Bank stocks are heating up! While we all know what that could mean (a coming bear market?), Bank of America dropped BIG profits on investors last quarter.


Raise your hand if you’ve ever worked in a bank. 

I see all my fellow money-slingers out there. 

Yes, that’s right, I too started in the banking business.

In fact, my first job in banking was as a teller back in 1996 for a little regional bank here in Florida called Fidelity Federal, and I loved the company. 

They had been in business for a few decades before I came on board, and they were a true family-based bank that actually cared about their customers. 

However, they couldn’t stay small for long. When the bigger banks came calling, they gobbled up Fidelity Federal so greedily that there’s little to no trace of that original company left. 

In my years at that bank, I went from a teller to business development, back to account specialist, then on to operations manager–and as much as I loved my job under Fidelity Federal, I absolutely HATED it under the umbrella of any other branch. 

Something about it just felt too… impersonal. 

I went from being able to service my long-time customers to having to actually FIGHT with our back office to get a fee reversed, and I just couldn’t stand it anymore. 

I was very unhappy, but I learned a LOT about the financial business from my decade in banking, and I still value the time I spent there. 

Bank Stocks: A Safe Harbor

One of the best things I did, though, was buy stock in the company with my 401K. Even after all this time, that money is still sitting in my account, accruing interest and hopefully setting me up for a comfortable retirement. 

Investing in banks has been pretty good to me.

Minus the 2008 “Too Big To Fail” debacle, I’ve always seen banks as a “safe” investment–especially those banks that are FDIC insured. If the government is going to back them REGARDLESS of whether they fail or not, there really isn’t a safer place to put my money, right? 

But do you know who else seems to like investing in banks? 

None other than the Oracle of Omaha himself, Warren Buffett.

Though it seems like he may have dumped Wells Fargo (WFC) stock a BIT too soon, as the company rallied and the decision to sell means he missed out on a whopping $10 billion in profit. 

Yeah…I’d love to have such problems. 

However, the one stock he seems to be hanging onto is Bank of America (BAC). Buffett likes this stock so much that it made up 14.6% of Berkshire Hathaway’s (BRK-B) total portfolio through Q3 last year.

For anybody that followed suit, congratulations! BoA just paid back that faith in the form of better-than-expected earnings. 

Bank of America Is Your Best Bet

Bank of America’s investment banking segment absolutely KILLED it last quarter, driving up revenue a whopping 26% from the previous year, which led to better-than-expected profits of 28%. 

Comparatively, while BoA is up, other large banks saw their profits decline in Q4, as some of the aspects that powered profits over the past few years–like frenetic trading and a lucrative mortgage market–are beginning to return to normal levels.

Even more, Bank of America’s revenue totaled $22.06 billion, up 10% from a year ago and just off target from the $22.18 billion expected by analysts–but it remains a 10% gain nonetheless. 

However, what’s even more promising for BoA stock is the fact that talk about the Fed raising the interest rates will only benefit them. Once interest rates start to rise, it’ll allow the bank to charge more on the loans it offers. 

That’s a much more stable business model for BoA, especially when you think about how there’s no guarantee that companies will keep striking deals when it becomes more expensive to borrow money. 

Constant revenue is the key, and the way Bank of America is going, they’ll be set when (not if) the bear market finally arrives. 

The real question is: Will you? 

If the answer to that question is ANYTHING but “yes,” then you might want to start looking at Bank of America as a safe haven. 

Right now, the Green Zone rating system has them rated as “Neutral,” but that could change soon. Things are lining up in BoA’s favor. 

Here’s how the bank is looking right now:

However, I wouldn’t anticipate that being the case for long…

You may want to take a chance on Bank of America.

I mean, if Buffett is on board, who are we to ignore their appeal?