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Bank Of America Hits A Home Run

ByJosh Arnold:

The results of the capital plans of the Federal Reserve's Comprehensive Capital Analysis and Review were released Thursday afternoon amid great speculation as to what the results might tell us about our nation's largest banks. Bank of America (BAC) has come out a huge winner, in my view. The bank asked the Fed for $5 billion in common stock buybacks and $5.5 billion in preferred share redemptions for 2013. This request was granted and has several implications.

First, it proves BAC is clearly out of the damage control mode that ensued following the horrific aftermath of the financial crisis which saw shares eventually trade down to $5. If BAC didn't have a fortress capital position, the Fed would not have allowed any capital returns, let alone over $10 billion worth. Second, BAC will be repurchasing common shares that are trading below their tangible book value. With tangible book


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