Saite said that Bank of America's net interest income "will also benefit from [trust preferred share] repurchases ($50m in Q4 and $300m in 2013)," and said that Thompson "appeared confident that reduced funding costs will offset pressure on securities yields going forward."
The analyst is expecting major expense reductions for the company, saying that "the two key drivers of BAC's earnings over the next three years will be its success in reducing Legacy Asset Servicing (LAS) costs, which were running $10bn above normal in Q3 2012, plus the amount of the "New BAC" [the name for the company's long-term cost-cutting plan] $8bn in cost savings that drop to the bottom line."
Staite is way out in front of the consensus, estimating that Bank of America will earn $1.23 a share in 2013, followed by EPS of $1.53 in 2014.
Interested in more on Bank of America? See TheStreet Ratings' report card for this stock.
Written by Philip van Doorn in Jupiter, Fla.