Circling Back on Bank of America After Q4 Earnings; Lowering Our Fair Value Estimate to $37 From $39

The acquisitions of shaky investment bank Merrill Lynch, shady mortgage lender Countrywide Financial, and the equally dysfunctional MBNA led to a decade of troubles for Bank of America. The bank had to spend billions of dollars to settle legal and regulatory issues, and it took years to reshape the business and work through the credit losses. With all of this behind it, Bank of America has emerged as one of the pre-eminent U.S. banking franchises. The bank now has one of the best retail branch networks and overall retail franchises in the United States, is a Tier 1 investment bank, is a top four U.S. credit card issuer, is a top three U.S. acquirer, has a solid commercial banking franchise, and owns the Merrill Lynch franchise, which has turned into one of the leading U.S. brokerage and advisor firms.