Despite delivering encouraging earnings results, Jonathan Finger, a partner with the Bank of America (BAC) shareholder group Finger Interests Number One Ltd., is determined in pursuing a proxy to oust BofA chief executive Ken Lewis and two other board members: lead director Temple Sloane Jr. and assets quality committee chair Jacqueline Ward at BofA’s April 29 shareholder meeting. In an e-mail to The Deal, Finger is quoted as saying:
The Deal: “1. We believe this earnings report does not change a thing with respect to our campaign. This is the same management team and board of directors that failed to protect shareholders in the Merrill Lynch transaction, which is permanently dilutive to shareholders. We believe investors will afford this company a higher valuation if there is a more independent board. Four proxy voting services agree with us.
2. On first blush, a good portion of the earnings are from non-recurring items – sale of some China Construction Bank shares and write ups on fixed income securities at Merrill Lynch. The company was able to add to its loan loss reserve, so that is good news. Simply due to the recession, the company will face a number of quarters of higher loan loss provisions.
3. We would encourage investors to look at the balance sheet as well as the earnings. Non-performing assets were up substantially. The Company still has large exposure to consumers through its lending areas, and all of the questionable assets acquired from Countrywide and Merrill Lynch are still on the balance sheet.“
Jonathan Finger believes the BofA board, led by Lewis, has destroyed shareholder value over the past five years. He also believes BofA withheld information about Merrill Lynch losses prior to the shareholder vote on the deal in December 5.