3 Reasons You Should Be Buying Bank of America Corp (BAC) Stocks Right Now

With a boost from the housing market still growing, and improved operations, the banks are poised for growth in the coming years. As impressive as the record earnings reported in the last quarter were, there are sure to be further improvements and more record earnings to come.

It’s a balancing act
The fear of another financial crisis may be what keeps investors at bay, but it’s what has spurned the banks to strengthen themselves. After the disaster of 2008-2009, most of the banks and other financial companies that contributed to the economic fall have taken steps to reduce their exposure to risk. Often, this has resulted in banks returning their focus to consumer banking, which had benefited banks like Wells Fargo and (NYSE:WFC) US Bancorp during the financial crisis because of reduced risk exposure.

At the same time, regulation changes had banks stock-piling capital. Just in time for regulators to announce changes to the new Basel III capital requirements, the nation’s largest banks reported impressive capital reserves:

Source: Company Q4 2012 earning presentations.

As you can see from the table, even the most traditional banks, WFC and USB, have their shortcomings when it comes to the ability to quickly raise capital. Boosted by their increased capital reserves, both Bank of America and Citigroup continue to trade below tangible book value, giving investors an opportunity to buy the undervalued stocks and see their money grow as both the banks book value and prices continue to appreciate.

At a time when investors still aren’t sure of the banking sector’s financial stability, it remains a fact that the nation’s banks have been working diligently to improve the balance sheets. All the while, Wall Street continues to look at the banks with clouded vision.

The article 3 Reasons You Should Be Buying Bank Stocks Right Now originally appeared on Fool.com and is written by Jessica Alling.

Fool contributor Jessica Alling has no position in any stocks mentioned, but you can contact her here. The Motley Fool recommends Wells Fargo. The Motley Fool owns shares of Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo.

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