Bank of America: Greek Austerity Winner (Update 2)

Updated with market close information.

NEW YORK (TheStreet) -- Shares of Bank of America (BAC) rose over 2% on Monday to close at $8.25.

The broad indexes saw 1% after roughly two-thirds of Greece's parliament voted to approve a series of drastic cuts in spending and wages, to meet the austerity demands for approval of a second eurozone bailout of Greece, to the tune of 130 million euro ($171.5 billion). Under the agreement, Greece's debt would also be cut by roughly 100 billion euro. Meanwhile, protests against the cuts spread across Athens, and European leaders were scheduled to meet in Brussels on Wednesday, to decide on the bailout package.

The The KBW Bank Index (I:BKX) rose 1% to close at 44.90, with all but five of 24 index components showing mid-day gains.

Bank of America's shares have now returned 48% year-to-date, after declining . 58% during 2011.

Of course, the biggest recent news for Bank of America is the company's $11.8 billion contribution to the mortgage foreclosure settlement. Wells Fargo analyst Matthew Burnell on Friday reduced his 2012 earnings estimate for Bank of America to 60 cents a share from 75 cents, and his 2013 estimate to a dollar from $1.25, because of the company's warning on lower net interest income because of the refinancing and principal forgiveness under the settlement.

Then again, potential good news out of Europe can only be good news for the company, which reported total exposure to Greece of $473 million to Greece as of Dec. 30, with total "select European exposure" to Greece, Ireland, Italy, Portugal and Spain, of $14.4 billion.

Bank of America's shares are still heavily discounted, at 0.7 times tangible book value, according to HighlineFI, but at Friday's close, the shares traded for 11.5 times the consensus 2012 EPS estimate of 70 cents, among analysts polled by Thomson Reuters. This is a rather high multiple to earnings for a "big four" U.S. bank in the current market environment.

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