Bank Of America Conference Call Highlights

Bank of America BAC reported its third quarter earnings on Tuesday. Shares of the company were down 5 percent.

Below are some key highlights from its conference call.

Growth and Operations:

• As you know, our bottom line results were heavily impacted by a previously announced settlement with the Department of Justice.
• Our businesses generated enough earnings to absorb the $5.3 billion charge and still reported positive net income before deferred dividends.
• The company reported $2.9 billion in year-to-date pre-tax net income.
• Relative to the second quarter of 2014, revenue was 3% lower driven by the lack of equity investment gains, seasonally lower investment banking fees and lower mortgage banking revenue.
• In addition to the $3.1 billion of preferred stock issuance we issued $3 billion of Tier two subordinated debt.
• Non-interest expense on slide seven was $19.7 billion in the third quarter of
• 2014 and included $5.6 billion of litigation expense.
• First mortgage retail originations of $11.7 billion were up 6% from the second quarter of 2014.

Segments:

• On a segment view revenue stable to modestly up in four of our five businesses.
• Consumer and Business Banking segment. Year-to-date net income was $5.3 billion in 2014.
• That compares to $4.6 billion after-tax in 2013. The return on average allocated capital in Consumer and Business Banking was 24%.
• Our Global Wealth and Investment Management business had net income of year-to-date of $2.3 billion in 2014. That's up 3% from 2013.
• We reduced our Global Markets balance sheet and associated funding by $11.7 billion from the second quarter of 2014.
• As a reminder we increased our quarterly common dividend to $0.05 a share during the quarter.
• If you look at our operational risk-weighted assets under the advanced approach they now represent approximately 30% of our overall risk-weighted assets.
• Feel very good about the work that the funding team did during the quarter.
• Growth in mobile as well as other self-service customer touch points has allowed us to continue to reduce our banking centers where we went below 5,000 units during the quarter.
• Card issuance remained strong at 1.2 million new accounts in the third quarter of 2014 with 64% of those cards going to existing customers.
• Consumer Real Estate Services. As I mentioned, the loss in the quarter was driven by the DOJ settlement, which impacted expense provision as well as income tax.
• Ending client loan balances also increased to a record level from the second quarter of 2014.