Buy Bank Of America Stock Now
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Whether purchasing Bank of America Corporation stock for the first time or enrolling your existing holdings, the Bank of America Corporation Investment Plan is a convenient, cost-effective method to invest in shares of Bank of America's common stock and to reinvest cash dividends. For information and a brochure on this plan, please call Computershare Trust Company, N.A. or view online at the Investor Center.
\"Bank of America\" is the marketing name for the global banking and global markets business of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation (\"Investment Banking Affiliates\"), including, in the United States, BofA Securities, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Merrill Lynch Professional Clearing Corp., all of which are registered broker-dealers and Members of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA. Company goals are aspirational and not guarantees or promises that all goals will be met. Statistics and metrics included in our ESG documents are estimates and may be based on assumptions or developing standards.
Bank of America (BAC 1.01%) was among the top performing bank stocks in the second half of 2022, returning 6.4% over the last two quarters of the year. Overall, the nation's second-largest bank was down about 26% in 2022.
As a new year begins, investors may be wondering if the bank stock's momentum from the second half of the year will continue this year amid much economic and market uncertainty. Here are several reasons Bank of America remains a buy in 2023.
Bank of America, like many banks, got a boost in 2022 as the Federal Reserve started aggressively hiking interest rates. After raising rates 25 (0.25%) basis points in March and 50 basis points in May, the Fed increased rates by 75 basis points at each of the four meetings that followed. It ended the year with a 50-point rate hike, which puts the federal funds rate that banks charge each other for overnight loans in the 4.25%-to-4.5% range.
The first reason is that loan activity should remain robust for the bank, even in an economy that is forecast to slow, and possibly even go into a recession. The bank reported fourth-quarter and year-end earnings on last Friday, and revenue and earnings topped analysts' forecasts. The company is anticipating loan growth in 2023, which along with rising interest rates, should lead to a boost in net interest income in 2023.
Investors must also consider the deposit beta. Just as banks can charge higher interest rates on loans, they must raise the interest paid on deposits. The amount a bank raises interest rates on deposits is called the deposit beta. Even though in the fourth quarter Bank of America raised its interest-bearing deposit costs from 0.40% in Q3 to 0.96%, that is still among the lowest for big banks. Nevertheless, Bank of America will likely have to continue to raise its deposit costs in 2023 to remain competitive.
Among the 10 largest banks, Bank of America had the second-lowest deposit cost in the third quarter, behind only Wells Fargo, according to S&P Global data. Lower deposit costs typically translate to higher net interest income. This will be something to watch in 2023, but it is a good sign that Bank of America was able to increase average deposits in consumer banking by 2% year over year to over $1 trillion in the fourth quarter. This suggests that customers aren't going elsewhere for better interest rates.
These factors all contributed to the bank's solid performance in the second half of the year. In 2023, conditions are largely the same, and they remain favorable for Bank of America. It should be able to navigate the rough waters of 2023 much as it did in 2022, with rising net interest income offsetting any losses elsewhere.
There is one other potential positive for Bank of America and that's its credit quality. Its net charge-off ratio rose in the fourth quarter, but its nonperforming loans ratio dropped. Those will be metrics worth watching through the first few quarters of 2023, but overall, the bank has done a good job of diversifying its loan mix over the years, reducing its overall credit risk.
Bank of America is an advertising partner of The Ascent, a Motley Fool company. Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America. The Motley Fool has a disclosure policy.
Investing in securities involves risks, and there is always the potential of losing money when you invest in securities. You should review any planned financial transactions that may have tax or legal implications with your personal tax or legal advisor.Securities products are provided by Merrill Lynch, Pierce, Fenner & Smith Incorporated (also referred to as \"MLPF&S\", or \"Merrill\"), a registered broker-dealer, registered investment adviser, Member SIPC layer, and a wholly-owned subsidiary of Bank of America Corporation. MLPF&S makes available certain investment products sponsored, managed, distributed or provided by companies that are affiliates of Bank of America Corporation.Bank of America Private Bank is a division of Bank of America, N.A., Member FDIC and a wholly owned subsidiary of Bank of America Corporation. Trust and fiduciary services are provided by Bank of America, N.A. and U.S. Trust Company of Delaware. Both are indirect subsidiaries of Bank of America Corporation.Insurance Products are offered through Merrill Lynch Life Agency Inc. (MLLA) and/or Banc of America Insurance Services, Inc., both of which are licensed insurance agencies and wholly-owned subsidiaries of Bank of America Corporation.Banking, credit card, automobile loans, mortgage and home equity products are provided by Bank of America, N.A. and affiliated banks, Members FDIC and wholly owned subsidiaries of Bank of America Corporation. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice.
Bank of America (NYSE:BAC) stock crashed 6.2% on Thursday, on news that a small regional bank was at risk of going bust, and large banks were having to raise CD interest rates. In a Thursday article, Reuters reported that Silicon Valley Bank (SIVB) was forced to issue shares, which caused the stock to crash 56% in a single day. Around the same time, Bloomberg reported that U.S. banks were having to jack up CD rates in order to meet capital requirements.
After a rough year in 2022, bank stocks are now navigating a fresh minefield in 2023. Rising interest rates have triggered a sharp decline in long-term bond prices, resulting in massive losses for banks holding them on their balance sheets. As a result, U.S. regional banks like Silicon Valley Bank parent SVB Financial Group (ticker: SIVB) and Signature Bank (SNBY) recently became the two largest U.S. bank failures since the 2008 financial crisis. Cryptocurrency lender Silvergate Capital Corp. (SI) has also announced it is liquidating its assets and shutting down after 2022's \"crypto winter\" prompted an exodus of customer funds. Investors are understandably concerned over potential for contagion within the banking industry, but the sharp sell-off in bank stocks could also prove to be an excellent long-term buying opportunity in high-quality banks. Here are eight of the best bank stocks to buy in 2023, according to Bank of America analysts.
J.P Morgan Chase is is one of the largest global financial services companies, with nearly $4 trillion in assets. Analyst Ebrahim Poonawala says investors seem to be dismissing J.P. Morgan's cautious guidance for 2023 net interest income, or NII. Poonawala says higher-than-expected interest rates and a delayed Fed pivot to rate cuts pose a \"significant risk\" to loan growth, credit quality and net interest margin, but J.P. Morgan's potential for a staggering $12 billion in share buybacks in 2023 offsets that risk. Bank of America has a \"buy\" rating and $153 price target for JPM stock, which closed at $134.62 on March 14.
Bank of America\" is the marketing name for the global banking and global markets business of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation (\"Investment Banking Affiliates\"), including, in the United States, BofA Securities, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Merrill Lynch Professional Clearing Corp., all of which are registered broker-dealers and Members of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA.
The Bank of America Corporation (often abbreviated BofA or BoA) is an American multinational investment bank and financial services holding company headquartered at the Bank of America Corporate Center in Charlotte, North Carolina, with investment banking and auxiliary headquarters in Manhattan. The bank was founded in San Francisco, California. It is the second-largest banking institution in the United States, after JPMorgan Chase, and the second-largest bank in the world by market capitalization. Bank of America is one of the Big Four banking institutions of the United States. It serves approximately 10.73% of all American bank deposits, in direct competition with JPMorgan Chase, Citigroup, and Wells Fargo. Its primary financial services revolve around commercial banking, wealth management, and investment banking. 59ce067264