Q4 2024 Bank of America Corp Earnings Call

Alastair Borthwick

Thank you, Brian.
And I’m going to start on slide 5 of the earnings presentation because it will provide just a little more context on the quarter. For the fourth quarter, as Brian noted, we reported $6.7 billion in net income or $0.82 per share. And before we talk about comparisons between periods, I just need to remind you that our fourth quarter 2023 GAAP net income number included two notable items. In the fourth quarter of ’23, first, we recorded $2.1 billion of pretax expense for the special assessment by the FDIC to the industry to recover losses from the failures of Silicon Valley Bank and Signature Bank. And that reduced the EPS last year by $0.20.
Second, we recorded a negative pretax impact to our market making revenue of approximately $1.6 billion related to the cessation of BSBY as an alternative rate and that reduced earnings per share last year by $0.15. So when you adjust for the large FDIC assessment and the BSBY cessation charge, fourth quarter ’23 net income was $5.9 billion or $0.70 per share.
On slide 6, we note some of the highlights of the quarter and we reported revenue of $25.5 billion on a fully taxable equivalent basis, up 15% from the fourth quarter of ’23. And if you exclude the fourth quarter ’23 BSBY cessation charge, our revenues grew 8% year over year. As Brian said, all the revenue items are showing improvement year over year. NII grew 3%. Investment banking grew 44%. This quarter, our $4 billion of sales and trading revenue marked the fourth quarter record and it grew 10% from the year ago period.
And investment and brokerage fees rose 21% with both assets under management flows and market levels contributing nicely to the growth. Our card income and service charges grew 7%. Noninterest expense was $16.8 billion and was up when adjusted for the FDIC special assessment driven by incentives paid for the strong revenue growth as Brian noted and the related activity costs that comes with that. Expense also included additional investments in people, technology and brand with some major partnerships announced recently and it included what we expect to be the peak in quarterly costs associated with enhancing our compliance costs and controls.
The good news is we created operating leverage in the quarter. Provision expense for the quarter was $1.5 billion and was consistent with the previous two quarters. And lastly, returns in the fourth quarter were 80 basis points of ROA and 13% return on tangible common equity.
Turning to the balance sheet on slide 7, we ended the quarter at 3.6 — sorry $3.26 trillion of total assets, down $63 billion from the third quarter driven by seasonally lower levels of client activity in global markets while loans across the businesses grew $20 billion in the quarter. Otherwise in the quarter, the investments of our excess liquidity saw a $9 billion reduction in hold to maturity securities and at the same time, the combination of shorter-term liquidity investments of cash and available for sale securities increased $28 billion.
On the funding side, total deposits grew $35 billion on an ending basis as both interest bearing and noninterest bearing grew. Long term debt fell $14 billion driven by net redemptions and valuations and global markets funding declined in line with assets. Liquidity remains strong with $953 billion of global liquidity sources. That is up modestly compared to the third quarter even as we paid down some debt and retired some preferreds.
Shareholders’ equity was flat at around $295 billion and within all of that, we returned $5.5 billion of capital back to shareholders with $2 billion in common dividends paid and the repurchase of $3.5 billion in shares this quarter. Tangible book value per share of $26.58 rose 9% from the fourth quarter last year.
Turning to regulatory capital, our CET1 level improved to $201 billion and the CET1 ratio rose to 11.9%, remaining well above our new 10.7% requirement. Risk-weighted assets increased modestly as increases in loans were mostly offset by lower RWA, supporting our global markets client activity. Our supplementary leverage ratio was 5.9% versus a minimum requirement of 5% which leaves some capacity for balance sheet growth and our $460 billion of total loss absorbing capital means our TLAC ratio remains comfortably above our requirements.
Let’s turn to slide 8, we can go a little deeper on loans by looking at average balances. And loans in the fourth quarter of $1.08 trillion improved 3% year over year driven by solid commercial loan growth. Overall, commercial loans grew 5% year over year. And importantly, this included an 8% drop in commercial real estate loans. Commercial loans excluding commercial real estate grew 7% year over year and the consumer loans grew modestly both linked quarter and year over year.
As Brian said, on a linked quarter basis, every category of consumer lending grew, and you can see that at the bottom of slide 8.
If we turn our focus to NII performance and use slide 9, regarding NII on a GAAP non fully taxable equivalent basis, NII in Q4 was $14.4 billion. And on a fully taxable equivalent basis, NII was $14.5 billion. Several quarters ago, we signaled our expectation that NII would trough in the second quarter of 2024 and begin to grow from there. And this represents now our second quarter of NII growth, and we expect that growth to continue in 2025.
In fact, if you look at the two quarters after the inflection point, NII is already growing at the 5% rate. Fourth quarter NII on a fully taxable equivalent basis increased by $399 million from the third quarter driven by a number of factors. First, it was led by improvement in deposits across the businesses and even as deposit balances increased linked quarter, our interest expense on those deposits declined by $600 million. Loan growth and fixed rate asset repricing also benefited us again this quarter.
With regard to a forward view, interest rate expectations continue to drive volatility and predictability, but we’ll provide some thoughts for future NII. We expect to start the year in the first quarter with NII modestly higher than the fourth. Remember that the first quarter has two fewer days of interest and that’s roughly the equivalent of about $250 million of NII equivalent.
So even with that, we expect to grow modestly. Then we expect that growth to increase through the year to the point where it could be 6% to 7% higher in 2025 than 2024. We expect to exit the year at least $1 billion higher in the fourth quarter and that would put us in a range of $15.5 billion to $15.7 billion on a fully taxable equivalent basis and that’s obviously significantly higher than the Q2 ’24 trough of $13.9 billion.
I have to note the following assumptions. First, we assume that the current forward curve materializes and while the interest rate curve has changed significantly over a fairly short period of time, as of the January 10, the curve was expecting only one rate cut in 2025 that may come in May or June. Based on our more recent growth experienced, we’re assuming loan and deposit growth in 2025 that’s higher than 2024 and more consistent with growth in a 2% to 3% GDP environment.
The other elements of anticipated growth in NII expected are the benefits of asset repricing as fixed rate securities and loans and swaps roll off and those get repriced at higher rates. And those themes all remain consistent with our prior conversations with you in the last several earnings calls. With regard to interest rate sensitivity, on a dynamic deposit basis, we provide a 12 month change in NII for an instantaneous shift in the curve above or below the forward curve.
And on that basis, a 100-basis point increase would benefit NII by roughly $1 billion while a decrease of 100 basis points would decrease NII over the next 12 months by $2.3 billion. Lastly, note that our slide showing the trended investment of excess deposits is in our appendix. It’s on page 21. Deposit levels grew to $870 billion over loans at the end of Q4. And that’s an incredible source of value for shareholders. And $649 billion or 54% of our excess liquidity is now in short dated cash and available for sale securities.
The longer dated lower yielding hold to maturity book continues to roll off and we continue to reinvest in higher yielding assets.
Okay. Let’s now turn to expense and we’ll use slide 10 for the discussion. We reported $16.8 billion in expense this quarter and the fourth quarter of ’23 included the large FDIC special assessment charge and excluding that, expense increased. The increased expense from prior periods was driven by a number of factors and was partially offset by a roughly $300 million release of prior period accruals for the FDIC special assessment.
Let’s talk about the drivers of the expense. First, in regard to revenue, our markets related businesses of investment banking, investment and brokerage and sales and trading. Those were up 20% year over year. Incentives for the firm were up 15% versus the fourth quarter of ’23 and were in large part related to these markets related revenue streams. On investments that we made, we added bankers and advisors across most of our businesses in 2024. And we also increased investments in our brand with significant sponsorships like the Masters and FIFA to name a few.
And we increased our investments around technology as well as financial centers. This quarter alone, we added 17 financial centers with 9 of those in our new expansion markets. We’re a growth company and we continue to invest in our future. As far as headcount goes, we’ve managed our headcount carefully and we’ve held it fairly flat through the four quarters of 2024 at around 213,000 people. Lastly, we incurred additional costs to accelerate work on compliance and controls.
As you likely saw in late December, the OCC issued a compliance consent order to Bank of America and that’s the result of exams done more than a year ago. This order is about correcting or enhancing certain deficiencies in some aspects of our processes that existed at the time. The order doesn’t limit any of our growth plans and the order acknowledges we began taking corrective actions before the order was announced. And as a result of the work in process, we increased our resources substantially in the second half of 2024. And those costs are already embedded in our quarterly run rate.
Okay. Let’s go back to expense and how to think about a forward view. First, most importantly, we remain focused on growing the company and driving operating leverage. Second, we expect the first quarter to include some normal seasonal elevation, and we believe this amount will be roughly $600 million to $700 million primarily for payroll tax expense. So we think $17.6 billion is a good number to expect for Q1 before seasonally declining in Q2. And that’s all part of our expectation that expense should be roughly 2% to 3% higher in 2025 compared to 2024.
Let’s now move to credit and turn to slide 11 where you can see net charge offs of a little less than $1.5 billion, improving modestly compared to Q3. That’s the fourth quarter. Now the net charge offs are around $1.5 billion. We’ve seen consumer losses in a pretty stable range of $1 billion to $1.1 billion over those past few quarters. And on the commercial side, we saw losses of $359 million, which is down from the third quarter driven by the continued decline in commercial real estate office losses.
And net charge off ratio this quarter was 54 basis points, down 4 basis points from the third quarter. We don’t see overall net charge offs or the related ratio changing much in 2025. Without much change in current GDP or the employment environment, we expect the net charge off ratio to be in a range of 50 basis points to 60 basis points of loans for 2025. Q4 provision expense was $90 million lower than Q3 at $1.5 billion as reserve levels remain constant.
And as it relates to reserve levels, on a weighted basis, we’re reserved for an unemployment rate a little below 5% by the end of 2025 and that compares to the most recent 4.1% rate reported. On slide 12, we highlight the credit quality metrics for both consumer and commercial portfolios and there’s nothing really noteworthy here that I want to highlight on this page.
So let’s move to the various lines of business starting on slide 13 with consumer banking, a business made merely with consumer banking, a business made nearly $11 billion or 40% of the company’s earnings in 2024. In the fourth quarter, consumer banking generated $10.6 billion in revenue and $2.8 billion in net income. Both grew modestly from the fourth quarter of ’23 as the improvement for card and service charges is now being complemented by the growth in NII. Consumer banking continued to deliver strong organic growth with high quality accounts and engaged clients and they achieved a new record of client experience scores in December.
The organic growth activity noted on slide 3 includes more than 200,000 net new checking accounts which now takes us to six years’ worth of quarter after quarter growth. And we show another strong period of card openings and investment account growth. Investment balances grew 22% to $518 billion with full year flows of $25 billion and market improvement throughout the year. Expense rose 8% as we continued investments in our business.
The biggest story in consumer this quarter is deposits because these are the most valuable deposits in the franchise. And in the last six months, we believe we’ve seen the floor begin to form after several periods of slowing decline. Consumer banking deposits appear to have bottomed in mid-August at around $928 billion and ended the year at $952 billion on an ending basis. Looking at averages, you can see then the deposits grew $4 billion from the third quarter to $942 billion all while our rate paid declined to 64 basis points.
Finally, as you can see in the appendix, page 26, digital adoption and engagement continue to improve and customer satisfaction scores rose to record levels, illustrating our clients’ appreciation of enhanced capabilities from these investments.
On slide 14, we move to wealth management where the business had a very profitable year generating $4.2 billion in earnings from nearly $23 billion in revenue. In 2024 our Merrill Lynch and private bank advisors added another 24,000 net new relationships. And the professionalism of these teams earned them numerous best in class industry rankings as you can see on slide 27 in the appendix. With a continued increase in banking product usage from our investing clients, the diversity of revenue in the wealth business continues to improve. The number of GWIM clients that now have banking products with us continues to grow and at this point, it represents more than 60% of our clients.
Importantly, about 30% of our revenue remains in net interest income which complements the fees earned in our advice model and those have also grown. Net income rose 15% from the fourth quarter of ’23 to nearly $1.2 billion. In the fourth quarter, we reported revenue of $6 billion, growing 15% over the prior year and led by 23% growth in asset management fees.
While expenses were up year over year, they grew slower than revenue, creating the operating leverage in the business. Business had a 26% pretax margin and generated a strong return on capital of 25%. Average loans were up 4% driven by growth in custom lending, securities-based lending and a pick up in mortgage lending. Deposits grew 2% from the third quarter and the teams were quite disciplined on pricing of those deposits.
Both Merrill and the private bank continue to see strong organic growth. And that helped to produce excellent asset under management flows of $79 billion this year, reflecting a good mix of new client money as well as existing clients putting money to work. We also want to draw your attention to the continued digital momentum that you’ll find on slide 28. Because for example, three quarters of Merrill bank and brokerage accounts were opened digitally this quarter.
Slide 15 shows the global banking results and this business generated $8.1 billion or 30% of the company’s earnings in 2024. And it continues to be the most efficient business in the company at less than 50% efficiency ratio. The business saw a nice rebound in investment banking fees in 2024 which we expect to continue in 2025. In Q4, global banking produced earnings of $2.1 billion. Pretax, preprovision results were flat year over year as improved investment banking fees offset lower NII and higher expense.
The total earnings were down 13% year over year driven by higher provision expense that came as a result of prior period reserve release. Investment banking fees were $1.7 billion in Q4, growing 44% year over year. This was led by mergers and acquisitions. We also saw strength across debt capital markets fees, mostly in leveraged finance and in equity capital markets fees. And we finished the year strong, maintaining our number three investment banking fee position.
The fourth quarter saw strong momentum as the election results provided a lifted sentiment for a more pro business climate and expectations for more deals to be completed. Expense in this business increased 6% year over year driven by the 13% growth in noninterest income and continued investments in people and technology. The balance sheet saw good client activity and it was muted somewhat by the strength of the US dollar. Year over year flatness in global banking loans includes this foreign exchange impact and the $6 billion decline in commercial real estate from paydowns.
Otherwise, loans in global banking were up 2%. Deposits have been growing for many quarters now with our commercial and corporate clients. And total global banking deposits are now up 10% year over year, reaching a new record. So we’re seeing strong growth across all the categories from our corporate and commercial clients all the way from the larger end to business banking on the lower end and we also saw 10% growth in our international deposits.
Turning to global markets on slide 16, I want to focus my comments on results excluding DVA as we normally do. Our team continued their impressive streak of strong revenue and earnings performance. They achieved operating leverage, and they continued to deliver a good return on capital. For the year, record sales and trading results of nearly $19 billion grew 7% from 2023 and they’ve been growing consistently now on a year over year basis for almost three years. This led to $5.7 billion in full year profits and represents more than 20% of the company’s full year results.
In the fourth quarter, earnings of $955 million grew 30% year over year. Revenue and again, this is ex-DVA improved 15% from the fourth quarter of ’23 as both sales and trading and investment banking fees improved nicely year over year. Focusing on sales and trading ex-DVA, revenue improved 10% year over year to $4.1 billion.
This is the first time we’ve recorded more than $4 billion in our Q4 results, and it included Q4 records for both FICC and equities. FICC grew 13% while equities improved 6% compared to the fourth quarter ’23. FICC benefited from tighter credit spreads as well as increased volatility and interest rates while equities benefited from increased activity around the US election. Year over year, expenses were up 7% on revenue improvement and our continued investment in the business.
And then on slide 17, you can see all other with a loss of $407 million in the fourth quarter. We spoke earlier about the fourth quarter ’23 charges for BSBY and the FDIC special assessment charge, their reversal impacts, the comparisons on revenue expense and net income in this segment. Otherwise, there really isn’t anything significant to report here. Our effective tax rate for the quarter was 6% and excluding discrete items in the tax credits related to investments in renewable energy and affordable housing, the effective tax rate would have been approximately 26%.
Looking forward, we expect the tax rate for 2025 to be in a range of 11% to 13%. And this just includes our expectation for higher expected earnings in 2025 and relatively stable tax credits.
Finally, this quarter on page 18, we thought it was important to summarize some of the guidance points we talked through this morning, and we hope you find this page helpful. So in summary, we’re looking for strong growth in NII and we’ll look to both continue important investments in the franchise and drive operating leverage as we grow throughout the year.
We aren’t expecting much movement around credit based on a pretty solid economic outlook and we remain with a very strong balance sheet with excess capital that we can deploy to grow the business and deliver back to shareholders as appropriate.
So with that, I’ll stop there.
I’ll thank everybody and we’ll open it up for Q&A.

Operator

(Operator Instructions)
Steven Chubak, Wolfe Research.

Steven Chubak

So I wanted to start off, Alastair with maybe unpacking some of the drivers of the NII growth in ’25. Now how much of the build that you’re guiding to is attributable to loan growth versus some rate or repricing tailwinds, runoff of legacy swaps, what have you? And does that acceleration in NII you cited for the second half continue into ’26 given some of those tailwinds should remain in place beyond ’25?

Alastair Borthwick

Well, first of all, I admire you asking about ’26. I’m always reluctant to talk about the back half of ’25. So I’ll leave ’26 for another time, but we don’t have a whole lot new, Steven, relative to what we’ve talked about in the prior quarters. We’re obviously pointing right now to deposit growth in particular because it’s beginning to get back to something more normal. There was a period there where deposit balances were declining as people got back to something more normal in their accounts.
But we’re highlighting here, consumer found its floor in August. Wealth found its floor in July. And that’s giving some support then as we grow deposits. That’s helping us with the NII growth.
But that hasn’t changed. It’s just that now we’ve got successive quarters of growth that we can actually point to. The loan growth that you asked about is interesting in that — there were several quarters there where we were bouncing around flattish on loans. In Q2, we added $9 billion of loans. In Q3, we added $19 billion. In Q4, we added $20 billion. So the loan growth has picked up a little bit. We can sort of see a little more optimism with clients, a little more activity, a little more demand from clients for loan growth.
So those two things, a little more confidence around deposit growth, a little more confidence around loan growth, those obviously compound through the course of the year. So that will help us in the back half of ’25. And then as you pointed out, we’re still a beneficiary of the fixed asset repricing. That comes from some of the old loans that are on our books that come off in 2025 when we reprice. And then we’ve got some cash flow swaps. That also will mature through the course of the year. So that’s what leads us to this idea of we think the NII growth will accelerate to 6% to 7% and for the full year.
So a little bit of it — a little bit faster in the back half of the year we kind of just see that. But that’s what gives us the confidence on NII.

Steven Chubak

That’s great, Alastair. And maybe a follow up for Brian. Just at a recent conference, you spoke about the expectation of delivering 200 bps of sustainable operating leverage, laying out an algorithm where revenues grow 4% to 5%, expenses grow 2% to 3%. What gives you confidence in that ability to deliver that level of top line growth on a sustainable basis? Just want to unpack that a little bit further.

Brian Moynihan

So I think what gives us confidence, we have periods with stable rate environments, a stable economy growing at a slower rate than it is now. And having produced that for five years in a row, I think it was by quarters or something like that. And so it’s not something we haven’t done. But if you think about the current environment, what’s driving is different. Our revenue growth is growing at twice that rate plus and the expense growth is growing close to that number.
But when you get the higher growth rates, especially where it’s coming from, wealth management business, markets based business, businesses and investment banking, it attaches a higher sort of instantaneous expense and yet, it still produces even a little bit of operating leverage at a higher growth rate, a good aftertax, a good EPS result, a good net operating income result. So there’s different times, different models. This is a model where the revenue is growing faster than it might grow all the time in more normalized environments, but in it — but the business is coming from those businesses which have the quickest move at relative expense.
Give me an example of that of the two. You normalize last year’s expense and think about our expectations from ’23 to ’24 and you look at the growth rate, a big part of the growth rate and expense about 45% to 50% of it is the incentives to the wealth management teammates, which is a good thing. And so that means revenue is growing and we’re taking about half of that in. And if you look at — there are other pieces added to that. So Steve, just to simply put, we did it before, we know we can do it. You can see underlying setup and as you see NII kick in the consumer business, which is more incrementally profitable because NII, you see that kick in and you see the expense base there flattening out, you see the — and you see the revenue base of the company broaden out, you’ll see that we’ll get back to the operating leverage that we expected albeit at may be a little slower year over year growth rate, unless you’re going to tell me the market’s going to go up 25%, 30% every year.
And drive the wealth management. When that slows down to more normal growth rate, that will slow down its expense growth rate also. Therefore, you’ll see opening up at that level. So it’s not something we make up. It’s something we put in our operating principles and it’s something we have done a lot of quarters, but we have to sort of get the stability in the relative business position.
And Steve, the easiest thing to think about is headcount. And the other day, our costs are all people and that’s been relatively stable. And that will start to flow through because during the course of last year, we basically kept the headcount relatively stable. We had some offbeat expenses that we had to deal with, but now we’re sort of settling into that 213,000 level people with a takeout on stuff through operating excellence and putting in on stuff into client coverage, expanding our pipes to draw more marketing, more client coverage, more technology investment.
So we always are shifting expenses and that’s how we make that operating leverage happen.

Steven Chubak

No, it’s a really good point. Thanks for the additional headcount nugget, Brian. Much appreciated.

Operator

John McDonald, Truist Securities.

John McDonald

I wanted to ask as a first question just to follow up to Steve’s NII questioning. Alastair, is the deposit growth in the model that you’ve laid out the year being used to pay down more expensive funding? And you’ve talked about the ability to kind of self fund balance sheet growth. And then also is there any sense of the yield pick up you get on the swap roll off and replacement that you could give us kind of ballpark on?

Brian Moynihan

John, before Alastair starts, welcome back from the cold to be able to be back in coverage and covering our company. And it’s always good to know that you’re going to consistently ask about NII, but I’ll turn it to Alastair to give you the.

John McDonald

Thanks, Brian. You got to be a typecast.

Alastair Borthwick

There you go. So I think your first question was if we get the deposit growth we anticipate, do we think we’ll use some of that to pay off some of the higher cost liabilities on the balance sheet? The answer is yes. That’s consistent with what we said in prior calls. We’ve done that. If you look at the other institutional CDs, you’ll see they came down by another $7 billion this quarter.
So as we grow the really high-quality parts of the deposit franchise, that allows us to take those down, and that’s one of the things that’s going to help grow net interest yield on an ongoing basis. It’s not NII accretive necessarily, but it helps us with net interest yield. So that remains a part of the strategy. John, you’ll see that continue.
As it relates to the cash flow swaps and how those reprice, no, we typically don’t lay out the table of what we’ve got on and how it reprices over time, but it is embedded in our guidance. So each quarter, when I give you guidance for the next quarter, that will incorporate what we know is coming off on the cash flow swaps and how that does. The other fixed rate assets, you can kind of see in our supplemental information just based on the originations of resi mortgage, the originations of auto loans. And every time obviously, we’re booking new residential mortgage, and old residential mortgages are coming off, we’re picking up 250 basis points every time there.
So you can see that happening each time you pick up the supplemental. We just don’t tend to disclose the cash flow swaps. So I will do that for you each quarter as we go through the year.

John McDonald

And then just to switch topics so that Brian doesn’t make fun of me, on —

Brian Moynihan

That’s all right, John. I’m just kidding.

John McDonald

Now in terms of capital, how are you thinking about the CET1 target and the buffer that feels appropriate in this environment? And how does that play into your thinking on buybacks?

Brian Moynihan

So I think we bought $3.5 billion this quarter. We’d expect to continue to step back to the highest levels. We’re in the money, we paid a dividend, we invest in the growth of the business and then we use the rest of buybacks stock. That was $3.5 billion in the past couple of quarters. So at this earnings rate, that seems a level that makes sense. We’re 11.9%. We think that a 10.7% requirement a buffer of 11.50%, that’s 11.2%.
Obviously, there’s going to be some sort of changes in the cap rules and we’ll have to settle it after we see that. And we hope some relief in the volatility of the CCAR outcomes because remember that last year, we jumped quite a bit without a lot of correlation to the actual risk of the company and stuff. So we’ll — hopefully, we’ll see that settle back in.

John McDonald

That — does that leave you towards a mid-teens ROTCE target, Brian, as NIM normalizes, and capital normalizes?

Brian Moynihan

Yeah. I think the capital normalization will be more sort of holding that capital grow through it and not have to retain more capital for growth frankly if there’s math that helps us favor it.
But the NIM is probably more critical to move. The yield from sub to this quarter 2% this quarter to 2.10% plus at the end of the fourth quarter and then moving from there, that as you know, is all that flows the bottom line and we’ll continue to drive the ROTCE back up as — if you look back in the areas where there was any — front end Fed funds was 2%. We are running a couple of hundred basis points more.
It’s the huge zero interest deposit base, especially in consumer and lowest deposit base that provides a lot of leverage. So that would be a driver. A capital return would help some. But I think that will be more complex based on all the different rules and what happens.

Operator

Glenn Schorr, Evercore.

Glenn Schorr

I have a relative question on trading. I know how impossible it is to predict really the environment. But you took share in investment banking, and you’ve invested and gotten benefits from that. You have invested in trading. So maybe it’s a weird question because you just put up record revenues in FICC and equities as you mentioned, but when we see good environments like this, some companies tend to really blow out numbers. You guys have zero loss days. You don’t tend to blow out numbers.
Are there — is that a comment about gaps in the business mix that you’d like to invest more and fill in? Is that a comment about risk tolerance? I’m just curious how to think about it on a relative basis.

Brian Moynihan

I think you have to back up if Jim DeMare and the team are driving the business 11 straight quarters of year over year growth. Frankly, I’m not sure any other company comes close to matching that. So other people have more volatile up and down as you’re prospecting. But over a course of time, we just want this to keep walking up the ladder and they’ve done a great job of doing that continuing to drive the business.
In fact, if you look at year over year comparisons, because your point was obviously something we asked ourselves and we looked at the last 48 hours here, 24 hours, basically a lot of people in the same range as opposed to fourth quarter where some people’s last year’s fourth quarter was down a lot from the prior years, ours was more stable. And I think last year’s fourth quarter was one of the highest fourth quarters we ever had.
And then we put another 10% plus growth on top of it. So think of us as being that business that just is imperturbable, it just keeps calmly growing forward and driving itself up without having maybe some of that more traditional trading house up and down. Not because we’re not good at, they’re very good at it. Not because they aren’t gaining share because frankly, if you look at the last three or four years, they could continue to get share. It’s just we have a little less volatility and principal activity on a given day.

Glenn Schorr

This might be a simple follow up. But on your comments when talking about credit and reserves, your reserve for unemployment are a little bit below 5%, you’re at 4.1% now. I think that’s the way this cycle is played out. I think that’s typical BofA conservatism. I think that’s the accounting.
But I guess my question is your reserves will be fine, your P&L will be fine. But if that plays out, does that completely change how we’re thinking about the pick up in consumer spending, overall loan growth, things like that. But that is we’re talking about just the next four quarters.

Brian Moynihan

Yeah. This is where you got — Glenn, you’ve got to kind of get away from reserve setting methodologies versus what we really believe is from our research team and your research team — your economics research team would tell you. Our core assumption is the, yeah, GDP grows in the med — low 2s this year. The unemployment stays between 4.01% and I think maybe gets up to 4.03% or something like that. So this is literally a weighting of a base case which would match that in an adverse case and some other cases just in the way we build methodologies for the reserves because you’re reserving for an uncertain future.
And that’s how it has it. So they’ll take it as a thought that we really believe we’re going to see 4.8% unemployment in the next four quarters. And so hopefully that answers.

Operator

Erika Najarian, UBS.

Erika Najarian

My first question just as a follow up, Brian, I think I heard you say in response to John’s question that you think the exit rate net interest margin will be 2.1%. I think in 4Q ’25. I just wanted to confirm that I heard that correctly. And underneath that Alastair, could you talk about the repricing or down deposit beta dynamics that you would assume to get to that net interest margin?

Brian Moynihan

Yes. So the simple answer is you stated what I stated to John, but I’ll let Alastair answer the second part of the question.

Alastair Borthwick

So generally, Erika, we’re obviously following the Fed rate cuts, just repricing things accordingly. There are, I think two things going on right now that are interesting. The first one is generally speaking in the commercial businesses with the higher end deposits, we’re typically following the rate cuts and just going down 25 basis points. Obviously at the other extreme on the noninterest bearing, there’s not — there’s nothing we can do with that. It’s already noninterest bearing, but we’re following the fed cuts, removing the rates with discipline accordingly.
And then the second thing that’s going on is there was some rotation going on over the course of the past two years where there have been a lot of things going from noninterest bearing into interest bearing across the different parts of our businesses. That has slowed significantly. So you look at, for example, consumer noninterest bearing, that seems to have bottomed out in February of last year and then noninterest bearing balances are growing now again. So that rotation is slowing. Also both of those things are factoring into our guidance.

Brian Moynihan

So, Erika, if you look at — and the interesting part that’s going on in the last couple of quarters just from a deposit behavior, if you look at our accounts that were here prior to the pandemic to now, you saw a runup and then you saw a little depletion and it’s basically stabilized at a level. But if you look at it in the aggregate, all the depletion is actually driven by the highest balance accounts like $250 million, $500 million average balances. And the others are still multiples of where they were before. That’s been going on and they’ve been growing and they’re growing 9% year over year in the lower balance accounts as people make more money and store more cash and have cash flow.
So if you think about what happened is our average balance accounts that was around 7,000, went up to 11,000 and now it’s basically stable at 9,000 checking accounts. And that’s kind of and you can grow out from there. That is very valuable because checking is either zero or very low interest. And so it’s where the growth we see coming as deposits grow in consumer that helps produce irrespective of the market dynamics of the higher at the market price deposits where you see the impact of the deposit franchise coming through.
So consumer being down 1 basis point quarter to quarter doesn’t sound like a lot, but you’ve got to remember a lot of their stuff is it doesn’t really price but are they growing that stuff? And each $10 billion of growth in that area is very, very important to us.

Erika Najarian

And just as a follow up, both you and Alastair have during — over the course of 2024 started introducing the concept of a normalized net interest margin of 2.3%. With a neutral rate, maybe around 4%, does — can BofA get there more quickly, particularly given the deposit dynamics that you mentioned, Brian? I guess I’m trying to — we’re just trying to figure out you guys did introduce the concept of normalized NIM. So I’m not trying to seek out guidance in terms of ’26 or ’27 or whatever you had had to have told us that for a reason and I’m just wondering if the forward curve or what the dynamics are, that would lay out the path to achieve that over the medium term.

Brian Moynihan

If the Fed funds rate stays higher, we’ll get there faster. So simple. Because that’s obvious because the sheer volume of low interest. So if we are sitting here in the October, I think in when we’re talking about that, the amount of rate cuts was still, I don’t know how many more, three or four more than we’ve had so far. Now we’re down to one. So as it stays at a higher nominal rate, you’ll see this adjustment come through. There are two caveats there. One is we’re carrying a larger markets balance sheet, which by definition is a little less robust in that area. And then secondly, we’re carrying a lot of low — a lot of excess liquidity just because we’re running that down as Alastair said.
So during, you have the buildup after — during the pandemic, we built up a lot of term financing and running off. So all that will help us, but we — it will go faster than we’d otherwise say mid last year to now just because the nominal rate environment stays higher.

Operator

Mike Mayo, Wells Fargo Securities.

Mike Mayo

So you kind of upped your NII guide in the next say several quarters. And this was the first question asked, how much is short rates, how much is long rates, but most importantly, how much of this is a little bit more steepness in the yield curve? And what part of the yield curve is most important for that? And what’s the sensitivity for every 10 basis points of additional steepness that adds, how much to NII or something along those lines?

Alastair Borthwick

So, Mike, it’s still the short end that drives probably 90% of the sensitivity around NII because if you think about it, we just don’t have enough fixed rate assets repricing to really drive NII. In any given quarter, you’ve got a few billion of resi mortgage, a few billion of CVL repricing. Let’s call that $10 billion to $12 billion. You’ve got $8 billion to $10 billion of ultimate maturity securities repricing. But that’s in the context of a $3.3 trillion balance sheet.
So it’s still the short end that drives most of the NII. So when Brian says, obviously, we’re helped by the fact that there might be two or three rate cuts less than there were previously, that’s obviously helpful. But the big thing is always — for us in terms of year over year growth, it’s always about deposit growth and loan growth.
The fixed rate asset repricing is it turbocharges a little bit at the margin, but it’s about deposit and loan growth and those are the important ones. And getting back to growth now in each of our businesses gives us a stronger foundation leading into 2025 than we had this year when we still had at the beginning of the year consumer coming down, wealth coming down. Now that they’ve found a floor, it’s slightly different.

Mike Mayo

And then a big picture question, Brian. With the new incoming administration in a different tone as it relates to bank regulation, in fact, the incoming Treasury Secretary said he would like to reinvigorate banks. So if you were to talk to them and maybe they’re listening, what would you like to see changed as it relates to bank regulation? And then a specific question, I know it’s going to be tough. If you give me any sense, it would be great. But your CET1ratio, if you didn’t have gold plating, if you had a level playing field, if you took out some of the extraneous operating risk penalty, how much would your CET1 ratio increase in that sort of world?

Brian Moynihan

So Mike, I think your second question brings up, the places that our industry and our company have been advocating heavily is that we’ve had a little bit of a situation from prepandemic to post pandemic where you’ve seen capital requirement –required capital go up nominally, 10%, 15%, 20% and not a big change in the risk of the companies. And that’s just all the mathematics behind all the counting, right? And so we’re saying, whoa, whoa, wait, we aren’t indexing the GCIB. So therefore, our relative size economy isn’t growing as fast as it was intended to be indexed on that basis isn’t there.
You’ve had, as you said, sort of an accretion of sort of methodologies that keep pulling more in and including the stress test volatility that we’ve all pointed out to him. And the last point you make it is if you look at this concept of Basel III making equivalent around the world is completely off in a different world because we’re using advanced — excuse me, the rest of the world is using advanced, we’re using standardized gold plating or whatever you want to talk about, it’s apples and oranges.
And so I would never think that we’d go — if we ever got to Europe, our numbers would be probably a big — a lot, lot higher, but that’s not going to happen because just we’re going to have — we as a society will have a more conservatively capitalized industry. So I think it’s simply put if they were to take into account our clear statement, our clear advocacy about — as an industry about index the GCIB, take the volatility out of CCAR, how can it change so much in the relatively same scenario? And also behind the scenes, all the changes in accounting, not a counting, but accounting for risk, you’re increasing capital requirements and without an explicit decision to do so.
And we think that that would be worth probably a 100 basis points or so if you really sat back and thought about it how do you get there. Mike, think about our volatility and CCAR outcomes, I think we went from — we went up by, I don’t know, 50 basis points, 70 basis points last year, whatever it was. The risk of the company didn’t change. As a matter of fact, it probably went down honestly.
And so that’s what we’re working on. So we want to see that. And then in the day-to-day supervision, we just want to see people focused on safety and soundness and good management and making sure there’s the regulatory agencies cooperate on things like BSA and AML and things that everybody’s all over the place and the industry is trying to sort it out in the middle. And we’ve given them precise points to look at and we’ll see what happens.

Operator

Jim Mitchell, Seaport Global Securities.

Jim Mitchell

Maybe just dialing in on the deposit growth. You clearly have been outperforming the peer group but maybe just want to focus on consumer for a second. You generated $1.1 million of net new checking accounts, which seems best among peers. I think that’s showing up in better consumer deposit growth in 4Q. So what do you think you’re doing differently that’s generating that kind of consistent success in adding new accounts?

Brian Moynihan

At the end of the day, our brand is beste. In terms of our scores, our customer service capabilities are scoring at the highest they’ve ever come. The fairness of our account structures of transparency, the digital capabilities. It’s just winning in the market. It’s — in 1 billion net new checking accounts and not 92%, 90%, whatever they are primary. They start with an average balance of $2,000 to $3,000, they move to $6,000, $7,000 over the course of a six months. This is just a great job done by Dean Athanasia and Aron Levine and Holly O’Neill that run this business force just continue to drive it.
Then on top of that, we’ve layered in ways with various business lines to help generate accounts. So our work we do with companies to offer our best products and services as a benefit to their employees helps us generate some extra growth. Our ability to do business around the college campuses, which is not huge for this quarter’s growth. But because we are generating the amount of openings at twice the rate of young people exist in society for our customers five years ago. Five years later, the people are outworking and they’re great customers.
So it’s a whole bunch of things. And so and it’s — but it’s relentless and sustainable. And yet we still have lots of ways to grow and we weren’t in. We just entered a lot of markets over the last five years. Denver, Cleveland, Columbus, Cincinnati, Indianapolis, Minneapolis, Milwaukee now, Lexington, et cetera. That’s one way.
And then if you think about in the wealth management teammates and Katy Knox and Lindsay and Eric do a great job there, but we have a lot of room to go where we continue to outfit those clients with a full range of services of Bank of America and even Merrill Edge has a lot going on there. So there’s a fair amount of deposits that come from our Merrill Edge originations, which are 300,000 accounts year over year and those are all $100,000 starting accounts, not $3,000.

Jim Mitchell

And then maybe pivoting on the expense side, the guidance of 2% to 3% growth. It’s kind of a pretty decent step down from what we saw in the back half of the year. So what areas do you see sort of slowing on the expense side given the — your optimism on organic growth? How do you kind of decelerate the expense growth in ’25?

Brian Moynihan

But I think three key things. One is, if we get the year over year growth in the markets related businesses, in the high double digits or 20% growth, that expense guidance might be a little tight. But again, you would cheer for that. So this is assuming a 5% to 6% growth in the GD — in S&P type of numbers. So that takes some of the growth pressure off. The aggregate numbers are locked in at a high level and growing from there. And then the second thing is frankly just getting a lot of this work behind us and some of the remediation and lookbacks and things are all completed and behind us.
And then, third is, is just keeping the headcount and getting — continuing to focus on OpEx and generating capabilities. And so as we stepped into some of these national brand campaigns around some of the major properties we’ve affiliated with most recently yesterday, women’s US soccer, including men’s and women’s teams. FIFA, the Masters, these are all things we’re paying by just driving other efficiencies.
So from a company that for years had gone down in expenses, the idea of growing 2% to 3% is not that hard a concept albeit the growth in the back half of this year was a bit driven by the incentive explosion that happened because the explosion of markets. When they took off, our teammates did a great job of capturing revenue and incentives won.

Operator

Vivek Juneja, JPMorgan.

Vivek Juneja

I have two separate questions. First one with expenses. Just want to clarify to the last question, Brian, what you said. So what are you assuming for incentive comp in ’25 in your guidance? Is it flat year on year? Are you assuming some increase? Any color on that?

Brian Moynihan

It would grow with the market stuff. But we have other efficiencies that would offset some of that growth.

Vivek Juneja

Second one, I guess I can’t leave you disappointed. It must given you and Alastair love NII. So let me ask a little netty question that. BSBY hedges, since those started to accrete this quarter, how much was the benefit this quarter? And what is the cadence of that as we look out over ’25?

Alastair Borthwick

So we think about the BSBY accreting back into the P&L kind of like the same way we do with the other cash flow swaps effects. So I’d say a couple of hundred this quarter. And then when we give you the guidance with all the cash flow swaps, it’s all included in there. So when I say that we think this year, Q1 should be up modestly, that is after the $250 million of day count adjustment and it’s including budget growth, loan growth and all the cash flow swap activity.

Vivek Juneja

So that $200 million — couple of hundred million, that probably and given that it’s $1.6 billion to be recovered over a couple of years, that should continue at this pace all through ’25 then, right, at least that —

Alastair Borthwick

Most of it will take place in 2025. It sort of burns back into the P&L and then there’ll be a little bit in 2026 and a tiny bit in ’27.

Vivek Juneja

And then — sorry if I may another one, Brian, to your comment on capital, you said you want to keep a 50-basis point buffer, your CET1 with 11.9%, 50 basis points, 11.2%. Is there a plan to go down to the 11.2% at some point and therefore step up your buybacks or what’s the thinking there?

Brian Moynihan

I wouldn’t assume that we’re going to take it down through a lot buybacks in your modeling. It’s going to be there to support growth. But Vivek, the simple answer is we’ve got to get a set of rules that could be moving around on us and once we get them, then we can give you better guidance on that.
Because it’s just hard to estimate when you could have more excess. If they do — what I — we as industry expect them to do and then we have a different conversation right now. We’ll probably grow a part of that away through the good work of our team in terms of loan growth and in the markets business, we continue to invest in that business. So you — so don’t expect us to deplete that ratio down quickly. But I’m holding my right to change that if we get the capital level straight out of the new rules.

Operator

Matt O’Connor, Deutsche Bank.

Matt O’Connor

Just if there was some relief on capital, are there areas that you would incrementally lean into. Obviously, without knowing all the rules, it’s hard to know for sure. But just are there areas that you’re like if we had that extra 100 basis points or 50 basis points or 150 basis points, you would do a little bit more in some areas than you have been?

Brian Moynihan

None of our businesses are constrained because of capital. So if the consumer team had more credit card loan growth that was based on what they think the right risk balance is and getting paid for it, et cetera, that’s got oddity, saw us just grow balances last quarter, the auto loans or whatever. And so I think it — I don’t see that wealth management, obviously not much of our RWA user in a lot of ways. And then the real question is, it’s in a global banking business again, if they’re getting strong loan growth, there’s nothing that we’re slowing them down.
In the markets business, we continue to drive the capital up. Being the lowest return on equity business, we have to be a little careful that we don’t do it. But Jim and the team have done a great job. And we basically — their balance sheet is $300 billion large than it was four or five years ago. And they’ve grown their — we’ve grown through the GCIBs as you know from 2.5% to 3%. And it will keep probably growing through those that we use some.
But it’s not like we’d say you can’t have it because of capital. It’s really just but in the company and keeping a balance in the overall management of the risk and where we want to take risk and how we do it. And then frankly it’s, they come up with business plans that we’ve never had to say we don’t have enough capital to do that. That’s not the issue.

Matt O’Connor

And I guess so like depending on how the capital rules are tweaked, it could make some businesses just more profitable, right? So even though you have enough capital to put to those businesses, if the returns aren’t making your hurdles, maybe it could with some tweaks, and I’ve heard some of your peers talk about like equity prime brokerage as one area that could have higher returns of capital requirements to reduce. And again, we don’t know exactly how it’s going to play out. But do you envision any kind of changes to how you evaluate businesses?

Brian Moynihan

Yeah. I’ll take it. It won’t change how we evaluate businesses because regulatory capital is only one of the ways we look at it. We look at the risk and sort of markets based capital and other things. But it could take the sword and for a lack of a better term, a little bit of the penalty to some of these businesses down some.
But you also have to remember the ROA and the mix of businesses and there’s another side to this because we have 6% tangible common equity, and we got to produce returns on that, and low ROA businesses affect that. So there are things that will favor it under regulatory capital, but not favor it under sort of market-based disciplines.
So we work through all that. I don’t expect to see change in how we do it. But I also don’t think that any of our businesses are constrained because we’re not having capital. So if Jim and the team have a chance to go prime brokerage and make it work, in our company, we could have other businesses which have very high ROAs to make up for it and some other companies, it would be more important for them because they don’t have those other businesses in relative size of the markets business.

Operator

Gerard Cassidy, RBC.

Gerard Cassidy

Brian, hey, we’ve talked about this in the past and also with you Alastair, obviously, credit quality for you and your peers has been — is very strong and in view of the rate cycle we just came through where we went from 0% to plus 5% at the short end of the curve and really never saw a surge in charge offs due to rates going up that much. When you guys look at credit quality, is it due to better underwriting standards or sticking to your underwriting standards or is it your customers themselves? Because we all went through the pandemic are just much stronger balance sheets, more resilient. Well, what would you account for so far that this credit cycle has been fairly benign for you and your peers?

Alastair Borthwick

Yeah, look, it’s definitely been benign. I think one thing that hasn’t changed, our underwriting strategy, our standards, our risk appetite, our client selection, those really haven’t changed, Gerard. But I think you’re right. Look, things are obviously different in 2019. 2019, we didn’t have this rate structure. So that’s a little bit harder at the margin for the consumer. At the same time, consumer is stronger. I mean we can see that in the deposit balances. We can see it right now in the consumer spending in the 3% to 4% range. We can see it in the balances being elevated over five years ago.
We can see it in the unemployment level, the income level, home prices, wealth effects. So look, 2019 was freakishly low in terms of like a historical norm. But things have settled in here. We sort of said a year ago, we thought they would plateau right around where we are. We’re glad to see three or four quarters now of some stability. It feels pretty good on the consumer side. It feels very good still on the commercial side. So that’s why we’re sort of laying out. Our expectation is unless there’s a big change in the economy, we think we’re going to be around in this 50 basis points to 60 basis points over the course of the next year or so.

Gerard Cassidy

Very good. And then as a follow up, I share your optimism on the outlook for the economy and many of your peers in the capital markets business, we — I think many investors do, what are the risks? I mean when you guys sit down at night and everything is going well, what do you talk about as what curveballs do we have to watch out for? Is it a rate environment that changes quickly without anybody really expecting it? Is it complacency? What are some of the risks that you guys think about?

Brian Moynihan

Well, you have wars and hopefully a resolution of one that’s just happening as we speak, but we have wars, you have trade wars, et cetera that bothers. You have the availability of resource around the world whether it’s physical resource or human resource to do work and shortages of that because unemployment rates in a lot of countries are pretty low. And so can you get the productivity to keep growing the economy?
But — and all the usual things, but if you think about it, Gerard, just to be clear, we’ve seen a 15 year run from after the pandemic — excuse me, after the financial crisis — global financial crisis or more year run where you’ve seen constantly improving credit statistics that then interrupted in the pandemic a little bit and then because the stimulus dropped down again and now it’s back to normal but that’s a long-term trend. So it’s not complacency. It’s just that how much leverage is building up in the system that there will be difficulties with either at the household level, at the corporate — at the company level.
And then a lot of it is outside the banking system. So we worry about that and how it reverberates into the banking system because just leverage that exists out there that higher levels than we traditionally have given in the banking system still will affect us because that means if people can’t carry it, there’ll be restructurings of companies and bankruptcies and things like that, which are going on today, but they’re going on a level which is very manageable.
So we worry about all those things and the federal debt levels and the pinch that will come out of state and federal spending if they have to — they need to slow down the growth. All those things are factors which we think about and the way we manage the company is to run it so that given those events, we can continue to operate. And that’s why the stress testing quite frankly is a good thing because it makes you think about the prey to horribles happening even though they don’t happen and make sure that you are positioned to survive them.
And if you said to the question, Alastair answered, one of the big impacts across time here in the bank industry is because the top 30 institutions are doing stress testing, which assumes that you’re wrong in your underwriting and the economy goes from 4% unemployment to 10% unemployment overnight. Think about the impact of that on bringing the underwriting narrower so that you can afford the capital that you have to hold for that outcome even though that outcome hasn’t occurred.
That’s going to cross a big portion of the bank industry. So I just think it’s more fundamentally structured, but leverage is going to be the issue. It always is and you’re always trying to find the p, where is the excess leverage and how do you make sure you’re avoiding it?

Gerard Cassidy

And Alastair, I liked your comment about when you’re talking about the 17 financial centers that you’re a growth company. Hopefully, that will be reflected in the PE shortly.

Alastair Borthwick

Well, there’s plenty of room on the PE multiple, but I’ll let you work on that, Gerard. You work on the PE part.

Operator

Betsy Graseck, Morgan Stanley.

Betsy Graseck

So Brian, here’s the question, small business optimism is up, and you’ve got a flat curve at the front end and so I’m kind of wondering how that feeds into C&I demand. And I’m wondering what your conversations with not only small business, mid business corporate, it’d be really interesting to hear how you think they’re preparing for this change.

Brian Moynihan

Sure, Betsy. So small business, small, medium sized businesses. So in our business banking category, in our — we have small business banking, we have global commercial banking, think middle market. Across that environment, the draw rates on lines of credit and stuff are still much lower than they were in a different prepandemic and things like that.
And to your point, the higher interest rate environment affects them most quickly and importantly, because they use lines of credit to do things, buy a piece of equipment, hire some more people and the payroll dynamics of that, whatever it is. And they might permanently finance that, but immediately, they use lines and the draw rates, you have 400 basis points over where it normally runs so to speak, which means that they’re drawing at less rate and that probably means they’re doing a little less.
And so we haven’t seen that move a lot. That’s a two-come in terms of loan growth as Alastair mentioned earlier, but their optimism has changed. And you saw that, and that’s really around — the other thing is when you talk to our small business customers and we made these points to people in Washington is the over the regulation, the impact, the hard — it’s hard to do business, hard to get things done, the rules coming out, they don’t have the big staffs that we do, what other companies do that can deal with all that.
And so it all confuses, slows them down, it makes them hesitate. Their belief is that that’s changed and that’s why you see the optimism come up and then we got to translate that optimism into activity. And then you’ll see the loan growth come. But I think it was a — it’s a quick change and it’s based on their view of how easy it will be for them to get things done both at the state and federal level.

Betsy Graseck

Yeah. I’m just looking at you are — Bank of America is one of the few that actually has small business loan growth year on year. And I know a lot of that came a couple of quarters ago. But with this very sharp increase in small business optimism, I would think that could potentially be something you could benefit from.

Brian Moynihan

No question. And so — but the real dollar volume of benefit is going to be — the small business loans I think grew — have been growing quarter after quarter, year over year for a good chunk of time now. And we feel good about that, but the dollar volume change in the middle market business from a little more drawing than the lines consistent with what people have done before is a lot of loan balances. There’s $200 billion of balances in that business. So it doesn’t take a lot to kick it up.
So I think, look, we’re the largest lender to small business and those customers tell us they’re optimistic and they see forward and the issues where I did — I couldn’t get enough people and that’s something we’ve got to be careful of. The regulations were hurting me and then the interest rates. And the interest rates coming down a little bit helps them. And the other two — the strong belief is that will be more readily available.

Operator

And it does appear that there are no further questions at this time. I would now like to turn it back to Brian for any additional or closing remarks.

Brian Moynihan

Sure. Well, thanks everyone for joining us today. We finished 2024 with good momentum. As we enter ’25, the economy is resilient and healthy. The consumers continue to spend a solid and healthy rate. The employment levels are strong. The asset quality we can see is very good. Our loans have now grown for several quarters in a row here. Deposit have grown for six straight quarters. The rate environment continues to be constructive. And then the added value in the last couple of quarters of the fee businesses have come on strong given the extra market activity. All that sets us up well for 2025.
Thank you for your support. We look forward to talking to you next time.

Operator

This does conclude today’s program. Thank you for your participation. You may disconnect at any time and have a wonderful afternoon.