BAC-WT - Bank of America Warrants

[John Hjorth]

Thank you, OracleofCarolina,

 

Good news indeed! - A bit belated Christmas gift!

[Rasputin]

https://www.sec.gov/Archives/edgar/data/70858/000119312519040878/d682811dsc13ga.htm

[Rasputin]

# of shares outstanding Dec 31 2017 : 10.2873 B

# of shares repurchased in 2018 : 0.6762 B

# of shares issued in 2018 : 0.0582 B

# of shares outstanding Dec 31 2018 : 9.6693 B

# of shares outstanding Feb 25 2019 : 9.6588 B

 

BAC issues most of its shares related to employee comps in Q1.  In 2018 out of 58.2 million shares issued, 41.2 million shares were issued in Q1 2018.  Also 121 million warrants A was outstanding as of Dec 31 2018, substantially all were exercised on or before January 16 2019.

 

Cost to repurchase shares in 2018 : $20.094 B

Avg cost per share : $29.72

[gfp]

Is this still the spot to post BAC material?

 

Link to the PDF of this mornings Q1 earnings report.  Good results

 

First linked presentation opens the pdf.

 

http://investor.bankofamerica.com/phoenix.zhtml?c=71595&p=irol-presentations#fbid=VClj-jm89g0

[RuleNumberOne]

BofA CEO says no recession:

 

https://www.cnn.com/2019/06/20/business/bank-of-america-ceo-recession/index.html

 

"He pointed to negative interest rate policies in foreign central banks that has created $11 trillion of negative-yielding debt. That once-unthinkable situation has driven investors into US debt, which looks attractive because of the relative strength of the US economy.

"Of course, people want to come and get 2.07% for a Treasury bond here versus negative yields in other countries," Moynihan said."

[sleepydragon]

I recently got an auto loan (new car) from BAC at 2.79%.

How can they make money with this loan?!

(Fortunately, two days after I got my loan I saw the rate increased to above 3%)

Anyway, they must be gaining market shares in auto loans

[coc]

I recently got an auto loan (new car) from BAC at 2.79%.

How can they make money with this loan?!

(Fortunately, two days after I got my loan I saw the rate increased to above 3%)

Anyway, they must be gaining market shares in auto loans

 

Anecdotally, KMX noted yesterday that their auto loan partners have gotten more aggressive recently.

[John Hjorth]

I'm posting here, because among the Big US Banks, BAC on overall level seems to be the "discussion darling" among the Big 4 US Banks in general here on CoBF [perhaps there has been more traction in the WFC topic lately, but I consider that more related to specifics about WFC itself].

 

- - - o 0 o - - -

 

We're up for three - at least to me - very interesting days, the three days including today, where C within an hour from now will report for 2019Q2. To me, it'll be a releaf "just" to get some "real" information from the mouths of the horses out of "all the noise" , that just seems to be going on at a steady increasing intensity [perhaps, that's just me feeling so].

 

My telescope is tuned in, I'll swing it a few times within the next few days, to receive hopefully clear signals - like pearls on a string - from a chaotic black sky at night. Then I'll read the signals, then crawl back in my cave, to try to do my best to avoid all the noise.

[Cigarbutt]

I'm posting here, because among the Big US Banks, BAC on overall level seems to be the "discussion darling" among the Big 4 US Banks in general here on CoBF [perhaps there has been more traction in the WFC topic lately, but I consider that more related to specifics about WFC itself].

 

- - - o 0 o - - -

 

We're up for three - at least to me - very interesting days, the three days including today, where C within an hour from now will report for 2019Q2. To me, it'll be a releaf "just" to get some "real" information from the mouths of the horses out of "all the noise" , that just seems to be going on at a steady increasing intensity [perhaps, that's just me feeling so].

 

My telescope is tuned in, I'll swing it a few times within the next few days, to receive hopefully clear signals - like pearls on a string - from a chaotic black sky at night. Then I'll read the signals, then crawl back in my cave, to try to do my best to avoid all the noise.

Sidenote about participation here:

This site provides filtered information mostly but important decisions should rely on unfiltered data and independent thinking is useful to distill the key inputs while doing away with the noise. From a conceptual perspective, filtering the noise will tend to help you come up with a more precise conclusion at a risk though to be more precisely wrong so the raw data and the choice of the filters is important. This is basically the basis for the bias-variance trade-off in decision making. A problem is that a lot of the stuff is simply unknowable with any degree of certainty.

 

---)Back to the Bank of America

Since 2009, I haven't been able (still) to invest in US banks because of what I feel to be embedded systemic fragility. The rest is optional reading and maybe your time would be better spent watering your flowers and Mr. Buffett clearly doesn't share those concerns, so…

But speaking of filters, here's a study from the Fed in San Francisco whose authors defined filters in order to asses the fragility of the financial system and the potential impact on banks. It seems to me they do a good job at giving access to raw data and how they define their assumptions but the conclusions are yours.

https://www.frbsf.org/economic-research/files/wp2019-06.pdf

[gfp]

https://mms.businesswire.com/media/20190717005354/en/733443/1/Q2_2019_Bank_of_America_Financial_Results_Press_Release.pdf?download=1

[CorpRaider]

Someone wake me at $25.  ;D

 

Deja vu.

[Viking]

Yes, the big banks are leading the charge lower. I wonder how the fall in long rates is going to impact earnings in future years (should long rates stay low or go even lower).

 

Slowing economy and risk of recession look to be getting priced in to shares.

 

The silver lining is the amount of excess capital they have on their balance sheet and the large number of shares they will be purchasing over the next 12 months.

 

The big US banks have also been very good at morphing as required to continue to drive solid earnings and my guess is this will continue as we see how the economy unfolds.

[RuleNumberOne]

There are plenty of loss-making 'growth' and momentum stocks that have been hurt very little. We wouldn't see that if a recession was being priced in.

 

IMO, this is the same old trend-following divergence between 'growth' and 'value.' Most trading volume is due to 'algos'. 'Algorithms' is a glorified term for trend-following, they are really quite stupid.

 

There will be a rush for yield eventually when the capital gains in bonds are tapped out (as pointed out by Ray Dalio.) US banks look set to benefit from such a rush for yield.

 

Yes, the big banks are leading the charge lower.

Slowing economy and risk of recession look to be getting priced in to shares.

[TwoCitiesCapital]

This entire time I've been expecting the better run European banks to catch up to the US ones.

 

But at this point, seems like a non-zero chance that US Bank catch down to European ones

[RuleNumberOne]

European banks may be blaming negative rates, but they never recovered from 2007.

 

The stock chart for banks like DB and Lloyds show a downward trend from 2007. Barrons recently listed the 6 biggest European banks and they had a combined market cap less than BAC.

 

Eurozone regulators have covered up the big holes in their banks and investors don't trust them. Like DB's derivatives. Italian and French banks holding several hundreds of billions of Italian debt,....

[RuleNumberOne]

The ECB stayed silent about the understated big losses and bad loans at Monte Paschi before they tried to raise capital. But European bank investors got their information anyway and Monte Paschi could not raise capital.

 

I think DB may be having the same problem - Eurozone regulators have zero credibility with investors.

 

https://www.bloomberg.com/graphics/2019-opinion-monte-paschi/

 

"Disposing of the loans would have produced a huge loss, and Monte Paschi began asking investors for yet more money to stanch the bleeding. Although the bank disclosed the ECB’s request to investors, neither it nor the ECB revealed the full scope of the firm’s challenges."

[fareastwarriors]

Warren Buffett Seeks Fed Leeway to Boost Stake in Bank of America Past 10%

 

 

https://finance.yahoo.com/news/warren-buffett-seeks-fed-leeway-162716126.html

[John Hjorth]

Pretty much no talk about the Big 4 US banks here on CoBF the last few days after the 2019Q3 Quarterly Earnings Releases.

 

[i post in the BAC topic here, as a "cross-over post", as an over-all & general coverage of them all, because BAC seems here on CoBF to have the best traction with regard to posting frequency from the CoBF members.]

 

My overall perception is [i haven't yet spent that much time looking in depth on the numbers though], that they are all still doing quite well, despite several kinds of US & global "muddy waters" & headwinds on net interest income.

 

I see slight increases in loan loss provisions.

 

There is an one-time litigation provision dent in 2019Q3 for WFC, which could be expected with the new WFC CEO at the steering wheel.

 

The same seems visible for BAC in the income statement item called "Other non-interest operating expenses" that has peaked in 2019Q3. I found this in BAC 2019Q3 Earnings Release, p. 6, section "All other" :

 

... Noninterest expense included $2.1 billion pretax impairment charge related to the notice of termination of the merchant services joint venture at the conclusion of its current term as well as higher legacy mortgage-related litigation expense. ...

 

[Junto]

The bloodletting on this one has gotten excessive. There is a lot of opportunity in an organization like Bank of America at these levels. Yes margins will get compressed but that depends on your outlook of a flu like virus driving an entire us economy to a halt. so far there are 99 cases in the U.S.https://www.cdc.gov/coronavirus/2019-ncov/cases-in-us.html 

 

I get there are concerns. I just don't believe that this virus has the potentially to significantly damage the us economy for more than a quarter or two. Even at that, it will be limited and supply side difficulties versus actual issues.

[Spekulatius]

The bloodletting on this one has gotten excessive. There is a lot of opportunity in an organization like Bank of America at these levels. Yes margins will get compressed but that depends on your outlook of a flu like virus driving an entire us economy to a halt. so far there are 99 cases in the U.S.https://www.cdc.gov/coronavirus/2019-ncov/cases-in-us.html 

 

I get there are concerns. I just don't believe that this virus has the potentially to significantly damage the us economy for more than a quarter or two. Even at that, it will be limited and supply side difficulties versus actual issues.

 

The Coronavirus will go away, but the low interest rates are going here to stay, they are like crack, once you are on the drug, it’s hard to wean off.

[Gregmal]

TBTF bank investing is soooo 2012...

 

They all seem to have similar challenges. If you like banks why not just go with JPM or buy BRK for the exposure and management.

[Mephistopheles]

TBTF bank investing is soooo 2012...

 

They all seem to have similar challenges. If you like banks why not just go with JPM or buy BRK for the exposure and management.

 

Why JPM and not BAC?

[Gregmal]

TBTF bank investing is soooo 2012...

 

They all seem to have similar challenges. If you like banks why not just go with JPM or buy BRK for the exposure and management.

 

Why JPM and not BAC?

 

Just my opinion, but Jamie Dimon is on another level. A total man's man, a leader's leader. The gold standard. Hope he recovers from the heart surgery. Would be impossible to replace.

[Spekulatius]

TBTF bank investing is soooo 2012...

 

They all seem to have similar challenges. If you like banks why not just go with JPM or buy BRK for the exposure and management.

 

JPM is probably a sell now too. I think Jamie is gone unless he want to die at his desk. With such a larger than life figure running the outfit, the bench behind it is often not as deep than assumed. And those that are not picked as a successor, will go elsewhere.

[Mephistopheles]

TBTF bank investing is soooo 2012...

 

They all seem to have similar challenges. If you like banks why not just go with JPM or buy BRK for the exposure and management.

 

Why JPM and not BAC?

 

Just my opinion, but Jamie Dimon is on another level. A total man's man, a leader's leader. The gold standard. Hope he recovers from the heart surgery. Would be impossible to replace.

 

Agree with everything regarding Dimon but I think Moynihan is underrated because he lacks the charisma and aura, frankly he's kind of boring in his interviews. But I think a boring banker is a good thing. I think both men are great.