In October 7, Bank of America Corp. chief executive Brian Moynihan received a telephone call from Barbara Desoer, president of the banks home mortgage division. A storm had been building for two weeks over shoddy paperwork in the U.S. mortgage market, prompting Bank of America, GMAC Mortgage and JPMorgan Chase & Co. to suspend foreclosure filings in 23 states where court orders are required to seize a house and triggering investigations into possibly fraudulent practices by attorneys general from dozens of states. For Bank of America, which originates one in five U.S. mortgages and services nearly 14 million loans worth a total of $2.1 trillion, the controversy carried enormous risks. Desoer, who had launched an internal review of the banks procedures on September 22, told the CEO that questions by officials and consumer advocates had reached such a fever pitch that the bank should temporarily freeze all foreclosures.
Moynihan didnt waste time. The next day, in a bid to get ahead of the problem, the CEO declared a nationwide moratorium on foreclosures while Bank of America checked the documentation on 102,000 delinquent mortgages. What we are trying to do is clear the air and say we will go back and check our work one more time, he told reporters at the National Press Club in Washington, where he had traveled for the annual meetings of the International Monetary Fund and the World Bank. Ten days later the bank announced it was resuming foreclosure proceedings, saying its review had not uncovered any errors in loan information.
Moynihan has been trying to clear the air on a number of fronts since being thrust into the top job at Bank of America at the start of this year. His predecessor, Kenneth Lewis, who built the bank into a behemoth in a decade of deal making, retired early under pressure after his costly acquisitions of subprime mortgage lender Countrywide Financial Corp. and investment bank Merrill Lynch & Co. nearly brought the bank down in 2008. Bank of America needed $45 billion in federal bailout funds an amount equaled only by Citigroup to survive the financial crisis.
To restore the bank to health, Moynihan has been waging a multipronged offensive. He has worked tirelessly to repair BofAs relations with regulators and politicians, embracing rather than fighting regulatory reform. The bank was the first to abandon overdraft charges on debit cards to comply with tough new U.S. rules on how customers are charged for overdrawing their accounts, a move that is expected to reduce revenues by a $1 billion annually. He has accelerated the integration of Merrill Lynchs investment banking and wealth management businesses with BofAs huge commercial and retail banking network, helping to unlock the potential of Lewiss empire. The CEO has also traveled the globe, from London and Paris to Beijing and Tokyo, to reassure and motivate his troops after the turmoil of the previous two years and to demonstrate to top clients that BofA is eager to do business.
The franchise build is over for Bank of America, Moynihan told investors at a conference in New York in September. Now it is just time to operate.
Moynihans no-nonsense approach is starting to bear fruit. Net income for the first nine months of the year, excluding noncash goodwill impairment charges, increased threefold, to $9.4 billion, even as revenue declined by 7.1 percent, to $87.8 billion. The gains reflect an improving credit trend. Provisions for bad debts, which peaked at $11.7 billion in the third quarter of 2009, have steadily declined, reaching $5.4 billion in the same quarter this year. BofA released $1.8 billion from its loan-loss reserves in the third quarter and $1.5 billion in the second, bolstering profits. Those reserve releases were the first in more than two years.
Ironically, Merrill Lynch, whose subprime losses nearly torpedoed Bank of America at the end of 2008 and prompted Lewiss departure, is playing a major part in the turnaround. Global banking and markets, the division that includes the investment bank, produced net income of $5.6 billion in the first nine months of the year. Although that was down 35 percent from a year earlier, reflecting lower trading profits, it represented more than half of the groups total profits. In the first nine months of this year, the bank ranked second in global investment banking revenues, with $3.3 billion, trailing only JPMorgan, according to data provider Dealogic. Wealth management, which combines the activities of Merrill Lynchs so-called thundering herd of brokers with BofAs legacy operations, chipped in $1.1 billion of net income in the same period.
Those results, and Moynihans restless energy and comprehensive command of BofAs sprawling operations, are winning over many of the banks critics. He appears to be more outgoing and engaged than Ken Lewis, says Jonathan Finger, a minority shareholder who helped lead a revolt last year that blocked Lewiss reappointment as chairman and who initially opposed Moynihans appointment as CEO. Hes focused on managing the company that he inherited, and that includes a lot of repair work.
For all the progress made, though, the hardest part of Moynihans restoration job is yet to come. As its name suggests, Bank of America remains inextricably tied to the struggling U.S. economy. The bank holds 12 percent of U.S. deposits, claims relationships with one half of all U.S. businesses and is the nations leading issuer of debit cards and its second-largest issuer of credit cards. More than 80 percent of BofAs revenue last year came from domestic operations. With the recovery flagging, unemployment near double digits and consumers still looking to pay down their debts U.S. consumer credit has contracted for six straight quarters the prospects for growth are limited. A company of this size whose business is primarily serving U.S. consumers isnt going to escape whats going on in the U.S. economy, says Richard Bove, Florida-based banking analyst with Rochdale Securities.
A tougher regulatory climate also promises to diminish returns. The bank estimates that new rules limiting overdraft charges, credit card rates and fees, and fees paid by businesses on debit card transactions will reduce revenues by $4.3 billion a year. Bank of America took a one-time charge of $10.4 billion in the third quarter for lost debit card revenue, turning a $3.1 billion operating profit into a $7.3 billion net loss for the period. Although the bank largely complies with the higher capital requirements that will be phased in under the new Basel III accord, global regulators are currently negotiating a capital surcharge to apply to systemically important banks, such as Bank of America.
Shareholders, who have had their stock massively diluted by the Merrill Lynch acquisition and by a $19.3 billion stock offering in December 2009 to finance the repayment of bailout funds, may not see stock buybacks resume until 2012. Real dividends, beyond the nominal 1 cent-a-share payout the bank has been making since the third quarter of 2008, may take even longer to arrive. BofAs return on equity, excluding goodwill impairment charges, was 5.06 percent in the third quarter, trailing JPMorgan (9.8 percent) and Wells Fargo & Co. (11.2 percent).
To top off the challenges, the troubled U.S. housing market continues to cloud the banks outlook. Complaints about poor paperwork notably, the use of so-called robo-signers who signed off on thousands of foreclosure demands without verifying loan information could still impede BofAs attempts to seize homes from delinquent borrowers. Even worse, last month a group of mortgage-backed-securities investors, including the Federal Reserve Bank of New York, BlackRock, Pacific Investment Management Co. and Metropolitan Life Insurance Co., demanded that Bank of America repurchase mortgages that were packaged into $47 billion worth of MBSs, alleging that the bank had misrepresented the quality of those loans and failed to service them properly. Fears that investors could force Bank of America to buy back some of the $2.1 trillion worth of mortgages that were securitized by Countrywide and BofA over the past decade sparked a sell-off that pushed BofAs shares down 17 percent in two weeks last month; they ended the month at $11.45, down 42 percent from their 52-week high back in April. Uncertainty will continue to weigh on the shares until investors become more confident in the loss exposure for the company, wrote Christopher Mutascio, an analyst with Stifel, Nicolaus & Co., who downgraded Bank of America shares to hold from buy. Christopher Gamaitoni, an analyst at Compass Point Research & Trading, estimates that BofA could be forced to buy back as much as $35 billion in mortgages.
The array of challenges facing Moynihan poses a larger question. Lewiss acquisitions built Bank of America into the largest U.S. bank, with $2.3 trillion in assets, 284,000 employees and operations that run the gamut from credit cards to consumer banking to money management to underwriting stock and bond sales by mulitinational corporations. That diversity provides numerous income streams. But it also carries multiple risks.
Bank of America is a relatively new company and hasnt had time to breathe, says Paul Miller, chief bank analyst at FBR Capital Markets in Arlington, Virginia. Moynihan is trying to make it work, but the question remains, is it too big to manage?
Moynihan, a tireless executive and a veteran boardroom survivor, makes no bones about the enormity of the task he faces. We need to restore the trust of customers in our industry and our company and the brand, he said in a recent interview at the banks Charlotte, North Carolina, headquarters. He aims to do just that by emphasizing profitability over volume, reducing the companys riskiest lending and trading activities, and strengthening Bank of Americas balance sheet. He is shutting down the banks proprietary trading activities and selling noncore businesses, and has reduced BofAs risk-weighted assets by $86.8 billion and boosted tier-1 common capital by $14 billion, to $124.8 billion.
Moynihan plans to generate profit growth by enhancing Bank of Americas retail network with technology and expanding relationships with institutional and corporate customers. BofA will invest in businesses that have a stronger growth potential, particularly international investment banking and wealth management, he says.
Bank of America rose to prominence through the vision and deal-making skills of a series of aggressive bankers. Thomas Storrs turned the former North Carolina National Bank into a regional player by venturing into Florida in 1982, in the early days of interstate banking. His successor, Hugh McColl, turned NCNB into NationsBank Corp. with a string of acquisitions in the South and Southwest, then paid $43 billion for Bank of America in 1998 in what was then the largest-ever U.S. banking merger.
Lewis, a 30-year bank veteran before he succeeded McColl as chairman and CEO in 2001, spent even more lavishly, with the aim of creating a universal banking powerhouse. He acquired FleetBoston Financial Corp. for $47 billion in 2004, credit card giant MBNA Corp. for $35 billion in 2006 and Chicago-based LaSalle Bank Corp. for $21 billion in 2007. Lewis considered the purchase of Merrill Lynch his crowning achievement, telling Institutional Investor last year that the firm represented the final piece of the puzzle.
The $29.1 billion all-stock deal was negotiated at the height of the financial crisis, on the same fateful weekend in September 2008 when Lehman Brothers Holdings collapsed. In their haste to conclude the deal, Lewis and his colleagues failed to fully grasp Merrills exposure to speculative mortgage securities. As markets tanked, Merrills losses ballooned to $15.8 billion in the fourth quarter of 2008 and led to bare-knuckle talks with the U.S. Treasury Department and the Federal Reserve over whether the transaction would be completed.
Public anger mounted after reports emerged that the investment bank paid out $3.6 billion in bonuses to top managers ahead of the deals close, even as Bank of America sought to stanch Merrills growing red ink with federal bailout funds. The bank eventually received $45 billion in funds from the Treasurys Troubled Assets Relief Program, including $20 billion to cover losses at Merrill Lynch, allowing U.S. regulators to impose unprecedented controls at the bank, including key boardroom changes that ultimately led to Lewiss departure. The U.S. Securities and Exchange Commission filed charges claiming that the bank failed to disclose the extent of Merrills losses before shareholders voted to approve the deal. Earlier this year, New York State Attorney General Andrew Cuomo sued Bank of America, Lewis and former CFO Joseph Price for allegedly failing to inform shareholders of Merrills losses.
Moynihan, 51, seemed an unlikely choice to lead Bank of America. Born in Marietta, Ohio, he is the sixth of eight children of a DuPont chemist and his wife. He attended college at Brown University in Providence, Rhode Island, and the University of Notre Dame Law School. After earning his law degree, he returned to Providence, where he joined the firm Edwards Angell Palmer & Dodge. His energy and drive impressed his first boss, Duncan Johnson. He will work around the clock if thats what it takes to get a project done, Johnson says.
Moynihan caught the attention of Terrence Murray, then chief executive of FleetBoston, while working on acquisitions for the Boston-based bank in the early 1990s. His grasp of business issues was eye-catching, Murray says. He could think beyond the transaction, which is unusual for some executives, especially lawyers. Murray invited Moynihan to join Fleet in 1993 as an associate general counsel. He soon rose to become head of corporate strategy and later head of wealth and investment management. When Bank of America acquired FleetBoston in 2004, Moynihan was one of a handful of Fleet executives to thrive at the Charlotte-based bank, initially put in charge of the combined companys wealth management unit and later running its investment banking operations.
When Merrill CEO John Thain took control of the combined groups investment banking and wealth management operations after the 2008 merger, Moynihan found himself without a position. Unwilling to move his family to Wilmington, Delaware, where hed been asked to run the banks credit card operations, he gave his notice and prepared to leave the bank. At the urging of some board members who were determined not to lose Moynihan, Lewis stepped in and appointed him Bank of Americas general counsel.
Ive always thought of myself as a person trying to do what the company needs me to do, Moynihan says.
In the chaotic months following the Merrill deal, Moynihan held three different management positions, heading consumer and small-business banking, global corporate banking and investment banking. When Lewis announced his intention to retire, he initially favored Gregory Curl, then the banks chief risk officer, as a successor, but the board ruled out Curl because of questions over his role in the Merrill deal. The board approached Robert Kelly, CEO of Bank of New York Mellon Corp., only to be turned down. Finally, the board offered the CEO post to Moynihan. Many of you know him because hes been in so many different jobs, Lewis quipped when he announced Moynihans appointment to employees at a town hall meeting in Charlotte last December. Hopefully, he will be in this job much longer than the last three or four.
The new CEO inherited a chastened institution. Federal regulators had forced several changes on the board, which officials believed was too beholden to Lewis and lacked sufficient experience. Only five of the 13 directors who selected Moynihan as CEO held their positions before 2009. The new members included Robert Scully, a former Morgan Stanley executive; Donald Powell, a former chairman of the Federal Deposit Insurance Corp.; Susan Bies, a onetime member of the Federal Reserve Systems board of governors; D. Paul Jones Jr., former chairman and chief executive of Compass Bancshares; and William Boardman, onetime chairman of Visa International.
Spurred by regulatory pressure, the revamped board has moved to strengthen risk management, transforming an asset-quality committee into a more focused credit committee and establishing an enterprise risk committee to oversee risk, capital and liquidity management. Historically, the bank has been dominated by strong managers and a weak board, says D. Anthony Plath, an associate professor of finance at the University of North Carolinas Belk College of Business in Charlotte. Its nowhere near what its culture, history and tradition were in the Storrs, McColl and Lewis years.
Charles (Chad) Gifford, a former FleetBoston executive and a board member since 2004, sees the changes as part of a broader trend in the industry postcrisis. This is less a commentary on Bank of America than on the world we live in right now, but I believe boards now and going forward must be more focused on areas like realistic strategy and risk management, Gifford says. Weve got to be absolutely comfortable asking questions.
Moynihan moved quickly to resolve regulatory problems and position the bank for an anticipated economic rebound. In February, BofA agreed to pay a $150 million fine to shareholders to settle the SEC charges stemming from the Merrill Lynch deal. The settlement, which Judge Jed Rakoff of the U.S. District Court for the Southern District of New York characterized as half-baked justice at best, doesnt prevent nearly a dozen other civil lawsuits related to the merger from moving forward. In June, BofA agreed to pay $108 million to more than 200,000 Countrywide clients to settle claims by the U.S. Federal Trade Commission that the mortgage lender had charged excessive fees to struggling home buyers.
Moynihan has sold nonbanking assets to fulfill a $3 billion capital-raising commitment, part of its TARP repayment. In May, Bank of America completed its sale of institutional asset manager Columbia Management to Ameriprise Financial. The bank also announced the sale of its stakes in Banco Santanders Mexican unit and Itaú Unibanco Holding, Brazils largest private bank. The three sales helped BofA generate $1.9 billin in aftertax gains. Other divestitures are expected, including Balboa Insurance Group, which BofA acquired through Countrywide.
The new CEO made a few senior management changes, notably promoting Bruce Thompson, head of the banks global capital markets unit, to replace Curl as chief risk officer. For the most part, however, Moynihan is relying on Lewiss management team to turn the bank around. His key lieutenants include Thomas Montag, a 22-year veteran of Goldman Sachs Group whom Thain recruited to Merrill in 2008 and who heads Bank of Americas global investment banking and markets operations, and Sallie Krawcheck, former Citigroup CFO and Smith Barney chief, who runs the banks wealth and investment management business, including Merrill Lynchs brokerage unit.
Other key executives include Desoer, who oversees the home lending and insurance unit; David Darnell, who heads the global commercial banking unit; and Anne Finucane, the banks chief strategy officer and a former FleetBoston colleague of Moynihans. Moynihan appointed Joe Price, the banks former CFO, to run consumer and small-business banking, and recruited Charles Noski, a former chief financial officer at Northrop Grumman Corp. and AT&T Corp., to serve as CFO.
Executives say theyve been impressed by Moynihans energy and management style, which gives division heads considerable autonomy to run their businesses. At an off-site meeting with top staff in London in March, Moynihan took the time to meet people, took time to look at issues. People came away feeling really good about him as the CEO, says Krawcheck. Its early days, but we like the fact that hes one of the hardest workers weve ever met.
One of the most notable successes so far under Moynihan has been the revival of the Merrill franchise. Most investment banks enjoyed strong profit recoveries in 2009 and the first half of this year, but Bank of America Merrill Lynch also gained market share. In the past 18 months, Montags division has hired about 800 people overseas half of them in Asia in investment banking, capital markets and sales and trading. Our greatest opportunities for growth are clearly overseas, Montag told II last year.
He can point to some early successes. In March, Bank of America Merrill Lynch served as joint global coordinator for the $11 billion IPO by Dai-ichi Mutual Life Insurance Co. of Japan. In July the unit acted as lead manager for Mizuho Financial Groups $8.82 billion share sale. Those deals helped lift the unit to third place as an IPO underwriter and seventh in investment banking revenue in Asia in the first nine months of this year, according to statistics compiled by Dealogic. The bank had ranked 13th and 12th, respectively, a year earlier.
In September, Bank of America Merrill Lynch acted as joint global coordinator and book runner on a $70 billion secondary stock offering by Brazils Petroleo Brasileiro, helping the bank rise to second place in Latin American equities from fifth a year earlier.
Overall, the bank edged ahead of JPMorgan to rank first in global debt in the first nine months of this year; it ranked fourth in global equities, with a share of 5.8 percent, and fifth in M&A, with a share of 5.3 percent.
Montag has also stabilized his ranks of investment bankers after some early departures in the tumultuous months after the Bank of America acquisition. Sam Chapin and Todd Kaplan, who left Merrill Lynch as the firm was being sold, returned in February as executive vice chairmen for global banking. Two months later, Montag recruited Christian Meissner, a key European deal maker for Nomura Holdings and a former senior banker at Lehman Brothers and Goldman Sachs, to come on board to head investment banking for Europe, the Middle East and Africa. Andrea Orcel, one of Merrills chief rainmakers in Europe, was tapped recently by Montag to spearhead the banks international push as president of emerging markets excluding Asia.
In addition to positioning his unit for growth, Montag has been reshaping his business to fit the new regulatory environment. In September, Bank of America Merrill Lynch announced it was laying off 20 to 30 proprietary traders to comply with the so-called Volcker rule of the Dodd-Frank Act, which restricts banks abilities to bet their own money on the markets.
Krawchecks wealth and investment management business is also key to Moynihans growth ambitions, which aim to exploit synergies between Bank of Americas retail banking network and Merrills big brokerage operations. There are just more arrows in the quiver, says Krawcheck. Branded as Merrill Lynch Wealth Management, Krawchecks unit boasts 15,340 financial advisers and 1,400 wealth advisers. They directed customers to 171,690 banking products in the year to mid-September, a 60-fold improvement over a year earlier. Bank of Americas retail network, meanwhile, ramped up brokerage referrals threefold, to 271,498, over the same period. That was only scratching the surface. BofAs affluent banking customers hold more than $7 trillion in assets at other financial institutions, while Merrill Lynch customers hold $500 billion in deposits at other banks, bank research shows.
One key target for Krawcheck is growing the banks share of the $2.7 trillion market for 401(k) retirement assets in the U.S., a market that is expected to grow to $3.8 trillion by 2014, according to Cerulli Associates in Boston. Krawchecks business oversees more than $400 billion in retirement assets, including $81.5 billion in 401(k) plans. New retirement assets grew 383 percent in the 12 months ended in mid-September, to $10.8 billion. Among recent wins, Legg Mason agreed to buy its 401(k) and nonqualified deferred compensation services from the bank. I guarantee you our 401(k) business will be one of the biggest in the country in the next ten years, says Moynihan.
In retail banking, Moynihan is playing defense rather than offense. His top priority is to restructure Bank of Americas sizable deposit business and recapture the revenue lost as a result of regulatory changes. The value of the branch system and core deposits isnt worth much in a low-interest-rate environment, says Nancy Bush, an independent bank analyst at NAB Research in New Jersey. That will change when the federal funds rate moves.
Moynihan is responding to margin pressures by seeking to migrate less-profitable deposit activities away from the banks 5,900 branches to electronic platforms. Automated transactions are growing by more than 8 percent a year, while teller transactions are declining at a 5 percent pace. Bank of America has invested heavily in automated technology. Nearly 13,800 of the banks more than 18,000 ATMs allow customers to feed cash and checks directly into the machine without an envelope or deposit slip and receive an image of their deposit on their receipt.
Over the next 12 months, Bank of America will reset its entire product line, increasing account balance minimums and introducing monthly fees, Moynihan said at the September investor presentation. BofAs termination of overdraft fees was a critical piece of the puzzle: About 10 percent of bank customers were paying 70 percent of overdraft charges, and account closings had grown by 18 percent in the previous year, equal to the number of new accounts. We made a decision last summer to repair a customer franchise that was starting to leak customers badly, Moynihan told analysts in October. Retail customers can now select the types of services they want, including a prototype e-banking account launched in August that allows customers to bank for free, regardless of their balances, if they use electronic channels and receive their statements online.
Moynihan also has been working to fix the banks credit card business. The card division posted a loss of $5.5 billion last year, a dramatic drop from 2007, when the unit earned $4.3 billion about a third of the banks total profits. Net charge-offs peaked at 12.13 percent of balances in the third quarter of 2009, the highest of the six major U.S. card issuers, a group that includes American Express Co., Capital One Financial Corp., Citigroup and JPMorgan; the charge-off rate declined to 9.12 percent in the quarter ended in September. The bank continues to reduce credit card balances, which amounted to $183.3 billion at the end of June, a 20 percent decline from the start of 2008.
Housing represents by far the biggest challenge facing Moynihan and his team. When it bought Countrywide, Bank of America took on a company that had lent heavily in California and Florida at the height of the housing bubble. Today fully 1.3 million of the banks 14 million mortgages are at least 60 days past due, including 200,000 on which borrowers have made no payments in two years. Losses at the banks home lending unit widened to $3.84 billion in 2009 from $2.48 billion a year earlier, and the unit racked up a further $3.95 billion in red ink in the first nine months of this year. Net charge-offs for the home loan and insurance unit totaled $8.77 billion over the past five quarters.
Desoer, the executive charged with fixing the banks mortgage mess, says changing the corporate culture at Countrywide is essential for turning around the business. At Countrywide only one value could be articulated consistently: winning. And it was the concept of winning at all costs, she tells II. The concept of balance performance didnt exist.
Bank of America has shifted staff and added contract workers to handle the modification of troubled mortgages. The bank now employs nearly 20,000 workers in default management almost twice the staff it had at the start of 2009. The bank had modified 700,000 mortgages by the end of September, almost 90 percent through in-house plans and the remainder through the government-sponsored Home Affordable Modification Program.
Provisions for credit losses, which amounted to $7.3 billion in the first nine months of the year, are expected to remain high as private investors and monoline insurers join government-sponsored agencies in demanding that Bank of America buy back troubled mortgages.
Just how big the buyback problem may become is anybodys guess. Bank of America, Countrywide and Merrill Lynch sold $2.1 trillion in mortgage securities, mostly between 2004 and 2008, with just over half sold to government-sponsored agencies, including Fannie Mae and Freddie Mac. Thats more than any other big financial institution sold. BofA reported outstanding buyback claims of $12.88 billion at the end of September, about half of them from government-sponsored entities.
The letter last month to Countrywide Home Loans Servicing by attorneys for BlackRock, MetLife, Pimco and the New York Fed demanding that Bank of America fix problems with $47 billion of mortgage securities within 60 days or buy them back has fueled speculation about potential mortgage buybacks. It has definitely added uncertainty to companies with high exposure to mortgage repurchases, says Compass Points Gamaitoni.
Bank of Americas litigation expenses increased by $380 million in the past quarter, and more lawsuits are on the way. On October 15, the Federal Home Loan Bank of Chicago sued BofA, along with dozens of other financial institutions, including Citigroup, Goldman Sachs and Wells Fargo, claiming that offering documents for $3.3 billion in private-label mortgage-backed securities were inaccurate and contained critical omissions. Similar lawsuits have been filed by the Federal Home Loan Banks of Seattle and San Francisco.
On October 18, Bank of America announced it would restart foreclosure proceedings on 102,000 properties in the 23 judicial states. The teams reviewing data have not found information which was inaccurate and could affect the status of foreclosure, Moynihan told analysts on BofAs earnings call the next day. He promised to vigorously contest buyback claims, saying, Were going to make sure that well pay when due, but not just do a settlement to move the matter behind us.
For analyst Nancy Bush, the latest foreclosure problem only underscores the tremendous challenges Bank of America and its chief executive continue to face. Brian Moynihan is not going to fix in a year what took 20 years to build and mess up, she says. Theres a lot of rebuilding to do. This is going to take three to five years before you can really take a look and see if hes tackled them.