In Brian Moynihan's second year at the helm of Bank of America Corp., the troubled bank returned to profitability, amassed capital, shed risky assets and earned a vote of confidence from investment titan Warren Buffett.
But that progress didn't always resonate with investors, regulators or the general public. Moynihan found himself a target of public anger after the bank's debit-card fee debacle, he failed to persuade federal regulators to let Bank of America raise its penny-per-share dividend, and he couldn't stop the Charlotte bank's stock from plummeting to two-year lows.
It all highlights a challenge some say will be central as he works to lift profits and deliver a return to shareholders: inspiring confidence in his company.
"He has continued to have a great deal of difficulty explaining where Bank of America stands to investors and giving a compelling reason to own Bank of America stock," said Gary Townsend of Hill-Townsend Capital, a Maryland firm that invests in banks. "The strengths that Bank of America has are evident to, I think, most everyone in the investment area, but if the CEO can't communicate these strengths well, it's a major shortcoming."
There's no shortage of opinions on what exactly Moynihan needs to say and do publicly. Analysts and insiders say the 52-year-old CEO is doing the right things and presenting his priorities consistently. They say the company's performance - not its leader's personality - is key to restoring confidence, and that many hurdles lie beyond Moynihan's control.
The bank said its top executive has made communication a priority this year, with a string of investor calls, client meetings, employee town halls and public appearances.
"He has probably been more visible and higher profile than any CEO in the industry this year, because we're going through a major transformation, and he needs people to understand that," bank spokesman Larry Di Rita said.
Other stakeholders still see a gap between progress and perception.
"I'd have him on a road show with his management team," said one source close to Bank of America, who asked not to be named because of ties to the company. "I'd have him outside, trying to reclaim the confidence. Right now, they're in the middle of a war, and he needs to be on the front lines."
'Very challenging hand'
Friday marked two years since Moynihan, who joined Bank of America when it bought FleetBoston Financial in 2004, was picked for the top job. He still lives in Boston, though his main office is in Charlotte.
Moynihan took over at a pivotal moment: Predecessor Ken Lewis retired in 2009 amid ongoing investigations of his Merrill Lynch acquisition. The bank was on its way toward a yearly net loss of $2.2 billion, straining under the weight of its 2008 acquisition of Countrywide Financial Corp.
The new CEO brought with him a reputation as a smart, respected insider, though some questioned whether he had enough experience and charisma to run the bank and rally its employees.
He drew a standing ovation at a gathering of employees in Charlotte in December 2009 as he pledged to carry the bank into better times. The next month, he began working to improve the bank's balance sheet and its relations with federal regulators.
Moynihan's frequent trips to the White House earned him a reputation that year as President Barack Obama's favorite banker. Insiders said morale improved markedly from a low in early 2009. And a bank executive told the Observer at the time that the new leader's ascent tempered the media and public's "siege mentality."
As economic troubles and mortgage losses dragged on, Moynihan began slimming the giant institution:
Bank of America has announced or completed the sale of more than 20 different assets or businesses since early 2010, generating more than $46 billion. The bank agreed in November to sell most of its remaining shares in China Construction Bank Corp., its latest major step to shed noncore businesses and build capital.
Moynihan in September named David Darnell and Tom Montag co-chief operating officers and pushed out retail banking head Joe Price and wealth and investment management head Sallie Krawcheck, streamlining the bank's top leadership. The surprise management shake-up was the first step in a wide-ranging efficiency program called Project New BAC.
Bank of America has begun eliminating 30,000 jobs as part of the efficiency initiative, including cuts last month to its technology and operations division that affected some of the roughly 15,000 people the bank employs in Charlotte.
The bank tumbled from its perch this year as the nation's largest bank by assets, ceding the spot to JPMorgan Chase & Co., in a sign of significant progress toward becoming leaner, though also of dwindling dominance over its peers.
And in the third quarter, the bank outpaced analysts' earnings expectations, posting a profit after losses in three of the previous four quarters.
"(Moynihan) has obviously received a lot of flack, but at the same time, he's been dealt a very, very challenging hand," analyst Jason Goldberg of Barclays Capital said. "I think he's playing it to the best of his ability."
Skepticism from investors
Yet investors remain unconvinced. The bank's stock price dipped this year to its lowest levels since March 2009 as potential mortgage losses and unresolved litigation, plus worries about the overall economy and European debt crisis, rattled investors.
Shares closed Friday at $5.20, down about 1 percent from the previous day's close and down more than 60 percent for the year, a steeper dive than most peers in a bad year for bank stocks.
"I decided that I could no longer have confidence in their management team and the decisions they were making as it relates to the bank's future," said longtime shareholder William Shipley of Charlotte, who sold his stake earlier this year. "What a shame to see what was a very good bank end up in the shape they are in today."
Some analysts say Moynihan, who rarely speaks in sound bites or colorful flourishes, communicates a mixed picture to investors because he seems to lack enthusiasm in his presentations - despite a message that makes sense.
A Bloomberg Businessweek story in September noted Moynihan "displays little if any humor in public and swallows many of his words," adding that his out-of-earshot nickname within the bank, according to several employees, is "the Mumbler."
And communications trade publication Ragan's PR Daily on Thursday ranked the CEO among its 10 worst communicators of 2011 - a list that includes actor Charlie Sheen and disgraced politician Anthony Weiner - saying that "at a time when clear communications and leadership was required, he stumbled."
The bank did not make Moynihan available for an interview for this story, but it referred to a long list of public appearances this year as evidence he has made it a priority to communicate with investors and other stakeholders. The CEO has spoken this year at more than a half-dozen investor conferences and to the public before groups such as the Delaware State Chamber of Commerce and Rotary Club of Atlanta.
In August, he participated in an unusual public grilling on a call hosted by fund manager Bruce Berkowitz of Fairholme Capital Management LLC that attracted some 6,000 listeners.
And Moynihan meets frequently with employees in small groups and hosts companywide town hall meetings at least quarterly.
His message has been consistent, bank-watchers say, outlining his vision and strategy. In his latest presentation to investors Dec. 6, Moynihan emphasized the bank's progress and described his goals for the coming year, including continuing to work through mortgage troubles, serving core customers and delivering returns to shareholders.
"Over the past couple years, we have been in a massive transformation of this great company, building capital, building reserves, strengthening the balance sheet overall and shedding core assets," he said. "And it has all been a deliberate repositioning to become more core, more focused on the franchise, more focused on the core customer groups we serve."
Meanwhile, a series of public relations flaps has prompted some investors to question Moynihan's credibility.
The Federal Reserve in March turned down the bank's request to raise its dividend in the second half of the year, despite recent dividend increases from peers such as Wells Fargo & Co. and JPMorgan. The unexpected rejection came just weeks after an investor conference where Moynihan offered a bullish outlook."I think he ought to just get up and say, 'Listen, I took over this job, and I'm going to straighten it out, just give me some time,'" said shareholder Steve McLendon of Matthews. "I think it would mean a lot to the shareholders."
The broader public's perception of Moynihan and his company also faltered this year. In July, The Atlantic magazine named Bank of America one of the "19 Most Hated Companies in America," citing customers irritated with high service fees and low interest rates for their savings accounts, among other complaints.
Later, website outages and slowdowns riled customers. And on Sept. 29, the bank rolled out plans to charge $5 per month to some customers who use their debit cards.
That move ignited widespread criticism, despite similar plans from other large lenders in response to new regulations that cap the "swipe fees" merchants pay banks when consumers pay with debit cards.
An online petition against Bank of America's fee, directed at Moynihan, gained more than 300,000 signatures. Even Obama joined the chorus of critics, singling out the company in an ABC interview in which he criticized big banks for "mistreating" customers.
Moynihan defended the fee to analysts and the public and told employees he was "incensed" by the attacks on the bank, but Bank of America eventually scrapped plans for the fee.
Stakeholders and observers said the CEO's timing, response and ultimate flip-flop seemed tone-deaf, though the bank didn't appear to lose a significant number of customers after the fiasco. The long-term effects aren't yet clear.
"One of (Bank of America's) major issues is the view that customers have of the organization," said Eleanor Bloxham, president of The Value Alliance and Corporate Government Alliance, an advisory firm that works with corporate directors and executives. "That eventually translates into profits."
Current and former employees say they think Moynihan is smart and working hard to clean up the Countrywide mess. But some also question whether his message could be more attentive to the public's complaints.
"At times, he communicates with too much optimism, and he's constantly saying we are doing all the right things," said one former worker, who left the bank in August. "Instead he could have said, 'We are changing, learning, adopting, listening and so on.' "
Another former employee, who was laid off in November, said he was impressed with the CEO's efforts so far but wanted more specifics on his plan, particularly on how the company would maintain customer service while cutting 30,000 jobs.
"Now is the time for Brian to be a visible leader with a visible plan demonstrating Bank of America is a good bank to work with as an employee, customer and stockholder," he said. "It is time to step up to the major tasks at hand to be a true, believable leader."
Experts agree making progress on outstanding mortgage issues and making sure the bank is in its best financial shape are top priorities. But they're divided on what Moynihan needs to do to eliminate the disconnect between the financial cleanup work he's doing and the bank's public perception.
SNL Financial contributing editor Nancy Bush said it's probably best to let the bank's performance speak for itself, advising Moynihan to stay out of the public eye until the bank gets through next year's Federal Reserve stress tests, turns out bigger profits and raises its dividend.
"It's time to let somebody else be in the target crosshairs," she said. "Get out of the spotlight. I would be happy if, as a shareholder, I did not have to look up every day and see some headline about Bank of America."
Yet bank-watchers acknowledge that sometimes, particularly in a post-recession economy where banks are often blamed for their role in the mess, improving a lender's public image can seem critical for its shareholders and its bottom line.
Retired Bank of America executive Jim Palermo said Moynihan can't fix the global economy or determine how the bank's legacy mortgage problems play out in courts, but he can control the intensity with which he tries to resolve those issues.
Moynihan should also be working to make customers and the broader public aware of the good the bank does in the community, how many people it employs and how important the company is to the local and national economy, Palermo said.
It might take time and some overall economic improvement, Palermo said, but he's confident in Moynihan's ability to right the ship.
"I commend anybody, and specifically him, for taking on a challenging assignment," he said. "But he knows where he's going, and he's got a good solid plan."