Big Banks

BankAmerica Corp.

BankAmerica <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BAC)") else Response.Write("(NYSE: BAC)") end if %> is not sitting still at the moment, having recently acquired Robertson Stephens, which will give the company a very dependable stream of annuity-like revenues to add to its trust business. Equity underwriting capabilities will be a nice addition in serving its larger and middle-market customers looking for financing alternatives and will be a nice enhancement to the company's already extensive trading operations.

The company has also said that it wants to expand its credit card operations, which provide a source of cash through securitizations (packaging credit card loans as securities and selling them) as well as a high-margin stream of revenues through servicing the trusts to which those loans are sold. With a strategy to grow internationally and expand higher-margin lines of business, BankAmerica's high ROA and ROE along with an amortization-adjusted trailing P/E of just over 15 make for an interesting subject for further analysis.

The Financials

Through six months, interest income grew 4.7% and noninterest income rose 9% year-over-year. Asset and equity growth were both slow, but the company still managed to squeeze out almost $1 billion in net share buybacks through the first six months of the year.

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