Brian Moynihan's strategy for his first call with analysts as Bank of America Corp.'s chief executive was clear: use measured reassurances to reconcile the highs and lows of the company's financials.

Moynihan, who succeeded Ken Lewis Jan. 1, had to report the company's third losing quarter in the past five and explain a mixture of good and bad signs on loan demand, credit quality and key operations. For the most part he played it safe, setting a tone of cautious optimism for the year ahead.

B of A will be "grinding through" a year of slow improvement with some unpredictable twists, Moynihan said. "We believe we can anticipate positive job growth in 2010, but even with that, the number of unemployed will remain large for quite some time and extend the drag on consumer spending and overall economic growth."

Moynihan and Chief Financial Officer Joe Price on multiple occasions warned that lagging loan demand, particularly from commercial clients, would be the big headwind this year.

Overall, the loan book shrank 1.6% from the third quarter and 3.8% from a year earlier, to $900 billion. Moynihan conceded that line utilization from corporate clients remained near an all-time low, at 58%, and most consumer portfolios continued to have decreased balances. "We know our companies continue to be very cautious, and we're not yet seeing the typical business level activity for recovery," he said.

The executives noted, however, that interest in loans had picked up in a handful of markets and more was on the way.

"I believe 2010 will be a tale of two periods," said Price, who will become head of consumer and small-business banking on Feb. 1, filling a post vacated by Moynihan. "The first period being gradual improvement in the economy and the second being a more significant improvement in consumer and commercial activity." He did not specify a possible timetable.

Price also warned that revenue levels "will be volatile" throughout the year.

Moynihan said B of A's credit problems had likely peaked in the third quarter and that the period of "significant additions of reserve are hopefully over." Yet he cautioned that credit issues would linger. "Net loss levels should remain elevated for the next several quarters," he said, with commercial real estate likely to remain problematic through midyear. "And we still have several quarters before we can discuss actual normalized earnings."

B of A's bottom line felt the bittersweet sting of exiting the Troubled Asset Relief Program, costing the company $4 billion in the fourth quarter. Those costs, paired with quarterly dividends on Tarp preferred stock, took what would have been a narrow loss of $194 million and ballooned it to $5.2 billion.

For 2009, Tarp participation contributed heavily to a $2.2 billion loss.

Investment banking remained solid, earning $1.6 billion, but trading profits were off 56% from the third quarter, at $1.5 billion, mostly because of declines in certain fixed-income and equity dealings. The fourth quarter included about $1 billion in securities gains, which were offset by roughly $1.6 billion in mark-to-market writedowns on Merrill Lynch & Co. debt. Price said however that "most of those negative marks should be behind us."

Still, analysts seemed relatively pleased with the results. "Overall, we viewed it as a positive quarter with better revenue trends and credit," said Keith Horowitz, an analyst at Citigroup Inc. He said, however, that expenses "seemed to include significant yearend bulk setting up for 2010."

Expenses also seemed to stand out for Bart Narter, a senior vice president in the banking group of Marsh & McLennan Cos. unit Celent. "Bank of America will certainly be reducing costs on the deposits side of the business since the revenue picture does not look bright," he said.

Moynihan vowed to keep a close watch across every business line, managing expenses, which rose slightly from a quarter earlier, to $16.4 billion. He refrained from detailing areas ripe for cuts. B of A is in the midst of eliminating up to 35,000 jobs, and last year said it would scale back on its network of more than 6,000 branches.

Analysts pressed Moynihan Wednesday on how he would put his own stamp on the company, a question he has been asked repeatedly since being named CEO. He reiterated his intention to largely stay the course of his predecessors, sticking to a game plan that relies on offering a wide array of products to vast numbers of customers.

"The business model is sound," he said. The main objective "is just taking this massive customer base, taking the product capabilities and putting them together."

Following an extended pause, Moynihan further drove home his point: "Don't look for any major changes."

In responding to analysts, Moynihan at times gave short, vague answers, straying from the often lengthy commentary typically offered by Lewis. And when prodded by an analyst, Moynihan declined to continue a Lewis tradition of projecting full-year pretax, preprovision earnings.

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