Stock Stories Bank of America (BAC) - Trading Below Book Value
Jun 26, 2023
Discover the fascinating journey of Bank of America, from its roots as the Bank of Italy in 1904 to its impressive rise as a financial powerhouse. Learn about the challenges faced during the 2008 crisis, including hefty fines and acquisitions that shaped its path. Despite setbacks, the bank's recovery is remarkable, showcasing mid single-digit growth across various segments. With a strategy of share buybacks and dividends, it continues to solidify its position as a leading banking institution in the U.S.
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Founding Bank of Italy
- Amadeo Peter Giannini founded the Bank of Italy in 1904 to serve working-class customers.
- He made loans to those rejected by other banks, often sealing deals with a handshake, building strong trust.
Crisis Acquisitions
- Bank of America acquired Countrywide Financial just before the 2008 crisis, inheriting its problems.
- The bank also acquired Merrill Lynch during the crisis and received $45 billion in bailout funds.
Bank's Diversified Business Model
- Bank of America's business is diversified across consumer banking, wealth management, corporate banking, and markets.
- This multi-segment model mirrors top banks like JPMorgan Chase, leveraging deposits and lending.