For Bank of America, It's About Cost Cuts, Not Growth

"We think it will be hard for Bank of America to grow revenues faster than the 'average' bank," Orenbuch wrote. He expects "incremental improvement in fee income in 2013 relative to 2012 with growth in service charges, investment banking income and trading."

In the meantime, far more than peers like Citigroup, Wells Fargo and JPMorgan Chase (JPM), Bank of America has relied on "releases" of capital it set aside to cover bad loans in order to boost its earnings. Such reserve releases equaled 86% of Bank of America's earnings last quarter and 163% of the bank's profits in the fourth quarter of 2011, according to Morgan Stanley analyst Betsy Graseck. She predicts such releases will equate to 72% of Bank of America's earnings in the fourth quarter. That compares to 17% at JPMorgan, which announced its fourth quarter earnings Wednesday.

Of course Bank of America's success will in many ways be tied to the overall economy, as Wells Fargo analyst Matt Burnell contended in a Jan. 7 report.

"In our view, [Bank of America]'s business remains the most dependent of its peers on U.S. economic growth. However, we would not expect the stock to trade at or significantly above tangible book value until management demonstrates greater progress in resolving legacy mortgage issues and restoring a more meaningful dividend," he wrote.

-- Written by Dan Freed in New York.

Follow @dan_freed

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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