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BAC-WT - Bank of America Warrants


ValueBuff

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JPM has gone up some 15% since they announced their deal.  So, let's get it over with. 

 

The market is a forward predicting machine.  This news is factored into the stock price.  If you unwind the mess of lawsuits BAC has already paid some of this out along the way.  JPM did it all in one shot.

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"Wall Street could pay nearly $50 billion to buy peace from federal authorities who are taking aim at the banks over their role in the mortgage crisis, according to interviews and a confidential analysis of the industry’s potential legal exposure.

 

Bracing for a potential reckoning, the banks and their outside lawyers are quietly using JPMorgan Chase’s record $13 billion mortgage settlement in November to do the math and determine just how much each bank might have to pay to move beyond the torrent of government mortgage litigation that has dogged them since the financial crisis. Such calculations, people briefed on the matter said, have gained particular urgency among the banks’ board members.

...

The analysis, which lawyers prepared for one of the financial institutions and which was reviewed by The New York Times, indicates that Bank of America could ultimately settle for $11.7 billion in penalties, with an additional $5 billion in relief to homeowners."

 

http://dealbook.nytimes.com/2014/01/09/wall-street-predicts-50-billion-bill-to-settle-u-s-mortgage-suits/?_r=0

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Bank of America Reports Fourth-quarter 2013 Net Income of $3.4 Billion, or $0.29 per Diluted Share, on Revenue of $21.7 Billion(A)

 

    Period-end Consolidated Deposit Balances Increased $14 Billion to Record $1.12 Trillion

    Period-end Loan Balances Increased $20 Billion to $928 Billion

    Combined Debit and Consumer Credit Card Spending Rose 4.0 Percent to $123 Billion

    Period-end Commercial Loan Balances Increased $42 Billion to $396 Billion

    Global Wealth and Investment Management Pretax Margin Increased to 26.6 Percent From 21.1 Percent

    Record Global Banking Revenue of $4.3 Billion, up 9 Percent

    Achieved New BAC and Legacy Assets and Servicing 2013 Cost Savings Targets

    Credit Quality Continued to Improve With Net Charge-offs Down 49 Percent; Ratio at 0.68 Percent

    Basel 1 Tier 1 Common Capital of $145 Billion, Ratio of 11.19 Percent

    Basel 3 Tier 1 Common Capital Ratio of 9.96 Percent, up From 9.25 PercentD

 

 

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Through 4Q, they have repurchased $3.2B of common at an average price of $13.90 (232m shares). Period end shares outstanding is 10.59B versus 10.78B one year ago. Diluted shares are up quite a bit YoY, however. I have to agree with Al about trading some tax efficiency for the discipline of the dividend.

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Through 4Q, they have repurchased $3.2B of common at an average price of $13.90 (232m shares). Period end shares outstanding is 10.59B versus 10.78B one year ago. Diluted shares are up quite a bit YoY, however. I have to agree with Al about trading some tax efficiency for the discipline of the dividend.

 

The 5% dilution every year makes me sad. Pay your employees more, don't give away cheap stock options that don't incentivize properly.

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allowance for Loan losses:

 

19.4 b in September to 17.4 Billion in December.  Pg. 6 supplemental.  Some of this is obviously taken off the balance sheet as payments are made.  Is some going to pad the earnings?

 

474 M released from counsumer real estate by the looks of it. 

 

I am trying to get at the total amount of reserve releases since they are a one time income item that can be significant. 

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Through 4Q, they have repurchased $3.2B of common at an average price of $13.90 (232m shares). Period end shares outstanding is 10.59B versus 10.78B one year ago. Diluted shares are up quite a bit YoY, however. I have to agree with Al about trading some tax efficiency for the discipline of the dividend.

 

The 5% dilution every year makes me sad. Pay your employees more, don't give away cheap stock options that don't incentivize properly.

 

agreed, horrible.

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Through 4Q, they have repurchased $3.2B of common at an average price of $13.90 (232m shares). Period end shares outstanding is 10.59B versus 10.78B one year ago. Diluted shares are up quite a bit YoY, however. I have to agree with Al about trading some tax efficiency for the discipline of the dividend.

 

The 5% dilution every year makes me sad. Pay your employees more, don't give away cheap stock options that don't incentivize properly.

 

agreed, horrible.

 

I do not understand why companies refuse to use their authorized buybacks.  That has been the most disappointing part of this whole thesis/playout.

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