How Much Is Bank of America Worth?
Bank of America is the second-largest bank in the U.S. — after JPMorgan Chase — handling roughly $3.8 trillion in total assets as of the fourth quarter of 2021. Here is a breakdown of how Bank of America stock is performing, how the company is faring, and whether or not now is the right time to invest in the company.
Bank of America: A Healthy-Looking Financial Stock
Over the past year, Bank of America stock (NYSE: BAC) has returned about 43%, outpacing the KBW Nasdaq Bank Index, which is up just under 29%. Its performance has been strong enough that analysts’ consensus rating, as reported by The Wall Street Journal, has been a steady “overweight” over the last several months, meaning analysts expect the stock’s performance to improve. The consensus is based on ratings ranging from “buy” to “sell,” with 14 of 28 analysts rating the stock a “buy.”
Bank of America showed strong earnings for the fourth quarter of 2021. In its earnings report for the final quarter of the year, Bank of America announced a 28% increase in profits, with earnings per share beating analysts estimates. At $22.17 billion, revenue was nearly even with the $22.2 billion forecast by Refinitiv, according to CNBC. Profit gains were spread across business segments, with consumer banking, global wealth and investment management, global banking and global markets all reporting significant gains. Total client balances reached a record $3.8 trillion
Bank of America’s Historic Bond Offering
On April 16, Bank of America announced a plan to sell $15 billion in bonds. It is a record-breaking deal, announced just one day after JPMorgan Chase & Co. announced a similar but smaller offering worth $13 billion and Goldman Sachs Group sold $6 billion in new bond notes.
Investors responded favorably to Bank of America’s new bond offering, with one source claiming that investors bought to the tune of approximately $25 billion. That positions Bank of America to borrow at lower rates than planned. The company plans to use its proceeds from the bond sale for overall corporate needs, according to a spokesperson.
An Expanded Commitment to Housing Affordability
Last year, Bank of America announced plans to triple its investment in affordable homeownership — from $5 billion in 2019 to $15 billion through 2025. The company plans to help more than 60,000 consumers purchase homes. Bank of America’s previously committed funding to this initiative has already placed more than 21,000 people in homes via affordable loans, plus down payments and closing cost grants.
A Focus on Retaining Talent Through a Pandemic
Bank of America also made headlines recently for announcing that it would be providing pay raises for analysts, associates, vice presidents, and international staff. In light of the COVID-19 pandemic, the bank aims to recognize the increased workloads its workers continue to face. Bank of America will also raise its minimum wage from its current $20 per hour to $25 per hour by 2025 and require its vendors to pay their employees at least $15 per hour.
Last quarter, Bank of America announced it had exceeded its five-year goal to hire 10,000 individuals from low- and moderate-income communities through its Pathways program. Currently two years ahead of schedule, the bank is expanding the program and has committed to an additional 10,000 hires by 2025 through expanded partnerships with community colleges and local chapters of organizations such s the National Urban League.
Bank of America at a Glance
Here’s the 10,000-foot view based on the company’s fourth-quarter 2021 earnings report:
|Headquarters||Charlotte, North Carolina|
|Total Assets (2021)||$3.17 trillion|
|Total Liabilities (2021)||$2.9 trillion|
|Revenue (2021)||$93.85 billion|
Here is an overview of the company’s business, according to estimates on its website:
|Clients||67 million consumer and small business clients|
Bank of America’s Market Cap: $362.86B
Market capitalization is determined by the total dollar value of a company’s outstanding shares, which helps investors determine the relative size of a company. Bank of America’s market cap, which sits at $362.86 billion as of Jan. 21, reflects how the overall market values the company.
Bank of America’s Net Worth: $449.1B
Market caps offer just one view of what the market values a company at. That value is also susceptible to change on an almost hourly basis due to external market forces and investors fighting over the value of shares. The GOBankingRates Evaluation, however, calculates a company’s net worth based on recent annual reports of income and profit while also taking into consideration its assets and liabilities.
Based on the company’s revenue and profits from the last three years, Bank of America is worth just over $449.1 billion.
A Company Performing Well in Challenging Times
Bank of America appears to be weathering the COVID-19 pandemic with resolve and focus.
The company has weathered hard times before. Bank of America CEO Brian Moynihan has been credited with steering the company out of the 2008 financial crisis by “methodically overhauling and streamlining” its business model, reported The Post and Courier in November 2017. His strategy included closing branches, terminating employees, and cutting operating costs. He also made a significant investment choice by purchasing Merrill Lynch in 2008 — completed in 2009 — and integrating it into BofA’s wealth management firm.
Customer deposits increased under Moynihan’s watch, and in the third quarter of 2021 exceeded $1 trillion for the first time and grew 16% in the fourth quarter. It’s the bank’s deposit volume that contributes significantly to it being the country’s second-largest bank.
It appears that Moynihan is again navigating a difficult period with relative success — this time, investing in products and people that will help steer the bank through the economic stress and uncertainty of the COVID-19 pandemic. Investors may want to keep a close eye on Bank of America, its next moves, and its better-than-expected stock performance in the financial sector.
Data is accurate as of Jan. 22, 2022, unless otherwise noted, and subject to change.
Methodology: The GOBankingRates Evaluation assesses a company’s net worth based on the company’s total assets, total liabilities, and revenue and net income from the last three years. Base value is established by subtracting total liabilities from total assets from the company’s last full fiscal year. Income value is established by taking the average of the revenue from the last three full fiscal years, plus 10 times the average of the net profits from the last three full fiscal years, and then calculating the average of those two figures. The final GOBankingRates Evaluation number is the sum of the base value and the income value.
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- Bank of America. 2022. "4Q21 Earnings Press Release."
- Bank of America. 2021. "Bank of America Triples Affordable Homeownership Commitment to $15 Billion."
- Bank of America. 2021. "Bank of America Increases US Minimum Hourly Wage to $25 by 2025."
- Bank of America. 2021. "Bank of America Exceeds Five-Year Goal to Hire 10,000 Individuals From Low- and Moderate-Income Communities."
- Bloomberg. 2021. "Bank of America Plans to Boost Salaries for Its Junior Investment Bankers."
- The Wall Street Journal. "Bank of America Corp."