The ghost of Ken Lewis continues to haunt Bank of America's shareholders. The Charlotte-based bank has made progress since he resigned as chief executive almost a year ago following a second bailout by the U.S. government. Yet the megabank's stock has fallen 38 percent from this year's high, more than rivals, and now trades at a whopping 43 percent discount to last quarter's book value. Investors may have taken fright too easily.

Granted, the ghouls of Lewis's expansionism are still rattling their chains. In early August, the bank revealed that it may be on the hook to buy back up to $11.1 billion of mortgages made by the bank or the troubled mortgage business, Countrywide, that it acquired in 2008. That's up 45 percent from the end of 2009 and almost three times what Wells Fargo's saddled with and almost four times JPMorgan's load.

And then there's the specter of Lewis's broader campaign to snaffle up all manner of U.S. consumer businesses. Low interest rates and slow lending are hurting B of A more than others — net interest income fell 0.16 percent in the second quarter while rivals, on average, hardly budged. That's helping make the bank's top line look anemic. Meanwhile, the bank is releasing loan loss reserves more slowly than peers.

The new regime under Brian Moynihan spooked investors too when, on July's second-quarter earnings call, executives announced they expected annual revenue to be hit by up to $2.3 billion from changes to the credit card business wrought by both last year's CARD Act and this summer's broader regulatory reform bill.

But it's not all scary stuff. B of A may be slower than others, but releasing reserves is still a plus. What's more, the bank reckons it will only have to buy back around half the mortgage repurchase requests, and already has almost $4 billion stashed away to help. And while regulatory reform costs look high, the bank should be able to cut costs to offset some of the pain — it just needs to lay out how.

It is easy to see why investors are cautious about B of A and the sector in general: many details about regulatory reform have yet to be worked out, it's unclear which party will win a congressional majority in November's mid-term elections — and there's still a chance of a double dip recession. That's why rivals have lost ground too — though the likes of Wells Fargo and JPMorgan trade just above or below book value. In bolting from B of A, investors may have given more power to Ken Lewis's phantom than it deserves.

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