Bank of America Corp. is by far Warren Buffett’s favorite bank, as his Berkshire Hathaway Inc. has boosted its stake in the moneycenter bank to $29 billion.
In a Form 3 filing with the Securities and Exchange Commission late Thursday, Berkshire Hathaway disclosed that it owned 950 million shares of Bank of America, or more than 10% of the common shares outstanding. Buffett is Berkshire’s chairman and chief executive officer.
That’s up from a previous disclosure of a 896.2 million-share stake, or about 9.4% of the shares outstanding, as of March 31.
Berkshire has extended its lead as the Bank of America’s largest shareholder. The Vanguard Group is the second largest shareholder at about 6.4%, followed by SSgA Funds Management Inc. at 4.1%, according to FactSet.
Bank of America’s stock BAC, +1.54% rose 0.8% in morning trading Friday. At current prices, Berkshire’s stake would be valued at $29.05 billion. That is well above the value of Berkshire’s second-largest bank holding, as the 409.8 million shares of Wells Fargo & Co. it owns is currently worth about $19.94 billion. Berkshire’s Class B shares BRK.B, +0.40% tacked on 0.3%.
“The beneficial ownership of the shares of common stock reported herein exceeds 10% as a result of the issuer’s repurchases of its own securities, based on the issuer’s most recently announced number of shares of common stock outstanding,” Berkshire stated in a Form 3 filing with the Securities and Exchange Commission. BofA’s most recent 10-Q filing said there were 9.51 billion shares outstanding as of April 25, but the bank said it bought back $6.5 billion worth of stock during the second quarter.
One way Buffett built his stake in BofA was by exercising warrants that were acquired as part of a deal announced in August 2011, in which he invested $5 billion in preferred stock that paid a 6% annual dividend at a time the bank was struggling to return to health in the aftermath of the 2008-2009 financial crisis. That dividend yield was nearly triple the yield on the 10-year Treasury note TMUBMUSD10Y, -0.18% at the time.
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Also providing a boost to BofA shares, Keefe, Bruyette & Woods analyst Brian Kleinhanzl upgraded the bank to outperform from market perform, and raised his stock price target to $36 from $32, saying he expects the bank to benefit from an improved economic outlook after expected interest rate target cuts by the Federal Reserve.
BofA’s stock has edged up 0.8% the past three months, while the SPDR Financial Select Sector exchange-traded fund XLF, +0.76% has advanced 3.1% and the Dow Jones Industrial Average DJIA, +0.07% has tacked on 2.3%.
The following table shows the Berkshire’s holdings of banks other than Bank of America, as of Berkshire’s latest 13F filing in May. The next 13F is due in mid-August.
| Bank (ticker) | Common share holdings | Value at current stock prices |
| Wells Fargo & Co. (WFC) | 409,803,773 | $19.94 billion |
| U.S. Bancorp (USB) | 129,308,831 | $7.37 billion |
| JPMorgan Chase & Co. (JPM) | 59,514,932 | $6.90 billion |
| Goldman Sachs Group Inc. (GS) | 18,353,635 | $4.05 billion |
| Bank of New York Mellon Corp. (BK) | 80,937,250 | $3.80 billion |
| M&T Bank Corp. (MTB) | 5,382,040 | $882.8 million |
| Berkshire Hathaway 13F filing on May 15 | ||