This Day On The Street
Continue to site
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

Bank of America: Federal Reserve Loser

The KBW Bank Index (I:BKX) was down 2% to close at 54.54, with all 24 index components showing declines.

Bank of America

Shares of Bank of America have returned 2% this year after more than doubling in 2012. In 2011, the stock tumbled 58%.

The shares trade for 0.9 times their reported Dec. 31 tangible book value of $13.36, and for 9.2 times the consensus 2014 earnings estimate of $1.29 a share, among analysts polled by Thomson Reuters. The consensus 2013 EPS estimate is $1.

Bank of America remains very much a recovery play, as the company works through its mortgage mess, including $28.3 billion in unresolved mortgage repurchase demands from investors as of Dec. 31. However, the company put a major dent in that number early in January, as a mortgage putback settlement with Fannie Mae (FNMA) lowered repurchase claims by roughly $12.2 billion.

Following reports that Bank of America CEO Brian Moynihan earned $12.1 million in 2012, and was paid more than JPMorgan Chase (JPM) CEO James Dimon, who earned $11.5 million, Rafferty Capital Markets analyst Richard Bove released a note taking the media to task for bashing banks over executive pay.

"These two banks employ more than half a million people. Yet their CEOs make about 25% of what they could make if they were shooting guards on the Los Angeles Lakers or good golfers or tennis players, let alone quarterbacks in Denver," Bove wrote.

The analyst went on to say: "The AFL-CIO publishes its list of the top 25 CEOs according to compensation. The average take was $63.5 million and there were no bankers on the list."

-- Written by Philip van Doorn in Jupiter, Fla.

BAC Chart BAC data by YCharts

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


>Contact by Email.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BAC $17.47 0.00%
AAPL $118.13 -0.63%
FB $105.51 -0.22%
GOOG $751.16 0.38%
TSLA $229.29 5.10%


Chart of I:DJI
DOW 17,836.44 +24.25 0.14%
S&P 500 2,091.46 +2.32 0.11%
NASDAQ 5,121.3420 +18.5340 0.36%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs