Hello, and welcome, everyone joining today's Bank of America Earnings Announcement. Please note, this call is being recorded. It is now my pleasure to turn the meeting over to Lee McEntire. Please go ahead.

Thank you, Leo. Good morning. Thank you for joining us to review our fourth quarter results. During the quarter, we elected to change the accounting method related to our tax-related equity investments in order to better align our financial statement presentation with the economic and financial impact of those investments. As a result, we filed an 8-K on January 6 and a related mini supplemental package recasting the numbers for the quarters of 2024 and 2025 and the full year of '23 and '24. The primary impact of the accounting change was a reclassification between the income statement line items in our income statement, which had an insignificant impact on net income. Our discussion today is based on those recast numbers. As usual, our earnings release documents are available on the Investor Relations section of the bankofamerica.com website. Those documents include the earnings presentation that we will make reference to during the call. Brian Moynihan will make some brief comments before turning the call over to Alastair Borthwick, our CFO, to discuss more of the details in the quarter. 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 our actual results to materially differ from expectations are detailed in our earnings materials and SEC filings available on our website. Information about non-GAAP financial measures, including reconciliations to U.S. GAAP, can also be found in our earnings materials and are available on our website. With that, Brian, I'll pass it over to you.

Thank you, Lee, and good morning, and thank you for joining us. This morning, Bank of America reported net income of $7.6 billion for the fourth quarter. That is up 12% from the fourth quarter of 2024. Our EPS was $0.98 per share. That's an increase of 18% from the fourth quarter of '24. We delivered 7% year-over-year revenue growth. This was led by a 10% improvement in net interest income, up to $15.9 billion on an FTE basis. For net interest income, we have delivered each quarter what we laid out across the year and finished a bit stronger than we expected. We grew average loans 8%. We grew average deposits 3%, and we delivered 330 basis points of operating leverage in quarter 4 through continuing disciplined expense management. Alastair Borthwick will take you through the details of the quarter. But first, I want to highlight a few things about 2025 to close the year out. I'm working off of Slide 2 in the earnings presentation. Our fourth quarter topped off a strong performance by my teammates at Bank of America for 2025. We delivered on our commitments to shareholders across the year with solid growth across revenue, earnings, and returns. We drove operating leverage and continued robust investments in people, brand, and technology in both our physical and digital networks. Those results reflect the power of our diversified business model and our commitment to drive responsible growth. Some highlights of 2025, you can see here, revenue was a little over $113 billion, was up 7% year-over-year. We generated 250 basis points of operating leverage for the year. Asset quality was strong and net charge-offs improved from 2024. We grew net income year-over-year by 13%. In addition, we grew EPS year-over-year to $3.81 or by 19%. We also increased our profitability and returns during the year. Return on tangible common equity improved by 128 basis points. Our return on assets improved to 89 basis points. Our results and prudent balance sheet management allowed us to distribute 41% more capital back to shareholders, more than $30 billion. We grew loans 8% and we grew deposits 3%. Loans outpaced the industry and average deposits have now grown for the tenth consecutive quarter. Our focus on all the markets we serve, whether they're domestic or international, has allowed us to grow our client balances at a faster pace than the industry. Dean described how we do this in the U.S. at our Investor Day, and we will cover it later in the program. As you look to Slide 3, we've also highlighted some organic growth highlights for the year and the quarter. We grew net new consumer checking accounts by 680,000 during the year. And that's while maintaining a strong average balance of over $9,000. This extended our consecutive quarter net growth to 28 or 7 years straight. We crossed over $6.5 trillion in client balances of investments, deposits, and loans across Wealth and Consumer Banking. Our consumer investment totals reached $600 billion. Similarly, our workplace benefits totals, that is, 401(k) related balances crossed over $600 billion also. It's worth noting that $28 billion of our year-over-year loan growth came through our wealth management clients. Global Wealth & Investment Management showed improved nominal profit growth, stronger pretax margin improvement, and continued to draw net new assets within the combined consumer of $100 billion during the year. In Global Banking, average deposits increased $71 billion, up 13%. We saw treasury service fees increased 13% over '24 and ending loans grew across each line of business year-over-year, indicating good core customer organic growth driving that. Investment banking saw good activity. For the full year, our investment banking fees were the highest they've been since going back to 2020 and the pandemic period recovery. They were 7% higher than the prior year. Fees generated in the second half of 2025 were 25% greater than the first half. What does this show? It shows good momentum by our team. It also showed that our corporate commercial clients settled in during the year after tax policy being clear, tariffs became more understood, and they look forward and receive the benefits of deregulation. Global Markets under Jimmy's leadership saw continued growth in sales and trading with its 15th consecutive quarter of improvement and drove a record year of nearly $21 billion in sales and trading revenue. In addition to these statistics, I commend you to review Slides 21, 23, and 25. Those highlight the continued progress of digital deployment and activation statistics for each of our businesses. You should note the impact of Zelle and the continued usage growth and also note the impact of Erica, our AI agent and its use both across our businesses and with our teammates. A couple of high-level comments on what we see in the economy. It was a pretty decent environment as we move through year 2025. Consumer spending grew 5%, reaching $4.5 trillion, a growth of 5% over the 2024 levels. Account balances in the consumer business, that broad base of the U.S. consumer were stable through the year. Delinquencies and charge-offs improved in 2025 consumer credit. Unemployment in the market remains stable, and equity market appreciation benefited those consumers or investors in our Merrill Edge products or in our 401(k) platforms. This strong consumer health bodes well for the continued improvement in growth in 2026. When you go to our corporate commercial customers, again, as the tax law settled in, the tariffs appear to be manageable, and deregulation kicked in. They had a pretty good year with good profits, including good credit quality and good money movement activity as we move through the year as they participate in the world economy. A world-class research team has the global growth rate for GDP at 3.4% in 2026 and the U.S. at 2.6%. Risks remain out there. They always do, but we're encouraged and constructive on the year ahead. So I'll turn it over to Alistair to cover the quarter.

Thank you, Brian. I'll start using Slide 4. As Brian noted, the fourth quarter was a strong quarter for us with 7% year-over-year revenue growth and good operating leverage producing $7.6 billion in net income or $0.98 in earnings per share. Our EPS grew 18% compared to the fourth quarter of '24. Net interest income of $15.9 billion on a fully taxable equivalent basis was strong and a little better than expected, and we saw good momentum from market-based fees that complemented the NII growth. Of the $28.4 billion in total revenue, $10.4 billion came from Sales & Trading, investment banking, and asset management fees. Those are 3 of the more highly compensable market-facing areas. It's these areas that grew revenue 10% year-over-year in the aggregate. On expense, the teams have shown good discipline across the businesses as we held headcount flat across the year despite the volume growth of clients and activity. Most of the year-over-year expense growth was a result of revenue-related growth in markets and wealth-based activities I just described and our continued investments in the franchise. We saw productivity improvements through AI and digitalization more generally, and those enabled us to add client-facing associates as we eliminated work and roles in our operational support areas. This year, we brought another 2,000 college graduates into the company, and we remain an employer of choice with progressive benefit programs for our employees. Even with those additions, we managed to hold our headcount flat for the year through good management. Provision and net charge-offs declined year-over-year, that's for a second straight quarter, driven by continued stabilization around credit card and lower losses in commercial real estate. The net charge-off ratio fell to 44 basis points and is down 10 basis points year-over-year. Lastly, we reduced our average diluted share count by about 300 million shares or 4% from the fourth quarter of '24. Slide 5 highlights the various earnings points that Brian and I have covered to this point. Let's transfer to a discussion of the balance sheet using Slide 6 where total assets ended the quarter at $3.4 trillion, a little change from Q3 as securities and cash reductions were replaced with loan growth. Deposits grew $17 billion from Q3 and we used those deposits to continue to reduce wholesale funding as part of the plan we've discussed previously to intentionally lower balances and drive a more efficient balance sheet. Average global liquidity sources of $975 billion remain very strong. Shareholders' equity of $303 billion was up less than $1 billion as earnings and a modest increase in OCI were mostly offset by capital return to shareholders. In the quarter, we returned $8.4 billion of capital back to shareholders with $2.1 billion in common dividends paid and $6.3 billion of shares repurchased, a $1 billion increase in share repurchase from Q3 reflects increased earnings over the past 6 months and some reduction in excess capital. Tangible book value per share of $28.73 rose 9% from the fourth quarter of '24. Turning to regulatory capital, our CET1 level decreased modestly to $201 billion, driven by a $2.1 billion capital reduction from making the tax equity investment accounting change period, and we were not required to restate prior period regulatory capital. That capital reduction reflects the timing of equity and profitability in those investment deals and comes back into our capital over the next several years as those deals wind down. That accounted for roughly 12 basis points of CET1 reduction in the quarter, again, that we'll get back over time. Risk-weighted assets rose $22 billion from Q3, driven by loan growth. Our CET1 ratio then declined from 11.6% to 11.4%, and it remains well above our 10% regulatory required minimum. Our supplemental leverage ratio was 5.7% versus a minimum requirement of 5% as of December 31 and 3.75% under the new rule, which we are adopting starting in 2026. This leaves ample capacity for balance sheet growth and our $467 billion of TLAC, meaning our TLAC ratio remained comfortably above our requirements. On Slide 11, we show a trend of average deposits and the consecutive growth across those periods. Average deposits were up nearly 3% from the fourth quarter of '24, driven largely by commercial client activity. Mobile Banking grew average deposits by $74 billion or 13% compared to the fourth quarter of '24. Our global capabilities, innovative solutions, and our relationship managers continue to offer clients value and access to our award-winning digital platform in CashPro. Consumer Banking reported its third consecutive quarter of year-over-year growth and low and no interest checking was up $9 billion or 2%. Importantly, ending deposits improved sequentially in every segment. The team also showed continued discipline on pricing while achieving that growth; the overall rate paid on total deposits of 163 basis points declined 15 basis points from Q3, reflecting lower rates and disciplined actions in our Global Banking and Wealth Management businesses. Global Banking and Wealth Management rate paid both declined 28 basis points from Q3. The rate paid on the roughly $945 million of consumer deposits fell 3 basis points to 55 basis points in Q4 and remains low driven by the operating nature of that account base and that client base. Let's turn to loans by looking at average balances on Slide 8. Loans in Q4 of $1.17 trillion improved $90 billion or 8% year-over-year, driven by 12% commercial loan growth. Consumer loans grew at a slower 4% year-over-year pace and importantly, we're up across every loan category of card, mortgage, auto, and home equity. For the fifth quarter in a row, every business segment recorded higher average loans on a year-over-year basis. While commercial loan growth has been driven by our Global Markets Group, we've also seen year-over-year growth of 3% in Global Banking and strong custom lending growth of $18 billion year-over-year in Wealth Management as affluent clients borrowed for investments in assets like hospitality, sports, yachts, arts, and business. In addition, small business saw its 12th straight quarter of year-over-year lending growth. Let's turn our focus to NII on Slide 9, where on a GAAP non-FTE basis, NII in Q4 was $15.8 billion, and on a fully taxable equivalent basis, NII was $15.9 billion. And as I said earlier, that's up 10% from the fourth quarter of '24. On a fully taxable equivalent basis, NII grew $1.4 billion year-over-year, and $528 million over the third quarter. Our growth was driven by several factors: First, we saw good core NII performance from loan and deposit growth and disciplined pricing; second, we benefited from asset repricing as higher-yielding loan growth replaced loan and security maturities and paydowns; third, client activity in Global Markets drove more of the sales and trading growth through NII than fees this quarter compared to Q3. That was about $100 million more of a shift in global markets activity to NII from MMSA than we had originally anticipated. Lastly, we had a small benefit from an average Fed fund rate, which primarily impacted our liabilities dropping more than the way average SOFR rates behaved on variable rate assets, so we had a slight benefit there. Our net interest yield, NIY, improved 7 basis points from the third quarter to 208 basis points, reflecting the growth in NII, while the earning balance remains stable as higher-yielding loan balances replaced lower-yielding securities. As I said earlier, higher deposits allowed us to reduce wholesale funding while cash balances declined. Regarding interest rate sensitivity, on a dynamic deposit basis, we provide a 12-month change in NII for an instantaneous shift in the curve. That means interest rates would have to move instantaneously lower by another 100 basis points more than the 2 expected cuts contemplated in the curve. On that basis, a 100 basis point decline would decrease NII growth over the next 12 months by $2 billion, and if rates went up 100 basis points, NII growth would benefit additionally by approximately $700 million. With regard to a forward view of NII, let me give you a few thoughts. At Investor Day in November, we indicated our expectation that we would see 5% to 7% growth in net interest income in 2026 compared to 2025, and that's still our belief today based on the latest interest rate curve, which includes 2 rate cuts in 2026. To reiterate our expectation from Investor Day, we expect good core NII performance from loan and deposit growth that will additionally benefit from sizable fixed asset repricing and cash flow swap repricing to drive the 5% to 7% NII improvement. During 2026, we expect roughly $12 billion to $15 billion in combined mortgage-backed securities and mortgage loans to roll off quarterly, and those will be replaced with new assets at 150 to 200 basis points higher in yield or they'll allow us to pay down expensive short-term debt. For Q1 NII expectations, I would use Q4 as a base after excluding about $100 million or so for the shift in Global Markets client activity that I referenced, that is likely to be offset in MMSA. So simply a change in geography that's revenue neutral. I'd also note we have 2 fewer days of interest in Q1 than Q4. And of course, we had a 25 basis point rate cut in December. Still we expect Q1 NII will grow roughly 7% from Q1 '25 based on the assumptions on Slide 18, in line with our full-year guidance. Okay. So let's turn to expense and we'll use Slide 10 for our discussion. This quarter, we reported $17.4 billion in expense, up a little less than 4% year-over-year. When combined with our 7% revenue growth, this good expense management allowed us to generate more than 300 basis points of operating leverage, and that aligns with our target for the medium-term operating leverage range that we discussed at Investor Day. The increase in expense was mainly driven by incentives tied to revenue growth and higher brokerage clearing and exchange costs, or BC&E costs from trading activity. Those BC&E costs reflect client activity shifting toward higher growth and higher transaction cost overseas markets. Now these costs are the ones that are generally reimbursed by the client, so they're included in our revenue and essentially offset one another. If we isolate the change in expense for the incentives tied to Wealth Management, and remember, that reflects a 13% year-over-year improvement in asset management fees, and we isolate the BC&E costs that supported a 10% increase in sales and trading revenue, then combined, they represented roughly 2% of our expense growth for the year and came with good revenue. Beyond that, productivity improvements from AI and digitalization continued to help offset higher wages, benefits, and technology investments. Headcount remains our key driver of expense from compensation and benefits to real estate and technology. We manage this closely, not only in total numbers but also in our organizational structure aiming to strike the right balance of managers and teammates. Since the end of 2023, we've operated within a tight range of 213,000 employees. This year, we hired about 17,000 new teammates just to replace departures from what was a very low attrition rate. Every time someone leaves, we take the opportunity to evaluate whether the role needs to be replaced. Coming to the third quarter, non-interest expense was up about $100 million, driven by technology investments and wealth management revenue-related costs. That was partially offset by a $200 million net benefit from the combined impact of the reduction of the FDIC special assessment accrual and some other settlements that modestly increased litigation expense. Looking ahead, our focus remains on delivering operating leverage for shareholders. We expect to generate about 200 basis points of operating leverage in 2026. Those expectations include a constructive fee environment that complements our expected NII growth. We've seen encouraging momentum in asset management fees, investment banking, and Sales & Trading, and we look for that to continue. Importantly, if revenue comes in below our expectations, then obviously, revenue-related expense will be lower. As for Q1, we typically see seasonal strength in sales and trading activity and elevated payroll tax expenses. Combined with the absence of the FDIC benefit we saw in the fourth quarter and combined with ongoing productivity improvements, we expect Q1 expenses to be about 4% higher than Q1 of 2025. And even with that, we still expect to deliver operating leverage. Let's now move to credit and turn to Slide 11. Here you can see asset quality remains sound with small improvements in several key indicators. It's not a great deal to cover here. Our net charge-offs were $1.3 billion, down about $80 million from the third quarter and driven by lower losses in commercial real estate. The total net charge-off ratio this quarter was 44 basis points, down 3 basis points from the third quarter and down 10 basis points from Q4 '24. Provision expense in the quarter was $1.3 billion and mostly matched net charge-offs. Focusing on total net charge-offs looking forward in the near term, we expect continued stability in total net charge-offs, given the mostly benign consumer delinquency trends and low unemployment data, the continued stability of C&I and reductions in our commercial real estate exposures. On Slide 12, in addition to the consumer delinquency statistics, note the modest changes in other stats for both our consumer and commercial portfolios. Let's now turn to the performance across our lines of business, beginning with Consumer Banking on Slide 13. Our Consumer Bank had a strong year, and for the full year, the team generated $44 billion in revenue and delivered $12 billion in net income. Net income grew 14% from 2024, and we earned a 28% return on allocated capital. In Q4, Consumer Banking delivered strong results, generating $11.2 billion in revenue, up 5% versus the fourth quarter of last year and $3.3 billion in net income up 17%. So a really strong finish to the year. These results reflect the value of our deposit franchise and underscore both the breadth of our platform and the success of our organic growth strategy and digital banking capabilities. Our focus on client experience and investments in both physical and digital capabilities, combined with more investment in product innovation and rewards drove the strong results. Business was also managed well for shareholders as we grew expense less than 2%, allowing us to improve our efficiency ratio to 51% and deliver nearly 350 basis points of operating leverage. This 2% expense growth reflects our continued investments in our brand, highlighted by our minimum wage increase to $25 earlier this year and incentives for more production. Digitalization and early utilization of AI helped offset some of the investments. Consumer investment balances grew $81 billion from Q4 '24 to nearly $600 million, supported by $19 billion in full-year client flows and market appreciation. The average balance per investment account at $147,000 is up 12% from last year. This investment platform serves as a great catch basin for first-time investors and for more experienced investors looking to manage some element of their own money. As mentioned, consumer net charge-offs improved again on a year-over-year basis, and we continue to see stability in asset quality metrics. The credit card net charge ratio of 3.4% improved nearly 40 basis points from Q4 and improved linked quarter. Finally, as shown in the appendix, this is Slide 21. You can see strong digital adoption and the engagement that continues to grow, and the customer experience scores remain strong, reflecting the impact of our ongoing investments in digital. Turning to Wealth Management on Slide 14. This is a business that has strong momentum right now, and we've improved growth as we work towards the medium-term targets laid out at Investor Day. For the full year, revenue of $25 billion grew 9% compared to 2024, and net income grew 10% to nearly $4.7 billion. Over the past 3 quarters, net income has gone from $1 billion in Q2 to nearly $1.3 billion in Q3 and to $1.4 billion in Q4. Return on allocated capital went from 20% in Q2, up to 28% in Q4. The pretax margin has climbed back into the high 20% range as we ended the year. Underneath all that, client balances grew $500 billion across the year to $4.8 trillion, and that included strong ending loan growth of nearly $30 billion or 13%. Within that, AUM flows were $82 billion and total flows of $96 billion. Coupled with the flows of consumer investments, we saw $115 billion of total flows for the firm this year. For the year, the Private Bank added 21,000 net new relationships with the average size of new relationships continuing to grow across both businesses. Importantly, we're not just growing relationships; we're deepening them as we added 114,000 new bank accounts this year. Finally, I'd highlight the continued digital momentum as shown on Slide 23, where new accounts have increasingly opened digitally, underscoring the effectiveness of our digital investments and the evolving preferences of our clients. On Slide 15, you see the results for Global Banking. The team had a good year and generated $7.8 billion in earnings, which represented about 25% of the company's overall net income. Year-over-year earnings were down a modest 2% as a result of interest rate cuts impacting NII from the variable rate assets in the business. Global Banking grew average deposits by $71 billion or 13% and grew loans by $12 billion. This included the addition of roughly 500 new clients in middle market banking and more than 1,000 in business banking that chose Bank of America as their financial services provider in 2025. For the fourth quarter, Global Banking delivered net income of $2.1 billion down 3% year-over-year with a 6% improvement in fees overcoming the NII pressure. The business remains very efficient with a 50% efficiency ratio, and we earned a 16% return on allocated capital in Q4. We generated $1.67 billion in investment banking fees, up modestly over Q4 '24, and we maintained our #3 position for the full year. Investment banking fees showed good momentum, given all the regulatory and tariff announcements around the globe, with uncertainty settling in, and our pipeline remains strong. Non-interest expense grew 6% compared to last year as we position the firm for the future with continued investments in technology and bankers. Switching to Global Markets on Slide 16. I'll focus my comments on results that exclude DVA as we typically do. The Global Markets team produced a record year of revenue, improved earnings, and solid returns. We generated $24 billion in revenue for the year, and that exceeded last year's revenue by 10%. Earnings of $6.1 billion for the year were up 8% and the business generated a 13% return on allocated capital. It's worth noting this is the 12th consecutive quarter of year-over-year net income growth. In Q4, Global Markets generated net income just shy of $1 billion, up 5% from Q4 '24. Revenue, excluding DVA, grew 10% year-over-year, driven by strong sales and trading performance. Focusing on Sales & Trading, revenue ex-DVA rose 10% year-over-year to $4.5 billion, with equities trading leading the improvement, growing 23%, supported by increased activity in Asia. That brought higher revenue; it also brought higher costs in the form of transaction costs, as the clients still reimburse us for those fees. Revenue grew 1% driven by improved performance in macro rates and FX products offsetting a modest decline in credit products. Loan growth continues to benefit from opportunities tied to highly collateralized pools of high-quality assets, and clients value our expertise in delivering these solutions. On Slide 17, all other shows a loss of $132 million in Q4, with very little to cover here. As we wrap up, I would just note Q4's effective tax rate was 21%, and it was 19% for the full year. For 2026, we expect an effective tax rate of roughly 20%. Finally, I'd just note on Slide 18, we provided a summary of the forward-looking guidance that we discussed today. So I'll stop there. Thank you. With that, we'll jump into Q&A.

Our first question comes from Betsy Graseck with Morgan Stanley.

Thanks so much for all the detail here. I did just want to understand one thing on the outlook as we're thinking about the expense ratio. I know that you've got the accounting change, and you also have outstanding guidance for the expense ratio over the medium term, I believe it is 55% to 59%, is that right?

Right.

Okay. I'm wondering, are you going to be adjusting that expense ratio guide given the accounting changes that you have made in this quarter?

Well, I don't think — so at this stage, Betsy, but similar to our comments at Investor Day, the numbers that we put out aren't a cap on our ambition. So obviously, as we go through the course of the next couple of years, if we improved our efficiency ratio by a couple of hundred basis points this year, we're going to keep driving towards that range. And once we get in that range, we'll reassess and consider whether it's time to consider a lower efficiency number in the future.

Yes, I was just thinking mechanically with the accounting change, the revenues improve, right? So with the denominator moving higher, shouldn't that target expense ratio of 55 to 59 move down a percentage point on each side?

Well, remember, we recast the prior periods. So that's already in there when you use the comparative periods. Part of the reason that it was important for us just to recast all the numbers and adopt the accounting is because that's how our competitors showed their results. So now we feel like it's on a comparable footing.

We'll now move on to Ken Usdin of Autonomous Research.

So just a follow-up, Alastair, you made the point about just your outlook for fees is strong, and obviously, there will be compensation aligned with that. So just coming back on expenses in an absolute sense with 4% year-over-year growth expected in the first quarter. I know everyone is just thinking about just how do you get to this operating leverage algorithm. Is that around what you're expecting just absolute expenses to grow given your underlying base of good fee growth in there?

Well, I think what we're trying to convey is, and we've said this over the course of the past several years, ours is an organic growth company. We're investing for growth all the time. When we perform the way that we believe we can, we're going to create operating leverage every year. That's what our North Star is in terms of the financial model. So we've guided you towards NII, up 5% to 7% this year. We've said in the first quarter, we believe the first quarter will be up 4% or so. We've said that we expect the operating leverage to be a couple of hundred basis points. That should allow you to work backwards into the expense side of the equation, especially since we've given Q1 essentially. I think it would just depend on your revenue assumptions regarding assets under management fees, markets, and investment banking because those will be the big drivers. Yes, we remain constructive on all 3 of those.

Okay. Got it. And then as you think about your — when you talked about the Investor Day, you talked about a 200 to 300 basis point range. Obviously, each year is going to be different things, but you've got — with a strong base of NII growth and fee growth and we're on the 200 side, what are the things you could do to kind of longer term expand that and potentially get back — to get up to the 300 side of that 200, 300 range that you had given us in November?

One of the things we've talked about when we went back to Investor Day, this gets back to driving return on tangible common equity over time. You think about the fact that we've just gone from 13% to 14% last quarter. Prior quarter, we were at 15%. We said we're going to get in the 16% to 18%. If you think about the organic growth opportunity we have around deposits and loans, then you add the fixed rate asset repricing that drops to the bottom line. Combine that with the fee growth that we've talked about. When we manage expense carefully, as we have done this year, where headcount is flat, sort of the core expense minus BC&E and incentive comp closer to 2% type growth. You'd look at something that gets pretty interesting over time.

So Ken, the number one thing is to continue to let the headcount work through operational excellence and applications of new technologies, including AI. We gave you some sense for this at Investor Day, today's activity in Erica in our consumer business alone is worth thousands of teammates that we don't have to have to do the great work we do for the customers. We've applied digital, and that's why I put the pieces in the deck that you can see in the pages following. We apply the digital capabilities and now AI capabilities.

We'll now move on to Mike Mayo with Wells Fargo Securities.

If you could just give more of an update on technology. What do you expect your spend to be this year versus last year, your spend on AI? And then Slide 21, again, I think everybody appreciates the data you provide on your digital engagement, which is more than others. But no good deed goes unpunished. I'm just looking at Slide 21 and your interactions in consumer with Erica took a dip down in the last year, even while your users go up. So if you can talk about the spend investments and the results from Tech and especially AI.

Yes. So Mike, we'll be up on initiatives this year, 5%, 6%, 7%, types of numbers. Total spending $13 billion, plus $4 billion on initiatives, that's all new code. In that spending, remember, also we get the advantage of all the other people. For example, under the 365 CoPilot rollout, which is now out across a total of 200,000 teammates and using it and learning from it, we expect to get good leverage of that. The technology number is sizable, and the team does a good job of implementing change every weekend, frankly, except for one a year. We feel good about that. One of the things that you'll note is you use these technologies in combinations. Your point on Erica, I asked the same question, Mike, because it's pretty straightforward why would the interactions of Erica go down. The reality is we don't show is the amount of alerts that we deliver. You can set up alerts that have slowed down the need for Erica because the alerts tell you when you're low on balance and things like that, avoiding you going in and asking the question. So that combination of things is growing very quickly. So again, what you always try to do is look at a process from a customer to you and figure out how you can get that customer the best client experience at the lowest cost so you can plow that back into the low fee structures.

Okay. And specifically on AI investments, how much do you spend on that? Or the number of people, if you could dimension that and what kind of outcomes you're looking for, especially as we say here at the start of the year?

Yes. Well, we have to give you an example; we have 18,000 people on the company's payroll who code. We've used AI techniques. We've taken 30% out of the coding part of introducing a new product to service or change that saves us about 2,000 people. So that's how we're applying it. That was this year's statistic. Next year, we should get more out of it as we figure out and apply it across. There are different projects going on in the company. I don't know off the top of my head the total expenditure, but it's several hundred million dollars. Importantly, we're going through the company to generate more ideas how to apply AI. I use the example of our audit team, which has built a capability they think of in a series of prompts around audits and stuff to allow them to shape the headcount back down that they had to grow during the regulatory process. They're going to be able to bring that down further, and they've laid out plans to do that. So that's going on everywhere.

We'll now move on to John McDonald with Truist Securities.

One of the other levers for the ROTCE ambitions that you guys have talked about is the denominator with the CET1 ratio. Could you talk a little bit, Alastair or Brian, about the timeline for kind of where you are today with 11.4% to the target you laid out, which I think was around mid-10s?

I think, John, if you think about that we're still, as you well know, and your colleagues will now, we're still waiting for the rules to get finalized and they're a multifaceted rule set that we got to make sure how it applies. Our goal, we appealed from 11.6% to 11.40%. You're going to keep peeling that number down through expansion of our markets business, expansion of lending, and other uses of RWA. We've bought back a little more stock than in dividends than we earned. We'll keep working that down. The idea is not to take the $200 billion-ish nominal and reduce that a lot. The idea is to use the excess to grow the balance sheet and let that work down as we see the final rules.

Okay. And then maybe if we pull back just the broader timeline on the ROTCE path. It looks like for 2025, you kind of ended in the 14, low 14s. What's the ambition to get to the lower end of the 16 and then the 18 over time?

I think we made it clear that you had to, by the 8th quarter to the 12th quarter, move in the lower part of the range and then the upper part of the range given a core economy growing to a 2.5% type of number. All the other attributes, to make that clear. So that's basically 8 quarters from including this quarter, obviously, first quarter '26, and then we move into the 16 level, and then we move to the upper end of the range as we move through the third year.

We'll now move on to Matt O'Connor with Deutsche Bank.

I was hoping you could elaborate a bit on your outlook for loan growth and some of the drivers. You've obviously been growing loans quite a bit, well in excess of the industry, and just how sustainable is that? And what are some of the drivers?

Embedded in our NII assumption is loan growth in the mid-single digits, Matt. Obviously, we've had pretty good loan growth this year, around $20 billion a quarter or so. A decent amount of that has been on the commercial side. We highlighted that in our financials and in our earlier comments. We're still seeing growth in each of the consumer categories. That feels like it's in a position where it's likely to continue to grow from here. We feel pretty good about those 2. I don't see any reason that it would be a whole lot lower necessarily than it was last year, but last year was a good year, no question. That's why we're saying mid-single digits. I think it will still be led by commercial, but you see the consumer categories picking up.

Okay. And then I guess, specifically in credit cards, the spending was good, up 6% year-over-year or the balances were up just a couple of percent, fees were down. I know at Investor Day, you talked about accelerating the growth there. Maybe just update a little on kind of the initiatives there and the timing.

Yes. So it was very clear about this at Investor Day. It's our intention to continue to accelerate the growth in card. I think we've seen that in the last 3 or 4 quarters; it's picked up sequentially quarter after quarter. If you were to look at what the team is doing right now, they're investing a little more for future growth. You can see that in some of the things we're doing around the World Cup this year. You can see it in some of the things we're doing around more rewards in November. You can see it in our rewards program with our co-brand partners. We have a lot of things going on right now that we're excited about. We know what we've committed in terms of higher credit card growth, and we feel like we're on the right path.

We'll now move on to Erika Najarian with UBS.

I just need to reask this question, Brian, Alastair because as I speak with investors, I think the communication on efficiency and expenses is a big part of what's holding down the stock. Just to clarify in terms of what Betsy was asking, she was asking, well, given the restatement and thereby higher fees, shouldn't you adjust the efficiency ratio range to 54% to 58% because you shouldn't get credit for the restatement, right? So that's why she was asking that. I think what Ken was asking was, everything that Alastair mentioned, the curve, the growth capital markets, it will hit this year, right? So you're on the low side of the 200 basis point — the 200 to 300. The question here is what should we take away regarding the expense messaging? Is it what Brian alluded to, that the headcount just needs time to work through, and then you'll hit 250 to 300, and we just need to be patient? Is there more investment spend like you told Mike Mayo that you wanted to front-load in a great revenue year? What is your underlying message for operating leverage for Bank of America over this year and over the 3 years underpinning that 16% to 18%?

Let's back up to it. We — as Alastair said, we're driving these numbers and they've improved on a recast basis by a couple of hundred basis points, and they'll continue to improve. The range will move down to lower numbers. We're focused on the wrong thing. The question is, what are you doing now as opposed to what you say you're going to do. We have a tendency to actually deliver as opposed to talk about what we do in the future. That's what we focus on. What have we done? The efficiency ratio came down a couple of hundred basis points on an apples-to-apples basis with the parts of the revenue stream that are least efficient, the wealth management revenue growing very strong in capital markets revenue. You have to think of where the revenue growth is coming from to see the improvement, but we moved to 200 basis points. We've moved in past years when rates stabilize, we'll move it into the 50s. We expect the lower efficiency ratio to mean operating leverage can be narrower even while you see a bigger earnings spot. We expect to keep driving profit margins and that will continue as we go forwards.

We'll now move on to Jim Mitchell with Seaport Global Securities.

Maybe just a question on deposits. We've seen 3 rate cuts in September. Can you speak to what you're seeing in terms of deposit pricing, whether betas are worse, better or worse than expected? What you're seeing with client behavior would just be helpful to?

Okay. First, with respect to our pricing discipline, we're most focused on the upper end of the corporate banking, commercial banking, and a large global banking deposit base where we're passing on rate cuts essentially the moment they take place and in full. That's why you see the beta there, obviously quite high. The same thing in the upper end of wealth management. Consumer, you see much less in the way of pricing coming down because we have so much in the way of noninterest-bearing, and checking and so much in the way of low interest-bearing. We feel good about the team's pricing discipline overall. You should expect that to continue in Q1, recognizing that the rate cut was late in Q4. In terms of growth, looking at Page 7 in the earnings materials tells you the picture. On the bottom right, you can see Global Banking has had a very good period of growth. That's not sure that will sustain at that sort of level. But we've had good growth in Global Banking. Most importantly, on the top right, consumer has begun to turn and is growing. That's the most powerful engine for us. We've now got 3 quarters of year-over-year growth. It's poised to accelerate. Feel good about the mix of deposits changing in our favor this year. I just need to ensure that we keep track of that through the course of the year, but we're quite optimistic.

When you think about maybe inflection, deposits growing loan growth still strong. You have an NII target of 5% to 7% for this year. Could we just drill down and look at NII ex markets? It's grown about 5% over the past 2 quarters. Is that a reasonable growth rate for this year? Or do rate cuts make that a little more challenging? Just how do we think about the markets versus ex-markets NII dynamic?

Markets should benefit from a couple of different things. First, we obviously invested 10% plus into the Global Markets balance sheet. That tends to mean that we're likely to grow NII. Second, a big portion of that growth has been in loans. They're totally about NII. That obviously is helpful. Third, when rates are cut because markets tend to be liability sensitive, that tends to be good for markets NII too. All those things are true. The only thing, Jim, that I was just making sure that I pointed out in my earlier comments was we ended up at $15.9 billion. That is what I would consider to be mostly all core NII. It just happens that we had about $100 million or so of Global Markets NII that I think will revert back to MMSA next period.

We'll now move on to Chris McGratty with KBW.

Alastair, on the funding remix. I guess what's left to go in your view based on your core deposit trends? How much of that is baked into the guide, the liability optimization?

I'd say probably at this point, somewhere around $50 billion to $100 billion just ballparking that between repo, CP, and some of the short-term wholesale funding institutional CDs that we quietly roll off each quarter. So that's the sort of number I would use.

Okay. Great. Just piggybacking on the loan growth comment. The optimism I heard on the commercial growth. I guess any asset class is perhaps not as optimistic into '26? If I missed it on the card expectations with the proposal, any comments there about either growth or expectations would be great.

I'd say we're pushing for loan growth everywhere we can find good high-quality loan growth. There is no place that we're not pushing. We obviously have substantial excess deposits above our loans, so we've got a lot of capacity there. We have a lot of excess capital; we'd like to continue to deploy if we can find productive uses with our client base. We're pushing everywhere. Commercial has had a good period. Wealth Management has had a good period as well, some of that reflects things like traditional securities-based lending, but some relates to wealthy people looking to purchase expensive assets. We're there to help them with that, obviously. The consumer piece had been quieter last year but may have picked up a little more this year. We can see the growth in a variety of categories. Interesting to see home equity beginning to grow right across time. Mortgages are seeing a little more activity this past quarter; if you see our originations, we had more there in residential mortgages. We're looking to continue to see pickup in consumer activity broadly. We're also trying to drive more card balances, and that's really important for us. That remains the front of our strategy.

On the rate cap, obviously, there's a public debate going out there over whether capping rates has unintended consequences. If you bring the caps down, you're going to see stricter credit; fewer people will get credit cards, and the balance available on those credit cards will also be restricted. You have to balance that against what you're trying to achieve on affordability. We all want affordability and that's why we get good growth and high customer scores. We build products to stop people from going to payday lenders. It's called Balance Assist. We've had more than 700,000 clients this year take that card. We believe in affordability. If you use instruments that cap, you will see unintended consequences, and that's why we're aware of this and continue to convey our concerns.

Could you guys share with us, as you know, the Genius Act was passed, and there's a lot of talk about stablecoin deposits. I think they're now trying to figure out how to close a loophole so that the stablecoin deposits cannot pay interest. If they are not — meaning Congress, if they are not successful in closing that loophole, what's kind of the impact that you guys are thinking could happen from this trend in stablecoin deposits?

I think I would not — look, we'll be fine. We'll have the product. We'll meet customer demand, whatever surfaces. I don't worry about it. If you look at some studies done by the treasury, they say you can see upwards of $6 trillion in deposits flow off the liabilities of a banking system into the stablecoin environment. The key of that is you have to think that the restrictions for a stablecoin will basically operate like a money market mutual fund that has to be invested in only deposits, government securities, or treasuries. If you take out deposits, they're not going to — they're either not going to be able to lend, or they're going to have to get wholesale funding and that wholesale funding will come at a cost, pushing up the cost of borrowing. That's the concern we've all expressed to Congress and the industry.

Very good. As a follow-up question, you guys have presented a positive outlook for yourselves for 2026. The industry appears to be setting up very well with deregulation, a steepening yield curve, and healthy economic growth. Loan growth is picking up according to the H8 data. As bank investors, we've learned to always look over our shoulders, but it seems like the worry now is that there aren't too many worries out there. Do you guys — when you look at other than the geopolitical risk, of course, which is always a risk, what do you guys focus on just to keep an eye on in case something goes off the rails?

We are always doing stress tests that reflect a 50% decline in house prices and market declines and all that kind of stuff, and we test ourselves every quarter. We have trading stresses run every day. You're always trying to see, whatever configuration of activities that produce as a result, the result that's going to reverberate into the global financial system and the U.S. financial system and the U.S. banking system. What we do is we stress scenarios that produce those characteristics. If you think about it, the stress test adjusts from where we are today to a 10% plus unemployment and home prices declining. Our goal is to continue fine-tuning it and to ensure alignment.

I wanted to follow up on credit. Your loan loss provisions and charge-offs have been particularly low in the last couple of quarters. I'm curious about whether you think we're at below-trend levels of losses and in what categories? Is there a way to think about what more normalized levels of losses would be, even in an economic environment that remains benign as we have now?

You're right, asset quality has performed quite well. You can see that in consumer and in commercial. At Investor Day, we gave an idea of what we thought through the cycle might be, I think we said at the time, 50 to 55 basis points. You can see right now, the last 2 quarters, we were at 47 and 44 overall. We're obviously happy to see that. We feel like we've earned that and it happens to be a good environment right now. Maybe 50% to 55% is the right number or through the cycle, with no change to investment.

Okay. That's helpful. In consumer deposits, you expressed some optimism that you're seeing an inflection there and some acceleration. Just curious where you think the growth can get to? Do you think we can get to mid-single-digit types of growth in consumer deposits? What are some of the variables that would drive that? Does it depend on additional rate cuts?

If you look at checking account balances, for example, they're up a couple of percent now year-over-year, not zero. Can it go higher again next year? I believe we do. Historically, we might see consumer deposit growth at GDP to GDP plus type levels. That would put you in the sort of 4% to 5% type of range. Maybe we don't get all the way there this year, but we just come off a year where we added 3%. We're expecting and hoping for something slightly higher again in 2026 as we move to something more normal.

Thank you. At this time, there are no further questions in queue. I will now turn the meeting back to Brian Moynihan.

Thank all of you for joining us. It was a good quarter and a good year, and I want to thank our team at Bank of America for producing it. We've laid out at Investor Day that world-class franchise we have across all these businesses their performance continues to make good progress in '25, both on revenue profitability and returns. The organic growth that I outlined earlier remains strong. The credit is very stable and very good quality. We continue to manage headcount and expense as we talked about to drive operating leverage. Thank you. We look forward to talking to you next quarter.

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.