Four takeaways from Bank of America's 4Q results

Bank of America reported fourth-quarter earnings Wednesday, following Tuesday's earnings release by JPMorgan Chase and Wells Fargo.

JP and Wells saw their revenues fall from a year ago. At Bank of America, revenue rose in the quarter, and 2013 turned out to be the most profitable year for the Charlotte bank since 2007.

Here are four key takeaways from Bank of America's quarterly results and conference call.

1. Legal costs go up.
The bank reported that its litigation expenses rose to $2.3 billion in the fourth quarter from $1.1 billion in the third quarter. It was also higher than the $916 million in litigation expenses in the fourth quarter of 2012.

Those funds are what the bank puts into its legal reserves to cover litigation-related costs. The bank said the increase in fourth-quarter litigation expenses resulted from an evaluation of its exposure to lawsuits, primarily those involving residential mortgage-backed securities.

The bank has paid out billions in legal costs to settle lawsuits stemming from the financial crisis, but there continues to be uncertainty about its future exposure to litigation resulting from the downturn. Some analysts, though, say they are confident that the bank has reduced the lion's share of its legal exposure arising from the crisis.

2. Wealth and investment management business sets record.
The bank said its Global Wealth & Investment Management division, which includes Merrill Lynch and U.S. Trust, posted record profit of $2.9 billion in 2013. That was up from $2.26 billion in 2012.

Brian Moynihan, Bank of America's CEO, called 2013 "the best year in the company's history for wealth management results." He said the bank now manages client assets worth more than $2.4 trillion.

The bank encourages its employees from other areas within the bank to refer customers to the Global Wealth & Investment Management division. Moynihan said the bank compares referral rates across its markets.

"We have a very stringent program ... where we count the referrals that go in," Moynihan said.

"We count the close rate and who participates and all that. And then markets are stack ranked. ... We monitor it monthly to see how they're doing and reward the people doing well. Then we set aggressive goals, and this year for 2013 they hit all the goals. Every market was in good shape."

3. Mum's the word on the dividend.
Analysts tried to get the bank to say whether it plans to seek an increase of its meager quarterly dividend, which has been stuck at 1 cent since the financial crisis.

But bank officials' lips were sealed.

Since the crisis, the nation’s largest banks can't just raise their dividend or buy back stocks. They must receive approval from the Federal Reserve, which looks to see whether the banks have enough capital to keep operating in a severe economic downturn.

The Fed in 2011 rejected Bank of America’s plan for a dividend increase in the second half of that year. It’s the only time since the financial crisis that the bank has asked the Fed to allow it to raise its dividend.

Bank of America CFO Bruce Thompson told one analyst who asked Wednesday about the dividend that he would not comment on whether the bank will seek an increase this year as part of the Fed's Comprehensive Capital Analysis and Review process, also known as CCAR.

Later in the conference call, another analyst tried to get the bank to talk about its plans to return capital to shareholders.

"Unfortunately ... we're not going to give any more guidance on CCAR than we've already given," Thompson said.

"It was a good attempt, though," Moynihan added.

4. More branches will be cut.
Thompson said Bank of America could lower its branch count to less than 5,000 by the end of 2014. That would give the nation's second-largest bank by assets fewer branches than Wells Fargo, the fourth-largest bank by assets.

As of June 30, Wells Fargo had 6,293 branches, down from 6,312 the year before, according to Federal Deposit Insurance Corp. data.

Bank of America now has 5,151 branches, a reduction of 327 over the past year.

Bank of America and other banks have been cutting branches as a means to lower their operating costs and as fewer customers are coming into branches for basic transactions. Moynihan said "over-the-counter transactions" are falling, while use of automated teller machines and online and mobile banking continue to rise.

But Bank of America still needs branches, Moynihan said, pointing out that about 8 million customers visit the bank's branches a week.

"Branches do remain a critical component of everything we do," he said.

The 8 million visits, he said, are something that most retailers would give their right arm for.