Bank of America Corporation (BAC) - NYSE
  • Tue, May 24, 10:22 AM
    • Stocks had already started the morning nicely in the green, but a blowout new home sales number for April has the homebuilders higher by about 2.5%, and the major indexes up by more than 1%.
    • It's also got traders upping bets on a June rate hike, with another move to follow before year-end. That's boosting the yield-starved financials (XLF +1.5%), particularly the banks (KBE +2%).
    • Among the financial movers: Bank of America (BAC +1.4%), JPMorgan (JPM +1.9%), Regions Financial (RF +1.8%), Fifth Third (FITB +2.1%), E*Trade (ETFC +2.9%), Interactive Brokers (IBKR +2.6%), MetLife (MET +1.8%), Prudential (PRU +2.2%), Lincoln National (LNC +1.8%), State Street (STT +2.1%)
    | Tue, May 24, 10:22 AM | 20 Comments
  • Wed, May 18, 1:08 PM
    • The meme of rates lower for longer has been stood on its head in the last 24 hours thanks to some decent economic data, but also surprisingly hawkish Fedspeak yesterday.
    • The fixed-income world now believes remarks from the Fed's Williams and Lockhart yesterday may have been a preview of what we'll get when the real power speaks tomorrow - Fischer and Dudley - and then on May 27, when Janet Yellen gives a speech.
    • Up at 2 ET are the minutes from the FOMC's April meeting.
    • The 10-year yield is higher by five basis points to 1.82% and short-term rate markets have upped expectations for a Fed move this year.
    • XLF +1.85%, KBE +3.15%, KRE +3.3%
    • Bank of America (BAC +3.7%), Citigroup (C +4.2%), JPMorgan (JPM +3.2%), Wells Fargo (WFC +2.1%), U.S. Bancorp (USB +2.1%), Regions (RF +3.3%), KeyCorp (KEY +3.7%), PNC Financial (PNC +2.7%), Fifth Third (FITB +3.7%), Capital One (COF +1.9%), E*Trade (ETFC +4.4%), Schwab (SCHW +4.8%), MetLife (MET +2.9%), Prudential (PRU +3.4%), Lincoln National (LNC +4.2%), BNY Mellon (BK +2.3%), Northern Trust (NTRS +2.9%)
    | Wed, May 18, 1:08 PM | 74 Comments
  • Fri, May 13, 5:52 PM
    • David Tepper and Appaloosa have filed their 13F, and while it shows new positions in Valeant (NYSE:VRX), Bank of America (NYSE:BAC), Facebook (NASDAQ:FB) and Fox (FOX, FOXA), a source told CNBC that he's already sold that Valeant stake.
    • Shares in Valeant moved accordingly after the release: First up as much as 2.9% after hours, then back again to a 0.6% gain.
    • Meanwhile, the firm notes dissolved stakes in Apple (AAPL, sold 1.26M shares), HP Enterprise (HPE, sold 3.66M shares) and Eastman Chemical (EMN, sold 700K shares).
    • In energy bets, Tepper heavily increased stakes in Williams Partners (WPZ, +10.87M shares) and Energy Transfer Partners (ETP, +11M shares), while cutting a stake in Kinder Morgan (NYSE:KMI) by 4.95M shares.
    | Fri, May 13, 5:52 PM | 84 Comments
  • Thu, Apr. 14, 10:32 AM
    • Living will: The fixes are "completely doable," says CFO Paul Donofrio, addressing yesterday's rejection of his bank's wind-down plan.
    • Return on assets: ROA slipped to 0.5% in Q1 from 0.6% a quarter earlier - just half of CEO Brian Moynihan's goal of 1%. Moynihan tells callers interest rates will have to rise before that level can be reached.
    • Mobile still growing fast: The bank in Q1 had 19.6M active users of its mobile banking services, up 15% from a year ago. 16% of deposits are now done through mobile devices. On branch cuts, management says they are consolidating into larger branches, and the new ones look more like a sales office than a traditional branch. Donofrio: “I think the branches are not going to be places where people come to transact. They’re going to come for a product they need because something changed in their life."
    • Expenses: The efficiency ratio improved, but it's still a whopping 75% vs. peers in the mid-to-high 50s. Moynihan wants to at least get it down to the low-60s. Pressed on expenses by Mike Mayo, Donofrio says the bank is splitting cost savings between future growth and the bottom line. "It's a lever we can pull over an extended period of time."
    • Presentation slides
    • WSJ blog
    • Now read: Bank Of America: This Is Disappointing! (April 14)
    • BAC +1.1%
    | Thu, Apr. 14, 10:32 AM | 5 Comments
  • Wed, Apr. 13, 11:31 AM
    • JPMorgan's revenues and profits both fell from a year ago, but the lame performance of the banks thus far this year has already priced in a weak quarter. JPMorgan is higher by 3.8%, with Citigroup (C +4.7%), Bank of America (BAC +3.5%), Wells Fargo (WFC +1.7%), Goldman Sachs (GS +2.9%), and Morgan Stanley (MS +4.4%) joining the party. The XLF is higher by 1.75% vs. the S&P 500's 0.7% advance.
    • But what about all of these players (except for Citi) having their living wills rejected by the Fed, FDIC, or both? A sideshow, no doubt. Regulators are going to regulate - like the commercial goes, "It's what they do." Banks will tweak plans, numbers, or whatever they need to in order to get D.C. to eventually sign off.
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, BTO, IAI, IYG, FNCL, SEF, FXO, RYF, KCE, FINU, RWW, XLFS, FINZ, FAZZ
    | Wed, Apr. 13, 11:31 AM | 24 Comments
  • Thu, Apr. 7, 3:09 PM
    • The 10-year Treasury yield at 1.69% has returned back to levels not seen since the panicky action in mid-February. And while the Fed has marked down its expectation of rate hikes this year to just two, short-term interest rate markets haven't even priced in one.
    • This leaves those whose business model depends on riding the yield curve having to contend with not only a middling macro picture, but - once again - a rates lower for longer picture (although Jamie Dimon says his big fear is that markets aren't pricing in nearly enough in the way of higher rates).
    • Citigroup (C -4.1%), Bank of America (BAC -3.3%), U.S. Bancorp (USB -2.8%), KeyCorp (KEY -3.4%), Regions Financial (RF -3.4%), BNY Mellon (BK -3.6%), E*Trade (ETFC -4.7%), Manulife (MFC -5.2%), Lincoln National (LNC -3.6%)
    | Thu, Apr. 7, 3:09 PM | 13 Comments
  • Tue, Mar. 29, 2:49 PM
    | Tue, Mar. 29, 2:49 PM | 10 Comments
  • Wed, Mar. 16, 2:28 PM
    | Wed, Mar. 16, 2:28 PM | 55 Comments
  • Wed, Feb. 24, 1:13 PM
    • It's another nasty session for banks today, writes David Reilly, and the KBW Nasdaq Bank Index is now lower by almost 20% YTD, with names like Citigroup (C -2.3%) and Bank of America (BAC -2.3%) down nearly 30%.
    • The nasty feedback cycle begins with the crash in the oil price, which stings banks thanks to worries of big losses on energy-lending, and more broadly hurts lenders by dragging down the stocks in general. This in turn, leads to concern about a recession would further ding bank profits.
    • More ominous, the yield curve is flattening. Using the spread between two-year and 10-year Treasury notes isn't a bad proxy for bank profits and it's slumped to just 0.96% today. Old-timers will remember when this spread used to turn negative - a sure sign of looming recession.
    • The good news, says Reilly, is that the energy crash and low rates don't look to cause the sorts of losses seen in 2008. Take the long view - the cycle will someday turn.
    • ETFs: XLF, FAS, FAZ, KRE, UYG, VFH, KBE, IYF, BTO, IAT, IYG, SEF, FNCL, FXO, KBWB, QABA, RYF, FINU, KBWR, KRU, RWW, FINZ, KRS, XLFS
    | Wed, Feb. 24, 1:13 PM | 35 Comments
  • Tue, Feb. 23, 2:38 PM
    • Holding its investor day today, JPMorgan said it was going to add another $500M to energy-related loan-loss reserves. This followed a $67M provision in Q4, which at the time brought total oil and gas loss reserves to $815M (vs. a portfolio with book value of $44B).
    • In addition, the bank said it could need to add another $1.5B to reserves should oil hang around $25 per barrel over the next 18 months. For perspective, prior to Q4, JPMorgan hadn't had to add to reserves for six years - in fact reserve releases were a big boost to profits across the industry.
    • "When the biggest bank increases reserves for potential oil losses it sets a tone for the industry,” says Mike Mayo.
    • Separately, the FDIC says bad loan provisions across the banking sector were $3.8B higher in Q4 than a year earlier.
    • JPMorgan (JPM -3.5%), Citigroup (C -2.9%), Bank of America (BAC -2.9%), Wells Fargo (WFC -2%), U.S. Bancorp (USB -3%), Regions Financial (RF -3.8%), Comerica (CMA -4.2%), Zions (ZION -4.1%), PNC Financial (PNC -2%).
    • ETFs: KRE, KBE, IAT, KBWB, QABA, KBWR, KRU, KRS
    | Tue, Feb. 23, 2:38 PM | 56 Comments
  • Thu, Feb. 11, 2:37 PM
    | Thu, Feb. 11, 2:37 PM | 69 Comments
  • Mon, Feb. 8, 2:24 PM
    • It is the European banks and contagion concerns that are freaking out the markets today - not just the Fed, China and crude oil - according to David Rosenberg, noting that some of the European banks are trading at 2008 crisis levels after the group has tumbled 18% YTD vs. 11% for the STOXX 600 index.
    • European financial firms are taking a beating amid fears of "a chronic profitability crisis that makes it impossible for banks to build up barely-adequate capital bases," WSJ reports.
    • Deutsche Bank (DB -9.8%) is down another ~10%, bringing its YTD loss to nearly 40% while its valuation has fallen to ~30% of book value, and its credit default swaps spiked to their highest levels since 2012.
    • News of major withdrawals out of Credit Suisse (CS -4.2%) caused its shares to sink 11% last week, hitting a 24-year low, and Santander (SAN -6.2%), BBVA (BBVA -5.4%), and UniCredit (OTCPK:UNCFF -5.5%) are down to lows seen during the last eurozone financial crisis.
    • "Oil and the flatter yield curve alone do not explain the 12% plunge we have seen in S&P Financials so far this year," Rosenberg says, adding that BofA (BAC -6.1%), Citigroup (C -6.2%) and Wells Fargo (WFC -3.5%) all briefly touched 52-week lows last week - "an ominous signpost."
    • ETFs: XLF, FAS, FAZ, UYG, VFH, PSP, IYF, EUFN, BTO, IPF, IAI, IYG, SEF, FNCL, FXO, PFI, IXG, PEX, RYF, FINU, KCE, RWW, KBWC
    • Earlier: Markets extend two-day rout; gold gets 3% boost
    | Mon, Feb. 8, 2:24 PM | 36 Comments
  • Tue, Feb. 2, 12:52 PM
    • Alongside energy's underperformance today is the financial sector (XLF -2.4%). The long-awaited hope of a sustained rise in interest rates appears dashed once again - at least so far this year.
    • The 10-year Treasury yield is lower by seven basis points to 1.88% - a nine-month low - and short-term rate markets are now pricing is less than one 25 basis point rate hike for the remainder of the year.
    • TBTFs: Bank of America (BAC -4.4%), Citigroup (C -4%), Goldman Sahcs (GS -4.4%)
    • Regionals: U.S. Bancorp (USB -2.5%), Regions (RF -3.1%), SunTrust (STI -4%)
    • Life insurers: MetLife (MET -3%), Prudential (PRU -3.2%), Lincoln Financial (LNC -3.7%)
    • Online brokerage: Schwab (SCHW -4.2%), E*Trade (ETFC -3.8%), Ameritrade (AMTD -3.6%)
    • ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, BTO, IAT, SEF, IYG, FXO, FNCL, KBWB, FINU, QABA, KRU, KBWR, RWW, RYF, FINZ, KRS, XLFS
    | Tue, Feb. 2, 12:52 PM | 69 Comments
  • Fri, Jan. 29, 11:14 AM
    • The stock trades at a 20% discount to year-end estimated tangible book value of $17 per share, says CLSA's Mike Mayo. That's worse than the recessions in the early 1990s and early 2000s, despite better balance sheet strength today.
    • Further, the bank could grow book value even if the U.S. goes into recession.
    • There's also the chance BofA (BAC +1.1%) could become an "event-driven" stock, says Mayo. First, the 67% efficiency ratio is worst among the large U.S. banks, so there's plenty of room for improvement. Second, a sum-of-the parts analysis yields a result 40% higher than the current market cap. Third, shareholders are starting to speak up - while an activist is an outside shot, increased owner pressure seems likely.
    • He upgrades from Sell to Outperform, with price target of $16 up from (suggesting upside of less than 20%).
    • Previously: Mike Mayo calls bottom in BofA (Jan. 29)
    | Fri, Jan. 29, 11:14 AM | 38 Comments
  • Fri, Jan. 29, 9:47 AM
    • Saying the stock trades at a recession-level price to tangible book value ratio despite the absence of a recession, CLSA's Mike Mayo upgrades Bank of America (BAC +1.1%) to Outperform from Sell.
    • BofA is lower by 18.5% YTD and about 25% over the last six months. By comparison, Wells Fargo is down 9% YTD and 15% over the last six months, and JPMorgan 12% and 18%.
    | Fri, Jan. 29, 9:47 AM | 55 Comments
  • Thu, Jan. 21, 3:15 PM
    • The stock has given up another 2.6% today, even as the broader market rallies and its TBTF peers are just modestly lower. Shares are lower by 20% YTD, and 13.4% Y/Y.
    • Holding court at Davos, CEO Brian Moynihan says the job cuts will continue this year after more than 10K reductions in 2015. Total headcount at the bank is 213.3K. The efficiency ratio at BofA for 2015 of 68.6% is far worse than competitors like Citigroup (57%) and Wells Fargo (57.8%)
    • Cost cuts are nice, but revenue growth can also help that ratio. Expect that to remain challenging, however, even as the U.S. economy improves, says CFO Paul Donofrio.
    | Thu, Jan. 21, 3:15 PM | 72 Comments
Company Description
Bank of America Corp. operates as a bank holding and financial holding company. It operates through the following segments: Consumer Banking, Global Wealth & Investment Management, Global Banking, Global Markets, and Legacy Assets & Servicing. The Consumer Banking segment offers credit, banking... More
Sector: Financial
Industry: Regional - Mid-Atlantic Banks
Country: United States