The Shocking Declaration About Bank of America's Future

With 2013 behind us, Bank of America CEO Brian Moynihan announces where he thinks the company will be going over the next three years.

Jan 26, 2014 at 2:34PM

2013 marked a year where Bank of America (NYSE:BAC) seemingly returned to normalcy. But where is the bank headed now? 


2013 considerably lacked the negative Bank of America was used to. The absence of that ill will meant Bank of America shareholders could feel better about owning the company, but in reality, it meant a stunning return to profitability for the bank. Consider that in the fourth quarter of 2013 Bank of America announced earnings per share of $0.29, which was more than what it earned in all of 2012 ($0.25).

The chart of its net income since 2008 also shows a rather eye-opening story as well:

Source: Company SEC Filings and Investor Relations.

Bank of America earned almost as much in 2013 -- $11.4 billion -- as it did in the five years between 2008 and 2012, where the total net income stood at $13.6 billion.

But the past is the past, and CEO Brian Moynihan recently provided one critical insight about the future.

Astounding profitability growth
Although Bank of America had a great 2013, the reality is, it actually remained less profitable on a comparable basis to peers like the aforementioned JPMorgan Chase, Wells Fargo, and Citigroup, as shown in the chart below:

Source: Company Investor Relations.

Bank of America did point to the fact that its return on average tangible shareholder's equity was higher, at 7.1% on the year, but even that level would place it among the lowest of its peers.

However Brian Moynihan was notably not enthused with such low return numbers and said:

"We are looking to get to the point where we are returning 1% on assets, which translates into a 14% return on tangible common equity. Those are the types of levels that we see ourselves looking to achieve over the course of the next three years."

Put simply, Moynihan expects that Bank of America will be able to nearly double its profitability in the coming years.

Bank of America's stock has been on quite a run since 2012, as shown in the chart below:

BAC Chart

BAC data by YCharts.

And as a result, many have begun to question if it is still worth buying. However, when you consider that its price to tangible book value -- a key measure of bank valuation -- still trails both Wells Fargo's and JPMorgan Chase's, the rapid rise in its price doesn't pose a major concern.


Price to Tangible
Book Value

Wells Fargo


Bank of America


JPMorgan Chase




The value of a company and an investment goes beyond simply its relative valuation to its peers, into factors like its business, management, and much more. However, Bank of America is seemingly on the right track in those areas as well.

And when you factor in that the CEO believes in just three years it can essentially double its profitability, Bank of America still presents a compelling consideration.

The one stock to buy this year
Perhaps you don't want to wait for three years for Bank of America to rebound, and you understand there's a huge difference between a good stock and a stock that can make you rich. We're here to help. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Fool contributor Patrick Morris owns shares of Bank of America. The Motley Fool recommends Bank of America and Wells Fargo. The Motley Fool owns shares of Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers