I'm not discounting that Bank of America still faces plenty of legacy operational issues. But it seems that despite the ample signs of progress, management still isn't getting any credit. The Street also ignored management's shedding some of the bank's low-performing assets and loans as it strives to improve its ability to return value to shareholders.
This is while the bank is in the midst of a significant restructuring plan that includes a 10% headcount reduction, extinguishing debt and so on. The bank also continues to bolster its balance sheet as its Basel 3 Tier 1 common capital ratio continues to improve.
Basel 3 is a global regulatory standard that serves to prevent too-big-to-fail scenarios by enforcing not only bank capital requirements, but also by adding minimum standards on liquidity and leverage. Basel 3 requires banks to hold 4.5% of common equity. This is an area in which CEO Brian Moynihan has taken a personal interest in an effort to help build back trust in the bank.
In that regard, there are signs that the bank is starting to regain both investor and consumer confidence after a long-fought battle toward recovery. There's still plenty of work to be done, but with mortgage originations on the rise as the housing recovery continues, it's safe to say that the worst for Bank of America is over. I would be a buyer here ahead of earnings.
At the time of publication, the author held no position in any stock mentioned
This article was written by an independent contributor, separate from TheStreet's regular news coverage.