⚠ Buying Back at 1.9 Times Tangible BookLow threat

Bank of America (BAC) — threat to the moat

Bank of America's heaviest buybacks have come at nearly twice tangible book, where each dollar retires about fifty cents of equity.

Repurchases reduce the share count at whatever price the stock trades. Bank of America's shares were $56.03 on 24 September 20261 against tangible book value per share of $29.37 in June2, about 1.91 times3. At the end of 2023 tangible book value was $24.28 a share4.

Tangible book value per share ($)24.28202326.37202428.73202529.37June 202656.03Share priceSep 2026Bank of America releases and January 2026 8-K; stockanalysis
The price is nearly twice the tangible book.

At that price each dollar of buyback retires about fifty cents of tangible equity. The purchase makes sense if the bank earns well above its cost of equity on that equity, which at a 14.22% ROTCE in 20255 it does, but with less margin than at lower prices.

The market capitalisation was $266.46 billion at the end of 2023 and $391.80 billion in September 202667. The heaviest buying has come as the price rose.

Analysts expect the price to rise further. The average analyst price target was $68.62 in September 20268, and the shares traded in a 52-week range of $46.12 to $65.239. At the top of that range the bank would be buying at more than twice tangible book.

Price to tangible book is the figure that judges this. Continued heavy repurchases above twice tangible book with ROTCE still in the mid-teens would be buying less value for each dollar spent.

References
  1. ReportedBank of America's shares were $56.03 on 24 September 2026 against tangible book value per share of $29.37 in June, about 1.91 times.
    Bank of America (BAC) market data - $56.03 at the close on 24 September 2026, market cap $391.80B, trailing P/E 12.95. — September 2026 · publ. 24 September 2026 · source ↗
  2. ReportedBank of America's shares were $56.03 on 24 September 2026 against tangible book value per share of $29.37 in June, about 1.91 times.
    Bank of America second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - consolidated results, credit quality, capital and forward-looking risks. — Q2 2026 · publ. 14 July 2026 · source ↗
  3. Moat Explorer calcBank of America's shares were $56.03 on 24 September 2026 against tangible book value per share of $29.37 in June, about 1.91 times.
    Moat Explorer calculation from Bank of America's reported figures ($ millions unless stated). Deposits: cost of total deposits = interest on interest-bearing deposits / (average interest-bearing + average noninterest-bearing deposits): 2019 7,188 / 1,380,326 = 0.52%; 2021 537 / 1,914,286 = 0.03%; 2022 4,718 / 1,986,158 = 0.24%; 2023 26,163 / 1,887,541 = 1.39%; 2024 38,442 / 1,924,106 = 2.00%; 2025 34,513 / 1,984,182 = 1.74% (1,469,705 + 514,477 = 1,984,182, about $1.98 trillion). Average total deposits 2015 1,155,860; 2021 1,914,286; 2022 1,986,158 (about $1.99 trillion); 2015 to 2025 1,984,182 / 1,155,860 - 1 = 72%. Noninterest-bearing share 744,035 / 1,914,286 = 38.9% (2021); 514,477 / 1,984,182 = 25.9% (2025). Noninterest-bearing decline 751,470 - 514,477 = 236,993 (about $237 billion). JPMorgan comparison: deposit cost gap 1.80% - 1.74% = 0.06 points; 0.0006 x 1,984,182 = about 1,190 (about $1.2 billion). JPMorgan revenue per dollar of average deposits 182,447 / 2,506,565 = 7.3 cents; Bank of America 113,097 / 1,984,182 = 5.7 cents. JPMorgan year-end deposits 2,559,320 / 2,018,729 - 1 = 27%; revenue 182,447 / 113,097 - 1 = 61%; market value 935.79 / 391.80 = 2.4 times. Net income margin JPMorgan 57,048 / 182,447 = 31.3%; Bank of America 30,509 / 113,097 = 27.0%. Efficiency gap 61.65% - 52% = 9.65 points x 113,097 = about 10,914 (about $10.9 billion). Loans to deposits 1,185,700 / 2,018,729 = 58.7%. Uninsured deposits 723.0 + 134.9 = 857.9 billion; 857.9 / 2,018.7 = 42.5%; insured and other 2,018.7 - 857.9 = 1,160.8 billion. Consumer deposits per checking account 957.0 billion / 38.7 million = about $24,700. Securities: held-to-maturity unrealised loss as a share of common equity 108,596 / 244,800 = 44% (2022); 82,094 / 276,100 = 30% (June 2026). Held-to-maturity amortised cost 2021 674,591 - 2025 522,685 = 151,906 (about $152 billion); 2020 438,279 to 2021 674,591 = +236,312 (about $236 billion); 2021 fair value 665,890 - cost 674,591 = -8,701. Runoff time 505,828 / 34,794 = 14.5 years. Agency MBS share of loss 67,309 / 80,257 = 84%. Net interest income H1 31,742 / 29,113 - 1 = 9.0%. Capital: CET1 headroom (11.2% - 10.0%) x 1,792 billion = about 21.5 billion; 2027 minimum 4.5% + 3.5% + 2.5% = 10.5%. Capital returned 2025 (8.1 + 21.433) / 29.055 = 101% of net income to common. Average diluted shares 7,680.9 / 11,236.2 - 1 = -31.6%. EPS growth (3.81 / 1.31)^(1/10) - 1 = 11.3% a year. Price to tangible book 56.03 / 29.37 = 1.91. Revenue 2023 102,769 to 2025 113,097 = +10%. Compensation 42,346 / 69,727 = 61% of noninterest expense. Financial centers 3,530 / 3,664 - 1 = -3.7%. Noninterest expense Q2 2026 18,627 / 17,183 - 1 = 8.4%. Berkshire holding 483,394,015 / 1,032,852,006 - 1 = -53%. Investment banking fees Q2 2025 implied 2.1 / 1.5 = 1.4 billion. Segments (FTE, 2025): segment revenue 43,673 + 24,883 + 24,108 + 24,096 = 116,760; less All Other 3,054 = 113,706; less FTE adjustment 609 = 113,097. Shares of total FTE revenue: Consumer 43,673 / 113,706 = 38.4%; GWIM 24,883 / 113,706 = 21.9%. Shares of net income 30,509: Consumer 12,245 = 40.1%; Global Banking 7,793 = 25.5%; Global Markets 6,111 = 20.0%; GWIM 4,670 = 15.3%. Net income margins: Consumer 12,245 / 43,673 = 28.0%; GWIM 4,670 / 24,883 = 18.8% (2024 4,263 / 22,929 = 18.6%; 2023 3,947 / 21,105 = 18.7%); Global Banking 7,793 / 24,108 = 32.3%; Global Markets 6,111 / 24,096 = 25.4%. Consumer net interest income 35,309 / 43,673 = 81%; Consumer provision 4,649 / 5,675 = 82%. Growth 2023-2025: Consumer 43,673 / 42,031 - 1 = 3.9%; GWIM 24,883 / 21,105 - 1 = 17.9%; Global Markets 24,096 / 19,533 - 1 = 23.4%; Global Banking net income 7,793 / 10,072 - 1 = -23%. Consumer H1 2026 revenue 11,336 + 11,049 = 22,385. GWIM net interest income 7,197 / 24,883 = 29%. Revenue per dollar of year-end assets: Global Markets 24,096 / 1,032,858 = 2.3 cents; Consumer 43,673 / 1,039,346 = 4.2 cents. GWIM client balances 4,751,394 / 4,252,106 - 1 = 11.7%, increase 499,288; net flows 81,997 / 4,252,106 = 1.9%; consumer investment assets 639.5 / 599.1 - 1 = 6.7%. Revenue per dollar of balances: Private Bank 4,167 / 759,082 = 0.55%; Merrill 20,716 / 3,992,312 = 0.52%; Private Bank share of GWIM balances 759,082 / 4,751,394 = 16% and revenue 4,167 / 24,883 = 17%. Investment and brokerage services 19,956 / 17,766 - 1 = 12.3%. Common equity 277,251 / total assets 3,411,738 = 8.1%. AUM net flows 81,997 / 2,177,708 = 3.8%. Held-to-maturity loss 2023 97,994 / 263,249 = 37%. Share price 56.03 / 52-week high 65.23 - 1 = -14%. First half 2026 (Q1 + Q2): Consumer Banking revenue 11,049 + 11,336 = 22,385 and net income 3,060 + 3,281 = 6,341; Global Banking net income 2,087 + 2,046 = 4,133; Global Markets revenue 7,109 + 8,022 = 15,131 - capital, valuation, returns and comparisons with JPMorgan. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Bank of America's Forms 10-K and 10-Q, earnings releases, JPMorgan's 10-K, Berkshire 13F tables and market data; operands shown in the source line.
  4. ReportedAt the end of 2023 tangible book value was $24.28 a share.
    Bank of America Form 8-K exhibit 99.1, revised supplemental information for the change in accounting for tax-related equity investments - restated 2023 and 2024 results. — FY2023-FY2024 · publ. 6 January 2026 · source ↗
  5. ReportedThe purchase makes sense if the bank earns well above its cost of equity on that equity, which at a 14.22% ROTCE in 2025 it does, but with less margin than at lower prices.
    Bank of America Form 10-K for fiscal 2025 - financial highlights, income statement, capital and shareholders' equity. — FY2025 · publ. 25 February 2026 · source ↗
  6. ReportedThe market capitalisation was $266.46 billion at the end of 2023 and $391.80 billion in September 2026.
    Bank of America market capitalisation history and related stocks - year-end values 2015-2025, and JPMorgan, Wells Fargo and Citigroup market caps. — 2015-2026 · publ. September 2026 · source ↗
  7. ReportedThe market capitalisation was $266.46 billion at the end of 2023 and $391.80 billion in September 2026.
    Bank of America (BAC) market data - $56.03 at the close on 24 September 2026, market cap $391.80B, trailing P/E 12.95. — September 2026 · publ. 24 September 2026 · source ↗
  8. ReportedThe average analyst price target was $68.62 in September 2026, and the shares traded in a 52-week range of $46.12 to $65.23.
    Bank of America (BAC) market data - $56.03 at the close on 24 September 2026, market cap $391.80B, trailing P/E 12.95. — September 2026 · publ. 24 September 2026 · source ↗
  9. ReportedThe average analyst price target was $68.62 in September 2026, and the shares traded in a 52-week range of $46.12 to $65.23.
    Bank of America (BAC) market data - $56.03 at the close on 24 September 2026, market cap $391.80B, trailing P/E 12.95. — September 2026 · publ. 24 September 2026 · source ↗
Sources
Generated September 25, 2026