5 Must-See Bank of America Corp (BAC) Stock Pictures

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Late last month, as part of its annual shareholder meeting, Bank of America Corp (NYSE:BAC) made a presentation to attending owners of BAC stock. It was similar in tone, as well as topic, to its quarterly earnings presentations used during its earnings conference calls. Somehow, though, the annual meeting’s slide-deck was a little more enlightening, and much easier to wade through.

5 Must-See Bank of America Corp (BAC) Stock Pictures

Source: Shutterstock

Even so, if reading a multi-page presentation of infographics just isn’t your thing, but you’re still interested in BofA, this is for you.

We’ve further condensed that presentation/slideshow to only the top five graphics that tell the crux of the story.

Net Income Has Stabilized


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Above all else, the fact that Bank of America is now able to consistently grow its bottom line is a sure sign that CEO Brian Moynihan finally has full control of a ship that had proven to be a little unwieldy in open seas.

Last year’s $17.9 billion in net income ($1.50 per share of BAC stock) was 13% better than 2015’s income of $15.8 billion ($1.31 per share). But more importantly, it puts an apparent end to the wild swings the bottom line suffered between 2008 and 2014.

ROTCE Is Healthy


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Prior to the banking implosion of 2008 stemming from the subprime mortgage meltdown and the subsequent new rules put into place by the Federal Reserve, ROTCE (return on average tangible common equity) wasn’t even a premise the average owner of BAC stock knew or cared about. Since then though, it’s become a well-watched measure of bank health.

Good news on that front: In step with the stabilization of its income, Bank of America’s ROTCE has also stabilized at healthy levels, and continues to improve. Last quarter’s total ROTCE of 10.3% not only got the bank started on the right foot, it was meaningfully better than the bank’s 9.1% cost of that capital.

BAC Stock Is Performing


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Say what you want about Brian Moynihan and/or Bank of America itself. Just don’t say BAC stock isn’t rewarding owners who’ve had the foresight (or guts) to jump in and stay in for the past five years.

It’s outperformed its peers and the broad market in all the major timeframes possible since the end of 2011.

Bad Loans Are (Mostly) a Thing of the Past


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Although the subprime mortgage meltdown occurred in 2008, the adverse impact it had on banks was neither limited to 2008 nor was it limited to subprime mortgage loans.

That same headwind has proven to be a financial drags on all banks ever since, forcing heavy charge-offs as delinquencies finally graduated to bad-loan status. It happened for its commercial as well as its consumer loan business.

The good news is, as of 2016 those charge-offs have fallen to or below the industry average. Commercial charge-offs only amounted to 0.11$ of that loan portfolio last quarter, versus 1.64% of the portfolio in 2010. For consumer loans, charge-offs totaled 0.74% of the portfolio last year, compared to 4.51% in 2010.

Costs Are Falling


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One of the tasks Moynihan has made a priority since taking the helm in early 2010 is culling costs. And, he’s done a great job in the meantime. 2011’s non-interest and non-litigation expenses of $74.7 billion were whittle down to only $53.8 billion last year.

It was in the middle of last year, however, Moynihan said he was looking to cut another $5 billion worth of annual expenses by 2018. Given the trajectory here, it’s not difficult to believe he’ll do it.

Bottom Line for BAC Stock

As of the latest look, BAC stock is arguably a little overextended and a little overvalued. Right now may not be the perfect time to get into a position.

The fundamental undertow is clearly bullish though. After any decent dip, Bank of America could make for a decent addition to a portfolio that’s in need of some banking exposure.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/05/5-must-see-bank-of-america-corp-bac-stock-pictures/.

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