While Warren Buffett will always have a special place in his heart for Bank of AmericaBAC

, he’s dialing back his interest. Last week, Berkshire Hathaway ($BRK-A) reduced its stake in the bank to 12.5% of its portfolio, selling 52.8M shares in total. This is the first time in four years that Berkshire has cut its stake in the bank, and history indicates that when Buffett starts selling, there’s no telling when he might stop… (RIP US Bancorp and Wells Fargo).

• BAC
  has risen 23% in 2024, outpacing the S&P 500’s 15% increase. However, the bank’s provisions for bad loans grew to $1.5B in the second quarter, which led to a drop in profits.
• The recent sales may be aimed at reducing Berkshire’s stake below 10%, which would cut reporting requirements and allow for more discreet transactions.

F’d up finances: Higher interest rates and increased provisions for bad loans are straining banks, as shown by the mixed earnings reports this month. Despite better performance from regional banks, the KRE ETFKRE

, which tracks these banks, saw $820M in outflows year-to-date (YTD). However, the XLF ETFXLF

, tracking financial firms likeBRK-A

andBAC

, experienced $3.6B in YTD inflows — indicating there’s still consumer confidence in major banks.