NEW YORK ( TheStreet) -- While regulators and the media have had great fun bashing Bank of America (BAC) during the extended aftermath of the credit crisis, CEO Brian Moynihan has been making excellent progress in cutting costs at the nation's second largest bank.
When "Project New BAC" was rolled out in 2011, the company's goal was to reduce annual expenses by $8 billion. The company's second-quarter noninterest expense totaled $15.547 billion, declining from $16.085 billion during the second quarter of 2012, and from $17.834 billion during the second quarter of 2010, according to Thomson Reuters Bank Insight.
Quite a bit of the savings is coming from the improvement in the housing market, which allows the company to trim mortgage loan servicing staff members, who were very busy working through the mess that was inherited in part from Countrywide Financial, which Bank of America purchased during 2008.
When announcing its second-quarter results last month, the bank said its legacy mortgage loan servicing expenses declined by roughly $250 million during the second quarter from the first quarter. The company reduced its full-time staff by over 2% during the second quarter, mainly from reductions in mortgage loan servicing employees and "staff associated with consumer delivery network optimization."During the company's earnings conference call in July, Moynihan said legacy asset servicing expenses, excluding litigation expenses, were "down by nearly $800 million on a quarterly basis from the peak only a couple quarters ago and are ahead of our projections." Moynihan apparently is leaving no stone unturned in his quest to lower expenses, going so far as to close some of Bank of America's drive-through teller windows. The Charlotte Observer on Tuesday reported that the bank would completely close drive-through teller lanes in some locations, even in its home city of Charlotte, N.C. Two Charlotte-area branches saw their drive-through lanes closed during August, with three more branches slated for the same treatment in September, according to the report. "The strategy also impacts Bank of America branches across the country, from Atlanta to Detroit to Houston," the report said. The bank has said that the decisions on drive-through lanes were "based on location and volume."
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV