Good day, everyone, and welcome to today’s Bank of America Earnings Announcement. At this time, all participants are in a listen-only mode. Please note, this call will be recorded, and I am standing by if you should need any assistance. It is now my pleasure to turn today’s program over to Lee McEntire. Please go ahead.

Thank you. Good morning. Welcome. Thank you for joining the call to review the fourth quarter results. I know it’s a busy day with lots of banks reporting, and we appreciate your interest. I trust everybody has had a chance to review our earnings release documents. They’re available, including the earnings presentation that we’ll be referring to during the call, on the Investor Relations section of the bankofamerica.com website. I’m going to first turn the call over to our CEO, Brian Moynihan, for some opening comments, and then ask Alastair Borthwick, our CFO, to cover some other elements of the quarter. Before I turn the call over to Brian, let me remind you that we may make forward-looking statements, and refer to non-GAAP financial measures during the call. Forward-looking statements are based on management’s current expectations and assumptions that are subject to risks and uncertainties. Factors that may cause actual results to materially differ from expectations are detailed in our earnings materials and SEC filings available on our website. Information about our non-GAAP financial measures, including reconciliations to U.S. GAAP can also be found in our earnings materials that are available on the website. So with that, take it away, Brian.

Thank you, Lee. And thank all of you for joining us this morning. I am starting on slide 2 of the earnings presentation. During the fourth quarter of 2022, our team once again delivered responsible growth for our shareholders. We reported $7.1 billion in net income after tax or $0.85 per diluted share. We grew revenue 11% year-over-year and delivered our sixth straight quarter of operating leverage. And again, we delivered a strong 16% return on tangible common equity. If you move to slide 3, we list the highlights of the quarter, which have been pretty consistent throughout the year. We drove good organic customer activity and saw significant increases in net interest income, which all helped drive operating leverage. Revenue increased year-over-year 11%. It was led by a 29% improvement in net interest income, coupled with a strong 27% growth in sales and trading results by Jimmy DeMare and the team. This growth will exceed the impacts of lower investment banking fees and the impact of bond and equity market valuations on asset management fees in our wealth management business. The positive contributions of NII and sales and trading were also enough to overcome a decline in service charges driven by the fully implemented changes in NSF and overdraft fees in our consumer business. Importantly, we improved our common equity Tier 1 ratio by 25 basis points in quarter four to 11.2%, and we achieved that without changing our business strategies. We’re well above both our current 10.4% minimum CET1 requirement and above the requirement that we’ll have beginning next year in January of 10.9%. We added to our buffer while both growing loans and reducing outstanding shares in the quarter. On a year-over-year comparative basis, both net income and EPS are up modestly with strong operating leverage more than offsetting higher provision expense. The higher provision expense is driven primarily by reserve builds this quarter, a result of loan growth in our portfolios and also our conservative weighting in our reserve setting methodology, which I’ll touch on later. Last year, we had large reserve releases. Net charge-offs increased this quarter, but asset quality remains strong. Charge-offs are well below both the beginning of the pandemic as well as longer-term historical levels. And again, I’ll touch on this in a few pages. All that being said, the simple way to think about it is pretax pre-provision income, which neutralizes these reserve actions, grew 23% year-over-year. Let’s turn to slide 4. Slide 4 shows the year-over-year annualized results. And quarter four results were a nice finish to a successful year in which we produced $27.5 billion in net income on 7% revenue growth and a 4% operating leverage. While the year was strong, full year earnings declined as a result of loan loss reserve actions. For the full year of 2022, again, we built about $370 million reserves. And by contrast, last year, in 2021, we released $6.8 billion of reserves. Isolating those changes, again, you’ll see that PPNR grew a strong 14% over 2021. As I said earlier, the themes were characterized by good organic customer activity, strong NII and always helped by years of responsible growth. Slide 5 highlights some of the attributes of organic growth for the quarter and the year. This plus the slides that we include in each earnings materials in our appendix, which show digital trends and organic growth highlights across all the businesses. Our investments over the past several years in our people, tools and resources for our customers and our teammates as well as renovating our facilities have allowed us to continue to enhance the customer experience to record high levels and fuel organic growth. In the fourth quarter of 2022, we added 195,000 net new checking accounts, bringing the total for the year to more than 1 million. This is twice the rate of addition that we had in 2019 in periods before the pandemic. This net growth has led to a 10% increase in our customer checking accounts since the pandemic, while 92% of our accounts are primary checking accounts of the household and the average opening balance, not the average balance, but the average opening balance of these new accounts is over $5,000. We also produced more than 1 million new credit cards, the sixth consecutive quarter of doing that, bringing us back to levels that we generated pre-pandemic. Credit quality, you can see on Appendix slide 28 for consumer, remains very high in new originations. Verified digital users grew to 56 million with 73% of our consumer households fully digitally active. We have more than 1 billion logins to our digital platforms each month, and that’s been going on for some time now. Digital sales are also growing, and they now represent half of our sales in the consumer business. Erica, our virtual digital assistant, is now handling 145 million interactions this past quarter and has passed 1 billion interactions since its introduction just a few years ago. This saves a lot of work for our team. When you move to the GWIM business, the wealth management business, our advisers grew by 800 in the second half of the year. Our team added 28,000 net new households across Merrill and the Private Bank in 2022. We experienced solid net flows despite the turbulence of markets. By the way, during 2022, our average Merrill household opened with balances of $1.6 million; we get very high-quality account openings. On flows, when combined across all our investment platforms in our consumer wealth management business, we saw $125 billion of net client flows this year. Additionally, we continue to see increased activity around both investments and our GWIM business and our banking products. Diversified bank element is a strong differentiator for us as a company. It also supports the healthy pretax margin. This helped the GWIM business deliver strong operating leverage for the year, and they grew revenue and net income to records. In our Global Banking business, we saw solid loan production and growing use of our digital platforms throughout the year and added new clients to our portfolio. As you well know, the overall investment banking fee pool was down. However, we continue to deepen and expand client relationships with our build-out of commercial bankers. Our global treasury services business also grew revenue 38% year-over-year as a result of both rates as well as fees for service on cash management. In global markets, we had our highest fourth quarter sales and trading performance on record, growing 27% from last year ex-DVA. This was led by a strong performance in our macro FICC businesses, where we made continuous investments over the past 18 months. Equities had a record quarter four performance as well. Let’s move to slide 6 and talk about operating leverage. As I’ve said to you for many years, one of the primary goals of this company which is an important part of our shareholder return model, has been to drive operating leverage. Those efforts, including investments made for the future, coupled with revenue growth produced 18 straight quarters of operating leverage leading up to the pandemic. Beginning last year, in the third quarter of 2021, I told you that we had started achieving operating leverage and got back on a streak, and we’re now at six quarters of operating leverage despite all the things that are going on out there, and the team continues to drive towards that for 2023. So, I thought I’d spend a few minutes on a discussion of topics that have been important as we’ve talked with investors over the last couple of months, deposits and credit. So let’s go to slide 7. First, on deposits. There are several factors impacting deposits as our industry and the economy work through an impressive period: a surge in deposits from the pandemic-related stimulus, the impact of unprecedented monetary easing, the impact of high inflation and then the reversal of that with unprecedented pace and size of rate hikes and monetary tightening. But on a year-on-year basis, average deposits of $1.93 trillion are down 5%. This reflects the market trends and in fact, it reflects high tax payments to the governments in 2022. In addition, as we moved through 2022, customers with excess cash, investment-oriented cash saw yield as rates increased for money market funds, direct treasuries and other products. It’s probably more relevant to discuss the more near-term trends comparing third quarter of 2022 to fourth quarter of 2022: average deposits were down 1.9%. Noninterest-bearing deposits are down 8%, low interest-bearing deposits are up 2%. The mix shift is especially pronounced in treasury services in the global banking business. Corporate treasurers manage $500 billion of deposits they have with us. The impact of their activities has a change in the mix. On the personal side, you can see the checking account balances floating down a little bit from core expenses and spending while more affluent customers put money into higher-yielding deposits in the market. We do manage all these products differentially. And the discussion of these deposits by business segment you can see on slide 8, and we’ll talk through that. So this breaks down our deposits in a more near-term trend. In the upper left, you can see the full year across the whole company going across the page and the rate hikes that you can see on the chart. You can see the heavy tax payment outflows in the second quarter. Then we saw the acceleration of rate hikes and deposits move to products seeking yield in certain customer segments. But in large part, what you’ve seen over the course of the quarter four has been stabilization and more normal client activity. Simply put, we ended quarter four of 2022 with $1.93 trillion in deposits, roughly the overall level as we added in quarter three ending deposit balances. So, let’s look at those differentiated by business. In consumer, looking at the upper right chart, we show the difference between the movement through the quarter between the balance of low- to no-interest checking accounts to somewhat higher-yielding non-checking accounts, money market and savings accounts and a limited portion of CDs. Across the quarter, we saw a $24 billion decline in total, down 2%. We have seen small declines in customers continued higher levels of spending, pay down debt and also move money to the brokerage accounts even in this business. Higher wages have offset this. We saw a decline in quarter four deposits in consumer. Correspondingly, we also saw brokerage levels of consumer investments increased $11 billion, capturing a good portion of those deposits. In general, think of these consumer deposits as being very sticky at $1 trillion. That stickiness, along with net checking account growth, reflects the recognition in the value proposition of a relationship transactional account with our company. It also reflects industry-leading digital capabilities we offer, and the convenience of a nationwide franchise. It also reflects that the customers in our mass market segments have fewer excess cash investment-style cash balances. Fifty-six percent of the $1 trillion in consumer deposits remain in low and no interest checking accounts. And because of all that, overall rate paid in this segment remains low at 6 basis points. In wealth management, which you can see at the bottom left of the chart, more than $300 billion of deposits became more stable across the fourth quarter. Here, you also witness a shift to higher-yielding preferred deposits from lower-yielding transaction deposits as these customers have more excess cash and move them to seek higher yields. Early in the quarter, we saw modest declines in balances, but November’s rate hikes began to slow and the probability of future rate hikes became less. People had moved their money, and we saw an uptick in balances as we moved through the quarter. This reflects the seasonal inflows that happened in the fourth quarter for wealth management clients. At the bottom right chart, you can see the most dynamic part of this equation. Our global banking deposit movement reflects more than $500 billion in customer deposits. The shift here is what drives the mix total for the company. It’s pretty typical with the exception that it happened very quickly in quarter four, driven by the pace of rate hikes. In a rising rate environment, where a company’s operational funds are more expensive, we anticipate these changes, particularly in the high liquidity environments as clients use cash inventory to yield, pay down debt or manage their cash for investment yield. We have seen the mix of global banking interest-bearing deposits move from 35% last quarter to 45% in quarter four. And obviously, we’re paying higher rates on those deposits to retain them. Customer pricing here is on a customer-to-customer basis based on the depth of relationship, the product usage and many other factors. So, overall deposit rates paid as a percent of Fed funds increases are still very favorable to last cycle, even as rates are rising much faster than last cycle. I would note, about to the last cycle that the Fed increases have been rapid and we’d expect to pay higher rates as we continue to move through the end of the interest rate cycle. So just remember, while we’re paying more for deposits, we also get that on our asset side. That is simply why the NII is up 29% from quarter four 2022 versus quarter four 2021. Now let’s move to the second topic I want to touch on specifically, which is credit. And this begins on slide 9. First, it is an indisputable truth that our asset quality of our customers remains very healthy. On the other hand, it’s impossible to gainsay that the net charge-offs are moving to pre-pandemic levels. So, in the fourth quarter, we saw net charge-offs of $689 million, increased $169 million from quarter three. The increase was driven by both higher commercial and credit card losses. As these charts show, they’re still very low in the overall context. In commercial, we had a few older company-specific loans, but not related or predictive of any broader trends in the portfolio. These were already reserved for in prior periods and based on our methodologies, went through charge-off in quarter four. Credit card charge-offs increased in quarter four as a result of the flow-through of a modest increase in last quarter’s late-stage delinquencies. This should continue as we transition off the historic lows and delinquencies to still very low pre-pandemic levels. Provision expense was $1.1 billion in quarter four. In addition to our charge-off provision, it included roughly $400 million reserve build. This was higher than quarter three, reflecting good credit card and other loan growth combined with the reserve setting scenario. So, let’s just stop on the reserve setting scenario. Our baseline scenario contemplates a mild recession. That’s the base case of the economic assumptions in the Blue Chip consensus and other methods we use. But we also add to that a downside scenario. And what this results in is 95% of our reserve methodologies weighted towards a recessionary environment in 2023. That includes higher expectations of inflation leading to depressed GDP and higher unemployment expectations. This scenario is more conservative than last quarter’s scenario. Now to be clear, just to give you a sense of how that scenario plays out, it contemplates a rapid rise in unemployment to peak at 5.5% early this year in 2023 and remain at 5% or above all the way through the end of 2024, obviously much more conservative than the economic estimates that are out there. We included again the updated slides in the appendix, pages 36 and 37 to highlight differences in our credit portfolios between pre-financial crisis, pre-pandemic and current status. We also, again, gave you the new origination statistics for consumer credit on page 28. The work the team has done on responsible growth continues to show strong results. From an outsider’s view, you don’t have to look any further than the Fed stress test results. We’ve had the lowest net charge-offs for peer banks in 10 of the last 11 stress tests. On slides 10 to 12, we included some longer-term perspective. We showed long-term trends for commercial net charge-offs, total consumer charge-off rates and more specifically, credit card charge-off rates. This compares those ratios to pre-financial crisis, during the recovery after the financial crisis, pre-pandemic and then through the pandemic. So that gives you a long-term perspective, which I think keeps in context the idea that we’re moving off the bottom in credit cost towards a level which is normalizing to pre-pandemic, but that level was very low in the grand context of banking. So before I move it to Alastair, I want to just update a few comments on our consumer behavior. Consumer deposit balances continue to show strong liquidity with the lower cohorts of our consumers continuing to hold several multiples of balances that they had as the pandemic began. These balances are drifting down, but they still have plenty of cushion left. And while their spending remains healthy, we continue to see the pace of that year-over-year growth slow. In the aggregate, in 2022, our consumers spent $4.2 trillion, which outpaced 2021 by 10%. You can see that on slide 35. Two things to note on that consumer spending pace. There continues to be a slowdown. Year-over-year growth percentages earlier in 2022 were 14% year-over-year. They’ve now moved to 5% year-over-year in the fourth quarter. So, what does this mean? That level of year-over-year spending growth is consistent with the low inflation, 2% growth economy we saw pre-pandemic. Consumers are also moving spending from goods to services and experience and spending more money on travel, vacations and eating out and things like that. That is good for employment, but continues to maintain service-side inflation pressure. With that, let me pass the mic over to Alastair to go through the rest of the quarter. Alastair?

Okay. Thanks, Brian. And let me start with the balance sheet, and I’ll use slide 13 for this. During the quarter, our balance sheet declined $23 billion to $3.05 trillion, driven by modestly lower global markets balances. Our average liquidity portfolio declined in the quarter, reflecting the decrease in deposits and securities levels. At $868 billion, it still remains $300 billion above our pre-pandemic levels. Shareholders’ equity increased $3.7 billion from the third quarter as earnings were only partially offset by capital we distributed to shareholders and roughly $700 million in redemption of some preferred securities. We paid out $1.8 billion in common dividends. And we bought back $1 billion of shares, which was $600 million above those issued for employees in the quarter. AOCI was little changed in the quarter as a small benefit from lower mortgage rates was more than offset by a change in our annual pension revaluation. With regard to regulatory capital, our supplementary leverage ratio increased to 5.9% versus our minimum requirement of 5%. And that obviously leaves capacity for balance sheet growth and our TLAC ratio remains comfortably above our requirements. Okay. Let’s turn to slide 14 and talk about CET1, where, as you can see, our capital remains strong as our CET1 level improved to $180 billion and our CET1 ratio improved 25 basis points to 11.2%. That means in the past two quarters, we’ve improved our CET1 ratio by 74 basis points as we’ve added to our management buffer on top of both our current and 2024 requirements. So, we can walk through the drivers of the CET1 ratio this quarter, and you can see earnings net of preferred dividends generated 43 basis points, common dividends used 11 basis points, and gross share repurchases used 6 basis points. And while the balance sheet was down, loan growth drove a modest increase in RWA using 3 basis points of CET1. So, we were able to support our loan growth and return capital and add to our capital buffer in the same quarter. Let’s spend a minute on the loan growth by focusing on average loans on slide 15. And here, you can see average loans grew 10% year-over-year, driven by credit card and commercial loan improvement. On a more near-term linked-quarter basis, loans grew at a slower 2% annualized pace just driven by credit card. The credit card growth reflects increased marketing, enhanced offers and reopening of our financial centers, delivering higher levels of account openings. Mortgage balances were up modestly year-over-year, and linked quarter were driven by slower prepayments. Commercial growth reflects a good balance of global markets lending as well as commercial real estate and to a lesser degree, custom lending in our private bank and Merrill businesses. Turning to slide 16 and net interest income. On a GAAP non-FTE basis, NII in Q4 was $14.7 billion, and the FTE NII number was $14.8 billion. Focusing on FTE, net interest income increased $3.3 billion from Q4 of 2021 or 29%, driven by a few notable components. First, nearly $3.6 billion of the year-over-year improvement in NII was driven by interest rates. Year-over-year, the average Fed funds rate has increased 359 basis points, driving up the interest earned on our variable rate assets. Relative to that Fed funds move, the rate paid on our total deposits increased 59 basis points to 62 basis points. And focusing just on interest-bearing deposit rates paid, the increase is 91 basis points. So, even while Fed funds rates have increased 140 basis points more than the last cycle, at this point, our cumulative pass-through percentage rates still remain lower in this cycle. That includes an increase in the pass-through rates in the past 90 days due to the unprecedented period of rate hikes. Included in the rate benefit was $1 billion improvement in the quarterly securities premium amortization. Long-term interest rates on mortgages have increased 345 basis points from the fourth quarter of 2021, which has driven down refinancing of mortgage assets and therefore, slowed the recognition of prepayment-related amortization expense recognized in our securities portfolio. The second contributor is loan growth, net of securities paydowns, and that’s added nearly $400 million to the year-over-year improvement. And lastly, partially offsetting the banking book NII growth just described was higher funding costs for our global markets inventory. Now, that is passed on to clients through our noninterest market-making line, so it’s revenue neutral to both sales and trading and to total revenue. And as you can see in our material, Global Markets NII is down $660 million year-over-year. Okay. Turning to a linked quarter discussion. NII is up $933 million from the third quarter, driven largely by interest rates. That $933 million increase included a $372 million decline in our global markets NII. The net interest yield was 2.2%, and that improved 55 basis points from the fourth quarter of 2021. Nearly 30% of that improvement occurred in the most recent quarter with the primary driver being the benefit from higher interest rates, which includes a 13 basis-point benefit from lower premium amortization. As you will note, excluding global markets, our net interest yield was up 89 basis points to 2.81%. Looking forward, I would make a couple of comments. As I do every quarter, let me provide the important caveats regarding our NII guidance. Our caveats include assumptions that interest rates in the forward curve materialize, and we anticipate card loans will decline seasonally from holiday spend paydowns, and otherwise, we expect modest loan growth. We expect a seasonal decline in global banking deposits and that the other deposit mix shifts experienced in Q4 may continue into the first quarter in the face of more rate hikes. We also expect the funding cost for global markets to continue to increase based on higher rates. And as noted, the impact of that is recognized and offset in noninterest income, so it’s revenue neutral. So, starting with the fourth quarter NII of $14.8 billion, and assuming a decline of roughly $300 million of global markets NII in Q1, which would be similar to the fourth quarter decline, that would get us to a Q1 number around $14.5 billion. In addition, we have to factor in two less days of interest, which is about $250 million. So, that would lower our starting point to $14.25 billion. We believe the core banking book will continue to show the benefit of rates and other elements and can offset most of the day count. So, we’re expecting Q1 NII to be somewhere around $14.4 billion. Beyond Q1, with increases in rates slowing and if balances continue their recent stabilization trends, expect less variability in NII for the balance of 2023. Okay. Let’s turn to expense, and we’ll use slide 17 for the discussion. Q4 expenses were $15.5 billion, and they were up $240 million from Q3, driven by an increase in our people and technology costs. In addition, we also saw higher costs from our continued return to work and travel and cost of client engagement. We’ve seen pent-up demand for our teams gathering back together in person to drive collaboration and to spend more time with our clients. Inflationary pressures continued but our operational excellence improvements as well as the benefits of a more digitized customer base helped offset those pressures. Our headcount this quarter increased by 3,600 from Q3. And as we faced increased attrition in 2022, our teams were quite successful in their hiring efforts to continue to support customers. As attrition slowed in the fall, our accelerated pace of hiring outpaced attrition, leaving us with growth in our headcount. As we look forward to next quarter, I would just remind everyone that Q1 typically includes $400 million to $500 million in seasonally elevated payroll taxes. And Q1 will also be the first quarter to include the costs of the late October announcement by regulators of higher FDIC insurance costs. And as a result of holding the leadership share in U.S. retail deposits, that will add $125 million to each of our quarterly costs or a total of $500 million for the year. We expect these items will put expenses around $16 billion in the first quarter before expectations that they should trend back down again over the course of 2023. On asset quality, we highlight credit quality metrics on slide 18 for both our consumer and commercial portfolios. And since Brian already covered much of the topics on asset quality, I’m going to move to a discussion of our line of business results, starting with consumer on slide 19. Brian noted the earlier organic growth across checking accounts, card accounts and investments were strong again this quarter, and that’s as a result of many years of retooling and continuous investments in the business. So, let me offer some highlights. At this point, we have the leading retail deposit market share. We have leadership positions among the most important products for consumers, and we’re the leading digital bank with convenient capabilities for consumer and small business clients. We also have a leading online consumer investment platform and a great small business platform offering for our clients. And importantly, when you combine all these capabilities with improved service, at this point, customer satisfaction is now at all-time highs. And we produced another strong quarter of results in consumer banking that resulted in $12.5 billion in net income in 2022. For the quarter, consumer banking earned $3.6 billion on good organic growth and delivered its seventh consecutive quarter of operating leverage, while we continue to invest for the future. Note that our top line grew 21%, while expense grew 8%. The earnings impact of 21% year-over-year revenue growth was partially offset by an increase in provision expense, and that provision increase reflects reserve builds this period compared to a reserve release in the fourth quarter of 2021. Net charge-offs increased as a result of the card charge-offs that Brian noted earlier. While this quarter’s reported earnings were up 15% year-over-year, pretax pre-provision income grew an even stronger 36% year-over-year. So that highlights the earnings improvement without the impact of the reserve actions. Revenue improvement reflects the fuller value of our deposit base as well as deepening with our deposit relationships. I’d note the growth also includes a decline in service charges of $335 million year-over-year as our insufficient funds and overdraft policy changes were in full effect by the end of Q2 of this year. And as a result of those policy changes, we continue to benefit from the better overall customer satisfaction and the corresponding lower attrition and the lower costs associated with fewer customer complaint calls, obviously as a result of fewer fees. The 8% increase in expenses reflects business investments for growth, including people and technology, along with costs related to reopening the business to fuller capacity. And remember, much of the Company’s minimum wage hikes and quarter two increased salary and wage moves impacts consumer banking the most of our lines of business and therefore, impacts most the year-over-year comparisons. We also continued our investment in financial centers. For the year, we opened 58 and we renovated 784 more. And against all of that, both digital banking and operational excellence helped us to pay for investments and that allowed us to improve the efficiency ratio to 47%, an impressive 600 basis-point improvement over the year-ago period. Before moving away from consumer banking, I want to note some differences to highlight just how much more effectively and efficiently this business is running since even just before the pandemic. It’s easy to lose sight of how well this business is operating from an already strong position in 2019. And you can see some of the stats in the appendix. We can best summarize by noting we’ve got $318 billion more in deposits, 10% more checking customers, 92% of whom are primary, 28% more investment accounts. And absent the card divestitures, we’ve increased the amount of new card accounts by 4%, and our payment volumes are 36% higher. We’re servicing those customers with 387 fewer financial centers because of our digital capabilities, and it’s allowed us to need 10% fewer people to run the business. Our combined credit and debit spend was up 35%. Digital sales increased 77%, and we sent and received 3 times the number of Zelle transactions. All of this allowed us to run the business with fewer employees and lower our cost of deposits ratio below 120 basis points. Moving to slide 20. Wealth management produced strong results, earning $1.2 billion on good revenue and a 29% profit margin. This led to full year records for both revenue and net income of $21.7 billion and $4.7 billion respectively. This was an especially good result given the nearly unprecedented negative returns of both the equity and the bond markets at the same time this year. The volatility and generally lower market levels put pressure on certain revenues in this business again in Q4, but what helps differentiate Merrill and the private bank is a strong banking business at scale with $324 billion of deposits and $224 billion of loans. So, despite a 14% decline in assets under management and brokerage fees year-over-year, we saw revenues hold flat with the fourth quarter of 2021. Our talented group of wealth advisers, coupled with powerful digital capabilities, generated 8,500 net new households in Merrill in the fourth quarter, while the private bank gained an impressive 550 net new high net worth relationships in the quarter; both were up nicely from net household generation in 2021. We added $20 billion of loans in this business since Q4 of 2021, growing 10% and marking the 51st consecutive quarter of average loan growth in the business despite securities-based lending reductions related to the current market environment. That’s consistent and sustained performance by the teams. Our expenses declined 1%, driven by lower revenue-related incentives, partially offset by investments in our business. Moving to global banking on slide 21. And you can see the business earned $2.5 billion in the fourth quarter on record revenues of $6.4 billion, pretty remarkable given the decline in investment banking fees during this year. Lower investment banking fees, higher credit costs and a modest increase in expenses were mostly offset by stronger NII and other fees. So overall, revenue grew 9%, reflecting the value of our global transaction service business to our clients and our associated revenue growth, while investment banking fees declined a little more than 50%. The company’s overall investment banking fees were $1.1 billion in Q4, declining $1.3 billion year-over-year in a continued tough market. Still, we increased our ranking in overall fees for the full year 2022 to number three as we’ve continued to invest in the business. The $612 million increase in provision expense reflected a modest reserve build of $37 million in the fourth quarter compared to a $435 million release in the year-ago period and pretax pre-provision income grew 13% year-over-year. Expense increased 4% year-over-year, and that was driven by strategic investments in the business, including hiring and technology. Switching to global markets on slide 22. And as we usually do, I’ll talk about the segment results, excluding DVA. You can see our fourth quarter record results were a very strong finish to a good year. The continued themes of inflation, geopolitical tensions and central banks changing monetary policies around the globe continue to drive volatility in both bond and equity markets and repositioning from our clients. And as a result, it was another quarter that favored macro trading, while our credit trading businesses improved as spreads fared better than the prior year. Our fourth quarter net income of $650 million reflects a good quarter of sales and trading revenue, partially offset by lower shares of investment banking revenue. And it’s worth noting that this net income excludes $193 million of DVA losses this quarter as a result of our own credit spread movements. Reported net income was $504 million. Focusing on year-over-year, sales and trading contributed $3.7 billion to revenue, and that improved 27%. That’s a new fourth quarter record for this business, exceeding the previous one by 21%. And at $16.5 billion in sales and trading for the year, it marked the best in more than a decade. FICC improved 49%, while equities was up 1% compared to the quarter a year ago. The FICC improvement was primarily driven by growth in our macro products, while credit products also improved from a weaker Q4 2021 environment. We’ve been investing continuously over the past year in our macro businesses. We’ve identified those as opportunities for us. And again, we’ve been rewarded for that this quarter. Year-over-year expense increased about 10%, primarily driven by investments in the business. Finally, on slide 23, we show all other, which reported a loss of $689 million, and that was consistent with the year ago period. For the quarter, the effective tax rate was approximately 10%, benefiting from ESG investment tax credits and certain discrete tax benefits. Excluding those discrete items, our tax rate would have been 12.5%. And further adjusting for the tax credits, it would have been 25%. Our full year GAAP tax rate was 11%, and we would not expect 2023 to be a lot different. So with that, we’ll stop here, and we’ll open it up please for Q&A.

We’ll take our first question from Glenn Schorr with Evercore.

Hi. Thanks very much. Need a little more help, you gave a lot, but I need a little more help on NII for 2023. You walked us to the $14.4 billion as a starting point for the quarter and your words were less variability in NII for the rest of 2023. So, I guess, my question is, you got a lot of loan growth, you have a few more rate hikes hopefully coming through, and I understand the opposite. The flip side of that is deposit migration, some outflows and betas. But could you fill in those blanks? Because I think — I won’t speak for everybody. I know I am — we’re still expecting some growth in NII for the calendar year. So, maybe you could talk through some of those pieces and maybe the outflow in global banking, noninterest-bearing is a big piece of it. So, thank you.

Glenn, I’ll start with just by way of context, obviously. We’re coming off a period with historic inflows for pandemic deposits. And now in Q4, we’re beginning to see the impact of quantitative tightening and a number of sharp rate rises. So, that obviously creates some uncertainty. We don’t necessarily have a playbook for that. We just have to see how actual balances perform, and we’ve got to see how the rotation and the rate paid develop. So, it’s dynamic. It’s evolving, and we manage and we forecast that weekly. So, when we lay out for you the actuals on page 7 and 8 of the earnings presentation, we’re trying to show you what we’re seeing in real time around balances and mix. So, what we’ve said with respect to this quarter coming up is we’ve got to adjust for the day count as we would every year. That’s timing, and we’ll get that back, obviously, in Q2 and Q3. And then we highlighted the global markets NII impact. It’s always been there. The last couple of quarters, it’s been around $300 million. It is revenue neutral to shareholders as we point out, because we pass that along to clients and we capture it elsewhere in sales and trading, but it does obviously impact the NII. That’s why we’re highlighting it. But as it relates to the forecast, look, we feel like the modest balance declines are kind of in there that may continue. And this continued rotation from some of the noninterest-bearing to interest-bearing. We’ve got some pricing and rate pressure. So, that’s in the back of our mind, too. And the only final thing I’ll just say is, we’re reluctant to go a whole lot further out. Last year, we declined to give a full year guide. This year, we feel that way in particular because it’s just a much more sensitive environment when we’re modeling when interest rates are at 5% than when they were at 50 basis points. So, for all those reasons. Now, I will say this as the final point. We just have to stay patient because we’ve got to see how rates and balances and rotation shake out. And as rates return to more normal and as customer behavior normalizes, we may resume our upward path over time. But we’ve got to see how this shakes out, and that’s why we don’t want to go out beyond Q1 at this stage.

Fair enough. I feel bad for all of us. Maybe a quick one on credit. Good to see charge-offs down given everything that’s going on in the world. But can you talk through the big — the $1.6 billion sequential pickup in criticized book from last quarter? What’s driving that and how you feel about reserves against that? Thanks.

Yes. So, you’re aware, the main driver there is commercial real estate. And it’s specifically about $1 billion of it is office. Obviously, there’s a significant amount of change going on in office. And what we’ve chosen to do is as rates are rising here, we’re pushing that through the models. And just with the debt service coverage it comes down, we pushed through the downgrade. So, we’ve chosen to do that. The performance is still okay. So, we’re not concerned with the performance, but we’re just making sure we’re being tight on the modeling there. It is obviously a portfolio where I think you know this, we’re pretty focused on making originations into office buildings that are leased up, generally at 55% LTV at origination and 75% of that book is Class A office building. So, we’re not alarmed there. We’re just following our own process with respect to making sure we’re current on the debt service coverage.

Just remember that we’re talking about office with very high-quality underwriting characteristics, all Class A, et cetera. And so we just have a conservative rating process, frankly. And it’s well viewed out there and well looked at by many people. But remember, office is $14 billion to $15 billion of the total portfolio. So, we feel very comfortable where we are. And then, obviously, we built reserves against the portfolios across the board that are strong and reflect, as I said earlier, basically a mild recession in the base case and a more severe recession in the adverse case.

We’ll go next to Gerard Cassidy with RBC.

Thank you. Alastair, on the loan loss reserving and Brian just talked about the adverse case being about 40%. Can you share with us how much of the reserve building is what may be referred to as management overlay relative to what the models are specifically dictating on reserve building?

We don’t disclose that. You might assume that there’s a fair amount. There are three components to this. One is what the models say, two is uncertainty and precision and other things we overlay, and then judgmental adjustments, and you might think that there’s a fair amount of that right now with the uncertainty. So the model piece would be a portion of it, but we don’t quantify the exact split.

Very good, Brian. And then when you look at your deposit behavior of the consumer, the past cycles, is there any material differences in the way they’re moving money around or not moving money around from their checking accounts or low-yielding savings accounts?

I think for higher-end consumers, not really; they move to money market funds and other higher-yielding products as rates rise, and we manage that flow. That sort of investment cash moves; the checking accounts don’t move as much. The difference, frankly, is that there was a lot of stimulus that was in addition to the earnings power of consumers. So we’ve never had that in history. The question is, will they spend it down or will they keep storing it up? They’ve been spending it down very modestly across medium-income households and the general consumer business. For example, the cohort that was $2,000 to $5,000 in average balances pre-pandemic at $3,400, they’re still sitting at $12,800, but they peaked early in 2022 at $13,400. So, they’re drifting down, but it’s still multiples. The big question was, will they end up spending that down? If they’re employed, probably not. But if unemployment rates change — and our models assume the unemployment rate changes — we incorporate that. I think we’re at 6 basis points now in total consumer rate paid. The rate structure is very favorable. We have very low CD volumes and a fair amount of money markets, but most of it’s checking. That’s why we showed you the differential in checking. So, is it different? Yes, probably in the mass consumer business just because they are sitting on more cash and may use that cash in certain scenarios, but the rest of the behavior is largely the same, including in the corporate business where people can have less balances and the effective credit rate generates a bigger number to cover their fees, so they tend to pull balances out.

Just quickly, Brian, when you look at the high net worth and corporate, did that move from 0% to 3% Fed funds, for example, versus 3% to where we got today at 4.5%? Is most of that completed where the people that were going to move the money have already moved it in those two categories?

I can’t say definitively, but if you look at the pages showing balances, wealth management in the fourth quarter had about $300-plus billion of deposits and was relatively stable across the last several weeks of the quarter. There’s always a little movement into preferred deposits that yield more. The big shift earlier in the year was driven by large tax payments in the second quarter, which were unusually high due to 2021 dynamics. So what we’re seeing in the last 4 or 5 weeks is relatively stable deposit balances. Quarter-end three and quarter four were basically flat with a little movement among categories. In that business, it’s relatively stable right now, so the large moves have mostly already taken place.

We’ll take our next question from Mike Mayo with Wells Fargo.

I guess, Alastair, no good deed goes unpunished. I mean, NII did grow 21% for the year 2022. It did grow 7% linked quarter and the fourth quarter up $900 million. But six weeks after you gave guidance last quarter, you lowered that guidance by $300 million. And it just raised some questions about the quality of your modeling or if you had your arms completely around the asset-liability management. So, what happened to cause you to change that guidance, albeit in the context of still some of the best NII growth you guys have seen in many years?

So Mike, if I go back to six months ago, in Q2 earnings, what we said at the time was we thought over the course of the next six months, NII might go up by $1.8 billion, $1.85 billion. In actual fact, it’s gone up $2.25 billion. So that’s the actuals. Remember, we’re forecasting as best we can at any given time. Q3 was more favorable than I think we had thought and Q4 was less favorable. And Q4 was less favorable in large part because the balances behaved just a little bit differently, and the rate paid behaved just a little bit differently. And the mix or rotation behaved a little differently. It kind of makes sense because Q4 is where QT kicked in. So look, we don’t have a great deal of precedent. It’s obviously a historic period. It’s difficult to forecast quarter-to-quarter, and our models are just a lot more sensitive right now. So, I think we’re going to try and share with you what we know when we know it, but it’s just a more difficult environment at this point to predict looking forward.

It’s like the first half of your round of golf, you played well, you should have just stopped after then, I guess. But, as we look — so in other words, that $400 million extra that you got, you’re kind of giving back here from the fourth to the first quarter. So, $14.4 billion NII guide, if you annualize that that would be still 9% NII growth in 2023. Is that a fair starting point? Can you give us not big confidence, but a little confidence given that deposits have stabilized, the day count, cards are seasonally lower. So again, you analyze that that’s 9% NII growth. And then, Brian, still on expenses, any change there? Are you going to keep it to just like 1.5% growth?

On the first thing, Mike, you were right to the math. If you take the $14.4 billion as a starting point and annualize, you get about 9% NII growth year-over-year. So that’s a reasonable way to think about it. As you move through the year 2023, leave aside the economic scenario playing out, you’ll move from where we are today, which is uncertainty about where the balances will finally settle in and the plateauing of NII, to where you get back to normalized growth and normalized loan growth. So, you’ll have nice NII growth year-over-year. On expenses, if you look at analysts’ estimates for us, they average about 62.5% efficiency, which is consistent with our commentary and what we’re comfortable with. That requires continued management, letting headcount drift back down and continuing to invest in things that provide efficiencies. Key to that is the six quarters of operating leverage and continuing that going forward.

And then, the last part of the income statement — or the EPS is simply your excess capital, which you highlighted, it seems like you’re well above your CET1 ratio. So, what does that mean for the pace of buybacks and your desire to buy back stock at this price?

We’ve always said that the first priority is to support business growth, and that’s what we’ve been doing. We’re well above our minimums. We’re on a path to close out the requirement for next year. We bought back a chunk of shares this quarter, and you should expect that to start to increase, neutralizing employee issuances and then going above that each quarter now because we have room. We’re back in the game on buybacks.

We’ll go next to John McDonald with Autonomous Research.

Alastair, I know we’re asking you to predict a lot of things here. Just thinking about the credit and the pace of normalization, do you have any sense of where charge-offs might start out and what kind of pace of normalization if we look at the charge-off ratio that moved up a little bit this quarter, what might that look like for 2023?

We’re not going to look too far into the future, John. But if you look at our 90 days past due in the credit card data that we show you every quarter, that tends to give you a pretty good leading indicator of what’s coming down next quarter. So, you can see the 90 days past due have picked up just a little bit, and 30 days past due have picked up just a little bit. We’re still well below where we were pre-pandemic, but that would tell you on the consumer side, it looks like it’s drifting just a little higher. Number two, with respect to commercial, this quarter was a little unusual. We had three deals that we ended up having to charge off. Not correlated in any way. They’re in totally different businesses, and they’ve been hanging around for a while. Two of them are fully reserved. So they didn’t come as a surprise. But, because the commercial stuff was so close to zero, it immediately looks like a pop in any given number. That’s part of the reason why we showed those graphs of what charge-offs have looked like over time in the earnings materials. But the commercial portfolio continues to look very strong.

Okay. And you touched on this a little bit on Brian’s comments, but just on loan growth, what are you guys thinking about for this year? And what’s the perspective of where you closed the spigots a little bit in the third quarter as you managed RWA. You kind of said those were opening up in the fourth, but we didn’t really see it translate to robust loan growth. Just kind of that dynamic between what you’re looking to do and what you’re seeing on demand for loan growth outlook. Thank you.

We said we were quite open for business in the fourth quarter, and that remains the case. Brian covered the capital point: we added 75 basis points of capital in the last two quarters, which puts us in a great place. Mainly what you’re seeing in Q4 is that it was a slower environment for loan growth. A year ago, we were anticipating high single-digit loan growth, and we grew 10%. This year, we feel like it’s going to be mid-single digits; it’s going to be slower. It’s going to be led by commercial and by card, but things like securities-based lending are quieter. Mortgage is quiet through this year. And then, in our base case with the blue-chip consensus forecasting a recession, it will be a quieter loan growth year this year. But we’re open for business to support our clients.

We’ll go next to Erika Najarian with UBS.

I just had one compound clarifying question. The first is, Brian, did you, in response to Mike’s question on NII, mean $57.6 billion in NII for 2023, right? He was saying $14.4 billion times 4 or 9% NII growth. You seem to be going with it. I just wanted to confirm that. I think there’s a bit of confusion given that you guys were saying you don’t want to go beyond the first quarter? And the second question is also for you, Brian. I think that you’ve done an unbelievable job at transforming the company. And I think the one thing that remains is that the investor base still thinks of you as mostly a bank to invest in when rates are going up, right? And clearly, there’s a lot of uncertainty over the NII outlook. But, could you sort of give us what we should be potentially excited about that you can control with regards to the revenue trajectory from here? And also you spent so much time on deposits. I’m just kind of confused on the message in terms of deposit declines from here because you laid out this case that you have this very resilient deposit base, and it seems like a lot of attrition has already happened. So, that — sorry, that was actually three questions in one. I apologize, but that’s it.

I’ll put those questions together. If you look at the slide that shows the difference between consumer business in 2019 and now, it’s something to be excited about because we have rebuilt and improved the franchise through the pandemic. We have 10% more checking accounts, customer favorability at all-time highs, and the small business business is the biggest in the country and growing. We have a large anchor of low-cost deposits, which is valuable as rates materialize. In past cycles, we continued to grow deposits in the consumer business in the mid-single-digits even when rates did not move up, which provides leverage over time. Pair that with the wealth management business with significant deposits and loans and strong net household growth, you get a powerful organic growth engine. You have to put that against the backdrop of a plateauing of NII in the near term, which is what Alastair discussed — less variability around the $14.4 billion starting number. The trading business that we invested in is performing very well, delivering record fourth-quarter results. So, in sum, be excited about more customers, deeper relationships, strong digital engagement, and investments that are starting to bear fruit. Those are long-term drivers of revenue beyond the near-term interest rate noise.

Just to clarify, Brian, you mentioned the plateauing of NII and then, hopefully, all the investments in the business will drive growth from there. Is that still possible if we have continued rate cuts through 2024?

The impact depends on what causes rate cuts. If cuts are a normalization of the rate curve, that’s different than cuts made in response to a severe downturn like in the pandemic. We base our modeling on the Blue Chip consensus and then look at our balances. What’s different this time is that even with a strong rise in interest rates, we’re seeing consumer spending consistent with a 2% growth economy, which is supportive. So if rates were to be cut modestly as economic conditions normalize, the franchise strength and customer behaviors will continue to support revenue. If they are cut sharply because of a severe economic downturn, that’s a different environment and would have broader impacts.

Erika, the other thing I’d just say is why we’ve got a slowdown in some of our fee-based businesses right now is because rates have risen so quickly, creating volatility in markets and a big sell-off in bonds and stocks. We’re now poised in a lower base where we can grow from here. We have a diversified set of businesses where as some normalcy returns, we can see some pickup in those fee lines as well.

We’ll go next to Ken Usdin with Jefferies.

I wanted to follow up, Alastair. You had about $800 million of incremental interest income from the securities book. I’m just wondering if you can help us understand how much of that was attributed to the continued benefit from the swap portfolio? And also then how would you expect that to impact your outlook for the $14.4 billion in the first quarter guide? Thank you.

Most of the increase in the securities portfolio yield is driven by treasuries that are swapped to floating. That way, we don’t have capital impact from rising rates. You’re going to see the securities yield continue to pick up over time as floating rates go higher and as lower-rate securities mature and roll off. At the same time, we’re using the cash flow from those securities to put money into loans, which is our preferred use of capital. So, the securities portfolio pickup is part of the NII improvement, and it supports the $14.4 billion Q1 expectation.

And just as a follow-up, what’s our best benchmark rate to watch that trajectory for how we can understand that helper from that swap portfolio?

Normally, it’s SOFR, the secured overnight financing rate.

Okay, great. Second quick one just on capital. You had 20 basis points increase in your CET1. You did $1 billion or so of the buyback. Just wondering how you’re thinking about capital return with the Basel package of rules still ahead of us going forward. Thanks.

Brian said the right things. The strategy hasn’t changed. We’ll support our clients, invest in growth, sustain and grow our dividend and over time balance building capital and buying back shares. The difficult part with Basel III endgame is we don’t have the final rules yet, so we’ll wait until they come out and then provide more perspective. But banks have plenty of capital. We were asked to take 90 basis points more in June, there’s a lot of procyclicality already in things like the stress test and stress capital buffer and CECL, and we’ve shown our ability to perform and build capital: 75 basis points in two quarters in this case. We’ll deal with whatever the ultimate rules are.

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

Good morning. Have you thought about how to better insulate yourself against potentially lower rates and not just a small decline, but if we get something unusual and rates drop a lot? I know it’s easier for some of the smaller banks to do it, but we have seen some regional banks essentially trying to lock in a corridor of the NIM so that medium-term it’s more about growing the balance sheet versus the rate moves up and down. Clearly, with your deposit rates low, if we do get Fed cuts, there’s just not as much leverage to bring down those rates.

We don’t necessarily think in terms of a fixed NIM corridor, but we think about balancing earnings, capital and liquidity through the cycle. We strive to operate and deliver across all rate environments. You can see our changes at the margin: moving securities into loans, restriking assets, and maintaining a more efficient balance sheet. At the margin we may consider fixing some rates depending on developments, but our strategy has allowed us to drive net interest yields and support NII growth. We feel we have the right balance and may keep a little asset sensitivity.

We’ll take our next question from Betsy Graseck with Morgan Stanley.

Two questions. One, just a little more color on the loan growth outlook. I heard you on expecting loan growth will be slowing as you go through the year. I just wanted to understand — is that more just demand slowing and base effects or is there also anything in there from you on proactive credit decisioning as normalization comes through the rest of the year?

A couple of things. In the fourth quarter you saw card balances up seasonally and those will decline as holiday spend paydowns occur. Usage rates are still low relative to pre-pandemic levels, and customers continue to pay down balances. Line usage has come back down; it hasn’t returned to pre-pandemic levels. Corporates are managing borrowing and cash more conservatively and acquisitions are slowed. Securities-based lending balances are being paid down. Mortgages are quiet. So put all that together and demand is a bit softer. We have not changed underwriting standards; you can see originations quality in the appendix. In our base case as the rate environment settles, you should see normalization and return to mid-single-digit loan growth, but not the 10% we saw last year.

Okay. Got it. And then, on the expense side, I know we talked a lot about the NII and the puts and takes as you go through the year. What about stability on the expense line to manage through any worse-than-expected outcomes on the NII? What kind of levers do you think you have to pull there, Brian?

We have a few levers. Variable compensation will adjust as results change. We can manage headcount trends; we slowed hiring as attrition eased and that gives us flexibility to not add as many roles. Operational excellence and digital capabilities free up costs. We plan to continue investing in technology — about $3.7 billion in development in 2023 versus $3.4 billion in 2022 — and in talent, but we will manage hiring pace and variable compensation to maintain operating leverage. There are choices to slow some investments if necessary, but we balance those against long-term value creation.

We’ll go next to Vivek Juneja with JP Morgan.

Thank you. A couple of clarifications on the same NII question. I just want to understand, in your assumption about staying at $14.4 billion through the year on a quarterly basis, are you assuming deposits to continue growing or shrinking? Number one, are you expecting further rotation out of noninterest-bearing to interest-bearing? And do you expect the $14.4 billion number even if there are rate cuts towards the end of the year? Is that number doable even with rate cuts?

We said less variability around that number given the recent market moves. All the items you mentioned — deposit growth or shrinkage, rotation to interest-bearing, and potential rate cuts — are why we’re reluctant to offer a full-year precise guide. We base modeling on Blue Chip consensus and weekly balance data. If rates and balances stabilize, you should see the $14.4 billion type base and then growth from normalized loan and deposit trends. We’ll share what we know when we know it.

Another question slightly different. You gave the $2,000 to $5,000 deposit cohort, Brian, in terms of where they are in deposit balances. In the past, you’ve also given a cohort below that, like a $1,000 cohort. How is that doing? Can you give any numbers on that?

It’s similar; they’re moving down slightly. All cohorts have drifted down somewhat, but they still hold multiple times their pre-pandemic balances in many cases. I don’t have the exact figure for that $1,000 cohort in front of me, but it’s also down slightly quarter-over-quarter. Lee will follow up with the exact number for you.

We have no further questions in queue at this time. I’d like to turn the program back over to Brian Moynihan for any additional or closing remarks.

Thank all of you. Good quarter to finish 2022, and thank you to our teammates for producing it. We continue to grow earnings year-over-year. We have good organic growth and operating leverage for the sixth straight quarter. Those will continue in 2023. The asset quality in the company continues to remain at historic lows relative to any normalized time period in the company’s history, including the strong credit performance we had just leading into the pandemic. So, our job is now to drive what we can control, which is the organic growth of the franchise; the investments that we make are bearing fruit and also to keep the expenses in good control, and we plan to do that in 2023. Thank you. We look forward to talking to you next quarter.

This does conclude today’s program. Thank you for your participation. You may disconnect at any time.