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Bank Of America (BAC)

Participants
Lee McEntire Investor Relations
Brian Moynihan Chief Executive Officer
Paul Donofrio Chief Financial Officer
John McDonald Autonomous Research
Mike Mayo Wells Fargo
Glenn Schorr Evercore
Matt O'Connor Deutsche Bank
Betsy Graseck Morgan Stanley
Vivek Juneja JPMorgan
Ken Usdin Jefferies
Jim Mitchell Seaport Global
Gerard Cassidy RBC Capital Markets
Brian Kleinhanzl KBW
Charles Peabody Portales
Call transcript
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Operator

Good day, everyone and welcome to today's Bank of America Fourth Quarter Earnings Announcement's Conference Call. 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. And it's now my pleasure to turn the conference over to Lee McEntire. ahead. go Please

Lee McEntire

release and review Welcome now for the the joining all Good fourth thank quarter to earnings review to our a by results. call had morning. chance you documents. I you've hope

then As opening section be call to Paul we'll the presentation our ask referring call website. bankofamerica.com’s Brian available comments; I'm usual for Investor first during CEO, Relations over quarter. CFO, turn including the they're our the earnings to that of the details on and of the some going Moynihan Donofrio, to to cover the

Before to may various our financial let make just the the non-GAAP I we and elements me of statements during turn regards to refer call Brian and that forward-looking that results. financial over remind you measures Paul, call

on and actual to Forward-looking particularly uncertainties that, and turn to available Take found website. management's those earnings this non-GAAP pandemic that it statements to in With detailed and period. Brian. to during current from and subject are about our assumptions operate results our based also happy Factors am our reconciliations on measures materially cause over are differ GAAP in filings are including materials Information financial be to materials. the the U.S. that that expectations risks call are to as continue we I SEC expectations may can away, Brian.

Brian Moynihan

and of Lee you you, Thank you joining thank us good all to morning for today. and

to want hit points. to Before Paul review I quarter, a I to pass the the call fourth few

and economy made progress what where highlight full provide we commentary I XXXX, and areas XXXX year about then beyond. talk momentum that for as believe to XXXX enter brief the some want we into drive strategic I we First see will strong in the some then on

a and In or period, slide of in on EPS $XX was you of cost generated billion nearly XXXX above as $X.XX that our net return we starting capital. all environment earned tough two. a operating know. income So

pandemic was company XX% the driven XXXX coronavirus economy. on the compared impacts of EPS Our and down to by the

know, the net Loan that then we demand zero. to income. had nearly panic That last told likely third reduced rates But in NII to the you and As rates you XXXX. waned as we believed also Fed as historic subsided. fell interest dropped quarter of the lows. surged Longer that bottomed quarter

declined Non-interest interesting included saw improvement but which quarter balances of by Bank we by going the clients, Paul accounts. fact, despite In later higher diversity this loans. will the levels economy good That's a also thing dynamics model. revenue driven of slightly, the some fees modest challenges from for activity forward. of Consumer but account America's cover highlighting and declined lower customer a

banking the and investment business Our in from more and to us wealth allowed mix sales market-related businesses. investment trading, brokerage management in activities benefit

Our year. brokerage an to trading of we XX% over year revenue XX% $XX generated billion last of year of more billion increase this and full revenue rose nearly $X Banking revenues Investment $XX from Investment X% sales billion. grew and than and

the a as of costs clients higher and communities our the were our for Our result our serve. many with and expenses we COVID support associated teams,

were the service Paul the the managing line. costs quarter joint including -- will of that XXXX, and a on venture but revenue comparison third year-over-year. a the net These the and franchise Expenses always the and to Setting now elevated all focus come dissolution making to increasing using deduction and later our expense and it, good change in for about continued flat gains quarter XXXX see relatively productivity across aside merchant and expense will For then as in client fund accounting -- a talk costs venture XXXX of addition do maintained services, XXXX incurred elevated under COVID-related joint included of remained through and third a our of net teams merchant XXXX. XXXX you'll flows. costs investments accounting, job following we're

flat reserves XXXX in them of X, which expect first quarter. the CECL as year. macroeconomic adopted higher part we as be Provision But versus rules, the the reflects improved, the XXXX. the to given fourth January deterioration result a outlook released built of in some also reserves XXXX. was This for We accounting experienced were the macroeconomic of as new

capital then repurchases. its we'll quarter excess minimum to CETX of second above of suspending billion -- look and we momentum by at prior calculation driven once share count in of back begin the in share the requirements the bought declined exam, half XXXX it above first of in With As excess and moved X% the reverting shares in SLR XXXX normal common repurchasing CCAR and capital $XX shares we completion today. our time starting as again to

our minimum our our all know is $XX benefits COVID and increased an business in organically. care expanded you funded teammates, to we we capital we and for wages all our funded of that. of use have grow hour priority expanded first areas And we've As growth have taken of to many all

shareholders prudent. allowed Board looking our as we're to as deems capital Now and return we're much our to as

approved for quarter of our quarter of return This the under billion that addition allowed and to the separate of a dividend Board -- up quarter has first per morning this share to press quarterly $X.X for in is saw including first guidelines that is the beginning XXXX a This the maximum of release maintaining employees. accounts in capital. issued shares in that another repurchase to our XXXX. $X.X you So billion $X.XX Fed's established

and a are circumstance -- we we'll what reflect Before work find when the other. each quarter, the I was continue serve they crisis year hard to communities my -- and summary, it markets rules. the good health our to on out given thank to world. beyond help and rules did the for economy to the impact clients, the first change to the the to the of authorizations around our our In serve want we teammates those

-- the -- by we recovery clients to Year, economy continue As improve. is turn we our spending what begin quality continued that the Consumer and the occurring. asset New to and let's see

are course except by that highly for those generally liquid companies -- shape Our COVID. hit good focused of are industries pretty hard and on are in that most

well of economy the went to companies quarter. saw signs we push continues demand the fourth As we as ahead operating that are through these capital early need stabilizing and operating loan will

there's behind economy regain can As everyone get priority to healthcare vaccinated the strength. and and therefore we all us is the know that's crisis one so its

has upgraded their And view will growth growth U.S. that has XXXX X.X%. the team just Our be week around global past forecast. and is research for this are forecast GDP X%

we you our the Let payments. our customer see me data can slide views some growth. consumer slide On me, of snapshot you supports what that see give excuse a X X for in of and U.S. provides consumer have and payments a With across of payment consumer small clients deep channels, our view XX million business business we data set the all trends. small making trends that a rich --

chart areas in that single strong. early year the for and see the see is began up and and digits government are change lockdowns status shows activity You The the can This the back troughed each year payments economic full payments By By on high dotted very different impact here snapped year-over-year total this year-over-year. the many in for of down shows XX%. the then ended increased the given the lines pandemic now the can of in months you stimulus month the April, reflecting unemployment. and of reopening change the solid spending. year line in the we year of across-the-board spread were payments summer during Consumer the were which In early cumulative spending. with first Slide payment economies X. two

slowdown hit depleted we the As normal grow of off ran fact those levels activity retail volume saw to difference Total in reached still grew with year payments to some rate trillion, spending. of the a volumes holiday year up as here high X% purchasing new the trends by consistent spending December record holiday funds billion pre-pandemic year-over-year lengthened lengthened the in of level by a high -- $XXX $X.X which payments prior in we periods. of Full the a managed period a driven But were and the was And of to and strengthen. entered the in a at recovery. back month up of year-over-year. continue of X%

easier XX% of to quite track they side spending about they're do represent think it XX% the of you consumers about things. all volume the spend frankly. and they transactions. left-hand And only an is amount the credit spending, lower credit all habits outgrow of this about the make So dollar of get because has we a that can volume, see up and But one but just that discussion entertainment debit tend spend. for on When we we money important This smaller side. consume debit seen of to travel left-hand -- shifted lower take has And to actually have think done is which outside of away you've travel ways the spending page chart things -- especially pie and the and spending here as even provide consumer reason. transaction on

ATMs means payments, of happens XX% payments our person-to-business payments the So many made of and the checks dollar including volume and spent taken written. and other by out consumers cash person-to-person of through wires ACH,

lowest transaction has So fell physical of operational many year has stimulus on started of forward to new hitting of strong The migration bottom crisis. cash first XX more than as More accounts card-based about chart, payments a cash see record, and million and our moved XXXX the XXXX the and hit Full a how they was which those IRS. moved begun into to the been check digital from in digital accounts one mostly the by this as COVID checks strategic January. can that to the $XX digital forms flowed year transaction payments payments. terms billion for initiative customers' for accelerated and of checks the of us creates the to for have in you weeks volume efficiencies years have accounts transfers payments. down XX% at right and

dollars and from first January rates to payment rates rates. And they XX% spent credit X.X%. about by debit of payments dollar The all performed types In amounts, spent. growth in be customers, January? how first is good levels XX% of Growth of $XXX so half pre-COVID being payments the half total growth the across up faster X.X% more with in of checking So news is is up XXXX. larger so are and exceed bigger primary that and these our

mainly driven side. see to they can activity of Corporate see Banking, all the As top on clients as weeks our we Commercial on to gotten them. reflects the inventories stabilization market, by X, chart XXXX, closing Slide low we continued move rebuilt the segments: the total commercial middle have some we finance auto Global Investment Global loans Banking, and Global Business The the X Slide of In Banking. across Banking

experienced month. the we commercial capital about loan draws the paydowns panic-borrowing was of three to with the about driven commitments loan people soft different in crisis wits saw in we years year, markets quarter first in the growth And -- And in as balances. and you clients as crisis. a the know recall moved a G-SIB heightened set you single by them normalized that level significant the gathered As and loan stage of as client a the on their high demand for of

and live have under to crisis two more by tip focused of growth they us continue period. to continue American remain you markets see market and page, middle the last the our we In well-understood have reopened of we and the of prepared started can to this be part and up, the customer the us, the growth decade credit hope for but affected them our into on larger stable of communities results underwriting before risk has look we to corporate that standards have that framework can bottom on to declines the our fact, all Business as the that the forward. responsible core and we demand And has seen A in we the Banking on and increased the the of in. crisis. chart economy year allowed well support loans the During operating months principles turn basically

because backdrop of well in positioned we improving are initiatives progress our We against economic strategic made this over many of the years. the respect

in Slide Consumer Let's Bank talk go and about the to can with the process. start the next the X we'll left. upper strategic We

XX checking X America satisfaction the deposit in average year one American coupled grew deposits consumer number X, or accounts. $XXX $X the In deposits markets at we population, top our the representing of for Wealth twice is which over the consumers position that We grew hold $XXX of ended retained know position our was have deposits half we you XX markets billion As billion across And now. high. position; many leadership now the that's X including $XXX consumer Customer share our number -- new XX all-time markets billion as deposits X billion-plus. $XXX closest for XX%. peer. the we number of trillion U.S. of those a retail low-cost as Management deposits, we average checking with or

times billion were growth. million all year In They our growth throughout of consumer up the Erica this talking those auto things. form now up early clients customer the wealth three of pages. the the more the they balances. has here from X aren't consumer year move It when XX% our digitally clients this Erica, active earlier focus to payment is hours PXB relationship basis hundred in us signing objective customers base. it sales. than payment couple the a just the million. users sales, checking penetration XX their mortgage Zelle, did just investment of year. to are also digital -- it. signed transactions the with enrolled, to households depth lot an Digital expanded this is or of through assistant but our at of are active. on areas XX% XX% $XXXX in not of in ahead average with On an payment and businesses X.X important interacting also of form on What's looking charts representing Another they loan America, us. and interesting have $XXX,XXX PXP buying management digital That's year-over-year. investment Bank And the points grew spent expanded balances for balances helps Remember of and banking. digital These XX% deep average with those higher-cost There's engagement the balance of a they sales sales. and sales account double-digit accounts lower-cost Zelle have means. have average about they they checking payments been

in consumer these broadly, funded a new investment million Now XXX the consumer major switching are $XXX our moved mass of more affluent business, XXXX That's milestone In planning Life financial helps accounts. surpassed balances accounts We investment X we've had in mass over created balances, ever that already, and And we of added Plan, in people segment. fastest had. September, affluent our billion rolled financial up plans with prioritize one million-plus goals. out the XX% we've year-over-year. their rollouts product that two

face-to-face digitally. to of meetings a face-to-face Wealth Merrill were indeed, deposited two This adding record significant strong Banking growth of clients, deposit accelerated of appreciation through services strong Bank new by in of share. managers In X,XXX. digitally. America clients the As Banking the their flows. improve in checking a they across market to the digital of a a through with been $XX half multi-year but XX% And Management Merrill our to we continued and And checks for million-plus inability terms net with and as were increased our market has both in calling bankers at XX% relationship our across XX,XXX the hiring increased we for investment adding partner we as Global turn we numbers Merrill services Overall, saw environment, XX% the we've our the had market record have virtual by and this balances and with in the trillion up of move we with clients. all business year virtual country. done a Management Wealth the balances When Merrill of a households client areas, more particularly XX% crisis, the integration saw year. utilized to household year-over-year. Bank through dedicating the clients clients the Private clients year COVID Despite the year effort is businesses. our second businesses, Bank gain new checking clients group, on deposited relationships We Private more the to commercial were this $X.X efforts adoption the engagements bankers, achieved inherently and Commercial position Banking continued Investment adoption business, middle Product checks of in focused

market markets We with in grew market quarters company's businesses. of fee as clients accesses had development basis history this we of through that strongest $X three there fees points improved We reported Banking our the XX growing capabilities allowed of the best We fourth capabilities, app. since including to year. continue our and continue. and environmental, billion ranking three financing customer in in do record our nature quarter equities days, our our our speed system. consecutive process house, In growing in the a to level market app XXX work shows last share as number commercial point, In continue I including the in of even the in Investment the to trades overall app. we took equity to in moved working-from-home, December ability Merrill in market in XX sustainable e-trading platform picked merger estimate advice. CashPro cash with We proprietary M&A cash XXXX place, bonds side and way clients' social our quarter alone, This we bonds. include capital the and enhance commercial Given governance, Bank we highest-ever two customer from side markets is income one sign-ons digital of well management we house, row. compared year our fourth the want improvements award-winning even our we XX with and This all to record of cash system COVID-related equities up bonds to The a while activities the last business had our the basis research surround the and on points business, the fixed research staff the to of the is of In initiatives shares the world was and our share client trading increase comfort equities. the mention sustainable clients saw the gained America faster. when year. share were trading XXXX These and as that our number trading for and the is green over years up

middle Our And made of over team the address in injustice and COVID billion significant six that, with $X economic the work there. strong Paul also the me quarter. to further the made progress let for opportunities turn announcements over the pandemic. on committed and to racial last it done We've months

Paul Donofrio

starting slide Thanks, X everyone. X Brian. on and Hello I'm together.

litigation in As released individual to were relative QX In per expense, declined $XXX from speak QX, I in from a interested billion share, with most $X.X was but which QX, $XXX we the did on in Also $X.XX million nearly from progress declined. costs, investors pandemic will mixed. more reserves, than income million earnings, QX, in Non-interest benefiting QX. net $X.X driven last earned or as results NII as or the which QX, the QX compares results charge-offs, lower declined items $X.XX to offsetting we transverse quarter, compare provision moved Compared our billion as we across line periods. trough. expenses we share and lower by pre-pandemic our to also mostly earnings rather I comparison are to improvement

but the our activity which in higher seasonal as ESG rate, benefited in other First, decline investments, I tax client partnership driven to discussions. annual income was previous created respect described have losses, by with

and the linked-quarter, our to I year QX was emphasize tax the also for socially of point portfolio other for the was offset If would of rate that revenue benefit year recorded our X%. the QX, sales was tax trading, ESG tax to full have adjust more investments, up this been by in slows trading portion Relative from tax while benefits XX%. of rate losses the and out to roughly it throughout the non-interest impacted of we responsible Our sales lower income down year. income which X%. QX. year-over-year was than typically But, investments

and income year. as And side, Investment And positive this from households the both benefited finally, asset net revenue, new from improved. of year-over-year. deferred QX, the $XXX grew increased asset. of income net another comparing to fees non-interest from revaluation again QX the the expense we good QX we levels which had Also management tax the strong higher when remember, On our market UK benefited million tax by quarter Banking

respect Finally XX returns, and note to with approached that points. was our our XX.X% ROTCE basis ROA

expanded slide point in trillion The to grew QX driving substantially growth. $X.X X, this all Deposits are of and total billion $XX $XXX balance the main up from $XX QX billion funding deposits are XXXX. and billion assets. in that the Moving assets, sheet is quarter versus to

is are and from securities down, and loans up On Liquidity sources loans cash deposits billion from Global in piling With $XX the our up other portfolios. QX. hand, QX. billion year-over-year excess declined up, liquidity just $XXX

ratio QX. is dividends cushion. is binding respect by cash which paid But, $X.X $X XX.X%, equity was our billion the our to with so to common a fact, requirement, above $XX basis up this three issued exceeds much we amount billion. higher earnings XXX points minimum stock XX.X% In With increased securities. invested Global totaling offset that regulatory we Shareholders' plus equates loans. RWA, of as At in CETX more preferred at the billion, more capital approach total consistent ratios, than as it Liquidity were remains now standardized times

Our our TLAC ratio also above increased comfortably requirements. and remains

to show with provide deposits. respect we on the loans usual, X and historical the as sheet, average XX balance the to leaving charts and Before trends slide

we deposits. deposits growth previous point capabilities, well our strong we to paid with in believe We deposits X%. down can trends The of add are on prove we appendix. declined down will in customers' low continue that, and credit now centers on in the and overall interest I customers commercial and that year-over-year loans paid On decline raising these rates, by and our utilization end-of-period by I we record are given Fed lines pullback out clients. paydowns same they around quarter an XXXX for basis $X.X only activity. just in interest innovate total Overall, year-over-year, the are charts reference, card in our deposits driven revolver of as rates. included lower X%. business, other And linked-quarter the For and was points in business physical the important number of deposit will us, of as you trillion year-over-year reflects nationwide began trillion was same rate on led which already in At that experience ATMs, deposits slide the million. as rate have deposits and lower on every line our the our for continued historically to to than line XX And business see for to deposits. surpasses a any provide footprint the digital modestly far before tremendous growth financial by Brian this growth XX% of in company. $X.X $XXX cost made to customers of enhance

[Audio driven net on while improvement in improvement reinvestment value the billion, securities. non-FTE of plus rates was loan deposits reminder one higher good basis, modestly starting billion balances, On from large GAAP Note the Gap] and in respect interest by basis low rising only interest into QX basis Lower FTE and an asset mitigated NII. remains The XX net rates securities $XX.XX million slide was the to $XX.XX of quite net NII to interest mortgage-backed from was deployment from rates, relationships. a a The that given interest QX. and increased declining excess QX of growth, the the our lower deposit income. the income stable, point to Turning sensitivity is these all deposit QX relatively write-offs with premium yield level. declined point

NII. to respect with Now

perspectives. we As the we following offer move into XXXX,

interest NIIs that remind negative that nearly than days assume QX not not lower card that everyone holiday Our perspective two $XXX a spending and developments. I the expect net levels Also, related economy first forward of will payments lower and we a impacted does by current With backwards recent curve as interest, to in headwind be on meaningful move step of balances. less to take follow rates result COVID do is the which see a that would million. seasonally, result of said, would

the security benefit. rates and focused invest in impacts, earnings NII growth, as We a payment the also We maturing deposits lower-yielding will into have trends shows difference which new continued all mortgage again our portion are and as XXXX note to the low way, on paying PPP intend depend mortgage-backed loan QX of which of improvement, more One a between the continuing PPP impact NII. headwinds excess added bond a all the Should replaced develop were impact with we write-off specific of appendix on on off generally, NII being factors refinancings, and or final and that originations grow will forgiveness today. loan well in last currently and in QX when securities. slide short-term to this these those as positive premiums. speeds, Having we higher-yielding our those assets Offsetting listed such ones.

balance is decline then growth improved between the the NII and our which and The in in important difference now then. sheet expenses since

reduction billion; expenses $XXX a to decline million of lower were slide in $XX.X driven was XX. by QX. Speaking than QX and expenses turning litigation The expense.

reductions. with the in claims reduction and a unemployment saw planned COVID-related insurance. for mitigated revenue-related and across Higher processing also incentives marketing expenses, costs processing those firm the associated We primarily

tax into As payroll seasonally remember, at roughly XXXX, include million. expense, $XXX which higher we estimate we move will QX

Given QX across expense COVID-related $XXX in $XXX net the cases we million that Europe, resurgence of to COVID and million expenses. remained the of our in U.S. estimate

but not increases. expense, costs, hard continue the to at tightly, digital COVID and safety work mitigate of our types of manage to employees to of continue to productivity customers. in expense we outside And these the We gains expense other of lower and using activity these

to slide Turning XX. on quality asset

expense Our total declined rate loans. by on net charge-offs well growth, stimulus government decline as years continued economy programs. only and deferral points $XX of responsible was net this as quarter, Provision XX uncertainties reserve The consumer crisis. by a in Net that average incorporated reflected loan These loan projections, million, benefit resulted the card improvement due charge-offs $XXX quarter to loss $XXX card million, in average were charge-offs in reducing losses. credit of XXX million $XXX in loans. A remain driven basis of reserves this an million an by low from and commercial points million macroeconomic credit lower to health $XXX million. XX-year $XX or to also which considerations release the of was basis but not

reserve. following CECL allowance and one we With the used adoption the loans key year, accounting began well our as which day above where Our a the percentage variables at standards. is of our to of in leases setting the X.XX%, year X.XX% ended respect

end unemployment portfolios. at a return downside As out include previous to for we XXXX. XXXX, scenarios, of of done is in quarters, break QX level XXXX of The both in improved GDP in of QX. resulted the north XX by slide the to those on rate QX today, X.X%. of our a continued its couple On This also early credit consistent relative quarters and forecasted metrics weighting to number is part scenarios. commercial we scenario our consumer where Based just weighting to of quality XXXX it an

effects net on activity Overall, remained and consumer in delinquency lows. consumer expected, driven charge-offs $XX levels, by the modest near NPL given customers. increases benign. net but continued of the and losses million, front, charge-offs were experienced card low remain We declined COVID's remained historic to and they On deferral

And, consumer XX% slide balances modest $X our bucket deferral-related card. into balances drove the XX-plus importantly, year-end. shows in Moreover, a time remain at moving year further deferral the modestly deferrals ending expected XX-day in appendix billion. level. of estate-related bulge compared at QX, delinquencies way added to expired consumer their with a highlights It are strong and trends which now QX, to underlying below collateral delinquency values. real through delinquency the decline they for higher We credit the mostly While consumer continued year-ago

bulge passed of delinquencies receded. the time periods, through delinquencies As deferral-related

down period, As delinquencies in QX, lower. which were delinquencies example, this five-day and through an year-over-year fell time XX% more stayed that after than passed deferrals shows

higher in So, to card but net relationship decline QX. other would bucket XX-plus losses historical delinquencies in then no losses follow we the to changes assuming trends, QX day payment card expect in be and their in

environment, of even asset solid, to in net flat XX% and remained the our as were charge-offs commercial, of industries, book the investment-grade sold either relatively we QX exposures collateralized. Overall, but given losses Moving were to affected quality crystallizing risk. commercial reducing some loans or loan

estate real reservable in exposures to Our and continue COVID exposure this led commercial primarily by -- $X downgrades from downgraded criticized increased the by quarter impacted metric by be hotels. billion QX, heavily most

remained low at commercial up modestly, of Importantly, points loans. basis only NPLs XX while

Client to -- disruption Turning expense. the from impacted provision impacted to PPP fee segment increased of customer revenue on with year $X.X below for versus has provision room activity improved. know Consumer Reserve-building Banking and It billion we But In pre-pandemic of plenty Banking mortgage and QX, revenue, with refinance from We and this the we investment COVID. the heavily decline rates, has and Consumer segments expenses throughout been around have $X.X activity. balances most earnings programs still XX. strength business associates near-term most flows, slide -- growth Consumer for was impacted And in in XXXX, protection waivers. been QX. all bore show deposits momentum prior of impacted and earned Banking starting six brunt and the -- QX customers. by in loan interest business while compared in heightened still expenses billion continued improvement. QX, levels, to in by

and NII fees spending fees. linked-quarter, level increased account of reflected an growth both Consumer P&L as at Looking the the as components revenue higher investment well holiday activity. of higher included

expenses pandemic reduction had costs benefits engaged customer higher digitally moved as moved realize we base. revenue to a of a lower, as and Even modestly more the in continued

with cost accounts on paid through increased associated that, increase dropped added service but past we Zelle. basis the XXX,XXX pandemic. in in enrollment. net and can As in both deposits Most and In slide rate an the deposits our of as fulfillment not of improvement more is with see our XX, saw Cost over and Brian points, deposits and XX% also both reflected digital more digital Note new use cost noted, sign-ons capabilities growth XX our deposit digital we of customer grew channels of with digital by importantly, also the even higher Erica declined. sales, XXX checking you as points. now year, costs basis volume only and

both will XX speak. Wealth skip Let's slides, XX. on I to and as to I slide And refer Management

Okay.

and of Private investments new a by revenue-related flows. of year-over-year driven Expenses rose to client on $XXX we market and by $X.X Here impact driven positive increased loan well to improved AUM choice a and exceeded, $XXX solid of NII book trillion by grew deposit XX% flows. respect record Lynch as with clients. to as our to solid flows, otherwise market billion than on And impacting force. deposits. remain expense grow fees income higher Client record as growth. in a up both market from driven positive Net a Merrill lower appreciation management a solid and again and and of the growth deposit solid pressured sales provider QX, and of households, Bank the growth an continue valuations provision large levels rates expense. NII, improvement as million in for higher revenue in balances more asset With modest grew both increase revenue, loans quarter affluent

results lower XX. to heavily interest we on Global Global again move Let's impacted has credit Banking our to here, higher Banking saw loan due COVID also But costs. and demand slide softer rates, driven provision driven were by On improved basis, earnings a The billion $XXX business improving $X.X revenue. million $XXX from QX lower, earned lower QX by and expense year-over-year million in nearly improvement. NII.

comparing revenue were up company Investment investments. as QX of the more QX, Looking to clients' grew at Banking billion $X.X activity as revenue leasing Banking XX% by nearly driven ESG with improvement and year-over-year. for fees fees Investments from was associated our higher and X% well

of of to a key in As compared products. of overall Brian release expense, compared $XXX for Provision also well share QX, $XXX in QX. services noted, of change in reserve number million reflecting accounting the to Non-interest to reflecting the this as the program in and given linked was market merchant million reserves platform the expense and year-over-year, the improved led support the expense investments a reflected performance quarter and as higher in PPP recording versus quarter. a build year-ago primarily in

helping earlier, continued noted continued banking grow, ease, digital customers and the Brian appreciate of convenience usage highlights some XX. other digital capabilities. present We costs. safety As to our And to on defray slide

trend to increased new loans businesses late stabilization the average relative saw the spread as continuing the noted to as the quarter. spread QX, QX remained liquid. Average spreads but As continued earlier, XX% deposits originations of highly in of higher average portfolio loan declined the And to tick since exceeded on on portfolio.

robust slide the on revenue QX. sales levels XX. and of Markets Results year-over-year from Global in to Switching improvement reflect trading, solid but from declined Okay.

about talk DVA. usually do, I I As segment results, excluding will

Global markedly was basis, quarter decline robust QX, $XX in QX This in that DVA $XXX the earnings but from of XXXX. a of a QX, trading from Markets loss small produced million. On more million net up

equities The up claims trading increase $X.X XX% and year-over-year driven revenue X% higher trading. by billion by XX% to Sales on and year-over-year, on sales revenue unemployment driven contributed was reflected both and across trading was market offset trading was driven performance, increasing by credit in processing. and was and costs year-over-year activity most a higher macro than improvement which activity-based declines expense Focusing The for a The equities FICC. repositioning, products strength higher. FICC drove client in mortgage strong by X% decline volatility trading. in investment more which and decline in

year-over-year business in been As has XXXX. every strong noted, the Brian quarter performance of this of

see segment that XX% that capital allocated slide produced can of for on and the year. returns strong XX You on

Okay.

associated QX XX, primarily driven Finally which benefit of for in Compared by $XXX decline and a million show investments. tax net with prior of deferred ESG $XXX from was U.K. million. loss the declined accounting solar by income, Other on asset. other our All QX tax the and to driven quarter's reported the wind slide we Revenue

were We expense, equity Expenses also on declined offset from higher but some costs. losses. partially QX by experienced lower modest litigation investment marketing

level to the current and Q&A. And back Lee I'll driven relative the the changes laws that, low the we any in absent would of with activity earnings. double client in rate tax for unusual XXXX, expect it tax ESG be or turn For to items, pre-tax to effective by Brian digits

Operator

We'll John ahead. Research. Instructions] with from today [Operator Autonomous question take our McDonald go first Please

John McDonald

in a on morning. versus XXXX. the Good wanted be Brian cost expecting I mentioned to number Hi. ask question expenses. flattish to XXXX

If the for or expenses the could wondering, -- give some COVID of kind this and for Thanks. expect trend of expenses all-in year? metric? Just that COVID is Paul you core that expenses you outlook kind an

Brian Moynihan

feel largely, we on to little the that's good you since our and with so came out the slower case It about quarter due to and continue if Yes, including billion in why sales to go so think year why we October fact in of benefits COVID. the closed. their $XX were given all in of this that, years to that's the the be they keep teammates, to effective need down normal counts a provide scores, both homes John get in even back -- was could the the we those growth around where checking XX% strong ability XX% XX%, a branches care bringing child half to customer

it. through. number. investing the centers remember, technology employees year-over-year importantly help all-in sell drive next we'll underneath more, But yes, are in financial to So, then to And we're it year, new we $X.X expansion flat continue billion working dynamics and

as in a year, the move change sort over flat but of work to down So got we hopefully we've see do, you'll COVID cost through overall. the but year-over-year coming some

John McDonald

term as Okay. Brian, a about a low of about still thinking back kind $XX things? you're billion getting Is longer And you've that then run to how rate ex-COVID. talked

Brian Moynihan

more get years X% work and of to year. get quotidian expense the down. But of the in out and work costs the the we and we years day-to-day Yes. a you. Again sort have more rent as We many pay is efficient ago, at as either, increases should increases said payroll the grow idea start at to net

just X% these manage that work a on COVID work up couple in from we'll future. do day-to-day the cost percents continue to here. getting to of We've to and down got out So, so out expenses of

John McDonald

Okay. Thanks.

Operator

comes Mayo Fargo. with next go ahead. Wells Our from question Mike Please

Mike Mayo

on of with more Or either follow-up be the big you're I efficiency. and still engaged. cost, other I XX%, go I cry efficiency but your you're in investing been. through opening you from you your banking some many out XX% -- that's had metrics know in but your a COVID all said efficient $XXX rates maybe a you've see not take ratio million wanted the little COVID more than as low disclosed. you're XX getting bit, ways where you XX% Hi. -- XX%. far making the Or so there? becoming there digital million comments to costs are if Brian. hurt digital And quarter for would to you with mean, those in of are also strides you households And it

kind So a or of adjusted more ratio level. with my your current normal help efficiency efficiency me reconcile

Brian Moynihan

basically you from So billion of Mike, $X is of interest page realize net the of -- on bridge year quarter, a last XX interest revenue to per which that four lot that we I quarters in the take back and and the lost net income, yield, bridge.

we so And go revenue, that work per $X ultimately rise quarter rates That that and will $X that's as cost. as with really billion no up. back in so billion up

accounts. efficient of So at added of cost is continue now over the as branch more X.XX%, checking we we deposit the XXX,XXX get and base the in to operating

system. cost revenue today. the on gross about opened up offsetting million or PPP process. COVID off of $XXX -- stuff is by you're much and and we obviously ready just right We've impact million. we're anything costs next got the $XXX -- the savings the NII else employees finishes whole includes go of to expenses. to affected forgiveness it's to of that. by than that saying than it come PPP The are So net got complete We've of more that will terms X,XXX that higher round travel as That out in And it's stuff. against but Remember,

So we got you.

Mike Mayo

not loans. And I specific through sure, a not I'm is you to went Paul, that. as mean, to NII. then now gave you greater outlook if than you going the follow-up is that said or when liquidity

to the loan-to-deposit I at now. it's Your history ratio think close XX%, lowest in ever right like

for that NII powder So do is can there's environment? rate think this too you for And, is? did Or leverage dry tough year it you there. this But give of curve a lot you year? assuming the somehow pull stays forward guidance the out yield where operating given positive

Paul Donofrio

XXXX, bottom situations interest like beginning pay significantly and/or the the QX where QX. day higher helpful to balance we and fell when had lot there. clues give basis plus low XXX accessed capital interest XXX grow taken were down past, think NII. quarters declined, down in want We to made historically indeed didn't it kind of sheet points can have rates growth unfold review were and and We become progress always to All to markets a may 'XX, There's cetera, to how should think model in et and several was of and of you declined in in equal sort little estimate weakened levels. it's rates in moved it rates else NII long I the debt Remember XXXX. count easier point in think give But I you down loans larger specific QX NII demand as significant a guidance. reach that really and QX how NII believe where companies color as it's of you found a about enough perspectives we liquidity. of loans rates In I compensate. from we've here renewed build to Short this do XXXX. sort more to on our on

the instead excess to relatively of recent this in again confidence influx what think grow cash. was in tremendous and invest securities to to crisis that the start I quickly helped in excess us our holding of deposits

QX of investment in NII us those leads low the the that the the in QX continued leaving days QX, in QX, through before loan picked QX to two cash reinvestment So lost moving flat and up in and interest in recent Remember up versus balance we QX. offset we we NII year. that less in of relatively back headwinds our demand days can near-term QX of of of believe -- yields

of increased reviewed, demand we the at that also QX end follow. Brian hope loan saw stabilize soon loans will As providing commercial

year-over-year using some be days, QX rate expect existing loan the for which higher than demand quarterly that much over in the to half of QX XXXX to steepened expect curve, XX as XXXX. the 'XX XXXX the year to example compared of And as second first XXXX, of half should be past well when XXXX through Given comparisons we the second get favorable. we the we quite to has and would NII half

Mike Mayo

helpful. That's bread sizing a then any in a I say QX And box? QX Okay. Or higher mean to than than you lot when bigger that?

Paul Donofrio

I would --

Brian Moynihan

said, -- way the to FD, start times growth. get think we'll loan you to economy Once simple we once levels, and And -- in the NII. Mike outgrow is sort in we get the you of get underneath about growing growth in the the loan it, normalized

to sheet kind it four grow of and got from this to work back quarter fight up and down balance turned it here. repositioned just five So have get -- to a back It's it but we've out. huge or and then fight

we'll So see.

Mike Mayo

Okay. Thank you.

Operator

next question go is Glenn ahead. Evercore. Please Schorr with from our And

Glenn Schorr

very Thanks much. Hi.

steady this I and going your your are on and are has front. pretty on guys predictable ever -- requirements don't your sure capital. But not higher CETX thoughts on You been up. I'm not curious I'm

capital So low peers. your continues is to relative and big reasonably as G-SIB target your to build

Just with distribution how the about in you, that? your asset of given you get in curious aggressive franchise. talk we don't management much acquisitions And on Thanks. bolt-on capital how you you do but what might if about are terms you thinking versus return particular address think great

Brian Moynihan

back all markets we're that, like illegal not deposit The GLBA be the years but but big large distributor it was is we do would -- let's Glenn, or we one. point been XX, can't since Remember, then stuff priority. we management. so the and asset sold more has asset for in backwards and being it. that or whatever XX go because management ago even and before, It's acquisitions to believed the leverage way that

we've us But But from remember stuff company then everybody things accommodations were -- that the Like become organic we over It look at the constraint. was we're and growth expect time-to-time you back what recalcs don't It what's So SLR way at stuff issue. doesn't shareholders. to capital and like have like plenty and rules going we'll we interesting, SCB an of need have does. given, -- SLR. the said and plenty got change. we even delivering doesn't the built that we this see look And didn't you the to any the if the that.

it the best months to got We isn't billion capital. on but $X time-to-time, aggressive to we'll got basis forward. works. as we United to then look continue see And of development much -- So on And and after -- the what States basically those two we'll an organic in is are franchise things and instructions at then it we consider returning right there and will they this return to we've be return we move from develop Fed and the change just now. now get answer

have in moving more ones $XXX brand that markets, a branch up open expanded and our years share look averaging been If to in couple per the deposits or year-by-year-by-year. you we're system we've million literally in of the

that's where to driving. so And think we we got keep that

Glenn Schorr

that. it there. all a whenever the excess? $XX in either appreciate and/or CETX there the resting buffer you I you tomorrow, Is is get natural want Not Where specific to above just billion but put a ground?

Brian Moynihan

XX points back to criterias relevant Yes. basically earnings. remember, you'd to down. We we're only always slow above basis of where start binding said getting But sort the

basis XX of from where And SLR move standardize is those to whatever think plus are. that's room whatever so got advance binding. and a around Board But the us is between about targets points. time-to-time the lot And requirement we

Glenn Schorr

Thanks, your Thanks for Brian. reference.

Operator

O'Connor with go Bank. is Deutsche question next from Our Please Matt ahead.

Matt O'Connor

morning. Good

Brian Moynihan

Good morning.

Matt O'Connor

months think of to liquidity Can talk fourth the can if will picks a I timing higher And out XX the came the bit you deployment rolled down. mortgage rates one quarter? actually be you vaccines kind look six about rates argue of in as longer-term the economy get out up.

but have buying. it's tons assets you I of obviously, So that think pretty long-duration also you're deposits, would

So that? if could talk about you

Paul Donofrio

Yes.

approximately And up rates an on well and certainly, declined $XXX was in absolutely going points. rates the some improvement Having You're -- securities The approximately on declined; mortgage-backed -- $XXX basis both yield liquidity right. call rates of went understand said in the and We slightly. returns that probably billion mortgage-backed of XX-year that I to we into quarter. said always capital we rate was million quarter our to that, to our and did treasuries do. into cash mortgage-backed the of get right structure. thing securities quarter, It third think, did mortgage and we and deploy We customers securities. on think the profits on XXX we're and we balance our but as securities

say, cash, -- lot of a I Matt. excess we've So would and still got

sheet, you by at look billion this billion, $XX balance cash our quarter. If $XX grew

on I So, we what of was growth of the that net top already deployment. had mean

obviously future. to more lot the the plan of So, we some do we're we to in rate but at invest in investments room looking environment. a still always have And QX,

Matt O'Connor

decisions? little of somewhat just charge I a a Or have better these kind of kind the related, of sheet free just balance Or want where you is for deposits? don't tough have guess It's some not there efficient of of even to up these capital. to an And and make then say, more deposits? point bit we some more

Brian Moynihan

down start -- relationship, a you'd a Well, whether to you deposits. for so turn account and a a customer consumer core checking commercial customer customer it's a comes lifetime open why never if to or that

markets And and the bidding consumer we're not growth, so, if -- you the CDs for money or at on look side.

You account $XXX continued the $XXX billion relationships. continue core would checking before, our expect by of to the when way rose can growth balance see rates account these checking customer that And and because billion we we was are that growth.

rose rates grow look double-digit after to continued taking means, which we just So, if quarter type you market XXXX, quarter go after you're XXXX, checking back numbers of in as and XXXX, quarter, share.

so And on commercial thing same business. the side in the GTS the

And not this market bit sandwiched and but all floor, services -- it that paid stuff deposits pressed that Haven't been. that's we're in so commercial is gets you'd to down. getting taking floors from hard people. frankly real core the zero a albeit, the hit the short-term to little overcome out take. We zero are side the turn as are it in be And

So, That already. it's you on can have don't few just your doesn't balance sheet not lot do here's down yield? billion put a dollars, it like We turned a that. give happen. that we of and us We

Matt O'Connor

Okay. Thank you.

Operator

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

Betsy Graseck

$XX this Like first securities. reinvestment just mentioned, to last a you follow-on Paul, off so did billion you quarter. the around or past thanks. one into question the Hey

the about million increase thinking securities that just $XXX we're as you roughly run rate should XQ? we be So, an you and that's book did NII gave, above in the beyond guidance into anticipating that

Paul Donofrio

are of behavior. and that of a like judgments demand assess Look, expect pace deposits to more, expected excess but to disclosing more we be we including meaningful the The and we things the -- really by is continue how guidance not influenced loan to you. obviously purchases securities. to the customer into much amount gave like access size do -- continue there in and planning deploy a We're cash that going number on deposit

expecting we're meaningful going give you quarter. that So me yes, do not excuse in in to this but it's number, I QX I'm -- increase a a mean to

Betsy Graseck

Yes.

expect a book that's that rate? credit, could still stunning indicated that's then And to pretty are XQ. it. about Maybe statement, be you it we color is. talking that Got down really the impacted you give delinquencies your -- that's why the just where about, a And of rate in little what bit happening unemployment Can by business? have NCOs in you Okay. not unemployment a suggesting just you being Do are that talk us in there. population separately, this you your some going Q-on-Q coming have given just

Paul Donofrio

Sure.

correct I make may -- have everybody sure to Now, I you I think it. heard said want to I want but something heard say you it, not --

We going for QX. expect in [Audio NCOs not the for to up -- to card And yes? be reason Gap] it's be down in that

Brian Moynihan

Hey say for saying. a were just, Paul. what if you could there you We lost you second

Paul Donofrio

Okay.

wanted heard to everybody heard Sorry. you different. I I What I thought make sure something say because,

decline primary expect for in driver up in those -- consumer net expect the be uptick obviously QX. then We charge-offs card, loans, and QX the which to And we of

Betsy Graseck

I what that. thought That's Yes. I sorry about so said

Paul Donofrio

because way our worked the to the and as is that those Okay. the can if percent we in in of XX-day, what in the terms of historically at x losses get the back next buckets, XXX to say -- sort the up bucket. -- bucket. to other And XX-day, than days. by are delinquencies see they're the bucket expectation And the XX-plus And have the deferrals XX-plus And that you we XX the the of driven their look you in quarter you'll bucket, delinquencies in have now bucket see that's XX being in delinquencies. look other show XX they're five-day from higher

when look the behind see bucket, And levels. so, same elevated But you XX-day you seeing. all that's importantly, we're don't the

you're year-over-year look down levels. bucket, in you of terms meaningfully if fact, at In the XX-day

is get by those to helped it, that's else will And affected new have get QX people they why pushed out all stimulus be think, just health come back? this we where crisis, who down. ever by the been them will equal, question So carry periods? stimulus, think is really, the jobs too have word, who who have will they are vaccinated future point losses? we you will Probably down. to unemployed, to would about if been think they what have strong you and this Or And come maybe a into see the

Brian Moynihan

to information, extra Betsy, we give So you just included. some

we of would XX because the If were this four arise. bottom at in put the deck appendix at specifically charts the knew in the and question you page look

look more amount you across was of -- probably And different top look actually XX-plus and in of a if 'XX, the of even XX, go can because, still the end from side And you mid it's charge-offs to mouse that is of of down, days you the the gross buckets see dollar down million. So, the all chart are this sort can dollar left can a then to the from buckets went down quarter pig back through that people back consumer a the page would the thought year-over-year. But in XXXX you delinquency what through see a snake analogy you that it in the the page. the up see right come to if amount. you you snake $XXX in lower were it the total the move

future. this in card, of dramatically If in down amounts you look gross will can they're in bode terms the credit which year-over-year the red the is bars then dollar that and you see well

back So level going was ever in talk below historically where that a up, about dollar when from much terms been we going amounts. up they're of they have

rate the being that to society. selection borrowing in last it rate so you have prime the American to the unemployment just just base customer client is the made -- especially in base on the below and unemployment our And that's the you due is in business. due And point so customer the

Paul Donofrio

the to seen just complete -- maybe conversation increase Betsy, basis NPLs haven't Hey, of at now. right have XX in commercial, They're significantly. respect to criticized, but loans increases with we they points seen haven't we reservable

that the COVID. this impacted this losses NCOs quarter. as reduce some COVID. we showed heavily commercial hadn't those we NCOs by specific losses up coming out that play exposures and company and credits our affected take industries that concentrated likely will are in future in have out would sold really think obviously we we And would by those point some took quarter driven have be industries be were events lower in losses, commercial. would over to even we more chose losses had hadn't going in quarters If in crystallized quarters, in that to So by I we

Betsy Graseck

or mean, maybe in in peaked peaked, No, they But given question end Yes. time I I NCOs will some peaking it. we're have already is Yes. your have the comments XXXX. the forecasting of they XQ? like got you for

Brian Moynihan

consumer sort runs five care there commercial, XX, the really this the straight to to of, is But course XX the the is just have and may to And quarters. the out throughput XX, XX. course. point, the occur by built the reserves consumer at run The in XX the activity think to

because you So first the half mathematical we're pretty a going the happen showing and to calculation. that in really it's tell charts you what's

Betsy Graseck

Yes. you. No, Impressive. it. got I Thank

Operator

Vivek ahead. from JPMorgan. question Please go Next Juneja with

Vivek Juneja

Brian, a Hi, Paul. thinking You've are plans little about question in a talk this XXXX are Hi, you bit you. XQ. it? Brian. including your FICC you share What for your trading? lost about for What Can in business?

Brian Moynihan

up does It's -- it highest up business you if years the we -- Jimmy job. year-over-year. at good Well, whatever it our integrated on plans or keep to of the markets. XX% year-over-year, way a is we it an it's had up it's are running chart. It's And it's look you ever that showed one do.

great when run given Interesting don't a forget on that. don't people a about which play quarter. areas, in certain do run job. We enough they they So

stable of have level so And revenue. we a more of a

$XX.X look which billion, revenue, billion, trade areas to year. is that $XX.X on you see some from billion in substantial so the good the FICC $XX.X if of we So we page a in. $X.X and XX, billion up was had And billion, billion, you'll $XX.X $X.X don't

business. So a it's clients really to job. we're competitors. the connectivity with They issuing that happy and driven it. continue investing more And between our we'll -- help drives to some credit the and the do We're drive drive us clients. what And that's great versus there do of our

Paul Donofrio

to think share Can looking happy but we're I just see data in losing add don't one, FICC. what you're market at I

And we're we're share. as I gaining perhaps as investing share within FICC. we're market actually the certainly we're much gaining in equities, market where not think in segments but gaining

Vivek Juneja

been below have rates growth peers. your Paul,

like growth look about through at is was quarters that something Brian it several peers macro So and credit are commodities been and of you talking in XXXX. certainly year-on-year else? products, Because or passing you've that doing by we out segment between your rates, if business and below

Paul Donofrio

the but Some in lots of all Europe… There's of of peers, the peers. not peers

Vivek Juneja

guess… bigger Right. I -- yes, ones yes But the -- but

Paul Donofrio

fee gaining you'll in market you share that if at we look think are I global see FICC. pools,

Vivek Juneja

Okay.

you. Europeans. what go that MBS Okay. this for expense amortization back and much was We'll compare the with question Paul how Different quarter? premium --

Paul Donofrio

it don't excuse the up. stabilize it we're for that to impact, I higher go did -- to say NII. need higher we're and to to and me, giving number stabilize go rates I and that meaningfully mortgage customer for go number stabilize would From think see lower. here, -- mortgage exact And was number going but

Vivek Juneja

Yes. meant. you what understood I

Paul Donofrio

if though. this But give sense its -- Yes. I'll impact you you of

the due amortization at If net look the one-third for interest the you was quarter. of in yield in decline company, it to premium

Vivek Juneja

And by reversal how so MBS the much guide? us a you much were you better, amortization be NII in premium that for giving that of quarter a in are time -- guide forecasting to that fourth

Paul Donofrio

you end look the it rates to that by look up it that. in rates would assuming -- that today… estimate the year goes the forward where you Well, not at at Because to the get of are curve, up if are from We're for I forward guidance. they

Vivek Juneja

grow. it them Paul? yes, are I much not do you -- to decline my was you I to No question yes. Yes, how was know expecting expect

Paul Donofrio

dollar I amount not understand to were you amount. the going the you asking for and I'm dollar give

Vivek Juneja

I'm expecting the that. dollar said element, percentage, Not not not decline of amount I'm of for you the since any Any that. of sense any asking precise a but sense one-third -- from came But sense.

Paul Donofrio

I But my don't that. follow-up. give the off percent don't improvement top probably have we the top I much, of have I'll some head. how it sense just of off Maybe head. is of the can from -- of it mean, my you I I what don't

is due as to to premium about that in rates. just thing of in the that out I it's would other not this you're The write-off decline keep thinking point point mind at just the

bigger You portfolio has have the gotten to too. remember that

Vivek Juneja

it. been by you've more others But Right. hurt than

that turn for in should around later you obviously, So, year if the refinance…

Paul Donofrio

rates if mortgage-backed mortgage -- if a That's increase. Yes. meaningful tailwind

Vivek Juneja

All Thanks. right.

Operator

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

Ken Usdin

Thanks. Good morning.

Just one for Paul. accounting follow-up you

go but I the you looks the any other there's of that you to help wanted mentioned Just pretty side like you're us through been has a when low if fee see it. tax that us rate as where the the what other investments ESG big And just helping line understand double-digit And just number. negative volatile, for rate. can way pretty understand tax

Paul Donofrio

a partnership is the increase volatility those fourth quarter. this that the -- in the there's in look unusual that in but item, I we try saw by higher things bounce going at lots I with gains hedges. lot line items million line would can around to you But on are respect you guess, -- a that two there's quarter-to-quarter. okay? a forward for income purposes will sure. it's driven to modeling can company, there about modeling the assumption fourth quarter debt loans the given income securities. loss and value line Yes, and with help investments mark-to-market good more give this -- quarter there's in year investment sale fair of to be seasonal losses. in often the certainly except going our I normally And to that triangulate loans things that. our other The some absent as losses a related partnership gains, in equity of it it. Other And ways be $XXX on on the line of was that for FVL line, lot

there. in So quarter larger there's going around a of to loss would per be I the use $XXX a with million in quarter. loss fourth volatility

Ken Usdin

Yes. Understood.

minus. still got closer Okay. just this needs on happen that little kind you et consumer-related in plus there we kind been to the mentioned cetera. franchise Great. Obviously, way? in A reopening. And to card- happening follow-up right progress -- we to and as are think get hanging has or just What weighing moving lot you've of of a then a fees excess for liquidity fee the the bit overdrafts, and still on of those do start those items all

as see you that well? So new mass of start improvement is this with also improve the do normal? a Or stuff to economic -- to fees start expect

Brian Moynihan

is biggest they but about interchange-type deficit recovering I earlier. growing, as spoke and dynamics from both the line they're think the a And in are I item debit credit.

should them trying were in And had a But account, to get up. is accounts numbers -- we're way clients' overcharges help. a And benefits remember, most. balance that to safe million by the charges of our numbers. services overdraft customers -- transaction that we've then our lower that So that three round really accounts which the strategy go yes, to use

that line the up. overdraft dollar And goes sheer against so volume the as works

also because growth So be accounts what's driving grow is really of down. driver. constantly we'll just taking sheer will us been though It will have But see. slowly the numbers in we

overdrafts total We percentage because and fees as of customer's have down, to of that means drive continue of in that the good any the shape. lowest the in peers large consumer we'll

Ken Usdin

Got it.

update the and out? now quick that another of quarter seen along that Okay. merchant that we've well? on full that's Last thing kind And of how any as progressing broken

Brian Moynihan

Yes.

we But new getting still business. is COVID. it held by that's open We of to back affected core sell it's that our feel, and think to of which the services people we're that's to one things more system merchant that's we a okay. a integral it's -- is the I starting who more the part feel of be and types obviously it sales process, use put

it. improve to need we but okay, its So,

Ken Usdin

All right. you, Got it. Thank Brian.

Operator

Global. Next with question go ahead. Please Seaport Jim from is Mitchell

Jim Mitchell

But typical like a Hey, bit given mortgage. seems pretty good. little deliberately Maybe credit consumer growth. a was Auto It loan good little just seasonality. residential looked I you sluggish, card shrunk morning. on think,

a we cash. with on forward? some for You consumer lending about the How the color customers basis. How on flush So, nice going do commercial side? are the about think monthly gave demand do side think we

Brian Moynihan

was small -- in in especially the you large watch and hit and you business a just unsecured you May issue if about March, Well, even let me the April, being when lender pulled space the space. think consumer

the we're So, reverting is good news is, to that norm.

credit example, for XXX,XXX in back running pre-COVID back then. That that's booked the really so we XXX,XXX, XXX,XXX we to but And highest days, in -- going card. accounts had were December,

on So we side, got it for to to back the work amount get to example. some the card do full

In we conservative we're to terms are of on look at rates also we mortgage. gone careful but and that. there, Again,

booked core lending side about the including consumer mortgage in we billion in So, secured $X the business.

like feel equity so better or a quarter that. Auto And we billion home that but $X.X is down about or when billion $X running up, it to was picked back something something.

And some So we've stable is seasonality, you good the room news XX are card million the stabilized. least have some the at at is the sort got to but balances go. But of some the has adjustments a like and then And there. mortgage to stabilize we've normalized the back bit we're as gone up back underwriting, they looks strong. made been and picking more auto

you're XXX the month. picked low to it do. have volume So card we're we'll pull to at XXX a out. to about to from million, lost work right, million but back up on the we've and But credit play had some point And -- back given half see got we

Jim Mitchell

that to some with going sort spend of marketing consumer sort in reengage should of uptick of improvement the nice is reflective expect forward? and So, we push

Brian Moynihan

All capabilities. really our around marketing product consumer is

So, yes.

Jim Mitchell

you. Thank Great. Okay.

Operator

with is Markets. Gerard RBC ahead. question next from Please go Our Capital Cassidy

Gerard Cassidy

morning that I Can you Good follow-up it color or side? to guess a back give they what's brought consumer your you pre-COVID think the the you on was you FICO questions some Paul. your morning on Brian, your same that tightened normal? side levels. on now to I on how back up in the commercial they're did to Was you're And some good -- changed? thing? color Two the When scores it And underwriting there. changed remarks today parts us commentary of also you consumer them gave. bringing And do Brian said just prepared you underwriting standards two it.

Brian Moynihan

Yes.

the over sure frankly ratings every done are you make We've single to through want So commercial to make stopped start the Business prospecting impossible of is Investment of Banking. relationship quarterly Commercial do Banking, reviews, because this was side. the Global Basically about let the in side sort Corporate Global sort commercial March, it portfolio you going portfolios. Banking, loan And of right understood with April, plus group business, improving which me of the make talked we sure rest Paul they're covenant customer to here it as that the waivers. understood understood with shape. we customers course need solid quarter. industries by in And of sure And the that looked has the frankly, the the are difficult. to to we good about at customers whether time in going sure credit sorted are been make has we That the are of their

very and they ago, moved can industries Banking we go narrow Commercial And for so end to upper business about list and of middle our market limited back of and But months four prospecting for small into all prospects expect. markets. we except full Global then think you'd for flipped Bank prospecting across that recently Business with

in little the quarter -- business we're business, we're a lot linked-quarter we're terms XX% but the quarter up XX%. XX% back year-over-year still originations you small up were a quarter-over-quarter, and give were we've fourth up than than think. I dramatic getting a On it of we more nature up in side the down XXX-plus I the -- we that was percent We're opened of the more of still up. And to in sense -- because more think

And year-over-year XX%. down up XXX%; still so but new commitments

in happen see that small we side. through So and business that that's the shows you will coming

they probably the it's the slowest are So, most risk. -- that was because

secured the commercial When the that's -- was dynamics we the the back side. go stopped we we on nature of with equity you more stayed nature slowed commercial reality the so requirements -- the mortgage it. quickly Auto, basically because market And slowed side, consumer we and to side. short-term do down. LTVs consumer FICO the and down on We of just basically out the on went home of

where up you But really so down and see while. we of that just generate in you a about XX% that thing for ability moved months had going probably really move. had has been flow were until good we're felt to several it's We to we was last -- the and prime had. some we'll stayed it what's we So, And XX%, careful XX% that through. few always probably and was we're this consumer probably to last and clarity the super back But be the there. in changed back

well and growth activity future. in loan bodes the economic to that So,

Gerard Cassidy

deposits in the to comments Very good. the talking Paul on you your yield with confidence further go then were And greater Thank curve. you. about out having

You talked months six take deposits that on I question a changed little guess the those them what that to already. now move further out you're versus side and bit maybe confidence ago? is the comfortable about

Paul Donofrio

Sure.

to of A, of So, cetera the in. and Three, continue look the new noted get a deposits, growth of are coupled of those deposits reviewing just significant more build a we're at that to this right? we're Brian the with decline where not deposits the money the deposits coming of We earlier sheer increase, as when predominantly see what's hard recession accounts. we more level likely B, money changed expectation going high-quality more get is et to that supply you case deposits. checking, share fair as the from come if in going out our And velocity it's U.S. will to the in deposits

So, because focusing deposits we of run how retail in and just side have. good feel on the of deposits, high-quality terms commercial our on business we about both we the

Brian Moynihan

corporate just it you a little by and the be this to sort state make whether move; that of Once on was going Yes what an a side the straightforward. ephemeral you and especially, could to Gerard feeling was this be more got interested.

the you the side, you but a on the ephemeral. wasn't hang, commercial On always to make big to the are sure consumer those it reality had going inflow is know side

Gerard Cassidy

guys in year person. Paul, and see Brian And we'll this good. hopefully, Very you Bank at

Brian Moynihan

try, we'll Good,

Paul Donofrio

so. Hope

Gerard Cassidy

Okay. Thank you, gentlemen.

Operator

from is Brian question Next KBW. Kleinhanzl with ahead. go Please

Brian Kleinhanzl

guess I just think true comes changes this about some case, I reserve know qualitative of related base factors. Meaning was if it be levels quarter the you relative still the I overall. with over you Thanks. to I have I the It's the factors? driven how at case time. regarding there base when that when released much reserve think guess could to look by qualitative one is question. But that

Brian Moynihan

not we don't give I'm -- me sure sure the -- well, not give a I just I'm let Yes, methodology, you but exact sense. we

statistics, our because XXXX, XXXX it the set end setting other was it take before in year actual what for and unemployment rate you the was by X.X% And we we was below X.X%. reserve end basis If year words the reserve the for that. December points-plus weighting set XXX obviously

side where the is clarifying era as happen so in with the reserve you'll is volumes more down COVID And as would changed setting is is forward. most with gives think go of which assumptions. But as you you're the have the importantly, that see So, about of path into two up on has probability as clarified charge-offs economic of the are see you end that that vaccine. that expect you that you narrower reserves we and are the sheer dealing lifetime terms the the confidence activity forward dollar and of when a path is. uncertainty of and that real range you things going confidence the to site like come in and shows assumptions forward things One pretty our less quickly other the and

elements. So will down of the nearly XX% we That weighted over come downside weighting time.

And over time, that reserves releases come you'll down so from comes away see when the that.

vaccinated, of also duration crisis drive lifetime bigger bigger i.e. thing certainty that the the of calculation to The the and you people will and include the other with river rest see a is so side comes more as it. of portion second the in more the

before you the So into those earlier, like said of economy size was our terms at where and they Paul economics things our takes team crossing year end it growing next as at it over past both of and will this sheer and of underlying in the setting And have reserve it. look that. things if year change

implies So more we are case conservative using a which judgment.

Brian Kleinhanzl

right. Great. All Thanks.

Operator

ahead. We'll Please with take today's last question go from Charles Portales. Peabody

Charles Peabody

the to appointees. front. The that's SEC first of I'm where hearing to two new going on what And on Recently, going had one CFPB. issues be. more Wondering the deals in biggest, the is what might and emerge consumer the these thought regulatory appointees just with with side, what's you the potential to which because sort we one

of fees, are a on going in probably But the to artificial fees. lending of might hearing there Some the And affect rates, be fees? anything sort that there's you things those usurious things of can I'm might overdraft affect crackdown you payday overdraft used you? intelligence think of Most specifically, affect overdraft redlining. what

Brian Moynihan

changing overdraft operating Well was rules the more started posture that realizing in a we vastly a decade-plus changed customer stable for the franchise before base ago were better in the our fees deficiency.

We've run it that has welcome way a that's been company. a And we so long our we great to time. path an for because how industry doing consumer-oriented which it,

So as amounts in probably most declining fees a years. and dollar gross on overdrafts every really been of our percentage have fees year

we're not checking to primary stuff therefore how so stimulus year depending the the household. this with and those we the And of largely account being And checks because customer even less. business it's in the on lower. And overdraft core run XX%-plus they tend

an lives allowing their interest basically their been market and really are welcome us emergency And effectively. really mass which segment, it These use us to we've to of this -- loan customers in no back our introduced a for segment that our for customer help for to money quickly. we retail response at new paying get right things to on gives our customer while product is who've $X. manage access with that all the done anticipation So loan a we is

brings -- And we that's so because built regulation fine the any service brand and us. that best on efficient largest with the structures those we and we franchise business why to and of fee the don't not most kind not -- customer that's welcome that's market as have the a the best we're us,

Charles Peabody

historical And then a revenues the -- big very, didn't. recognize follow-up all my strong. trading deals I question banks on fourth for basis or -- with [Audio quarter Gap] was very

fourth Gap] expectations? And a already to making difficult more so more the conservative little the had quarter. that's it my something in the is year question [Audio We

Lee McEntire

cutting This really is you're Charlie, Hey, Lee. out.

sure up. cutting I'm we not picked You're really out.

question were you. but asking you we hear and something, think about I FICC a couldn't

Charles Peabody

BofA, in JPMorgan, there a at too that's environment not historical more Goldman strong. Citi, in basis results the very to fourth Basically, at changing, analyst what estimates FICC in but trying making difficult I'm it Gap] is something Yes. the everybody. expectations? at at quarter aggressive understand were [Audio just miss on But trading they did that's the And their

Brian Moynihan

consistent That the expectations. run had year, franchise think But balance sheet I and the billion we cost capital business balance almost keeping of And good a the sheet for were the the well it the they we in it that don't the shaped. -- one-third environments our how year team did of earned They with develop and $XX-odd in do well. capital those have the drove and above team by our -- business. above of -- about Markets month the we Jimmy

it. about So good we feel

And so, offline I'll broader let Lee follow to people's only don't questions, the you we some set our set of but other we estimates, own.

Lee? think me caller, the -- was last let that So I

Lee McEntire

Brian. right, That's

Brian Moynihan

Okay. Thanks.

strong the you to that. a Let let year me on book your team. finish back here and It was by XXXX the get day. close let's

A customer think about implement, paid the we work-from-home, back, those multiple massive a borrowing of changes government operating us job. in that cases over that faced: did government programs we yet environment the with inflows, what diminished and those great wild As massive to team year, course deferrals deposit the of programs, programs government

We So all did. the of finished work stronger team stronger I -- hard during the thank the than they the the for the year three quarter crisis.

to continue mitigate We asset see quality and now. --

stock in quarter. told so feel $X you And buying market back back today. this billion-plus we'll good. we We're the We buy

fact said push from continue year-over-year quarter troughed the also here. balance And to investing franchise. NII sheet And despite the flattish, heavily and the allow to best ratios will to that. third strong capital us have be up expenses do we in as we're Our we

So support. to look next to thank you forward Thanks. for talking We your you time.

Operator

will today's Thanks conclude for program. this And participation. your

disconnect. may You now