Bank of America’s (BAC) disciplined cost-out initiatives have allowed it to outperform its banking cohorts on an operating basis in recent quarters. Action Alerts PLUS Portfolio Manager Jim Cramer and Director of Research Jack Mohr discuss why they continue to be bullish on shares of BAC following the strong quarter. Overall, they are impressed by how the company has managed to strike a balance between cutting costs and driving growth. CEO Brian Moynihan's relentless focus on expense management showed up in the results, with expenses falling 31% (or $6.5 billion) year over year (y/y), to $13.8 billion. The improvement was largely driven by lower-than-expected legal fees ($231 million from $6 billion a year ago) and shrinking mortgage losses. In fact, operating costs in the unit that handles bad, crisis-era mortgages fell 31%, as the number of delinquent loans (60 days or more behind their payments) were nearly cut in half. The company’s ability to deliver on all fronts amidst a prolonged low interest rate environment creates a compelling story; Bank of America’s earnings power appears ready to explode the moment the Federal Reserve raises rates.