Bank of America

With Basel III endgame rules still being negotiated and potentially watered down significantly, how are people thinking about BAC's capital return capacity over the next 12 to 18 months? Their CET1 ratio is already above their target so there should be room for buybacks but I keep second-guessing the regulatory timeline.

Bank of America's net interest income is finally stabilizing after the rate cycle pain, and the consumer banking segment still has 69 million clients that nobody talks about enough. When rates eventually come down gradually rather than cliff-diving, NII headwinds become a slow grind not a collapse, and the deposit franchise becomes the moat again.

The efficiency ratio at Bank of America is still stubbornly high compared to where Moynihan said it would be, and expenses keep surprising to the upside partly because of technology investment and branch refresh costs. When revenue growth is uncertain and expenses keep climbing, the operating leverage story they keep selling just doesn't materialize.

The commercial real estate office exposure at Bank of America is much more manageable than people feared — their CRE office loans as a percentage of total loans is pretty small relative to regional banks that took the real hits. The fact that BAC is a diversified mega-bank means the office loan drama that crushed New York Community Bancorp simply isn't a comparable risk.

Credit card delinquency rates at Bank of America have been creeping up steadily and the consumer credit quality story is not as clean as it was 18 months ago. If unemployment ticks up even modestly, their consumer and small business loan book is going to see charge-offs that will pressure earnings.

Bank of America's Global Banking segment which covers corporate lending, treasury services, and investment banking is often overlooked relative to the consumer side but it's where a lot of the margin quality lives. Treasury services in particular is a sticky, high-return business that doesn't get enough credit in how investors analyze the stock.

The unrealized losses in their held-to-maturity bond portfolio are still sitting around $100 billion and that is not a small problem to hand-wave away. They loaded up on long-duration Treasuries and MBS at the worst possible time and now they're locked in until maturity or a rate reversal that may not come fast enough.

Bank of America reported Q3 2024 net income of $6.9 billion, which beat consensus estimates, driven partly by stronger-than-expected investment banking fees as the M&A pipeline started reopening. Global Markets revenue also came in ahead of expectations on FICC trading strength.

Does anyone have a strong view on how the Merrill Lynch wealth management business compares to Morgan Stanley's wealth unit at this point? Morgan Stanley seems to get a much richer valuation multiple for their wealth segment and I'm trying to figure out if that gap is justified.

People forget that Bank of America's CashPay, Zelle integration, and the Erica AI assistant have driven digital banking engagement to over 57 million active digital users, which is massive. The cost-to-serve for a digital-only customer is a fraction of a branch customer and that operating leverage will show up in efficiency ratios over the next few years.