Bank of America Corp at Morgan Stanley Financials Conference Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Betsy Graseck - Morgan Stanley - Analyst : <_ALACRA_META_ABSTRACT>Yes. So now that I've got everybody warmed up post disclosure read. Brian, 15 years as Bank of America's CEO drive responsible growth and seeing the significant changes in the operating environment in the industry overall over the past 15 years, it's -- I'm thrilled to have you here to talk through how you see the current environment and the forward look. So first off, can we talk a little bit about the current operating environment, given the considerable amount of policy uncertainty that we had at the beginning of the year and even running through to today. So let's start a little bit with the macro on the consumer. How are you seeing the consumer spending, deposits, overall health? Brian Moynihan - Bank of America Corp - Chairman of the Board, President, Chief Executive Officer So I think if you look across the consumer and you think about the three or four ways to think they're doing what they're -- what their confidence is to spend money, what's in their accounts, what's their credit posture, unemployment and things like that, the other piece, and you all have all the data on that. But if you look at our customer base and our institute just put out some research, but if you look at it more broadly in our customer base in the month of May, the consumers moved into the economy about 5% more than they moved in the month of May last year. And that's consistent with year to date, that's consistent with really what we saw happening early in the year, and up for about a 4% rate in the first quarter, a little over 4% at fourth quarter last year versus fourth quarter year before, so 4% moving up to LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JUNE 11, 2025 / 2:30PM, BAC.N - Bank of America Corp at Morgan Stanley Financials Conference 5%. And that's good. And so what that goes into moves around. And so with some of debates about international flights just more on cruises. People spend a lot of movies right now because the movies are good, but they move the money around. And across May year to date, that is about $1.7 trillion of money movement into the economy. So the consumer is spending money, and that's a little counterintuitive to the different confidence studies, but those are more impacted by what I feel versus what I do, and that's why trying to make sure. This is what the consumer is doing. What they're telling the feel is a question for the future. Credit quality is very strong, charge-offs in the consumer credit area came back up over the last couple of years from the post-pandemic drop and now basically settled at a level very consistent. So we feel very good about that. And there's a lot of availability of credit whereas loan to value on our home equity loan portfolio is about $0.50 on the dollar. The home equity in homes is $40 some trillion or something was the other day. So there's a lot of borrowing power if the consumer need to do it. You're not using a lot of it up right now, quite frankly. Our home equity balances came down or bumping along not growing a lot. So there's borrowing capacity. They're employed, as you well know, the wage growth is strong. So -- and even in our small business area, you can see the payrolls are okay and fine, not as strong as they were a lot more uncertainty in a small business and middle market than there is in the core consumer.

Question: Betsy Graseck - Morgan Stanley - Analyst : Okay. Let's switch to the corporates, the largest customers that you work with? What's the outlook there for investment given the volatility that we've had? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JUNE 11, 2025 / 2:30PM, BAC.N - Bank of America Corp at Morgan Stanley Financials Conference

Question: Betsy Graseck - Morgan Stanley - Analyst : Okay. Let's dig in a little bit on the consumer bank, and we'll go through each of the business lines. But starting with the consumer bank, you have a dominant retail banking franchise with a very strong national brand. I would expect that Bank of America is one of the most well-recognized consumer brands out there. Can you talk to what has been key in driving your deposit, your checking account growth? I think it's been something like 25 consecutive quarters of net new checking account growth.

Question: Betsy Graseck - Morgan Stanley - Analyst : Okay. 99% plus --

Question: Betsy Graseck - Morgan Stanley - Analyst : Yes. Okay. And so you're everywhere, you have the product set, you have the digital capabilities. What's the driver of growth in consumer from here?

Question: Betsy Graseck - Morgan Stanley - Analyst : And I know card is something you focus on your depositor customers with. Would you ever think about on card as a way to attract new customers?

Question: Betsy Graseck - Morgan Stanley - Analyst : Super. That was very helpful. And so the profit growth dynamic is clearly being toggled efficiently. Can we turn to Wealth and just talk a little bit about very broad-spectrum wealth channel that you have wealth business, I should say, across Merrill, the private bank as well as just your affluent offering as well. Can we talk a little bit about what you're doing to drive growth and profitability in wealth?

Question: Betsy Graseck - Morgan Stanley - Analyst : Great. Okay. And what about driving growth through financial adviser acquisition? How important is that?

Question: Betsy Graseck - Morgan Stanley - Analyst : Okay. But it seems like there could be even better?

Question: Betsy Graseck - Morgan Stanley - Analyst : Got it. Okay. Great. Let's turn to Capital Markets, where clearly you've been investing in the markets business, and you are the only firm to grow sales and trading revenue year on year for 12 consecutive quarters, which was very impressive.

Question: Betsy Graseck - Morgan Stanley - Analyst : What -- I'm sorry?

Question: Betsy Graseck - Morgan Stanley - Analyst : This one should be 13?

Question: Betsy Graseck - Morgan Stanley - Analyst : Okay. Just want to make sure I heard that right. So where have you made the investments to generate that kind of result? And what's been most impactful there?

Question: Betsy Graseck - Morgan Stanley - Analyst : What about the international side? 40% is coming of your revenues in markets and banking, I think, is coming from international. Is that right?

Question: Betsy Graseck - Morgan Stanley - Analyst : Okay. So just to make sure that we got the comments about the quarter, you mentioned markets revenues.

Question: Betsy Graseck - Morgan Stanley - Analyst : And then while we're on quarterly commentary. Maybe you could give us a sense on whether or not there's any updates on net interest income?

Question: Betsy Graseck - Morgan Stanley - Analyst : Excellent. And does this deeper curve help just generally speaking?

Question: Betsy Graseck - Morgan Stanley - Analyst : Excellent. All right. Thank you. That's it for updates on the quarter, I believe, right. Yes, that's it. So I did want to turn the conversation towards what you're doing in payments. Clearly, you're a leader in payments. But you've also made some recent comments around stablecoin and some of the potential rule changes coming. We've got GENIUS Act working through Congress. So are there more crypto opportunities in your future? I would just like to understand how you're thinking about all that. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JUNE 11, 2025 / 2:30PM, BAC.N - Bank of America Corp at Morgan Stanley Financials Conference

Question: Betsy Graseck - Morgan Stanley - Analyst : I've been a little confused about this because I thought Clearing House has real-time payment for easily a decade.

Question: Betsy Graseck - Morgan Stanley - Analyst : Okay. So with that, I would -- I think we're done with payments. Would like to understand how we're thinking about the other side of the operating leverage, the expense side. And I think you guided 20% to 25% full year expense growth to 2% to 3%, but with positive operating leverage. So can you talk about how much investment is embedded in that. And if revenues are lighter, where the levers are to deliver that positive operating leverage.

Question: Betsy Graseck - Morgan Stanley - Analyst : And AI clearly has been leveraged in the consumer, retail and wealth significantly. Can you talk about how there's legs to that into the rest of the organization?

Question: Betsy Graseck - Morgan Stanley - Analyst : So tech budget goes up and headcount comes down?

Question: Betsy Graseck - Morgan Stanley - Analyst : Okay. Well, we've identified opportunity for growth in the various businesses and the efficiencies that you're driving from investment spend in addition to other drivers?

Question: Betsy Graseck - Morgan Stanley - Analyst : And so as I think about the ROTCE and the direction of travel here looks like it's moving up from what we discussed. I did want to understand thoughts on the denominator a little bit as we enter into the era of Michelle Bowman, as Vice Chair of Supervision, what are you thinking about with regard to what is likely coming on regulation changes?

Question: Betsy Graseck - Morgan Stanley - Analyst : But do you think it would be correct?

Question: Betsy Graseck - Morgan Stanley - Analyst : Well, and significant excess.

Question: Betsy Graseck - Morgan Stanley - Analyst : And as a result, as we get the clarity on where they're going to go, how do you think about optimizing your capital structure? Like let's say we get a rule in the next year or two?