) -- It's been a tumultuous year for financial firms, but perhaps none more so than

Bank of America

(BAC) - Get Report


In the past two years, the Charlotte, North Carolina-based lender, money manager, retail bank and investment bank has gobbled up two massive companies, Countrywide and Merrill Lynch, accepted $20 billion in government assistance through the Troubled Asset Relief Program (TARP) in addition to another $118 billion in federal guarantees, and seen its share price fall from a peak of $55 to the single digits. The future remains unclear for Bank of America, but government intervention makes the shaky bank surprisingly safe.

Bank of America's stock has risen 21% this year, largely in line with the

S&P 500 Index

. While the company's stock is volatile (it has a beta of 2.7), most of the increase is due to a strong rally in financial shares. Bank of America even looks relatively cheap compared with other financial-services stocks. It has a price-to-earnings ratio of 27.8 versus 38.1. (The average for peers is skewed:

Fifth Third Bank

(FITB) - Get Report

, for example, has a P/E ratio of 219.

Much of Bank of America's run this year can be linked to earnings surprises in the first and second quarters, when results trounced analysts' expectations by 1,000% and 17.9%, respectively. That followed the last two quarters of 2008, when Bank of America missed expectations by 75.8% in the third quarter and 700% in the fourth. The gaps between expectations and reality show how little analysts agree on the company's prospects. With a 37-cent spread between estimates for the third quarter versus 8 cents for the similarly complex

General Electric

(GE) - Get Report

, it's clear that some supposed experts have no idea how Bank of America could be faring during the recovery of the economy and thawing of the credit market.

Federal Reserve Chairman Ben Bernanke said this week the economy probably has pulled out of the recession. That's no doubt music to the ears of many who are struggling to stay afloat. Still, the lean times aren't over by a long shot. With rampant unemployment and slow growth, the pain will continue to be felt for some time. As a result, phenomenal profits won't return to the financial industry in the foreseeable future.

So why, then, would Bank of America be a safe bet? Simply because the government won't allow it to fail.

With over $2 trillion in liabilities on its balance sheet, Bank of America is the definition of "too big to fail." After watching the collapse of Lehman Brothers and the panic that ensued, the government has shown that it will go to great lengths to ensure that a similar crisis doesn't happen again. With the acquisition of Countrywide, Bank of America now accounts for almost 25% of the home-lending market, in addition to holding about 12% of all U.S. deposits. A collapse of Bank of America could cripple the world's financial markets.

Moreover, the risk of failure is now likely behind Bank of America and institutions of the same ilk, such as


(C) - Get Report


Wells Fargo

(WFC) - Get Report


Even if an investor bought Bank of America at $17 a share today and waited 10 years for the stock to return to its previous high, he would earn about 12.5% a year, excluding dividends. That would be a good payoff in anybody's book.

-- Reported by David MacDougall in Boston.

Prior to joining Ratings, David MacDougall was an analyst at Cambridge Associates, an investment consulting firm, where he worked with private equity and venture capital funds. He graduated cum laude from Northeastern University with a bachelor's degree in finance and is a Level III CFA candidate.