Friday, February 6, 2009

Lewis Puts Money Where Mouth Is

Bank of America Corp. Chairman and Chief Executive Kenneth Lewis purchased an additional 200,000 shares of the Charlotte, N.C., bank's common stock Wednesday in his latest effort to convince employees, investors and the board that he and his management team can lead it out of its current crisis.

The bank's shares fell on Thursday to their lowest level since October 1984 before rebounding to close at $4.84, up 2.98%. Analysts attributed the volatility to concerns about how involved the U.S. government is in the affairs of the nation's largest bank by assets.

Government officials played a heavy hand in Bank of America's acquisition of securities firm Merrill Lynch & Co., for which Mr. Lewis has been under fire. The stock's price improved once U.S. Sen. Christopher Dodd (D., Conn.) publicly dismissed speculation that the U.S. could soon nationalize Bank of America.

Last week, Mr. Lewis went before his directors in Charlotte for "the longest board meeting in anyone's memory," he told employees in a memo. "The board unanimously endorsed our business model, strategic direction and the team. The burden of execution and accountability, as always, rests squarely on our shoulders to vindicate their confidence in us."

He called the company's performance in January "encouraging." The "extreme dislocations in the capital markets we suffered last quarter seem to have moderated" but "credit costs continue to be a big issue."

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