The year is nearing its end, and now is a good time to look at what happened throughout the year to the stocks you follow. If you know the important things a company achieved, as well as any challenges it failed to overcome, then you can make a better decision about whether it deserves a spot in your portfolio.

Today, I'll look at Bank of America (NYSE:BAC). As a member of the Dow Jones Industrials (DJINDICES:^DJI) and a leading U.S. bank, Bank of America has seen truly hard times over the past five years as the housing boom fizzled out. Since the financial crisis, though, B of A has taken drastic steps to survive. Below, you'll find more on what moved shares of Bank of America this year.

Stats on Bank of America

Year-to-Date Stock Return


Market Cap

$106 billion

1-Year Net Interest Income Growth


Net Income to Common Shareholders, Trailing 12 Months

$3.98 billion

Dividend Yield


CAPS rating


Source: S&P Capital IQ.

Why has Bank of America soared this year?
Bank of America's rebound in 2012 owes in part to the simple fact that it got beaten down so hard in 2011. With lingering concerns about toxic assets, as well as potential liability for its acquisition of mortgage originator Countrywide Financial during the financial crisis, B of A seemed particularly threatened by the potential for more stringent regulation.

In response, the bank has taken steps to strengthen its capital position. By selling off assets that aren't part of its core business, including Merrill Lynch's international business and B of A's stake in China Construction Bank, B of A has slowly but surely gotten to the point where its capital ratios are better than those of Citigroup (NYSE:C) and its other banking peers.

Helping Bank of America in its capital-raising efforts is its base of deposit customers. As the largest bank by deposits in the U.S. at $1.13 trillion, Bank of America has a solid grip on the industry, holding 12% of the nation's deposits and besting both Wells Fargo (NYSE:WFC) and JPMorgan Chase (NYSE:JPM) by 25% to 30%. This ensures that B of A has cheap sources of funds, especially as interest rates on savings accounts and CDs remain at near-record lows.

At the same time, settlements of litigation have helped reduce uncertainty. Despite its sizable share of liability for a massive $25 billion settlement with Wells, JPMorgan, Citi, and other mortgage lenders over foreclosure-related allegations, B of A has benefited from the removal of huge potential verdicts that could have resulted from those allegations. Customers aren't entirely happy with B of A as a mortgage lender, but with a strengthening housing market, things are looking up for the bank.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.