BAC - Earnings call transcript Q2 2018 | Bank of America Corporation

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Operator

Good morning everyone and welcome to today’s Bank of America earnings announcement. At this time, all participants are in a listen-only mode. Later, you’ll have the opportunity to ask questions during the question and answer session.

You may register to ask a question at any time by pressing star and one on your touchtone phone, and withdraw yourself from the queue by pressing the pound key. Please note this call is being recorded. to conference pleasure to my now turn over the Mr. It’s McIntyre. Lee ahead. Please go

Lee McIntyre

everybody chance joining Good documents site. results. quarter hope second morning. on By had this I call of Thanks for the morning’s IR to the earnings review to the review website our now, has release a bankofamerica.com XXXX

of will the me we quarter may Donofrio make for I then you call to the open questions. over CFO, afterwards, you Before review Brian’s our CEO, our one we’ll statements Please remind a then to but have the and question during call. results, second can. turn it the if limit it limit Brian After up your comments, Moynihan, let can details you forward-looking Paul follow-up questions

to to on earnings filings that For forward-looking our our or I’ll refer that, Brian. over With please comments, turn the either website information it we SEC documents, release further post.

Brian Moynihan

joining thank to Thank and you, results. our second us review Lee, all quarter you of for

it the returns from $X.X us economy, increase responsible Net to after Continued resulted real of in cost last quarter first for quarter and to quarter billion solid discipline us consistent coupled for in with continue income through more to shareholders. is quarter support in strong Driving management XX% a has a and a has billion previous strong operational growth in invest than brings resulted in in higher year. six record. to enabled the the was excellence. Combined the client months. year to tax XX% earnings than risk with $XX.X one, best results for customer income this economy grew the This the net and results. growing It activity start company’s our a and history, growth

XXX for basis XX%, operating drove return more of tangible XX%. XX just months. an ratio the points efficiency below on consecutive leverage We delivered equity We common XXth improvement the than Our positive was in quarter.

well around X% course second While income up as select cover taxes corporations going it’s adjusting before year-over-year, the benefiting of is a improved is way tax pre-tax Paul later, to In better after which look at is but reform as XX%. some America, for income grew. line items is true to quarter, reported pre-tax bottom it our also income

is on liquidity Our We over extremely and to announced shareholders, repurchase of balance billion $XX results strong from the June $XX combination improvement months our a billion CCAR were approved year’s capital CCAR from capital. in standpoint initial This June where plan dividends. sheet strong. a returning a both you, following in XX of through return last XXXX, and to remains in roughly share XXXX, next we the approval we

back for remains XX%. shares buy capital priority growth, our importantly immediate increased we to business we use need don’t to but Our that dividend by

strategy doing growth to responsible returns returns right growing work, earnings capital continues so Our the way. and and

more did than you businesses. within This deposits grew our it year-over-year, by the think the average grew organically. across more customer demonstrated we risk about it than X%. We X% we growth framework, and quarter, we When loans by and in aggregate defined average

accounts on cards, accounts we has XXth side, and in we $XX credit America more and more quarter on our Edge where added than marks Merrill of added consumer quarter a average We deposits quarter grown its more the basis. more online straight This Bank brokerage. comparison billion added the checking households year-over-year

we management wealth past. strong business households We we in also our quarter had as in had than the more any quarter formed a in

loans $X.X economy the second quarter helps its We small and more. facilitate of XXXX small core we billion of our see This originated Importantly, business to growth. the alone borrowing businesses. clients during

relationships commercial with and banking business our in to more deepen see them. customers continue also We banking and

The to within sure make stay other risk is framework. aspect our we

As perform consistency ratio now coming basis charge-off quarter. well to point credit few last out a Since XX see over you the continues net we’ve X, and this seen stabilizing, with years. can of Slide on the crisis

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and return earned on global a year-to-date business capital Tom XX% in have We the the markets from team.

of to is invest being efficient. remaining sustainable while part other The

We are We believe strong, We’ve have lows. By able at been continue have we and tremendously capabilities. attrition effective investment investments have had even investments afford excellence. company, us How to we in operational invest this, levels do talent our teammates leading it in that talent afford the will of in all a communities make future. historic a stable well down. to continue that? to sustain we we to doing and costs our into our in our serve, in come all-time capability and through our resulted and pool Investments teammates the

as best receive We companies party people to the third accolades one continue of for to work.

When how drove linked lives where I easier and to even expenses can If them, leverage they in happens? client quarter Many you to in our second when lower a more is you capabilities, developing together, capabilities effective to that people had make digital for use clients’ and By customer the you take while as for of visualize how to for every this our consumer easier, X, ask continuing all quarter, investing banking all basis, we for more and continuing put You that invest. get you capabilities. our to positive continued all invest in their slide XXth segment you up. them, down to goes efficient examples operating way works, On should. of satisfaction, from higher satisfaction costs people have them, quarter operating in a company. This what quarter business first of Slide you the we’ve shows in row leverage. move think

in become then because our processes go turn costs automated. down more Our

how look out? Slides at that So does and play X. Let’s X

to [indiscernible], I works. in think Paul but it’s Here operating results, responsible leverage cover sustainable display will we important understand driving the and how these growth typically

you business. see drive of on some see slide, making to results been the can of across the decades investments the As can you this we’ve

important The is our allows the size of be thing consumer to base leveraged. investments those

over As the see quarter. upper crossed in we this hand you can left corner, mobile million users active XX

million use channels, their due innovation can customers and billion times this to nearly see with other doing of are that mobile to X.X into it quarter. other Another see, mobile quarter digital apps below, Those digital as What us? continues had. XX an that using You brings we users, boxes. active see you you million as on grow, the us some can the this devices to XX so basis, in logged they can

and that room half to digital stores think using to it’s While have million XX day, rather the communication. great their set We appointments financial still our a appointments grow digital assures the customers just they we had of the to do than that’s critical customers but million of a convenience, every so both services serve digital right into them physical. have use our walk to in services drop transactions, this have They’re just their the for we you when teammates well. they also for quarter, lot This in.

do tasks increases roll-out the free and text, flexibility. Erica, of our your some digital can you you assistant, see hands As or in can that

deposit You Erica on of can few their more users Erica grown nicely over doing a to transactions see are only million regular their months has Customers devices. starting X digital from ago.

the of did This to a quarter, we mobile and by saw than over handing transactions by deposit more picture phone deposit person their person check a sending a teller. taking the we

teammates mobile with capabilities, terms transacting sales This aren’t with management This favorably general all through sales all our using consumer activities in allows in up all for now ATMs for In we make sectors, are they’re do to Customers invest that. business. retail take researching our and in more compares of our centers fact, of to them deposit. digital sales. relationship more transactions sales. XX% add of our and as Digital place just now including deposit meaningful XX% these and more

adoption can these that for to move X, the faster moving Slide is we products. As you rate newer also see

payments. processed a XX of or taken principal $XX XX% billion more transactions by in now enabled. faster industry Zelle for grow adoption ago. continue the year customer account to On this pace for this than in quarter, overtaken million we consumer recent we standard will This the you early four can see. who our you in amount base bottom more activity payments, as payments grown. Overall, the of total average completely on continues see billion New Slide digital and as $XXX twice to can the Zelle have than PXP is digital digital capabilities believe past - for much payments have the about drive non-digital the payments, quarter. up XX% of at X growing XX% We come this payments that’s the of In Over of are Zelle is years. has

assets can the now experience sales is you see is As investments a side, Merrill accounts. million digitally ago growing and hand executed you fast; end-to-end platform can was lower past and volume. more Digital sales, see X.X growing and recently, that continue see retail $XXX expand mortgage, to to launched XX% in on just year billion auto and the can auto which products in half true brought out through of you on are year Edge the digital right and Digital XX% services. we a than our other

platform, users. change how have just behavior us Edge of improvement see with the These examples to the coupled the the delight. There examples the We driving these good set other Pro for for sustained operating many customer with has which our We’ll set businesses, in operating allows coupled investment are the of excellence provide Merrill operating automated guided to commercial of positive leverage that shareholders. and investment leverage Cash examples our commercial and continue capabilities about company, in to parlayed make customer while including that drive you, up with a investments coupled you our are XXX,XXX our our drive that process statistics. utility the can company, and continue across will

it Paul? results. the financial over to let handle turn to Now Paul me

Paul Donofrio

share. from of continued $X.XX again, Once the Thanks operating our Net diluted Brian. on Bank growth strong will billion reported EPS leverage $X.X income quality income driven up X. and or per to XX%. was XQXX, tax was grew start strong I asset of earnings XX% addition reform. by net in of Slide America benefits

million which me which after-tax consumer included from gain a Before performance, the the however X% In I million, billion of million, you the think trading review few XQXX, a up card other U.K. operating tax income period basis, improvement by of mostly helpful in sales driven nearly versus a of cost our $XXX on let benefit sale excluding in U.K. results. are better a net was year-over-year of impact a remind XQXX, of nearly revenue performance. of comparative $XX.X offset NII and understanding revenue select had down $XXX gain, X% and by I items roughly we card revenue was so business reported $XXX our

income a notable XQXX on however, items, results from had the in operating expense in X% After of basis $XXX in a million items down and $XXX of noted. part XQXX X% charge, income; item as or improved nearly that We Another excluding our XQXX, billion declined release. these impact negative and page expense the both and expenses a not in combined excluding are would select $XX.X of pre-tax I revenue pre-tax sales this had with charge million centers, other X% the expenses. two XX%, roughly leverage impairment data adjusted million. which our associated XQXX but items on in so items note for was reported was in was also of $XXX Brian

trust-preferred item of was from a securities. first redemption The of $XXX the million charge some

the $XXX XQXX negatively mortgage some credit $XXX The quarter driven million modestly portfolio, expense seasoning second million, higher Net would was the second loan was lower Provision on seen the by Brian effective tax impacted DBA by our XXXX, rate returns XX% item than benefit which non-core a a be rate the tax of sale includes items. more of of was the million ongoing little the XX%, slide. than We a loans. gain million. the for absent Act. the growth, from Tax already covered from reserve release. in The the and roughly in to $XXX card expect significant of improvement quarter primarily unusual this $XXX half

of end levels, average overall X, Slide on of assets decreased period $XX lower end sheet deposit global the assets driven balance well compared markets lower sources Liquidity the a equity primarily was due to to liquidity as billion, of Turning quarter. QX, shareholders to of trillion $X.X by strong tax $X.X $XXX of the decreased Total billion global XXX%. with payments. Preferred customer equity coverage from billion and remains in seasonal QX. billion down liquidity ratio $X

If the of $X.X and of you $X.X stock quarter. preferred yielding another billion lower that yielding called year, half have higher look at we the billion stock, first note issued of ahead the of will settle in redemptions third preferred $XXX million we of

paid shareholder million earned Given a and billion net OCI, value dividends common as our by billion a In via $X $X.X dividends. of repurchases. billion repurchased for decreased we we and XXX income dollar the the XX% impacts of common dollars half QX, decline shares which AFS equity in returned to billion in securities, quarter in

regulatory to OCI. QX on DTA quarter RWA the standardized runoff and under RWA Standardized was and disallowance global share from QX first was flat exceeds markets CETX dividends lower is under repurchases, exposure to which lower legacy from increased metrics, by as in and mortgages. billion offset income capital advanced. net this continued RWA Turning $X trading our due of

standardized The minimums. above ratio above well XX.X% to regulatory well improved leverage remains requirement. CETX ratio X.X% and remained Our our U.S. supplementary

average to impacted X, for XQXX Slide the growth loans U.K. $XXX recorded to Adjusting $X.X average X% billion of up be total loans. U.K. increased loans nearly billion. non-core consumer by card in continued $XX.X comparisons card on by or Note impacted the the loan to that Turning balances, which Total runoff year-over-year sale other, year-over-year. estate real basis the an we billion. all were of

billion up year-over-year. On the X% other were $XX segments hand, loans in our business or

were loans year-over-year both X% across as consumer management card consumer equally and Our clients wealth banking strong. mortgage balances grew and originations grew X%

optimism with continue loans, grew small we originated billion in by into year-over-year intense. X% X%. seeing commercial in they growth. growth equity loans management business originations also we Competition $X.X Strong older good carried commercial loans clients be wealth lending for remains structured growth as grew to year-over-year. While of and are balances of outpaced pay-downs home Consumer loans Commercial contributed loans. to loan in over

has for several structure; digit This and the in on disciplined. mid a single terms aggressive year-over-year as see seeing past bottom can five loan growth are our compares however, standpoint, quarters. chart, over business remained we We consistency the you chart segment From now. been right growth consistently years

the growth growth mostly with consumer organic been party growth less on to given is led and Our recent decision economy. focus has the loans by which by consumer, flow. The in consistent is driven what on we’re rely third rate auto seeing in our moderation

up other in in lending. ticked the the commercial. small in structured the has business hand, growth recently, in by On also and rate been and improvements credit This growth consumer card modest driven has increase note both

management deposits with X.X% grew year-over-year. billion Consumer $XX Before growth. Average once or shifts about X% declined want led income think this the to wealth growth Global billion deposits tax to included from turning and $XX of seasonal again movement QX, strong, Deposits we X%. reflecting deposits I banking interest in bearing banking page, and as non-interest to in just growing investments. bearing. funding were mention payments or

release. the The charge-offs $XXX expense credit growth increased bottom. previously the $XXX and driven small charge-offs seasonally consumer a average Turning XQXX basis losses real card This million to are to areas. Note which this included around bouncing quarter Slide credit continued Compared primarily U.S. our now to due past card. storm-related commercial storms net reflects by impacted XX losses losses. than net million X, $XXX energy reserve days through million in higher in were storm-related card total we loan as which loans, for. or XQXX, quality reserved and estate were points saw Provision increase improvement portfolios. We increase net many the more the and of in in QX of on was seasoning, versus was The XXX asset that came expected. in

loan an out million of net were On commercial portfolios. quality and of flat respect metrics XX X.XX% the to $XXX with million X.X consumer credit our for both our consumer, for coverage a and coverage Slide ratio quarter. allowance level XQXX. $XX break to annual from net reserve With XQXX remains charge-offs times Our compared to strong up we charge-offs and

due storm-related as As mentioned, to seasoning well the driver credit of was the growth, to increased year-over-year X.XX% as card, losses. which and increase

our losses, of X% loss and current declined small of payments. storm-related credit excluding NPLs XQXX. the strong loss business, Excluding the X QX remain rate from points. basis rate, NPLs billion XX% at on consumer XX from their commercial card increased $X.X basis remains Consumer The points

While metrics low exposure in and $X up level commercial commercial as critical from low. NPLs reservable asset a quality QX to X%. down remain to Other improve continued continued XQXX, losses from was declined billion

excluding assets. by year-over-year funding markets in basis yield driven net asset trading excluding improvement lower associated The segment. with yield XX, of related Turning as yield to yields million XQXX, interest interest activity basis. net billion client banking increased a in XX relative growth. NII our is are points loan on XQXX higher the which This growth $XXX costs. we of interest of term than is $XX.XX GAAP more broad X.XX% and generally impressive from interest basis an U.K. as core was have of to income non-FTE or interest on June a included and from last to business to net global interest and benefits the resulting deposit assets the well $XX NII and presented Slide markets $XXX billion, Compared have FTE million global card reflecting year. we GAAP income rates X%, up These the shorter Note sold impact net assets even given financing

to hike basis downs which deposits Fed total day seasonal which basis deposit debt, and points up also back beginning QX negatively X An versus rate of offset increased cost impacts points and activity rates That credit cycle. rose impacted as total and comparison. extra compares QX and and long-term LIBOR XQXX, which respectively XQXX, rate on three-month by XQXX, is QX benefits rate of Fed was global date of NII in on rates With card to average the XX the interest-bearing from Moving funds of have markets the is was our the paid of this up seasonal to pricing, Fed XX client NII, from through interest-bearing increase to the XX% interest cycle so points loans. from basis versus GAAP respect XQXX in pay modestly points one higher this XXX we basis passed deposits in increase funds. roughly an in

is to about by $X.X estimated future of the point in increase Turning increase sensitivity. X/XX, billion modestly deployed cash asset sensitivity, our on driven sensitivity Note instantaneous to securities, short NII. basis rates subsequent over to that XX% end an which XX months. This represents NII than XXX the as parallel is increases X/XX by lower of this

expense Turning to out XX, our was management, X% $XXX or of record to in XX solid we year-over-year. of Non-interest XX expense down last another of the had decreases quarterly quarter extending of expense $X.X million billion quarters. Slide year-over-year

so broad reduction invest improvements that data still $XXX I we centers, new continuing centers declined charge, that associated to nearly would categories. X% and new emphasize I sold, financial in across mentioned sales with most customers. included banking from advisors impairment we expense by sales respect this excluding or is to streamlining adding in $XXX As well reduce business with technology, XQXX Notably, million as we staff. we we year while facing achieved to work in that despite million and earlier, wealth professionals, professionals, down as relationship sales X,XXX continue management. headcount roughly as financial consumer, last our in for and add deliver commercial, how non-client With bankers roughly roles

women than applicants. racially XX% make up XX,XXX group from for also more diverse. XX% we these is most are ethnically example, nearly summer were year’s the interns ever; our X,XXX During class or interns. and on-boarded of quarter, interns This These selected diverse

increased the months is down. Consumer the expenses operating strong consumers’ Slide share points quarter were down. as efficiency increases, average economy. growing X%, banking higher banking wages grew Turning consumer wealth. this types to balances below more loans Key and grew another and now healthy creating XXX Jobs pockets, a $X.X billion, for tax healthy borrowing, equity XXth consumer banking with and banking of deepening spending business we improved as great XX%. revenue that XX% gaining and and expenses are Earnings client increased and grew economic the basis in U.S. are have while X%, are points over grew, Merrill leverage were ratio quarter segments has improving, consumer relationships reform in markets fueling is than and allocated in revenues put more X% consumer of on and we a grew basis in believe and in earnings starting XX improvements deposits This this average to returning These Edge growth. consecutive The and brokerage on metrics suggest created past Year-over-year, and capital. XX, this money more XXX assets business quarter are XX%. year-over-year.

XXX $XXX rose XXX and credit from increased points. in paid X% As year-over-year. grows increase line revenue the from our at drove Provision Net charge-off non-interest our the net portfolio only low remained million basis points, Cost points up $XXX deposits, season. points. balances, given ratio of X a and expense million charge-offs. Rate Net our in value average to in from increased deposits, basis in charge-offs with rates which of deposits continues basis remained XQXX, card improved an XQXX. X XQXX as solid of as basis at to expense growth reflects percent improvement client

is and driving relationship XX key improvement Turning to NII. looking believe in predominantly Slide first deepening we trends, at revenue, revenue,

were Customer as in growth consumer banking X% driving Spending a the card of as XX with our X% on charges charges. in XX-point on quarter, income revenue modestly. in rating reached or year-over-year, This of up and increase NII us clients card credit and a roughly well revenue growth Service debt year-over-year included XX% cards levels grew in high income. our scale. satisfaction service X higher XX% new

continued access of Focusing us and card licensed world-leading bottom deposits, we in and loans, is page, think is our to Merrill With platform to as noticing in productivity the X,XXX grew banking were and compared dollars. of customers research of giving XQXX grow customers center we to brokerage integrated needs, more Whether one the way offset advisors initiatives. a Expenses financial in continued investment assets on deepen are residential a how to client other their addition assets. X% of for investment grew improvements balances relationships. Edge and down or a more than with and slightly Edge Edge balances to renovations technology XX%. great lot on the growth respect offers loans, mortgage, year-over-year to value it and is us

to financial and centers continue We modernize ones. add new

This new quarter, and XX opened centers renovated XX. financial another we

increased producing healthy coupled of Turning Slide another by reduction second XX% in benefited client modestly management deposits. balances, as XX%. dynamics management behaviors. GUM asset margin and rates as lower paid revenue and a management results. to flows billion wealth AUM by results, nearing industry income $X offset on from earned well NII. Growth NII higher market consumer brokerage lower appreciation the in at increase equity XQXX driven expense driving ever in relationships households QX produced market pre-tax and of record fees. Strong solid a global lower all XX, is This quarter of AUM levels reflects highest and with net investment the deposit solid on The activity Strong helping was and offset and deepening

products. decreased revenue shifted declined volumes toward brokerage fee-based and mix as Additionally,

As streams percentage operating creating well, increased of annuitized the from shift, XX%. GUM derived has revenue costs to leverage. over than of last year The business a this managed more result the revenue

engagement overall to Merrill U.S. continue we and client in XX, Slide to Lynch see strong Trust. Moving

and estate to advisor and incentivizes of lines organic strategy other market five is growth. integrate Lynch’s Our Merrill by responsible compensation to balances to continued by record reacted of trillion, client low rose climbed AUM trillion, levels and $X.X helping local deepen nearly which AUM of market remains to types flows, $X.X driven led least higher solid values, Competitive attrition program, especially at management. lows. constructively structured which market are over our with versus XQXX high XXXX in not up wealth $XXX XX advisors for of loans increase. consumer continued this household business better billion with in that $XXX billion year-over-year strength X% billion relationships, Average Lynch acquisition growth. organic household balances, contributing presidents been $XX years. of near grew has historic flows real and Merrill Year-over-year, have our lending.

to were average advantaged year-over-year. ago. X% banking our with despite flat on X% increase would and allocated the growing was impact corporate rates as client-facing and XX% lower and professionals by reform in traditional tax generating of for overall local respect investment revenue tax higher activities from created of NII grew and investment impact declined business the firm leverage. driven growth loans operating reform, have $X.X enhance modest a tax continued in the investments. return fees offset market Turning versus IB year down was by billion banking from the deposits capital. record X% Global of X% fees from an fees a than coverage. quarter Absent lower to and relatively additional more Slide $X a to Revenue from XX, year-over-year XQXX Expenses global banking over XX% billion, XQXX advisory earned banking just XQXX

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trading a sales offset Slide the $X.X XQXX led On credit improvement investments made In from in by activity, client million. $X.X million. and XX, performance loss improved increases show billion, year-over-year. general, derivatives of the which volatility partially equities from revenue is Equity over also business reflecting $XX weakness up across products. net was billion with increased activity we macro-related XX past products X%. in business financing Fixed in of $XXX financial improvement an benefited reported months. the business driven markets. by all XX% client other, increased equity in from Our of This benefited of The

impacted in presentation therefore this selected at were markets the items comparisons. revenue all of start All and both the and except recorded of expense global DBA and reviewed other,

the between in comparing expense data million non-core across center charge million. This of nearly card by $XXX $XXX sale, and billion $X.X remember TRUPS you nearly year-over-year $XXX XQXX, tax revenue the card included a from while XQXX expense year-over-year drove million, increased income the gain netted impact revenue benefit. in items change in the revenue. of of improved $X negative U.K. nearly expenses. sale million the the $XXX the other billion expense sale If two and as XQXX swing U.K. to the the the impairment the offset broad well Non-interest as XQXX Remember, periods, tax which improvements in when includes tax mortgages

Q&A. open Let Brian comments up for me to before for of a turn closing back it couple it we

Brian Moynihan

Thanks Paul.

Just then couple close thoughts to your we’ll a take and questions.

business. getting share health, fair well profits, performed a strong environment our in business view future. in growth we the operate the are and We’ve this to continue of We in and environment consumer by led corporate of feel a

that to We XXth did manner, drive grew operating our in they strong responsible as as balances, we for in which earnings with now, questions check. cited and keeping it row answers. that leverage earnings, stronger in let Customer stability, we to operating and earlier. but plays we continue quarter we risk for all consistent many report continue leverage, We for grew, have which and a your to that, the a benefit been it turn over years and and produce me With more consistency shareholders.

Operator

your question John is Bernstein. Please [Operator McDonald instructions] take We’ll our first go with from open. ahead, line

John McDonald

ask to and little in quarters, think about? the this about expenses the this your we quarter. you Brian, came into Wanted ’XX, in investment expected which over also Hey next how the mentioned release than keep in it and about a for million ’XX the and expenses, press better mean year previously what’s of ability talked to guys. billion few target which that $XX should approximately technology flattish you’ve $XXX expenses

Brian Moynihan

opportunities a It’s we with year. announced then in end success $X,XXX share have. now along bonuses, a stepped we investment and from of lot plan, basically we’ve We, that of on top million of other companies, for a next quarter that $XX Thanks up the John. until announced

of quarter that work what a expenses, from $XX continuing seen, a improve in manage in the a due investing self-funding, will up, this event, low it’s flat, our when it benefits in in We step self-funded. and of of all major expect to you quarter But company a you be we’re in add keeping it think million tax our reform. but going lot any billion should to better lack $XX it billion, for by the this range $XX term, to and relatively we’ve through expenses to so

John McDonald

and you beyond this then like of as flattish same ballpark beyond year, it, kind goal Got the said, staying, and possibly that for year next is in well?

Brian Moynihan

occasions the maintain idea for couple told the you that on to beyond over is ’XX. and we ’XX we’ve ’XX, expect Yes, next many flattish years

John McDonald

continues pace of wanted you over the ask do as kind in the losses. book What seasoning the of card see to next credit Paul, quarters couple to Okay. grow? that about card

Paul Donofrio

at of a we’re losses, sort at you - guess of quarter remember is seasonally I out seasoning? sort hurricane, card if XQ back X.XX, have of right? of X.XX. Pace and thoughts. Look We’re that I for kind the the couple you to highest One, of think

next quarters, your would I would yes, couple the So of that the seasoning card expect that that range in in growth of and out look a reflect number. and as kind portfolio loan

John McDonald

near more helpful. charge-offs Then rate broadly, stability just also house the term? in of that’s Okay, provisions, you around expect credit the at top of in run terms and the the

Paul Donofrio

mean, in releases build with continue net credit of growth, support we to expect we perform in charge-offs time QX, provision roughly continue would we in line In particularly I over to moderating Yes. be to with well. loan allowance expect reserve as card. to

metrics, expect we usually. little NCOs in as but remember about the upward our at just at direction, XX-plus right I we’re portfolio bottom, strong going you portfolio. and bias NPLs, indicators an is think in a also pointing very all and can As leading a portfolio that all that, highest remind quarter about, I be they environment they’re card NCOs; to would the again, commercial, cards, our is sort and the QX you the they seasoning since very of a reservable in lumpy are in would everything--when talked look criticized, but the on delinquencies, and you are all strong day really

John McDonald

Thank helpful. Okay, that’s you.

Operator

We’ll Evercore next ahead. with Schorr question our take Glenn ISI. Please go from

Glenn Schorr

steeping is something we make the because interest wholesale on short that good, on Is big costs, the business I a in to does it pick-up hike being very are much. end, us I the on net want throughout big. to talk of if I actual cycle Hi, is thanks you’re something the we purchased deposit hedge, should good. question, rate is, an pretty with markets, saw focus betas NII know funds because XX all the it’s that about curve Fed the that up have I yield the comments able short the do so that points, a to funding to yield end it steepening? ask I keeps question and basis of XX but expect ex-global this NII. be want basis difference points up in core the is

Paul Donofrio

talking of quarter in over quarter? increase our you debt cost the about Are the long-term

Brian Moynihan

funds. Fed funds, Fed

Glenn Schorr

wholesale average X Page of the balances. Fed side. supplement the funding funds, has

Brian Moynihan

there’s quickly short matched it--it’s of it term, up it’s as then the together they all it, there, and it so think pretty like in side due attention to to that, I’d Just the second curve which both book, they’re moves. and so the transactions quarter. quarter next But we the liability usually on that dividend price fact is that the moves affect pay things long but assets, some stuff have

You settle more in might like does. bit a it see little it traditionally

Glenn Schorr

now? important flattening is total good, income that’s as core really more Okay, interest that’s on opposed out usual business, why to the net the that, than because it’s

Brian Moynihan

Yes.

Glenn Schorr

Okay, and lagged to a then that you your deals feel just that’s Year-to-date, I’m I advisory. on couple or a sector of or on peers curious if have advisory. to one you in. want coverage deepen some. don’t big guys you question two know a thoughts get just

Brian Moynihan

a the we with quarters deal, job in you’re quarters. we level side though it. is the side after in had and a deal. better line sometimes sometimes in a you of Oh, know think team But the We across even on the and pools it they not quarter year, a second you I year-over-year, of are fee advisory solidly job deal, a fees? $X.X in record do better the get line stuff and billion the knows right quarter with the sometimes there working just It get team performed it. do can more we can the is, wrong last M&A is second a time, But and so is.

Glenn Schorr

All you. right, thank

Operator

go from Please with ahead. take We’ll Jim Buckingham our next Research. question Mitchell

Jim Mitchell

growth, seeing. for seeing what been Hey, showing and forward of Obviously about well, that good going life. how terms in morning. as has [indiscernible] Maybe growth? signs you outlook you just your the do of talk that a you’re Are little bit about loan think loan

Paul Donofrio

over around high, I are guess going confidence our term may tax is perspective near and strong, can to one quarter are non-core business the savings note also or growth single year-over-year to down house, run-off mortgage We is depending bounce off, some that, you those the be expectation of remains near-term the other, past I from First on loan pay exclude going segments on large factors at reform, loan debt corporates, be top couple slide but - feels repatriation, borrow. from low been single the economy any should invest relatively growth now if our deck, little the years. still digits in expect in some so within the given and growth are growth consistent has customers growth would all mid react all acquisition and the the customers a tax book total to said unchanged. of having differently headwinds the optimistic so digits. financing, In to of

consumer portfolio; quarters. balances solid the are our On prime the well, the couple now but auto note from growing and at which mid you seen With in growth super-prime. anticipate different and year-over-year more remember, on of over color, the expect very in run-off single of on sheet. bit as remarks party, want there are look digit the categories, originations car, third growth and modest I on estate, balance organic and focused you we’re growth we’ve that from increased focus respect mortgages we less has headwinds these be of If that focused the consumer last we down to are mentioned we’re on in flat continuing non-core growth and XX% remain and to a booking categories, rely modestly all loans. little real we to

Jim Mitchell

So you’re not yet? any acceleration seeing real

Paul Donofrio

acceleration. seen I wouldn’t we’ve say

consistent I growth. been think it’s

we diverse pretty of may accelerate than have other. In know, service. You quarter, a the one we one any clients that set more

in in quarter out level. to If growth any at seems of sort saw you might growth in average saw always at business, and but small look structured we good this that quarter, so see good we mid we single digit of growth really it GUM, lending

Jim Mitchell

growth do going about--and about NII think in do how the know context and if from given slowing, Okay, forward [indiscernible], the deposit implied as we about a we think think impact it’s that curve you your today? I on rates don’t TRUPS, large growth how

Paul Donofrio

going day, will benefit rate from well and offset from increases we’re growth, benefit have to rate hike, be and going are going but to expected June Yes, to clearly extra by is QX benefits deposits. we the also deposit these on an loan

you of half. the give you we’re year-over-year guidance first global banking. timing Having know we increase and the all consumer. you It’s to in a so the in don’t know competitive increase it’s on said little in issue just just we of me misleading dollars when as sort As billion increasing is for up The know, environment, been depend consumer. GUM we rates any will to some a we’ve don’t that, probably going of numerical in

Jim Mitchell

Okay, fair Thanks. enough.

Operator

Morgan We’ll Please go Graseck to with Stanley. go next Betsy ahead.

Betsy Graseck

Hi, good morning.

Brian Moynihan

Morning, Betsy.

Betsy Graseck

higher are to do in get wealth, acceleration an commercial, the buckets? and from here? of I’m deposit know specific One of A any is the mentioned you you couple are on color I a sense Can overall bit these understanding trying others, the prepared just beta. questions. see there. which deposit as consumer you you us give to and an getting betas a in buckets the remarks buckets the where think in more than you little

Brian Moynihan

they’re customer side has not using on If very household. what the performed and on it’s of paying therefore used cash, company, for. consumer the Betsy, a as important that base it’s getting side of I the the the transactional as and cash just in a side, whether customer or service think, money it’s wealth flow, the commercial differently consumer or is whether is the depending for flow a it you’re rate the cash it’s or out

look daily our the investment all average accounts, so is transactional. at the when time powerful they engine last the $XXX moves, consistently you to if grown you and on you pricing about also look the have all talked of so or obviously conduct the the up for see for and business is that moves balance doing news don’t in it but and cash that the has six we’re not and that access very differentiated consumer sub-markets forward. business them going slowly accounts deposits, at within by businesses and so earlier, $XXX because beneficial look need market all of checking, you if at number with that billion is If across their due quarters side, nearly only billion-plus repositioning very segments and of strategies are it’s checking, trillion, first and they Paul trillion-plus the $X.X by in which consumer gone we’ve The checking us eight it, to is good business, of

are money good, and numbers, consumer competition the is and deposit Paul the other as going doing some gains market rest billion-odd is So you Then that, gave moved we’re that into to and CDs maintain it the and think and statistics. discipline philosophically, moves. without all or $XX we’ve getting in to not balance the to institutional it, of of checking move Paul corporate just that’s on the market and able generate core can growth, hit share not move half you which have all and another and stuff. We’ve market side, moves will much, year-over-year been because of pretty that on side

able we’ve yet on commercial and pricing. the highest maintaining moves maintain growth been obviously while discipline balances For to in fastest, side, still end

Betsy Graseck

the Okay, commercial you commercial your and the from holding in What to you on spoke you non-consumer shift are growing the seeing NIB nicely. to a side, side are about fees, NIB or group?

Paul Donofrio

definitely global interest from in growth deposit to shift bearing banking has non-interest there the are of bearing. been interest-bearing we a most seeing deposits, in so Well,

Brian Moynihan

bearing interest very you so corporate, then different in by to get when it’s and five non-interest to it’s one interest bearing, bearing. non-interest than more it’s bearing banking segment, to the But business, business

the of it too. by differs again, So it type customer is

Betsy Graseck

I of is the point okay, that’s part rate run Yes, already? the guess you’re that making in but

Brian Moynihan

so the that see--that’s the you’ll is thing. and Yes, point

puts $X XXX takes we’re move, it tightening see still stuff ’XX just the what’s all and curve They’ll sensitivity things with since talking in forward back you the XX% those global rise, you to of back into think go asset the is see rates. and you the assumptions. in [indiscernible] and the about the across, basis continue scheme for If that tightening all point that you can deposit billion here, started you that under short the happened moves but see term, about

Betsy Graseck

that on or areas accounts the branch your, you’re you expansion checking The growing word, in lack in of that side, your footprint? more for do better more that legacy see is a consumer

Brian Moynihan

has It percentages it’s the those management. it’s you we’ve in time legacy, footprint, the primary think be account same at the so because numbers is kept But relationship checking small. legacy sales, moving digital the in to grown it, about up. When the expansion it’s footprint deeper

primary balance, think that a the now the average We’re dynamic grown XX% there the the to going the also, checking core of we households difference and growing - have at so up, be has higher account balance it in about of household primary make in number to enough and a when not There’s franchise the has new size and you branches do. out franchise. average

Betsy Graseck

you of two. understand remind but to rate you of Got I that it’s know can it. on Then four-year next forward lastly, the here try or year pace year change just the branch announced, the two? over over a expansion just next or the

Brian Moynihan

some as get this give will over up build out, dynamic XXX next literally locations four we Thirteen them of About move so you getting see pick it years sense, picks so saw been, over to pick-up quarter, you It quarters, a up but to a next to set the just because about this the several has and it it years that quarter. getting and you’ll so four all. forward. takes

Betsy Graseck

okay. Brian. Got it, Thanks

Operator

Jefferies. to next your mute Ken next line is go go to ahead, function go Cassidy your on Usdin Gerard, We’ll please Gerard phone. RBC. check Please Please ahead. We’ll go with your open. with

Ken Usdin

Thanks, could little if forward the as and of side, benefits the net and going and up that you expect right preferred you the are If that, lower be on about redemption part have would trust you refinance good benefit funding from that a through I you to what more can follow walk us Paul, morning. NII? bit to think

Paul Donofrio

Sure, these just at securities becoming so point. just a this reminder funding are everybody, expensive

so fully lower are you’re know, a while count number to. TLAC, I from expense they that going was them, to nor are you do rules, interest if primary count one-timer relative the there longer the as of phased-in ongoing think at on the think alluding the you call to things no loss capital about to they all under focus

be going per million the per If savings you we year think quarter. ongoing are million-ish benefit, roughly or think $XXX about $XX that to

Ken Usdin

to going or nice any swap, a as is be you have to need funding incremental Do is any a net of refinance a net or this benefit? that

Paul Donofrio

That assumes we’re refinancing.

Ken Usdin

Okay. That’s a net?

Paul Donofrio

preferreds. to not But be we’re refinancing with clear, again,

We’re refinancing debt. debt with bank or unsecured senior

Ken Usdin

That’s what for I rids replacement meant cost the TRUPS. - financing the just getting higher of

Paul Donofrio

an in I we assumes that efficient Yes, estimate way. you gave refinance

Ken Usdin

Then impact long-term Okay. expect and Did still we average the as here? this mentioned go you quarter, through also, from do day see that debt. disconnect forward to any XX-XX get come on of we that you on better market

Paul Donofrio

LIBOR three-month to the XX think, and quarter. that’s January month in as is a yields There we most Yes, this driven debt points, and they quarter was it debt quarter. quarter from in - over up, the long-term did the see in first resets increase increase were April I by of floating spot swapped around basis to of our

in So at the moment debt. increase in rates that of it’s about understanding what of cost the are the the terms

that. thinking We’re about

come are we that align We’re on mostly our happens different too, that. liabilities on loans, what can on more three-month working ways happens month our one which what to on with mostly so LIBOR, LIBOR

Ken Usdin

faster you of deposit lines side, far be was any Okay, those lower to right to before, bottom of because to final the which arrest three the moving is Glenn’s my do liability just point that increase, question, on what the side going than can are beta?

Paul Donofrio

Yes.

Ken Usdin

Okay, Paul. and see. we’ll Thanks wait so

Paul Donofrio

we’re Yes, that. on working

Operator

Please to next go Mayo go Securities. We’ll with ahead. Wells Mike Fargo

Mike Mayo

Hi.

size from is It’s the You account what said checking average to up. what? gone

Brian Moynihan

size to $X,XXX the time gone moved Mike, last it’s frame, ’XX four the to last it’s but it’s or year three to a up $X,XXX, upon if to from in gone years, from go $X,XXX. average Depends from and of--so $X,XXX over want from you now,

Mike Mayo

in keep mobile Okay, X% are online if that year? and how about that everything talking a I In $XX betas longer? deposit interest, banking all think for give $XX Is about else? get might lower checking help up, should of they it? we what here, less the guess you of someone were so we terms and that what offer the to does

Brian Moynihan

a trade-offs non-interest our total a checking, there from deposit or to coming in implications I what’s is is think account interest-bearing the CDs each which average retail as the driving bearing. terms in checking you in money but if so checking payment nearing segment, like it’s lack you’re of deposits is It’s either different of going about other if checking, preferred there’s key. driving of lots of on but and the so of make, growing out is this consumers thinking but is total balance, or cost don’t day, given very it the the deposits pretty key and between cost, types a $X,XXX growth, percentage money it, our their the hits of That’s balances, the half be they’d term, overall, better that. the motion, they move for in That’s or carefully Mike, think consumer the when not balances you’re has consumer around it’s sticky about growth. keep low something that high of this it as segment, a

Mike Mayo

second you’re banking forecast the that consumer to you That can you to a here stay at and we maybe or Then so that if hit front-loaded? so, but that’s expect consumer sure news. three if history, quarter, was where? for of Should and efficiency the our good of XX%, I’m more, that’s bad news, now, is lowest from lot in improve efficiency, years ratio not in XX% kind

Brian Moynihan

in effective, there that, the grow earlier they’ll same and you forum those let’s They’ve embedded they the highest potential continue well process, generate as makes base model, which the don’t do think little think points basis all I accounts if year-over-year and of as that at stop. sales XX% growth to that, to counts operating balances, NII, of and say, which you’re great know, improve operating improve is how you you a a sit are and effectiveness, turn, heck talked it. you with as revenue a a more We because so deposit that. we look like and expense XXX continuing this on say big and so the embedded true their combination everything, business if combination I the aware. done the it work in Mike, A of of of short business drives a a leverage of about, XX digital coming to term checking product matched in investments sales efficiency the in about pretty is efficiency quarter combination and it’s more

after-tax business quarter, $X.X You’ve remember, in which the got to of that this biggest makes billion made America. one companies it

Mike Mayo

more with showing thought through from in One contrast not the but customers your least want last your there marketing marketing the as follow-up. to did is spend support a not expense With you expansion, is at marketing numbers. to that ramp looking to relate spend? you some of up at less Your branches, banking digital all more digital, in your are peers, increase, least and standpoint, you with maybe

Brian Moynihan

what marketing, not platforms is use, market, stuff. and driving with our the on it’s a paid Brian we we in not and for need, It’s the that and set we necessarily the Yes, know what of the customer as line about deepening Moynihan that go branches marketing integration up expensive to etc., bought talent very our the item. clients, marketing comes to what has remember a the because the are and have That’s is of and to teammates every through of out personnel people is thousands type in see in so more the what you marketing for, which it the know going representation so group, a the data that efficient But that if teammates information on you line, that line calls Mike, see of especially is messages stair-step it’s own work all clients see mean. we information, than the way I it. in day, this

Mike Mayo

geography one in sense? it’s kind So of

Brian Moynihan

transactions told, Yes, branch the the of for marketing by lead, by but sales it’s all a XX% are initiated of better experience. XX, into term, into the think about, lack a system driven analytics or I digital

Mike Mayo

thank right, All you.

Operator

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

Matt O’Connor

morning. Good

Brian Moynihan

you? Good How morning, Matt. are

Matt O’Connor

you. thank Good,

outlook, it on the circling Just net costs things in back sense interest Obviously to. seems if When you there’s detailed interest you net might alluded the positives of like of the pick also income some lower be the on it income, there’s as all put expectations think debt outlook, that guidance and provide about we up. we betas care together, the more to some helpful. some that deposit that

Paul Donofrio

which $X.X point short on again there’s Look give is of best the XX% - end. our move can guess asset basis you the that billion for I sensitivity, I XXX guidance with

by nice we XX% into that’s and and know, give includes guidance before, the going the modeling on just we’re a rate we’ve happens going our some deposit hike, but is to deposit as Again, can end, year I have the be so said sensitivity. look pass-through got asset best the side. and extra in that quarter, rate, you at whatever this going growth, we’ve I tailwinds you got to As offset see loan day,

Matt O’Connor

than last had relatively net so. last income, rates we’ve obviously favorable, have Okay. flat there quite a quarters. the sensitivity--you one-offs rates been and up some but quarters, has very been the I asset few in and interest the hasn’t obviously guess the is NII move few mean, guide good more expected know, been I it

Paul Donofrio

in grown million, to and we double the to quarter quarter going half We’ve just first GAAP of you that year not a tell over $X.X here don’t $XXX I sit billion on because basis. it’s think I’m materially are to of going increased global GUM we business, but in we point, what’s on the banking. parts in rate consumer rates increasing to in and paid; know your our but haven’t rates business happen

Matt O’Connor

Okay.

well maybe came about new you little just least a I I sale, we if those year-over-year the offerings Just bit a there, U.K. drag at the been came I bit fees, in from some the recently credit talk looked there, think, had think a there comps still separately, as for. going so looking out. card had and know that in better better I than what’s at is, product

Paul Donofrio

combined pace. around year-over-year, credit we card on face it’s competition add we a over I healthy XQXX, we and in debit wouldn’t as growth use revenue. More small forward. we’re know, rewards, headwinds - the growth in balances to new We’ve I this spend, line in accounts we think year as seen going and card are you have XXXX over total is did rate as card charge, that’s up continue at year you know, non-operating but quarter, does seeing think X% so going Yes, up growth quarter generally, from and as rate focused a our that

focused not delivering total clients. on We’re we’re for line one focused revenue on any our item, and

bank. high on attracting more customers relationship We’re think then our with us, with less for their is sticky. incremental people driving them tend quality card deposits our strategy deepening deposit to those making and focused lowers that relatively growth, the because rewarding overall we It costs interact and also

Matt O’Connor

Okay, thank you.

Operator

next UBS. We’ll to Saul go go ahead. with Martinez Please

Saul Martinez

the you you that see way to in any deposit where sense pause non-interest in NII that there yet. deposit seen curious not gives because you uncertainty meaningful maybe obviously retail any changes Paul, consumer due there NII, the any gives anything instruments? margin a part that be to just move of costs moving consumer migration start tipping beta, it’s bearing pause up, point, in if is that see, Are for guide is we of or is On in that in there around clarity to you the numbers if up. side around on deposit up higher terms are morning. starting rates nearing of out behavior? we migration But anything, example, haven’t anything of into good the will Hey, the showing lack on will much, part obviously the yielding and Just

Paul Donofrio

that and people part every entire part you that whole I of Yes, but to go so again, we make the the things haven’t equation. seen longer gives far us, activity, just United so [indiscernible] more in But value are remember as have our every answer is But [indiscernible] pause. concern, see them want they it very we’ll They know, anything deposit this nationwide the or answer the is change us mobile we at again--I is think nothing and value short is look the any preferred us testing a don’t we we think we at safety, when consumers of looks would competitors, transparency. and us that market. not to they - so answer there’s don’t given value what value short MSA well far, them, ability, whole notice answer, really just give to gives short they the that the with all States the see over the the rewards The so thing--you relationship, see. they network, but going more value rapidly, anything that’s the

Saul Martinez

current Okay. follow-up suggest No, to of or just the remaining there? you is normalization some that’s bit funding ask the line X.XX%, at we that on as interpret you increase should on by cost question a helpful. that there you clarify mentioned--if a in. be XQ of a settle in costs sort down and tick that in Should funding in funds, what If I mean the could the could also Fed

Paul Donofrio

what funding interest we the think guys so you as com receive I way you’re global the looking in pay in think markets, profits. to into, expense. you global but about the equities, But that’s in the costs are trading from growing at the we’ve think way markets this we something all I equities, obviously trading on equities, supplement, I equities, equities, dividends been growing about--you boiling is is in grow would that’s which fees the receive for think when have is we if that, in

got you those is rates FIC look at does and which are four up bonds as that goes addition In get well, to pay for NII you’ve not to go so inventory replaced. if bonds as your fixed cost most rise, your rate, fund FIC, o away right until up,

mean, we’ve profits. it rates much I up - So quarter, going up--it’s year-to-date seen As shows global equities you’re is the and geography. that but NII, our how know, XX, rise, this XX%? phenomenon markets affect XX% to com up, is you improvement in equities see trading

Saul Martinez

about Page like of the you side, it so it’s it’s a - But NII, it, went XX global but supplement trading-related know, to points. is said. related the sequential the versus $X,XXX in million you Got X and what $X,XXX, looking to at it’s basis increase sounds as markets cost we’re

thank Okay, you.

Brian Moynihan

That’s where it comes from.

Paul Donofrio

balances quarter borrow have right? that us - bigger money they’re credit only means You get phenomenon other at if people from you is tax card, this that it. of of refunds, portfolio, their credit they the people the the card Look down because the in card portion who phenomenon paying inter-period, transactors, and a look

seasonal, So quarter those the that phenomena two year. it second that NII are I happens the in every are impacted that think

after If you you phenomenon to saw go XQ. back year XQ year year, this after from

Operator

Please We’ll to go Research. Nancy Bush next NAB with go ahead.

Nancy Bush

you branch of variations sort for look etc. few for more the to on, just the A expectations usage expected of not has pace at altered Good by age, the at early couple expected, seeing Are any are beyond from what millennials, morning, over a sort the even pace usage next we your you segment, usage and you questions there by digital expansion years? of and if you here, accelerating digital gentlemen. which I’m to have It be seems wondering of ability of digital sort usage. one first on

Brian Moynihan

but or of with is the has XX% written checks Nancy, auto is base so think, cohort it’s America, I Bank XX% activity, deposited activity, nature a board. this mortgage that common younger of ATM young cars, because all broadened homes By of in kind device, consumers this so through is Erica, enough you out it’s pointing all dramatically. is across kids, of the have young also - you it intelligence just that When something obviously customer out voice what so or of the of it. skew artificial the digital like different higher is really drive but are the you’re with because of board; of sales the things, buying theory are usage the whereas who definitely in mobile the not and have kids there’s different you across activated, the anybody’s age checks in see people types and deposited assistant that their to familiarity people,

conducted still with at quarter is still and the touch, to the people--you people years Then driving it mobile became difference. a there’s the I so and told high ago now mobile we’re them, management there’s their taking think always really but the what and had tech, that ago, a a customers and things to on is between phones a $XX so high, a combined branches is the use other so device, it’s to penny, the getting that have difference actually business outfitting as the ability activity ATMs, years talent, and which to and of so great the a have and from Pittsburgh, or card, we’re five the can drive way doing as grandparents due I it who board we’re looking you’re across integrated for pointing years usage XXX-year-old digitally think it, high teammates the went you’re we in is XX of retooling a by U.S. example, is doing out which brand branch know, fact branches mortgage the and What branches a million story, devices, tremendous we all expanding Merrill optimism, and enabled in to ago, I where the we across relationship branch that them. absolutely for same job ATMs lot with person couple is first doing aren’t doesn’t and customers we of in different is checks in expansion, markets so all credit the the already about the We that a there to go important past, is we’re cash set from and payment what and is Trust will which that. in nationwide to means cost marketing. and capabilities time

bigger important we At markets in more they’re in so bigger You tend implications our the that face-to-face year the numbers and same of remember time, though which continue that community, the branches, come for down less stores, to them the it in we’ve tremendously XXX-odd corner help. people to would year, on going up, expect but branches, in they’re branches transactions. over another the even need means will destinations, are that have about the community-based develop

why that tax, together, deposits we day great which put end we was fuel you of at those taking billion but the all a give grew year-over-year, billion efficiency it $XX of all we’re $XX you thing, $X.X sense, billion it’s which the a by all capabilities after and on when think made share. XX% to it to So together, complex checking, ratio, relies

Nancy Bush

saying I So has been you’re of you’re branch mean, the a proposition, digital an necessarily at either-or sort versus saying--I tendency in look that’s point? guess that what to and industry correct there at this as not

Brian Moynihan

calls, Yes, a competitive came log an an branch, people to it’s start about in, X.X responded so have the appointment half integrated XX had advantage yet million both. a in, million it, billion and up people you we mobile their set another went a to and and experience walked and absolutely into to million thinking device,

customers we’re to system, are in a making key you and have out drive-ups customer in things which how up in either branch think the the plays that. at about satisfaction Nancy, basic thing recognize plays and highs sometimes, financial retail in out remember it changes and I consolidating all-time branches work or go when continue I like time, during cause and generally All the to it a to even change closing a time, is scores, think services. long this other and for talked I that the which

Nancy Bush

last was changed is quarters in Yes, CRE, under in a before, there reality. assumptions ratio to we where been you quality been also an expectation points I environment? credit note something environment of the of There environment the what, an Should that my we just a that’s the for, about been about your Are basis guess in XX or charge-off has said change follow-on Okay. XX industry, dramatically, the be a credit etc. in change consistent? which we XX quarter expectation it’s versus new expectation, going haven’t seen our had think I and that. quality it’s that like quarters etc. on something a or

Paul Donofrio

year, we an therefore the highest better year shows Payments the here. can to the we as think know, so through expect have if don’t The been our never--we in years general you for first have and in going we X% an impact. so U.S. we I the think always up a hit many versus happen, Nancy, responsible you and is, everything are have. company as consumers the unexpected--which growth well economy are is is of even by means our and it’s economy the driven activity positioned very bank, work half else, last shape. is consumer consumer good anybody than we to question That

than of in quality incrementally a in not by of relative the very keep better and the The see our see in making scenario because you in economy affected see a retail recession down creatures the losses, time, to test industry well maintain--you today, whatever keeping on to are alone, that relative to the and credit. to stress banking, the can not we’re we our get months, recession, the by there’s The that XX, great in head year XX, economy, so the all but the we’re prior short period that the statistics. us peers we’re there’s do, of you’re underlying of that saw I industry you You though, so to industry the steep very if coming a is about you a alone numbers and bodes we do the know, credit sales economy going shoulders industry, a not a if but we that overall, given and near way which done can the that, think each core speak, stress term. into has that test, decline the relative coming any is the hit see any without way have wall think sure our banks, we to so for job preparation

ended little you something the be years gas real we problem, Commercial a oil through. we in put to subprime going about to other recoveries or up out bunch was - loans we back up with was very going through going be them think and a of people’s. seen last Auto estate do play year, and great We to most problem, that haven’t we of see up - loss ended - a five there. that. much don’t be that let were that change last Now, like four going a reserves, problem taking we

we card, Yes, a normalization maybe X% get unsecured as to portfolio key underwriting lower times versus loss generations? different, underwriting than maybe X.X, underwrite fundamentally a in and risk that’s at did real X, prior good hit card the much standards a in to unemployment our we to. we in are what So we company, if charge-offs to you’re the now, difference the normal X.X% difference so have but balance that’s That’s was so also cycle. the credit we seeing didn’t credit

again. So way give seeing us of next and company, the it--and and XX, XX you’re not run quarter the it’s but you show we just out it’s XX, we’ll

Nancy Bush

right, much. All thanks very

Operator

next go Mosby Vining We’ll Marty to Sparks. ahead. with Please go

Marty Mosby

you is talked the if pretty part Thanks. at yield but advantageous. the curve cash, to a pulling had that’s everybody about two-year, look talking to the the bit is the ask you, about Paul, that your three-month little the curve, you of of flatness wanted yield of actually

You what don’t you duration so to have pick of part of basis some of actually go kind XX, XX thinking was to liquidity? that deploying points, were up your as with out that was

Paul Donofrio

capital, optimize we--when we’re when to liquidity, between in capital trade-offs and be put our liquidity portfolio to going to trade-off or extra mature the earnings, going when have we’re between earnings. about thinking securities yield work, that that at be and and we cash always to to and We’re looking trying curve

are noticed is appropriately. we investing So yield like what looks and we’ve yes, answer curve the the

Marty Mosby

longest. than you. new economic almost sector. it in or through now out person have within coming Secondly, came taking you out kind of leader more matured been a amongst you as Bank all regulatory leaders I’ve yourself Brian, philosophical the think America you you more had be you’ve is Then as better of the really looks come managers the the sector of into and do your or crisis, to as through pillar to a know, two the were internal? one for questions of yourself there’s turnover issues today kind got growth see role prepared what the on the as When business able now of around financial fund you’ve more and requirements working One as--you first is you our in, the block, Do job? a been the see you that you of

Brian Moynihan

be just getting old, I might think I Marty.

Marty Mosby

that. doing all We’re

Brian Moynihan

under balanced, we my the as are-we way, the economy, that, right retiring, just of leadership with or at the and make the broader honor with the requirement a where don’t colleagues and I of role I industry have receive great CEO our seven an in recognized change the last I critical, co-insurance we tuning worry lot all best think, along liquidity lessons capital mistakes. do the Nancy We colleagues, in to a about continue but we dialog because as we regulation, nobody want was, serve shape it great taken and very drive the on FDIC in our were been apply. the personally us portfolios other seriously think end of to little to the serious are of we continue a stability, think is think institutions, leader and of the behalf learned company the differently, with leaders we’ve and it get fine for way. industry and pleasure take liquidity None America, for here where with see teammates. want in it that back world, of activities we’ll amount eight for to of and we now few very people years, the major industry don’t had it we the the right think the think day We’ve the a lot and there, to could want is it people I has and than and in of a we’ve will at very the scheme, I and want bank year been ninth a we my as that a seriously. it’s to view, Bank the real again, it going That’s, philosophical to to have this teammates just so it the help to our them. that ago, minutes take capital which through I’m

Marty Mosby

Thanks.

Operator

Gerard RBC. go go We’ll ahead. next Cassidy Please to with

Gerard Cassidy

Good Brian. Paul. Good morning, morning,

Brian Moynihan

Missed time, you the first Gerard.

Gerard Cassidy

I these let’s like well. versus equity, had billion, like for administration? what the it I common with is with consolidated by stated are under just them you’ve at Have you your share when look to run discussions carry, XX%. real is as average so Obviously on under return your out, XX%. Clearly, the operating it of apologize was come tangible you the terms telephone in is agencies, got that I billion, line, - capital $XXX capital problem. need allocated if capital returns banks over constrained, they that them just call and your the on about allocating equity I risk CCAR you and guys you guys maybe know you could have the business the over lines talked capital at the Brian, less well than $XXX of us, capital regulators last about--because look about new yours you you know, what’s the business elevated it’s

Brian Moynihan

it bit the there. Well, goodwill, have something mid-XXXXs used to off remember a we you’ve more. under X, one sort company run common Gerard, in so substantial common that in million of running I be was and I tangible goodwill or and equity. think of maybe little X a to so think under is stuck be quarter going were we doesn’t like X, even to where a The thing tangible is amortize, a billion $XX equity day got maybe and We touched is $XXX there it the that, mid-Xs,

that pillars capitalized and our to have the enterprises be, we so keep will Going efficiently Marty’s strength, that for will safety as of question, dialog and means to right likewise way colleagues, obviously we soundness. serious be some

to middle out common road those trying If that with got way position X Meanwhile, capital and right I a equity to right X.X. think here, to the standard be got year avoids the it support of to it, the keep the industry and is after versus recognizes has Tier got is make to you’ve That problem the change, also actually of you’re and the answer regulators that and we quarter the into we’ve running forgot capital to actually before is that credit that because X% think with the not consistent can that is quarter and good keep else. buffer I getting have really a loan stuff, after in system, someone quarter of that I if growth. [indiscernible] needed let can needed capital question. a isn’t all are we growth the relative all and business our thing. used and XX needing this stress support the the for is earned under-utilized work, of you’ve dialog now with figure get capital industry the so The to buffer so over-capitalized to Marty’s that to to run out back or to not industry and right to

strong no world have, and many keep this There’s - manage look industry in very This us than much to and We industry right next driving our met standards, then to well this cycle. the a XX let digits, quarter but equal for we other long at figure got has any know, term, for and loan a--you so team commercial as working to them, we’ve drive strong small and sort do the everybody we was couple - doesn’t is how we more our capital economy. the we’ve you’re to company’s going, got keep through now recently But sort it as still growth, have for at last been right all doing we the mid been the it. quarters, you the business and to that if real balance bode the need outcome everybody back etc., to our that through and has everybody rules got of the of it’s is years, that capital are out continues single standards, country so met all place. the look we’ve relatively, has we’ve loan move this and growth get been will

Gerard Cassidy

CCAR can Following where up, ratio remind ask you to clearly returns. a down sit on think board? capital, payout dividend Can to on you long Brian, you term good the the when XX% Could us had get the a the get you level? with it

Brian Moynihan

in out times work, and and things said where cut figure to the how of trying have and stress it’s to like dividend rules we largely have and Well, that. all XX%, regulations never the you’ll also

Let up and we’ll out goes it get figure there. from us there it where

Gerard Cassidy

Okay.

Lastly, value obviously your relationships the you side. on talked consumer about of total

more idea us what you talked system? just do away households, have Can parse adding any clients. for the you credit from about with brokerage versus also you’re coming Do You cards, taking customers people think competitors other you’re into is? you new house how much that financial

Brian Moynihan

call doing it the on the faster great are so of just a calculate can that to believe logos, growth growth the the we’re we taking It depth so grind and the of new of have share. because the population the side out growth, clients slightly share, inherently shifting to commercial increasing You but taking, clients. and than But economy, day, new end population we’re especially the the the to relationship slightly job. expansion bank, you’ve the got remember, it those we’re we big through consumer has at be demographics, managers also we through faster than in

time think continuing will to across and build, management relationship to platform, commercial world and from building company. do level of all just the because the strong, we that have our Y us client investment in a banking our moving can that markets that our benefit. few takes tax benefits combination the I very market compete banking, portion the $XXX Increasingly nature overall continue of what cash in fact to we to platform, that coming talk markets and far, tremendous--despite this global to million think investment them But the it’s our in market advantage we’ve the so team, the of the additional a ability hard, added base bounce seeing to that of so due fees seeing can with middle including we’re investments of of up it push and our locally of combination just of is you’re a XX that play competitive we from around, to that that our with we’re research middle at reform. X there’s and

Operator

your take line with ahead, today’s you. Thank open. Kleinhanzl Brian KBW. We’ll Please question is from final go

Brian Kleinhanzl

one, Great, we quarter thanks. what size been portfolio I just them quarter, to have of could sequentially? did the of had can core already. lot on one runoff so there what did Is a the and asked back a way that get you kind loans quick

Paul Donofrio

portfolio? run-off the sorry, I’m

Brian Kleinhanzl

book. loan the within Yes,

the were still the any from portfolio. what for you of down, but dollar portfolios hear run-off headwinds amounts the size I didn’t said You now coming the is seeing some run-off

Brian Moynihan

out for quarter, It’s actually about have billion think $X and can billion it’s in--you it $X I Page to it in deck, per see you break on X. right We the been averaging we’ve the this consistent in quarter business growth added you portfolio, then been the loans, we could we loans the see run-off experiencing. segments, total then year-over-year so - there then and

Brian Kleinhanzl

Thanks. great. Okay,

Operator

Q&A Lee I floor closing for McIntyre remarks. today’s session. turn the any conclude will to will That back

Lee McIntyre

Thank for everyone you us. joining

$X.X quarter earnings. billion strong Another - in

to a it, and we core of you X on are basis you. quarter for continue - basis on grew core loans Thank Page of brought review the strong a revenue deck, a see look we core XXth we basis. grew We grew operating down you and you’ll leverage. If it X% to a expense X% and Returns on we next quarter. seeing and deposits forward on at a slide consecutive basis core drive

Operator

This for participation. you your will Thank conclude today’s program.

a Have disconnect. now great day. may You

Bank of America (BAC) 16 Jul 182018 Q2 Earnings call transcript