Bank of America delivers on the bottom line

Shares were up Wednesday after earnings, but is this just a case of jumping over a very low hurdle?

By Motley Fool Investor Beat Jan 15, 2014 4:14PM
Shares of Bank of America (BAC) were up Wednesday on news of bottom-line strength in the company's earnings. However, much of the credit for BAC's increase to its bottom line year over year can be attributed to weak revenue from the fourth quarter last year that was fairly easy to beat.

In this video, host Mark Reeth talks with Motley Fool One analyst Jason Moser about what's behind the curtain at Bank of America today. He notes that the company was able to increase both its net interest margin and its deposit base, but for the long-term investor, he sees some big headwinds here.
While Jason commends Bank of America for starting now to embrace some of the major macro shifts that are going to be coming to the banking industry over the next decade, such as the shift to entirely online banking and the resulting branch closures and job scalebacks to cut costs, he sees that shift more broadly as part of the commoditization of banking. Bank sign © John Foxx, Stockbyte, Getty Images

This could put a large amount of downward pressure on Bank of America's fee pricing structure, and force the company to be much more reliant on other areas of its business.

Finally looking forward, Jason sees no reason to be a buyer of this stock today. He notes that a company of this size with a pretty anemic yield holds little interest for him, and says that the management team at BAC isn't nearly inspiring enough to change that opinion. His final verdict: there are plenty of other opportunities elsewhere.

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Tags: BAC
5Comments
Jan 15, 2014 4:47PM
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 Shares are up delivers on the bottom line like any good criminal organization must ! Keep the sheep happy the real money always floats to the top !  DIE BANK OF AMERICA DIE !

Jan 16, 2014 1:40AM
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right on ... this is all taxpayer money flowed through the hands of the super-rich banksters with a paltry remainder tossed back to the investing public ... bleeeeeah .... this is not capitalism or they would be out of business and the major players still doing jail time ...
Jan 15, 2014 10:12PM
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Bottom line is Bank of America along with Citicorp, GM, Goldman and JPMorgan screwed American taxpayers.
Jan 16, 2014 10:14PM
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A future Republican in the making.

http://www.youtube.c​​​om/watch?v=AukE25i​s​p​VY

They are simply adorable and loving little things aren't they?
Jan 16, 2014 8:36AM
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What Bank of America and K-Mart have in common... with all products and services ubiquitous now, it's a matter of price, location, location condition and the experience. Essentially, both are also-rans in the pricing arena... always a few pennies or percentage higher, close but with that smell of age or the armed security at the door is too obvious and the transaction is cold.

We should all have zero-tolerance for what has happened to us... humans mass terminated but bad businesses funded back into existence with fiat money, but the stitches and artificial replacement parts are showing. You died, Bank of America. Go into the ground and let Free Enterprise create the 21st Century alternative for what gave you life a very long time ago.

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