3 Reasons to Fear Bank of America

Before you go, we thought you'd like these...
Before you go close icon

Today, analyst Anand Chokkavelu reports that Bank of America was able to turn in a profitable quarter, though just barely, at an EPS of $0.00. But here are three things to fear from the release:

1. The company notes an 18% increase in its mortgage business. That equates to extra loans of $3 billion to 4 billion. Compare that with the $15.9 billion in loans it lost versus last year by shuttering its correspondent lending business, and it doesn't seem that impressive
2. Total loans were down versus last year. Although many of these moves are good (correspondent lending), B of A, along with Citigroup, is distracted while Wells Fargo and JPMorgan Chase are crushing it on mortgages.
3. Another $1.6 billion of litigation expenses is a big cloud over B of A that continues to keep shares cheap.
 
Overall, Anand remains bullish on Bank of America, even despite these concerns.

To learn more about why, check out our in-depth company report on Bank of America. The report details Bank of America's prospects, including three reasons to buy and three reasons to sell. Just click here to get access.

The article 3 Reasons to Fear Bank of America originally appeared on Fool.com.

Anand Chokkavelu, CFA, owns shares of Bank of America, JPMorgan Chase, Citigroup, and Wells Fargo. Fool contributor Matt Koppenheffer owns shares of Bank of America. The Motley Fool owns shares of Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo. Motley Fool newsletter services recommend Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners