December 18, 2012

The bank has "made a lot of progress" on legal issues, Moynihan said, but he acknowledged that the company is still working through lawsuits and investor demands to buy back soured mortgages the bank sold off during the housing boom.

In recent weeks, the bank's dispute with insurer MBIA Inc over mortgage-related claims has heated up, with Bank of America filing a new lawsuit last week against the insurer. The legal tussle with MBIA has dragged on, even as Bank of America has worked out settlements with other insurers of mortgage-backed securities issued by Countrywide.

Moynihan said the bank will settle the MBIA dispute if it can reach an agreement that is reasonable for shareholders but otherwise it is ready to litigate the matter.

The bank's shares closed Tuesday at $11.35, up 3.2 percent for the day. The shares are the best performer in the Dow Jones industrial average this year, after falling the most in 2011.

HEALING

In an effort to improve earnings, Moynihan is aiming to cut costs by $8 billion annually by mid-2015 through a program called Project New BAC, including 30,000 layoffs that have been under way since September 2011. Bank of America had noninterest expenses of $76.5 billion in 2011.

In addition, Bank of America expects to eventually reduce costs in its unit that serves delinquent mortgage customers to about $500 million per quarter from about $3.4 billion in the third quarter. If delinquent mortgages continue to fall, that saving should be achieved in 2015, if not sooner, Moynihan said.

(Reporting By Rick Rothacker in Charlotte, N.C.; Editing by Steve Orlofsky)

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