Bank of America
Word on the street:
- Analysts expect earnings to increase 8%, to $1.16 per share.
- The Motley Fool CAPS community has awarded this stock a four-star rating.
By the numbers:
The key number for Bank of America is 10%. Federal law dictates that no single bank can hold more than that portion of the nation's deposits. With nearly $600 billion in domestic deposits at the end of 2006, Bank of America currently has about a 9% share of the domestic deposit market.
More importantly, this means that Bank of America can no longer make big acquisitions that would push it past the 10% cap. Instead, it must largely sit on the sidelines as Barclay's
One Fool says:
Some vocal critics believe that Bank of America has been too acquisitive, diluting shareholder value in the name of empire-building. Over the past couple of years, Bank of America purchased FleetBoston for $47 billion, MBNA for $34.6 billion, and U.S. Trust for $3.6 billion.
Bank of America has done a reasonably good job so far with these integrations, but now it must grow organically, lacking the option of pursuing more big mergers. Its biggest rival, Citigroup
Fools should also keep an eye on B of A's organic deposit growth. Whereas competitors like Citigroup, ING
Wait! There's more. Be sure to read pre-earnings news and analysis for other Big Banks.
Fool contributor Emil Lee is an analyst and a disciple of value investing. He doesn't own shares in any of the companies mentioned above. Emil appreciates your comments, concerns, and complaints. The Motley Fool has a disclosure policy.