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

On Slide 15, all other. The results in the fourth quarter of ’13 reflect lower revenue from NII largely associated with the market related adjustments that we’ve discussed, as well as lower securities gained and equity investment income partially offset by gains on the sale of certain loans with long-term standby agreements that were converted to securities. Significant equity investment income is largely a thing of the past for us as we’ve reduced the size of the principle investing positions in the business as well as strategic positions and should be modeled accordingly. You’ll also notice we took additional reserves to the payment protection insurance, but at a lower level than we saw during the third quarter of 2014. Our fourth quarter 2014 expense is down year-over-year on less non-mortgage litigation expense and lower infrastructure costs. Our effective tax rate for the quarter was 29% and I would expect the tax rate for the company in 2015 to be in the low 30’s absent any unusual items.

One other thing I want to mention before wrapping up is some movement in our business lines that you’ll see as we report them to you in 2015. In the first quarter of ’15 we expect to align business banking into our global banking business which takes this more commercial business out of our core consumer and business banking unit. In addition, we expect to move the home loans portion of our consumer real estate services business to consumer banking as this product remains integral to their relationships with us.

So, to conclude my comments as we look at both 2014 and the fourth quarter of ’14, capital and liquidity reached record levels, which provides a solid base to support our businesses that hold leading or top tier positions in the industry. We continue our focus on expense and operating leverage after reaching significant milestones this year on both new BAC as well as LAS cost saving initiatives. We reported a quarter of much lower legacy assets and servicing, operating and litigation costs, which have been burdening our reported results. Asset quality continues its trend of improvement against the slowly improving US macroeconomic backdrop and we continue to remain well positioned to benefit in an environment where rates starts to increase. And with that we’ll go ahead and open it up for questions.