Bank Of America (BAC)

Lee McEntire Investor Relations
Brian Moynihan Chairman of the Board and Chief Executive Officer, Bank of America
Paul Donofrio Chief Financial Officer
Glenn Schorr Evercore ISI
Jim Mitchell Seaport Global Securities LLC
Betsy Graseck Morgan Stanley
Mike Mayo Wells Fargo Securities LLC
Matt O'Connor Deutsche Bank
John McDonald Autonomous Research
Ken Usdin Jefferies
Charles Peabody Portales Partners LLC
Call transcript
Due to licensing restrictions, you must log in to view earnings call transcripts.

Good day, and welcome to the Bank of America Third Quarter Earnings announcement. [Operator instructions] Please be advised today's program may be recorded. It is now my pleasure to turn the program over to your host, Lee McEntire.

Lee McEntire

Good morning. Welcome and thank you for joining the call to review the third quarter results. during had usual to presentation the they're will referring has release our that bankofamerica.com everybody the be as on documents, available to website. trust a section review chance earnings we Investor I Relations call of the including earnings Moynihan, Paul elements. I'm to Donofrio, to some other Brian our the opening comments to the call CFO, going some over and turn CEO, first for then ask cover

this you just Paul, Before may I financial over risks call statements based website. about let current and in our detailed expectations from uncertainties period. refer make financials. we GAAP SEC filings turn earnings available elements pandemic materially toe as on found reconciliations may remind and to Brian forward-looking to on website. that expectations materials are the and materials can particularly Factors our assumptions just financial are to results measures me and forward-looking during US also regarding the cause to they the in of and and statements subject Information operate be we management's are The non-GAAP the to our various the call are continue non-GAAP these measures differ including in available earnings our that on

that, Brian. with So, take t away,

Brian Moynihan

and Lee, for joining you safe. and of you, thank Thank you of all staying I hope are all

at on America. I begin XXXX for X. financials, the today, Bank here you And detail of three on to the before some quarters we're slide and going on takes are of driving I'd the first give thoughts you We through how thought you Paul

have the sinuous than else comment, care This global the by the economy the created year been more defined by of opening anything for has As health crisis. recovery. impact paths and markets an this

Bank won't there effects underlying fiscal are and is of There and fully themes and that have been we are until But here, we forward. health address the the to by economy America projected As our a to core and continues is to get its seeing economy. on on. our fundamentals see path earnings One the lessened generally, generally These of what sound the effects. the we suggest given company's monetary healthcare crisis key the by in data said going return early that what the impact we have US the policies, I'd we those comment consumer the and and prospects like policies. three of of on associated data

downturn recovery. risk strategies. beginnings how The the second third our economic progress the the we're is that think making from backdrop managing on given is and of subsequent all corporate we about resulting continue the to And the how

brief tax Before face the after quarter earned with backdrop I on capital, We of our the the quarter. just per summary We we. these touch given we performance ratio $X.XX versus minimum. or operating X.X% items, of solid XX.X% billion $X around share. Overall, a capital ended

a continues immediate in delivery transaction the basis. quarter. with and all our apropos dividends, elevated levels it can the before, technology higher This volumes of remains capabilities requires has high has a to in customer deliver it. that also strong to demands operational It requires period third extra requires than customer our franchise, franchise to security of and environment required company. The it on balance daily of redefined our day-to-day on teammates. thing results in experience clients our talented delivery that from to It the our expense be group has the volatility to to do on flow this also events. basis. dealing from given across processing It protect teammates, that It daily ebb come -- meet a twice earned which the this sheet cost right we've work require attesting our ever than of For pandemic, the operating more this more excellence

the down quarter-to-quarter COVID a from forward evidenced drop in the And back the of this talk fourth is the discipline That we will expenses these turned COVID, Paul see company. as headcount, As however, X,XXX are see our costs path on the by expense going intact. in quarter quarter; about a the well we remains in forward cost on basis. more corner minute. management coming We've

We we its saw large and saw impact We another a US So with outside base of our data let's in in start of company. spending customers. it and restoration partial saw on the economy. economy our that the our

through quarter; start to first strong March As was the the hit a spending customer as the you think our after current impacted year. quarters, we in

still However, first they more our the than customers quarter, did for the XXXX. of quarter spent in

recover of saw kicked as policy year. monetary have of more payment than in a The drop and levels they stimulus, June. reopenings other September XXXX in Bank spending customers and the of XX% year. when It were larger Overall, worst trillion and second in did the And of the quarter spending the to last spent GDP started we've crisis PPP, of in America of in Year-to-date, that also by America, compared spending September In the a terms was fell deeply $X.X April spending. customer there May in full began. the restoration Bank quarter, across than third seen customers XXXX. to last

programs some and the This course. their occurred You of even slide XX XX. can that XXXX has see stimulus summer in have run as

of around Our Bank rebound predict experts own GDP of a sharp quarter economic America in XX%. third

[GSI]. plus of we're where terms back put, So to we XX% were in simply

deposits by are continue banking about and elevated. XX% consumers global as spending turned of thanks In about remain ahead last So continued The seeing we liquidity. as is in what to to year, our still make and October? Management. grow banking, It Wealth flattish we've solid deposits customers Global choices are consumer

below have utilization seen trough a pre-pandemic September. of we We -- levels commercial, In last may year. down are loan have stabilized demand may come and seeing in it rates

the card be to forward, grind we continues new businesses, and believe stabilizing, some In auto lending continues growing next demand consumer credit we in business spending recover to And appear the we our see in card our balances accounts new are over As to Consumer accounts are mortgage at is grow. few quarters. growing economy our Lending, business stable.

to demand that of this balances later. stability of for more the trough So stability deposits, the to the believe a Paul of NII view cover some now lead quarter of that loan the and will cash and third given redeploy quarter more lengthier balances was customer us ability

risks. X about to I second want to The topic, the touch slide is going on

on whether and and the market credit unusual risk, risks operational, to all remain that reputational risk, focused all conditions trading in. continue given working the we're We incredible volumes

volatility, day. was obviously this risk the We've quarter well, Going back profits to market market on and again for every the trading handled made concerns risk. between single this first quarter

are was that we X. Mostly on to levels slide And levels due till historically in high the aggressively of two commercial fully I and stands Reserve ahead each reviewing capital open risk We of can may are last card you are of highlights the staying length the time quarters and the before, the by release be reopen. industries reserves our quarter portfolios liquidity in Consumer it they the specified believe quarter. and being that's the having of for we the just ability Charge-offs have banking Our as and liquidity bill quarter still not as middle facing, current portfolios market liquidity. well of pay that on declines done XXX% side. commercial $XXX this for this risk over focus focus integrity, to as at stated the and we see internal the all to review ensure quarter. ratings Credit is example. billion. business strong on

$X.X the balance a engaging. points an touch comes quarter views to this $XXX growing in nonperforming remains basis to more clients There's modest on to basically and last that criticized loans. and commercial exposure is the nonperforming Overall, the till Paul loans at You responsible industries billion flat assets remain a seen back around criticized that. those overall testimony on the to of is and growth Meanwhile, some XX of on the decade it consumer with first of This couple around will company increase we've million. can loans come [reruns]. weeks, those refinance. down the certain focused In see

the expect terms are this increase are low credit, among and year-over-year. mid of expected losses deferral on to deferral of and are XXX,XXX are expect means losses our should a those have and secured we only which Interesting that dollar talked see remaining $X other deferral we of accounted billion and year. customers other card including reserve in us, a in net charge-offs in positive percent balances P&L value builds be last loans. All over; largely financials Importantly, amount delinquencies is around don't meaningful And to about the XX% might in $X.X behind attributes loan based in delinquencies well remain the management. on next story, impact deferrals, the that we all wealth said quarter which mortgage end the both our the reserves for consumer them that in to already. come. to There mortgage are at XX% down we Having couple was Of billion on the many of total September. of

in And investing engagement households the existing consumer after our we in platform prospects about multiple becomes grow having around then commercial company reviews households work balances. see all have in invest the and across saw So the I and the financial been bankers business, quality business, throughout to are home, the advisors whole Through excellence, our our management at from this we the investment to the fully clients grew investments Merrill by the we by our In on managing to see advisors while platforms assessing and early, prospect the consumer $XXX our time? -- digital client and year-over-year. we customer question technology, continue is operational future; work wealth actively We across plus you quarter. In assets in that again move can spoke depth net then businesses, country. penetration quarter. growth year, we slide even in we consumer checking and continue done of the We XXX,XXX our our strong credit private focusing Edge growing drive risk households In continuing our we the customer billion business. core $XX checking production X. billion again, prove as as can core same board year-over- our know the we about in get now

of new we've X a trillion. fact, record In client reached bounces

that board is filled products better offset third the only market centers with out every that business. the company the This to continue feature capabilities. digital in in over is operating rollout We expansion also weeks. planned plan and But this a client now number in the new the we quarter a but were closures financial in across industry XX a expansion customer pandemic. We engagement life delight, And the of we with and financial the market our before have pre plan consumer and week's change in continue deeper where of new the crisis. XXX,XXX during digital services and penetration customers like already Not efficiency. couple the investments plan our here added continued of to last enablement life announcement, trifecta have

see on You engagement digital slide highlights these can X.

is logins total Erica in quarter XX Zelle to This million our XX up consumer million X.X had digital users. business. we at users, in was billion

over how see mobile. a was our that bottom and Lynch our advice checks. quarter currencies to to and allow the list we out and features, products provide wealth called we've the engagement over In for private that how bank customers. touch the digital commercial up high the clients deposit of -- saves week world proving business money and interacted tech. platform, they in kinds around company high of costs. capabilities. digital to of see of CashPro environments. have these to and rolled for with kinds do new of better a CashPro all like all easier the how at the and interfaces This them things dramatically last you bunch lives personal This CashPro, and and have the of makes Through from new user as the our clients manage companies ranges treasures Importantly, advisor again just our clients research Merrill us our page, In capabilities digital middle -- our operating and embraced statistics you management area, And your

billion the most customer business, we economic risk With side, to business let importantly, in underlying business, do, Paul. it but turn the on $X side summary, growth strong we'll in after tax progress and progress it on So earnings, the perpetuity. in quarter; in that solid that which what and a a over of recovery, do continue to me is the

Paul Donofrio

in more balances reserves expense, compares added and versus progress slide this reserves earnings starting comments against QX. per rates in mostly has health The made the gain this on investors of $X.XX most in less we the periods of lower litigation decline quarter my will the provision to significant QX QX was as Lower lower are QX. year-over-year the costs as I $XXX through linked my Thanks, covered NII improvement with increase in higher loan a The million lower comparisons comparisons QX, the Brian. robust comparisons XXXX, as $X.X by will was we on which in and QX in was well provision for share expense X credit driven and quarter-over-quarter focused $X.X or of COVID together. in I'm mortgages the towards noninterest $X.XX environment moment. and compression, directed cost most income compared relevant. a X environment. in driven interested losses IB our caused modestly earnings recorded of more on offset of income quarter, many QX, trading as are discuss more be but and as work we to QX, sequentially in year-over-year speak given billion remarks or And net sale crisis and billion NII to by by

in across in While which many investment income revenue. were up and fees billion, card and impacted showed markets banking solidly linked-quarter, quarter that charges company's mitigate And higher more to $X.X of linked down progress both up the in businesses. a markets noted was capital quarter of more history. the for QX heavily from helped making fees second saw year-over-year. our heavily from capital levels levels. -- Brian the At investment fees, increased in banking market best decline in service levels QX activity move

this higher also We market households fees we as improved, asset experienced new quarter. management the again and grew net

in by expenses; three QX were higher they QX Turning in driven things.

to reserves respect litigation built we with First, for litigation some older matters.

quarter's and quarter COVID on $XXX litigation about linked quarter $XXX elevated in is driven the impact in of their report costs. also the two increase loan that with first million. this some services items, provision increase with more to And recorded of obviously was associated change merchant sale an would expense. decline revenue, of profits. this the we pretax abnormal related out expense merchant from the prior that And of in gain had we was increases third, the costs Second, $X.X important point the even which servicing defray related respect recording COVID is helps income; million, and increase It to period the in billion which I pre point out by expense in

given policy, a In had our tax results to a we expense UK revalued positive in down. included our tax written reversal $XXX tax that adjustment million UK as previously been our assets deferred addition,

and XX% points. ROTCE XX was was basis Our ROA

liquidity little declined quarter at point change the billion main trillion excess cash about reverse and reverse sheet to and the balance of of by ended total $XXX want and is $X.X about securities. of assets. from in The balance some at repo from the QX. repo slide we out sheet redeployment the to Cash make X, Moving QX into our I

XX.X loans in our and decline ratio improved will of we only RWA Shareholders equity were amount. The earning advanced compression RWA risk a With in dividends RWA even CETX downs. advanced resulted this approach. improvement similar quarters. to twice advanced NII reinvestment amount lower in to in But billion as capital reduction importantly, rates This a the regulatory decline the RWA, advanced in pay received standardized customer under offset more approach the under under The of to ratio, help lower in the our quarter from approach, RWA notable driven well. standardized given by XX.X. improved rose the billion ratios, The quarter. in $XXX governing in point approval as model calculate levels $X.X our decline on decline loans large other under the paid. operational from which increased updated security this balance loans, CET became drove again respect our than our coming was by While sheet

improved basis that approach, requirement $XX translates XXX CETX requirement. and capital ratio into our cushion above under billion the standardized minimum XX.X%, is to Our which points a above

and also above Our TLAC requirements. ratios remain increased comfortably our

higher the addition grew mortgages. in and QX grew couple environments, year we lines next rose as charts loans business total grew Consumer then only X%. leaving growth loans give down deposit offset caused In I things of a the two and X% on commercial near-term $XX longer are out that to year-over-year, loans of and of and than balance billion Year-over-year on incorporated in X%; banking perspective loan by with five average X each you respect quarters. X trend in point deposits Banking, given to want Before yielding of sheet, the to Overall and residential was The a show the loans of a more PPP more global X% loans declined as trends. and wanted normal a loans the card decline disruption the year-over-year, by loans slide the pandemic.

perspectives. few a forward, In terms of the past

and declined half these XX% continued declined but from the pre market first to begin the XX%. quarters, in QX, categories, move improve gradually cash economy pandemic respect to to First, to to news has number of of our travel XX% cases, of believe during where is should to if the has of is credit loans, below I On declines. points over is that optimistic and business. Brian as customers With growth This in the that PPP absent Outside began line loan are materially trends banking we bottoming cards, next few deposits of The economy. forgiveness impacting higher ago significantly of every the in deposits. good of year, in gone now further utilization the see XX%. resurgence below grind a rate you spending declines the deposits. credit rates. year at spending larger and entertainment. We year-over-year COVID us; middle slide will that pay forward. to card XXXX continues couple the government remained volumes rates rate was balances and a lower. certain before such driving the X, in rate line in in already And can drive remain will are We past behind the just paid the add or of by same on line quarters made tremendous raising each business business provide Fed for levels

reflects So us. we deposit growth our experience think customers overall strong with our

$XX.X an declined slide FTE income and $XXX by than yield QX, from a billion on the loan XX; and on basis, XXXX income which in more QX XXXX. was average non in lower to FTE the pronounced on basis. basis billion billion, Turning GAAP NII rates interest driven $X.X from Net basis. million drop interest decline was net spot $XX.XX interest QX and curve, The balances across from on QX, was

quarter, half prepayments. of of we negatively securities, our overall continue the resulted negatively long on the higher in to also drove The Compared and for a securities write-offs lowering QX. on rates of company decline of basis net increase NII the by rates mortgage the prepayments more the impacted points. our saw little in yield XX decline term reinvestment the than six mortgage maturing in -- QX, premium to impacted basis yield yield. points and impact Given level by and NII This the extraordinarily was in bond an during lower

the other noted. balances quarter previously driver the decline of was lower The card commercial linked credit in and primary NII

While loans lower This repricing variable deposits did short of by lower. rate long-term funding the cost term was debt. mitigated yields also reduce on both of rates and decline

should from We excess also the redeployment in securities. aid subsequent saw point that we more in want of NII our a benefit QX modest quarters. to liquidity of some out into This

sharp interest basis decline the XX net declined Given NII, yield the points by from in QX.

I you already On right, this chart. and we premium the net other the drivers noted decline. show drivers the bond see the of bottom the can interest impact on yield

terms big not likely of of the there worth and not couple guidance, low moving optimistic we drive could which negative caveats Having XXXX. step taking be move are QX again. for are emphasizing will and economy NII levels as from such rates forward lower backwards in a In we an a developments, lower the QX that, it COVID -- NII higher demand bottom said believe than will

Let feel on forward. good NII provide why few me about we moving a thoughts

slowly First, the next expected or grind that optimistic are the over loan are commercial start to picking levels. we loan see demand you economy two, could historically quarter utilization C&I rates up. forward, And low at with

slowly had As cards we Brian credit on noted, picking up. seen spending also

rates, large card we outstanding are card past well. loans. with the the continued in least, very quarters seasonal expecting could or a customer two So At declines balances not stable see commercial over the as repayment we lift in seen

being replaced And addition, the yielding combination in near I or mitigate securities factors NII In assets future. believe lastly, yielding these effects will to negative of in and and with write-off term in ongoing the loan currently on paying result ones. impacting of NII lower than higher and as premium of maturing, taken higher NII. We off together yielding rates aid the stabilization of deployment mentioned, some target should bond refinancing the less will cash

expenses, quarter which higher expenses billion billion, are this were slide QX. $X Turning than $XX.X in XX;

with With have don't split increase dissolution. just Both quarter the COVID expense this in Therefore, which The was our by higher, around insurance, expense, expense associated PPP continued processing costs. product, number increase million and similar of between of of helped of Turning unexpected million elevation loans. driven changes, claims. card unprecedented our expect QX, of the in First, $XX. QX benefits, revenue JV unemployment repeat we should to with be quality to accounted X commercial is quarter about slide points merchant litigation were COVID and to a our net expect XX; in activities on through we respect for are respect cost remaining but claims the the of absent which loans. net a asset believe basis differently expenses, amount and offset this these QX or litigation of following don't is of supporting from higher other not the of $XXX elevated some total processing our for expense billion processing unemployment have insurance charge-offs The levels activity average neighborhood $XXX costs to expense. XX we costs

net rate credit by XXX to and builds a responsible deferral While average of adherence government net model. stimulus loan card to charge-offs $X.X million lower in The The It points also declined losses. card reserve decline $XXX benefit years was quarter. Provision loans. billion credit net driven by driven loss from programs. charge-offs growth of this reflected our of expense on basis million $XXX

now would note credit also commercial for total QX, loan with from coverage CRE modestly grew ratio leases as the increased percentage X.X%. reserves I card at from total QX billion, and just to balances north $XX at declined a X.X%. of category increasing allowance loans X.X% loan to our total of XX% every loans While

scenarios multiple is nearly in, weighing to XXXX continue interest to as produced in the process and year great In later. assumption these return of and downside variables late seems setting everyone reserve, an weighting exit The scenarios. an to QX, could terms key respect unemployment XXXX. to of we also XXXX we something with its X% produced a XQ, have X% a outlook include that of The GDP level sometime which our of

we to XXXX impacted At end COVID heavily higher the of to improved more exposures So the are our reserves current for by other reduce unemployment industries unchanged felt the XX, uncertainty in too much macro of time and the the assumptions commercial of portfolios. metrics we duration reserve is day, total than our quarter. we both end positive despite compared consumer quality there nearly to and stimulus, to for the commercial build coverage break areas unemployment, reserves. the our GDP credit unemployment improvement; still On around left to and expiration to the as of pandemic return last slide

to COVID in the by driven On -- to began deferrals rose me front, charge-offs ended, from consumer net a benign. asset quality very decline Consumer levels million remain $XXX on continued NPLs delinquencies card credit decline day effects XX and those and excuse enter low in metrics. as losses.

collateral collateralize. by real but that declined exposures, values. flat mostly higher $XXX now. losses, were exposures declined, which billion related accounts and QX of the mall first end commercial of estate Commercial strong their than the payment. remains QX, the deferrals either grade, C&I million have estate Brian from were And Credit have investment expired at to offset losses. environment, As noted, to than XX% are consumer business, primarily XX% consumer excluding related the net asset quality card which or deferrals of lower remaining, solid, deferrals have of materially have small given with our Overall, with made only charge-offs have included commercial with related book around X $X real more more billion with

exposures be heavily QX. and and you by $XX billion this increase. COVID hotel Our airline continues the to to surprise the most in industries metric Reservable from It by quarter increased impacted Criticized no exposure that lead that should be

which our compared low that worth rated criticized of -- sector, COVID commercial America low basis billion, percentages and loans compared our than lower X% coverage. loans commercial which investment of very However, on loans is collateral. With points real only feel for which about we are flat respect either to also low XX of Today, a the represents real are of XX% potential Bank and QX to noting impact by $X.X commercial equity. XX% an billion given grade still industry. the are only reserve exposure broader outstanding which it's good estate, NPLs than are at less $XX area or are loans. remained focus are these total for These of and very of total estate to secured

more our of about one of CRE diverse, $XXX go our representing book. and diverse a this million area the by our less on led of with of little multifamily approach hold these of more nearly just only NPLs take allowance a exposure of Currently, have as over the have loans. just measured an XX% charge-offs. at status, we the a in year-to-date, And I'll to north We exposure in than have million quarter X.X% the we hotels, loan of And retail seen against a CRE CRE to just than exposure, on space than mix CRE, regionally hotels, portfolio, moment exposure. each of example our net years. office we is $XXX a little XX% book country deeper also

of quality X% can loans weather classified with of pre million that we properties, of is NPLs. XX% are LTVs, as theory, have COVID criticized, are Within around than are many only $XXX of XX% price meaningful decline. related while reservable XX% these loans hotel to respect having XX% overall these And them about less collateralized a loans. With $X loans, to outstanding asset to billion that

have are yet projected banking reserves In because brunt consumer provide. establishing most rates as consumer first comments highlights to to interest on starting the bore also note well our revenue slide the segments versus the see with costs, not In half large lower to and credit It you of for time, lower not it just in expected XX. segments, losses, COVID improvement can from of on business disruption was as I systems. turning quarters. brief a realized add will I from normally would banking, bore profits the compared instead the year the for and hit the my business also and coming did customer keep on impacted materialize consumer lines materialize. the losses Okay, we as of spending, slides other In that heavily need the of QX, which but of the by to we losses, QX. reserves, in the the and credit dislocation over

reserves In decline in that fact, charge-offs QX. from saw we

saw also saw improvement improved, and in activity waivers. demand fees as fee consumer less growth account We for customer and through assistance we

this the be may turning respect quarter We to COVID believe point with expense. also

digitally decline, we As the customer expect COVID engaged of a benefit see costs more base. to

deposits but been result paid Client credit banking last productive below investment more deposits both cards. of remained deposits billion but as NII handled our in and as be XXX momentum and are declines transactions, declined rates consumer pointing pressured of by QX, in grew, out this in were worth funds, to and We a versus year's in pandemic. by loan roughly fees we digital strength growth and business well cost continued while continued processing. more impacted in around have in million expenses all It as that X.X result QX, the is show to

XX of both I XX the will to pages and refer on those Let's wealth speak. skip management and as slide I

lower solid with in impact driven Here higher NII impacting book lower improved income again decline and QX to the and With grow of XXXX, on larger respect both related in as resulted building remained lower Expenses well Lynch $XXX provider sales revenue solid expense. by Net driven than we to and quarter Private down lower on by from growth. offset rates in QX, of Bank from was choice our market asset comparisons flows, appreciation XX% subsided. continued as income both periods more revenue noninterest deposit deposit against loan as force. million and the provision clients positive investments a Merrill otherwise in management Net expense affluent fees. AUM expense in as of NII improvement a increased for reserve clients. revenue,

we've by XX,XXX flows. added Bank. well as great rose relationships our more the new as a guidance in net households nearly net Client in new relative As Private and markets in X,XXX the record client to advice than the up these year-over-year, in driven of trillion, Lynch, positive times; rebound to work balances X% year-to-date, and to $X.X Merrill advisors challenging provide

credit by costs. reflect advantages, income, million $XXX banking lower relatively related Within our these quarter. million to Let's decline IB results lower COVID both adding rates. business in from QX, to revenue revenue continued investment $XXX included strong NII while banking result impacts, The banking results as driven of higher the The lower XXXX, continued the fees on impacts Mitigating slide and credit XX. global a costs lower was to move evenly was noninterest income reserves. leasing to Global higher lower, earned and rates between billion business revenue which in rose. Net of $X.X produce credit interest results. QX, tax split declined in

banking were billion As in platform, the fees up our investment services were increase and $X.X in XX% year-over-year, they year. And investments the expense year-over- company primarily I for including noninterest business. merchant mentioned, reflected

up are paid nicely lower expected liquidity. robust QX spreads, before reflecting positive some lower the customers at noting reflect deposit slide worth trends revenue albeit levels of began pay deposits were also and Results average but just on year-over-year to from noted down the QX. Average solid we've seen XX. of on as markets rates it's rates that levels improvement the at uses but lower declined are for from the deposits to Switching average seen end now While origination we earlier, Rate other their level trading, and loan XXXX level. than sales year-over-year year-over-year on rise. continue a decline in lower from the global chose modestly

both as of money during unprecedented of states. insurance. in period, associated saw received. quite increase Unfortunately, higher costs revenue COVID the important activity processing, quarter needed of this on the in pandemic we expense level another with an get whereby the behalf than this the we hands those claims in addition, were This many fees for activities and a bit unemployment In driven is an other

to both expect reduce quarter. next We substantially

about segments results will usually the excluding DVA. do, I As speak I

sales execution as Global The Asia. expense associated equities trading quarter higher This revenue investment FX. performance costs costs, process and Year- unemployment produced a to million higher fees contributed was billion and and activity the QX, The net and results DVA higher up mortgage Sales over-year, XX% as improvement processing million. and was improvement increasing was for Markets a claims increase in in in higher and effect. a in $XXX of claims. modestly $X.X was loss fees, well QX, clearing FICC on of improvement driven earnings trading driven revenue XXXX. than by with banking X% higher X% improved and brokers by year-over-year, driven X% by $XXX

equities strength Although in by client driven was Asia. activity in

by QX, rate XX% investments, as pretax partnership benefits these the QX, the rate litigation tax the losses, losses tax $XXX QX, and reflects pretax higher around the XXXX, effective the our in of driven consolidated And normally mortgages show of the of as which Finally compared also reflected profit reflecting advantaged tax result slide absent versus compared The the partial $XXX is adjustments items, on improvement high other $XXX earnings are the was the adjustments a to UK benefit in expense Difficulty] expect of tax Other to servicing income. All assets. these by both improvement associated well which deferred year merchant associated income. tax impairment reminder, charge unusual the the from million credits, [Tech commitment relative $X.X XQ's pretax JV billion quarter by offset seasonally the In tax in a impact driven our QX. net million QX. gain QX, expense tax XXXX, tax reported of with to we be million linked primarily ongoing advantaged XX, income with investments. In ESG just in sale mostly to prior in And we partnership to are our tax

let's with that, jump Q&A. to Okay,


[Operator is first with Instructions] Evercore. Our Glenn from question Schorr


very thanks much. Hi,

same the you're you but that steady Is stress your could from thing? trading. is back again, this, if that question are this are about been earth will rehash curious times. you you bigger historically gaps? you've conscious? I have it to seeing Meanings perspective? mix CCARD to and have Thanks. if the spikes? times come just I'm a business? investing you during other peers And So And Just down not could incredibly guess I tell markets spikes, quarter, that And some curious stable then you testing close on us risk to of talk it your a have they'll in it Is some Is tolerance? like at but about


up Sure. up X%, and Well, sales were solid, is total the X]. results revenue equities up look, again, with trading year-over-year, [X our

days again no quarter. have losses this We with trading

time then and we at some in have over quarter we equities one another parts If share say, And like a is But sales business to longer share don't going and or and markets gaining kind I about create that our really have up we've think in of certainly we mix. of really where We in don't noted, quarters of trading you quarters. competitors. focus many note is done And individual And, But I would clue of gained more periods. you'll go in XX% can on year-to-date. as our look look gained, other performance. investment different we're talking banking. our that competitor at, better risk see relative peers every results instead, differences where take QX, I will much better, business competitors, to there our also I have where we've than basically did some peers. we, equities been back that mean,

So taking the meeting in we're staying term, jerk. long we we're were focused the And investing on business.


up just enough. one last Maybe Fair on. follow

deferrals a you and we'll demand mostly for cushion. buyback quarter more suspension. feel have loan get I'm NII, you curious a what don't add natural capital is obviously, number. noted, over expect point, some off trough to $XX And billion stabilized, [Indiscernible] at You

might to more into your what on number a organic like So you growth feels excess can because And natural with be what do it what's more your capital make intentions for plow going money you're to while. growth; than organic for a cushion? that


the up And put rate dividend that's even generating every for our things with reserves, while of to been and structure twice we hits. we quarter even list a citing good or are have more work terms the yes,

get So our And to the as to goal then run last the through over we'll NII for reserves, general trough stress that basis expenses test did minimum. redeployment coming points the down, and start into is expect capital before. XXX quarter we'd we we'll go about quarter, built

But of it. of and another free of XX.X, us us, that of so for we that's all Remember, capital in is is which ability was an so use got mix the once important we a buffer to terms reason didn't referenced X.X from management earlier. basis business to clear. we plenty stress why here had that operational capital So we're the and you cushions use


we can Mitchell Jim move with next Seaport Global. And to


and for Brian, scale see, did? of good share is Maybe your given try advantages, might you to advantage accelerate little opportunity kind the if pressure industry, in and one market a morning. pressure what that an you the bit sort of Hey, mean do here to there for and expenses


share. I well, been to able market Yes, push think we've

up points XX. watch of is deposit were look stick to share benefits share monetary aggregate XX XX to where breadth. XX FDIC policy, think basis you what we data, market the is the if at the market had but going So the everybody in the I we June And or to June

billion, financial $XXX have year, the people a deposits. in business we've consumer, forget personal plus deposits, per in commercial also think you total. terms think adding we've we have with of entered about trillion per $XXX million billion $XX think we've about been markets, while billion new open in it markets of they're plus bankers, the branch. terms just about This new which moving Think in you a about look markets, adding in management keep deposits, entering we these business, in that And that lot wealth $XXX a branches. at if added. so driving we but So a million several other GUM $XXX and And that advisors, in $X.X branch if of

that, has and So to consumer, XX% accounts checking XX%, reposition primary been business we like new checking they're in we from XXX,XXX activities, that's all our pressing advantage been the a in have something consumer The plus, who've those from some year-to-year, expenses million - company, XXX,XXX, we've strong pressed the where, the a around quarter. manage year XX, quarters, performance couple are we've shut at a down for between and been the to time. XX.X able been branches, that of Magic a

digital quarter, merchant plan got million we think invest the put it, and that customers just then to this ourselves, you transactions, your lose four still own you in a couple look Erica, those growth. you it's all the It's and very add a XX.X, rate. with Paul can to at -- XX%, life in X.X Now product l And a at that's on there's financial did page I strong, plan out new that do weeks. that

board each of the across and $X has So its technology. element franchise investing in billion

day, that come So you're seeing we're and advantage out. organically pressing every

where has has our has we're business and across share share to grown, and grown grow on continued said, as And continued GTS our has board market deposit keeping compete investment Our loan Paul banking driving. and our to the we grow.


That's helpful.

to And mean, add can to $XXX feel million that the comfortable XX.X. so to you to I still XX XX XX.X the you

You still expenses that all and keeping feel comfortable range. doing in that


and think you flat. whatever made, across code maybe XXX four We've was, look we've you that done new years or XXX XXX page decade, development, those billion And you'd in all the think in too new look or been, at XXX that's show a never Yes, markets, branches billion think year investments Think it's branches in make I so to three go $XX this of cetera. market, and $XX it that even the you been to period technology at of in expenses We've years this think across just, that a if that XXX to initiatives, $X and quarters. new excellence three platform, operational about back probably stayed before opened all that that, development, far. time about refurbishing. redeploying, relatively billion, et that's we so

XX branches just quarter, this just So in we markets. quarter, little new open this

more in the the advantage. with do and the could marketing, I, that on the you a the asked people it enough I drive discussions they'd it sure, So board there's we're way answers, spend trick if and to have and you, want talk to spend think press risk. to but the in by we'd pressing to market we me shareholders, money stick our harder, And our major


Betsy And we Graseck next can with Morgan move Stanley. to


redeploy morning. redeployment NIM And little just I about Hey, the I How into that? earlier more going be on? to from you're into of limit wanted is to how a XQ. as you're pretty time. have the the think sense guiding and already? uplift to securities? a cash here? the to What willing bit And use to cash for making of on you going do there a much is good you're cash And used How wanted then get securities. you you point what for much to Thanks Paul get dig percentage to much in


Yes, sure.

billion quarter. to that into treasuries securities, between deployed. probably produced So, on point a in basis the $XXX And our we and third about average cash percentage weighted the lift quarter, backed what close we about on a mortgage of cash the over deposit backed relative securities third mortgage a treasuries to

a including to be cash number And and liquidity demand see through between purchases you'll have come more likely in we're a The that $XXX respect judgments, you QX answer and the to deploy likely that call future of you, going of to mix not and cash, the forward, telling of by size purchases we'll in left. deployment, of number access see will assess You right With to we impact more like deposit moving and deploy give behavior. throughout quarter; balance trade-offs but of I'm influenced didn't no more much. the as We're it the pace continuing that into yet some loan of because firepower but of the of we continue also to very capital, lot will securities customer QX. all deposit another that fourth a how things quarter. those to in maybe exactly earning. I the hesitate billion-ish, deploy timing


talking left yield versus the on as is you're about point The percentage cash. the in portfolio one


what a investment what if treasuries less in is mortgage No. backed cash we were than X%. up compare security, we're to or repo. that That on buying The earning little yield is, you pick in



little low an But could to gives it historic speak Okay. in Yes, or that around for lows and you right. C&I you is you you're what close utilization. seeing All that that expectation utilization, the both to yourself the we're it. your I QX discussion and a could left that a customer loan XXXX. discussions got get start that Brian, and maybe, see if then to in and bit into to at the I And


down. just So quarter going people been -- it what throughout we the ran see ran the isn't it it lines, first second then bar, down of hasn't have we quarter, drawing down, in is kind and panic

of these made And ever so are making some in. companies cash flow they've than more

to they're have to are going is So retail dealers, to build; like things. what you're that starting and in going to auto, sell. couple to stuff is see a areas also have the inventories One nothing

to build just talking are when it think they'll other payrolls from They that, more back they're brought as it's seeing million banking. business on products their neck because the running can't the So in down that those far things. I get gave revenue are you, call as more lower people and of $XX think paying it key, of the seeing inventories of they start that basis, parts building demand it their numbers about that the suppliers things, is companies and up, Paul we what much sort day-to-day that that you and so you're can, seeing they that frankly, operational to which and doing sustain they final

expand to back up to to as they're And their meet they so demands. start client build going start to

who up. wrong the goes terms middle to when this The the when really to side, is that loan them we've to you reviews big picks and you're them can from make -- balance around deep this only access so but that's in it's to to been clear move investment they're that deep these that markets, the the well know that September of May question would what the had to banking And high and balance end markets in get how had to that August done, the on on feeling July June just these loan all as with core in we've conference, demand, better we which we're has conversation that. talking we in


to Mike Fargo. move we And can with Mayo Wells next

open. is line Your


year-over-year, bad your Hi, this it's banking deposits; got growing is your is a mean, I corporation is Good one you're follow your you up the pressing household, news. fourth news, growing. to digital good news up advantage.

And is, that's award gotten So your right. great. your NII crushed,

versus short long So customers. lower want to assume term assumptions but rates value trade eventually an because benefits term acquire with for environment to changed Have it's at longer look of your lifetime happening I for yet? the relationship, not you just Try these monetize a as you you the off.


$XXX is is ways. I as checking it Mike, two year-over-year. the basically us about That incremental So you at that zero said. on think billion have coming for money bringing on think, deposits customers to you One coming can Paul redeploy, new in

quick when of So kind if the to you of other the to rates it and we the things by move out that underneath having a there's had, represented or But, down question to had value company. relationships, as fall forward. that incrementally the have that's franchise see value come is The where you get a core well you house of look, positive the side, know. you

auto We're build helps we sales that a by then seeing are rebound year-over-year, if just the core coming the up a are because side, billion quarter. grow. And the at, in you we're consumer, coming card about on at of page linked have billion seeing? our that look Those that relationships lending; digitally. us are are the inactive, $XX And look on investment you're what XX think $XX our we So in digitally rebound seeing seeing lending. XX% you

to fees looked So across the structure, up, come seeing back the different is news the good materialize start you're platforms you've at balance just things the core that the the and and fee activity. is which

quarterly So, $XXX have deposit only $XXX you in total million, interest. million

it XXX So much that billion left. not it And there's can this zero, to in class [FICC] a was from quarter. year go only

environment, and you're comfort rejections. checking deposit more it's you So brought than seeing because grow out, it's the depth to management addition we got on low back of the core frankly, even that more gives our at we it. just well single accounts wealth And to product, the TTS core happen. customers, We're deposit, pressing in start will down. advantage that's over we more what And to more business that a in now from know. money business volume the rate Paul relationship; not as GUM, And any make

even rates the XXXX, XXXX, You mid get think but a XXXXs. year, in the this rates just move. discussion you might XXXX in saw before the a come given back. had of We up quarter, twist earnings


getting to and rates, mentioning the put like we a getting the fees this, way have effort think or you're low is new linchpin And something? households? relationship, typical yes, know, more again, a or your a gathered Is relationship the to just for charging it's different this worth there customer you value more If environment rate about products. you've into these today that money's


clearly, gives Yes, dropped is you experience then do rate bad that it customer think, permission does with because them. our low the other high not team just well, as Mike, delivers, customer to I the is a at penalty a the quality fees attrition experience, the thing more the book and very because

any is book, the I fees So is are the to definition, consumer But but deposits go. is penalty preferred the the think, reality which by and of not are XX% our core way above of there requirement for structures is most fees. account fees, for minimum way

so only XX% that's with deposits XX% that's it just what of And of get -- the is up capacity make environment sheer. book it volume, up got consumer there. your the customers, ultimately in you how about expenses you And your low make so operating you've a in the even and rate you

in distributors. Mike, franchise, this in we branches X,XXX had XXXX, X,XXX have We


them, I deepen progress those in And them with deepened loans, you in Mike wealth areas. with making management. deepened in you we're And you all think with them,


And move with we next can O'Connor to Bank. Matt Deutsche

Your open. line is


want follow I morning. expenses. to Good on up

number that You for it, out still an talked is just from to I elevated And you $XX.X the in billion analyze yes, COVID? XQ it of figure but like of and wanted bump, about the mid next feels fourth $XX kind if quarter. high And because give to call year. you're billion benefit doubt. is seasonal want range Which I a you guys



that the $XXX points, net billion billion the think million million. probably XQ $XX.X to $XX.X I of include roughly COVID $XXX expenses to three


tricky timing that of everybody $XXX assuming and it million $XXX off? you be Okay at this do how I guess about think the million point. that can to coming


fourth or $XXX to in baked fourth was $XXX million, million million per quarter, of of higher But quarter the $XXX quarter. I it kind right, it $XXX net that number quarter. million to the million into $XXX million in COVID mean, the is this $XXX on expensive.

full of of So and I of year, we than maybe ratably would that'll year come expect I of the basis. year were more know, off, we'll in beginning it'll, fourth but to the I be come can't, the that on of on quarter half down. the Difficulty] it get don't a at [Tech end over XXXX


in but next income, for on linked-quarter on net obviously interest for that's the on separate just down based a assumptions basis, Okay moving a challenges I a bit talked about and maybe net the outlook that assume and in from quarter, you year, elaborate you then the third on higher XXXX? a upon day income have.


Sure, the growth I'll of look, recovers. expect are the any we middle that be year cash are guidance. we're a the specific continue to impact that's reinvestment going that Obviously, then deployment hopeful for you early securities. lower NII headwind yields the thoughts next in give tailwind few not year, but And providing economy year. be will by loan should into a as the by offset the to

So move NII here. we should from think up forward and


year nuances. the Would that in in for some adjust day math year? XQ about, think be that I If of than income to count net expectation work next dollars again, those higher of this be and and interest your


XQ mean I XQ? to Yes.




mean, of it at the Yes. that. yes, would certainly I look I'd I'd higher to that year. than, it, to affect Yes. this year, XQ than say XQ have think I be next higher would have will


can Research. And we with John next to McDonald Autonomous move


near two Paul, Hi, NII just term. questions

in you like kind of little, NII. the So NII quarter all of a the it factors a up of what's talked be sounds in you just lift or the near kind flattish outlook of term fourth on might about net little bit expecting


So least said, as going it's the at to optimistic is, be think, we I near term is we're outlook up. flat to going be and

balances, we loan got headwinds are for think excess on We've security. So this And on, point we've ones And the by average low the cash quarter. reinvestment X at given of we to on the got the that ending quarter But of loan we're those lower NII. be probably deployment going we've the we'll balances. think the fourth do to done. continue in offset we're

flat least optimistic up. at for So and


low duration you are about still some Okay, against what to cash protect NII? thinking back; looking And low balance and in today, expressed how, there. and redeploying how might do rates the come yields loan think locking very you when of -- risk optimism you risk, growth


question. Yes, good very a it's

go to detail, but balancing the company We these purchases. earnings. assets and are the I maintaining liquidity, sensitivity into our a want with we are lot always of of capital


net noninterest one minus and the category, other then here Okay, the million. income nitpick $XXX income in and loss

things, expect advantaged bit kind little the runs you benefit going So forward, getting income we there. mentioned, tax tax other is some what other should you're a losses, it and issues but that or investments of rate, there's of this other kind of and the a in


think no, expect that that. Yes, I I would

it create energy but our be partnership million, in income ESG around you renewable other bounce as hundred which of to down investment going losses. the think other on couple a and quarter-to-quarter, said, I average, given, efforts, should is products



So new runway of that's that. kind for a


And are partnership always those fourth the higher. in losses quarter, remember

maybe higher. million So think hundred a couple


Okay, quarter. $XXX this million the more than


line tax throughout the benefit the the year. get we but in Yes,


do tax this an rate idea XX% of new Yes, with like for fourth you And basis for the going quarter. forward arrangement? annual have


These quarter that we're I are that Yes, on a it talking cost part the help to you. But an unusual are good generate income talking earnings. company's and our year And solar. absent us we're us are remind tax the about net fourth don't we would advantaged wind and ESG are for hand, of company. also I have the next the of expectation things because helps just things for losses share business doing of items, about investments it's effort. to everybody XX%. society. we're housing; We're with are a militaristic low benefits doing the But other these positive


Ken move And to next we with can Jefferies. Usdin


really on your Thanks. expectations believe is last Paul, gotten little losses Good evolve? I just and year. to wouldn't mid just bit up you stimulus elaborate start moving as to wondering cake. a morning, we whether for how more baked could get to the guys. we how we've if cycle you year, mentioned evaluate start or what next much the expect until I And in that already was going not versus

commercial side to we move the the both and see project you Just us forward? Thanks. consumer how are as expecting


Yes, sure.

not we've regarding And charge-offs, come of delinquencies significant to given given mid mid days off kind the those it's look, to going fact show even which So bankruptcy we've covered I don't we're charge-offs, deferral. but past XXXX. XXX consumer the so charge-offs that will on customers lack think far, without seen net see occur up the in consumer, until just of net until due, at likely, XXXX



to frankly you we States in we States, If doing in out indicate out looked the keeps of unemployment based stronger first at this than United all it, pushed quarter, third the back generally are second further, consumers statistics to better, quarter go models. quarter characteristics pushed we pushed the thought the United of and than the are things out going it the are just because third further, at our about the and you we the their pushing what back out characteristics of year on looked going so think quarter, then was mentioned, happen we would consumers characteristics

next but And it's so just half out. it's pushed year. now And in of the it second


I guess wonder to -- sorry, just trying am go ahead. Yeah, I


-- down and a on near-term balance. down Paul But as be a and are delinquencies and year-over-year is delinquency like dollar as it's down cards remember, that, said, as to driven by the the at a day as like XX path end what's this things and the of and if percent percent of that, smaller mortgages the and down things roll delinquency And going charge-offs quarter. amount

So it's, their credit quality strong. has been


And more on, said to clear to being about zone of guess, say, how the forward can I much the uncertainties, in that are a yet of part back you is you look release utilize know, future I capital? you feel starting the you quite What should point equation? do get of you lead kind that Yes. if just into and comfort that reserves made just those given not flow comfortable reserves, of stimulus kind terms done, can you that even but of builds


stimulus There were affected. don't states businesses, their there's capacity help kind and the you'd in in, be their way reserves all It's been budgets lower. frankly. said Paul further and/or down, now know, baked and help it earlier, get right been have these would they're of these utilization -- people speed the out the up business pace get so -- hospitals, come have of but it those or, struggling -- not it's still schools reduction now, expectation then their businesses, so as things, the heavily Stimulus because would and if other move towns, for to a coming those business you obvious us all further, hasn't would plan unemployed, Right the all see -- less. coming the quite they stimulus of lifetime further, estimates there's in, loss to of in and affecting works would


Portales. And we with to will Peabody Charles move next

line Your is open.


quick growth. possibility to questions. trying also that of guidance And make talked you've more the your because Yes, on no two understand I builds. about I'm sure loan reserve

provide for least, also you'll charge-offs growth. cover the we but at loan So very


of but think change couple percentage dramatically. We loan it of of reserving a just would about growth level the given wouldn't

economy loan had to the but a think faster, that'd to going be support problem is high in we growth. fast if have which So term, we'd for reserves I grow to quality don't build have growth, to near loan


some like pipeline the the Sure. us fourth quarter? looks on question or And year give What the ago the that for investment quarter banking? second is second color can then you versus


quarter second pipeline looks the banking; the investment second quarter was for again, the quarter solid Yes, was And a best the third us. quarter record for us. for

think the the or a volume seeing third don't could quarter quarter, So I or pickup in the And fourth sequentially perhaps third see And quarter, even type M&A discussion normally solid. the down investment that pipeline second banking saw quarter same the expect quarter. in looks you to fourth we of least from but the at standpoint. some in we're


that has driving year and are grow. And Tom Koder over done the great connectivity so with market the driving Montag coverage, last work I half middle with and businesses, Matthew fees and very there to he that the have their just to our team took since and been great pleased continue over a or

And done expect business he's very that good a we'd keep and making to of him so management progress. in they've the job done team --


with from a share from about earlier. share; we in we've gone middle year a gains gone Yes, X.X% market market alone, second to just fourth talked market we've


session. over to closing does turn this question-and-answer remarks. Moynihan conclude I'd like for program any the to And the Brian

Brian Moynihan

our you all in So us thank and number one; for company. your interest joining

And client spending, billion $X of saw we that share. client progress earnings, customer our board across earning, $X Good the in continued also of in $X.XX quarter continue terms in solid economy growth. to progress business October. and plus household terms the see of and billion nearly continued in activity a a it to Second; in

So nearly strong growth very continuing our $X Thank manager. in capital, you. strong liquidity, billion very earnings, solid, responsible


does This conclude participation. your for today's program. you Thank

may You at time. any disconnect