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Bank Of America (BAC)

Participants
Lee McEntire Investor Relations
Brian Moynihan Chief Executive Officer
Paul Donofrio Chief Financial Officer
Glenn Schorr Evercore ISI
Mike Mayo Wells Fargo
Jim Mitchell Seaport Global
Betsy Graseck Morgan Stanley
Matt O’Connor Deutsche Bank
Ken Usdin Jefferies
Saul Martinez UBS
Vivek Juneja JPMorgan
Brian Kleinhanzl KBW
Charles Peabody Portales
Call transcript
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Operator

Good day, everyone. And welcome to today's Bank of America Earnings Announcement. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. [Operator Instructions] Please note today's call is being recorded. now the pleasure Lee over my McEntire. is to conference turn to It go Please ahead.

Lee McEntire

for call other for a joining second Thanks quarter. section They're first morning. our Good the and comments, Investor then the I Paul our release Relations everybody available review on quarter Donofrio, going the bankofamerica.com to trust has call to opening to had website. chance of earnings documents. results. our to I'm the our some over to elements cover some CFO the turn CEO, of Brian Moynihan review ask

either call Before information earnings I further during website our turn let to SEC release the forward-looking call. we the over on that those remind documents, may statements our make our me to or you forward-looking for just filings. comments, And Brian, refer please

that, Thanks. Brian. So to turn me with over it you let

Brian Moynihan

results. you, thank for Thank and Lee, our of you us joining for all

and areas the thought paying -- mid-April instant of that the move we seeing completed and of of We're in you mid-March we in As home. terms draws projections to approached already haven at crisis. economic mid-April, the that of rise were had to requests as still us a in same I time, deposits amount up our and saw still need and customers been this loans. were at predictions later. We talking our for for reality as back catching -- that saw Economic are projections revised deep path liquidity. has massive state-at-home closing We path to to rising the assistance We In And quarter's the COVID-XX recessionary of loan In virus out and and of the of forward cases and earnings. a less. by safe flood quarter last Baseline we're extend a world some of million And in a future in future and massive from branches asking a We line X for depths core the from has additional facilities. last health around safety virus the some environment of We've other to a to create to thought panic our had of reserves the and we sat commercial the mid-April XXXX reality company companies for are and seen orders. the work the back and the cases. the now rising their substantial step results. provide credit areas, about into have projections now I of officials' the worsening talking, down quarter, we're the this discussion looking impacted that losses into predictions XXXX. time. length quarter. Yet shut quarter expected reflect the deteriorated

consumers some On activity improved sizable during it's April. trillion, Bank so U.S. XXXX signs. since by spending other has America vastly a has there $X Spending been of of hand, the activity. of was total encouraging sample Consumer a

to April compared was For XX% spending XXXX. month April of that the down of

relatively the flat June However, spending month that for was of to XXXX.

what far adapted businesses total it that of a so and new actually have last we're couple spending And the seeing Customers through July, of to year. weeks first environment. was above be

and reclosed have have yes again. limited been some or Some reopened also

time around into some XXXX stays ahead. was in it as this provision that case our to at we core elevated X% by We at half assumptions reserving it making XX%. expect base to heading be ends of and it this year look get the for operating size, XXXX aggregate setting and present, same to first the end unemployment In takes XXXX our XXXX. remains for credit or the At XXXX. start-stop late And projections of scenario and at until level GDP early the X.X% the mix, the

be to of market terms extend level. be get direct through in companies stimulus do government stabilized. their not levels have -- actions Most need system. middle of Consumers provided also will their of bit maturities. and down last payments to to direct supplements they would work are U.S. the banks in in are to by year. a their the growth central segment credit payments have deferrals predicted actually smaller lines loan the revenue get it The rates operations. the from led liquidity benefited unemployment back stabilized So like not all things they liquidity. unprecedented that on business as may for as banks, from PPP Draw out that to that The from In world our many has things Fed it around number were XX% accounts. Consumers back companies unemployment such scenario. in lower provided of help of weather are conversation. borrowing source companies the money other has and where a more American are what companies than But many to mid have they provide quarter in and an delinquencies to they dissipated far have marks the storm. last many financing are to fact program citizens that, different EIP, Due the Panic financial the

XX% proceeds at the small that For far. the at so out PPP, Bank spent money those the America, that it business of only the has been estimate we received level that received of PPP

So and asked and storm request in been from XX% is have will then down That mid-April. we health get not to The always call is are question, the where program requests consumer economic when an the employees one. CAP other all the from fallen, care they end? has were XX%'s for their week companies what a question assistance distributed Coronavirus few last of we those weeks left vendors. the to be

for that through to to drive get our responsible whatever across So you brings. quarter And to our job team scenario And did We start ahead second do reviewed how the businesses. Well, economic adamant level company. we prepared the into in XXXX. prepared? quarter, our late this too great in it's Portfolio continues is our second at shape heading loan commercial in a decade-long in customer the year. our effort portfolios growth be

in that Our remain portfolio the buyers' through matters, company and quickly better also asset A risk was now to the near-term it appetite. unemployment-related basically And books, the ratings quality. credit of from also date. have business what difference to is in since designations. our the the surprising with NPL improvement Recession they'll assess the consumer are every our we for versus We're we consumer moving benefit criticize We've up to liquidity key pared to We needs On gone borrow the prospects. crisis going underwriting into our half card our credit is consistent. standards. unsecured and risk our in last decade-long Great

especially difference lowest large stress example far We commercial construction in real the the especially again, the exposure, this we in estate, is Another less had the of as out losses recent tests among our area. firms. prove saw

run. -- this amidst eight Fed today, past fortress the sheet our of from the crisis. has We've even balance of For eight this also seventh -- eight all for test past stress improved the year-end the out seventh the to

liquidity. We built have

despite calculation. ratio quarter year-to-date and Tier remained the capital It XX $XX above significantly credit resulting points ratio you as We our the of built $X.X in of of the from we within doubled We've room basis at reserves the only stood in higher incurred capital at NPL points XX.X% charge-offs floored COVID XXX to $XX.X X the was as quarter $XX.X up with as range we're level regulatory billion reserves you is environment as $XXX this at of to at in after buffer, this billion at we scouring disclosed portfolio and the And test earned the expenses rating equity the on half. from quarter liquidity remained XX.X% billion the of quarter has were up even billion Our And first stable our X.X% way a $XX Quarterly in basis continued low at to we tight our operating $XX even returned stress of exception where long common year-end. we year-end. changes. versus period have modestly a little in four-year and we're By We've despite X% billion levels minimum. end end the billion built average. a and actual -- the the the billion even they our increased our we stressed expenses. year-end. for with to over those investments capital

programs. we also lost haven't During on the way our strategic our crisis,

driven have our we half, leader as digital first promise the businesses. all the During our across

as and smooth from capabilities transitions institutional their will whether our who see. our investors work in way companies Our and enabled this with sheltering they whatever they're people financial home want customers, transact or place to have Where to. business, goes working we our for we

of data emphasize signs provided has Our here. some raw We optimism. cautious cautious

in here. state reactive aren't the We

communities We to great sure decade happens ready the any for regard, XXX,XXX are keep do because who importantly, for and shareholders. making day are company whatever we're of job growth. because me we teammates Most work being we ready a our and of diligent have customers, the responsible work last every and on with talented hard we're we our In strong. come

So charts combination. refer about going on let's the three to drop ask into two. and results. three you We're slide together, I'd to do The commentary to and two two quarter slide slide on talks that

balance showed company. in This quarter the we our

us $X.X institutional billion down saw quarter $X.X This billion provisions solid per issuers position businesses by net top reserve as income. reserve our fast-growing second impacted to building due a billion. Markets of produced businesses, credit-sensitive from billion, earnings more second anchor primarily allows windward and to quarter, lower markets to for provision our served the total our by results. of produce for last are of an loss a were investors $X.XX capital we loan build. platform share. the While In deposit-intensive the rates $X lower company. our $X.X year overall due as our to expense Earnings Earnings concluded driven and

growth the XXXX, drops the in in help customers of interest company, to this lower our made time record of in to the As X% the accommodate changes it support consumer we've to income deposits pre-provision resilience. of that the pre-tax of last draw We it's credit which billion quarter your a costs pre-provision power think down I $X.X from downturn. the earnings company the two income, pre-tax to I We attention assess helps in number produced economic was did fees quarter. in given our number. useful the remarkable pretty believe and quarter, It overall impact in and rates stress of in forgiveness activity has shows

year-over-year. it's billion $XX revenues company, produced the fact the improvement record This Global a our lower were the fell income as a of Investment Markets past billion $X.X think trading XX% the and Sales brunt team first the and pre-provision In $X.X excluding driven banking NII were aggregate, the of profit of Markets investment X% significant quarters. In XX% Banking just billion level decline in revenue in year-over-year. was quarter. quarter for segment. about the Most this up revenue year-over-year in sales Mitigating after-tax this of four we rate NII importantly profit pre-tax in billion separate decline by below billion results. saw average trading year-on-year. of from quarter. and and a fees bearing Global The $X.X was grew we DVA cuts entire strong to for NII. $X.X

-- $XX.X included said as million expense I expenses savings was is in to of roughly billion and rough earlier and non-interest related net Our $XXX COVID-XX. impact it

was Our X%. tangible return common on equity

Let's go to slide X.

financial last the one, and that centers work-from-home our quarter remained and XX% support exposure note less around our established centers employees to promote to measures teammates we of or in COVID. in limit our world. posture their the than the In have quarter initiated and those quarter. clients efforts in to call mostly the health broad two, and programs of of we helped expansion with Here expand to of teammates safety we In continue continuation the offices

critical the services they thing important worldwide permanent of out to such associates. jobs is of X,XXX role for and resources in seeing providers college. all and services continue and childcare care the We this of and employees adult and other frontline the and the numbers play of we for are summer students the as must hire enhanced many honor care ongoing Taking to to benefits supplements the backup them quarter. for commitments provide to access comprehensive those economy coming And And incentives to jobs costs you're enables among do the right each our as U.S. economy.

In our sales, was in we of the serve of Paycheck certain business cars, to matters. to refund we evictions, and -- at offer largest and of other affected number crisis, keeping to open program commercial that Protection consumer all One deferrals, the of centers addition continue certain of actions path Program. consumer providing repossessions clients small These business small continuously originated and the the by loan loans our COVID. PPP, clients noteworthy XXX,XXX-plus funding receiving $XX financial through clients included foreclosure billion. We assistance in fees, pausing payment

have certain country. the existed and billion announced healthcare fight we the announcement by a this a in tensions also initiative been opportunity, disproportionately of quality, communities effects the one commitment economic of recognized in. initiatives. in there announced donate this -- elevated years four-year advance the impacted two. to $XXX quarter in new that of to We and are supported live issues pandemic, and million immediate We people race crisis communities healthcare quarter $X the After racial We we that for to

presence processed generally their This playing program we page easy critical those as our and I'm deploy plan I'm ease and access -- for even busy we to a call customer their us throughout peaking a prouder week. the request leaders systems By On in weeks consumer as in at we largest five funds started these The are built below actions. the other we've million $XX payments July. peak. first They three last XX% burdens. numbers are role deferrals. more with deferral. single we this crisis, of from can and we continued Request cardholders. loan drop. customers those of serve quickly in to helping that mid-May COVID week point our play billion help. as about clients the market the XXX,XXX program in to during they're dropping discuss see April CAP consumer remaining This balance it In the X.X clients deferrals request systems to of financial country part million the credit with how how Our but provide to represents requests have consistently deferrals been total, fell on their working deferrals proud of teammates and my immediate to that you X.X end of process how critical vital

Another area concentrated practice group of solution the small and business. is request

me Let provide deeper categories. into a insight these little

month. payment see card least the payments right-hand made lower were slide. initiated down XX% early their requested. one-third one at deferrals was on April than deferrals initiated active XX% of the payment can current the every that have since going were credit then. every made On part deferral, it have March of on when deferral of has the More since card and late on XX% You the died in

forward no in three deferrals spending other expect in changes are the consumer if payment observations. expiration quarter card major there we'd or these habits macro we in look given deterioration, decline to major As significantly

highest our percentage credit characteristics all Importantly, requesting the we of propose. a is they deferred where P&L in Small you saw assistance. that our today individual risk see borrowers higher reserving the these business credit and reflects accounts of

now about our crisis, As business solutions you this. and the were quarter, These we are mostly down from during These last group. practice shut who may doctors talked are recall, requests open. dentists but came

few revenue. XX% our of In borrowers, deferrals -- not many they through work elevated borrowers us with X% that accounts internal to for expect these contacts while level the need continued a request we'd of these a back no to those amounted these second and of And were in indicated accounts our their XX% steady -- to survey deferral. roughly conversations loans deferral. unsecured not ago distress our being weeks and not X% continue chart our with of commercial with are of all as reopen this of through As that shows they'll informed

those -- pandemic severe of discretionary in pace ahead in travel, in changed lower economy U.S. after a moving which in XXXX. Chart we healthy page Now, as in particularly consumer you early by six cash. signs slide the spending This we before. supplies. on all of spread of spending of to was leisure, about while began debit representing increase at a consumer improvement touch the credit large seen slowdown were a in momentum April drives points still compares total is like credit as I first is amount, card -- across months a with largely But on payment running shows health There have the significant for shutdown. single-digit on the the like decline and and see debit, beginning percentage in card. it's talked $X week six couple than or spending early and year. necessities the cards groceries May. staples same slide moving debit are Again spending After spending. around XX%, to payments lines And to see high trillion a including same payments That debit other of last payments Overall, in seven-day categories period and made July. average of can saw total and about We payment are same economy, followed the spending. in three about year payments the entertainment, levels forms obviously as for credit, and

other an down of or customers But in on XXXX. saw home a ahead April eating further off isn't basically Well, is as to causing COVID impose or rose leveling higher and from in July demonstrating that around we couple change. and XXXX. states periods spending debit flat. buying was are between and the is fuel improvement checking through shutdown paid was basis and more As as on some May. by began April restaurants as needed usage over and running habits a the to further same assistance of saw the Much as said And restrictions. appears projects month more payments in active as and early of year their seen the improvement last levels XX% earlier, of country monthly customers delivery months, spending from returned municipalities out. environment the to consumers May shopping actually basis on stimulus April have moving became pause to states physical to restrictions XX% as June that, recently and reopen It the quickly year's accounts. they're comparing reopening May On you and much back past cases and weekly XXXX of as changing the hotspots prior adapting I down spending even are with phases doing online and takeout in forth during spending

every continue behavior we normal. flows to cases government's and and in and operate this the there'll and reactions of also this new that be them -- see to stops and expect day as monitor except and We to ebbs you until and starts people's learn

go lending -- to Let page activity slide X. on us X

We've troughed in some activity in shows involving some modest loans the consumer which we paydowns. growth April. see all borrowing beyond and recovery seen applications lab Here commercial the modest loan that credit

$X mentioning sale of can one, dynamics $XX Within billion of billion growth PPP loan commercial, activity, of quarter, worth from total down $XX As quarter the billion the see in $X during loans paid there declined as are grew several year-to-date $XX loans. quarter of you the but billion the one. mortgage excluding including loans billion clients end

which the in a they've do. While of out back good and balance liquidity funds is accessed or and to capital sheet this quarter loan sign get many one we since termed accessed has borrowers in for or emergency as borrowing financing the good markets paid assist to were growth, isn't helping it them those able but many panic

returned fight where is than during lot in and point levels business. usage shows mortgage solid lower soft, our revolver underneath it -- solid Bank underlying card apps at capital continue in loans despite some as our I were their was I demands has a in America. of but year year. apps lending there credit are business continued growth levels have note bought pre-crisis Mortgage spending the the of cars. dealers COVID-related to to business in about We've said there in I for build a price but they opened earlier, we described to is, would last be people middle customers. decline half the also first loan activity, levels to that the banking and earlier. have back And levels these those supply way As -- The market auto seen of conservative to residential were that credit while last Consumer

in have XX%. $XXX billion the the in growth position core been consistent leading billion consumers. the the throughout above to bank the XX our have continued periods. X. business. deposits across commitments talk the of basis checking commitments and those to risen Since disciplined on American to than risen deposits for more our also $X.X cementing total short points transactional have see we've every billion nearly trillion that and $XXX customers commercial nine new $XXX Global weather We trillion. they've Our pricing grew deposits customer customers. during commercial activity noting line total basis them our rates quarter, points about of $XXX end XXXX, On decline. to Banking of moved further worth year-to-date, paid for impressive client of help XX% $X remained been single deposits, storm. as or Consumer the all we or expanded And an has as activity that And It billion rates from has XX%. approved to these is slide paid

to of or Management customers up value as a continue Our XX%. partner. company course to Continue -- our deposits billion Wealth $XX were

before X numbers to Importantly mention turn in-depth about our this. is thing we'll more over the talk in last on it I'll on usage. It's digital slide I go to -- Paul clients'

a have I'll surprising boomers customers use a Providing customers proves mobile centers or More as physical ever-increasing there and the again bank. a last traditionally new our this we consumer opening the since once depth these digital many a increased The safety check year as This they deposit of in engagement high and We investment continuous of and in America. running sold on of running is users. discover are keeping of found and the examples need past harder by call number a months. those satisfaction as quarter digitally XX% for centers our log-ins digital over XX%, at COVID XX% year are user baby digitally the in that touch units who added In increased with million the of Our customer users up sales. X.X and environment. log-ins Digital all-times engagement those few. have value billion and log-ins XX% demonstrating convenience were X accounts to seniors XX% of average innovation representing been at our being physical capabilities bank digitally. efforts Bank per also engage in in an have in XX quantity of users

in we a mode. increased work-from-home of more to digitally Digital in have equally an XXX% to and which year-over-year. clients seen Wealth we've were Management side Management conference versus similar commercial And online year. have whether Merrill secure were commercial than in engagement, our banking to last the less capability even users with utilize for growth clients growth WebEx our applications up in log-ins users the convenient deposit video across engage Wealth and household as than impressive the conveniences usage result business XX% crisis. XX% And in methods and other checks, addition need our during On

on top actively is XX, of can our to the XX more segment. I system. chart much the you through million money past active to right how We customers month, your at have on nearly And months see you volume the for lot using A XX If the attention to draw the want focus look single-purpose consumer moving customers every payment now side in through Zelle that you three providers. adding illuminate Zelle looks doubled the just in alone. chart this customers. nearly with we million billion fact transactions have dropped. of to industry's costs. for total lower resulted better year than And doubling more that in let million now it's And to our used given four quarter. in shareholders payment and years that the free $XX the all impressive this That's to dollars has turn over during Above every for clients is our volumes through transactions transfers gains benefits Zelle volume XXX to Paul. the our past And that, me it quarter.

Paul Donofrio

sheet. Thank you, Brian. I'm balance the going to start on with slide XX

$XXX QX, surge increasing quarter the balance deposits. $X.X of billion driven by since in trillion a assets end sheet in Our at the total ended

standardized to respect CETX approach years the for cash billion, be commercial is earnings modestly During loans much increased quarter the to ratios liquidity regulatory continued Shareholders' QX, ratio under borrowers Excess in our has therefore $XXX two to invested binding, repaid their distributions equivalents. of $XX With under past ratio equity approach declined deposits lower as lines. this but cash and shareholders. by while the exceeded the as and advanced by grew billion been binding. predominantly

paydowns, mainly CETX points credit under well in was loan decline improved balances. commercial This by XX.X%, as decline standardized primarily quarter RWA. $XX linked to the approach Our lower card ratio RWA billion driven an by as driven XX basis

Standardized In we the derivatives. adopted aka addition, Approach for earlier for Counterparty Credit SA-CCR Risk

Buffer our to RWA Reserve advanced received as Also the Federal XX.X% to the advanced Our preliminary this quarter, improved we declined CETX under CCAR results. SCB approach ratio our or under from Stress pursuant modestly. Capital

under approximately add-on, little basis the stress including our and Our a was depletion points X%. SCB was XXX dividend

X.X%. as are you However, floored know at SCBs

to minimum unchanged. of ratings advanced and binding standardized under impact the the advanced requirement approach. and The billion was at ratio migration The due remained risk credit approach the ratio minimum advanced became So above is CETX end. our corporate X.X% cushion our the CETX primarily RWA of quarter under capital X.X% $XX on CETX our

Our remained minimum above increased TLAC our ratios and comfortably requirements.

Turning GAAP interest a billion an QX XXXX. to basis, declined NII slide income. $XX $XX.X XXXX was on billion, as billion for XX, well QX QX net in $X.X both non-FTE On Net basis. interest as income FTE

credit as on $XXX month roughly more roughly call point our quarter Other to in XXX following lower $XX backed rate QX higher PPP a experienced asset offset did LIBOR quarter the addition of pricing. balances. lower loans assets marginally than QX. we coupled deposit The was -- marginally with one lower basis environment premium Global include in this our as As rate the billion decline in yielding amortization and it from costs. deposit NII million the fell were also aided by a Market in quarter repriced average growth partially and These negative NII impacts quarter, card on higher headwinds decline securities noted this notable funding lower of variable NII given

coupled growth, XX yields driven by increase the sharp points. Given net by deposit sheet, NII declined decline balance notably basis the with the interest in in quarter-over-quarter

driver was at quarter-over-quarter. the decline Looking lower that interest bottom-right of largest chart, rates the

the yield XX cash is of which was in deposits, or net diluting or cash only in increase invested given the QX was modestly excess most helping earning interest funding impact large but in NII points. Another XX equivalents, basis that

level elements the high-yielding are deposits. yield. assess Two of respect cards. credit with the amortization; higher continue uncertainty to duration the interest other premium net of of lower to diluted We balances They these and

declines largest we of in NII from terms interest the rate guidance, QX forward impact expected. believe as occurred In the

NII a re-price as reduce of as portfolio commercial million curve the we headwind continues we of could by the NII face end a enter from by will long the dollars. loans, our couple And As QX, reminder, securities a be paydowns of impacted hundred lower. which to

Beyond changes the absent rather into QX, on higher economic NII stability be material cash. from growth asset of redeployment conditions deposits yielding securities and/or will dependent than

and has despite you rates strong Beyond also interest management profits. short-term solid balances those remind with before revenue just in diversity Plus which mentioned, XXXX supported would NII balances pre-tax have that periods. in today those higher we -- as of the In rates. versus zero our were will years, near streams rates Brian in expense the I unprecedented income $XXX combined produced rose. with pre-provision billion balance $XXX NII in XXXX billion we higher and and benefit deposit loan decline

billion, lower At $XX.X quarter QX modestly expenses than XX were to and slide Turning XXXX. expenses. this

marketing, now, For in financial such investments renovated sales minimum professionals, and increased years three wage. or as technology, areas despite philanthropy, centers, expanded new benefits,

expenses have of and operated well quarter XXXX. tight expense billion in $XX.X impairment billion $XX charge QX each to outside managed in range taken have of the in a We

to we increase QX, exception, This COVID-XX. expense, even was savings COVID-related COVID-related that to In the $XXX spending quarter an netted estimate related added costs million. in versus no with totaling

services cost at venture. merchant for comparing We safe. same versus in method revenue will as higher we separately July joint The these will are this beyond be operations customers working X, tax expense mostly when QX, to again ensuring accounting that respect them time opposed hard noninterest on employees for expense that to through began as cost please the under we while and QX, netting to of by this the to of record absence was to customers crisis, equity COVID provided accounting. total we move QX. the our reduce our directly Accordingly, elevated and a of offset through note With expenses payroll

for result, rate. our to quarter add a business per roughly this $XXX we to As expense expect million the run expense

more revenue be quarter, Additional even driving in increased near value as term economy clients. become merchant should fully a and recovers for services roughly $XXX the the improving integrated million operations for

services excited of cards significant many clients, of are merchant from on rely debit their for for accepting revenue. to into is services of integrate important credit to and who product small businesses Merchant our large an portions multinationals business. lines We our

lease transactional cost banking As we in is expedited market and credit to authorization, it users, businesses, such, liquidity working including and routing, the across leading analytics value consumers that innovations our spectrum add innovate, Because products. and provide management, core services and across connect both share can capital other data enjoy payment many management. settlement, of enhanced LOBs FX offering

resilient to of grow the evolves. flexible, and platform proprietary the and the new as enables Our facilitate payment is us marketplace evolution ecosystem

quality Turning to slide on asset XX.

of test. CCAR and Federal as through relative expect stress for advance annual quality indicator the benefit us been our this and Reserve's is the years balance fact independent crisis. have underwriting standards Our many One responsible health we of to this we strong sheet now,

lower this of was or $XX in consumer offset uptick peers of been from our million an Net were lowest Our seven Total was net losses. Provision $X.X loans. ratio again with charge-off the under in of expense stress points test has billion. mostly net eight years. once losses commercial charge-offs year's $X.X lowest the by basis rose XX QX and the billion average last this charge-offs quarter

a which losses. build expected outlook of billion since QX, of Our weaker end reserve the economic $X reflects impacted future

expected While the thus NPLs criticized expectations. versus impacted been increases we rose better in our by virus, saw credit far exposures, as modestly overall only than has commercial reservable

As metrics end draws we commercial of trends of payments slower saw our faster towards quarter commercial reopened, requests, than and we a payment portfolios. better XX, borrowers, economy both anticipated. deferral break we quality the credit and of for the the lower line stressed downgrades the from our slide consumer pace out On

on On is declined attributable This businesses. estate provide energy. which for the concentrations commercial, remained deferrals with front, stimulus with a small better which net be coupled quality borrowers, recovery chance COVID real and increase -- In to million, extended charge-offs stimulus Consumer deferral $XXX which effects $XXX government by benign. individuals is assistance. in with commercial charge-offs in net should saw other million consumer should consumer and partially a asset of we to driven and

increased impact One commercial loan restaurants, exposures, small from surprisingly QX. driven which or Our quarter investment-grade XX% by increase retailing. could excluding not reservable clearly and business more collateralized. criticized real the exposures was lines, cruise see $X estate COVID book This and to at ended billion

provides a full to Slide table allowance This XX. Turning XXXX. picture our year-end since build of

CRE to which strong our years concentrated in consumer excuse the for mix while and underwriting payment loan portfolio -- rose loans Note loan focused As has These with leases investment-grade ratios commitments you XX.X% characteristics. of $XX QX have for borrowers commercial year-end XX we also X%. billion also that high-FICO are flat. me, secured our card for coverage to $XX has with an with It X.X% allowance that relatively with was we standards note XX%, ended relationships. doubled than credit and I can whom at increased would to strong reserve commercial the increased X.X%. unfunded with total nature past overall our balances see and billion, loans service and loans debt on reflect of ratio our more to consistent-high including allowance the to reflects

in most an estimates. economic increase Our from recent outlook reserves reflect consensus the QX, based upon

impact will minimum deferral how It conditions noting the outlook there our we fiscal In reserves in produced significantly long But CCAR addition today and new XX.XX% perhaps be we scenarios return own that stress would continue those CETX programs to latest by to the deeper impact gap to is remain of above the biggest losses Fed's actions activity still outcome impacted how and include all ratio many a economic worth how if at downside the will pushed scenarios. GDP. one looks be decline and with including government into the and uncertainty these recessionary a credit unknowns losses. weighting of virus. just versus our is our have A and assumes X.X%. will Obviously that, monetary losses positive

Okay.

customers value impacts Despite expense, has financial investments and in reflected differentiating provision challenges impacts strategy. to quarter. us health Turning rates, higher impact and for the peers. in significant including of higher on business from losses profitable that expense lower And segments from crisis expected high-touch digital the capabilities and fee -- our reductions, resource future and the a increased business been our Banking our the as complementing remained charge-offs enormous declined. and actually economic net centers the high-tech period And the financial in the XX. our valuable Brian conditions. Slide starting discussed note -- proven dramatically of this various innovation The Provision have worsened investments in COVID-related with Consumer

this With challenges customers' between assure team open. centers related is keep been fewer brunt expected country in And which customers. of until the incurred in financial this a year and expenses respect financial waivers end has much banking So of the in the this our need have year service of are deferrals Revenue were the the losses later. first of our half of absorbed decline The segment through and managed worked in well know down a an were balance and bulk activity, because in segment increased NII considered impacting half fees significant this also Service down or as of the result to of first as result as the the likely as as bore fee brunt we segment our year. fee accounts. future well not our waivers. lower a of charge-offs burden were service. the company's of waivers enormous ongoing the to of as fees customers' fee employees essential of as Card And due safety overdraft XX% to well across to of service revenue. as balances daily the deposits. the to of as negatively has spending charges this business you And

only We've these Many not and to interactions Our calls reflect managed for roles and home. small additional to also but business added service this of from personnel services, the products costs for applications balancing Program. digital act. Paycheck work existing Protection

saw at from and associates We improvements. We in average salespeople just digitalization also in consumer their accounts was deposits checking the mentioned. continue from $XXX minimum rise XX% more and impressive The increased renovated this up payments Client investments ramping of technology calls to delayed environment. received growth improvements, I low-rate tax increased fact be loans decline card as added mitigated Even as in in even part in QX mortgage handle 'XX. to by was the spending. are billion XX% slowly centers in this demand and or Average balances. Mortgage by stimulus, growth credit X% other that was a addition franchise. these mitigated the we momentum continued invest least by process and that added to and We to wages. customer have expense we financial continued clients driven

than investment by and and rose consumer those market QX, XX% year customer XX% last accounts this our see of platform. add Edge X% investment valuation. we flows AUM than Merrill In accounts added to driven flows digitally. continue into more strong We added with year more

move Wealth already. trends think most of skip XX Let's we've slide to and as Management the I covered

our benefit reserves otherwise past deposit current X% to offset Management XX by for Merrill partially to home, new driven were we COVID-related remained and Total Wealth charge-offs, X% a decline from Despite choice QX, associated technology new rose referring with to and affluent they quarter COVID. low. valuations revenue, increased market decline at by savings transactional for driven X,XXX bank and $XXX both year-over-year, with net $X.X lower by driven by AUM equity were lower of Wealth remained flows. as you driven stable while good higher investments driven COVID-related net the provision net Investment made -- and strong impact sales was was revenue in QX well Management and AUM bank. and from of XX% revenues client clients. nearly the asset Lynch growth. incentives in and professionals income Expenses charge-offs and Global as offset on of private XX loans. saw flows solid ago, driven in fees Compared as by Lynch working expense management added households revenue-related in we NII as markets. as in rates net well continue well Provision to credit Net the down XXX net deposits, in slide decreased in to income wealth future here expense. an equally built the months again, and The fees. clients, loan and the as -- as by by million flows lower up lower XX%, by force AUM as sales costs balances a strong from lower are grow as relationships the growth Non-interest So private to rebound a year trillion provider Merrill XX, nearly

Banking and Moving slides to on XX. XX Global

as offset draws, Investment QX from investment Global earlier, But to for saw a falling COVID. average fees. but growth the those losses and XXXX, earned enough allowance QX As impact noted this loan higher Banking million, the record lower included this from result $XXX strong as business revenue billion banking improve X.X credit $X.X were record in In and of billion a Banking $X.X -- rates by line fees expense and pre-tax Banking equity not as X% excuse basis Investment result year-over-year. quarter. This quarter. straight $X.X results. both included well year-over-year On records Investment pre-provision we market QX, second XX% for our Banking were capital share adding of investment-grade results the both me, record were benefits driven record a of to billion The deposit levels provision improved able to up notably markets.

spreads Banking bankers addition of decline the Growth deposits Investment and our rates. will to began coverage. applied be would XXXX, reflect and as XX% loans seen the which not progressed, also note At few now significantly of quality, I year-over-year. just same levels past that improving even only which as growth the the back in I XX% average we to in origination Rates what we were paid that QX. decline headwind repayment over billion draws quarter LIBOR increasing up paid up to in rate new or following an believe quarter-over-quarter continued in years see also the to fees, and rates the the loans to increased strong client before were deposits, at time, loan $XXX QX While built QX XXXX of would NII be note to from rise. but are of end hundreds

Turning around we've covered most already to digital important as of the XX, XX. on activity deposit on and slide loan points

capabilities. increased treasury in and we needs. work-from-home in it's these Markets see this to important surprise As capabilities in this XX. and no slide use are our manage ever more to And GWIM, that on enabling environment consumer digital continue seamlessly Switching useful and their than of clients to would Global crisis, health

income the unusual market producing from credit with Our quarter in of mostly products. well fixed the and since in QX, particular recovered environment quarter prices revenue XXXX. first strength an through We of teams the performed the best saw strengthened quarter

I'll I about DVA. usually As talk results do, excluding

across pretty $X cash past financing, comparisons year years through driven QX. flows, sales quarter DVA loss doubling the nearly of Within net of in Slide in over trading and which also in XX% compared and an revenue was benefited Markets client QX prices the sales FICC several on quarter This up credit sales in equity spread a FICC quarter. results. period a a which by a in up which asset XX% credit. a stable partially by year-over-year, improvement and the but in improved tightening, half was QX, fees, trading Expenses XX% to of and around growth sales partially in weaker and linked trading improved trading by in record XX, and derivatives. in macro and from and reflected XXXX. XX% offset overcame performance prior Compared million. QX lower Banking were FICC QX stronger the and earnings at improved, revenue otherwise year's Investment controlled as by occurred increased performance driven note a offset results flat On improved from equities trading, and trading Global Trading revenue, QX all client year-over-year within XXXX. and decline FICC billion from investment results $X.X Year-over-year QX absence products a comparisons revenue funding billion. produced better XXXX both the solid from $XXX rallied shows -- sales XX% for well and was Equity X% gain to performance equities. costs to improvement higher

XX, Revenue Finally mortgage in from QX. which $X $XXX $XXX which we million. drove revenue reported in on of benefited the from gain Slide the a of sale All million of from Other, billion a improvement show profit loans,

adjustment pre-tax the to rate. tax investments year-to-date the greater related quarter effective to for X%, this of rate Our as expected the rest income credits tax was tax-advantaged well as tax rate to reflecting due of the tax XX% the related on lower XXXX, impact

up that With open questions. let's for Okay. it

Operator

Glenn go ahead. Evercore. [Operator Please to go Schorr Instructions] with We'll first

open. Your line is

Glenn Schorr

off -- I Two depending current your much. the that there? assess do and very down is your income we net And of of from interest about clarifications. assuming comments we I'm thanks heard Hi, quick comments On base? then couple hundred a duration million, the of deposits. stabilize on stickiness how the of

about can could what if how stickiness don't duration. good you deposits? of So but the would assess were clients you -- talk sounds redeploy how you you And It you the thought they that help sticky? you how do assess do how I maybe assess if into, somewhat duration that the know but you you and --

Paul Donofrio

Yes.

just million about couple -- be won't kind QX of to of of clear, of the So hundred all drivers repeat to a talking off that. from we're I QX.

since in be and of year-end. of higher-yielding -- into We've growth really acuities. is of Beyond to sort QX, deposits NII is upon going asset added $XXX billion dependent kind the of deposits redeployment growth NII

gone into XX basis has earning All points. that of cash

two So much as a around on as security that's the it, be of the say, we pandemic, get elements confident or of assess or -- bit and you we going this rates be a basis is difference future a between these those securities. even points. let's assess securities a can into portion how XX in treasury kind on we a that into there's of And can mortgage-backed deployed stick deployed more bond to what -- can of that on earn and little big

to I think opportunity it about it's you there's those going we're know there -- and So some see when one I of think has you but it to thoughtful it. be things

Glenn Schorr

similar now -- in The expense, we're things. want of adding a combination that's that question PPP of. million roll-off servicing core I to the assuming does number Thanks. Got expenses. Do and of it. that get million expenses Maybe work-from-home merchant stick related a that $XXX on to starting top $XXX I'm on COVID-related the around?

Paul Donofrio

Yes, sure.

decreases, take estimating all a increases million. $XXX we're we sort you you the said, as the that all from COVID-related if net of had and spending So,

increases, supplemental financial There's pay. There's it's think If There's guards about PPP. not child more at financial There's you just masks. those centers. in our all food. There's care.

PPP-related all the got You've expenses.

all You've move expenses home work-from-home. got moving all the -- people our employees -- tech virtually to moving from

quarter We're anything all safety as course, we of it's going going that. some offsets on down expenses we're to million. going nets to other travel going sure sort employee not customers you go this in do, employees. to can make say work away $XXX some those think kind meetings got But of You on I to in to forward. work our that of we in QX and all terms don't jeopardizing but of the we're we're and expenses of move

we So opportunity there. think there's some

Glenn Schorr

Last wonder the reserve I would a The if those a Management Wealth build, building you could loans. like things Okay. require that of about one. much for Management talk is of How profile build? that wealthy to

Paul Donofrio

of is mortgages. most think it I

Brian Moynihan

but there, of was there personal very XX% there's mortgage XXth. at And loans some this some lending high-quality wealthy all people's and originations our commercial and in quarter -- aided it's

the the or picks good mortgage a portfolio, just question. same that separate estimates the whether rest it's and in it's of portfolios But applied significant that factors to a applied just but it is some so up the happens And that we book not about feel and business.

Glenn Schorr

it. Appreciate Okay.

Brian Moynihan

estate there's our exposure no exposure sort estate. like We There's estate to handled years, things real-estate in many It's Management -- as at Glenn that real exposure look and talking hidden we're about. people have going Wealth of back real business consider that on things buildings we the business. real

Glenn Schorr

Understood. Thanks, Brian.

Operator

Fargo. is Wells Mayo from question with ahead. Please Next go Mike

Mike Mayo

Hey, Brian.

Brian Moynihan

Hi, Mike.

Mike Mayo

are increase many in your in COVID green guess wondering, death You a seeing big or last leads leads activity I favor. trends right? I more cases. that's if that's like shoots. is the little you're And In to looking. mean, But shutdown. markets that on backward of mentioned your you're California that So, all to Texas, I'm or color an and Florida, seems year. It the where just bit that above July Is just like

How those perspective, to give you does these do on-the-ground you an green states? from expect advice all it in What governors shoots the So out? do continue? shake

Brian Moynihan

the tip everybody advice we get of The some seen is you've give in to we April, about you see safe. can over the is be XXth you the hotspots of very talked be over be year. last just can first as last up. data to you pick to so as about that's activity try recent the get as to through The to the faster July, But able precise environment might up

little it places in Texas that, still an the XX% were weeks look shutdown the a higher bit phase. and like of as fell first but in it's you aggregate If than they two July, in where

activities you'll other So it will think, plateau the I bit you and see flow. numbers. and little bars But general of you data their what saw overwhelm just supports a that that of activities today the in And improvement sales are homes on that just that spending closing some stuff, in in see homes. the ebb the Mike the that people's there terms retail

a So, card. yes, it's flattened little bit, flattened because it credit in

stuff. mid-single Texas weeks, travel those digit the because goes compared dramatically, XX% it's some in to it in up. last card the the spending weeks and that restaurants before But of still week-to-week That's the more -- but -- credit fell think XX% in Florida, I that couple it just see of and reopening. in on that and percentages, You'll

it So, we'll XX. than to play date out. see It's more July hard any be to down

Mike Mayo

pretty to flat And another disconnect, remarkable. then more it's quarter-to-quarter. added reserve two maybe a reserves the a added $X a And separate disconnect. billion was this net your ratio charge-off question. about Talk your quarter what not your I billion last quarters $X however, guess, you've to

to would a and magnitude didn't X% of order would the have ended higher? Like, in of in higher? it But just guess, Or place? the what problems your XX% the be your recognize NPAs you you it's What charge-offs it tough of a higher? be So sense would had I forbearance if question. tomorrow if full What? extent fee? XX%

Brian Moynihan

you answer. to give Just a simple

because the just higher, you this the took payment If on roll little and stuff you will a rate you if about would them $XX think number another for a as But bit of to credit well all place Mike no have you assume the there's timing, second cards but took -- know. if quarter, always deferral. there and I depend was million behavior the think then been

million, non-deferred what? the down actually it's went million so $XXX to on And for so points. basis or million $XX XX the that's enough quarter-to-quarter XX $XXX something small. customers, Interesting delinquency

non-deferred the non-deferred For excuse customers. customer, me, the

So XX% delinquency of people in went cards that didn't their defer down quarter-to-quarter.

And so, mixed it's as you think a bag. about that,

other it that providing as road provision. is, you are used for or CECL the that's all The methods is, losses us then of versus inherent and going have thing which CECL else of lifetime in to old definition, question the a getting come later you to down the provide by your

the come right. is rate the nothing payment and consistent that's seeing But And that's now, consumer see with employment you're we XX% that later losses you'll in So, helping behavior. to substantially. has things stimulus in quarters. the that actual Right the later are actual do an with than quite margins

in that's to it's you it. give sense data points there's of to I'd it, the a predict, give lot you kind of but of because a So factors hard

Mike Mayo

doesn't last based follow-up. believe your market your stock weaker. price customers stock clearly, mean, think you. are just a the They And lot on I

three are or this was it going say, are that, think better we realize? yet? do worse in mean lot Or to than quarters like we So I in you is you out than not now borrowers expected. shape where a actually the oh, just it two people seeing play

Brian Moynihan

you I forward terms Phase the on think, NPLs million this the will on of something everything basis out path up quarter commercial $XXX and went the our X in points. But play or occurs. of NPLs part Stimulus -- XX commercial even and how if for look on side, the the

through And not it, criticized that's they've all sure, when banking And they're date. borrowers, tens went home were able asked work our what The you up commercial on the every of middle actual and expected. team we through sure So even Make and borrower non-performers on make to and rerate aren't. to go and at to -- and that market side and they our thousands up do through to business really go see commercial as yes, is segment, in we everyone much. our just book. of moved which assess gone

those are commercial so, it. you're and seeing customers And adapting

the think methodology to -- XX% the next I So have assessment, is, half unemployment provision of at year-end, year, down we it first gets we the X.X%. basically setting as looked said, X%

So is we or than to sitting the with been. we're losses and the a actual proof rosy reserves cash, as we're scenarios, stimulus to And they I to picture was test. And give consumers lot in the of not customers do don't that their stress behavior and day-to-day ever scenario our expenses. and that is not carry a Paul it's in a know, today said, crisis data it's Fed, all in with by under those ways. delinquencies their And those of X%, X.X%. X% in given payment terms different has ability do directly and to sustain this It to run,

Mike Mayo

right. All you. Thank

Paul Donofrio

obviously Mike. Hey, It's --

Mike Mayo

Yes.

Paul Donofrio

I are those out obviously would at industry. one hard them, there of looking at -- see can look and clues right? you data let's you Mike. clues just But Hey, It's And there some to yet, start across the mentioned losses.

You can growth. look at NPL

and other next what and more ratios You just our of changed, like that it's eight something growth. this the lowest peers. loss exams. kind the where tests did, mean, loss they is been have this they Brian the this done else can one. the different. They've Every at one lowest is reserve did quick them, we had one one, They not in among that out Fed matter one-time stress stress on of those exams then thing And on thing eight Seven said, of change I rate. what matter look no as no of

So there at carefully look if is there evidence it. you out some

Mike Mayo

again. right. Thanks All

Operator

Global. with Next Mitchell question is from Seaport Jim

Jim Mitchell

follow-up Hey, a just on morning. Brian, Good comment. Hey. corporate your credit

look at had a individual to opposed If least increase look real your comments peers. versus absolutely I every you of you did quarter-over-quarter you micro macro that as appreciate your And amount the NPLs, at loan. your really

doing to your in? you think is -- think raising how more that with look? quarter to and borrowers just that's a your do amount that, about look And So about how that factor macro the your massive you that really industry think the it liquidity performance took you some the in grade, a to mix? of you Or when investment fact micro and second than the -- do provides it's capital corporate we exposure Just maybe do it. Thanks. peers is rather higher

Brian Moynihan

in but portfolio. the the basically it's it it, quality I'm it's of the of that, which not that sure latter where is sequence, is part

real not crisis $XX into going exposure, of much it's we earlier, or for billion had as commercial said construction-related our housing. last estate is So Paul -- something

We have little. like $XXX like very million that. It's or something

on pulled we in pretty And of million gas the of to couple a of -- lot what? think the charge-offs so, for took those we've quickly. of Paul. hundred For quarter the a exposure remember, kinds taking So care yes exposure And been first get I company portfolio.

quality have selection So, client gets it's actually across in just the not of what there. decade It's us macro-micro. the we done last

that's stress growth a that of mix how third-party with and shows the we'll fortress adamantine But But is and and so under SCB a responsible losses see that tests all And rates yet And our that and where it. build that's and of that's floor we the be lot built times and differences the there's see has that'd them. so in and things. lot in to we -- other this company this in why the objective our and all how evidence do goes. build -- we remember businesses you

Jim Mitchell

you are about continues then at growth for month? it it is negative lately? Do of comment surprisingly any But near it to kind deposits think when not Appreciate now. of got last you the holds quarter throughout seeing as it stimulus there deposit we money holding Yes. the the paid? deposit are do growth, on how those How the maybe strong. be trends think Absolutely. term you of ability about I the up think And in seeing you're in Or sure see -- terms cash what turn slowing? over you for least and

Brian Moynihan

inflows large run place he for ago talk But Paul got long to is the this time cash Well used corporate we uncertain a him and reality the us to especially is about let this that from commercial the the customers I'll be because business on side we're CFO. a before money We that money not have the redeploy economy opposed frankly. they're going money into to you're sheet. on and markets start want to drawn that to sitting to balance money the raise the when should the and or and having it want using as redeploy sure them the them in in

putting is yield and when a take companies So little when that's some like because volatility that in things the -- prints out to do real it the do question higher think money allows -- them settling off sheet. marketing stability yield them more bank's a they the some those about of balance with are money for to move and

sense, quarters' So question net you that just of in billion. almost that. consumer volatility up checking accounts, $XX you Those net But deposits. new that's XXX,XXX are XXX,XXX. around the are linked-quarter We look the terms year-over-year in production. was a when at It's give of had numbers sort to normal checking consumer growth

have I like quarter been this. XXX,XXX like in that we something a think or might

still accounts XX%, XX%. so that is the building core what's up in up average happened And base we are amount and consumer are

PPP, accounts. Obviously any the That's small through We we customers so deployed. than is was $X,XXX-type of limited the the EIP-type business people's been small all Some the it's accounts of because been the down. well to much. -- went came supplements the for out that's that's spent largely that's think spent as system. good On in be XX% -- out seeing of the a It's you're smaller gone stimulus stimulus that that is also pretty XX% a of the future to went seeing people's unemployment which you're of whole. have. population, stimulus But number stimulus and group be

of digital commercial all a more And it this And of question. a those more question is about deposit would are ribs growth at comments new that balance checking your up so, think core if worried average or make here deploy growth large going of had that over Paul's liquidity than to with to next you about keep to pieces, even understanding due the you to ground why But go position and for this. shut where digital is and XX% is on time. stick out about you that sticks accounts purposes branches corporate of out focus whether run half are XX% will and core we clients' we I a sales wealth management non-digital and behind that's trying that moving tune even the consumer XXX,XXX environment question we because our out, ground like of another we're all sure with down whatever. money -- the yes this what's going have on and we've the to might

comments the volatility I So Paul, side. all think on institutional are really the

Paul Donofrio

got just at Yes. in up. end to macro of Brian. usual. obviously anything at I'm the grows, is -- Maybe at well. treasuries than guess point going it's that's -- way as our deposit addition you And bank not And the an you when enormous more higher balance my sector look of Fed a go up sure to if private the the you in balances to look account some supply going add money are when

that to increase reminding to spending payments about quarter. so going of Brian the the delayed are feel deposits get of back get then that worth continues and and -- that's in things the forces Tax balances went little to GWIM, deposit our of go a There banks some accounts third markets came get come out they're people's some into sitting that may we're in if couple perhaps fair continue would we're on there both money and side. third hoping were as the and market lot that grow the deposit people. are got going people, tiny out at were accounts share. all expect to you says to into of that's and good some and some going market. And to quarter that see Plus a paid So macro just you've excess suggest in deposits of corporate of and just spent consumer to

Jim Mitchell

Thanks. helpful. really all That's

Operator

Our with go Please from Betsy next is Morgan question ahead. Graseck Stanley.

Betsy Graseck

you leave couple on That's had the those points deposits Hi, It's making of to, A were what that paybacks, good and drawdowns yet. basically but One all morning. you're there. didn't that referring interesting the deposits. about follow-ups right? the you

Brian Moynihan

point. Betsy, that's interesting the Yes,

been you but institutional that do came companies because I but consumer came share. with those and would back more seen we You'd It's been Nothing the predictions have haven't. side, grabbed on pay and have to fair they our they our other decline than the deposits and cash books on it the side. just interesting if we'd already think seen it, into the expect them

Betsy Graseck

my to waivers. Is So, should Are you questions. it do it to dealing come Can help Do a stop going in to automatically? it the more the fee roll those? you're How this us that. you I an as XQ kick you just fading? phase-in and waivers modeling One give with is on is with forbearance the back? us going be in? through two fee Just they off how how or dealing be And person-by-person? going back Do you're you understand of XXXX? I update mean waiver

Brian Moynihan

like distress. and products as really mortgage I I statutes always speak. stuff the consumers think We're of other runs The stuff. has said size business of maybe the of run earlier going the aspects because in small then of as to side help the rest some lending especially different And we off the it begins through.

when need have and they if we help days to collection figure and want panic So, in which going need view where unemployed side people who of we're XX it work month, with fee somebody's did is and from every them. somebody help and pick you'll with the lack waiver. to starts of I stuff like and things to efforts. up waivers Those that our a they get the on But the We'll so to activity off. on side we're were you going better dialogue consumer both on start people was the they unemployed out can't away -- that and didn't actually up. term. collection But from to you'll that them calls and what the I'm to out you the stand them by The obviously, with for and people the and says work in definition always roll see get paid and down we'll work off our They're disappear and we to do help. struggling roll work

of side board so mortgage credit our And basis really that's So, were the XX%, The move. in and relative you percentages if dropped sort the of stuff. will requests the requests basis industry of XXX nothing the big to across point, numbers of thing. points and it's have XXX lower numbers at said terms look I

this. it to feel process. So, approach into we good went about to we down a you really type a this going We this natural-disaster of When the is as bit thinking -- get that. fees, to all about come

market So, things that's that. down in that condition what's like to whether able work market the the going come to consumer they're going and and the where lives on to

wouldn't round last out. they negative to had that play that of If the off sure whole of fees. they the in their been stimulus in got on the that have fees could we the see held account $XXXX the so waive another have payments, fees We've we'll there's So, make people case payment.

those things then sort ease again the you next do to quarter a normalize. We of will towards they right sure get they'll specific question year, to payments. But thing make will because of the that that that's third do those -- the on depending get benefits as really through and

Betsy Graseck

we points as pandemic, call, asked earlier again locations a branches through this And on big locations. of footprint you obviously, in we've in go certain then building flash these the got you've got were like

wave. think are second coming who that open would into that obviously back are I So, folks for your programs

And we've Just had that about more back in fast the term than bit thinking confirm quarter. you branch hey, on most you before? think, the our we that. digital $XXX earlier little you to you to that an improve about the recent million But been does footprint then mean this even net mentioned just efficiencies given make to experienced ramp Give seen opportunities there. we the months are pull us thinking COVID update in longer call back of couple Thanks. can branches I generally? a that cost increase how the want increase

Brian Moynihan

time little the to because work think I bit it be that a all Yes, not don't will Betsy figure we time. later out the

that. small working always working down count. that They we'll that year's This this we in year's XX branches dynamic. three or XX even something -- places terms bigger as second might be So, ones. many replace two be -- but like year-over-year just had second be we're always branch of and think too I or or or They last whatever quarter might quarter we're

So, by that X,XXX to customer and we're to following X,XXX branches continue doing behavior. work

-- something some the this deposits So X behavior ribs, keep our actually costs went now changes you'll or operating By with of in again points us cost of consumer stick this to fine way that. all about the down like over basis if to deposits, the -- tuning the year-over-year see by system.

to So manage all just the continue we the centers things operating and that branches down, cost of not and around it's it's all call overall it. the

-- remember, So I opened stuff in have. middle let we're then deploying way and don't branches and by the us in play that the of out. didn't we Ohio this think we places thing and in

left than a may much years ago. at that different over the that account execution And been from something so on have replaces

will or is we've way don't play one of some but will they'll been markets doing markets I get the go think it don't and out. they'll believe consolidated other where have So to reach. as will way -- what deploy we happen be dramatically, count the we always

million X.X I think day, to a business the on given getting still branches. we're

every them. important we an in of crisis and day what have is the environment the branches during those work this it being incredible what do So part done going was teammates in open despite on around

I important So be an incredibly -- us part, important an makes will -- different. which it always

combination results. superior reach we're big that company and company We proves a customer digital are and physical big and a

Betsy Graseck

Thanks.

Operator

We'll with go next O'Connor ahead. Please Matt to go Deutsche Bank.

Matt O’Connor

of is Thanks. interest of your it in think just forgiven small or included the about you income there? Good that will you PPP talk us net morning. remind when of accounting the and in be Can terms timing the business repaid outlook? And

Paul Donofrio

NII be with the over So there's if for little under than of don't million. a NII you're a of the will loans. fees plus look PPP. next the That's at the into Why function start going accounting? under amortize about in -- FAS more little quarter, a It X% $XXX rate XX, quarter the I this to you life interest that

quite in did -- In any we weeks. of terms profitability to that do expensive so XXX,XXX the of few terms I overall in we're was do program, about PPP. and would out we all of well, That to not if much that a loans had expect

Matt O’Connor

there a Okay. that the to your just the if you're forbearance? include obviously, profit. revenue, from there's you so. on some And to articles the think the well does that it's get point, is accelerated that there as fees focus I out and were going donate any there cost But

Paul Donofrio

then -- to fees have remaining been NII, a extent accelerate If were loan haven't there's that we is once once forbearance into to fees amortized. the those amortizing that you Yes. forgiven the

I company think somebody of small a massive effort be in of But was wouldn't spike could This to it a in this donate loans don't So XX in outside it loans seeing program. expect of I quarter like the lot but forbearance. or do -- a me probably a I you two we've to -- as in if out get company, said, we XXX,XXX a lot to know, consumer know quarter was of we're in we people years business. told again, a profits start going well. profits, that involved the is

Matt O’Connor

the just then sure this. separately And that everybody criticized you Okay. on loans, commercial not I'm it's helpful do does. disclose

loans Obviously, -- you might think how would versus much are that. it's you're criticized kind I how But Or bucket of and non-performing? bigger say non-performing? say that about how should the into we than the kind of think flow are on that? loss content But appreciate watching. a much So non-performers risk of about loans that

Brian Moynihan

-- on remember is the probability that -- Yes. criticized collateralized -- the follow but what sort is They're default given and driven Well, They're the recovery, a largely loss of depends structure. loss I'd ratings secured. then loan. say to a that the that's collateral the

results the methodology the in built build. reserving into So reserve all that that's

have that stages something years. to through have So, think really bankruptcy -- we lot you say have the process gone have several of it's so than are example, through it's separately we NPLs. -- the in a not of system, just the you there different It's getting -- who to retailers of but if last for over -- it's

securing had -- Whereas that. like And great things that's haven't method but yourself We has if line a and business job done somebody for of of lost anything unsecured the a it's because and we've there. an follow-on somebody rest all the problematic. it's produces the the But you in just produces which -- quickly reserves which the have -- be that's decades built content that more loss it's a we scenarios methodology use. can follows assured which into that --

Matt O'Connor

you. Thank Okay.

Operator

Ken Jefferies. ahead. go from is with Usdin question Next Please

Ken Usdin

morning. questions Thanks. dissolution. a on couple of Good had the JV I

relative located kind give second million of to of we $XXX Paul all to are where help us going first fees; is was where maybe you perspective of to as it? at see peak? get you've And it better all, wondering, the we mentioned what disclosures just it of track So your your What's And the that its watch of it can economy progress? metric best improves. could can

Paul Donofrio

big of never to was of to coming it that -- terms in it basis never Banking. we'd of is revenue is it a in going about profits portion A it have in out see be -- on a because how number to going net certainly portion -- net A to Global I it's think of help you JV. consumer. that be

the it way, we some we integrate gave it expect sales expect customer important gave would we supplement to -- perspective. you to to grow now I now don't can our term. again, revenues right whether of in near I really it's investments put it relationships, it. we we our force there think innovate. about is And it's something leverage how or that, grow expect we full be and I you question and as think $XXX our million directly the We to you would about not. that our up our But ramp can how do behind I customers it, incredibly -- think answer on them the know bear We see your But appropriate to start and for to about It's it. more have this some fruit. can

Ken Usdin

given Okay. effect? was other because categories, that of that the Was And market fees, management just levels in wealth asset terms averaging saw? the management, down. of the should period-end part that we And improve

Paul Donofrio

Yes.

picking at quarter. a you're lag, end fees one-month of the first AUM that remember happened on are so up the to have what there You

Ken Usdin

Paul. Yes. in the strength quarter? given And any pipeline the relative that lastly, we comments the second Thanks, saw just about Investment Banking

Paul Donofrio

Investment been know up Yes share. sure. significant quarters great, we picking quarter. a for up significant The great And many had market now. Banking We've picked share we market

of a I that. you have think was of It recognized sort record. all

emphasis the also X% I And rising banking add. think our middle market share we this in share at is investment market there market given our point. above is bankers our on

of activity think this -- in a as clients to the up couple there. quarter. weeks can't capital of little you activity we're first -- in the expect bit sort of their -- lot A needs, I address X% don't we don't help already we're we're I but of a over slowdown we of to answer, know really raise seeing

think progress feel been. we don't to expect terms market market in has for the about the quarter can you made companies. and world I robust really the of large the our But third is we want have the both as good that second emphasize around I middle going So share will quarter be with as companies to what clients

Operator

next We'll go go Saul Martinez. ahead. to Please

line open. is Your

Saul Martinez

NII, guys. morning wanted clarification. on Good Hi. bit I start a off what's of to just a

You couple quarter-on-quarter said paydowns. of would million a on commercial be down NII hundred

said also on weigh You long-end also that NII. would rates

up a of assume that me the redeployment of sense quarter give I rates? into third NII to give of know the would Just in the period only be from Paul of terms pressure could cash securities additional securities us order rates risk the is of And the in Now talked of on -- what magnitude long-end we've something kind impact longer cash a over long-end reinvestment I and about past sized of that helped, time. but flow.

us on you it potential about how if help quarter can and that? beyond think So to impacts third the understand

Paul Donofrio

say Yes, perspective quarter-over-quarter in stuff look will XQ, million current in I terms being $XXX all that of down XQ right? of to our there, putting kind of we're

Saul Martinez

Yeah.

Paul Donofrio

down. potentially being loans got You've

down. average got You've coming LIBOR

-- Securities below portfolio. are about securities quarter. there. that got all reinvestment $XX And is. portfolio the billion, kind You've the billion yields where where matures portfolio $XX in of now significantly every It's right

can we So slowly sort offset. time. natural just put some offset into that how plays are in sort We if of we of these that cash sitting have now dilute we see going them take over that's can securities of out. a a some and to decide deposits of that, to get But to just all

Saul Martinez

Okay. thought met. have I I may don't you that think -- misunderstood. I

because I fair think you And assume $X proportion $XX to rates of billion. forgiven. given on and PPP those, billion have I over you mean easily to of but of things a your -- number be couple will better could paydowns, not a million $XXX fee on order the of a little pretty NII, size guess of get magnitude loans I I is relative even for a guess. of of be, in I the that -- your talking million it's back the bit impact not go of Matt's get sizable So The and hundred all I mean those sense I simply about what to commercial on the follow-up wanted from question from and PPP the small mean we're impact to numbers the

timing of going accounting and I and the competitors pretty make of those a an I significant first understand loans So get And your guess money recognized? just it's order the I and trying why impact. I'm on trying my Or that you geography one NII base mean the up Is is is accounting lot you're to XQ should forgiven and I expenses, in not guess question on as income had you've away to in it spike that guess understand to in already by of XQ what from start revenue you'll donate as it we see is I'm relatedly a the that. -- are of as those recognized sort ratchet revenues to that expenses? guess magnitude accounting standpoint doing. the expense to of is,

they So to small don't to me. be seem

Brian Moynihan

the work are hire we'd this was people -- lot working from to open The allocation that to had part business up away go then we of -- in April this that net And it the to to also coming a there's on elements. think it in of we and profits we and announced point. XX,XXX we've of for X,XXX of and working forgiveness We what -- costs on internal the of so had then high on in forgiveness had I third got There's couple a costs people lined a origination lot activity. already weeks. platform do we supplement us some parties work obviously

So where with -- cost But well saying in the and up it it. insignificant. you're just it. is of revenue lot -- The I there's against not is a shows we'll revenue deal issue

Saul Martinez

Yeah.

Brian Moynihan

next to quarter's side, Some teammates are working be the P&L, on it. are and forgiveness on some in the these going we have P&L because

away it something in but This to you, was to give to reconcile not all news. net is April. new we'll That committed profits. was we space for this So commitment

Saul Martinez

But it terms about I in Okay. am thinking of-- right

Paul Donofrio

You're not going to see--

Saul Martinez

ahead. Yes. Go

Paul Donofrio

revenue, you're going in the on start the until revenue To see forgiven. get loans the point it to not to your

Saul Martinez

fourth First Or? assume is quarter? would what we which Yes, quarter?

Paul Donofrio

yes. -- it's do know don't we be. when see -- We to We going see

Brian Moynihan

X And there's a by doing bunch loans they're and Yes. extending in and of talking phase about proposals. the way more

then because hard from do a A say this things weeks another weeks last So to they like to if of XX it little weeks eight loan XX we're even and and do can or predict, -- or you bit that's quarter to was -- the going that. extend in loan

through just mystery just changed -- here. until rules no because much. the is -- it's don't So know happen what We'll going so look get exactly to just there's it we we

Saul Martinez

Yeah.

it. Thanks Okay. guys. All appreciate I right.

Operator

is Juneja Vivek Please The question from next JPMorgan. with ahead. go

Vivek Juneja

just The I of been Paul late XX of to see hey, that through consumer sort that or to period, you stock early -- in just wanted started some loans I'm deferral deferred, that June had presuming to July been Brian, question deferrals a get the or those days. Hey, clarify.

re-upping so are the where ones percentage going those seeing? And and of for asking you you what off And going What cut are seeing many are how what anew to done? versus are deferral a in deferrals are off?

Brian Moynihan

-- point Vivek period of period -- kind time all the of most We're it of -- It time your not now that. we're sort that rolls the that in off. it is now -- for time it's occurred a where the is

And a hundred we've a you rolling so we'll of as we better. couple know already them and of seen speak. thousand bunch card, the are separate But off off roll

biggest is biggest the separate So told the yeah, that is their all paying the all docs said us of and in us coming -- up which the so July what category, dentists August. next aspects standpoint now which I small XX% and are there. percentage earlier of they're those our is and card early other are in They've that. From and business, about payments

In seeing who numbers home because less the on people continued deferral pay. week we're loans, new drop requests terms have to are the than there of every

it And so we'll us a you substantial whatever been lot them don't at if in reserves who all said million all will built us credit the out today. with a second paying what paying quarter it's it $XX a and them quarter. million, the number hear we're some the they actual people had loans. be all, chunk outcome individual them of in But of decent some million charge-off -- as for cards expected that on these down partly there's there yeah specifically And is. And the month, $XX a are. and $XXX this that would are the set-up -- say to didn't business out come have paying to been But characteristics plays it's every I substantial that that period deferred earlier, as have play type the for charge-offs know while of we deferred, earlier, roll-rate for and those of we based going thing. some card reserves said down our that us been was about, of in them over holders by the time. increase When card in that of reserves haven't What is I -- and on basis there's

it a difference wasn't substantial yet. So

And during quarter. rolled and the got that so people were charged are only the that those enough off they

us covered see reserves. will So the out. in let play reserves. It It's it the be by

Vivek Juneja

Okay. Thanks.

Operator

Our Please next go question KBW. is from ahead. Brian Kleinhanzl with

Brian Kleinhanzl

Thanks. Yeah.

questions. quick I mean, first on two the Just expenses.

then how but we Just I quarter, third from quarter? the expense we trajectory fourth how look then thinking million the the are as and seasonality of $XXX expected that are get third get expenses to about much out be into in should typical year? still well half services, back off of the extra we these to as the COVID-type merchant roll the the quarter, if

Brian Moynihan

Yes.

That joint but about when all we those joint factors, a quarter the this from to it increase time going balance we reminding what took P&L we we it venture it unwound out our happens. said people told laid through of when interest the venture you year I the where is is year, sheet -- interest, expenses. it the it earlier, last think and million So on were was last $XXX this Paul

had. them just we in. that we and will the we'll that and All expenses of, we And last we'll so want tightly we'll that, and it that sure company you have this the you down. told year. sort Absent down, management work in pluses of to to forget we practice be people know, manage factoring but are didn't it make And want we same, some manage rest minuses people that

down bit. come PPP expenses a little You have some

activity have be that to have we make a key is a little more the want see didn't then fare, you what have We'll and moved you But people will You mentioned. around you sure we we've as difference And business forget opened expenses. play up -- all it but have the last as standard year. seasonality -- people little you bit, out. told

Brian Kleinhanzl

does then the gave a that the one And just simple guide separate in tax half, rate into second roll Okay. you is forward that XXXX? Thanks.

Paul Donofrio

rest answer At XX%. answer, back have the but need you you I a it. it don't around we an that year But XXXX good think on for we least don't have will can to yet. be year, I of if the get for

Brian Kleinhanzl

Yeah.

Okay.

Operator

with And final ahead. we'll Charles Portales. Please take today from our go question Peabody

Charles Peabody

bank community I other know ask various JPMorgan, Yeah. it I big mortgages, color other losing are consumer Wells, lines particularly cards, and more profitability and consumer branching. your the better and businesses much relative autos, probably of like that is And the I basis because than Citi. bank to of the community a your has done a big cards the three part wanted on And money. on where product get some and

cards. companies in other money losing are The

about value So, bit major guys the little talk a for different profitability versus relative of can produced product you they banks? you and the that your lines other

Brian Moynihan

bank with I'm not consumer of business. is premise agree our the by driven profitability deposit sure the frankly I that your

you And now rates that'd the with rates consumer but and that middle go twist so it expected business zero be of you're in a that of part quarter, fell falling this right through given the the floors as twist. in this

quarter. running And So it's the lending $X -- even about segments running running would been type billion of quarter $X have XXXX billion a numbers. if in been segment, consumer that's the a in deposit been have back

-- a lending just card which it's the So and lending. business not is all that's

that's the when business. driven business a in to up. a the profit. general driven it's portion the is card it's we of -- I the catch but fell going rates not little to of by -- a-third quickly while rates the moved which The as is operating take And and sure, premise and the back is by a business down card deposit with business that that So but agree I'm quarter

Paul Donofrio

right, you're think I Brian.

of competitors the franchise than credit. I profitability given rates unsecured deposit before is credit That of position our came it think it careful -- respect have way we was we how with given think many to to been about our consumer started stronger and strength at of the down. a

a sort potential consumer, we You're losses as because unsecured same of seeing as deposits franchises and hurt -- not you're much in those the the just others. in that aren't now seeing us valuable us have but don't have as environment, because deposit lower-rate on getting

Brian Moynihan

that because to money it deposit portion make as And money lending Be that lost may business Yeah. this the quarter. quarter. continue this

I not you sure, the point, but give just to a sense. I'm So get that starting

And of so deposit wasn't it a business. lot by was the overall, there made money but

Charles Peabody

and banks the point an losing businesses money. be the guess, clearly to other tend starting card was I big that outsized are they they're the product -- for

big -- that your is so big companies? this quarter businesses And less as well money the Is losing than differentiation? so other but and big card business the other

Brian Moynihan

the tax. on because side, Yes. money. business deposit and of and consumer the brought and The We lending I P&L. lending after it separate business money. card money But losses versus The don't business lending $X.XX made to billion billion lost of lost $X.XX have offset profit a of don't profit the provisions --

That's So or business These core million COVID That -- but what deposits. that. for remember, and they're even anchor, in have checking is when we of a year-over-year. XX% as a all products. position that don't the a think but when are you drives -- all XXth are double-digits good the of a checking And year-over-year a taking year think tougher business it percentage consumer year. average balances the coming of position -- lending played typically accounts -- very the out through gets accounts We low. impact, has one of is as The measures profitability CEO down we that cost in growing number still rates just I've deposits, my been give the X/XX. customer a growth we operating across business. in account, growing of account of of terms great been at year-over-year

is to in charge-offs. we keep think has we've an economic to the responsible I actual given for what think that, in doing. to or quarter The size that adamantine growth they're the therefore is what way We up the today business. and the it the rest been a one now the business risk-adjusted card that X% way. Fed causing Then in drive Remember reserves what's scenario life a fund other zero portfolio P&L putting so with losses consistent the the quarter is we're of one nice -- is that's margin commitment that's never our business and you're of a rate that deteriorated. basically it's going

or us. basis. -- a it's And we -- as business, run profit. that It's of good loan business a got out of it business many consumer we it -- in drive wonderful biggest So on a it business. a a but terms saying, a it's the don't unified card ago for home and is our it business as We decade

Charles Peabody

All right. Thank you.

Operator

questions. floor for further the no have return I'll Brian to we closing appears remarks. It

Brian Moynihan

quarter It's responsible we've time and Well, thank thank us you you, where another this morning. with driven growth. for spending

We given to And the this continue and in Global we're especially and company environment core work this continue with Markets to team pleased we're forward. we manage tightly drive the the activities our in, quarter, did our have to and dividend build the in capital, liquidity, providing earn twice gaining worst the earnings share a Banking our area economic since us and our Investment quarter Great power have build Depression. the --

you. We'll next you to time. thank So talk

Operator

will This for today's program. conclude your Thanks participation.

disconnect. now may You