March 28 (Bloomberg) -- Bank of America Corp., the best performer on the Dow Jones Industrial Average this year, is still not yet fairly valued, said Chief Executive Officer Brian T. Moynihan.
The firm’s shares were pressured by new regulations, low interest rates and concern about the global economy and U.S. mortgage expenses, Moynihan said in an annual letter to investors released today and dated March 12. The shares closed at $7.99 that day in New York, and rallied to $9.60 at yesterday’s close, up more than 70 percent since Dec. 31.
“Our stock price does not yet reflect the work we are doing to strengthen capital, reduce risk and attract more business from our customers,” Moynihan said in the letter. The firm made progress last year improving profitability and “with the economy slowly but steadily improving, we believe this trend should continue in 2012.”
Bank of America, the second-biggest U.S. lender, rebounded from a 58 percent decline in New York trading in 2011 after signs of economic improvement this year. More than $33 billion in asset sales helped the Charlotte, North Carolina-based firm boost capital levels, and its shares extended their rally this month after the firm passed the Federal Reserve stress tests.
Moynihan announced a plan last year to eliminate at least 30,000 jobs, part of his Project New BAC efficiency effort. The first phase of the plan, meant to trim $5 billion in costs, is being implemented now and the second phase will conclude in April, the CEO said in his letter.
To contact the reporter on this story: Hugh Son in New York at email@example.com