Bank of America Corp (NYSE:BAC) released its fourth quarter earnings this morning, and analysts can’t agree whether it was a sign of strong management or a mild disappointment.

Bank Of America BAC
Bank of America

Bank of America Corp (NYSE:BAC)’s 4Q EPS of $0.29 beat the consensus of $0.26 and core growth was up 1% over last year, while core expenses were down 8%, but consumer and business average loans were down 6% (mostly due to fewer mortgages) and reserve coverage slipped from the last quarter. Net interest margin was up 12 basis points, although this is largely due to market-related effects. While equities fell 7% from the last quarter, fixed income, currencies, and commodities were up 2% and capital markets were up 10% on a sequential basis.

Citi bullish on Bank Of America

“Stock should react positively to the results as it’s another data point of mgmt executing on its sizable opportunity to improve underlying returns,” wrote Citi analyst Keith Horowitz, who rated the stock a Buy with a $19 price target (currently $16.77). Horowitz sees lots of one-off effects, partially cancelling each other out last quarter, that don’t affect the bank’s long term prospects.

Sterne Agee rates Bank Of America as neutral

“Although the underlying profitability of most business units improved sequentially, particularly banking–heavy expenses (elevated litigation accruals), a smaller balance sheet, and lower consumer loan balances were soft spots in the quarter,” write Sterne Agee analysts Todd Hagerman and Robert Greene.  Additionally, while credit measures were broadly improved, credit leverage seems to be waning as reserve coverage slipped below 2%.”

Hagerman and Greene rate the stock as Neutral and set a price target of just $14, but they have been bearish on Bank of America Corp (NYSE:BAC) for a while – they had a below consensus 4Q2013 EPS estimate of $0.22. Of course the two sides don’t agree on the basic facts, but Horowitz hardly mentions the litigation costs that are driving expenses, choosing to focus on core expenses instead and doesn’t seem terribly concerned about the potential impact of smaller loan balances. He seems to be more impressed by the fact that core PTPP (pre-tax, pre-provisioning) beat his expectations by nearly $600 million.

core PTPP Bank Of America  BAC 0114

Bank of America Corp (NYSE:BAC)’s share price has been climbing all year, like the rest of the market, so even if Hagerman and Greene’s assessment turns out to be more accurate, the stock could get carried along by the market’s overall bullishness for a while longer.