Bank of America
BACBank of America
Bank of America is one of Berkshire Hathaway's largest equity positions, built from a crisis-era preferred investment in 2011 that later converted into a massive common-stock stake.
The Investment
In 2011, with bank stocks still recovering from the financial crisis, Berkshire invested $5 billion in Bank of America preferred shares carrying a 6% dividend and warrants to buy common stock at a deeply discounted strike. As the bank's fortunes recovered, the warrants became extremely valuable, and Berkshire became one of BAC's largest shareholders.
Why It Fits the Framework
- Scale and distribution: a vast deposit franchise with operating leverage on its cost base.
- Capital returns: disciplined capital allocation now funds buybacks and dividends.
- Low-valuation entry: the original purchase embodied margin of safety, buying fear when others wouldn't.
A Study in Patience
The position shows Buffett's willingness to wait years for a wrinkle to resolve, then let compounding do the work—exactly the long-term, owner-oriented mindset he preaches. Bank of America also illustrates how a bank's low-cost deposit base resembles insurance float: a large pool of capital held at minimal cost.
Mentions in Letters
“Berkshire invested $5 billion in Bank of America preferred shares with warrants, a vote of confidence during the post-crisis period.”
“Our Bank of America position grew into one of Berkshire's largest common-stock holdings as the warrants were exercised.”
Analyze BAC the Buffett Way
Read the story above, then check the live numbers — Score, Moat, and DCF for Bank of America.
Frequently Asked Questions
What does Bank of America (BAC) do?
Bank of America (BAC) is a business Warren Buffett has assessed through the lens of quality, financial strength, and valuation. On ValueOS, read every mention of Bank of America across 60 years of Berkshire Hathaway shareholder letters, plus a one-click Score, Moat, and DCF assessment.
Is Bank of America a good investment by Buffett's standards?
Buffett judges a business by its durable competitive advantage, honest management, and a sensible price. ValueOS scores Bank of America on those same dimensions from SEC filings — open the Score page to see how it measures up.
Who owns Bank of America?
Bank of America is a Berkshire Hathaway holding — one of the equity positions in Buffett's portfolio. ValueOS traces every shareholder-letter mention to show why he owns it. See the economic moat concept for why he prizes such businesses.