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Warren Buffett sticks with Bank of America as crisis rocks bank stocks

Warren Buffett conceded at the Berkshire Hathaway (BRK-A, BRK-B) annual meeting on Saturday he doesn't know the next move in bank stocks amidst considerable turmoil in the sector.

But he does like one bank in particular for the long-term, crisis or no crisis — Bank of America (BAC).

"We're very cautious… about ownership of banks and we do remain with one bank… I like Bank of America and I like the management," Buffett said at the shareholder gathering in Omaha, Nebraska.

Buffett has a long history with Bank of America.

The 'Oracle of Omaha' injected $5 billion into Bank of America in 2011. It wasn't solely a bet on Bank of America's leadership position, but also in the steady hand of CEO Brian Moynihan.

Investor Warren Buffett (L) and Bank of America CEO Brian Moynihan speak to students at Georgetown University at an event co-sponsored by Bank of America and the Global Social Enterprise Initiative (GSEI) at Georgetown's McDonough School of Business in Washington September 19, 2013. REUTERS/James Lawler Duggan (UNITED STATES - Tags: BUSINESS)
Investor Warren Buffett (L) and Bank of America CEO Brian Moynihan speak to students at Georgetown University at an event co-sponsored by Bank of America and the Global Social Enterprise Initiative (GSEI) at Georgetown's McDonough School of Business in Washington September 19, 2013. REUTERS/James Lawler Duggan (JAMES LAWLER DUGGAN / reuters)

Moynihan remains CEO of BofA and has overseen impressive growth at the systemically important bank. Shares have surged about 185% since that 2011 deal with Berkshire.

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Today, Buffett has a 13% stake in Bank of America.

The vote of confidence in BofA comes against the backdrop of headline-grabbing bank busts. And as Buffett has sold tens of billions of dollars worth of bank stocks in the last several years.

Regulators seized regional bank First Republic on Monday and sold a majority of the bank's operations to JPMorgan Chase (JPM). It marks the largest bank failure since the 2008 financial crisis.

Regional bank PacWest (PACW) is now in focus by investors for a potential collapse.

The crisis commenced in March with the downfalls of Silicon Valley Bank, Signature, and Credit Suisse.

Year to date, the KBW Bank Index has shed 25%.

"We don't know where shareholders of banks are going," Buffett said, noting shareholders in bad banks deserve to be wiped out.

"Banking can have all kinds of new inventions, but it needs to have old values," added Buffett.

Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations or anything else? Email brian.sozzi@yahoofinance.com

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