Bank of America is a banking behemoth, with operations in more than 35 countries throughout Europe, the Middle East, Africa, Asia Pacific, and the Americas. It is the third largest financial institution in the U.S. with $1.66 trillion in assets, more than 148,000 employees, and some 72 million accounts.
Bank of America offers a suite of banking, investing, asset management, and other financial and risk management products and services. The Charlotte, North Carolina-based bank had its beginnings in 1904 when it was founded as the Bank of Italy in San Francisco by Amadeo Petro Giannini. In 1922 he established Bank of America and Italy, and six years later merged his bank with Bank of America, Los Angeles, becoming the largest bank in the U.S. BofA would begin to expand outside of California and gobble competitors. The rest is history. A defining moment for the company came in 1998 when NationsBank acquired it. At the time it was the largest banking acquisition ever.
Right now the buzz about BofA is that analysts are sweet on it. There is speculation that as interest rates rise, a bank like BofA will be well positioned to earn billions more in revenue per year, which no doubt will raise the valuation of its stock, according to John Maxfield of The Motley Fool. He says BofA is a buy. Maxwell says he has a hefty chunk of BofA stock. His thinking, “the potential reward for investing in Bank of America, the second cheapest large-cap bank stock in the market today, outweighs the risk.”
For sure there are risks. With the Wells Fargo scandal, big banks are on the hot seat. Who knows what inquiring minds will unearth at other banks, including BofA? It’s not like BofA has been without sin. Quite the contrary. In 2014, the Justice Department fined BofA a record $16.65 billion to settle allegations that it knowingly sold toxic mortgages to investors, $7 billion of which was designated to go to consumers who faced financial hardship as a result. That was how the story of BofA’s role in the financial crisis came to a head. BofA was deemed as having helped create the housing bubble that wreaked havoc on the country, and the global economy, in the late 2000’s.
Back in 2010, New York Attorney General Andrew Cuomo brought civil charges against senior Bank of America executives and top dog CEO Ken Lewis for their role in the company’s controversial purchase of Merrill Lynch. In addition, the SEC struck a $150 million settlement agreement with the bank over its decision to pay billions in bonuses to former Merrill employees. The lawsuit charged that the bank’s management team understated the losses at Merrill in order to get shareholders to go along with the deal, then subsequently overstated the firm’s willingness to terminate the merger to regulators, in order to get $20 billion in additional aid from the federal government.
The BofA story though, isn’t just about the big bad bank. This year, Euromoney named BofA the World’s Best Bank in financing and diversity. Euromoney touted the bank for its “demonstrated ability to deliver certainty in execution and the right mix of financing, advice, and products to clients, regardless of market conditions.”
Bank of America Merrill Lynch makes many of the top employers and best places to work list. The bank has been recognized as a 2020 Women on Boards Winning “W” Company, for having 20 percent or more of the board seats held by women. The Environmental Finance Green Bond Awards lauded BofA as the biggest green underwriter in 2015. The list of such distinctions that it touts goes on and on.
BofA may no longer be the biggest bank in the U.S., but that’s hardly an indication that its best days are over. It’s not by chance that the bank is still around after all these years. Just like its ferocious appetite to gobble competitors in the past, don’t assume the competitive spirit is dead.