Citigroup Inc. (C), JPMorgan Chase & Co. (JPM): Why Bank of America Corp (BAC) Investors Are Stressed Out

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Bank of America Corp (NYSE:BAC) shares began the week trading at $12.05. About midway through the day they’re trading at $12.16, making for a barely noticeable uptick of 0.91%. Not what you’d call a big week. Chalk it up to stress — investor stress — over the Fed’s stress tests.

Bank of America Corp (NYSE:BAC)

The tale of the tickers
But before we stress out over that, here’s a quick look at where the superbank’s peers stand on the week:

Citigroup Inc. (NYSE:C) moved a bit more than B of A, with an uptick of 2.1%.

JPMorgan Chase & Co. (NYSE:JPM) is up a sluggish 1.32%.

Wells Fargo & Co (NYSE:WFC) didn’t even make it up a percentage point, with a gain of just 0.85%.

No reason to stress
Today, at around 4:30 p.m. ET, the Federal Reserve is going to release the second set of results from its 2013 stress tests, officially known as the Comprehensive Capital Analysis and Review.

The CCAR runs the country’s biggest 18 banks through a simulated, severe economic downturn and measures — most importantly — what’s called the Tier 1 common capital ratio. This ratio looks at the bank’s capital reserves in relation to its risk-weighted assets. Last Thursday, the Fed made public what each bank’s common ratios were.

B of A did well — much better than last year, the first year the Dodd-Frank mandated stress tests were run. For 2013, the superbank had an actual common ratio of 11.4% and a stressed minimum common ratio of 6.8%. Last year, B of A had an actual common ratio of just 8.7% and a stressed minimum of only 5.7%.

The median performance for this year was 7.7%. The Fed considers 5% the lowest stressed minimum a bank should have. As such, B of A comfortably passed its 2013 stress test, and also performed well in comparison to its peers.

For 2013, JPMorgan Chase & Co. (NYSE:JPM) had an actual Tier 1 common ratio of 10.4% and a stressed minimum of 6.3%. Wells Fargo posted numbers of 9.9% and 7%, respectively. Given the drubbing B of A took in the financial crisis, and the fact it didn’t even pass its stress test last year, its performance this year should be lighting up the faces of investors everywhere.

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