Alastair Borthwick: [Technical Difficulty] will materialize. And this now includes three interest rate cuts, starting in September, another in November, and one more in December. And the waterfall shows an estimated impact of those rate cuts to our quarterly NII. The next couple of categories are a result of natural management of interest rate risk in a balance sheet mixed with fixed-rate assets and variable-rate assets. And our balance sheet is split roughly half and half. So we take in liquidity from customers that we use to fund our assets, and then we store excess liquidity in cash and securities. We have fixed assets that mature and pay down, and those supply cash that then gets put back to work on the balance sheet and reprices over time. And we have two basic categories of fixed assets that mature and pay off, and those are securities and loans. On securities, you can see we've got about $10 billion a quarter of cash coming off of our securities portfolio, and we gain roughly 300 basis points of improvement on those assets when we put that money back on the balance sheet. On loans, between resi, mortgage, and auto, we've got another roughly $10 billion, which reprices with a little less yield improvement than securities. And between the securities and loans, we expect a fixed-rate asset repricing adds about $300 million to our quarterly rate of NII as we get to the fourth quarter. On the variable rate asset side, and to protect from down moves in rates, we hedge some of that with cash flow swaps. And those typically roll off in any given quarter and get replaced over time. So included in the cash flow hedges is an impact of cessation of BSBY as an alternative rate. If you recall, we took a charge in the fourth quarter of ‘23. It was $1.6 billion, and we said that would come back to us through time. And beginning in November, we start to see the benefit coming back into NII. And in Q4, that's about $200 million. That Q4 partial quarter benefit will grow by a slightly smaller sequential NII benefit in Q1 ‘25. And then it begins to taper off heading into 2026. In addition, we've got about $150 billion of received fixed cash flow hedges, protecting us from short rate moves moving over. Most are hedging floating rate commercial loans. And the cost of those hedges is reported as contra revenue in commercial loan interest income. These hedges have a weighted average life of just over two years. And they've got an average fixed rate of approximately 250 basis points. So starting in the second-half of 2025, we begin to get some additional NII tailwind, because the cash flow hedges with lower fixed rate likes where we receive, those will begin to roll off, and will likely replace those at higher current market rates at the time. The actual size of the tailwind we'll get from the expiration of those swaps will obviously be highly dependent on the level and the shape of the yield curve at the time of those maturities. And that stretches out over the course of the next four years. Okay, a couple other points to make. You'll note we don't expect much movement around our modestly, liability sensitive global markets NII activity. And lastly, our forward view has an expectation of low-single-digit growth in loans, low-single-digit growth in deposits, with continued slowing of rate paid movement through the back half of 2024. And you can see our expectation of the combined impact here as well. This last element is the one that has the most potential variability. And obviously, it will depend upon actual deposit and loan growth, and pricing and rotation. Okay, let's turn to expense and we'll use slide 11 for the discussion. We reported $16.3 billion of expense this quarter. And that's more than $900 million lower than Q1, which included $700 million for the FDIC special assessment. Not including the FDIC assessment, expenses were lower than Q1 by $229 million, driven by seasonally lower payroll tax expense. Compared to Q2 ‘23, we're up less than 2%. And that increase is equal to the incentives paid for improved fee revenue. Incentives for our GWIN business alone are up $200 million year-over-year. And that's obviously an expense we're happy to pay when we have a 14% improvement in fees for assets under management. Our second quarter headcount number included welcoming a diverse class of nearly 2,000 summer interns we hope will join us over the course of the next year or two upon their graduation. And absent those interns, our headcount fell by nearly 2,000. In the third quarter, we expect to add approximately 2,500 college graduates for full time. More than -- and that's from more than 120,000 applications received, showing that we remain an employer of choice for talented young people. Expense levels for the rest of 2024 are expected to bounce around this second quarter level, given the higher fee revenue and investments made for growth. So let's now move to credit and we'll turn to slide 12. There was little change in our asset quality metrics this quarter. Provision expense was $1.5 billion. That was $189 million higher than Q1, driven by a smaller reserve release in Q2. Net charge offs of $1.5 billion were little changed, with a small increase in credit card, mostly offset by lower commercial real estate office charge offs. On a weighted basis, we remain reserved for an employment rate of nearly 5% by the end of 2025, compared to the most recent 4.1% rate reported. The net charge off ratio was 59 basis points, largely unchanged for Q1. On slide 13, we highlight more credit quality metrics for both our consumer and commercial portfolios. Consumer net charge-offs increased by a modest $31 million versus the first quarter from the flow-through of higher late-stage credit card delinquencies from Q1. Highlighting the change in direction of delinquencies, consumer 90-day-plus delinquencies declined in 2Q by $57 million. Commercial net charge-offs were relatively flat as lower commercial real estate losses were mostly offset by a small increase in other commercial loans. Our office losses went from $304 million in Q1 to $226 million in Q2. Other commercial real estate loan losses were simply one hotel. Okay, let's move to the various lines of business and some brief comments on their results, and I'll start on slide 14 with consumer banking. For the quarter, consumer earned $2.6 billion on continued strong organic growth, and reported earnings declined 9% year-over-year as revenue declined from lower deposit balances, compared to the second quarter of last year. Customer activity showed another strong quarter, net new checking growth, another strong period of card openings, and investment balances for consumer clients, which climbed 23% year-over-year to a new record $476 billion. That included 12 months of strong flows at $38 billion in addition to market appreciation over the time. As noted earlier, loans grew nicely year-over-year from credit card, as well as small business where we remained the industry leader. The team held expense flat year-over-year, reflecting good work with continued business investments for growth, offset by the operational excellence work to improve processes and move more of our transactions to digital. And as you can see on the appendix page 26, digital adoption and engagement continue to improve, and customer satisfaction scores remain near record levels, illustrating customer appreciation of our enhanced capabilities due to our continuous investment. Moving to wealth management on slide 15, we produced good results, and those included good organic client activity, market favorability, and strong AUM flows, and this quarter also saw good lending results. Our comprehensive suite of investment and advisory services, coupled with our commitment to personalized wealth management planning and solutions, has enabled us to meet the diverse needs and aspirations of our clients. Net income rose 5% from the second quarter of last year to a little more than $1 billion. In Q2, we reported revenue of $5.6 billion, growing 6% over the prior year. As Brian noted, a strong 14% growth in fee revenue from investment and brokerage services overcame the NII headwind. Expense growth reflects the fee growth and other investments for future. The business had a 25% margin, and it generated a strong return on capital of more than 22%. Average loans were up 2% year-over-year, driven by strong growth we're seeing in custom lending and a pickup in mortgage lending. Both Merrill and the Private Bank continue to see good organic growth, and they produced strong assets under management flows of $58 billion since last year's second quarter, which reflects a mix of new client money, as well as existing clients putting more of their money to work. I also want to highlight the continued digital momentum in this business, and you can find that on slide 28. On slide 16, we turn to Global Banking results. And here, the business produced earnings of $2.1 billion, down 20% year-over-year, as improved investment banking fees and treasury services revenue were overcome by lower net interest income and higher provision expense. Revenue declined 6%, driven by the impact of interest rates and deposit rotation. The diversified revenue across products and regions reflects the strength of our Global Banking franchise. In our GTS business, fees for managing the cash of clients offsets a lot of the NII pressure from higher rates, and clients are accessing the capital markets for their capital needs instead of borrowing. Investment banking had a strong quarter, growing fees 29% year-over-year to nearly $1.6 billion, led by debt capital markets fees, mostly in leveraged finance and investment grade. And we finished the quarter strong, maintaining our number three investment banking fee position globally. A solid start to 2024 has left us in a good position, with top three rankings now in North America, Latin America, and EMEA, and number six in APAC. And we're seeing strong performance in important industry groups as well. An increase in provision expense from last year was driven by the commercial real estate net charge-offs I discussed earlier, and expense increased 3% year-over-year, including continued investment in the business. Switching to Global Markets on Slide 17, I'll focus my comments on results, excluding DVA as I normally do. The team had another terrific quarter as we generated good revenue growth and achieved operating leverage and continued to deliver a solid return on capital. Earnings of $1.4 billion grew 19% year-over-year, and return on average allocated capital was 13%. Revenue, and again, this is ex-DVA, improved 10% from the second quarter of 2023. Focusing on sales and trading, ex-DVA, revenue improved 7% year-over-year to $4.7 billion, and that's the highest second quarter in over a decade. FICC was down 1%, while equities increased 20% compared to Q2 '23. FICC revenues remained strong, and versus Q2 '23, they were modestly lower, driven by a weaker macro trading quarter in FX and rates, and that was largely offset by better commodities and mortgage trading. Equities was driven by strong trading results in derivatives and cash equities. Year-over-year expenses were up 4% on revenue improvement and continued investment in the business. Finally, on Slide 18, all other shows a loss of $0.3 billion, and that was little changed year-over-year, as lower expense was offset by lower provision costs as a result of reserve changes. Our effective tax rate for the quarter was 9%, and excluding discrete items and the tax credits related to investments in renewable energy and affordable housing, the effective tax rate would have been 25%. And with that, I think we'll stop there, and we'll jump into questions.


Brian Moynihan: Thank you, Lee, and good morning, and thank all of you for joining us for our discussion of our third quarter results. Bank of America continued to demonstrate strength this quarter in an economy that continued to be stable, albeit with slower growth and falling inflation. So many of you asked me from time-to-time what do we see in our own customer -- consumer customer base. As we talked about many times, our consumer payments is an indicator of activity. Those payments were up 4% to 5% year-over-year for the quarter in the total money those consumers moved in the economy. The pace of year-to-year money movement has been steady since late summer this year. After having fallen in the spring and early summer. This growth in consumer payments continues into October. This activity is consistent with how customers are spending money in the 2016 to 2019 timeframe. When the economy was growing, inflation was under control. This report is not meant to gainsay that consumers are worried of the cost of living, worried about higher rates and other matters. But overall activity is fine, unemployment is low and wage growth is steady, both of which bode well for the consumer overall and for consumer asset quality. With respect to what we see in our commercial businesses, it is consistent with a lower growth economy. Line of credit usage rates remain lower than pre-pandemic levels. This does not surprise us what with the dramatic increase in the cost of borrowing for small and medium-sized businesses. They aren't being indolent, they want to grow. They are simply being more careful and worry a final demand will hold. Therefore, they are being cost conscious across the board. So how did Bank of America do against this backdrop? At Bank of America, our commitment to responsible growth remains unwavering, and this quarter is another illustration of that. We grew, we did it the right way. In the third quarter, Bank of America generated $25.5 billion in revenue and earned $6.9 billion in net income after tax. Year-to-date, we've generated net income of just over $20 billion. Four quarters ago, we called that a bottom would occur in our net interest income in the second quarter of 2024. Even with a rate environment that has bounced around quite a bit since we said that we got it right. As we expected then, NII indeed troughed in the quarter two. NII grew 2% this quarter and Alastair will note later, we expect NII to grow again in quarter four, even as the market expects two more rate cuts in quarter four. This quarter, we saw a healthy revenue growth in our wealth and investment management business and in our global markets businesses. We returned 5.6 billion of capital to shareholders while also supporting the needs of our clients. So with that brief overview, let's dive into Slide 2. Earnings per share came in at $0.81 this quarter at $25.5 billion in revenue we grew modestly from the third quarter, '23 as improvement in noninterest income more than offset a year-over-year decline in net interest income. Fees grew 5% year-over-year and represented 45% of total revenue. The strong year-over-year fee performance was led by a 15% improvement in investment in brokerage services, mostly in our global wealth management business. We also grew investment banking fees 18% year-over-year sales and trading revenue increased 12% year-over-year and aggregate, these market related revenue streams rose an impressive 13% year-over-year. Our total expense in the company increased 4%. You can attribute most of the year-over-year expense growth to these market related areas. Overall, a good job by the team. On asset quality a few quarters ago we told you that consumer credit losses would go down this quarter, given delinquency trends we had seen at the time. We also told you that office losses would be lower. Both of these proved true again this quarter. Good asset quality resulted in net charge-off in provision expense for this quarter at $1.5 billion, which was unchanged from last quarter. Our performance is partly attributable to the diversity and balance of the company. A little more than half our earnings come from our consumer and GWIM businesses serving people and the other half come through from our Global Banking and Markets businesses serving companies and institutional investors. So let's turn to see how we grew organically this quarter. We are now on Slide 3. Our organic growth has been driven by a continued focus on customers and client experience throughout all our businesses. Consumer leads the way delivering solid organic growth with high quality accounts engaged clients. For the 23rd consecutive quarter, we added significant net new consumer checking accounts and expanded our customer base and market share. We added 360,000 net new checking accounts this quarter, which brings our first nine months of '24 to more than 880,000 net new checking accounts. In wealth management, we added another 5,500 net new relationships this quarter. In our commercial businesses, we added hundreds of small business and commercial banking relationships. Also note that we saw a strong organic growth of investment balances with banking customers and growth in banking products for our investment clients in our GWIM business. This has led us to now manage $5.9 trillion in client balances of loans, deposits and investments across the consumer and wealth management clients. We saw flows of $62 billion into those businesses in the past four quarters. In our Global Banking business, we saw loan demand start to pick up late in the quarter. We again ranked third in the logic IB fees we received and have a solid pipeline. Our global transaction services platform continues to grow around the world and showed strong deposit growth for our commercial businesses over the last year and a quarter. This quarter, global markets saw continued momentum. Global markets recorded the 10th consecutive quarter of year-over-year growth in sales and trading. Investments we've made in this business and the intensity of the teams has enabled a 35% improvement in sales and trading revenue in the past three years. Good work by Jimmy DeMare and the team. Our customers and clients continue to want more from us, especially when it comes to our digital capabilities. So let's discuss this on Slide 4. Slide 4 highlights this continued success across our digital platforms. As usual, we include our disclosures on digital stats across the business, which we believe lead the industry. I commend you the pages in the appendix, which give you more granular disclosure for each of the businesses' digital activities. Our fully integrated consumer banking investment application drives the utility for our customers across GWIM and consumer. The usage stats you see are strong proof points. Our second language capabilities also enhance the customer's experience. We have grown to more than 48 million active digital users and those digital users logged in more than 3.6 billion times this quarter. We also continue to see more sales through their digital properties. Digital sales represented 54% of our total consumer sales this quarter. Note that it simply takes both high-touch and high-tech to drive continued growth with individual clients across the wealth spectrum in America. Erica, our AI enabled virtual assistant reached 2.4 billion client interactions since its launch and Zelle showed continued user and usage increases. In our wealth management business, we continue to see full relationships increase with both investing and banking relationships being open. 75% of new accounts in Merrill were opened digitally whether they were banking accounts or investment accounts. This enables more efficient customer coverage for our advisory teams. Finally, 87% of our Global Banking relationship clients are digitally active. We have innovated and significantly streamlined service requests by enabling clients to directly initiate and track inquiries within our award winning cash flow platform. As a result, app sign-ins for these clients increased nearly 80% in just the last 24-months. In summary, the economic environment remains solid. Issues remain out there to external factors that could affect our business and the economy generally. We still see great opportunities for continued growth across all our businesses. We are focused on driving market share in all our businesses, investing in technology to further enhance the customer experience and continue to increase our efficiency. With NII now growing and complementing our fee growth along with our continued solid expense discipline, we expect to return to operating leverage as we move through the quarters in 2025. With that, I'll turn to Alastair for additional details.


Brian Moynihan: So good morning, everyone, and thank you for joining us. Before we begin today, I just want to express our deep concern for our communities, clients, and teammates impacted by the California wildfires. Our top priority, of course, is ensuring the safety and welfare of our team and helping our clients and customers. Our imperturbable Market President Raul Anaya is leading our team out there. We have teams on the ground assisting in any way we can and are monitoring of the situation to extend support and resources. So far, we have activated our Client Assistance Program, donated $1 million in disaster relief to the American Red Cross, additional contributions to the L.A. Food Bank and the L.A. Chamber of Commerce Small Business Efforts. With that, let's turn to earnings starting on page two of the presentation. This morning, we reported $6.7 billion in net income, that is $0.82 in EPS for the fourth quarter. That was a solid finish to another good year at Bank of America. We grew revenue on a year-over-year basis in every category in quarter four. We saw good loan and deposit growth, and Alastair is going to walk you through some of the details of the quarter in a moment, but I want to thank our team for another great year. For the full-year of 2024, we generated $102 billion of revenue and reported net income of $27.1 billion of EPS of $3.21. We produced 83 basis points return on assets and 13% return on tangible common equity. We generated these results working from a strong balance sheet that allowed us to support clients and economies continue to grow. The economy appears to be now settled into a 2% to 3% GDP-type growth environment. It has healthy employment levels in the resilient consumer. The immensity of the American consumer can be seen in our data. So far in the first two weeks in January, they're spending money at 4% to 5% clip over last year, similar to what they did in the fourth quarter. In our business side, the clients are profitable, they're liquid, and seeing good productivity. We ended the year with $953 billion in liquidity. We also ended with $201 billion of regulatory CET1 capital and a CET1 ratio of 11.9%, leaving us nearly 115 basis points of excess capital as we begin 2025. For Bank of America, the year was characterized by a few important highlights that played out as expected and were consistent with our communications to you throughout the year. First, we saw net interest income bottom out at $13.9 billion on an FTE basis in the second quarter of 2024. We ended the year with a fourth quarter on the same FTE basis at $14.5 billion, then that was a bit better than we expected. This obviously provides a great starting point for 2025, and based on the assumptions Alastair is going to discuss a little later, we should report record NII in 2025. So how did we do that? We drove organic growth in all the businesses, and that we have highlighted on Slide 3. We saw continued growth in net new checking, new households, new companies, and commercial banking growth in our institutional markets business. This organic activity enabled us to grow loans and deposits at a pace we believe is to be ahead of our industry average and our peers. A key for us, obviously, is a growth in our deposit franchise. If you look at Slide 4, you can see we've now grown deposits for six consecutive quarters. In the most recent quarter, we saw growth in consumer balances and stability around non-interest-bearing balances across all the businesses. We continued to price in a disciplined manner, and rates paid moved lower this quarter across the board. Overall, rate paid on deposits moved from 210 basis points in the third quarter to 194 basis points this quarter. And we're lower in the fourth quarter, we're lower in every business segment. On the loan side, consumer loans grew in every category-linked quarter. Commercial loan demand continued to build off the strengths we saw in the third quarter of 2024, and commercial loans grew 5% year-over-year for the fourth quarter, and a much faster annualized pace when comparing the third quarter to the fourth quarter of 2024. So back to Slide 3. In our wealth management business, we added 24,000 new households in 2024. We ended the year with $6 trillion in total client balances that we manage for people in America across our global wealth and consumer businesses. Our consumer investments team, what we call Merrill Edge, crossed a new milestone this quarter and now sits in excess of $518 billion in balances. Investment banking gained share of industry revenue in 2024. Our sales and trading team put up the 11th straight quarter of year-over-year revenue growth and achieved a new full-year record of nearly $19 billion in revenue. As the quality stabilized and remained strong, with net charge-offs declining modestly from third quarter. Early in the year, we highlighted that our expectation on consumer credit is that they would stabilize to normal level. And on commercial office losses, they would trend down during the year. We saw both those trends continue into quarter four. On the expense side, we continue to invest in our franchise. And even though spending increases in brand, people, and technology, and strong fee growth, which drove incentive and transaction processing costs higher, we managed to create operating leverage in the fourth quarter. Our digitalization and engagement expanded across all our businesses. We saw more than 14 billion logins to our digital platforms in 2024. Our Erica capability surpassed 2.5 billion interactions from its inception. And our CashPro app surpassed $1 trillion in payments made through the app in 2024. It's also worth noting that digital sales in our consumer product areas crossed 60% in the fourth quarter again. You can see all these trends in our industry-leading digital disclosure on Slides 26, 28, and 30 in the appendix. All the success in balance sheet straights allowed us to deliver more capital back to our shareholders. We returned $21 billion of capital to the shareholders in 2024, which was 75% more than 2023 and included an 8% increase in the common dividend. So in summary, for both the fourth quarter and for the year, we enjoyed good profitability, we drove healthy returns, we saw good organic client activity across all the businesses, we continue to manage the risk well and increase the capital delivered back to our shareholders. And we positioned ourselves well for growth in 2025. I want to again thank my team for continuing to drive another year of responsible growth. And with that, I'll turn it over to Alastair.


Gerard Cassidy: Alastair, can you elaborate a little further, you talked about, I think in Slide 12, you showed us 100 basis point parallel shift impacts, net interest income by a positive $3.3 billion over the following 12 months. If the rate environment does shift and, maybe, we do start to see lower rates by the end of the year, how quickly can you guys move this from being asset sensitive to neutral or a liability sensitive on the balance sheet?

net interest income 100 basis point parallel shift following 12 months


Erika Najarian: Hi, good morning. I'm sorry I missed the earlier call. On the net interest income trajectory, Alastair, clearly a big focus for your shareholders. You mentioned when you were responding to Gerard's first question that you narrowed the volatility of net interest income. And I think that investors I'm sure are going to start asking you guys and us about the starting point of $14 billion for NII next year. I guess we're wondering, if the Fed stays higher for longer, doesn't move, how does that impact that $14 billion run rate? Does that $14 billion capture a cumulative deposit beta that would sort of fully reflect what you would expect to experience through the cycle? And then I have a follow-up question from there.

net interest income $14 billion next year


Alastair Borthwick: So I'd say right now in terms of the 1.93%, we feel like we are under earning. We feel like that number is going to go up over time. It'll go up as net interest income goes up. But additionally, I think the balance sheet is likely to stay kind of flattish here. So the numerator is going to grow, the denominator is going to stay pretty tight here. So we think we're under-earning there. We think through a cycle, we got to get back to a more normal number like 2.30-ish over time. That takes a while. It's a grind, Mike, quarter-after-quarter, so that's where we're headed. And in terms of return on allocated capital, right now we're right around that 14%. We want to be 15% or higher for our shareholder. A lot of it is because we've accrued an awful lot of capital over the time -- over the course of time in advance of any potential capital changes. And the other final thing I'll just remind you is, we're a little different than some of the regional banks in that we've got an enormous global markets business. And that obviously makes an impact on the headline NIM number.


net interest income second quarter of 2024


net interest income fourth quarter a bit better than we expected


Brian Moynihan: So our goal is always to maintain it. And Mike, you point out that the toughest times when you have sort of a twist in the interest-rate environment and you can see that at the end of '19 and we got right back into it right after the environment stabilize, but just thinking about the question you asked me a few years ago Mike was - when NII is coming in are going to let it fall the bottom-line, you going to spend it at about 80% plus of it is falling to the bottom-line, which shows you how we position the franchise from the second quarter of '21 until now as we went through the interest-rate - the fast interest-rate raising. So we gave you the specific as you said, the specific expense guidance by quarter. We'd expect that should produce operating leverage that will be it gets tougher and then it will get easier as we start to see the stabilization of deposits and loans and loan growth, you sort of routinely come through in the economy frankly, shaking through whether we're going to have a recession or not. And so we feel good about what we've done, that's why I tried to give that longer period of time that people have the context, it's very different environments how you've achieved at sometimes revenue fell and expense fell faster, sometimes revenue grew and expense grew, but slower and all the different ways. So we'll keep working at it in a key leading indicator we like as we've been able to manage the headcount down as Alastair said earlier and frankly that is in the face of a turnover rate year-over-year which has dropped in half, which is good because we're not training and hiring as many people, and that then sets us up for the second half of the year because that headcount benefit us not really come through the P&L and will offset some of the other inflation.


John McDonald: Hi, Alastair, Brian. Alastair, I wanted to go back on the NII and maybe you could help us. It's so hard for us to square the NII outlook with the rate sensitivity disclosure that you have in the slide with the 100 basis point parallel shift down is $3.1 billion. Maybe just, is there some caveats about how in the real world it doesn't play out like the disclosures? We've already seen rates come down on the long end, almost 100 basis points. So I guess it just -- where's that $3.1 billion headwind in your number? Because it's very impressive, obviously, to be able to kind of keep it flat despite that, using the forward curve. Thanks.


Betsy Graseck: Thanks very much for taking the question. I guess I just wanted to follow up on the conversation you were just having, and Alastair, I know that--look, your NII guide improved this quarter due to 1Q results being better than what you had anticipated a quarter ago. My question is on the second half ’24 improvement, I guess it is going to be an improvement from first half, right - that’s basically the base that you’re looking at? I’m wondering how you’re thinking about the NII trajectory on a year-[audio loss]. I believe NII is down about 3% year-on-year in 1Q. Should we anticipate that that is stable pace throughout the year, or that reduces as well when we’re talking about second half ’24? If you can just give us a sense of year-on-year, that’d be helpful, thanks.


Alastair Borthwick: Sure, well I’d say generally speaking, higher for longer is probably better for banks, as a general statement. The question will become why are rates higher, like what’s going on in the economy? Are we talking about inflation, is it under control, is it coming down? Right now, that appears to be the case, so that’s obviously a good place. The Fed’s in a good place because they appear to have rates that are a real rate that is high enough to make sure that inflation stays in a good place. Things can change, Matt, so an awful lot will depend upon just the why for rates; but generally speaking, if it’s just because it’s taken a little while longer for the inflation to nudge down before the next set of cuts, that’s probably a good environment for us. I would expect us to perform relatively better than we’ve disclosed so far. Then you’re asking a second question, which is around what does the sensitivity look like to plus-100 or minus-100. We’ve tried to just make sure that we continue to stay balanced. If anything, that corridor of plus-100, minus-100 has gotten narrower and narrower over time as we’re trying to lock in NII that’s $4 billion or $5 billion higher per quarter today than it was three years ago, and just make sure that the shareholder benefits from that through the course of time. We’ll see how the environment plays out - it’s only been a quarter since we were last here talking about six cuts. Now it’s three, so we just have to watch this play out and stay patient. Matt O’Connor: Okay, fair enough. That’s helpful, thank you.


Brian Moynihan: Thank you Lee, and good morning to all of you, and thank you for joining us. I am starting on Slide 2 of the earnings presentation. We once again delivered a strong set of results in quarter one. We reported net income of $6.7 billion after tax and EPS of $0.76. This included the additional expense accrual for the industry special assessment by the FDIC to recover losses from the failures of Silicon Valley Bank and Signature Bank. This lowered our quarter one EPS by $0.07. Excluding that expense, net income was $7.2 billion and EPS was $0.83 per share in quarter one. Alastair is going to walk you through details of the quarter momentarily, but first let me give you a few thoughts on our performance. We delivered good improvement in our fee-based business, driven both by continued organic growth and good market conditions. Investment banking saw a nice rebound this quarter. We delivered nearly $1.6 billion in investment banking fees and grew 35% from the first quarter 2023. Matthew Koder and the team have done a great job delivering market share growth. In addition, our results reflect the benefits of investments made in our middle market investment banking teams and dual coverage teams. Matthew has utilized [indiscernible] power wisely to grow our middle market team from 15 bankers in 2018 across a dozen cities, to more than 200 bankers in twice as many cities today. Both groups work with our commercial bankers and wealth management advisors in those cities to deliver for our clients. Investment and brokerage services revenue across Merrill and the private bank grew 11% year-over-year in quarter one to nearly $3.6 billion. Continued investments in our advisor training programs and digital delivery for our clients as well as positive market helped us deliver strong revenue. Asset under management flows were $25 billion in the quarter. Sales and trading excluding DBA delivered its eighth consecutive quarter of year-over-year revenue improvement. At $5.2 billion, this is the highest first quarter result in over a decade. We have allocated more balance sheet invested in talent to build our [indiscernible] for the last five years in this business. Those investments plus the intensity of the teams under Jimmy DeMare’s leadership have resulted in good momentum and market share improvement. From a balance sheet perspective, we entered the quarter expecting modest moves in loan growth and a decline in deposits - those were our expectations. What we actually delivered was growth in ending deposits of more than $20 billion. Ending loans were down modestly due to the expected credit card seasonality, otherwise loans were pretty stable. This balance sheet performance along with our continued pricing discipline allowed us to deliver better than expected NII performance. We told you last quarter that we expected NII to decline from the fourth quarter of 2023 to the first quarter of 2024, a decline of about $100 million to $200 million. We actually reported today NII of $14.2 billion - that was $100 million higher than quarter four, exceeding our guidance. We continue to deliver strong expense management. Year-over-year expenses adjusted for the FDIC assessment was up a little less than 2% - that compares to the 4%-plus inflation rate. We also continued to invest in our company while managing those expenses. We had several categories with stronger fee-based revenue in the first quarter this year. This drove higher formulaic compensation and processing costs of the increased activity. Fees and commissions were up 10% year-over-year. We are happy to pay for that revenue and deliver more earnings to the bottom line because of it. How did we do all that and hold expenses under the inflation rate? Well, we remain focused on three primary drivers at Bank of America. First, our operational excellence platform continues to deliver and improve processes. These savings from that growth help fund the future growth in the company and lower the risk. Second, we managed headcount as we eliminated work. Recall, we noted an expectation in January of last year that our headcount would be down throughout the year. Our headcount at the end of first quarter 2024 was down by more than 4,700 people from the first quarter 2023. It declined 650 people just from the end of 2023. The digitization activity is also driving ongoing expense cost savings, customer retention and market share improvement, driving across all three factors. It also supports the ever-increasing volumes of client activity with little increased cost. I would highlight our continued capital strength with common equity Tier 1 capital of $197 billion. That amount of capital is $31 billion over the current regulatory minimums for our company. That capital has allowed us to both support our clients and return $4.4 billion to shareholders this quarter in share repurchases and dividends. Let me highlight a few points on our organic growth before I pass it over to Alastair. Now I’m turning to Slide 3. You can see on Slide 3 the highlights of quarter one successful organic activity across the businesses. We continue to invest and enhance our digital platforms. We provide our customers with convenient and secure banking experiences. By leveraging our technology and continuous investment in that technology and putting customers at the center of everything we do, we have successfully deepened our relationships and expanded our customer base across all our businesses. In consumer, we had added 245,000 net new checking accounts this quarter. This completes 21 straight quarters of net additions. Dean Athanasia, Aron Levine and Holly O’Neill helped drive that business for us and continue to perform well, driving strong performance across our consumer franchise. These checking balances continue to drive the performance of our consumer deposits. These checking additions are important for many other reasons. On average, 68% of our deposit balances have been with us for more than 10 years; 92% of the customer checking accounts are primary checking accounts in the household, meaning that they’re the core operating account for the household for their financial lives. When we on-board a client, we start a long-term valuable relationship. About 60% of our checking accounts customers use a debit card and on average they do about 400 transactions per year on that card. The new checking accounts have traditionally opened savings accounts, about 25% of the time within a few months of opening that checking account. Opening a new checking account on average brings about $4,000 in balances below our averages, but that continues to grow and within a year, it’s two times that amount. Likewise when we open a new savings account, it on average brings about $7,000 in balances. This also deepens by about two times during the year. Investment relationships and credit card account openings continued to be strong in the first quarter as well. While we believe some of these statistics are best in class, rest assured there are plenty opportunities for further growth in our franchise and our company. As we think about our global wealth team led by Eric Schimpf, Lindsay Hans and Katy Knox, that team added 7,300 net new wealth relationships with Merrill and the private bank. Our advisors opened 29,000 new bank accounts in the quarter with our customers, deepening their relationships. More than 60% are investing clients in Merrill and 90% of our private banking clients now have a core banking relationship with us. In addition, across our wealth spectrum we saw $60 billion in total flows over the last year. As you can see on this slide, we now manage more than $5.6 trillion in total client balances across loans, deposits and investments, and consumer and wealth management. When we move to global banking, we added more new relationships in this quarter than we did in last year’s first quarter. We also increased the number of solutions per relationship with preexisting clients. Just like in our consumer business, we have seen good growth in customers seeking the benefits of both our physical and our online capabilities and also the care of our talented relationship managers, who provide financing solutions and advice for our clients with global needs. A couple other points I’d make on our digital success. Erica, our virtual banking assistant, reached a key milestone of more than 2 billion interactions since its introduction about six years ago. It took four years to reach 1 billion interactions; it took just 18 months to reach the second billion. In August, we extended Erica’s reach and launched Erica in our global treasury services business and CashPro. Erica has resolved 43% of the CashPro chat inquiries automatedly, demonstrating more and more clients are able to self-solve. This is a great example of best practices being shared across the scale of our company. Second, as an example of our digital success, Zelle continues to grow. It wasn’t long ago that we noted that the number of Zelle transactions in a quarter had surpassed the number of checks written. Shortly after that, Zelle transactions reached two times the number of checks written. This quarter, Zelle transactions have now passed the combined number of checks written plus the amount of cash withdrawals from tellers and from ATMs. That is a rapid adoption and represents continued cost savings and convenience and security for the customers. These stats and others are included in our quarterly activity for our digital banking progress. That’s included in Slides 20, 22 and 24. I encourage you to read them. They show our market-leading efforts representing billions of dollars of our investment over the years, and we are continuing to drive growth with expense growth under control. The solid earnings results achieved this quarter are a testament to the dedication and talent of our 212,000 people who work here and deliver for our customers every day. I thank them for another great quarter. With that, I’ll turn it over to Alastair.


Glenn Schorr: Hi, thanks very much. Hello there. And definitely appreciate slide 10 a lot. I know you would have given us the 2025 NII guide if you wanted to give us one, so feel free to give that if you want, but that's not my question. My question is, given all the pieces of the puzzle that you gave us expectations for modest loan and deposit growth and slowing deposit-seeking behavior, if you get that 4% pickup from 2Q to 4Q this year that you're expecting, right now or at least recently, consensus had NII looking flattish with that fourth quarter number, and that doesn't make a lot of sense given all the pieces. So maybe if you can just comment directionally if you don't want to give the number of, does it make sense to you that we'd collectively be expecting flat NII with your higher fourth quarter number?


Alastair Borthwick: Yes. So this is -- this shows that we're asset sensitive. That's why the red box obviously is bigger than the green box. It's the market specifically that's liability sensitive. So we're still asset-sensitive, Gerard. What it would take for us is either we can have a lot more rotation into interest-bearing or we could buy some short-dated duration, fixed-rate. So those are the two alternatives. And if you look at the course of time, if you were to go back to our queues over time, you'd see that we've become less and less rate-sensitive overtime. We've really narrowed the corridor of whether rates go up by 100 or down by 100, what could that outcome look like? Narrowed that pretty substantially over time because we're trying to lock in rates here, recognizing that NII is up $4 billion or $5 billion over the course of the past several years per quarter.

NII over the course of the past several years per quarter


Alastair Borthwick: Thank you, Brian. And I'm going to start on Slide 5 of the earnings presentation, because it will provide just a little more context on the quarter. For the fourth quarter, as Brian noted, we reported $6.7 billion in net income or $0.82 per share. And before we talk about comparisons between periods, I just need to remind you that our fourth quarter 2023 GAAP net income number included two notable items. In the fourth quarter of ‘23, first, we recorded $2.1 billion of pre-tax expense for the special assessment by the FDIC to the industry to recover losses from the failures of Silicon Valley Bank and Signature Bank, and that reduced EPS last year by $0.20. Second, we recorded a negative pre-tax impact to our market-making revenue of approximately $1.6 billion related to the cessation of BSBY as an alternative rate, and that reduced earnings per share last year by $0.15. So when you adjust for the large FDIC assessment and the BSBY cessation charge, fourth quarter ‘23 net income was $5.9 billion or $0.70 per share. On Slide 6, we note some of the highlights of the quarter and we reported revenue of $25.5 billion on a fully taxable equivalent basis, up 15% from the fourth quarter of ‘23. And if you exclude the fourth quarter ‘23 BSBY cessation charge, our revenues grew 8% year-over-year. As Brian said, all the revenue items are showing improvement year-over-year. NII grew 3%. Investment banking grew 44%. This quarter, our $4 billion of sales and trading revenue marked a fourth quarter record, and it grew 10% from the year ago period. And investment brokerage fees rose 21%, with both assets under management flows and market levels contributing nicely to the growth. Our card income and service charges grew 7%. Non-interest expense was $16.8 billion and was up when adjusted for the FDIC special assessment driven by incentives paid for the strong revenue growth as Brian noted and the related activity costs that comes with that. Expense also included additional investments in people, technology, and brand with some major partnerships announced recently. And it included what we expect to be the peak in quarterly costs associated with enhancing our compliance costs and controls. The good news is we created operating leverage in the quarter. Provision expense for the quarter was $1.5 billion and was consistent with the previous two quarters. And lastly, returns in the fourth quarter were 80 basis points of ROA and 13% return on tangible common equity. Back to the balance sheet on Slide 7. We ended the quarter at $3.26 trillion of total assets, down $63 billion from the third quarter, driven by seasonally lower levels of client activity in global markets, while loans across the businesses grew $20 billion in the quarter. Otherwise in the quarter, the investments of our excess liquidity saw a $9 billion reduction in hold to maturity securities. And at the same time, the combination of shorter-term liquidity investments of cash and available for sale securities increased $28 billion. On the funding side, total deposits grew $35 billion on an ending basis as both interest bearing and non-interest bearing grew. Long-term debt fell $14 billion driven by net redemptions and valuations, and global markets funding declined in line with assets. Liquidity remains strong with $953 billion of global liquidity sources. That is up modestly compared to the third quarter, even as we paid down some debt and retired some preferreds. Shareholders' equity was flat at around $295 billion. And within all of that, we returned $5.5 billion of capital back to shareholders with $2 billion in common dividends paid and the repurchase of $3.5 billion in shares this quarter. Tangible book value per share of $26.58 rose 9% from the fourth quarter last year. Turning to regulatory capital, our CET1 level improved to $201 billion and the CET1 ratio rose to 11.9%, remaining well above our new 10.7% requirement. Risk-weighted assets increased modestly as increases in loans were mostly offset by lower RWA supporting our global markets client activity. Our supplementary leverage ratio was 5.9% versus a minimum requirement of 5%, which leaves some capacity for balance sheet growth, and our $460 billion of total loss absorbing capital means our TLAC ratio remains comfortably above our requirements. Let's turn to Slide 8. We can go a little deeper on loans by looking at average balances. And loans in the fourth quarter of $1.08 trillion improved 3% year-over-year, driven by solid commercial loan growth. Overall, commercial loans grew 5% year-over-year. And importantly, this included an 8% drop in commercial real estate loans. Commercial loans excluding commercial real estate grew 7% year-over-year, and the consumer loans grew modestly both linked quarter and year-over-year. As Brian said, on a linked quarter basis, every category of consumer lending grew, and you can see that at the bottom of Slide 8. If we turn our focus to NII performance and use Slide 9, regarding NII on a GAAP, non-fully taxable equivalent basis, NII in Q4 was $14.4 billion. And on a fully taxable equivalent basis, NII was $14.5 billion. Several quarters ago, we signaled our expectation that NII would trough in the second quarter of 2024 and begin to grow from there. And this represents now our second quarter of NII growth. And we expect that growth to continue in 2025. In fact, if you look at the two quarters after the inflection point, NII is already growing at a 5% rate. Fourth quarter NII on a fully taxable equivalent basis increased by $399 million from the third quarter, driven by a number of factors. First, it was led by improvement in deposits across the businesses. And even as deposit balances increased linked quarter, our interest expense on those deposits declined by $600 million. Loan growth and fixed rate asset repricing also benefited us again this quarter. With regard to a forward view, interest rate expectations continue to drive volatility and predictability, but we'll provide some thoughts for future NII. We expect to start the year in the first quarter with NII modestly higher than the fourth. Remember that the first quarter has two fewer days of interest and that's roughly the equivalent of about $250 million of NII equivalent. So even with that, we expect to grow modestly. Then we expect that growth to increase through the year to the point where it could be 6% to 7% higher in 2025 than 2024. We expect to exit the year at least $1 billion higher in the fourth quarter and that would put us in a range of $15.5 billion to $15.7 billion on a fully taxable equivalent basis, and that's obviously significantly higher than the Q2 '24 trough of $13.9 billion. I have to note the following assumptions. First, we assume that the current forward curve materializes. And while the interest rate curve has changed significantly over a fairly short period of time, as of the 10 of January, the curve was expecting only one rate cut in 2025 that may come in May or June. Based on our more recent growth experienced, we're assuming loan and deposit growth in 2025 that's higher than 2024, and more consistent with growth in a 2% to 3% GDP environment. The other elements of anticipated growth in NII expected are the benefits of asset repricing as fixed rate securities and loans and swaps roll off and those get repriced at higher rates. And those themes all remain consistent with our prior conversations with you in the last several earnings calls. With regard to interest rate sensitivity, on a dynamic deposit basis, we provide a 12-month change in NII for an instantaneous shift in the curve, above or below the forward curve. And on that basis, a 100 basis point increase would benefit NII by roughly $1 billion, while a decrease of 100 basis points would decrease NII over the next 12 months by $2.3 billion. Lastly, note that our slide showing the trended investment of excess deposits is in our appendix. It's on page 21. Deposit levels grew to $870 billion over loans at the end of Q4, and that's an incredible source of value for shareholders. And $649 billion, or 54% of our excess liquidity, is now in short-dated cash and available for sale securities. The longer-dated lower-yielding hold-to-maturity book continues to roll off, and we continue to reinvest in higher-yielding assets. Okay. Let's now turn to expense, and we'll use Slide 10 for the discussion. We reported $16.8 billion in expense this quarter. And the fourth quarter of '23 included the large FDIC special assessment charge and excluding that, expense increased. The increased expense from prior periods was driven by a number of factors and was partially offset by a roughly $300 million release of prior period accruals for the FDIC special assessment. Let's talk about the drivers of the expense. First, in regard to revenue, our markets-related businesses of investment banking, investment in Brokerage and Sales & Trading, those were up 20% year-over-year. Incentives for the firm were up 15% versus the fourth quarter of '23 and were in large part related to these market-related revenue streams. On investments that we made, we added bankers and advisers across most of our businesses in 2024, and we also increased investments in our brand with significant sponsorships like the Masters in FIFA to name a few. And we increased our investments around technology as well as financial centers. This quarter alone, we added 17 financial centers with nine of those in our new expansion markets. We're a growth company, and we continue to invest in our future. As far as head count goes, we've managed our head count carefully, and we've held it fairly flat through the 4 quarters of 2024 at around 213,000 people. Lastly, we incurred additional costs to accelerate work on compliance and controls. As you likely saw in late December, the OCC issued a compliance consent order to Bank of America, and that's a result of exams done more than a year ago. This orders about correcting or enhancing certain deficiencies in some aspects of our processes that existed at the time. The order doesn't limit any of our growth plans and the order acknowledges we began taking corrective actions before the order was announced. And as a result of the work in process, we increased our resources substantially in the second-half of 2024 and those costs are already embedded in our quarterly run rate. Okay. Let's go back to expense and how to think about a forward view. First, most importantly, we remain focused on growing the company and driving operating leverage. Second, we expect the first quarter to include some normal seasonal elevation and we believe this amount will be roughly $600 million to $700 million, primarily for payroll tax expense. So we think $17.6 billion is a good number to expect for Q1 and before seasonally declining in Q2. And that's all part of our expectation that expense should be roughly 2% to 3% higher in 2025, compared to 2024. Let's now move to credit and turn to Slide 11, where you can see net charge-offs of a little less than $1.5 billion, improving modestly compared to Q3. That's the fourth quarter now that net charge-offs are around $1.5 billion. We've seen consumer losses in a pretty stable range of $1 billion to $1.1 billion over those past few quarters. And on the commercial side, we saw losses of $359 million, which is down from the third quarter, driven by the continued decline in commercial real estate office losses. Net charge-off ratio this quarter was 54 basis points, down 4 basis points from the third quarter. We don't see overall net charge-offs or the related ratio changing much in 2025, without much change in current GDP or the employment environment, we expect the net charge-off ratio to be in the range of 50 to 60 basis points of loans for 2025. Q4 provision expense was $90 million lower than Q3 at $1.5 billion as reserve levels remain constant. And as it relates to reserve levels on a weighted basis, where reserved for an unemployment rate a little below 5% by the end of 2025, and that compares to the most recent 4.1% rate reported. On Slide 12, we highlight the credit quality metrics for both consumer and commercial portfolios. And there's nothing really noteworthy here that I want to highlight on this page. So let's move to the various lines of business starting on Slide 13 with Consumer Banking. That business made nearly $11 billion or 40% of the company's earnings in 2024. In the fourth quarter, Consumer Banking generated $10.6 billion in revenue and $2.8 billion in net income. Both grew modestly from the fourth quarter of '23 as fee improvement for card and service charges is now being complemented by the growth in NII. Consumer Banking continued to deliver strong organic growth with high-quality accounts and engage clients and they achieved a new record of client experience scores in December. The organic growth activity noted on Slide 3 includes more than 200,000 net new checking accounts, which now takes us to six years' worth of quarter-after-quarter growth. And we show another strong period of card openings and investment account growth. Investment balances grew 22% to $518 billion with full year flows of $25 billion and market improvement throughout the year. Expense rose 8% as we continued investments in our business. The biggest story in consumer this quarter is deposits because these are the most valuable deposits in the franchise. And in the last six months, we believe we've seen the floor begin to form after several periods of slowing decline. Consumer Banking deposits appear to have bottomed in mid-August at around $928 billion and ended the year at $952 billion on an ending basis. Looking at averages, you can see then the deposits grew $4 billion from the third quarter to $942 billion, all while our rate paid declined to 64 basis points. Finally, as you can see in the appendix, page 26, digital adoption and engagement continue to improve and customer satisfaction scores rose to record levels, illustrating our client appreciation of enhanced capabilities from these investments. On Slide 14, we move to Wealth Management, where the business had a very profitable year, generating $4.2 billion in earnings from nearly $23 billion in revenue. In 2024, our Merrill Lynch and Private Bank advisers added another 24,000 net new relationships. And the professionalism of these teams earned them numerous best-in-class industry rankings as you can see on Slide 27 in the appendix. With a continued increase in banking product usage from our investing clients, the diversity of revenue in the wealth business continues to improve. The number of GWIM clients that now have banking products with us continues to grow. And at this point, it represents more than 60% of our clients. Importantly, about 30% of our revenue remains in net interest income, which complements the fees earned in our advice model and those have also grown. Net income rose 15% from the fourth quarter of '23 to nearly $1.2 billion. In the fourth quarter, we reported revenue of $6 billion, growing 15% over the prior year and led by 23% growth in asset management fees. While expenses were up year-over-year, they grew slower than revenue creating the operating leverage in the business. Business had a 26% pretax margin and generated a strong return on capital of 25%. Average loans were up 4%, driven by growth in custom lending, securities-based lending and a pickup in mortgage lending. Deposits grew 2% from the third quarter, and the teams were quite disciplined on pricing of those deposits. Both Merrill and the Private Bank continued to see strong organic growth. And that helped to produce excellent asset under management flows of $79 billion this year, reflecting a good mix of new client money, as well as existing clients putting money to work. We also want to draw your attention to the continued digital momentum that you'll find on Slide 28. Because, for example, three quarters of Merrill bank and brokerage accounts were opened digitally this quarter. Slide 15 shows the Global Banking results and this business generating $8.1 billion or 30% of the company's earnings in 2024, and it continues to be the most efficient business in the company at less than 50% efficiency ratio. The business saw a nice rebound in investment banking fees in 2024, which we expect to continue in 2025. In Q4, Global Banking produced earnings of $2.1 billion. Pretax pre-provision results were flat year-over-year as improved investment banking fees offset lower NII and higher expense. The total earnings were down 13% year-over-year, driven by higher provision expense that came as a result of prior period reserve release. Investment banking fees were $1.7 billion in Q4, growing 44% year-over-year. This was led by mergers and acquisitions. We also saw strength across debt capital markets fees mostly in leverage finance and in equity capital markets fees and we finished the year strong, maintaining our number three investment banking fee position. The fourth quarter saw a strong momentum as the election results provided a lift to sentiment for a more pro-business climate and expectations for more deals to be completed. Expense in this business increased 6% year-over-year, driven by the 13% growth in non-interest income and continued investments in people and technology. The balance sheet saw good client activity, and it was muted somewhat by the strength of the U.S. dollar. Year-over-year flatness in Global Banking loans includes this foreign exchange impact and a $6 billion decline in commercial real estate from paydowns. Otherwise, loans in Global Banking were up 2%. Deposits have been growing for many quarters now with our commercial and corporate clients. And total global banking deposits are now up 10% year-over-year, reaching a new record. So we're seeing strong growth across all the categories from our corporate and commercial clients all the way from the larger end the business banking on the lower end. And we also saw a 10% growth in our international deposits. Turning to Global Markets on Slide 16, I want to focus my comments on results excluding DVA as we normally do. Our team continued their impressive streak of strong revenue and earnings performance. They achieved operating leverage, and they continue to deliver a good return on capital. For the year, record sales and trading results of nearly $19 billion grew 7% from 2023 and they've been growing consistently now on a year-over-year basis for almost three years. This led to $5.7 billion in full-year profits and represents more than 20% of the company's full-year results. In the fourth quarter, earnings of $955 million grew 30% year-over-year. Revenue and again, this is ex DVA, improved 15% from the fourth quarter of '23, as both Sales & Trading and Investment Banking fees improved nicely year-over-year. Focusing on sales and trading ex DVA, revenue improved 10% year-over-year to $4.1 billion. This is the first time we've recorded more than $4 billion in our Q4 results and it included Q4 records for both FICC and Equities. FICC grew 13%, while equities improved 6%, compared to the fourth quarter '23. FICC benefited from tighter credit spreads as well as increased volatility in interest rates, while equities benefited from increased activity around the U.S. election. Year-over-year expenses were up 7% on revenue improvement and our continued investment in the business. And then on Slide 17, you can see all other with a loss of $407 million in the fourth quarter. We spoke earlier about the fourth quarter ‘23 charges for BSBY and the FDIC special assessment charge. Their reversal impacts the comparisons on revenue, expense and net income in this segment. Otherwise, there really isn't anything significant to report here. Our effective tax rate for the quarter was 6%, and excluding discrete items and the tax credits related to investments in renewable energy and affordable housing, the effective tax rate would have been approximately 26%. Looking forward, we expect the tax rate for 2025 to be in a range of 11% to 13%. And this just includes our expectation for higher expected earnings in 2025 and relatively stable tax credits. Finally, this quarter, on page 18, we thought it was important to summarize some of the guidance points we talked through this morning, and we hope you'll find this page helpful. So in summary, we're looking for a strong growth in NII, and we'll look to both continue important investments in the franchise and drive operating leverage as we grow throughout the year. We aren't expecting much movement around credit based on a pretty solid economic outlook. And we remain with a very strong balance sheet with excess capital that we can deploy to grow the business and deliver back to shareholders as appropriate. So with that, I'll stop there. I thank everybody, and we'll open it up for Q&A.


Alastair Borthwick: Thank you, Brian. And I'll pick up on Slide 3, where we list some of the more detailed highlights of the quarter. And then, on Slide 4, we present the summary income statement. So, I'm going to refer to both of these together. As Brian mentioned, for the quarter, we generated $8.2 billion of net income, and that resulted in $0.94 per diluted share. Our revenue grew 13%, and that was led by a 25% improvement in net interest income, coupled with strong 9% growth in sales and trading results, excluding DVA. Our non-interest revenue was strong, despite three headwinds: First, we had lower service charges as commercial clients paid lower fees for treasury services, since they now receive higher earned rates on balances. And, obviously, that allows us to invest those funds to earn NII. On consumer, we had lower NSF insufficient funds and overdraft fees as a result of our policy changes announced in late 2021. Second, with lower asset management fees and that just reflects the lower equity market levels and fixed-income market levels. And, third, investment banking fees were lower, just reflecting the continuation of sluggish industry activity and reduced fee pools. Now, all that said, despite these headwinds, each of the three categories saw modest improvement from the fourth quarter levels. Asset quality remained strong, and provision expense for the quarter was $931 million. That consisted of $807 million of net charge-offs and $124 million of reserve build. And that reserve build compares to a reserve release in the first quarter 2022 of $362 million. Our charge-off rate was 32 basis points and still well below the fourth quarter of '19 when our pre-pandemic rate was 39 basis points. And, remember, 2019 was a multi-decade low. So, credit, obviously, remains quite strong. I want to make one other point on Slide 4 and that is simply to note that pre-tax pre-provision income grew 27% year-over-year compared to reported net income growth of 15%. So, let's turn to the balance sheet that starts on Slide 5. And you can see, during the quarter, our balance sheet increased $144 billion to $3.195 trillion. Brian noted our liquidity levels at the end of the period, those rose to more than $900 billion from December 31. That's $23 billion higher and it remains $324 billion above our pre-pandemic level in the fourth quarter of '19. Shareholders' equity increased $7 billion from the fourth quarter as earnings were only partially offset by capital distributed to shareholders, and we saw an improvement in AOCI of $3 billion due to lower long-term interest rates. The AOCI included more than $0.5 billion increase from improved valuations of AFS debt securities and that flows through CET1. And the remaining $2.5 billion due to changes in cash flow hedges doesn't impact regulatory capital. During the quarter, we paid $1.8 billion in common dividends and we bought back $2.2 billion in shares. Turning to regulatory capital, our CET1 level improved to $184 billion since December 31 and our CET1 ratio improved 14 basis points to 11.4%, once again, adding to our buffer over our 10.4% current minimum requirement as well as the 10.9% minimum requirement that we'll see on January 1st of 2024. That means, in the past 12 months, we've improved our CET1 ratio by 100 basis points, and we've supported our clients and we've returned $12 billion in capital to shareholders. CET1 capital improved $4 billion, and that reflects the benefit of earnings and the AOCI improvement, partially offset by the capital we've returned to shareholders. Our risk-weighted assets increased modestly and that partially offset the benefit to the CET1 ratio of the higher capital we generated. And then, our supplemental leverage ratio increased to 6%. That compares to a minimum requirement of 5% and leaves plenty of capacity for balance sheet growth, and our TLAC ratio remains comfortably above our requirements. So, let's spend a minute on loan growth, and we'll do that by turning to Slide 6, where you can see the average loans grew 7% year-over-year, driven by commercial loans and credit card growth. The credit card growth reflects increased marketing, it reflects enhanced offers and higher levels of card account openings. The commercial growth across the past year reflects the diversity of commercial activity across global banking and global markets and, to some degree, global wealth. And on a more near-term linked-quarter basis, loans grew at a much slower pace, partly driven by seasonal credit card paydowns after the fourth quarter holiday spending, and then commercial demand slowed in Q1 and we saw some paydowns by our wealth management clients as they lowered leverage as rates rose. So, let's turn to deposits and there's obviously been a lot of additional focus this quarter, so I want to spend extra time here and I'm going to start with Slide 7 and talk about average deposits. Just a few points we need to make before focusing on a more detailed discussion of the recent trends. Average total deposits for the first quarter were $1.89 trillion, that is down 2% linked-quarter and down 7% year-over-year. Our deposits peaked in the fourth quarter of 2021. And even as the Fed has continued to withdraw money supply, our deposits have held around $1.9 trillion, because there's a lot more industry deposits today in a much bigger economy today compared to pre-pandemic. Our average deposits were up 34% compared to our pre-pandemic Q4 '19 balance and the industry's deposits were up 31% to $17.4 trillion. So, we've obviously fared a little bit better than the industry. We put our pre-pandemic deposits for each line of business on the slide, so you can compare our balances then and now. I want to highlight consumer checking balances, which remained 53% higher than pre-pandemic. And as I think all of us would expect, GWIM combined client deposits are up a lesser 23%, as those are the clients that generally move their excess cash into other off-balance sheet products. And in global banking, you can see the rotation to interest-bearing across time as rates rose. So, let's get a little more granular and a little more near-term and we'll use Slide 8 for that, where you can see the breakout of deposit trends on a weekly ending basis across the last two quarters. You can also see that we plotted the timeline of Fed target and rate hikes on the top-left chart, just for comparison through time. In the upper left, you can see the trend of our total deposits. We ended Q1 '23 at $1.91 trillion, that's down 1%. And, as Brian mentioned, over the course of the past six months, those balances have been relatively stable. In consumer, looking at the top-right chart, we show the difference here in the movement through the quarter between the balances of low to no interest checking accounts, and the higher-yielding non-checking accounts and, across the entire quarter, we saw a modest $4 billion decline in total. Checking balances, obviously, have some variability around pay days in particular, but note the relative stability of checking deposits, because these are the operational accounts with money and motion to pay the bills and everyday living costs for families. I'd also point out that our checking balances were modestly growing even ahead of March 9th upheaval and continue to move higher through the quarter on the back of disruption. Lower non-checking balances mostly reflect money moved out of deposits and into brokerage accounts where we earn a small fee. Rate paid increased 6 basis points from the fourth quarter to 12 basis points on this [trillion dollars] (ph) of total consumer deposits and remains low, because of the 52% mix that is checking. Lastly, I just note that the rate movements in this business are concentrated in the small CDs and consumer investment deposits, which together represent about 5% of the deposits. In wealth management, as you would expect, it shows the most relative decline, and you can see the continued trend of clients moving money from lower-yielding sweep accounts into higher-yielding preferred deposits and off-balance sheet to other investment alternatives. Now, if we went back further, you'd see that roughly $90 billion has moved out of sweeps in the past year, which leaves $80 billion in these accounts. So, you can see how with the pace and size of rate hikes slowing, we expect the declines in balances to lessen from here. At the bottom-right, note the global banking deposit movement, where we hold about $500 billion in customer deposits. These are generally operational deposits of our commercial customers and they use that to manage their cash flows through the course of the year. Those were down $3 billion from the fourth quarter. And what's interesting to note is that, our total deposits in this segment have been stable at around $500 billion for the past six months and this business just continues to see rotation into interest-bearing. The mix of interest-bearing deposits on an ending basis moved from 49% last quarter to 55% in Q1. And, obviously, we pay increased rates on those interest-bearing deposits. And it's this rotation in global banking that's driving the rotational shift of the total company, and it's pretty typical and to be expected in this environment. So, in summary, our deposits continued to behave as we would expect. The cash transactional balances have shown some recent stabilization. And for investment cash, we've seen deposits moved to brokerage and other platforms for direct holdings of money market, mutual funds, treasuries, and we are capturing many of those flows as you see in our numbers, it's just we expect that to slow going forward. So, now that we've examined trends for the different lines of business, I want to make some important points about the characteristics of our deposit franchise using Slide 9, and this will just help reinforce for shareholders who own Bank of America that they're investing in one of the world's great deposit franchises, all of it based off of relationships we have with our customers and the value they place on the award-winning capabilities and convenience they have access to. So, starting from the top, focus first on consumer. You can see that more than 80% of deposits have been with us for more than five years, and more than two-thirds of our consumer deposits are balances with customers who have had relationships with the bank for more than 10 years. Also, more than three-quarters of these customers are very highly engaged in their activities with us. They are also, geographically, dispersed across the United States given our presence in 83 of the top 100 markets. Lastly, whether you look at consumers or small business, the value proposition is what's driving the same result. We've got long-tenured customers with deep relationships that are highly engaged. Turning to wealth management, you can see a similar story around long tenure and quite active relationships. The average relationship of our GWIM clients is around 14 years. And, again, these clients are very geographically diverse, they're also very digitally engaged, and we continue to see deepening around banking solutions and products of all types. There's lots of options for these clients that extend from their operational checking accounts all the way up through preferred deposit options, and then we also benefit from having great alternatives for them within our investment platform. On global banking, note that 80% of our U.S. deposit balances are held by clients who have had an account with us for at least 10 years. Furthermore, as we measure the number of solutions that clients have with us, we know that 73% of balances are held by clients that have at least five products on us and, just like the other businesses, they are highly diversified by industry and geography. So, those are some of the things that make our quality deposit base stable. So, now that we've walked through both loans and deposits, I want to transition a bit to make some points on balance sheet management and to focus on the liquidity we enjoy by having a surplus of customer deposits that far exceeds the loan demand of our clients today and far exceeded the loan demand of our clients pre-pandemic. Having the deposits alone doesn't pay the expenses to support these great customer bases and it doesn't mean much to our shareholders, unless we put them to work to extract the value of those deposits. So, that's what we're trying to illustrate and we want to show you how we do them. You can see that on Slide 10, where you note we had significant excess deposits over loans pre-pandemic. And during the pandemic, that increased -- that amount increased significantly. Before the pandemic, we had $0.5 trillion more in deposits than loans and that peaked in late 2021 at more than $1.1 trillion and it remains high at roughly $900 billion still today. That's the context as we talk about how we manage excess cash. So, let's turn to Slide 11. And here we're going to focus on the banking book, because our global markets' balance sheet has remained largely market funded. And just follow the graph from left to right. At the top of the slide, you note trend of cash and cash equivalents and the two components of the debt securities balances: available-for-sale and held-to-maturity. And you can see the trend of the overall combined cash and securities balance movement and it closely mirrors the previous slide's excess deposit trends, as you would expect. In 2020, deposits grew, while loans declined and that was pandemic borrowing from our commercial clients stopping and then quickly paying it off. Throughout 2020, as we put deposits to work, we took a number of actions to protect our capital and that included a buildup in hold-to-maturity, better aligning our capital treatment with our intent to hold those securities to maturity. We also hedged rate risk in the available-for-sale book using pay-fixed, receive-variable swaps. So, these securities acted like cash and they earned higher yields and guarded against capital volatility. As we entered the middle of 2021, it became more clearer that the stimulus payment would likely be the last one and, therefore, we believed deposits would be peaking. As a result, we stopped adding to our hold-to-maturity securities book. That book peaked in the third quarter of 2021 at $683 billion, $562 billion were mortgage backs, and the rest were treasuries. And all that's happened is that notional balances have declined in each of the past six quarters, ending the quarter at $625 billion. And within that, the mortgage-backed portfolio was down $67 billion to $495 billion. As rates began to rise quickly throughout 2022, the value of our deposits rose. And, at the same time, the disclosed market value of the hold-to-maturity securities has declined, resulting in a negative market valuation on those bonds. That negative market valuation peaked in the third quarter, came down in the fourth quarter, and it's come down another $10 billion in the first quarter. In our 10-K disclosure, we included a chart which shows the maturity distribution of our securities portfolio. And, I'd remind you, this is based on the maturity dates of those originations, i.e., the date of the last contractual payment. When we look at the actual cash flows of those bonds over time, it results in an average weighted life of the hold-to-maturity securities book of a little more than eight years. And as you can see, since the third quarter of 2021, we've continued to see increases in the overall yield on the balances due to both the maturity and reinvestment of lower-yielding securities as well as remix into higher-yielding cash. And, as you can see, with deposits paying 92 basis points, that compares to our blend of cash and government-guaranteed securities, which pays 290 basis points. So, we continue to benefit NII and yield. And, finally, one very important last point I want to make, which is on the improved NII of our banking book. Because, remember, we manage the entirety of our balance sheet. That includes our deposits and that's where you see the net interest income has improved significantly. NII, excluding global markets, which we disclose each quarter, troughed in the third quarter of 2020 at $9.1 billion, and it's now $5.4 billion higher on a quarterly basis at $14.5 billion in the first quarter of '23, and that's the acid test of managing the entire balance sheet. So, let's turn now to Slide 12 and focus on net interest income. On a GAAP non-FTE basis, NII in the first quarter was $14.4 billion and the FTE NII number was $14.6 billion. Focusing on FTE, net interest income increased $2.9 billion from the first quarter of 2022 or 25%, while our net interest yield improved 51 basis points to 2.2%. The improvement was driven by rates, and that includes reductions in securities premium amortization. Average Fed fund rates are up 440 basis points year-over-year. Relative to that increase in Fed funds, which has benefited all of our variable rate assets, the rate paid on our total deposits rose 89 basis points and the rate paid today on interest-bearing deposits is up 133 basis points. Average loan growth of $64 billion also aided the year-over-year NII improvement. Turning to a linked-quarter discussion, NII of $14.6 billion is down $222 million from Q4, and that's primarily driven by the continued impact of lower deposit balances and the mix shift into interest-bearing. It's also influenced by lower global markets NII, which, remember, still gets passed through to clients via higher non-interest income as part of the trading revenue. Excluding the $262 million decline in global markets' NII, the banking book NII of $14.5 billion, that was modestly higher as the benefit of increased short interest rates, some modest loan growth and some deposit favorability was offset by two less days of interest in the quarter. Turning to asset sensitivity on a forward basis, the plus 100 basis point parallel shift at March 31st stands at $3.3 billion of expected NII over the next 12 months from our banking book. 96% of that sensitivity is driven by short rates. Summary, the first quarter NII was $14.6 billion in this quarter on an FTE basis and that was a little better than our $14.4 billion expectation as we began the quarter since deposits and rate pass-throughs were both modestly better. Looking forward, based on everything we know about interest rates and customer behavior, we expect second quarter NII on an FTE basis to be around 2% lower compared to Q1. So, think about that NII as about $14.3 billion FTE, plus or minus, driven by expected deposit movements as well as lower global markets' NII, which again is offset in the trading revenue. So, let me remind you of some of the caveats when it comes to that NII guidance. First, importantly, it assumes that interest rates in the forward curve materialize and that includes one more hike and then a couple of cuts in 2023. We also expect funding costs for global markets client activity to continue to increase based on those high rates. And, as noted, the impact of that is still offset in non-interest income, and that obviously assumes our current client positioning and the forward rate expectations. We continue to expect modest loan growth. So, that's in our NII expectation as well, and it's driven by credit card and, to a lesser degree, commercial. And then, finally, we just expect lower deposits and rotational shifts towards interest-bearing, really for three reasons. First, we expect further Fed balance sheet reductions to continue to reduce deposits for the industry. Second, we anticipate lower wealth management deposits in the second quarter. That's pretty typical due to the seasonal impact of clients paying income taxes and, to a lesser degree now, a continuation of balance movement seeking better yields off-balance sheet. And, third, we just continue to expect some of the rotation of commercial deposits towards interest-bearing. Okay. Let's go to Slide 13, we'll talk about expense. And here what you can see is, in the first quarter, our expenses were $16.2 billion, that's up $700 million from the fourth quarter and it's driven by seasonal elevation from payroll taxes, mostly at $450 million, a little bit from higher FDIC insurance expense, that was another $100 million this quarter, and the cost of adding people, call that another $100 million. We ended the first quarter with a little more than 217,000 people at the company, that was 260 people more than year-end. During the quarter, we welcomed 3,000 additional people into the company in January, that's due to outstanding offers that we extended in the fourth quarter. That meant that our headcount peaked in January. That's a little more than 218,000. And, at the end of last week, we were down to 216,000. We continue to expect that to move lower over time and we expect, by the end of the second quarter, our full-time equivalent headcount will be roughly 213,000, excluding our summer interns. As we look forward to the next quarter then, we would expect Q2 expense to benefit from the reduction of the seasonal elevation of payroll tax in Q1, and we would also expect to see expense reductions coming from headcount reductions through attrition over time and our operational excellence work. So, we expect expense in Q2 to be around $400 million or $500 million lower than Q1, so think of that as around $15.8 billion, plus or minus, in Q2. And then further, we just expect continued sequential expense declines in the third quarter and then again in the fourth quarter as we benefit from continued headcount discipline and attrition through time. Now turn to asset quality on Slide 14, and I want to start the credit discussion by saying, once again, asset quality of our customers remains healthy and net charge-offs continue to rise from their near historic lows. Net charge-offs of $807 million increased $118 million from the fourth quarter. That increase was driven by credit card losses as higher late-stage delinquencies flowed through to charge-offs. For context, the credit card net charge-off rate was 2.21% in this first quarter and that compares to 3.03% in the fourth quarter of '19 pre-pandemic. Provision expense was $931 million in Q1, and that included a $124 million reserve build. That's obviously less than the $403 million build we took in the fourth quarter, and it reflects modest loan growth and an ever so slightly improved macroeconomic outlook that, on a weighted basis, continues to include an unemployment rate still north of 5% as we end 2023. We included a slide in the appendix this quarter that highlights the mix and credit metrics of our commercial real estate exposure. And I just wanted to remind everyone here, we've been very intentional around our client selection, very intentional around portfolio concentration, and deal structure over many years and, as a result, we've seen NPLs and realized losses that remain quite low for this portfolio. We had a total of $66 million of commercial real estate losses in 2022. 70% of that was in office loans and that resulted in an annualized loss rate of 26 basis points. In the first quarter, to give some perspective, our office loan losses were $15 million. We have roughly $73 billion in commercial real estate loans outstanding, that's less than 7% of our loan book. It's highly diversified by geography, and no part of the country represents more than 22% of the book. It's also very diversified across property type. Within property type, our office portfolio was $19 billion, it's about 2% of our total loans. The portfolio is roughly 75% Class A properties. And when we originate, they are typically around 55% loan-to-value. Even though we've seen some property value declines, this exposure still remain well secured. $3.6 billion is classified as reservable criticized. And even on the most recent refreshes on our toughest loans, we still have 75% LTVs. In our office book, $4 billion is scheduled to mature this year, another $6 billion in 2024, with the remainder spread over the following years. So, we continue to feel that the portfolio is well-positioned and adequately reserved given the current conditions. On Slide 15, for completeness, we highlight the credit quality metrics for both our consumer and commercial portfolios. And, with that, I'm going to turn it back to Brian to talk about the lines of business.

Bank of America provision expense first quarter