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 CET1 level first quarter

CET1 level improved $184 billion December 31


Bank of America CET1 ratio first quarter


Alastair Borthwick: Thanks, Brian. And on Slide 10, we present the summary income statement. I'm not going to spend a lot of time here because Brian touched on this and the highlights that we show on Slide 3. For the quarter, we generated $7.8 billion in net income, resulting in $0.90 per diluted share. Both of those are up the double digits from the third quarter of last year. The year-over-year revenue growth of 3% was led by improvement in net interest income, coupled with a strong 8% increase in sales and trading results, and that excludes DVA, and a 4% increase in investment in brokerage revenue driven by our Wealth Management businesses. Expense for the quarter of $15.8 billion included good discipline from our team, which allowed us to reduce costs from the second quarter, even as we continue our planned investments for marketing, technology and physical presence build-outs, including financial center openings and renovations. Asset quality remains stellar, and provision expense for the quarter was $1.2 billion. That consisted of $931 million of net charge-offs and $303 million of reserve build. The provision expense reflects the continued trend in charge-offs toward pre-pandemic levels and remains below historical levels. Our charge-off rate was 35 basis points, that's 2 basis points higher than the second quarter, and still below the 39 basis points we saw in the fourth quarter of '19. And as a reminder, that 2019 was a multi-decade low. 30-day delinquencies also remained below their fourth quarter '19 level. Lastly, our tax rate this quarter was 4%, driven mostly by higher-than-expected volume of investment tax credit, or ITC deals for the rest of the year. And we can expect other income in Q4 will reflect seasonally higher renewables investment losses when these projects get placed into service. Okay. Let's turn to the balance sheet that's on Slide 11. And you can see it ended the quarter at $3.2 trillion, up $31 billion from the second quarter. So not a lot to note here. The driver of the increase was a $34 billion increase in available for sales securities. With cash levels so high, we chose to reduce the cash and just put some of the money into short-term T-bills this quarter, and those earn essentially the same rate as cash. Our cash remains high at $352 billion. In addition to the cash level change, we saw another $11 billion decline in hold to maturity securities as those securities matured and paid down. And as Brian noted, global excess liquidity sources remain strong at $859 billion, that's down very modestly from the second quarter, and still remains approximately $280 billion above our pre-pandemic fourth quarter '19 level. Shareholders' equity increased $4 billion from the second quarter as earnings were only partially offset by capital distributed to shareholders. During the quarter, we paid out $1.9 billion in common dividends and we bought back $1 billion in shares to offset our employee awards. AOCI was $1.1 billion lower, reflecting both a modest decline in the value of AFS securities, modestly impacting CET1 as well as a small change in cash flow hedges, which doesn't impact the regulatory capital. Tangible book value per share is up 12% year-over-year. Turning to regulatory capital. our CET1 level improved to $194 billion from June 30, and our CET1 ratio improved 30 basis points to 11.9%. It's now well above our current 9.5% requirement as Brian noted. Risk-weighted assets declined modestly as loans and Global Markets RWA both moved lower. Our supplemental leverage ratio was 62% versus a minimum requirement of 5%, which leaves capacity for balance sheet growth and our TLAC ratio remains well above our requirements. LCR ratios remain well above minimums for BAC metrics and stronger at the bank level. Let's now focus on loans by looking at average balances on Slide 12. And loan growth slowed this quarter as a decline in demand for commercial borrowing more than offset our credit card growth. So we saw that lower commercial demand in lower revolver utilization among higher funding costs. And commercial balances were also impacted by term loan repayments due to borrowers accessing other capital market solutions. Focusing for a moment on average deposits and using Slide 13. Given Brian's earlier comments, I'll just note the comparisons. Relative to pre-pandemic fourth quarter '19, average deposits are up 33%. Consumer is up 36%, with consumer checking up 45%. And you can see the other segment comparisons on the page. Turning to Slide 14. Let's extend the conversation we’ve been having over the course of the past couple of quarters around management of our excess liquidity. This slide serves as a reminder of the size of our high-quality deposit book, the magnitude of deposits we have in excess of those needed to fund loans and the way we've extracted the value of that excess to deliver value back to our shareholders. The excess of deposits needed to fund loans increased from $420 billion pre-pandemic to a peak of $1.1 trillion in the fall of 2021. And as you can see, it remains high at $835 billion today. That $1.1 trillion of excess liquidity has always included a balanced mix of cash, available for sale securities, and securities we hold to maturity. In late 2020 and into 2021, we concluded that additional stimulus was going to remain in client accounts for an extended period, and we increased the hold to maturity securities portion so we could lock in value from those deposits. And we made these investments given the core nature of our customers' deposits. Note, the split of the shorter-term investments in cash and available-for-sale securities, and then the term hold to maturity securities. And I just draw your attention to just how much cash we have above the actual level we need to run the company. On the available-for-sale, we would just note the duration is less than six months as it's mostly all short-term treasuries. And the combination of the cash and available-for-sale securities represents about 47% of the total noted on this page in the third quarter of '23 to give us the balance we're looking for. And if we look at the hold-to-maturity book, it had grown from $190 billion pre-pandemic, peaking two years ago, and now falling to just over $600 billion currently. That $600 billion consists of about $122 billion in treasuries. Those will mature in a little more than six years, and about $474 billion in mortgage-backed securities and a few billion other. Hold to maturity securities peaked at $683 billion, and we're now down $80 billion from the peak and $11 billion in last quarter. That $80 billion decline from peak was all driven by the reduction of mortgages from $555 billion to $474 billion. With less loan funding needs over the past several quarters, the proceeds from security paydowns have been deployed into higher-yielding cash, and this mix shift has been happening at about a 300 basis point spread benefit for these assets. Given the increased cash rates, the combined cash and security yield has risen now to more than 3%. It's up more than 200 basis points since the peak size of the portfolio in the third quarter of '21, and it's risen faster than the rate paid on deposits. In fact, today, it's 178 basis points above what we pay for deposits. And remember also, we have $1 trillion of loans that are largely in floating rate in addition. From a valuation perspective, we did experience a decline in the valuation of the hold-to-maturity book this quarter, and that's in the context of mortgage rates reaching a two-decade high. Comparing the valuation change to the year-ago period, it worsened $15 billion. And over that same time period, we grew regulatory capital by $19 billion and hold global liquidity sources in excess of $850 billion. And importantly, as we move to Slide 15, I'll make one final comment here, which is the improved NII over this investment period. The net interest income, excluding Global Markets, which we disclose each quarter, troughed in Q3 '20 at $9.1 billion, that compares to $13.9 billion in the third quarter of '23 or $4.7 billion higher every quarter on a quarterly basis, and that gives a sense of the entire balance sheet working together. Okay. Let's now turn our focus to NII performance over the past quarter, and we'll talk about the path forward, and I'm going to use Slide 15 for that. On last quarter's call, we guided to expect Q3 NII to be about $14.2 billion to $14.3 billion on an FTE basis. Our third quarter performance turned out to be better than our guidance. And on an FTE basis, NII was $14.5 billion this quarter. We expect Q4 will be around $14 billion fully taxable equivalent, and that increases our full year guidance for NII in 2023 versus 2022 to 9% growth per year. We believe NII will hover around this expected fourth quarter $14 billion level, plus or minus, in the first half of next year, and then we anticipate modest growth in the half of 2024. By the time we get to the fourth quarter of 2024, we believe we can see NII up low single digits compared to the fourth quarter of 2023. The good news is we believe NII will likely trough around the fourth quarter level of $14 billion and begin to grow again in the middle of next year. I'd note a few caveats around that forward view I just provided. It includes an assumption that interest rates in the forward curve materialize and it includes rate cuts for the second half of 2024. It also includes an expectation of modest loan and deposit growth as we move into the second half of 2024. Focusing again on this quarter, $14.5 billion NII was an increase of nearly $700 million from the third quarter of '22, or 4%, while our net interest yield improved 5 basis points to 2.11%. The year-over-year improvement was driven by higher interest rates and partially offset by lower deposit balances. On a linked-quarter comparison, NII improved $239 million from Q2, and that comes from the benefit of an extra day of interest, a rate hike and higher global markets NII, partially offset by increased deposit pricing. And the net interest yield improved 5 basis points. Turning to asset sensitivity and focused on a forward yield curve basis, the plus 100 basis point parallel shift at September 30 was $3.1 billion of expected NII benefit over the next 12 months from our banking book. And that expects -- or that assumes no expected change in balance sheet levels or mix relative to our baseline forecast, and 95% of the sensitivity is driven by short rates. The 100 basis point down rate scenario was $3.3 billion. Okay. Let's turn to expense, and we'll use Slide 16 for the discussion. Previously highlighted that we guided you to a trend of sequential declines in our expense each quarter this year, and we achieved that in Q3 with our expense down $200 million to $15.8 billion. Additionally, we expect the fourth quarter to go down another couple of hundred million to $15.6 billion, excluding any FDIC special assessment. That would mean our fourth quarter expense of $15.6 billion, compared to the fourth quarter of '22, would be up by only $100 million or less than 1%. And we're proud of that work by the team, especially considering our regular FDIC insurance expense alone increased by $125 million quarterly starting in the first quarter of this year. So without that, we would be flat year-over-year in Q4. The decline this quarter from the second was driven by the reduction in litigation expense and lower headcount, offset somewhat by investments in inflationary costs. Our headcount is down nearly 2,800 from the second quarter to 213,000. And that includes the addition of 2,500 or so full-time campus hires we brought into the company. So that's good work by the team after we peaked at 218,000 in January month-end. And you see the movement here across the past year at the bottom left of the slide. As we look forward to next quarter, we'd add $1.9 billion of expense for the proposed notice of special assessment from the FDIC as a possibility. Absent that, we'd expect our fourth quarter $15.6 billion expense target to more fully benefit from the third quarter headcount reductions, and that will allow expense to continue the decline experienced throughout the year so far. All of that is going to set us up well for next year. Let's now turn to credit, and we'll turn to Slide 17. Net charge-offs of $931 million increased $62 million from the second quarter. The increase is driven by credit card losses as higher late-stage delinquencies flow through to charge-offs. For context, the credit card net charge-off rate rose 12 basis points to 2.72% in Q3, and it remains below the 3.03% pre-pandemic rate in the fourth quarter of '19. Provision expense was $1.2 billion in Q3, and that included a $303 million reserve build. It reflects a macroeconomic outlook that on a weighted basis continues to include an unemployment rate that rises to north of 5% during 2024. On Slide 18, we highlight the credit quality metrics for both our Consumer and our Commercial portfolios. And on Consumer, we just note that we continue to see the asset quality metrics come off the bottom. And for the most part, they remain below historical averages. 30 and 90-day consumer delinquencies still remain below the fourth quarter of 2019 as an example. Commercial net charge-offs declined from the second quarter, driven mostly by a reduction in office write-downs. And as a reminder, our CRE credit exposure represents 7% of total loans, and that includes office exposure, which represents less than 2% of our loans. We've been very intentional around client selection and portfolio concentration and deal structure over many years, and that's helped us to mitigate risk in this portfolio. We continue to believe that the portfolio is well positioned and adequately reserved against the current conditions. And in the appendix, we've included a current view of our commercial real estate and office portfolio stats we provided last quarter. We've also included the historical perspective of our loan book de-risking and our net charge-offs, and you can see all of those on Slides 36, 37, 38 and 39. Okay. Let's move on to the various lines of business and their results. And I'm going to start on Slide 19 with Consumer Banking. For the quarter, Consumer earned $2.9 billion on good organic revenue growth and delivered its 10th consecutive quarter of operating leverage, while we continue to invest for the future. Note that the top-line revenue grew 6%, while expense rose 3%. Reported earnings declined 7% year-over-year given credit costs continue to return to pre-pandemic level. And we believe this understates the underlying success of the business in driving revenue and managing costs, because PPNR grew 9% year-over-year. Much of this success is driven by the pace of organic growth of checking and card accounts, as well as investment accounts and balances, as Brian noted earlier. And expense reflects the continued investments by the business for their future growth. Moving to Wealth Management on Slide 20. We produced good results, and we earned a little more than $1 billion. These results are down from last year, due to a decline in NII from higher deposit costs, which more than offset higher fees from asset management. While lower this quarter, NII of $1.8 billion derives from a world-class banking offering, and it provides good balance in our revenue stream and a competitive advantage in the business for us. As Brian noted, both Merrill and the Private Bank continued to see strong organic growth, and they produced solid assets under management flows of $44 billion since the third quarter of last year, reflecting good mix of new client money as well as our existing clients putting their money to work. Expense reflects continued investments in the business as we add financial advisers and capabilities from technology investments. On Slide 21, you see the Global Banking results. And this business produced very strong results with earnings of $2.6 billion, driven by 11% year-over-year growth in revenue to $6.2 billion. Coupled with good expense management, the business has produced solid operating leverage. Our GTS, or Global Treasury Services business has been robust. We've also seen a steady volume of solar and wind investment projects this quarter, and our investment banking business is performing well in a sluggish environment. Year-over-year revenue growth also benefited from the absence of marks taken on leverage loans in the prior year-ago period. The company's overall investment banking fees were $1.2 billion in Q3, growing modestly over the prior year, despite a pool that was down nearly 20%. And we held on to number three position given our performance. Provision expense reflected a reserve release of $139 million as certain troubled industries and credits outside of commercial real estate continue to have improved outlooks. Expense increased 6% year-over-year, reflecting our continued investments in this business. Switching to Global Markets on Slide 22. The team had another strong quarter, with earnings growing to $1.3 billion driven by revenue growth of 10%, and I'm referring to results excluding DVA as we normally do. The continued themes of inflation, geopolitical tensions and central banks changing monetary policies around the globe have continued to impact both bond and equity markets. And as a result, it was a quarter where we saw strong performance in our FICC businesses, as well as a record third quarter in equities. Focusing on sales and trading, ex DVA, revenue improved 8% year-over-year to $4.4 billion. FICC improved 6% and equities improved 10% compared to the third quarter of last year. And at $1.7 billion, that's a record third quarter for our equities teammates. Year-over-year, expense increased 7%, primarily driven by investments for people and technology. Finally, on Slide 13, all other shows a profit of $89 million. So revenue improved from the second quarter, driven by the absence of prior period debt security sale losses and available-for-sale securities, and partially offset by higher operating losses on tax credit investments in wind, solar and affordable housing. As I mentioned earlier, our effective tax rate in the quarter was 4%, and that reflects a higher-than-expected volume of investment tax credits in which the value of the deals are recognized upfront. We also had a small discrete benefit to tax expense from a state tax law change. Excluding renewable investments and any other discrete tax benefits, our tax rate would have been 25%. And as we wrap up 2023, we expect our full year tax rate, excluding discrete and special items, such as the FDIC special assessment, we expect that full year tax rate should end up in the 9% to 10% range. So to summarize, we grew our earnings double digit year-over-year. We reported NII that was above our expectations, and we increased our full year expectations. We've managed costs aligned with our guidance and brought expenses down in every quarter so far this year, and we expect to do that again in the fourth quarter. We earned more than 15% return on tangible common equity. We returned $2.9 billion in capital back to shareholders, including a 9% dividend increase. And we built 30 basis points of CET1, positioning us well for the proposed capital rules. So all in all, it was a strong quarter. It was one where our teams executed well against responsible growth. And with that, David, I think we'll open it up for the Q&A session.


Alastair Borthwick: Thank you, Brian, and I'm going to start on slide six of the earnings presentation. I'll touch on more highlights noted on slide six as we work through the material. I just want to say upfront that we delivered strong returns with return on average assets of 85 basis points and a return on tangible common equity of nearly 14%. So let's move to the balance sheet on slide seven, where you can see we ended the quarter at $3.26 trillion of total assets, relatively unchanged from the first quarter. And not much to note here apart from a mixed shift of lower securities balances, mostly offset by an increase in reverse repo and modest loan growth, as well as global markets client activity. On the funding side, deposits declined $36 billion on an ending basis, reflecting typical seasonal customer payments of income taxes. And as Brian noted, average deposits were still modestly higher. Liquidity remained strong with $909 billion of global liquidity sources that was flat compared to the first quarter. Shareholders' equity was also flat compared to Q1, as earnings were offset by $5.4 billion in capital distributed to shareholders and a $1.9 billion redemption of preferred stock in the quarter. The $5.4 billion of capital contributions included $1.9 billion in common dividends and the repurchase of $3.5 billion in shares. AOCI improved modestly in the quarter and tangible book value per share of $25.37 rose 9% from the second quarter of last year. In terms of regulatory capital, our CET1 level improved to $198 billion and the CET1 ratio was stable at 11.9%. This 11.9% ratio remained well above our current 10% requirement, as well as our new 10.7% requirement as of October 1, 2024. Risk-weighted assets increased modestly and that was driven by lending activity. Our supplemental leverage ratio was 6% versus our minimum requirement of 5% and that leaves plenty of capacity for balance sheet growth. And our $468 billion of TLAC means our total loss-absorbing capital ratio remains comfortably above our requirements. Brian already covered deposit trends, so let's turn the balance sheet focus to loans and we'll look at average balances on slide eight. You can see average loans in Q2 of $1.051 trillion. They improved 1% year-over-year, driven by 5% credit card growth and modest commercial growth. The modest improvement in overall commercial loans included a 2% increase in our domestic commercial loans and leases, partially offset by a 4% decline in commercial real estate. Middle market lending saw an uptick in the quarter, and we saw good demand in our wealth businesses from custom lending. These areas of growth were largely offset by continued paydowns from our larger corporate clients on interest rate sentiment. Consumer growth was driven by credit card borrowing, and while home lending balances were flattish, originations picked up a bit this quarter. Lastly, and on a positive note, loan spreads continued to widen. As we turn our focus then to NII performance and slide nine, note that we moved the slide we typically use to talk about excess deposits to the appendix on slide 22, so you can see that there. Our excess deposit levels above loans remained high at $850 billion and continue to be a good source of value for shareholders. 52% 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 reinvested again this quarter in higher-yielding assets. The blended yield of cash and securities continued to improve in the quarter and is now 160 basis points above our deposit rate paid. Regarding NII, on a GAAP [Technical Difficulty]


Brian Moynihan: Thank you, Lee, and good morning and thank all of you for joining us today. Before I begin today, I just want to reflect a second on the horrible events this weekend. We at Bank of America are clear that there's no place for political violence in our great country, and we continue to wish the former President Trump a speedy recovery. And our thoughts, of course, go out to the victims and their families and others impacted by this terrible event. With that, let's turn attention to the results for the second quarter of 2024 at Bank of America Corporation. This quarter, we achieved success in a number of areas, underscoring the benefits of our diversity and the dedication of our team to deliver responsible growth. Our organic growth engine continues to add customers and activity to all our businesses, even as we see the drop in net interest income this quarter. I'm starting on slide two. Our net income for the quarter was $6.9 billion after tax or $0.83 in diluted EPS. Attesting to the balance in our franchise, the earnings were split evenly, half in our consumer and GWIM businesses, which serve people, and the other half in our institutional-focused business global banking and markets. We grew revenue from the second quarter of 2023 as improvement in non-interest income overcame the decline in net interest income. Fees grew 6% year-over-year and represented 46% of total revenue in the quarter. Our strong fee performance was led by a 14% improvement in asset management fees in our wealth management businesses. We grew investment banking fees 29% year-over-year and saw sales and trading revenue increase 7%. Global Markets had its 9th consecutive quarter of year-over-year growth in sales and trading revenue, a good job by Jimmy DeMare and his team. Card and service charge revenue also grew by 6% year-over-year in our Consumer business. Much of this fee growth is a result of our intensity around organic growth, and is a testament to the diversity of our operating model. Now on to slide three. Organic growth has been driven by several key factors. First, we focus on our customers. We continue to place them at the center of everything we do. Consumer led the way in delivering solid organic growth with high-quality accounts and engaged clients. For the 22nd consecutive quarter, we had significant net new consumer checking accounts. We expanded our customer base and our market share. Specifically, we added 278,000 net new checking accounts this quarter, which brings our first six months of 2024 to more than 500,000. In wealth management, we added another 6,100 new relationships this quarter. In our commercial businesses, we added 1,000s of small businesses and 100s of commercial banking relationships. This has led to now managing $5.7 trillion in client balances, loans, deposits, and investments across the consumer and wealth management client segments. In those areas, we saw flows of $58 billion in the past four quarters. Our emphasis on personalized financial solutions and superior customer service has strengthened customer loyalty, attracted new clients across all our businesses. Our focus on providing liquidity and risk management solutions to our institutional clients positions to continue to gain more share of the wallet as well. Second, we continue to deliver innovative digital solutions. One of the primary contributors of both attracting and retaining customers to our platforms is our digital banking capabilities for our clients across all the businesses. Our fully integrated consumer banking investment app drives the utility for our customers across their investment and consumer accounts. Our use of stats are strong proof points. Our second language capabilities in our consumer businesses further enhance our customers' capabilities. You can see the continued digital growth in the slides on pages 26, 28, and 30 in the appendix. A couple highlights. Our consumer mobile banking app now serves more than 47 million active users. They logged in 3.5 billion times this quarter. We also continue to see more sales through the use of our digital properties. Digital sales represented 53% of our total sales in the past quarter in our consumer businesses. 23 million consumers are now using Zelle. They send money on Zelle at nearly 2.5 times the rate they write checks. And, in fact, more Zelle transactions -- send transactions take place than a combination of customer ATM transactions, cash withdrawals, and tellers. Simply put, Zelle has become a dominant way to move money. In our wealth management business, we are seeing more banking accounts being opened to complement the investment business those clients do with us. Importantly, these clients are also recognizing the ease of our digital banking capability. 75% of our new accounts and our Merrill teammates were open digitally. 87% of our global banking clients also are digitally active. We have innovated and significantly streamlined service requests by enabling clients to directly initiate and track transaction inquiries within our awarded CashPro platform, using AI to accomplish that. Third, we continue to make core strategic investments in our businesses. We're not complacent with the success you see on this page. We continue to strategically invest in our core businesses. A few examples, while we have the leading retail deposit share in America, we continue to invest and have opened 11 new financial centers this quarter -- in this first-half of the year and renovated another 243. This is an investment in both our expansion markets and our growth markets. In wealth management, we continue to invest in our advisor development program. It's grown to 2,300 teammates, allowing us to continuously add more than -- teammates to our 18,000 strong best-in-class financial advisory force across all our wealth management businesses. We're also adding teams of experienced advisors strategically in areas across the country. In our banking teams, we continue to add to our regional investment banking team. We now have more than 200 regional bankers across the country to better serve our commercial clients, and they complement our industry coverage to our corporate clients. In our global markets business, we continue to extend balance sheet to our clients in adding expertise and talent to continue to lead our market share improvements seen over the last several years. We also have increased our technology initiatives and expect to spend nearly $4 billion on technology initiatives this year. We have focused projects around artificial intelligence enhancements with both clients and our teammates. A recent example of our use of AI is our advisor and client insights tool. We've delivered more than 6 million insights here today to our financial advisors, providing them proactive reasons to engage our clients. AI has moved from cost savings ideas to enhancing the quality of our customer interactions. Fourth, organic growth is driving integrated flows across our business. We invest heavily in each line of business that compete in the markets based on their particular customer segment. But importantly, we also invest across our lines of business to knit them together and gain market share in the local markets. It's a differentiated advantage for us, our banking leadership position across our businesses and our nationwide franchise. For example, we leverage our franchise by connecting business customers with wealth management teams. Our teams across all our businesses have made 4 million referrals to other businesses in the first six months of this year. Next, we drive efficiency and effectiveness, and that's through our operational excellence platform. We continue to invest heavily in the future of our franchise and growth, while we also have to manage expenses day-to-day. Our focus on operational excellence has enabled us to hold our expense growth up to 2% year-over-year, well below the inflation rates. We continue to work to achieve operating leverages as NII stabilizes and begins to grow again. As you look at it now, Alistair will explain later, a fair portion of the year-over-year increase in expense is due to the formulaic incentives of wealth management due to the peak growth of that business. And last, our capital strength allows us to deliver for all our stakeholders. Our capital remains strong as we held our CET1 ratio at 11.9% this quarter. We grew loans, increased our share repurchases to $3.5 billion and paid $1.9 billion in dividends. Average diluted shares dropped below 8 billion shares outstanding. In addition, we also announced our intent to increase our quarterly dividend 8% upon board approval. Note that with 11.9% CET1 ratio, we remain in a solid excess capital position, both above the current regulatory requirements and the increased requirement to 10.7% beginning in October as a result of the recent CCAR exam. Let's turn to slide four. A couple things to note here. First, we've noted for several quarters that the second quarter NII would be the trough for this rate cycle. We expect NII to grow in the third quarter and fourth quarter of this year. Alistair is going to provide you some points in detail about the path forward. One of the important contributors to that change is deposit behaviors of our customers. On slide four, you'll note that average deposits grew 2% year-over-year and increased modestly linked quarter. The second quarter, in reality, is typically a heavy outflow quarter. We have a lot of customers who pay a lot of taxes in that quarter. Quarter-over-quarter increases in rates paid continue to slow again this quarter across all businesses except for wealth management. And we show you that on this page, slide four, by line of business. While wealth business deposit rates have moved higher with continued rotation, we expect those rates to begin to stabilize and the rate of quarterly change to decrease going forward. Turning to slide five, in previous calls, many of you asked questions or commented upon the question about consumer net charge-offs and when would they stabilize in the second-half of 2024. That expectation we have remains unchanged as well. This quarter's net charge-offs were 59 basis points. And for context, this is a stabilization of the rate. I would just remind you that prior to this quarter, I have to go all the way back to 2014 to see a charge-off rate of that high. And that's near when we were still emerging from the financial crisis. On slide four, we highlight the 30 and 90-day-plus credit card delinquency trends, which showed delinquencies have plateaued for the second consecutive quarter. This should lead to stabilized net credit losses in credit card in the second-half of the year. At the bottom of the page, note a couple of facts. First, on the payment rates. This is the rate of paydown on balances in a given month remain 20% above index to the pre-pandemic levels, even while our card customers have plenty of capacity to borrow. And importantly, because we're relation-based businesses, look at the right-hand slide at the bottom of page five. There you can see our deposit investment balances of our customers, who also have a card with us, remain 25% above their pre-pandemic levels, illustrating continued health of these customers. So if you think about consumer credit, the card charge-offs drive it, and they flattened out in terms of delinquencies, and we expect an improvement in the second-half. With regard to commercial real estate, our usual CRA credit exposure slide is included in our appendix. We continue to aggressively work through our loans in our modest CRA office portfolio. We saw a decrease in all the categories, a decrease in reservable criticized loans, a decrease in NPLs, and a decrease in net charge-offs. This supports our previous expectation that net charge-offs in the second-half of 2024 will be lower than the first-half of 2024. Our second quarter performance highlights Bank of America's ability to generate strong, sustainable growth through a combination of customer-centric strategies, innovation, strategic investments, and a commitment to a strong balance of risk and reward. We call that responsible growth. We're confident that focused approach will continue to drive long-term success and create value for you, our shareholders. Now I will turn it to Alistair for additional results.


Alastair Borthwick: Thank you, Brian, and I'm starting on Slide 5 of the earnings presentation. We'll touch on more highlights noted here as we work through the material, and I'd just add that we delivered solid returns with a return on average assets of 83 basis points and return on tangible common equity of 12.8%. So let's move to the balance sheet on Slide 6, where you can see that the balance sheet ended the quarter at $3.3 trillion of total assets, up $66 billion from the second quarter, as global markets client demands expanded and commercial loans grew $16 billion in the quarter. Otherwise in the quarter, the investments of our excess liquidity saw a $10 billion reduction in hold to maturity securities, and the combination of shorter-term liquidity investments of cash and available for sale securities were relatively flat for the second quarter. On the funding side, global markets grew to support balance sheet needs of our clients and total deposits grew $20 billion on an ending basis. It's noteworthy that our average deposits are now up for the fifth consecutive quarter. Liquidity remains strong with $947 billion of global liquidity sources, and that was up $38 billion compared to the second quarter. Shareholders' equity was up $2.6 billion, with common equity up $4.6 billion and a preferred redemption driving a $2 billion decline in preferred equity. The increase income and equity compared to Q2, included $5.6 billion in capital returned to shareholders, partially offsetting our earnings, and it included an improvement in AOCI driven by an improvement from cash flow hedges given the drop in long-term rates in the quarter. $5.6 billion in capital distributions includes $2 billion in common dividends and the repurchase of $3.5 billion in shares. Tangible book value per share of $26.25 rose 10% from the third quarter of '23. And turning to regulatory capital, our CET1 level improved to $200 billion and the CET1 ratio was 11.8%. And that remains well above our new 10.7% requirement as of October 1. Risk weighted assets increased modestly, driven by both lending activity and global markets needs to support clients and our supplemental leverage ratio was 5.9% compared to the minimum requirement of 5%, which leaves plenty of capacity for balance sheet growth. Our $463 billion of total loss-absorbing capital means our TLAC ratio remains comfortably above our requirements. So let's dig a little deeper on deposits and the growth from the second quarter using Slide 7. Here, we show you deposits and rates by line of business. Average deposits grew $45 billion, or 2% year-over-year, and they increased modestly linked-quarter. Notably, quarter-over-quarter increases in rates paid continue to slow again this quarter, rising 7 basis points to 210 basis points. Consumer Banking increased modestly, driven by product mix and higher rate product offerings. And Global Banking rate paid increased modestly driven by growth in interest bearing balances. It's worth noting that wealth management declined a basis point. We acted quickly following the September 50 basis point rate cut in our wealth business and our Global Banking business, and since late in the quarter, only a small portion of those cuts are reflected. Total rate paid for all deposits from these actions is expected to fall below 2% later in October, as the fuller effect of the pass-throughs occur. Let's turn to loans by looking at average balances on Slide 8. Loans in Q3 of $1.06 trillion improved 1% year-over-year driven by solid commercial loan growth as well as credit card and vehicle loans. Overall, commercial loans grew 2% year-over-year. And importantly, this included a drop in commercial real estate loans of 6%. Commercial loans, excluding commercial real estate, grew 3% year-over-year and were up 6% annualized from the Q2. Consumer banking loan growth was driven by credit card, small business and vehicle borrowing, and the overall consumer growth was muted by a decline in mortgage balances as pay downs exceeded originations in a higher rate environment. Let's turn our focus to NII performance and Slide 9. So note that our trended investment of excess deposit slide is in our appendix on Page 21. Deposit levels were $855 billion in excess of loans at the end of Q3 and continue to be a good source of value for shareholders. Nearly $625 billion or 52% of our excess liquidity is in short dated cash and AFS securities. The longer dated lower yielding hold to maturity book continues to roll-off, and we reinvest that in higher yielding assets. The blended yield of cash and securities on Page 21 remains well above our deposit rate paid. So going back to Slide 9, regarding NII on a GAAP, non-FTE basis, NII in Q3 was $14 billion and on a fully tax equivalent basis, NII was $14.1 billion. On our Q3 earnings call last year, we first provided our expectation that the Q2 would be the trough and then we would begin to grow in the Q3 of '24, marking an inflection point for NII. And that's what you see this quarter. NII increased by $252 million from the Q2 driven by a number of factors. Global Markets activity and pricing, fixed asset repricing and one extra day all benefited NII, while higher funding costs partially offset those benefits. A 50 basis point rate cut in September also negatively impacted NII. With regard to a forward view of NII, there are obviously several variables at play in the Q4, and we still expect Q4 NII to grow, and we expect it to be $14.3 billion or more on a fully tax equivalent basis. Now we note the following assumptions. First, we assume that the forward curve on October 10, is the one that materializes, so that includes a 25 basis point cut in November and another 25 basis points in December. We also assumed very modest balance increases in both loans and deposits in Q4, building off the activity seen in Q3. Last quarter, we told you we expect about $20 billion in the aggregate of fixed rate loans and securities to reprice on a quarterly basis, and those are expected to reprice into higher yielding assets and provide a benefit to NII for many periods ahead. And as described previously, we expect to see roughly $200 million benefit in Q4 from the BSBY alternative rate transition. So we think this sets us up well for 2025. With regard to interest rate sensitivity on a dynamic deposit basis, we provide a 12-month change in NII for an instantaneous shift above or below the forward curve. On that basis, a 100 basis point increase would benefit NII by $1.8 billion, while a decrease of 100 basis points would decrease NII over the next 12 months by $2.7 billion. Okay, let's now turn to expense and we'll use Slide 10 for the discussion. We reported $16.5 billion in expense this quarter, up 1% from the second quarter, driven by the revenue improvement in three primary areas that Brian noted earlier. Investment banking, investment broke - and brokerage fees and sales and trading revenue all have more activity and incentive variability than other revenues, and they were up 3% in aggregate versus the second quarter and up 13% year-over-year. In Q3, our headcount of 213,000 was up a little more than 1000, and this quarter we saw the departure of roughly 2,000 summer interns and we welcomed roughly 2500 college graduates from the nearly 120,000 applications received. Regarding a forward view in Q4, we don't expect much change in our headcount, and with continued investments we expect expense to be in line with Q3 at $16.5 billion. As we look into 2025, with an expected return of NII growth and through our expense discipline, we expect a return to operating leverage, an improvement in our efficiency ratio. Let's turn to credit on Slide 11. And the good news is there's not a lot to report here compared to the second quarter. Net charge-offs of $1.5 billion were flat compared to Q2. We've seen consumer losses in a pretty tight range for a few quarters now. Outside of that, we saw lower losses from office exposure and otherwise we had two somewhat unrelated commercial losses. The net charge off ratio was 58 basis points, down one basis point from Q2. Provision expense was unchanged from Q2 at $1.5 billion as reserve levels remain constant. And with regard to reserve levels on a weighted basis, we remain reserved for an unemployment rate of 5% by the end of 2025 compared to the most recent 4.1% rate reported. On Slide 12, we highlight the credit quality metrics for both our consumer and commercial portfolios, and there's nothing really noteworthy to highlight on this page. So let's move to the various lines of business and some brief comments on their results, starting on Slide 13 with consumer banking. Consumer banking continues to lead the company in organic growth, and this included another strong quarter of net new checking growth, another strong period of card openings and investment balances for consumer clients, which climbed 28% year-over-year to a record $497 billion. It also included 12-months of strong flows at $29 billion in addition to market appreciation. As noted earlier, loans grew nicely year-over-year from credit card and vehicle as well as small business, where we remain the industry leader. One highlight to note, our Practice Solutions Lending Group for doctors and dentists and related professionals saw loans grow 11% year-over-year. All of this organic growth helped to drive $2.7 billion in net income in Q3. So reported earnings remained strong, declining 6% year-over-year as revenue declined from lower NII, partially offset by higher card income. With the trajectory shifting in NII, we should see earnings in this business begin to shift as well. Expense rose 5% as we continued our business investments. And those investments included those in our people, including the announcement of moving our minimum wage to $24 per hour and that raises the minimum annualized salary for our associates to nearly $50,000. As you can see on the appendix Page 25, digital adoption and engagement continue to improve and customer satisfaction scores remain near record levels illustrating the appreciation of enhanced capabilities from our continuous investments. Bank of America's 23 million Zelle users are up 10% in the past 12-months and their volume usage is now up more than 20%. Customers are now using Zelle at nearly 3x the rate they're writing checks, and Zelle usage has meaningfully surpassed the combination of checks written and ATM withdrawals. Moving to Wealth Management on Slide 14. We produced good results, reflecting healthy organic growth and client activity with increased banking activities of our clients and the impacts of increased market levels together with strong assets under management flows. With a continued increase in banking product usage from our investing clients, the diversity of our revenue base continues to improve. More than 60% of our wealth clients now have banking products with us and 30% of our revenue is now in net interest income to complement the fees earned in our advice model. Net income rose from the third quarter '23 to $1.1 billion this year. In Q3, we reported revenue of nearly $5.8 billion growing 8% over the prior year, led by 14% growth in asset management fees that Brian highlighted earlier. Expenses growth reflects the fee growth and other investments for our future growth as we continue to grow our advisor force through hiring of both experienced advisors and graduates from our training program. We welcomed 5,500 Merrill and Private Bank net new households this quarter and more than 1/3 of those Merrill openings were driven by graduates from our training program. The business had a 25% margin and generated a strong return on capital of 23%. Average loans were up 3% year-over-year, driven by growth in custom lending and a pickup in mortgage lending. Both Merrill and the Private Bank continue to see healthy organic growth, producing strong assets under management flows of $65 billion year-over-year, which reflects a good mix of new client money as well as existing clients putting money to work. We should also highlight the continued digital momentum that you'll find on Slide 27. As an example, three quarters of Merrill Bank and Investment accounts were opened digitally this quarter. On Slide 15, you see Global Banking results. This business produced earnings of $1.9 billion down 26% 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. In our global treasury services business, fees for managing the cash of clients continue to offset some of the NII pressure from higher rates. Investment banking had a strong quarter, growing fees 18% year-over-year to $1.4 billion, led by debt capital markets fees, mostly in leveraged finance and investment grade. We finished the quarter strong, maintaining our number three investment banking fee position. What began as a slow quarter this summer gained some momentum through September and the pipeline looking forward looks solid. An increase in provision expense from last year was driven by the previously noted commercial and CRE losses. Expense increased 7% year-over-year, including continued investments in the business, particularly around technology. Switching to global markets on Slide 16. I’ll focus comments on results excluding DVA as we normally do and the team continued their impressive streak of strong revenue and earnings performance. They achieved operating leverage and continued to deliver good return on capital. Earnings of $1.6 billion grew 23% year-over-year and return on average allocated capital was 14%. Revenue again, ex-DVA improved 14% from the third quarter of last year as both sales and trading and investment banking fees for institutional clients improved nicely year-over-year. Focusing on sales & trading, ex-DVA revenue improved 12% year-over-year to $4.9 billion. FICC increased 8% while equities increased 18% compared to the third quarter of '23. FICC revenues remained strong growing over both the prior year and the second quarter, driven by momentum in currencies trading. Equities had a record third quarter driven by strong trading performance in derivatives and cash. Year-over-year expenses were up 6% on revenue improvement and our continued investment in the business. Finally, on Slide 17, all other shows a loss of $295 million. Revenue was lower and included a charge to other income of roughly 200 million related to Visa's increase in its litigation escrow account. The decline in expense was driven by reduced costs of a liquidating business and lower legal expense. 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 24%. So that's where I'll stop, and with that we'll open it up for Q&A.

CET1 level $200 billion CET1 ratio 11.8%


CET1 ratio 11.8% new 10.7% requirement as of October 1


Brian Moynihan: Thank you, Alastair. And we're going to begin on Slide 16. So, I want to bring us back to the things that drive the long-term value of this franchise and the value for you, our shareholders. Every business segment grew customers and accounts organically in the quarter and use digital tools and capabilities to drive engagement even deeper and also to drive customer satisfaction to industry-leading levels. On Slide 16, we've highlighted some of the important elements of organic growth. I won't go through all the line items here, but, in consumer, we saw -- we opened 130,000 net new checking accounts, 1.3 million credit card accounts, and 9% more investment accounts, that aided to record quarter one consumer investment flows. Consumer also has now -- have -- has had 17 quarters of positive net new checking accounts. In global wealth, we had a record quarter, adding 14,500 net new wealth relationships. In global banking, we had our clients increase the number of products per relationship. In global markets, as we said earlier, Jim DeMare and team had one of the highest quarters of sales and trading. The other elements of earnings the management team remains focused on throughout this inflationary environment is our expense management efforts and -- but, even given those, we continue to make investments in the future. We continue to streak up operating leverage in our account and you can see that on Slide 17 -- in our company and you can see that on Slide 17. We now had seven quarters of operating leverage. The efficiency ratio went to 62%, and the nominal dollars of expenses we have today are similar to what we had 10 -- eight, nine, 10 years ago. As we go to Slide 18, let's talk about individual businesses, and consumer banking first. For the quarter, consumer banking earned 31 -- $3.1 billion on good organic revenue growth and delivered its eighth consecutive quarter of strong operating leverage, while we continue to invest in future. Top-line revenue grew 21%. Expenses rose 11%. These results demonstrate the true value of the $1 trillion deposit franchise and the deep relationship we have with the clients in that business. The business continues to have $700 billion in excess deposits over its loan balances. And, as we said earlier, we grew checking accounts $2.5 million -- 2.5 million new checking accounts, since the pandemic started. Solid earnings growth of 4% understates the success of this business as prior year included reserve releases, while we built reserves this quarter. On a pre-tax pre-provision basis PPNR grew 34% year-over-year. I'll also note that the revenue growth overcame a decline in service charges as a result of us lowering our NSFOD charges for customers several quarters ago. The expense in the consumers reflect the continued business investments for growth, including adding relationship associates, further develop increases in the cost of technology and implementation of new tools. As you think about this business, remember, much of the company's minimum wage hikes during 2022, the ones we made mid-year in addition to our March of $25 an hour, impact this business more than any other business. However, it has helped drive the attrition in this business in half compared to last year this quarter. On Slide 19, you can see some of the digital statistics around consumer. We believe that those digital tools, our customers have access to it, are the key to growing and retaining customer relationships. These tools also help us deliver more efficiently. We now have 45 million users actively engaged with our digital properties. They login 1 billion times a month. Erica, our artificial intelligence-driven personal assistant, saw usage rise 35% just in the past year. The number of our customers using Zelle grew 21% in the past year. Remember, these aren't new functionalities just being put in place, these are growing off a high scale and showed the Bank of America impact on these products. On Zelle, remember, back in mid-2021, Zelle transactions crossed the number of checks written for our clients. Now, at 60% higher, less than two years later. And you can see the growth in digital sales that continues. We remained focused on growing the customer base and delivering the best-in-class tools and service that make us more efficient and more important to our clients in the consumer business, and Dean Athanasia and team continue to do a good job with respect to those goals. On Slide 20, we move to wealth management. We had good results, earning about a little over $900 million after tax for the quarter. These results were down from last year, as Alastair said, as asset management fees fell with the negative market levels in equity and fixed income. Those fees were mitigated by the beneficial impact of revenue from the sizable banking business within this line of business for us. As I noted a moment ago, both Merrill and the Private Bank saw organic revenue growth and provided solid client flows at $25 billion in the quarter. Our assets under management flows of $15 billion reflects some of the movement in deposits noted earlier, but we also saw a $33 billion of brokerage flows. Expenses reflects lower revenue related incentives, but also reflects continued investments in the business as we continue to add financial advisors. We've added more than 650 wealth advisors in the past year alone. As we move forward, we are excited to have Eric Schimpf and Lindsay Hans lead this business. They work closely with Katy Knox to drive our global wealth and investment management business across the company. As we go to global wealth and investment management digital on Slide 21, you can see the statistics here. Just as with the consumer business, these clients become more and more digital engaged across time. Our advisors have led the way in driving a personal-driven advice model, supplemented by our digital tools. On Slide 21, you can see the client digital adoption rate of 84% with Merrill and the Private Bank is over 90%. More than 75% embrace digital delivery of their statements, which, as a key tool of their service, providing more convenience for them and our advisor. Erica and Zelle interactions continue to grow here also, even among these wealthy clients. On Slide 22, you see the global banking results. This business produced very strong results, growing revenue 19% year-to-year to $6.2 billion. The business earned $2.6 billion after tax. While investment banking remained sluggish, our global treasury services business has been robust, leading to strong revenue performance. Loan activity has been good across this business also. As noted earlier, the deposit flows appear to have stabilized in March and we benefitted from some customer flows during the flight to safety during the quarter. The company's overall investment banking fees were $1.2 billion in quarter one. And while down from quarter one '22, we saw a modest improvement from quarter four of '22. Provision expense declined year-over-year as prior year's reserve builds compared to release in the current period. Credit quality of this business, again, remains very strong. Expense increased 10% year-over-year, driven by strategic investments in the business, including relationship manager hiring and technology costs. Digital engagement, as shown on Slide 23, with our global banking customers. These commercial customers continue to grow in importance as treasuries and others appreciate the ease of doing business with us through these tools. While the volume of transactions in sheer numbers [aren't] (ph) the same as consumer, the volume of money moved is tremendous. Next business, we'll go towards our global markets business on Slide 24. Jim DeMare and the team had another strong quarter of results, growing year-over-year earnings to nearly $1.7 billion after tax. The continued themes of inflation due to political tensions and central banks changing monetary policies around the globe drove volatility in the bond and equity markets, which his team did a good job of managing. As a result, this quarter, we saw a strong performance in our credit trading business, particularly in mortgages and muni trading and macro trading again fared well buoyed by strong client activity and secured financing. Investments made in this business over the last few years continued to produce favorable results. Just to focus on the sales and trading numbers alone, ex-DVA, revenue improved 9% year-over-year to $5.1 billion. FICC improved 29%, while equities were down 19% compared to quarter one of 2022. Year-over-year expense increased 8%, primarily driven by continued investments as stated in this business. Finally, on [Slide 5] (ph), you can see the all other shows a modest loss, which includes the $220 million losses in securities sold, as Alastair mentioned earlier. And last, I would note our 10% effective tax rate this quarter continues to benefit us from a strong business with clients, supporting environmental investments, in-housing investments to produce tax benefits. Excluding those and the other discrete tax benefits, our tax rate would have been 26%. So, in summary, a strong quarter by our team delivered for you, our shareholders, operating leverage, organic growth, strong credit, capital return, and strong ROTCE. With that, let's jump to Q&A.

consumer bank 130,000 net new checking accounts


Brian Moynihan: Thanks, Lee, and good morning to all of you, and thank you for joining us. I'm starting on Slide 2 of the earnings presentation. This morning, Bank of America reported one of the best quarters and one of the best first halves net income in the company's history. Our results this quarter once again include solid performance on things we can control by delivering organic growth and operating leverage. We did that in economy that remains healthy that had a slowing rate of growth. It was also a quarter that included volatility from the debate about the debt ceiling, continuation of central bank monetary tightening actions and a slowing in consumer spending and the slowing inflation. As you look at it now, our customer spending patterns now are more consistent with the pre-pandemic, lower growth, lower inflation economy. Before Alastair takes to details, let me summarize Bank of America's quarter two performance. On Slide 2, you can see the highlights. We earned $7.4 billion after tax, and grew earnings per share of 21% over the second quarter of 2022. All business segments performed well, and I want to thank all my teammates for doing so. We grew clients and accounts organically and at a strong pace. We delivered 8th straight quarter of operating leverage, led by 11% year-over-year revenue growth. We further strengthened our balance sheet, improving our common equity Tier 1 ratio more than 110 basis points year-over-year to 11.6%, and we have $867 billion in Global Liquidity Sources. We also produced strong returns for our shareholders with a return on tangible common equity of 15.5%, continuing a streak of many quarters at that level or above. While our business has performed well this quarter, I would particularly highlight our global markets and sales and trading team, and our investment banking teams. Both have appeared to outperform the industry peers, investments made over the past couple of years and global markets capabilities under Jim DeMare's leadership, as well as Matthew Koder's leadership in the global corporate investment banking area allowed us to improve our market shares for both of these people. I'd also note the strong contribution by our middle-market clients and our teammates there led by Wendy Stewart. I'd also like to touch a few additional points before turning the call over to Alastair. These points will help illustrate continued investment in the franchise and work we do to drive growth. Let's start with the organic growth slide on Page 3. On that page, we highlight some of the important elements of organic growth. You can see evidence in every business segment as you look at the page. In consumer, in quarter two, we opened 157,000 net new checking accounts. Consumers now had 18 straight quarters of positive net new checking account growth. Now these are core primary checking accounts across the board, allowing our tremendous deposit franchise to continue to prosper and take market share. While the progress here made pier inch meal over the last three years, we've grown our core customers in consumer checking account customers from 33 million to 36 million. We opened another one million-plus credit card accounts this quarter, and have 10% more investment accounts this year than we did last year in the consumer business. Consumer investment business balances reached a new high of $387 billion aided by a 30% increase in new funded consumer investment accounts year-over-year, and frankly moving our money from our depositors into the market as they have done so. In Global Wealth, we added 12,000 net new relationships in Merrill and the Private Bank, and our advisors open more than 36,000 new banking relationships in the quarter, showing a strong differentiation of our model of fulfilling both investment in banking these for clients. In the past 90 days, we added 190 experienced advisors to our salesforce in addition to digital capabilities to help us deliver at scale. In Global Banking, we added clients and increased number of solutions per relationship. Over the past three years, we've added net new relationship managers and increased our client facing headcount by nearly 10%. We've also improved our tools for prospect colleagues through investments in technology, and it's benefiting our ability to add customers and improve our solutions per existing clients. Year-to-date, we've added over 1,000 new commercial and business banking clients across the United States, which is the same number we added in the full year of last year. Again, operationalizing that ability to do this at scale increases our speed of onboarding these clients. In our global markets area, we saw one of the highest second quarter for sales and trading in our history, so another quarter of good organic growth. To achieve that growth, we are managing our expense trajectory, which Alastair is going to cover, requires inherent efficiency progress from digital and other applied technology across all our units. Digital superiority is key to our operating dynamics. First, it produces a great customer experience resulting strong customer retention and strong customer scores. Second, it ensures our position as a lead transactional bank for our customers, whether they are consumers, companies or investors. Third, it preserves a strong deposit balance as a good price and do the core nature of transactional deposits. And last, but importantly not least, efficiency. So, how we're doing on digital progress? You can see that on Slide 4, first with the consumer. In consumer, we now have 46 million active users that are digitally engaged with our digital platform and are logging over 1 billion times a month. And even with this scale, the stage of maturity logins is up double digits from last year. Customer uses of Erica continues to be at expectations. This was an early application of natural language processing and artificial intelligence that we built in our company, and it continues to learn about with additional use. Interactions with Erica rose 35% in just the past year, and now it's crossed over 1.5 billion client interactions in the first five years of introduction. There's a lot of questions about our artificial intelligence out there, but one [indiscernible] together a series of systems. We have to build a system and it's highly regulated, high customer-focused business, and Erica is one such application you can see its impact. Likewise, Zelle hasn't slowed down either. The number of people using Zelle grew 19% this past year. Remember, these aren't new functionalities at this point, they've been around for years, but they continue to grow very strong growth rates, showing customer desire and acceptance of the activities. You can see the digital sales continue to growth. We continue to have both great high-tech and high-touch options. As part of that, we've added 310 new financial centers since 2019, and by the end of this year, we have refurbished every one of our existing centers in our company. We plan on opening 50 more centers a year for the next few years, which included an expansion in nine new markets we announced a few years ago - a few weeks ago, excuse me Our entrance into these markets is enhanced by digital and leads to strong early success. Just to give you a point of reference, for all the expansion markets over the last several years for branches opened a year or more in those expansion markets, our average deposit balances per those branch are $160 million in each branch. You go to the wealth management digital on Slide 5, you can see that they continue to be the most digitally engaged clients in our company. Our advisors have led the way in driving a personal driven advice model, supplemented by our digital tools. You can see the client adoption rate of 82% in Merrill and 92% in the private bank, 78% have embraced digital delivery as a tool service providing more convenience for them and our advisors. Erica and Zelle also continue expanding these client sets. A new program we announced just a few quarters ago has generated 20,000 digital leads to 7,000 advisors, it's called Advisor Match, matching our clients with advisors of their choice. On Slide 6, you can see the digital engagement of global banking area. Corporate treasury teams and our clients appreciate the ease of doing business with us digitally. CashPro App sign-ins are up nearly 60% from last year, where the value of payments through CashPro App are up 20%. As you can see, every line of business is delivering strong organic growth. Investments made in technology have enabled us to grow industry leading positions in digital tools, while enabling our clients to do great things and making us more efficient. This provides for a very satisfied, stable customer and client base with Bank of America's primary provider. And by doing with a digital application, that also produces operating leverage. On Slide 7, you can see our streak of operating leverage continued in the second quarter of 2023. We're now back in eight quarters in a row. The chart on Slide 7 covers the 8.5 years at 34 quarters, and all but eight of those quarters and you can see those identified. Six of which were in the heart of the pandemic, we've achieved operating leverage. Operating leverage is that simple task of growing revenue at a better growth rate and expense. As I said, Alastair's is going to discuss with you our good and declining expansion trajectory which sets us up to continue to provide operating leverage, even with the shift in economy. In sum, in the quarter, we delivered earnings that are 19% higher and a 15% return on tangible common equity that was driven by continued strong organic growth and operating leverage in a volatile economic environment. Alastair is going to talk to you about a bit more strength we see ahead in our net interest income for the balance of the year and that provides a better start as we think about 2024. You're going hear our expectations for the quarterly decline expenses in the following quarters for the rest of '23, even as we keep investing, and you hear about the resilience of credit and strong trajectory in capital, this all positions us well to continue both our streaks of organic growth and operating leverage. With that, let me turn it over to Alastair.

consumer net new checking accounts quarter two


Brian Moynihan: We prefer to grow deposits in line with customer growth and activity. So in the last four quarters, Consumer I think were up another 900,000. Net new checking accounts, which average balance is around $11,000, they come in lower than that and mature after that. We grow -- we have a transactional banking business for all types of customers and we grow irrespective of it. That produces $2 trillion. You have a loan business to customers, that produces $1 trillion, and that difference then is a wonderful thing to have every day.

Consumer net new checking accounts last four quarters


Net new checking accounts average balance