Bank of America at Goldman Sachs Conference Notes

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This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings.

“he credit quality which is something we need to do work on has improved dramatically over the last couple of years and it continues to improve. Charge offs are down to 2005 levels. Allowance coverage remains high, covering nearly three times annualized net charge offs. Past dues also continued to come down, reflecting a healthier economy and strengthened underwriting standards.”

“We segment this business into three different businesses, our retail business which serves general consumers; our preferred business which serves mass affluent consumers and our business banking which serves $50 million and under revenue companies. Our consumer strategy around the retail customer has been to optimize the cost as we strive to improve profitably and work to become their primary bank. Our strongest growth opportunity is with our 8 million preferred customers as we work to deepen their relationship, adding lending investments devised for that relationship on top of the core banking services.”

“Our mobile banking platform you can see on the lower left continues to grow. Last year we had 11 million customers. This year it’s 14 million customers are active mobile users. We get about 7,000 new ones a day. We’ve processed about $11.5 billion in revenue transactions a month in mobile transactions a month. This is more than 60% higher than when I was here last year.

Adoption of this channel continues to move rapidly. In the third quarter, 8% of all the checks deposited at Bank of America were deposited through mobile devices. That’s 13 million checks. It’s a major change in activity”

“we still have branches which are critically important to what we do every day. 8 million people come to our branches a week and this presents a great opportunity to engage with those customers, having moved the routine transactions to other means and engage those customers about what they really want us to do for them.”

“the difference for us in ’14 if you can go to one thing which is the legacy assets servicing side has come down..You can’t estimate, not only does that mean money because the run rate is $1 billion less year-over-year per quarter, but not doing that helps our brand, helps the spirit of the company in getting that behind us and tax litigations. So as you look at ’14 just have a lot less to work on and while we still have to deal with a few things left over, a lot of that stuff is working behind us.”

“When you look at Fed tapering, the reality is if you look at our interest rate projection, if we show you 100 basis points parallel shift and things like that, the long rate helps, but the short rates are really the drivers. Not unless you guys are different than the market, everybody thinks that that’s still out there. And that would drive the value of the core deposit platform even higher. And so that’s a ’15 event. And so we get some benefit off of incrementally higher yields in the mortgage and stuff you have to buy because we have excess liquidity and to put it to work or even treasuries. But I don’t think it’s going to change the environment. If the tapering is done because of why we think it’s being done and then why it is being done and why it’s being debated is the economy is growing and that’s always good for us.”

“I think there was a massive consolidation of one of the Monoline players into the, what we call the banking industry and your company wasn’t considered a bank six years ago. It wasn’t a bank coming into the city. You had a massive consolidate. It will be natural that some of that might go back out in the future. So in the mortgage are a I think you’re seeing a natural reselling of specialized servicers as banks are focused more and more on their core activity which is generating consumer mortgages and then servicing them for the customers. I think that’s just a natural hedge on because 30 years ago we could only bank in a certain part of the country and mortgage was something you could take national if you were a national player. So you want a mortgage business that’s your size. I think that’s natural.”

“I think it’s hard to isolate regulatory spending. If you talk about what we spend to support our chief risk officer it might be 10% of our spending. Is that regulatory or not? People can debate it, but the reality is these models … these technologies and systems developments are critical for us to be able to measure the risk more and more accurately and more quickly.”

“if LIBOR moves you start to get the assets re-priced that are LIBOR based which is substantially part of the floating rate assets in the company are LIBOR based.”

“as we look at ’14, we don’t see it a lot differently than ’13 in terms of general outlook it will be fine. ”

“don’t think it would be appropriate for me to be going on my BlackBerry reading while I’m speaking. But you can be on your BlackBerry and tell me what it says.”

“[in regards to Volcker rule] from a prop change definition that went out two years ago we stopped doing that.”

” the draw rates on lines of credits are about 1,000 basis points below where they typically average in a reasonable economy…So one of the issues in loan growth is just the economic activities causing the people not to borrow as much because they don’t have much opportunity”

“So I think next year will look a lot like this year, but incrementally better for two core reasons. One is where you’re deeper in this housing and other things are much more solid. Consumer spending is much more solid. And so you’re further into less runoff. And then secondly just I think that the average business person we talk to is getting incrementally more frisky and they want — if they can see the window for it they’ll start to make activities and they’ll draw on their lines I think.”