The largest US bank, Bank of America (BAC), is not participating in the banking recovery.

For example, Bank of America’s quarterly revenues fell by -11.03% from $23.44 billion in December 2022 to $20.86 billion in December 2023. Similarly, the quarterly net income fell by -55.92% from $7.13 billion to $3.14 billion in the same period. Predictably, BoA’s net profit margin fell by -50.44% to 15.08 in December 2023.

Yet, Bank of America’s share price is stable. Its share price fell from $35.48 on 31 January 2023 to $34.79 on 30 January 2024. However, the share price hit a low of $25.17 on 27 October 2023.

Is Bank of America (BAC) a value investment?

Conversely, Bank of America had $3.18 trillion in total assets and $938.72 billion in cash and short-term investments in December 2023. Thus, many people, including Warren Buffet, consider BAC a value investment.

The total assets grew by 4.21% from $3.05 trillion in December 2022. Meanwhile, the cash and short-term investment grew by 29.33% from $66.393 billion in December 2022.

Hence, BAC is adding cash and value. However, Bank of America (BAC) is also adding debt. Its total liabilities grew by 3.96% from $2.78 trillion in December 2022 to $2.89 trillion in December 2023.

Yet, Bank of America was Berkshire Hathaway’s second largest stock holding on 30 September 2023. Berkshire Hathaway (BRK.B) owned 1.03 billion shares of Bank of America on that day, Hedge Fellow reports. I estimate Berkshire’s BAC shares were worth $35.60 billion on 30 January 2024.

Is Buffett right about Bank of America? Is it a value investment?

Bank of America (BAC) is a cash-rich company. It reported $11.77 billion in quarterly cash from operations in September 2023.

However, the quarterly cash from operations fell by -10.51% between September 2022 and 2023. Bank of America reported $13.007 billion in quarterly cash from operations in September 2023.