Bank of America (BAC) 18 Apr 232023 Q1 Earnings call transcript

Good day, everyone, and welcome to the Bank of America Earnings Announcement. At this time, I'd like to turn the program over to Lee McEntire. Please go ahead, sir.

Thank you, Catherine. Good morning. Welcome. the review joining results. first for you call our to quarter Thank trust chance documents. a has review I had release to everybody our earnings They on earnings to are of the we'll website. available, referring be the presentation bankofamerica.com during Investor the that call, Relations section this including

Borthwick, to Alastair the Moynihan; turn discuss to going over to CFO, I'm Brian the CEO, call and our quarter.

me refer we may this statements and to But financial that call. before make you I just remind do, during non-GAAP let measures forward-looking

on based to our are those Our current Factors expectations might filings subject statements forward-looking detailed actual earnings from and assumptions, management's the website. SEC materially that risks that in and and expectations are differ uncertainties. are and materials our results available cause those to on

measures, GAAP, our on non-GAAP to our reconciliations in found the can be materials, about and are U.S. earnings Information financial those also website. available including

with So, over Brian. Thank will you. it that, I to turn

you of morning, all X Slide of thank joining starting on for you the Good and us. materials. I'm

produced we one Bank trust put, in of in Simply quarter. its earnings America well. of clients preparedness the our franchise. the decade-long a of model reflects growth and first and operating relationship numbers and core a The strength challenged EPS, that of environment company responsible our environment navigated Your highest of nature

importantly, growth one, engine organic quarter During continued to perform.

quarter. over to take Alastair to you first me it details and some summarize of the turn Let the I'll points, through

our quarter strong organically 'XX. growing We by a year-over-year leverage, business of well. Slide XX% a go segment operating you pace. at Bank accounts growth. We straight America quarter and clients strong X to of materials, Every and grew EPS revenue led If of delivered over seventh XX% first the delivered earnings, performed

maintained balance Liquidity in at highest We further sheet, Sources. XX.X%. at liquidity. capital quarter with $XXX ratio level Regulatory our billion We Global ended than to more $XXX the nominal in the billion. history strong ended with strengthened CETX our increasing our We

XXX return team We are per occur on as economy that research a this remember, average to points basis assets. common you with continues in year-over-year. grew share XX%, Tangible shallow did value equity We a our beginning in XXXX. good shareholders, And, on slowed. returns for the as our quarter predict return a recession X% tangible three of the book will of

spending continued we America. when a the healthy. interesting, U.S. our quarter little pay still It's and at at than We've of year-over-year a pace, out card but card behavior, to X% seen their economy. consumer less consumer things spending at by Bank slower payments represents look how credit about accounts consumers of debit growth remember, But, drive of for

After our customers' sources a were as quarter. pace XXXX in quarter. half of from parts about in payments back of Overall X% latter Year-to-date, up slowing across for March X% of the were back saw year-over-year payments they quarter especially the the bit, one, the a month. -- we all payments up up in accounts for the picked

and have positions with They're credit. access strong continue balances, good wages, have employed financial higher Consumers' to healthy. account to generally generally remains

As continued deposits you quarter, the the to $X.XX quarter yielding of perform tightening ending and all flows at investments actions Fed, alternative past disruption think assets, the the our the the well, through trillion. to

had about mid-October in you we If same that it, XXXX. think that's about balance of the

the XX% remain So, we've pandemic. prior were seen these above balances to they in stabilize and

a them we near-record by The drive periods to well during I earnings team with control very returns. through our thank things on for franchise. these remaining strong quarter, strong managed the has value focused can

details the call to Let to me of turn Alastair quarter. the over through walk the

Brian. you, Thank

summary list more income And then, we quarter. some X, X, on on up detailed highlights Slide where the pick Slide the I'll we of present the of statement. And

together. these So, I'm of going to to refer both

mentioned, Brian share. generated and the billion that per $X.XX for we diluted net $X.X resulted of quarter, in income, As

led grew revenue coupled with interest in improvement sales XX% strong income XX%, X% results, net was by and a and DVA. trading that excluding Our growth in

obviously, strong, result was XXXX. fees those lower for that charges clients in earned funds service First, we three allows lower since invest our consumer, we On receive of to non-interest commercial rates balances. as despite And, headwinds: announced us as fees NSF Our to had earn treasury late now lower changes and they revenue funds on insufficient NII. had overdraft paid policy higher services, a

lower asset the lower, industry reduced third, lower continuation banking just were And, pools. that fixed-income sluggish fee just equity levels. fees reflecting levels with the and management reflects Second, investment market of fees market and and activity

Now, despite from three the said, fourth modest categories headwinds, all improvement of levels. the saw these quarter that each

and Asset million XXXX of net strong, $XXX of build And remained million. million. expense the consisted for in quality of that $XXX That quarter of quarter a the reserve provision $XXX was first release to build. reserve and reserve charge-offs $XXX compares million

a and basis was the low. quarter of was Our pre-pandemic when And, points. charge-off points XXXX well XX remember, still rate was multi-decade 'XX basis below rate our fourth XX

remains strong. obviously, quite credit, So,

X I to reported that simply income XX%. of compared make pre-provision note that other want growth one pre-tax to income net grew year-over-year to point and on Slide XX% is

of And trillion. that to at during levels noted the $XXX increased sheet $X.XXX X. see, to quarter, higher balance quarter the our of Brian on So, balance liquidity can our in the those $XXX the let's end sheet billion That's level above remains the billion you starts billion our 'XX. billion XXst. and $XXX to $XX it turn fourth pre-pandemic Slide rose from period, than December more

and from Shareholders' earnings and due the improved in of long-term AOCI due lower we AOCI flows equity offset billion doesn't shareholders, billion capital. of $X billion more $X.X The fourth through partially rates. to regulatory to CETX. distributed the saw an by were only capital $X in flow improvement interest quarter as billion securities increased hedges changes $X.X than And that included increase from AFS remaining to debt cash valuations impact

back common bought shares. in we paid in During $X.X $X.X quarter, the billion we dividends and billion

capital, once our basis XX.X%, XX.X% again, we'll ratio to XX January billion our ratio as to on that improved over requirement our months, we've XXX That returned to our improved basis capital points, level Turning regulatory to and to Xst CETX by as XX.X% improved $XX CETX December XX current well the in points see we've XXXX. our past of adding our since requirement CETX we've $XXX billion means, the and minimum in XX minimum clients shareholders. and supported buffer

$X CETX and returned benefit that of the AOCI by to capital and the shareholders. the reflects we've capital earnings offset improvement, partially improved billion,

leaves benefit requirements. increased of generated. a ratio increased and then, assets risk-weighted That of growth. for to offset of the X% to our sheet comfortably our compares capital our we CETX higher modestly Our that requirement the And balance leverage capacity And ratio supplemental the TLAC above X%. plenty and ratio minimum partially to remains

that degree, on activity openings. reflects it credit the increased global So, commercial reflects loan marketing, driven year global credit levels markets to you we'll do by some commercial card and growth. of the card account and, grew and see X% can diversity higher growth, turning spend growth and past X, the loans year-over-year, a Slide let's minute reflects where and of The global by to average wealth. banking across commercial loans The enhanced across growth offers card

seasonal spending, fourth loans by rates partly lowered we driven as clients then at And a much in paydowns rose. slowed card grew QX slower some as and commercial holiday near-term quarter credit pace, basis, saw leverage wealth on management by after a more paydowns the demand and our they linked-quarter

extra there's time obviously going deposits so to turn of Slide focus deposits. and been and start talk and let's here about average additional I'm quarter, this So, to a want to spend with lot X I

of more recent on trends. Just before a discussion few need make the detailed points we to focusing a

deposits total X% for trillion, the that and X% down were is linked-quarter $X.XX Average first year-over-year. quarter down

has of today peaked as in $X.X bigger there's And deposits to a money deposits XXXX. to our around economy deposits supply, Fed quarter compared have industry the pre-pandemic. held because continued withdraw much a Our today in lot trillion, even more fourth the

were XX% trillion. XX% the 'XX Our average up pre-pandemic deposits $XX.X our to were up balance and industry's to QX deposits compared

line we've our balances obviously little now. you than can put so a deposits fared slide, pre-pandemic So, industry. business the for better and then compare of the We each bit our on

see consumer interest-bearing XX%, into as lesser checking the rates And which expect, as balances, think XX% the would remained up than to are banking, of other are as in highlight pre-pandemic. all higher you that to products. rose. a us excess deposits those sheet rotation I generally cash want GWIM can their time I across And clients global combined client move off-balance

two quarters. little on ending breakout little and So, granular use where of weekly let's you we'll more X trends that, get the Slide and basis across last near-term more a a can the see for deposit a

on You we just the target rate can and the also chart, see of for through that time. comparison timeline top-left plotted Fed hikes

total QX the of of upper In have left, stable. mentioned, been the our And, trillion, the $X.XX deposits. over trend you relatively We see can six 'XX Brian past ended down those course balances as that's X%. months, at the

and and, here at a checking to the In accounts we the non-checking modest operational checking the across looking pay days low show consumer, total. for accounts are the the accounts, balances costs Checking deposits, saw money between the bills and living higher-yielding movement billion quarter but interest top-right families. in pay motion entire of particular, we chart, no in quarter, the to variability around stability difference the obviously, through these the $X in some have note decline the and balances, with relative because of everyday

out accounts ahead our to earn reflect on modestly also disruption. Lower brokerage through higher continue were Xth of I'd where out the March even that moved into growing mostly and balances non-checking upheaval checking of we back small point a and deposits money the balances fee. move of quarter

Rate the remains of because and is of [trillion fourth that deposits to basis checking. on XX% from points points X XX total basis quarter dollars] this paid mix low, consumer the increased (ph)

rate small deposits. note are just which this business together the Lastly, the the CDs of X% movements in about in consumer I and deposits, represent investment concentrated that

trend it decline, money higher-yielding you sweep alternatives. other accounts the from In the investment shows into wealth you lower-yielding management, clients most relative sheet deposits moving would to and see and preferred can as expect, off-balance continued of

of see in has year, moved Now, which if sweeps in we roughly went past the $XX back $XX further, you'd that out these accounts. leaves billion billion

we slowing, of to hikes lessen with expect So, size from see the the and you pace here. balances how in declines rate can

into banking in down the of billion about are movement, commercial $XXX interest-bearing. our around this were Those the deposits At global for the year. to quarter. generally is where total of rotation that through business interesting use they from manage and and what's continues customer deposits cash note course this deposits. in flows past bottom-right, customers stable our $XXX These hold the the segment And we deposit operational note billion that, months at $X been fourth to to billion the just have see six their

on ending pretty XX% The mix be quarter on from and moved global in company, pay an rates of deposits. interest-bearing in expected driving And, deposits it's of shift the and And in total this we this QX. to it's that's rotational banking increased last those environment. rotation obviously, basis the to interest-bearing XX% typical

mutual flows our platforms to forward. So, And in stabilization. as recent expect. that see transactional it's numbers, are cash, holdings in summary, market, The we deposits cash some seen our deposits expect balances to behave money to of going capturing funds, other as for direct we we've those we treasuries, would for many just brokerage and investment continued slow of moved and have shown you

deposit that now for points about trends they to will of just help to. customers access the for using the relationships investing deposit of shareholders great they're who this some and world's and off with convenience important one capabilities based and Slide of make in reinforce business, the different they that have franchise of award-winning place of examined America Bank own our want franchises, our value So, the characteristics it I X, of all lines we the on we've have

So, the starting top, from focus consumer. first on

years. the in of their activities with these balances with see had more than been markets. and than our dispersed of States of Also, deposits our for five who highly than deposits relationships XX us for across that than customers have given with top are presence more XXX years, us. three-quarters in more They more more can very of are United engaged than customers consumer XX% bank have geographically, the with XX the You are two-thirds also,

driving what's whether We've the look or small the Lastly, is relationships at with customers business, that highly proposition you deep are consumers engaged. got result. same value long-tenured

of and years. platform. of you their our Turning digitally similar are all And, to relationships. story deepening we also these through around for the all again, way long very engaged, There's and see to wealth from options, average alternatives continue management, types. of diverse, GWIM relationship products and checking is around can banking see quite these The geographically up XX lots then from also clients active for tenure around a we very they're clients accounts having investment deposit solutions great and extend our them operational benefit that options within preferred clients

XX% just banking, are of an us, of us highly held the that held us on five products by are that and by our balances by businesses, know we least deposit as are diversified the clients have Furthermore, years. of have who they with note clients at XX% have measure with and, industry clients least geography. like that other On balances global account for number U.S. at XX we solutions that had

quality of So, some base those deposit our are stable. make that things the

we've alone transition a the and loan want exceeded to having work put doesn't of our deposits, to enjoy some liquidity the now today of our shareholders, the that sheet far through clients Having extract these customer support great we on the to loans deposits expenses the So, both make customer surplus exceeds bases balance we to unless to our loan that pay of demand I it to of value deposits focus demand to doesn't clients far by bit points walked and and much the and management those on a deposits. them mean pre-pandemic.

to trying and to show we them. So, how you do we want illustrate we're what that's

deposits pandemic, You can excess the where on loans had Slide And that you during see -- note significant that over increased amount increased XX, pre-pandemic. we that significantly.

billion talk manage and more in in Before trillion trillion late the $XXX today. context how than that deposits and cash. still we at pandemic, about loans roughly we high we $X.X at remains That's the had it XXXX $X.X more peaked excess than as

banking So, going from of remained graph left book, focus has global top to we're right. let's balance note the on turn our just And And the you here sheet the funded. the market held-to-maturity. trend and balances: to Slide markets' XX. of to because trend largely as components And excess slide's overall the cash would the the and At slide, deposit debt of can cash and and and previous equivalents balance the the it movement available-for-sale you trends, expect. combined you securities of mirrors securities two cash see closely follow

as grew, deposits it took we our borrowing buildup pandemic treatment in a securities intent loans with that our work, our put and declined and our from while included clients deposits protect those was XXXX, of stopping and better hold quickly that capital a commercial hold-to-maturity, In then actions paying we to off. to aligning to Throughout maturity. number to capital XXXX,

available-for-sale swaps. the also receive-variable We using rate hedged pay-fixed, in risk book

So, guarded these volatility. securities and cash and acted earned higher like they yields against capital

believed and, became it clearer stimulus of therefore, the As the one be we last peaking. the middle we likely would would deposits XXXX, payment entered more that be

that declined $XX that's notional each portfolio the the $XXX $XXX And in happened book at all were result, rest in quarter adding billion hold-to-maturity of within quarters, and $XXX billion backs, have to that, of $XXX third at past billion, is stopped That the As ending securities the down our billion. six the book. billion. quarter XXXX was to peaked treasuries. were a And mortgage-backed we balances mortgage

in the And, and down began billion resulting at quarter, rates of a another come came market negative the in on value That the securities $XX market negative bonds. down disclosed XXXX, third As deposits first it's to the valuation quarter. value in declined, throughout valuation those peaked the quarter, has fourth the rise in market of the our quickly time, hold-to-maturity rose. same

an it average years. payment. of the chart this of at i.e., we based the When of distribution dates you, XX-K In on contractual than our results a the is portfolio. book I'd last securities of flows shows actual our included disclosure, securities little a which in And, those more cash over look time, maturity bonds date of the remind those we of maturity originations, weighted hold-to-maturity eight life the the

as third of yield to can in as balances since quarter see continued the on we've maturity of deposits XXXX, due see, as and lower-yielding points, can securities well into And blend you XX And, see, increases you securities, overall to cash as and that pays with the cash. reinvestment which of basis higher-yielding remix our the paying compares government-guaranteed points. to basis the both XXX

and benefit to NII we So, continue yield.

markets, to we make, is entirety improved our quarter test has NII, billion income of higher that's excluding 'XX, which last first on see the in we billion, of and That includes now Because, quarterly improved And, point basis disclose the on interest troughed managing billion acid it's book. significantly. and our a global the the of important at want XXXX I NII finally, the deposits balance remember, at entire where our each quarter, $XX.X balance very of sheet. net of and you the $X.X manage that's which banking sheet. third the $X.X one in quarter

let's So, $XX.X was now Slide NII and NII income. XX number quarter GAAP a net non-FTE $XX.X and On in billion. focus FTE interest to the the first on was billion turn basis,

points reductions rates on is rates, and aided Average $XX the deposits rate of our XXXX are our growth of on XX funds, billion to the and fund which yield The today rose our up the basis points. also XXX points or the on year-over-year rate year-over-year. to rate that has Average first increase while in total income was Relative billion amortization. X.X%. XXX improvement. loan paid points FTE, quarter NII basis up net securities deposits of premium $X.X Fed paid interest improvement interest-bearing assets, XX%, that basis improved Focusing driven all increased from benefited variable in interest XX net includes basis by Fed

Turning by which, of markets to passed trading global continued revenue. shift that's as $XX.X driven a lower impact through $XXX clients billion the income into also QX, part million down deposit influenced gets is the NII, lower the linked-quarter and by non-interest discussion, and of mix of NII via still primarily interest-bearing. from remember, It's balances to higher

favorability NII, interest some growth by in as interest NII two modestly short increased book $XXX of the the markets' that $XX.X decline higher million quarter. was in global deposit loan billion, offset modest of the some benefit days less Excluding the rates, was of banking and

basis, plus March by basis at shift XXX that short sensitivity stands parallel to XX on forward of sensitivity driven rates. our a is billion the Turning the NII from point $X.X next XX% asset months of banking book. at XXst over expected

the a and we billion than little expectation on better. both the $XX.X was were basis Summary, our NII was quarter this as and began modestly $XX.X since quarter billion pass-throughs that quarter first in FTE an better rate deposits

we about on and everything NII X% on rates interest lower to behavior, forward, to an FTE Looking compared we QX. based know expect quarter basis second around customer be

that or again which global NII as movements plus $XX.X markets' FTE, driven about offset NII, expected as lower So, is minus, billion revenue. by think deposit well as the about trading in

So, comes guidance. you NII to let when remind caveats me it the of some of that

hike couple interest cuts one and the importantly, rates assumes of that it a forward curve more First, materialize XXXX. that in in and then includes

that noted, our current expect impact high obviously rate is assumes rates. still costs positioning of increase income, to markets offset those as also on to for We that the and client in and client funding forward non-interest the continue expectations. And, based global activity

modest We loan expect continue to growth.

and, lesser our and by it's that's as expectation driven a degree, So, well, commercial. credit in to card NII

And interest-bearing, shifts expect and lower for we three reasons. deposits finally, just rotational towards then, really

reduce expect deposits sheet we Fed the reductions to further balance to First, industry. for continue

some due sheet. continuation the the wealth commercial in third, of balance clients off-balance pretty we to second income lower typical anticipate rotation movement quarter. paying yields of we management deposits a seasonal deposits seeking of of impact the degree interest-bearing. taxes towards continue just and, lesser a Second, to to That's now, expect better And,

Okay.

fourth about billion, from talk And our from million XX, $XXX little of the payroll $XXX see go this $XXX can were and expense, cost expenses Let's it's $XXX million the $XX.X adding that's quarter, quarter, insurance call expense. elevation mostly people, quarter to what FDIC that up in we'll driven is, taxes, seasonal first here Slide the from a million. million, another was by and at bit higher that another you

company, first people was the XXX with little year-end. the quarter a at than more We people more XXX,XXX ended that than

we meant at welcomed to week, And, That fourth the we extended to X,XXX quarter, company our in end more that's we a outstanding due January, headcount into last additional the the that than During little of peaked people That's the January. XXX,XXX. in XXX,XXX. that down in offers were quarter.

roughly time of excluding that expect to and equivalent the XXX,XXX, end quarter, by lower move to our we will over our continue second expect, We full-time the headcount summer interns. be

forward look of excellence we and quarter reduction also QX, over in we through expense to reductions coming expense from of to headcount from time expect QX then, our tax benefit operational payroll attrition the elevation work. the expect As see the would would next to seasonal we and reductions

again So, quarter expense in further, QX million than million then And $XXX as and time. and in of as billion, minus, sequential discipline or through we think continued we QX. to third attrition QX, expense in that headcount the from continued in $XXX fourth $XX.X the just or lower quarter then around we around plus expect declines so be expect benefit

as from quarter. their $XXX card Net and losses quality on to asset charge-offs late-stage the healthy to want of Slide once our saying, turn continue quality discussion credit net XX, million was That $XXX to rise flowed customers through charge-offs. start remains from and lows. delinquencies historic by Now asset fourth increase I by near higher again, driven million of increased charge-offs to the credit

For and pre-pandemic. card compares first in quarter that this in was rate quarter of to X.XX% charge-off net X.XX% 'XX fourth context, the credit the

ever weighted in rate on less and end as was loan Provision an basis, a QX, included and macroeconomic obviously slightly so we to XXXX. the that, an million than reflects growth X% $XXX $XXX build. still modest unemployment we include That's the took continues north a of $XXX build it and fourth outlook expense improved that reserve in million million quarter,

credit We as structure a NPLs client the the seen been concentration, loans around deal that selection, everyone basis total remind metrics result, and of portfolio. many and years in we've low losses slide I wanted very real intentional remain points. just of loss estate around estate in XX% our over real and highlights and, in we've realized of was commercial a included here, and quite mix exposure. appendix And quarter rate portfolio very a $XX this losses intentional to an of office had We annualized XX that XXXX. that commercial million this for that resulted in our of

million. In our losses some to office loan give $XX quarter, the perspective, were first

billion highly have We and book. XX% diversified It's also of property diversified the X% estate of roughly than book. loan less than that's by part very country outstanding, $XX across real loans represents more commercial type. our geography, the in no of It's

$X.X exposure toughest recent loans, declines, value LTVs. on as even our still Class remain refreshes was of XX% And $XX loans. about when around have on portfolio it's they well property loan-to-value. typically total properties. X% type, some seen Within secured. are though office is we've Even criticized. The reservable the most we billion, is A our property classified still And our this originate, XX% portfolio XX% billion roughly we

the over In scheduled year, this with another remainder our $X spread following is XXXX, $X billion years. to billion office mature the in book,

portfolio current to the the given continue that adequately conditions. we reserved is and feel well-positioned So,

portfolios. credit completeness, quality metrics for the both On we and for highlight our XX, Slide commercial consumer

And, of turn going with back to business. the talk Brian that, to about it I'm lines to

Thank And you, begin Slide to Alastair. going we're XX. on

of Every business want the for organically tools shareholders. to and us franchise satisfaction even the drive things grew segment to value and this engagement to So, to industry-leading and the and value capabilities customer long-term levels. accounts the use drive drive back bring to in also deeper our that I you, and customers digital quarter

saw consumer, XX, won't all has net new Slide accounts, record highlighted but, of checking items -- credit we organic X.X positive opened important quarter consumer the XXX,XXX -- also X% through here, have to On new line the net of of in million that investment and go card -- growth. elements we Consumer accounts, flows. checking we've more some investment one XX quarters accounts, has now accounts. aided I had

products global In team the of had said global new we per relationship. global we we earlier, trading. had our relationships. increase wealth In wealth, had markets, XX,XXX quarter, of and a quarters the as of Jim net record one sales and clients In DeMare adding banking, number highest

The given those, the focused this even to of our earnings environment remains -- other make the elements on efforts and expense inflationary but, continue throughout management in is management future. team we investments

what eight, on dollars of years We continue to seven Slide today ratio on quarters of -- that XX. XX operating nine, streak can are ago. nominal XX We expenses we and you that you had Slide to can our had the similar account have and we see leverage. up operating The efficiency went see leverage to in in now and our -- XX%, XX company

about As let's individual and XX, first. we businesses, Slide talk to go consumer banking

of future. in that XX%. rose we and XX franchise revenue deep earned These we quarter in Expenses operating invest banking business. eighth growth while consecutive demonstrate the and revenue true relationship trillion organic -- the consumer strong value Top-line the deposit XX%. quarter, to clients have on leverage, $X with the continue good $X.X its of For delivered results grew the billion

since X.X its pandemic in continues The started. accounts, -- million accounts checking to new business grew the over loan we earlier, have we excess deposits as $X.X And, $XXX said checking million balances. billion

X% quarter. earnings business growth prior of year reserves included this Solid of the while success as built this understates reserve we releases,

a in PPNR year-over-year. our overcame a growth decline XX% grew several pre-provision also pre-tax charges note the a NSFOD I'll basis for lowering revenue of ago. On result charges quarters us customers that service as

further consumers in the in relationship reflect and implementation continued associates, increases the tools. new investments technology develop growth, of of business expense including The cost the for adding

other you business, March about the addition than impact of our the remember, XXXX, an made business company's hikes any $XX think this during hour, business. in we ones this As mid-year to of much minimum wage more

it However, attrition business half this this to in compared drive last quarter. year has helped the in

you the access XX, retaining see our customers tools those that around Slide more help consumer. some We us have growing also These statistics deliver the On key of it, tools, customer and are to to digital efficiently. believe can digital relationships.

put engaged billion XX artificial They Erica, We XX% number of times actively The and assistant, using login our new X Remember, past high off in XX% month. million rise personal a now intelligence-driven being aren't on our grew past saw the these have our showed the scale with just Zelle digital impact properties. a just the year. usage in users America in Bank of customers functionalities place, products. year. are growing these these

Zelle, transactions for crossed checks On written number of back mid-XXXX, remember, clients. in the Zelle our

higher, And see that in sales can less two XX% later. at the continues. Now, digital growth years you than

remained Athanasia on to us to more base and the do customer We in team the growing efficient those and good respect goals. make that our and important tools best-in-class clients and delivering service the focused to with job Dean more consumer business, and a continue

banking were equity fees Those business sizable the good said, from for after wealth move mitigated little market a beneficial this year, of the XX, as were the over management for fees tax fixed asset quarter. last Alastair Slide results and fell revenue the million in of as within management. from We with we levels impact results, about by earning to us. down had On negative $XXX These income. business line

Private Merrill ago, billion client $XX quarter. and Bank As at organic saw I solid both revenue the noted and in the flows provided a growth moment

reflects of incentives, of flows also the wealth in in under financial $XX investments alone. year assets business add reflects also Expenses brokerage continued as more than we management a the in revenue saw of XXX deposits to reflects added movement continue We've but noted Our earlier, some $XX lower related advisors. past we but billion billion the flows. advisors

As we move Knox the They forward, business and management have closely we work lead are investment global to company. drive Schimpf Lindsay and Eric excited this wealth with Katy Hans our across business. to

Slide wealth investment global to statistics and XX, see you go we As the here. digital can on management

and with the time. more these more become digital engaged consumer as Just clients business, across

tools. by personal-driven advice supplemented have Our advisors driving the way in digital model, a led our

client More with delivery continue digital them tool Bank and providing a and to also, their grow the service, digital Zelle even here for over advisor. than XX% of interactions which, of of adoption statements, see wealthy more their among our can clients. you these and XX, Slide key Merrill rate the On Private as embrace XX%. Erica convenience is XX%

results. The XX, business you see after strong banking global Slide $X.X the $X.X to On very earned tax. billion. produced This billion growing revenue business year-to-year XX% results,

global investment revenue services been across strong leading banking treasury Loan our activity also. remained good While has been robust, has business this business performance. sluggish, to

to have appear we from As the the earlier, safety the March in deposit to stabilized customer flows benefitted during noted and during some flight flows quarter.

costs. 'XX, investment year's The one. year-over-year saw manager builds improvement Expense quarter reserve of as driven company's Provision the business, current in period. were billion strong. in strategic modest overall down prior very XX% fees And compared a to hiring technology quarter Credit quality of 'XX. remains one from we declined expense year-over-year, quarter including banking while and business, release increased $X.X relationship in four this again, from the by investments

engagement, Digital continue commercial with Slide tools. in our shown banking treasuries customers. importance to customers business with of on XX, these the appreciate us These as grow through global and ease as others doing

sheer numbers transactions money is of consumer, (ph) While as tremendous. the in the same the of volume moved [aren't] volume

the and volatility our drove continued bond managing. of of quarter did and billion and we'll year-over-year team the another of business monetary job Next themes Jim good political on had equity global after XX. to $X.X strong banks globe business, due the DeMare which markets results, inflation nearly to team central around go earnings in growing tax. markets, his towards The changing tensions policies Slide a

we a particularly in this our fared strong again business, result, performance and trading trading credit and macro trading well muni activity a saw quarter, strong financing. and mortgages in secured by As buoyed client

made this to years last few over produce Investments results. the in business favorable continued

of one Year-over-year alone, by this Just FICC XX% the to XX%, expense and increased sales X%, down X% on improved quarter equities business. to continued were XXXX. in focus stated compared revenue numbers year-over-year as ex-DVA, $X.X investments to improved billion. trading driven primarily while

[Slide this tax modest shows loss, business our strong effective all losses note produce with rate quarter mentioned Alastair benefits. from X] as in-housing us And see to tax XX% a investments (ph), $XXX the on I the other last, in securities can to which would supporting earlier. clients, investments, Finally, continues you sold, million benefit a includes environmental

benefits, the and those tax would other rate have XX%. Excluding tax discrete our been

leverage, quarter shareholders, summary, you, in operating for by strong a and delivered our team capital return, So, our strong credit, organic growth, ROTCE. strong

With that, let's jump to Q&A.

question Global. Mitchell We'll first Instructions] take with our Seaport Jim [Operator from

is line open. Your

NII on good Hey, question the just trajectory. Maybe morning, guys. one

the we the If cuts in three takes you plays in forward out, currently out think you the remain rate banking impact the What think as about about how on You year? the is the I but expect of curve of think and beyond NII end that book, puts half that are guys pointed -- XQ? back do the by asset-sensitive year. NII

I around whether there'll in at Jim, expectations pretty a of the or got the that's be Similarly, now, or you've market not another terms in hike or there's back good. three. think, question right not the of So, cuts May, bouncing for whether half two

same with at We're rate looking day-to-day we're deposit So, paid. the balances. curve we we're At performing you for and forward information thinking we're the would are. way through. the of competing at that operating looking kind our time, same think They're the

point, about be this at speaking, significantly. obviously we this good It's feel generally say, NII. pretty I'd to up So, going year pretty

plus Fed nine me what it mean, that let it And, the we're many to sort right $XX look, or the but that's the X%. I where why very guidance it's full moving the Consensus six imply put predict is. months think, the going so provide difficult do there, to That's for down would year to comfortable of and we number it's pretty don't very out. I months is us billion, consensus year, see parts, to way, provide guidance. up comes just minus. for our just simple X% for we a don't -- can around we this reason, But is

had And given trading business that's gains outperformed strong your do Is and sustainable anything business, all you Or made that market the another guys income to maybe business. recent believe unusually have strong there? some fair. quarter just you investments? there pivoting No, peers in fixed you in share the

this talked that think, to A for a job. it we Well, we good that. couple Brian in a really what income. really And in we've made us made pretty in and decision that's more continue could significant about And investments and and the business that. in we a good which felt grow job we've has invest of we as our particular, was years done, done team team like, macro businesses, I has to ago, quarter. until a fixed that done important did equities

that, was this FICC, a This we happen had you positive to kind our We've quarter great and products micro had quarter, fire just better it them. because expect quarter quarter for particularly we cylinders, on for returns because more in a there. of

munis, I at credit, had all are them of team high financing, and just executing and, futures, mortgages, So, level. quarter a a pretty FX, think, really Jim good the

So, they just got to keep at it.

taking for Thanks my enough. Fair questions.

We'll from take UBS. Erika our next with Najarian question

Your open. line is

morning. good Alastair, a clarification. just Hi,

hit expect so Do You 'XX? still gave of year us the expenses in you or billion for to $XX.X expenses. expected trajectory quarterly full

rather. the days going that's through that's all way coming year we're be mean, see looking the Obviously, now, of quarter as headcount -- Right know expectation. we we our -- the so I'd is the to down, we're say into into the tailwind course forward, year. a the XX I

how We're our So, expectations don't we have going to develops. the any see now. right change year in

headwind having investing got little sales in our terms and we're something still year, a a and of the good in still business. business like We very of revenue bit trading a

it'll the where we particularly a of we into are feel respect half dog with So, back be as good the fight, the but still year, about get we to expense.

Brian. my for question is And it. second Got

and of looking think CETX. revenue uncertainty. your this the down you've investors I path Brian, Now, produced same that lot of a At a significant are significant grew macro time, the quarter of amount

forward, take should of that going activity test into think stress the about the account, we As June? we buyback how results ahead especially in

share you are basic, to base, our to buybacks. what the saw which principles, rate, is return use quarter, we see the adopt think, mentioned. apply we're is we rational the that stress of this you in continue our we in just use for -- the have then we that. support of as customer or rest the We'll our the Yeah, dividends and to we to pay results middle growth the basically I basic think test

we quarter basically on is the but for first -- is, which good -- quarter, need next news We the a an we year. excess also this crossed what has of of XX.XX% cushion top

to our continue principles. And basic follow so, we'll

every us pay grow and we but organic you to goes time. to the pay sort -- to about in feel the buyback we're very the on -- So, this expect what we've of the organic growth, or capital our support shares, idea to the through should follow get good dividend our continue good dividend near-term got and at year business --

you. Thank it. Got

We'll next Jefferies. go to Ken with Usdin

is Your open. line

great as are moving help there to do lot regards which Good ongoing you terms how referred with you morning. you you look that how is gave the as us if much as wondering forward, and where Hey, I obviously think mix detail deposit in can percentage of And expecting just the side, across customers of us to the a mix a deposits? to on think wondering, just you shift, expect more you I'm understand, on of just you. businesses DVAs Thank are incrementally? total shift funds also it.

Yeah.

I it's America, Ken, we as broad bearing thing, think of a this thinks and of think, this big bulk interest-bearing everybody categories at -- Bank accounts then -- and looks and treasury. really non-interest but

to they with really have what do their and customer bases You money. think about

how which they consumer if that's cash, are the is may that their excess of they running play customers, their their And all cash then expenses. household business that so, then, have And from then running a run through. level commercial consumer have day-to-day, whether and day-to-day household wealthy for there different or day-to-day successful, and who transactional

I So transactional and think investment -- cash. think, cash we

speak. lot as to investment a so seen of -- You've cash

good As our their manage competitively Alastair moves we news to around. day-to-day money price that a But don't that, to put if mentioned for household. investment that where massive the is, earlier, we work platform customers they need for we have

deposits near-term when our franchise, show That gave total points, in that it like pre-pandemic, we businesses. the that part meaning I the a for its and to of of -- look cost you of over you franchise grew all-in happens what charts The at is of in view about you business time they've including generates future, in the deposits you, those our got billion of generating at estimates, interest-bearing NII across think, $XXX a lot that, key are been lot billion XX and has the the stable. consumer excess balances, remember to It's basis our loans. think movement from a in basis of value points $XXX-odd excess they checking So, stable. deposits if XX

trends So, continue have excess you'd of cash, those work to in expect some differently. it customers putting terms of to

is don't move Here, we continue leave which deposit the this rates deposit businesses. the money interest is the market. we customers to to a on, the consumers, franchises broad cash, pay and of to by motion, people match that and it's the value expect transactional and wealthy driven us, But because both

imagine. team So, which the it's looking hard. as question spent time you or we a at It's of lot might a does, of very detailed

understand swaps? other how portfolio benefits terms It help those any securities us also you here from just Okay. done and if Alastair -- just walked then, composition underneath some do the have get of variable those just swaps. variable the you you of continue positioning to -- And I'm you is what through still the happens changing securities rate from question repositioning there -- the benefiting can looks been or surface? should from you've you wondering in like then, were losses. rate -- And

you have grind of the even it? continue more income room shrink to rework kind you how as out much portfolio book and of do So, the to

Yeah.

up way everyone it's quarter. good of treasuries them ended into the So, floating, understand, obviously, Ken, cash, easiest this swapped some to those for think simpler because about cash. And, for they're to a essentially mean, I quarter, bid this this they're we -- converting think is, it's to pretty just treasuries, about simpler, and so actually,

hundred loss million. converted just was some the That's accounted couple securities cash. we So, a for of them there, what into it

as of -- always you the about the overall as way we've talked But number right about I've us the portfolio options it's in That's And into pay in lot a something gives of down, asset; hold-to-maturity, I number continues as got is, available-for-sale, cash, to can a couple think think we're it a putting about during it because: that got high-yielding enhanced remember, we're really got think one, to we've and cash. just last we've cash, quarters. cash, of securities that it sweeping two, now period volatility.

straightforward pretty this at So, point.

Okay. Got Thank you. it.

Mayo Wells comes Mike with next Our Fargo. question from

open. is Your line

Hi. is, unrealized XX, are highlighting of I and securities your the assets day, I'm guess, Well, topic your staring the what degree losses. And to with at liabilities? month the front many papers, seen Slide matched week of your and you've page the

on You your X.X%. at securities highlight yield the

so portfolio that not well you're that suggest some all years, held-to-maturity matched. to would You your highlighted at eight

other it, deposit. don't your in the didn't value deposits even duration of the or the at hand, of or On your the what you change least see provide I

mark? matched the your So, And have you describe the question you can assets is, to are may basic been with on liabilities? or off think where your you degree what

Yeah.

you been in and anything you as time, and and rise, the start. of to this in rate expect bond see is you'd environment. for in for NII things why... stable and reasons how we're the at are and rising out That's that same why it's But go is deposit it's in just and the consumer to. rates the that that Brian broad in reasons relationships laid expecting, would can to how some valuable are we environment, very much turn laying chooses of diversified think long-tenured. I'll as and franchise out one negative. banking, wealth What deposits obviously these much he We markets And, around everyone so long global So, out one just we more the laying have Mike, up, a add of because deposit are base. because going the we is spend the time

that's put just hey, any numbers can one when most I say you can range? important you interrupt, I think number. Because -- just Alastair, if that long-tenured, the biggest around Alastair

some If a of little kind bit? -- could frame you that just

Yeah.

at you for If X, a look Slide out number lay to took we've tried you. that

look years us know of us. my with clients XX% were years. our you for you're -- commercial consumer, time on pretty been with XX the a in in bank, That's have average than So, more clients take at about for I talking example, from long-tenured. XX the

deposits have of long You all these businesses. operational in

can front to So, out you lay that's what we're that. so everyone, see in trying of

I I'm but Okay. sorry, go ahead. interrupted,

where remember Now, I it can't was.

about benefits having... were went the that's unrealized You loss, higher, part the the NII talking of securities of

No.

about you trying to all too, think, there's balance we we've look, this how And balance entire got I'm balance what with think know and sheet. entire lot convey on sheet. I the because have this, to you going works, to a to Mike, of the

We're billion $XX sure of We're points to XXX up in We so, best we're one, to that, we hundreds to billion, to past one now it added year. do existed the quarters we can. done about we what And grow this liquidity. earnings basis we earnings. excess, talk the at there that. two, many, we're we're trying grow which And it's We've balancing last We've Number has number is trying -- of we're make in quarter. invest ever. do three, trying $X.X capital. our in invest Number years. that grow the best way it, way billions to got for trying many it's

be we always So, look, can better.

flexibility that know taking into quarters asset We're the go at row. We're $X.X rates lot pretty that, cash of place like the a sort XXX. point. and there flowing up a been we're down We're it balanced We'll up now, if relative this it down down so overtime. we're six shorter doing and to just in You too. to in going And now XXX sensitivity what XXX, look going is that balanced get billion portfolio it's of smaller just taking rates we've going feel and when off up we're billion, and all we and at we're and That's XXX, or pretty continue smaller, rates rates making portfolio if you $X.X run the loans. go of doing.

as I your deposit And have weakness, then deposits as some is just the that pay beta. take on as guess, strength greatest a that a follow-up. estimate you don't others. lowest cycle-to-date you much will I

keeps And much? so, customers going around is not what to as that you're your them pay it if

we're I example, value that business, we're you Well, invested financial growth look the attracting. so that digital, for a is about, been. XXX,XXX on we've proposition of over what organic if the if -- Based in net if consumer new rewards, talking model we've people the about like, you a consumer look think, and And this XX a a quarters think look period new that has whether go the just centers, quarter, -- preferred the value you the it much it's at that's ours relationship to it's that's it's mobile, the in experience, business checking, that again, row. proposition, in client time, long at in the renovation, relationship added whether then whether

a management If accounts our you for people wealth tells this business, we you that's management go record XX,XXX franchise. Merrill to for quarter. for Bank, the That bank Private and this for And we're households added new net the something Lynch new wealth record valuable. a quarter in then, was people offering

people. indicator is that significant again what offering that as So, we're value a to

in and And banking banking, they're new we're now. were right and go to I logos business commercial business that in with adding if clients new a to happy my way time old back over really

who and clients' think, better. that's time, purpose-driven lives is, answer first. I company their period this a we financial stability what make offer. the helping our want ultimate people put So, are And That of is in interests we

All right. Thank you.

Glenn to Evercore. We'll go next with Schorr

Your line is open.

specifically flight-to-quality do on times safety Hi, comment thanks. noticeable, would that. that, the flocked you first. It the Maybe thought like an during didn't was have people easy benefit March there would but of Madness? like during I BofA have but one up you a wasn't that feel to

thanks. So,

that We're decline, period noticeable XXth flight it March a a week the confident a Glenn, saw part onboarding with move going specific accounts over or Part that trying in that pretty comes we're during and to who safety. has And second are around period comes parts. to of one to two So, like lag. time, is, while, here we a and clients takes operational two. number. a to then in just give that And

the So, get we but to quite you relationships time some can think longer onboard. and of quickly, about, take build deposits

leading numbers, it are to put in So, you improving exact was not ebbs the it, typical quarter, from there lot benefited. A But, but our especially any can of given speaking, see up just that and anyway. number We've disruption. an of on a to say, flows we end were because quarter. organic payroll we generally before improving obviously I'd chosen growth, is

Okay.

curve the half the one same the and the of curve. though forward is then doesn't Fed back hike that's noted What's cuts have market more You interesting year, through as the forward the has.

of are So, what curious your process? NII much of how to talk could forward sensitivity cuts, no that the helps you there thought I'm if if

the dispassionate curve, with it's because from forward it making of the of the the us the information importantly, people market use there most in just do and, broader we we like Well, most set up. feel assessment it's out kind not

best is how things developing curve. quickly, that sensitivity bouncing provide So, will hike? XXX And it develop, and one down depending are can at accordingly. it adjust up And the on we we model the things then, remarks, the Is zero? it But to we the even Is stage. you forward or mentioned during offer around are XXX around, is two allow it use probably they cuts? this I my

the you know is, one I anyway. simple talked is, held-to-maturity, a I answer last about, it I'll but it, lot bluntly The ask think

loss you stability, it your in growth, issue. [indiscernible]. So, just of can this and you kind do grind agency swaps, anything loan feel don't I get it's a you it treasuries, unrealized out like it, do it's ride capital at you feel with But you like to have material don't given deposit base, point, it's credit the mortgages, growth, have down? your

do. we've Correct. that's what shorter. pretty and getting been keeps exactly smaller to and that that's It communicated now, just We've doing. Right what we're clearly continuing

Thank Appreciate you. it.

next to with Chubak go Wolfe We'll Research. Steven

open. Your line is

Good Hey. morning.

morning, Good Steven.

the you're same pre-tax and you Alastair, time you're at I seeing to the KPIs GWIM, better both had decline strong a did wanted see business mentioned pretty to sequentially I So, understand investment of material some that goal might delivering business the of margins, balancing within in understand profitability? how margin the year-on-year. better about be how evolve thinking should trajectory? some continued leadership? the under how we just of wanted new with needs the And

The year-over-year, margin that came down margin hit XX% as its sort move back traditional the side more to because to expect to largely XX%, quarter, big because in or But elevated had the you taxes a incremental of the but of fell up they're payroll hit revenue to investment a to you remember, other we'd as markets XX%. and also a percentage beneficiary the have things are they the of in our not first compensation amount. company, small to

in move back high-XX%s. the expect that but -- we So to

the services side of improve business the on But we working to this it. have continue been to digitization of

the XX% it, financial rest convert So, then because about the bit, this profit of compensation and it a about take basically, we deposit, the in at you half a and the and payroll. it take down the about or past convert of revenue worth] you payouts, percentage little to XX% the other the advisory and points of pre-tax dollar's XX think other quarter, grids and if the you [a about (ph) get half

is to of to So, on drive continues very relative new one a level straightforward lot -- stand and Lindsay more on of Katy good of things there but simple, to where products, the excellence basis, things the still operational and delivery around simplicity about and that business, that. the work feel that we can across in we Eric a paper-based because like come usage we that out products, is believe team the those the costs

And in then, making are also, remember, advisors. investments we

company, is a drag have and the have P&L growing the we're We with to plus on it in best take the X,XXX do the we to the businesses own to in willing advisors that make and that's we one at continue trainees our believe that -- and the our advisor across growth company, future. sure we

are developments, just higher or expectations for There you recent assessment? Basel special some perspective around of FDIC And in my was IV, I terms Helpful have for fallout. lot been Brian. to events the Alastair items I could given scenario of was a hoping mark-to-market. either any color, update hoping, that floated an just upcoming follow-up, and get provide just regulatory around planning regulatory on SBV the expectations just specifically

think you do but and end have then liquidity I this through the and a think mean, extremely at through happened strong tightening we inflation then aftermath a industry cycle, I hasn't and through capital the then I demonstrated the I the more We don't before. capabilities. day, broad pandemic pandemic of anything sense, just through think, has than of in that and

good where it we overall. feel stands, to back So, industry step about people think the have about and and think I

to is industry It so but stronger than much to numbers this capital inch, than on amount speak, unbelievable. to frankly, pretty States ratios, so Europe there to the United has square get in so which get lower, per Europe. is does much then, And are capital of the

twice have our be to lower. counterparts and are European considered size ratios the So, of of similar capitals we

other the United the say, aren't together, So, in counting plating this different gold the to they beans got ways pull or make obviously, let's States. they things sure and in

understanding. see careful they the see out, will here that So, wisdom we'll and are but to sure making people have start play hopefully, any special and don't we

All right. taking Thanks for my questions.

take Bank. We'll Matt question Deutsche from O'Connor next with our

open. Your line is

Good morning.

the current XQ much hold and that some of temporary a NIM, sheet liquidity went pay questions. too shouldn't cash, did just a was was moving more kind you the balance I think on to a the continues, up short-term just cash several and those clarification to securities we that on to also Just didn't there? not allude borrowings (ph) or in that dollars, the lot. And The up obviously and quick of but environment that weighs know in lot assume period-end we I but [NII] and to a if which should trends the attention

little of bit a It's Matt. both,

build normally and is NOI no there, invest little because cash at can little bit. and quarter And NIM, first the impact drag happens, borrow. a so by in it three-way a just a but slightly hurt -- for it seasonal may it you're margin bit got that doesn't You've of us, there's you right,

right. All Okay.

So, but to hurts NIM it I hurt right? the you doesn't percent, dollars think, meant that NII it much, the say,

Correct.

Yeah.

credit intra-quarter X%. point Okay. total up in in you full of payments out to to quarter, highlighted March? trends up kind your of you of slowdown X% separately, that a to? and talked kind spending And then, any for and debit call Any the about year-over-year card Some was March, trend kind in peers of want and

think, saw back in up first bit kick we I being of saw bit -- the we a little a part quarter quarter, it -- in little and softer the March. then first

a March, of was So far in April, It's little of it's couple lower but than the still since. it weeks early. probably it's for a month

fall about So, that careful we due ways just got little like different to and things be vacations a to the that.

especially slower course So over year, the spending and means but year-over-year being economy and bit lower of think of little bit precursor -- the I cohorts the year, cash, first frankly seeing then little of more total up the last accounts, our last -- part a and use because it's being in to this that build we're down in have a consumers the honestly. -- accounts a to peak it's in fell cash careful continues slowed the the down that's back course that April, year. income increases of their From the for it all the the in built and

quarter-to-quarter, out. from in tax pushes you stay some play that the them know tuned. a been So, but as year this returns we'll see delay There's that of

softer I a the call, in think, here. it's part a of but the first little April early little to it is

you much. very Thank Okay.

J.P. to We'll Juneja go Vivek Morgan. with next

open. is line Your

Hi. Thanks.

expect high bearing. you non-interest is I couple slow, it interest-bearing expect on to that? wanted to shift to to of you know -- color or clarify Any still that accelerate? you Do or the even continue. very the pace Just a from to I running still it's just of that questions. said

think Yeah. are be now, QX to close last levels rotation, the the big Vivek, And I'd getting time, getting of driver, but we're tends the to doing 'XX anyway, if rising, clients pretty hikes would towards And, are was also, it end now expect because we're it which to peak. banking. their the you think. we over about slow global as rates

So, close you'd we're slow there. lag to probably think But, it now. at speaking, getting generally a little be point and of there'll anticipate expect I'd some a bit I

for you slides some One more, similar in portfolio? office CRE your total Can us CRE, the thing Alastair. the Office you gave geographical the mix give portfolio. for CRE

I but to it in because with I need afterwards, going to follow-up have can don't do, I'm you hand.

Thank Okay. you.

to But there similar typical serve way anything other I don't you're United find States. than sort think to the distribution our customers geographic the of around we going

Yeah. All right. Thanks.

We'll go Cassidy with RBC. next Gerard to

open. is line Your

morning, Brian. Good Good morning, Alastair.

are How morning. Good doing? you

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

it the now some they just won't think, of that same positively. global And is, what's a be downside, a company, the piece on -- continues probably, NII, the then, got down, there. across back down just hedge to a if now in obviously, you for a hedge, billion Well, would terms rise little also it'll interest-bearing happening I go of be be to markets were as XXX, give down rates, be hedge as that leading $X.X idea. get take bit will back something metric it And but you start we've to if start when complete and to back

puts course some how that there's takes, So, the see over but the develops of and some year. we'll

had Slide provision banking good. an XX, And it's you question, a follow-up negative improved then as outlook. global -- and slide, Can in that you gave macroeconomic referenced guys the quarter in us also seeing confidence does this have to give you give include this Very there a the you're exam the Shared recent us this National second, in color, you a well? item negative as results line Credit some what to provision? And you

time, -- Those do and continuously. a would is that. remember, of through continuous they there's those It -- this on across include set set always there's Gerard, change results. And well macroenvironment, business say at look the we always a It's not come over we credit world. that's things when

overall got is put there's to and day then places up. credit would that and have reserves, places we here the finished at quality very That lease side up to very we one on end reserves the So, stable. strong of on we some but the us other allowed up cleaning that

it. good. Appreciate Very

And you commercial, in asked correct? the question

Yes.

Yeah, okay.

one, at things So, terrific. have the blue-chip so macro I of just quality when look was any the the consensus asset slightly you going real three, growth. a didn't I environment mean, think, ever couple Number on. we Number remains Number better. two, loan

commercial had already. were quite exposure have places on we like two for run-off a reserved felt been the then, in provided bit And side, well may of we one we we So, little or conservatively. pretty where

was things those together. added all So, it

makes and quality, what on you're obviously peers As credit commercial any have have your and Brian you really Okay. all guys you is strong? Actually, so Alastair, this that a seeing good? through suggestions been Why cycles. good few so commercial

good their Well, profitability remains remain a Cash in place. in good place. flows a

I think, and corporate America XXXX XXXX. from something learn

is leverage good And so, in place. a

credit add that with that's decent quality. to are all the and respect You for up, environment a you we overall where economy got

terrific over that of watch to have time. we'll it's shape. So, as But now, in right

Thank very you much. Great.

Graseck Morgan comes next question from Our with Stanley. Betsy

open. Your line is

Hi. Good morning.

Good morning, Betsy.

just One, you now, discussion off just as lending loan the and thinking how you're environment? standards post questions. any us a keying [SIVB] a in Two about to give could (ph) sense changes

we Well, our a really to appetite. significant look, risk change don't have

cycle. to largely through selection. changed our client We speaking the are be haven't design Those

-- outlook. demand. our raises about on is, specific adjust we're more as But, sector our Fed what obviously at those it I'd seeing quality customer the the are performance will We growth, respect with changing asset concerns or to loan in say, rates rates,

don't and would we So, you lending doing the see it's standards, as right effect it's about but for more just just securities-based having or less Fed demand that mortgage, now much credit or about expect. tightening

function end balances Okay. checking in consumer end And pay more cycle type part there? something then uptick two One, there on a March, seasonality behavior, account of quickies. that and or of was the of of in going on period, is other

it they from and But bit. they the November, and always, think, that's last and they as This tax of do other bit. cohort move -- and Well, been because around stable time up year-end up, basically increasing of And and then of the are They now. returns January. little and were stuff. where little moved pre-pandemic sort up February a started things bounce months they December, and to in are the leveled then payments clearly they I going they bounced they for the compared had is a six

said quarter, So, they sitting of fair The to amount pre-pandemic clear up. are out down money having ends it third message clearly times. with or people of where the balances money, still it account are be is, we'll spending consumers mid-XXXX in a these see in their despite relative would these

lastly, just big been a recently topic as you then know. it's AI, And sure Okay. I'm

got You've Erica.

credit be maybe helpful. you. a be Just it's leverage but on there thoughts to wondering different that, to you about are going would AI, plans maybe strategy, Erica Thank leveraging

Yeah.

where ago is years So, and -- came six, out Erica, -- language general. came us a we do the it it put work seven into starting concept four of type of make it, number for to a was answers basic program, a but question the then wasn't years business, you sure obviously, it built business. with or and predictive special would language five, in It our had a to

captive we just our So, clients Then capability. it's to to that. condition deploy to data, our systems, did customers, where a finding put because is to us it's looking in and a really start giving to our service information

seen company. have We we written benefits and to coding extreme lot speed goes work terms In this us has quickly do service allowing increase We've do things is and technologies in could we've and a used types artificial what what be and And it object has about that think other like taken have of the more it also Ultimately, this processing, help even a internally think me, we've for could efficiently is how customer Erica and the to words, work can those systems to intelligence, teammates that the these the language and with someone have to indicator up be lot of can We they applied that. of That seen valuable seen make, our it called natural for them and process of computer predictive has -- I'd our programing. it I do get you've benefits. out clear to send somebody to it put, ability like it think in a key systems. areas. and to on. much analytics, in information --

lot to there's So a value of this.

demand frankly, have to decisions to -- and pull to our and fair stopped how question key stuff our worked. world's wasn't outside data reason us to the up regulations how other careful and your in without when be, was the the rules how we to The clear was, use it understand follow then, we able lot fear to -- a And made, and out lending. why and, be with for the it the would be being you industries interact of of stand -- it the on It laws and that. it the secondly, will industry are it and customers' and have can data with

really I important good, So, it's all that think, thing. is -- strong

a this operating will overall value us see in help but we next we've people the running we the management is value team or understand remember, a all potential -- So, company XXX,XXX step not sense, started great carefully digitization stuff a manage working value. that's And, company I apply started month, of actually more it, there, to sense, the quarter. headcount people same and the in neophyte continue down, aided a company it we're this will and which it's this bigger here this great so XXX,XXX but and we're the doing don't we out doing in it with been by of size change. we XXXX been with in which XXX,XXX function and with think company

Thanks it. so much. Appreciate

take with final We'll time. our a this This Mayo Mike go Wells at Fargo. ahead. is question Please from follow-up

is line open. Your

Hi.

expenses slower from in is terms activity then In technology? much for your second how to much due the expectations of guidance for quarter, quarter, scale third and is fourth how expected the lower benefits business the that then that quarter, of of

recession? are the guide? And of that seeing seeing is, I Are you is you crisis? a banking of evidence guess bigger too reason part evidence question the banking of for And the expense

and the No, I quarter -- the higher activity actually side it could trading in was be ways, not -- the of the like volatility Mike, in would say, first because that. there some things in

rate So, We more we to because across work activity year of and built-up hiring operating do. aren't ahead to scale slowed built-up bringing a lot when turnover requires it now in then the in and to gone down in is we're be do fear people down, had a less of stay we're we the expecting of we -- in and half get back and largely the that last us taking people, year, dollars it it the that to leverage OpEx expecting line.

credit because But headcount -- expense that's more managing no the the just base have frankly carefully, -- But there is we'll no the expenses of more checking given the leverage of accounts, are and yeah, card two-thirds do but, out we'll continue ebb there's trades getting activities. more flow, can we'll to have will activity wires and rise. do more we day, more day, accounts, given a and overall, expecting we're on on a that

another i.e., borrow say $XX we the that's down. $XX loan want to what people slows versus demand, well, ahead, Now,

So different doesn't -- -- not of that's money. is that a that's don't -- that they amounts but have that loan borrow yeah, they

All right.

not So, really this or spends, is like investment reduced anything managing your just the business, that?

an the our are low, consumer all-time chance we year what and we're in pure rate -- capabilities and that makes think all-time evidenced million continuing a new more few to an the that's Customers of run delights leverage stuff's us and numbers spend, is as through, this and that's we that's last and point initiative investment million that, through $XXX gives in wouldn't we we to well attrition it Betsy's is franchise the we nowhere are versus spending, where speak, to more high, the the going business, because branches that you in of in increase down franchise cut XXX again. as by comment, know bigger, to $XXX year-over-year invest were a year valuable all-time. spending going customer to continue at No, aren't

recession for has is thing, big temperature? last And impact it right you what's picture guys, yellow? Brian, are you it is that just How and it the you, it red? -- Or Is moved? coming Is on evidence Just green? the your what's flashing a where the now?

recession Fed would GDP then to positive. QX day QX basically recession research [Candace] they teams after amounts, to negative -- and in that a, predicted annualized X.X% have negative there at (ph) have X% and a back been growth this rates the mild consistent be see raises to QX say and and and

are fact commercial But the things day, everything that I the people So more of being relatively paid amount would see of we recession, -- plus. that think, a end leftover, on is -- and like points we the in see, that careful put unemployment customers pace was X.X% employment that. the don't the stimulus the money indicate they that mild consumer activity given but to at was and full that, still slowing at side have the

the are tipping over, they're so And wage still there, then but but, tipping that into growth of the relatively down size translates in -- good good is inflation slowing activity.

less is recessions, through in slight they're recession how see didn't we'll anybody including a as it the else, than we company always reduce what problem, decade scenarios answer, the and slides the last see a somewhere the stress are built because we built the because pandemic. through in without last we the a our you'll scenario So quarter we this go see happens, same that but across stress even company

right, it. Got thank All you.

for closing to additional back Moynihan to And turn Brian remarks. at this time, I'd any program over the or like

stability in quarter and to want performance my and first EPS customers time, XXXX, -- this capital touched for operating expenses. strong two million strong faster on, for being important The liquidity your thing there really a organic and for our leverage most you I quarter at again in and thank our year-over-year XX% revenue our it including of a just continue at of show strength the Thank by in $XXX XX.X%, growing through great things: teammates to But continued was growth. we franchise growth and GLS.

So, we feel-good about that and look-forward to quarter. talking next

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

at have may You day. and a disconnect any wonderful time,