It’s not unusual for Bank of America Corp (NYSE:BAC) to perform miserably on any given survey or ranking. Whether it is being graded on its reputation, its customer service, or how it performs in the mortgage arena, the big bank usually gets a double thumbs-down, often coming in dead last.
Lowest indicators on nearly every metric
A new evaluation by Bank Director magazine scores banks on five criteria, breaking up institutions by size. The 2013 Bank Performance Scorecard looked at each bank’s core return on average assets and core return on average equity to determine profitability, and established capital strength using a ratio of tangible common equity to tangible assets. Asset quality was determined by comparing the net charge-offs to average loans, as well as nonperforming assets to all loans, and real estate owned.
In the “$50 Billion and Above” category, Bank of America Corp (NYSE:BAC) was compared to 18 other banks and came in at position No. 19. While the magazine acknowledged that the first three criteria were weighted more heavily than the two measurements of asset quality, it was also noted that the best-performing banks generally did well in every category.
While Bank of America Corp (NYSE:BAC) did poorly across all categories, it came out looking especially feeble in the performance department, sporting a return on average assets, or ROAA, value of 0.22%, and a return on average equity, or ROAE, of slightly more than 2%. For comparison, Wells Fargo & Co (NYSE:WFC), which ranked No. 5, showed ratios of 1.47% on the first, and 13.17% on the second metric.
Big regionals took the top spots
Regionals smoked the bigger banks, and the top spot went to Huntington Bancshares Incorporated (NASDAQ:HBAN), followed by M&T Bank Corporation (NYSE:MTB). Both of these institutions have put a lot of work into becoming more robust over the past few years. Huntington Bancshares Incorporated (NASDAQ:HBAN), for example, has made an amazing recovery from the dark days of the financial crisis, while M&T has been busy expanding its footprint, most recently by its planned acquisition of Hudson City Bancorp, Inc. (NASDAQ:HCBK).
Lest you think that Bank Director may have been especially harsh with Bank of America Corp (NYSE:BAC), Forbes‘ 2012 listing of America’s Best and Worst Banks also gave the big guy a pretty pitiful score, ranking it at 86 out of 100 — with a ROAE of 2.3%.
Bank of America still has a lot of work to do
The bank has made some great strides since CEO Brian Moynihan has been at the helm, but it’s obvious that much still needs to be done. Moynihan’s ministrations have had some positive effects, to be sure — the bank’s capital ratios have practically come back from the dead — but issues such as improving mortgage lending and customer service seem stuck in neutral. Profitability, obviously, is an even bigger problem.
As long as the bank continues to struggle with stagnant profits and nagging legal problems, investors will bide their time, waiting until some real progress is made before putting their faith in the big bank again. At the current rate of improvement, that day could be a long time coming.
The article Bank of America Is Still the Biggest Loser originally appeared on Fool.com and is written by Amanda Alix.
Fool contributor Amanda Alix has no position in any stocks mentioned. The Motley Fool recommends Bank of America and Wells Fargo and (NYSE:WFC) owns shares of Bank of America, Huntington Bancshares, and Wells Fargo.
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