Bank Of America Stock History
Bank of America Corporation began business as Bank of Italy in San Francisco in 1904 but was later renamed In 1968. In 2007, the bank expanded into wealth management by acquiring U.S. Trust Corporation.
In 2008 it acquired Merrill Lynch & Co. Inc., an ill-timed decision that proved costly, leaving the bank with lots of bad debt. The U.S. government gave BAC a bailout of $20 billion and an additional $118 billion in guaranteed against the bad assets obtained from the Merrill Lynch acquisition.
Unsurprisingly, by February 2009, Bank of America stock had fallen to below $4 per share. After the drastic fall in 2009, the stock has risen steadily with the market. The stock gained +34.5% in 2013 and +15.7% in 2014. However, in 2015, the stock fell by -4.78%, rose to +33.33% in 2016 and +35.67% in 2017, before dropping in 2018 by -14.98% from the previous year.
In 2019 Warren Buffetts Berkshire Hathaway filed an application with the Federal Reserve in October to boost its stake in BAC above the 10% level. Shares of BAC gained 42.9%, easily beating the S& P 500 indexs 28.9%.
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Banking Stocks Have Outperformed
Banking stocks are cyclical in nature. US banks had to make higher loan loss provisions in 2020 amid the economic downturn. However, 2021 was a different ballgame for banking stocks. The US economy rebounded sharply from the 2020 lows and after easing in 2020, we are now staring at a gradual rollback of the accommodative easing policy. The Fed is expected to raise multiple times this year, beginning as soon as the next month.
Banks generally borrow at the short end of the curve and lend at the long end. As a result, banks including Bank of America tend to outperform in a rising rate environment. In a rising rate environment, banks make a higher margin as compared to a low interest rate environment. If the economic momentum sustains in 2022, bank stocks might continue to outperform.
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Could The Big Bank Stock Double This Year
Bank of America’s business transformation since the depths of the financial crisis has been simply remarkable under Brian Moynihan’s leadership. The bank went from one of the institutions whose viability was being questioned to a leaner institution with excellent asset quality, a focus on efficiency, and industry-leading technology. And investors who bought during the turbulent times have been handsomely rewarded. Over the past 10 years, Bank of America has delivered a staggering 820% total return, and investors who bought during the worst points of the financial crisis have done even better.
However, many analysts still refer to Bank of America’s stock as “cheap,” and for good reason. With several catalysts that could drive profits higher in 2022 and beyond, could Bank of America, which currently trades for about $49, reach $100 within the next year?
Compare The Best Bank Of America Trading Platforms
If you want to get Bank of America shares right away, then simply follow one of the links in the table below to our trusted brokers. Our data comparisons help you find the right platform to execute your trades. If you need to know more, then simply keep reading down the page to learn about the company.
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Step : Open Your Brokerage Account
After finding your online broker, you must open an account to begin trading. Opening an account with an online broker is much like opening a regular bank account, and it typically requires that you go through your computer or the companys website.
Depending on the broker, your location and the rules required for opening a new investment account, it can vary in time required to open your brokerage account.
Some apps like Robinhood take only a short time to input your information, have the company verify it and then clear you for trading.
Some brokers also have extensive processes or procedures they must follow for risk compliance, regulations or other reasons.
Trading Bank Of America
Weekly chart of Bank of America stock.
Chart courtesy of Stockcharts.com
Above is a weekly chart of Bank of America stock. The stocks recent decline is similar to JPMorgan – Get JPMorgan Chase & Co. Report, Goldman Sachs – Get Goldman Sachs Group, Inc. Report and Citigroup – Get Citigroup Inc. Report. However, BofA has taken the worst of it, while JPMorgan has done the best, down just 17.5%.
Im not sure if Bank of America will continue lower from here or if it has effectively put in a bottom. If it has bottomed, it hasnt done so in convincing fashion.
Should Bank of America stock continue lower, I would love to see it test down into multi-year range support between $26 and $26.50. In this area, bulls have shown a propensity to step in and buy the stock. It may take a retest of the recent lows from the S& P 500 or some other negative event, but I would consider this a reasonable buying opportunity for investors.
It helps that the 200-week moving average is in play at $25.50 and rising, as it serves as a line in the sand for buyers. Those who nibble in the low-$26 range can stop-out of their trade should BofA close below the 200-week moving average on a weekly basis.
On the upside, see if Bank of America stock can reclaim the $30 to $31 area and the 50-week moving average. Above puts $33 on the table. For now though, BAC stock may very well be range-bound for the time being.
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Artists Living With Disabilities Or Impacted By Housing Insecurity To Be Featured In Bank Of America Financial Centers Across The United States
Bank of America today announced a partnership with ArtLifting, investing $2 million to feature artwork by artists living with disabilities or impacted by housing insecurity. The artwork will be on display in Bank of America financial centers across the country in 2022. ArtLifting is a social enterprise that represents artists who have been traditionally underrepresented in the contemporary art market.
Bank of America today announced a record-breaking year for patents received in 2021, with 512 patents granted across technology categories, a 16 percent increase from 2020.
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Bank of America generates the largest part of its revenue and net income from consumer banking but Global Banking is growing the fastest.
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Will Bank Of America Grow
It is very likely that Bank of America will continue to grow in the near term. BAC’s growth prospects in the short term are validated by the bank’s Q3 2021 financial results which exceeded market expectations and the market’s positive response to its recent financial performance.
Bank of America reported its earnings for the third quarterof this year on before trading hours, and the bank’s stock price subsequently increased by +6% from $45.07 as of October 14, 2021 to $47.88 as of November 2, 2021.
BAC’s good share price performance post-results announcement came about, as the bank’s earnings per share jumped by +67% YoY from $0.51 in Q3 2020 to $0.85 in Q3 2021. In the company’s earnings press release, BAC noted that “a reserve release of $1.1 billion driven primarily by asset quality improvements” was a key growth driver in the recent quarter. It is also noteworthy that Bank of America’s third-quarter earnings per share were +22% higher than the Wall Street analysts’ consensus bottom line forecasts.
The most important takeaway from Bank of America’s Q3 2021 financial results is that the bank delivered decent growth in net interest income, on top of an increase in investment banking fees and sales & trading revenue.
Bank of America’s investment banking fees grew by +23% YoY from $1,769 million in Q3 2020 to $2,168 million in Q3 2021, while its sales & trading revenue increased by +12% YoY from $3,224 million to $3,614 million over the same period.
Will Bank Of America Be A Great Stock To Own In 2022
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Understanding The Stress Tests
The overarching purpose of the stress tests is to see whether banks have enough capital to survive a severe downturn in the economy, one in which the unemployment rate hits 10% and stock and real estate prices plummet, among other things. The Federal Reserve determines this by estimating what would happen to the value of a bank’s assets under adverse conditions like these.
The key for a bank is to be able to maintain a 4.5% common equity tier 1 capital ratio, also known as a CET1 ratio. There’s no reason to delve into the details of this measure other than to say that it reflects how much high-quality, highly liquid capital a bank holds on its balance sheet relative to a risk-adjusted estimate of its assets.
A bank that can maintain that ratio not only passes the stress tests — or the first round of the tests, anyway — but would also presumably be able to make it through an acute economic downturn without having to dilute shareholders. And it was this dilution that caused so much damage to Bank of America’s stock in the last crisis after the bank, to raise capital, more than doubled its outstanding share could by selling shares at a deep discount to its book value.
What’s Happening With Bank Of America Corp Stock Today
Bank of America Corp stock is trading at $23.58 as of 1:42 PM on Tuesday, Jun 30, a rise of $0.19, or 0.79% from the previous closing price of $23.39. The stock has traded between $23.10 and $23.75 so far today. Volume today is less active than usual. So far 28,274,418 shares have traded compared to average volume of 83,006,515 shares.
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Overview Of Bank Of America
Bank of America is a financial services company that provides deposit, lending and investing services to individual consumers
The bank offers retail banking products online through its subsidiary Bank of America. The bank is often ranked in the top five banks for customer satisfaction by J.D. Power and Associates
The bank offers personal banking products like checking and savings accounts, CDs and IRAs. It also offers minor savings accounts and checking accounts with debit cards for kids and teens.
It also provides corporate banking products like commercial loans, treasury management that helps manage cash flow for the company. Corporate customers can get trade finance to export goods or import raw materials
The bank offers investment services through Merrill Lynch Wealth Management with financial advisors. The brokerages provide wealth planning advice related to retirement accounts.
If youd like to buy Bank of America stock, youll need to find an online broker that gives you the ability to purchase the stock through the NASDAQ stock market exchange.
However, this does not mean the stock worth buying. You will need to decide for yourself if the company is a good stock choice for your individual investing situation.
Lets have a look at the steps needed to buy Bank of America stock now!
How To Buy Bank Of America Stock A Step
The process isnt massively complicated, so dont worry even if youre new to stock investing. These are the steps to follow in order to complete your investment:
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Favorable Outlook For The Bank In 2022
With rising inflation and a more robust economic activity, the steepening yield curve increases interest rates. As a result, the banking outlook throughout 2022 remains positive, with at least three interest rate hikes anticipated by the Federal Reserve. However, the three interest rate hikes as noted by the Fed might not be enough, and according to JPMorgan’s CEO Jamie Dimon, seven hikes might be the number to beat.
Higher interest rates negatively affect valuations, earnings, and stock prices, except in the financial sector. A few days ago, in a recent tweet, I emphasized the S& P 500’s 30-year historical patterns, which tend to perform strongly as the economy approaches the rate hike cycles, which are about to enter early in March.
BAC’s Net Interest Income , which is the spread between its interest income and expense, essentially the profit of the Bank, is expected to be well above 2021 for the current year.
BAC’s high asset-sensitivity will drive earnings
Both banks, BAC and WFC, are high asset-sensitive banks and are expected to earn a higher yield on their assets than their peers. However, as I have analyzed in an earlier article, BAC’s closest peer WFC is constrained by asset cap regulation, and it cannot grow its asset portfolio over the $1.95 trillion limit mark. Even though WFC still has room to grow its loan base, the deposits restriction is a real issue that may affect WFC’s lending activity but create a competitive advantage for BAC.
Average Deposits & Loans
Heres When You Need To Buy Bank Of America Stock
Its been a rough ride for Bank of America – Get Bank of America Corp Report stock, with shares down about 22% from the 52-week highs it hit in January.
Thats more than double the decline in the S& P 500, which currently sits 9.8% off its all-time highs from February. Its also worse than the 13% drawdown seen in the Financial Select Sector SPDR ETF – Get Financial Select Sector SPDR Fund Report.
So what gives?
Bank of America pays a 2.5% dividend and is buying back gobs of stock. Shares trade at roughly 9 times earnings despite estimates calling for positive revenue and earnings growth both this year and next year. Analysts currently expect earnings to grow 9.8% this year.
Admittedly, the slash in interest rates will crimp the banks net interest margins, which helps explain why the sector has been under so much pressure lately even after solid earnings about six weeks ago.
Because of this, some will call the fundamentals mixed. Others will call them solid after the recent decline. But those who follow the technicals cant ignore the major support mark sitting nearby.
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Results Appear To Be Strong
After a depressed 2020, BAC stock is currently trading at about $47, up more than 60% from its 52-week low of $29.5, beating the 23% of S& P 500 by a wide margin. Even though the bank has missed its consensus revenue target estimate by $130 million, compared to consensus estimates, BAC in MRQ reported better than expected EPS at $0.82 in the MRQ.
Total revenues have slightly dropped marginally due to a rise in noninterest expense, despite the $542 million improvements in credit losses due to the more favorable macroeconomic environment. BAC is one of the largest banks in the US, as it currently maintains $3.17 trillion in total assets, and in the last quarter, the Bank has increased total deposits by 5%, reporting a figure of $2.96 trillion.
Unfavorably, the bank’s efficiency ratio has slightly increased in Q4 to 67% from 63% but still, considering the improvement in the market outlook, it is reasonable to expect that the anticipated boosted revenues will push the efficiency ratio closer to 60% levels in the foreseeable future. Last but not least, the bank has decreased the headcount for a consecutive year, and the continued digital transformation is expected to drive operating expenses to new lows, which is also reflected by the 46% increase in consumer and small business digital sales.