10 Best Bank Stocks To Invest In For the Long Term

2. Bank of America Corporation (NYSE:BAC)

Number of Hedge Fund Investors In Q3 2024: 98

Bank of America Corporation (NYSE:BAC) is a sizable and well-diversified American bank that enjoys a nearly clean split between its net interest and noninterest income. For the nine months ending in September 2024, the bank earned 45% of its revenue through the latter line item. In an era where lower interest rates will impact bank revenues, the split offers Bank of America Corporation (NYSE:BAC) the ability to weather sharp revenue drops. Additionally, lower interest also benefits it in the form of lower deposit costs, as we covered in the introduction to this piece. Bank of America Corporation (NYSE:BAC)’s vast customer base of 66 million people also provides it with a wide moat in the industry. It is also a GSIB bank, which means that the government can help protect it against significant disruption. Bank of America Corporation (NYSE:BAC)’s investment banking division benefited from increased market activity in Q3 as its investment banking fees grew by 18% and sat at $1.4 billion.

Bank of America Corporation’s (NYSE:BAC) management commented on its investment banking division during the Q3 2024 earnings call. Here is what they said:

“On Slide 15, you see Global Banking results. This business produced earnings of $1.9 billion down 26% year-over-year as improved investment banking fees and treasury services revenue were overcome by lower net interest income and higher provision expense. Revenue declined 6%, driven by the impact of interest rates and deposit rotation.

In our global treasury services business, fees for managing the cash of clients continue to offset some of the NII pressure from higher rates. Investment banking had a strong quarter, growing fees 18% year-over-year to $1.4 billion, led by debt capital markets fees, mostly in leveraged finance and investment grade. We finished the quarter strong, maintaining our number three investment banking fee position. What began as a slow quarter this summer gained some momentum through September and the pipeline looking forward looks solid.”