Tomahawk, WI 08/22/2214 (Basicsmedia) – Bank of America Corp (NYSE:BAC) looks to have set a new record in the U.S in terms of one-time settlement, after agreeing to pay nearly $17 billion to settle its mortgage securities debacle with the department of Justice. CNBC’s Jim Cramer believes the settlement marks a turnaround for the company especially after its stock reacted positively to the news consequently surging in the market by 4.12%

“We are now about to estimate what Bank of America Corp (NYSE:BAC) can earn we are now able to put a number out there that can be reached. We are in the round that is called normalized earnings path,” said Mr. Cramer.

The Mortgage security debacle made it nearly impossible for investors to estimate what the company could earn and more so; its value compared to other banks that were cleared of any wrongdoing. The bank was marred by lawsuits from various government agencies that forced it to incur billions of dollars in both legal fees and settlements. The bank has already shelled out approximately $60 billion to settle out its past crimes.

Cramer believes it is high time that Bank of America Corp (NYSE:BAC) rose from years of anguish with the authorities, to give its shareholders value in terms of earnings per share. Cramer believes Bank of America earnings could improve in the next two years especially at the back of ongoing improvements in interest rates.

“I think the answer is $2 per share in 2016 maybe even earlier if rates were to spike to 3% on the benchmark tenure. That makes the price to earnings multiple, or PE multiple in this stock the cheapest in this banking group or you could argue may be the cheapest in the entire S&P 500,” said Mr. Cramer.

 The ‘Mad Money’ analysts maintain that Bank of America Corp (NYSE:BAC) is an earnings machines only hobbled by its past mistakes with great expectation that the stock is set to bounce again in the banking space.

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