For those long-term holders who bought BAC in the teens and watched in disbelief as it slid to $6.31, my heart goes out to you. Full disclosure: I currently hold a small position in BAC, bought below $10.
See, Bank of America (BAC, Financial) with a compelling entry point for long-term investors for my long thesis.
I have asserted in my thesis that BAC is trading at a discount to its tangible book value of low- to mid-teens, $13 or more, mainly due to the overhang of mortgage losses and lawsuits. It’s official: Citigroup (C) is no longer the most troubled big U.S. bank. That honor now goes, hands down, to Bank of America (BAC):
News brief from CNBC on Bank of America
Notes and quotes from story:
1) Moynihan says unsettling times for clients and staff.
2) CEO says bank taking aggressive action on legacy issues.
3) Reassures staff the bank will weather latest crisis.
Moynihan said the bank's capital ratios and excess cash are higher than they were a year ago, and that most of its legacy mortgage issues have been resolved. BofA has reserved $18 billion to settle outstanding mortgage-related issues.
"Most of the factors driving market volatility are beyond our control," he said, "but for matters within our control, we are taking action."
The story continues, Moynihan tells staff Bank of America on right path.
4) Moynihan said the bank has increased its consumer business and has cut costs in order to raise capital, including selling off 23 non-core businesses over the last six quarters.
5) But Merrill Lynch won't be touched.
[As mentioned in my thesis, Merrill Lynch franchise value will be earnings accretive to Bank of America. “Its investment bank and trading operations, largely inherited with the 2009 acquisition of securities firm Merrill Lynch & Co., accounted for $2.1 billion of profit in the first quarter.”]
6) Bank of America CEO Brian Moynihan, defending his leadership of the nation's biggest bank, said he would not resign and would not sell the Merrill Lynch brokerage business to raise capital.
Moynihan said the bank has increased its consumer business and has cut costs in order to raise capital, including selling off 23 non-core businesses over the last six quarters. But Merrill Lynch won't be touched, he said.
"Merrill Lynch is actually integrated" into the bank, he said. "There are other things we can sell that are much less important than what Merrill lynch does."
Moynihan said the issues raised by the AIG lawsuit are no different than other lawsuits filed over the past three years.
AIG said the bank and two companies it later bought, Merrill Lynch and Countrywide Financial, cheated AIG when it bought $28 billion in securities backed by home mortgages between 2005 and 2007, at the height of the housing boom.
7) The conference call is today, see Invitation: Berkowitz’s 90-Minute Conference Call with BofA's Moynihan Aug. 10.
8) In another CNBC story, Bofa got a vote of confidence from well-known banking analyst Dick Bove, who called the sell-off in BofA stock on Monday "a little bit obscene."
"This company is so far away from being in trouble or needing additional capital that it's ridiculous," Bove told CNBC. "I think the market's going lower so I'm not buying anything. The fact is, if I were to buy something I would be buying Bank of America aggressively."
Read more, BofA CEO Defends Bank: 'We're Doing Right Thing'
See, Bank of America (BAC, Financial) with a compelling entry point for long-term investors for my long thesis.
I have asserted in my thesis that BAC is trading at a discount to its tangible book value of low- to mid-teens, $13 or more, mainly due to the overhang of mortgage losses and lawsuits. It’s official: Citigroup (C) is no longer the most troubled big U.S. bank. That honor now goes, hands down, to Bank of America (BAC):
News brief from CNBC on Bank of America
Notes and quotes from story:
1) Moynihan says unsettling times for clients and staff.
2) CEO says bank taking aggressive action on legacy issues.
3) Reassures staff the bank will weather latest crisis.
Moynihan said the bank's capital ratios and excess cash are higher than they were a year ago, and that most of its legacy mortgage issues have been resolved. BofA has reserved $18 billion to settle outstanding mortgage-related issues.
"Most of the factors driving market volatility are beyond our control," he said, "but for matters within our control, we are taking action."
The story continues, Moynihan tells staff Bank of America on right path.
4) Moynihan said the bank has increased its consumer business and has cut costs in order to raise capital, including selling off 23 non-core businesses over the last six quarters.
5) But Merrill Lynch won't be touched.
[As mentioned in my thesis, Merrill Lynch franchise value will be earnings accretive to Bank of America. “Its investment bank and trading operations, largely inherited with the 2009 acquisition of securities firm Merrill Lynch & Co., accounted for $2.1 billion of profit in the first quarter.”]
6) Bank of America CEO Brian Moynihan, defending his leadership of the nation's biggest bank, said he would not resign and would not sell the Merrill Lynch brokerage business to raise capital.
Moynihan said the bank has increased its consumer business and has cut costs in order to raise capital, including selling off 23 non-core businesses over the last six quarters. But Merrill Lynch won't be touched, he said.
"Merrill Lynch is actually integrated" into the bank, he said. "There are other things we can sell that are much less important than what Merrill lynch does."
Moynihan said the issues raised by the AIG lawsuit are no different than other lawsuits filed over the past three years.
AIG said the bank and two companies it later bought, Merrill Lynch and Countrywide Financial, cheated AIG when it bought $28 billion in securities backed by home mortgages between 2005 and 2007, at the height of the housing boom.
7) The conference call is today, see Invitation: Berkowitz’s 90-Minute Conference Call with BofA's Moynihan Aug. 10.
8) In another CNBC story, Bofa got a vote of confidence from well-known banking analyst Dick Bove, who called the sell-off in BofA stock on Monday "a little bit obscene."
"This company is so far away from being in trouble or needing additional capital that it's ridiculous," Bove told CNBC. "I think the market's going lower so I'm not buying anything. The fact is, if I were to buy something I would be buying Bank of America aggressively."
Read more, BofA CEO Defends Bank: 'We're Doing Right Thing'
