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Earlier in the day, Merrill Lynch shareholders also approved the deal, voting in New York.
More than two-thirds of all Bank of America shares were voted in favor of the deal. However, some investors spoke against it at the Charlotte meeting, which more than 250 people attended. Some said they opposed the deal because of job cuts that are likely to result. Others questioned the wisdom of buying a large investment firm that has been posting losses. They said they'd prefer that Bank of America stick to commercial banking, which are the plain-vanilla type of loans that are usually less profitable but also less risky.
"History tells us this: Commercial banking and investment banking do not mix," said John Moore, a Charlotte shareholder who was one of about ten to take to the microphone. "Exotic derivatives and structured security investment vehicles must never again be allowed anywhere near the mortgage on your daughter's house or your grandfather's certificate of deposit."
John Burke, a retired General Electric worker from Salisbury, agreed. "This is the merger of a commercial bank that wants to be an investment bank merging with an investment bank that's not doing very well," Burke said.
Sam Brooks, a real estate developer and small-business owner from Massachusetts, also spoke out against the Merrill Lynch purchase, saying the deal is a gamble that could result in big losses. But by the end of the meeting, he'd changed his mind, telling chief executive Ken Lewis, "I was a little harsh with you."
After the meeting, he described himself as contrite. "Bank of America is going to be fine," he said. "I came here, I saw the guy, I think he knows what he's doing."
Lewis did not address reports of looming job cuts, but he did remind investors of Bank of America's relative strength. Though its earnings are down, and its stock price has fallen by more than half since the Merrill deal was announced in September, it's fared better than most peers. Its cross-town rival Wachovia Corp., for example, is scheduled to be sold to Wells Fargo & Co. this month after facing the brink of bankruptcy.
Bank of America "is the most profitable financial services company in the country," Lewis said. " ...You could pick some others that are not standing at the moment."
Some investors compared Merrill to Lehman Brothers, another large Wall Street investment firm that failed in September. Lewis replied: "They're two different companies and two different brands, and this (Merrill) is one of the best brands in the world."
Lewis has long had an eye on buying Merrill, and the deal will make his bank the biggest wealth manager in the country, allow it to reach more high-end clients, and bring stability to Merrill. Lewis, a 39-year veteran of Bank of America, also has a reputation for successfully leading his bank through tricky acquisitions, making it No. 1 in mortgages, credit cards and deposits in recent years.
"Ken Lewis, CEO, knows how to do successful deals," analyst Dick Bove at Ladenburg Thalmann & Co. wrote in a note to clients Thursday. "Merrill does not have a deeply flawed structure and this suggests that the company can be recovered just as Countrywide or Fleet, or for that matter Maryland National Bank, Boatmen's or Citizens and Southern were."
Bank of America expects the Merrill takeover to add to earnings by 2011. The shareholders' approval was one of the last remaining hurdles to closing the deal. It is expected to close by the end of the year.
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