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

Operator

And we can go next to Paul Miller with FBR. Please go ahead.

Paul Miller, FBR

Thank you very much, and most of the questions has been answered. But on your legacy assets, and you talked about this a little bit where your default numbers have dropped roughly to 189,000 from roughly I think 220,000. Did you sell anything? Or is that all improvement in just credit in the quarter? In other words, did you move the houses out, or
did you also sell?

Bruce Thompson, Chief Financial Officer

My recollection is there was roughly a third of that came from the sales of both servicing as well as the underlying loans themselves. And then in addition to that we saw continued improvement in net new 60 pluses and then we obviously worked others through the normal foreclosure process as well as for those borrowers that cured.

Paul Miller, FBR

One of the things, you made a comment about that the lower oil prices has improved some of the consumer credit, consumer spending, and all that. Are you seeing any improvement in working through those 60-day defaults from that? Or those loans are just so old, relatively speaking, in the default bucket that the lower oil prices really doesn’t help out?

Brian Moynihan, Chief Executive Officer

As we had said, it’s much too early to figure out what the lower price impact would have on mortgage defaults. What you’re seeing is — you’re actually seeing consumer spend the money they’re getting and you’re seeing the consumer credit quality stay strong that you project out a period of low prices. You would see a benefit on consumer side offset by the commercial side. So I am not sure Paul in the context of what is in that 60 days bucket, it will have a meaningful impact. It has had any meaningful impact so far. It is 30 more days. But because of it, people with delinquencies in their first mortgage portfolio they keep coming down and that’s the problem of long-term reduction.

Paul Miller, FBR

Brian, I missed — I was writing it down as fast as I could, but you talked about how that you are seeing consumer balances increase over the last couple months, I guess, or last month. Can you go over those numbers again?

Brian Moynihan, Chief Executive Officer

Consumer spending increased that is that what you are referring to Paul?

Paul Miller, FBR

Yeah.

Brian Moynihan, Chief Executive Officer

So far January of 2013 versus January of 2014, spending on credit, debit cards up about 3% year-over-year and that’s overcoming a drag effect of about a percentage and a half from lower fuel prices.

Paul Miller, FBR

Okay. Hey guys, thank you very much.

Bruce Thompson, Chief Financial Officer

Thank you.

Operator

And we can take our next question from Marty Mosby with Vining Sparks. Please go ahead.

Marty Mosby, Vining Sparks

Thank you. I wanted to kind of drill into the markets business a little bit. In the sense that we’ve seen pressure on fixed income the last two quarters, is there anything in the drivers of that weakness that would jeopardize the seasonal uptick that we usually see in the first quarter?

Bruce Thompson, Chief Financial Officer

I think if I understand your question, I think that the answer to that is no, if you go back and look at — with the exception of last year the fourth quarter does tend to be the weakest quarter of the year seasonally. It was obviously a little bit more so this quarter but structurally there is nothing that would lead you to that. Obviously it’s a market that ebbs and flows, but no, there is not anything structural that would lead you to believe that that should be different.