Brian Moynihan: That’s a couple of things. If you look in the fourth quarter, you can see the cards come up, which is seasonal, and that’s going to come down, and that’s one of the things that people tend to pay those down. The usage of those cards frankly, are still at low levels, the pay rate, the way to think about that still in the 30s. So, that’s sort of one thing that’s been kind of consistent through the pandemic. The customers are paying down the card balances. And you expect at some point, those will get back to more normalized paydown rate in the mid-20s. The second is line usage, frankly, has also come back down. It’s not gotten ever back to where it was pre-pandemic, and it moved up and it dropped by 100 or so basis points, which across a lot of lines is a fair amount of loan.
So, that you saw. And so, how corporates manage their borrowing and cash and demand cycle seems to be flattening out a little bit. Then obviously, acquisitions and things are way slowed down, so there wasn’t much activity there. So, I think you put it together, then you have in the securities-based business, customers took down leverage, paid off a fair amount of loans in the wealth management business, even though they’ve grown, I think, for 50 some quarters in a row now or something like that in loan balances, it happens, mortgages, obviously, are low. So — but what we think is as the rate environment settles in, you’ll see that normalize and that we’ll get — we’ll be back on the mid-single digits. We just won’t have the 10% loan growth year-over-year because that is faster in economy and faster we do.
We have not changed credit underwriting standards. And you can see that in the consistency of the origination standards back in pages of the appendix where we show sort of our cars and home equity and things like that. It’s just the demand side is a little soft because people are reading the same headlines we’re all reading about recessions coming and what should — they should be careful.
Betsy Graseck: Okay. Got it. And then, on the expense side, I know we talked a lot about the NII and the puts and takes as you go through the year that you’re looking for. What about stability on the expense line to manage through any worse than expected outcomes on the NII? What kind of levers do you think you have to pull there, Brian?
Brian Moynihan: Well, we always have the variable compensation stuff will drop because assuming that the reason why rates are going — being cut is because economic activities were some people thought. And then you have the general just efficiency movements in the house that we’ve been pretty good at. And then, you have to remember, we try to get people to go off of nominal expense to operating leverage. And so, we have six quarters of operating leverage. As the NII growth slows down, we have to manage a company to produce operating leverage. And so, we’d expect that fees might stabilize and absorb the $1 billion downdraft in quarterly investment banking fees and start to work up from there and other types of things. So, I think we feel very good about the ability to find ways to manage expenses, always have.
