Bank of America Corporation (BAC), the nation’s second-largest lender, has been taking a beating in terms of stock value over the past two months, which has lead to some financial experts giving up on the prospects of a stock rebound. Some claim that the potential of a Greek default, lawsuits by AIG and slowing economic growth will hamper B of A’s future capital appreciation. I thoroughly disagree with this notion and am still extremely bullish on BAC.

First of all, though the fears of a Greek default are completely valid, investors need to realize the crisis will resolve itself. Political posturing in Europe is no different than the posturing we had to put up with during the debt ceiling debate, which eventually got resolved. Second of all, the closer the lawsuits come to a resolution, the closer it is that the bank will place toxic disaster Countrywide into bankruptcy, which will eliminate bank liabilities and increase investor confidence. The New York Stock Exchange has seen volatile swings since the credit crunch of 2008 that led our economy into a position of anemic growth and dissipating hope. The banking sector, which led our economy from 2002 to 2007, has been hit the hardest with the fallout still affecting lenders today.

Bank of America’s stock depreciated over this past summer, having fallen by 31.69 percent over the past three months, and has fallen by 8.16 percent this month alone. Currently BAC stands at $6.64 a share, far from the $12.34 share price at the start of the year. The stock has been hit fiercely by short sellers, panic from the potential of a Greek default, bad mortgages and lawsuits because of its ownership of Countrywide and the slowing growth in the general economy. Market hawks look at the general market and feel that the B of A’s weakness will beget more weakness and that the stock is doomed to a fate of $2 to $3 a share before a rebound. On the other side of the coin, value investors see the panics in the markets as a perfect time to put more money in and buy B of A shares when they are so cheap now.

I’m with the value investors on this one. In fact, the wealthiest man in the world, Warren Buffet, agrees with this view. Berkshire Hathaway invested $5 billion into B of A in late August, in a star-studded deal that briefly surged the stock past $8 a share before the markets corrected back to the mid-$6 range BAC stands at now. Buffet still maintains his faith in the company as he stated in a September interview that, even though Bank of America is going through problems that will take much longer to clean up, the company and its underlying business is still fine.

I feel that Bank of America remains severely undervalued, as it has for the past two years, and will rebound in a big way when the general economy gets back to reasonable growth. B of A, as well as every other major bank out there has been taking losses due to fears from Europe and the possibility of Greek default. A Greek default would recreate the hysteria of 2008, when investment bank Lehman Brothers filed for bankruptcy and AIG underwent a liquidity crisis that called for a huge bailout from the federal government. We have learned since then, and European leaders have sworn to not let Greece default regardless of the political posturing going on right now there. Although the problems of Europe involve social and political factors, its problems will be resolved, the Germans will contribute more toward helping Greece manage its budget and, similar to the debt negotiations America had to put up with earlier this year, the European deal will get done. This will renew confidence in all sectors of the market, but especially the financial sector and will give American banks like B of A the boost they need.

Brian Moynihan, the CEO of Bank of America created a plan to get the bank back on track in early September called “Project New BAC,” which cuts the size of the bank, increases efficiency in management and cuts tens of millions of dollars worth of idle real estate owned by the bank. The plan outlines how Bank of America is going to scale down in the future and focus on being the best rather than the biggest bank out there. For example, the plan cuts the private equity department of the bank, which will save millions over the next few years, as well as cut bank stations in unprofitable areas. Rumors have also surfaced that the bank might put Countrywide into bankruptcy as well as spin off Merrill Lynch. All of this is great news for shareholders, as the bank is looking to cut its costs tremendously over the next few years while still maintaining top market share. This cost cutting will be key to reverse Bank of America’s negative earnings per share that is turning off some investors right now.

Overall, the bank is taking a proactive approach to solving its problems and that the infrastructure and strong management it has in place right now will pay off in the future. Moreover, almost any investor can see that the intrinsic value of America’s second-largest lender is certainly greater than the $6.64 a share it stands at today. The WSJ rates the company as having an average target price of over $10 and several other notable reports have the banks estimates in the $10 to $11 range by the end of the year. The bank’s main problem is its debt, and that will take a few years to resolve. The debt from mortgages has kept the bank down from the mid-$50 share price before the crisis, and it will take a few years for the bank to get completely healthy again. I am confident that the time will come. Yet again, Warren Buffett will have been proven right and Bank of America will reclaim its strength.