They move the money, they’re going to move. And so for wealth management and consumer, largely people who are going to move money out to get rates have done that and — is there — is it still bouncing around a little bit in consumer? Yeah, they’re $950 billion more or less on a given day. But it’s stabilized and been relatively consistent for the last four, six, eight weeks. But that’s got to settle in and then you grow out from there. But that — what that’s really telling you is they’ve kind of moved the money they’re going to move, mostly because they did it and you don’t get that money twice. So you moved a chunk in these higher end consumer balances. They moved 20% of their balances over in to get in money market funds, which we captured into other things.
And they don’t have it to move again because that was accumulated balances that they had in a zero interest rate environment, pre-pandemic, plus whatever other things they got. So if you look at the Slide 8, you can see this deposit slides laid out by non-interest bearing and interest bearing. But the key is that consumer with [$700 billion going into the pandemic, sits at $950 billion] (ph) today. And if you look at the checking, it’s still up $140 billion, and that’s kind of bouncing around. You can see it’s moved down a little bit, but that’s really the high — people with high end checking balances that have moved it into the market.
Glenn Schorr: That’s all good and more than I was looking for. I appreciate it. The quickie follow-up on reserves now. As you mentioned…
Brian Moynihan: Just one back — look at the Consumer Banking page. It’s 47 basis points all in, and it was six quarters ago. And so — and that’s all driven by the CDs. We don’t have a lot of CDs and some of the high end money market pricing. But the point is, if it was going to be moved, it’s — think about that. It’s — so the money that’s moved is moved and we pay higher rates for very high balances and stuff like that, so — especially in like the Merrill Edge platform. So a lot of that dynamic is through the system right now, for lack of better term.
Glenn Schorr: That was great. Good comment. I appreciate that. Quickly on reserves is, with a pretty solid economy, resilient US consumer, your NPLs are down. You have a lot of reserves. The question is, what are the signposts that you or we should be looking for to know when you’ve added enough, when we’re stable enough, point in time and you actually start funding charge-offs from reserves and not adding? Thanks.
Alastair Borthwick: I think we’re getting pretty close now because things are beginning to stabilize. They’re beginning to normalize. The whole — this is a period of transition for the economy and it’s a period of transition for our clients, too. A lot of them are dealing with higher interest rates and they’re just beginning to moderate and change their spending behaviors. So we’ve seen a trend over the course of the past few quarters. It’s pretty predictable around the consumer side. You can see that in our disclosures. I think it’s slide 12 and 13, but that’s going to bounce around over the course of the next couple of quarters. Now that we’re back towards 2018-2019 levels, it’s going to settle in, we think, in the first half of this year.
And then on the commercial side, the asset quality remains really in a very good position. We happen to have a couple of names that popped up this quarter, but to your point, we were pretty fully reserved against them. That wasn’t a surprise to us. We had seen those for the course of the past six months. So we think we’re getting close there, Glenn. And obviously, the closer we get to a soft landing, the better we’re going to feel about that.
Brian Moynihan: Glenn, as you think about it, when you said reserves, remember, because under CECL and stuff, we’ve always got sort of the lifetime reserve methodology, which we’re all still getting clear now. We’ve operated under for a few years, but this quarter we actually had commercial reserves come down to pay for the charge-off on a specifically prior period, reserved properties or loans, and that happened. And so you saw some of that. Be careful on the consumer side because basically the pay-as-you-go side, the consumer side is still building up to a nominal amount of charge-offs, consistent where it was in ’18/’19. So if you look at card in ’18/’19, the charge-off rate across the eight quarters ranged from a low of 2.90% to higher 3.26%.
We’re at 3.07% today, but we’re $6 billion, $8 billion higher balances. So you got to be careful the nominal amount to get that right. If you go look at it more broadly, all — the company, we had a 45 basis points this quarter, and the range in those eight quarters are [34 basis points to 43 basis points] (ph). But what’s different is the CRE piece of that and a charge-off. So the reserve to loans and all the classic factors looked at are very strong. The reserve has set itself with basically half the reserve is driven by the adverse case scenario, to give you a sense, versus the base case, and then some judgmental on top of that. And so as it becomes clear that we’re in a soft landing, to Alastair’s point, there’s less allocation to those scenarios.
We always will make some. But when you put all that together and wait, it has unemployment pushing up in the high 4s, and you look at unemployment today, it’s nowhere close to that, and there’s no prediction to get there in a base case. So that’s what will start to ease up on the general reserving. But remember, on card it’s a bit of pay-as-you-go. And we were running around 6% reserves. We’re up to 7% against card now. So there might be a little bit coming back, but not that — I’d rather have the growth to sop that up down to 6% in cards than give them back to reserves.
Glenn Schorr: That’s great color. Thank you for all that.
Operator: We’ll take our next question from Ken Usdin of Jefferies.
Ken Usdin: Hey, thanks. Good afternoon. Just a technical clarification on that BSBY $1.6 billion. So I presume that you start to get that back mid quarter 4Q next year, given the November 15, 2024 termination, and then does it just run out ratably? Just wondering how — over what exact period of time you get that $1.6 billion.
Brian Moynihan: Okay. Hey, Ken, Happy New Year. It — this year’s ‘24, so.
Ken Usdin: Correct, sorry.
Alastair Borthwick: Ken. Yes, you got it right. We’ll get some of it back at the back end of 2024. So we’ll get a little bit in the fourth quarter, and then I’d say we get most of it back in ’25, most of the remainder back in ’26. That’s the easiest way to think about it.
