Bank of America (NYSE:BAC) is one of the most well-known and most watched banks in the country. Yet there is one thing nearly no one knows about it.
What is it you ask?
Well it turns out, that's not the best question to ask. As the real question isn't what, but who.
The impressive leader
Brian Moynihan may not be a secret necessarily, but what often goes undiscussed is the impressive way he has led Bank of America over the last four and a half years.
Moynihan -- unlike most headline grabbing CEOs like Warren Buffett, Elon Musk, Mark Zuckerberg, or Jeff Bezos -- is not the most inspiring of speakers. He is direct, and to the point, and often speaks quickly. A recent Forbes article on him noted, "[c]olleagues describe Moynihan as a hard worker who is smart but unassuming and has a tendency to speak too fast."
Yet when he was named CEO in December of 2009 -- he officially started in January 2010 -- questions swirled about the future of Bank of America. Although its stock had rebounded from the depths it saw in the spring of that year, it had still fallen by more than 60% since the beginning of 2008.
But when Moynihan was tapped, Bank of America was the largest bank in country, and it had undergone staggering changes over the previous 20 years. His predecessors -- Hugh McColl and Ken Lewis -- were two of the most aggressive acquisition hunters and bought other banks at a somewhat dizzying pace. Thanks to numerous massive acquisitions, Bank of America had grown on average by 17% a year since 1990:
And while the last four and a half years with Moynihan atop Bank of America has been anything but smooth, his remark from when he was named CEO should give investors reason for great confidence in his leadership of the bank thus far.
The surprisingly simple task
In the press release announcing he would succeed Ken Lewis, Moynihan said:
What we need to do now is very simple. We need to execute. This company has a long tradition of operational excellence and strong execution. My goal is to refocus our efforts and attention on those core capabilities that will make us the best financial services firm in the world.
Although it isn't a direct admission, it's not difficult to think Moynihan would've willingly admitted Bank of America had grown too big for its own good. And the troubles which have assailed it since then are only further proof of that.
But the key word in Moynihan's remarks is "simple," as little by little, that is what Bank of America under Moynihan has been doing, simplifying itself. It has shrunk by more than $100 billion and has sold more than $70 billion of its non-core assets. It has dramatically reduced its branches, from more than 6,000 at the end of 2009 to 5,095 at the end of the first quarter. And it has cut its checking account options from 70 to three.
Nothing has or will go quickly for Bank of America and Brian Moynihan -- it has more than $2 trillion in assets after all -- but this dramatic goal of refocusing the bank to have its attention on its "core capabilities" has slowly but surely been executed over recent years.
After all, its wealth management, investment banking, and consumer banking operations have all had such dramatic improvement. They've refocused, simplified, and are executing on those goals. This execution on its core businesses is why fellow Fool Jordan Wathen notes its stock has 25% upside.
Say what you will about Bank of America and Brian Moynihan, but the reality is, he has done a phenomenal job executing on the tasks he set out to accomplish. While there may be moments of trouble ahead for the bank for the messes he overtook, they will be temporary and will pass, and Moynihan has placed it in the position to succeed.
Patrick Morris owns shares of Bank of America. The Motley Fool recommends Bank of America. The Motley Fool owns shares of Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.