Bank of America

1
Bank of America

• Gary Moore

http//www.bankofamerica.com
2
About BAC

• Large Cap (237 billion)
• Industry Banks-Major
• Sector Financials
• 2 U.S Bank in terms of size
• Member of SP 500
• No. 1 overall Small Business Administration (SBA)
  lender in the United States
  
• Recent acquisition of MBNA Corp has made BAC the
  largest U.S. credit card issuer
  

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About BAC Cont.

• Provides financial services in the U.S
  internationally
  
• As of December 31, 2005 operated 5,873 retail
  banking centers and approximately 16,785 ATMs
  
• Worlds most profitable financial services
  company
  
• Competitors include Citigroup, Wachovia, Wells
  Fargo
  
• Known for unmatched convenience in the United
  States
  
• Serves more than 54 million consumer and small
  business relationships in 175 countries
  
• Recently acquired HealthLogic Systems
  Corporation
  

4
U.S Presence
90 more locations then nearest rival
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Stock Performance
1 year Performance High 54.87 Low 42.92 Curre
nt Price 53.92 Stock has given us 15.4 return

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Ratios

• Ratio BAC Industry
• Current Ratio (TTM) .84 ---
• Quick Ratio (TTM) .84 ---
• Equity Multiplier (TTM) 12.72 ---
• Total Asset Turnover (TTM) --- ---
• Net Profit Margin (5 YRS) 26.38 25.71
• ROA (5 YRS) 1.40 1.24
• ROE (5 YRS) 17.81 15.35

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Risk Related Info

• Corporate Governance better then 94.3 of
  industry
  
• Corporate Governance better then 42.9 of SP
  500
  
• Lowest P/E among large cap banks
• Beta of .55 (Industry Beta .58)
• Less then 1 of shares shorted

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Value Criteria

• Ratio BAC Industry
• P/E (TTM) 12.8 13.71
• Dividend Yield 4.4 3.63
• PEG Ratio 1.25 1.27
• 5/5 Years Positive Earnings Growth
• CA
• BAC meets 4/5 Value Criteria

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Analysts Projections

• Merrill Lynch BUY (59 1 Yr target price)
• SP 5 Star Strong Buy (63)
• Morningstar 4 Star Buy (64)
• Buckingham Buy (59)
• Yahoo 1 Yr Target 57.67

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Outlook

• 5 YR Growth Estimate 9.4 (Industry Avg 9.4)
• Positive analysts recommendations
• MBNA integration completion in next few quarters
  provides potential for positive performance
  
• Solid organic growth

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Outlook Cont.

• Recent Earnings Report (10/19/2006) Net Income
  rose to 1.18 per share, up from .95/share a
  year ago
  
• Beat earnings estimates 4 of past 5 quarters
• Reduced exposure to some of the higher-risk
  businesses that came with the acquisition of
  FleetBoston Corp in 2004
  
• Trading near 52 week high

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Intrinsic Value

• P/E Multiple
• Target EPS 4.83
• Industry Avg P/E 13.71
• Target Price 60.20 ((4.8313.71)/1.1)
• Dividend Discount Model
• 2.29/(.1-.095) 458

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Recommendation

• Hold BAC
• -Improved balance sheet with successful
  integration of acquisitions
  
• -Low risk in holding stock
• -Meets Criteria
• -Trades _at_ 14 discount to median large-cap bank
• -Difficult to estimate true intrinsic value
• -Monitor due to nearing stock price 52 week high,
  may offer limited upside