Bank of America: Q1 Results Dispel Fears on Deposits & Bond Portfolio

Company Update (BAC US) (Buy)

Highlights

• BAC delivered solid Q1 2023 results with a ROTCE of 17.4%

• Deposits were stable even before March’s “flight to quality”

• There were further reassuring details on BAC’s bond portfolio

• P/TBV is 1.34x, P/E is <10x and Dividend Yield is 2.9%

• We expect a total return of 93% (29% p.a.) by end of 2025. Buy

Introduction

We review our Buy rating on Bank of America (“BAC”) after Q1 2023 results on Tuesday (April 18).

We have followed bank stocks for over a decade and have been publishing our research on BAC publicly since 2019. Our most recent article, reassuring investors during the panic around “unrealized losses” in mid-March, was the top trending article on Seeking Alpha for 2 days and received nearly 150,000 views:

Our Most Recent BAC Article Trending

Source: Seeking Alpha (15-Mar-23).

BAC stock closed up 0.6% on Tuesday and has now rebounded 16% since its trough a few weeks ago, but remains 38% below the ~$49 level it reached in early January 2022.

We believe Q1 2023 results should dispel mo…