This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

10 Most Profitable Banks Trading Below Book Value

5. Bank of America
Shares of Bank of America were up 68% year-to-date, through Monday's close at $9.30. During 2011, the shares dropped 58%.

The shares trade for 0.7 times their reported June 30 tangible book value of $13.22, and for ten times the consensus 2013 EPS estimate of 91 cents. The consensus 2012 EPS estimate is 55 cents

For the 12-month period ended June 30, Bank of America's ROA was 0.52%, while the company's ROE was 4.84%.

With hindsight being 20-20, it's clear that there was a lot of money to be made for investors jumping into BAC shares at the end of last year, or early this year. But the shares have been quite volatile, and the mortgage putback theme is likely to be the main story for the company for some time to come.

During the second quarter alone, Bank of America's mortgage purchase demands from Fannie Mae (FNMA), Freddie Mac (FMCC) and private investors increased by 41%, to $22.7 billion as of June 30.

Oppenheimer analyst Chris Kotowski on Sunday said that "one could make the argument that BofA looks cheap here as well, but part of that is because the market is already baking in the putback losses and their ultimate impact on [tangible book value]."

The analyst shies away from Bank of America for the time being, saying "BofA/Countrywide had $222B of principal at risk as of 1Q11, and we suspect this number is now somewhere between $250B and $300B. With losses to investors in the $125B to $250B range we just can't get comfortable with the potential impact to BAC and some of that is currently reflected in the optically attractive [price-to-tangible-book-value] ratio."

BAC ChartBAC data by YCharts

Interested in more on Bank of America? See TheStreet Ratings' report card for this stock.

7 of 11

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,849.85 -62.26 -0.37%
S&P 500 1,965.28 -4.67 -0.24%
NASDAQ 4,450.5640 +7.8660 0.18%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs