Bank of America Corp (BAC)’s Fourth Quarter 2014 Earnings Conference Call Transcript

Brennan Hawken, UBS

Should we expect to think about some revenue headwinds in your equities business as we model out ’15 as a result of some of those efforts?

Bruce Thompson, Chief Financial Officer

I’d say no. It’s all pretty much through it right now and as you look at the revenue sort of quarter-to-quarter run, plus or minus $1 billion and [indiscernible] has done a good job of increasing the yields from the other clients at the same time. So I would — absent market forces are just — I wouldn’t expect that much an effect.

Brennan Hawken, UBS

Terrific. Okay. Then, helpful to hear about the target of around $800 million for LAS by year-end and then driving it lower in ’16. Can you help us think about how you think about that number to zero? Because I mean, ultimately, that’s — given the title, the L in the LAS, right? That’s got to go to zero eventually. How should we think about that?

Brian Moynihan, Chief Executive Officer

Well we have got several — so there is all the servicing expense in the company is in that unit well good loans and bad loans, so it doesn’t go to zero but it’s got to get a lot better at this because if you start to move on to 4 million or so units we have in first mortgage servicing, and think about the annualized cost, we got to get us down significantly may be servicing and mortgages make sense to us and so. But that’s a project that we’re working against. Doing it the right way for the customer, doing it the right way for the regulatory environment and the consent orders and all the things that have gone on, as you are aware. And so we just got to keep feeling out a way. So when we say $800 million or so, that is the next way station on our train right here but it’s got to go a lot further than that for the 3.5 million to 4 million the good units we have, so to speak.

Brennan Hawken, UBS

Okay. So no indication about where that settling-out level might ultimately be? Even if not a win, but kind of what the number would be?

Brian Moynihan, Chief Executive Officer

Well, I think the — we’ve talked about a half-billion but I am not sure that’s a great performance net overtime either, so just assume that there is nothing more interesting than driving that number down to a normalized servicing cost than in this company.

Brennan Hawken, UBS

Fair enough. And then last one for me, you guys hit on in the wealth management business and the margin there support cost and revenue related comp. Could you maybe quantify how much each of those factors impacted the margin change quarter-over-quarter?

Bruce Thompson, Chief Financial Officer

Yes I think if you look at the a couple of things — the first is that from a margin perspective you had a little bit of headwind with NII being lower than what it was, but I would — as you look at the support cost during the quarter I would think about is being about 200 basis points on the margin during the quarter that we saw.

Brennan Hawken, UBS

Great. Thanks a lot.

Bruce Thompson, Chief Financial Officer

Thank you.