BAC
Bank of America
Bank / BV
★ Quality 28/100Price today
$62.68
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See what it is worthcharlieapp.co
What this business is made of
The business
Lives off other people's money: $1.9 trillion in nearly free deposits.
Bank of America is one of the four big universal banks in the U.S. It makes money by borrowing cheap (deposits) and charging more (loans, cards, mortgages), plus fees from wealth management (Merrill) and investment banking. NII represents about 55% of revenue.
Retail deposit scale — $1.9 trillion in deposits, many with no real cost. Switching your primary bank is a hassle few clients take on. The moat exists, but JPMorgan executes it better with a lower cost of capital.
Revenue history
From $89.1B to $108.6B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $113.1B · FY2025
Of every $100 in sales, $73 goes to costs and operations; $27 is left as net profit (27% margin).
Catalysts and risks
2026 guidance: NII growing +5-7% with asset repricing at current rates.
Buybacks of $18.3B in FY2025 cutting shares -4% YoY.
Normalization of unrealized losses in the HTM portfolio if the curve stays stable.
HTM portfolio with persistent unrealized losses — book equity pressured if rates rise.
ROE 10.6% barely beats cost of capital. Mediocre quality compared to JPM.
Sensitive to the consumer credit cycle: cards and auto loans are the first to fall in a recession.
Charlie's note
“At 1.275x book value you're paying a bit more than paper for a business growing at 7% — reasonable for a sticky deposit franchise, but remember JPMorgan does the same thing cheaper and better. Here patience means waiting to buy the second best at third-best pricing.”
Analysis · May 2026
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