combined revenue of the other 99 institutions on the Financial 100 was just 13.6% of BofA’s. But profits are another story. After losing more than $2 billion in 2010, BofA reported net income of $1.4 billion. BB&T, with a fraction of the revenue, made $1.3 billion. Plus, the smaller bank is growing assets while the much larger one is shedding them.

BB&T is gearing up for more expansion this year as it pursues acquisition of Fort Lauderdale, Fla.-based BankAtlantic, though it remains a regional bank with offices in 12 states, most in the Southeast. Still, all of that growth pales in comparison with BofA’s sheer size. Last year, its assets fell 6% as part of its effort to cut costs and increase capital. Two of its divestitures — selling its Canadian credit-card portfolio and all but 1% of its once-10% stake in China Construction Bank Corp. — more than doubled BB&T’s revenue. “The magnitude of our companies is so different,” says Wes Beckner, president of BB&T’s Charlotte operations, and that’s fine with his bank, whose assets grew 11% in 2011. “It is a nice niche for BB&T.”

BofA’s downsizing resulted in it relinquishing its title as the nation’s largest bank by assets to New York-based JPMorgan Chase & Co. “That’s also been a strategy of community banks,” says Harry Davis, North Carolina Bankers Association professor of banking at Appalachian State University. Lowering assets allows smaller banks to more easily meet federal regulators’ capital requirements. Forty-one institutions in the Financial 100 reported lower assets, but only 29 lost money, compared with 31 the year before.

Download a full list of the Financial 100 here.