Bank of America Corporation (BAC) Earnings Call Transcript & Summary

Great. Thank you, everybody, for joining. We're very happy to have Bank of America up next. Some quick housekeeping reminders. We are conducting Q&A via Pigeonhole. [Operator Instructions] We're also conducting a live poll with our partner, Procensus, on both Bank of America shares and the stock. [Operator Instructions] And you'll be able to see the results of the poll immediately following the link. So with that, we are very pleased to have Brian Moynihan with us today. Brian is the Chairman and CEO of Bank of America, a position he has held for over 10 years. And he's been a consistent supporter and speaker of this conference for that entire time. Brian, thanks for attending today.

My pleasure, John. It's good to be here, and I hope everything is going well for you and your family and for everybody else out there, too.

Thank you very much.

So let's get started, Brian. With the breadth and depth of your franchise, you often have a good read on what's happening with the economy. Let's start by asking for an update on what you've been seeing in terms of consumer spending on credit and debit cards.

So John, we have spoken about consumer spending and how we look at it. So it's beyond credit and debit. It's all forms of consumer movement of money in for '19, 2019 at Bank of America, that would have been about $3 trillion. If you saw it coming into the COVID period here, January was -- the month of January is 9%, above the month of January of '19. February is 10%. March, you saw the impact start to hit, it was up 7%. April was down 27%. And May, so far this month through 20 days here, 25 days, is actually only down 5%. So you're seeing the consumer spending levels across the whole franchise come back relatively strongly. Certain areas are still -- whether it's travel or things like that, credit card spending on travel is still down. But spending on clothing, for example, in the last week is up to -- last month, every month is up 50% from April to May, month-to-date. So you're seeing things come back. Memorial Day spending, any aggregate by our consumers, meaning cash on the ATM spending on debit and credit cards was only -- it was about 10% different than last year, even given the restrictions on economies are only partly open. So the consumer spending is largely fueled by the stimulus and the EIP and the PPP and the unemployment, for those people unfortunately unemployed, but for the rest of the people fueled by their desire to start to normalize here.

Great. And Brian, that trend of down 5% for May, that's combined debit and credit card, I assume? And I assume the difference is that cards down a bit more and debits maybe flat to growing a bit?

Well, that's the broader [ indices ] of all the activity. And so yes, credit -- and so credit and debit's about 25% of that spending, and that's where you have to be careful because there's a lot more ways customers use money, P2P payments to each other or suppliers of services on our Zelle network or cash out of the ATM. So that's the broadest indices of payments. Credit cards are down, with debit being almost flattish now running flat to last year, and credit being down 10% or so. So -- and each one is about half the spending. So that's still coming back on the credit side because that has more of a travel bias, quite frankly.

And that's down 10% or so in May?

Yes. That's the current environment, yes.

Okay. Great. How about credit card lending balances? We started to see a big drop in the H.8 data on revolving balances in March and April, kind of following the spending down. Are you seeing any improvement in the balances of the credit cards?

Not really because -- again, because the impact -- and so the total was down 10%. I was just double-checking that. But the impact is high enough that the transactors came down and people take a trip and pay it off, and so the balances have come down. You're seeing that flatten out now. Frankly, it's -- again, it came down, in our case, it came down across the industry. But largely, that was the payment side, the activity people will charge and then paid it off going out of the system. But it seems like we're stabilizing at a number now, but I don't think it's going to come back up quickly just because people being relatively conservative about borrowing.

Okay. That makes sense. Let's talk a bit about deferrals and forbearance. What's been the magnitude of deferrals that you've seen across the different types of loans? And what kind of differences have you noted in the makeup of deferrals across different products?

Well, if you look at the broad base, we've seen about 1.6 million or so in total deferrals, but it's really stopped. I'd say nearly 1 million of those in probably the first 2 or 3 weeks, maybe 4 weeks or something like that. And so just to give you a sense of mortgage, we have a round number of 180,000 deferrals. I think there's less than 1,000 in the last week or so. So you're seeing the numbers come down dramatically. Most of it was in the 4-week period, sort of beginning in the latter part of March to the sort of third or fourth week of April. And then now it's really stopped. And so of that card is the dominant -- 1 million of them a card. What's been interesting is of the people who ask for deferral, got the deferral, its payment came due, 40-odd percent of them paid us. So it's clear that this -- between the EIP, the -- and the others -- the $1,200 EIP stimulus payment supplied on a family, between people getting paid and other things, you're seeing the performance of our book, which is a high-end book, that super prime-type book has been very strong.

It's still early, but how are you going to assess the potential credit implications of deferred accounts as they stay on deferral? Most of them have kind of still been current before they ask for the deferral, I assume?

Yes. They were current. And then like I said, 40% of people paid us. So I -- we'll just -- we'll judge that behavior as you go through 2020, but our forward expectations would expect that there'd be a bubble of charge-offs if they came due and couldn't pay. But for us, in particular, not necessarily -- remember that book is a very prime, super-prime book, so it does -- we definitely expect there will be a bubble and go through it. And then it will build the reserves now if the charge-offs will occur, and then we'll readjust it given when we get to the other side of the river here.

And do you know how long and under what conditions you'll continue to offer deferrals?

We haven't thought that through yet. Some of them come up -- they were 90 days and things. We'll have to figure out what's best for the customer. Our job is to help this customer make it through. And so as you see the unemployment level spike and you see the historic levels, we see the rehiring going back on. It will sort out literally customer by customer, but I think we've seen the peak so far.

How about on the corporate payment side, what trends have you seen in corporate payments? And how is that different between larger and smaller businesses?

The outlier in terms of numbers in our book is around doctors and dentists and stuff. We have a business we call Practice Solutions, which lends to doctors and dentists. And the unusual thing about this economic -- this health care crisis that precipitated an economic crisis is with the stay-at-home orders and shutdown orders, you saw doctors and dentists and things that traditionally never shut down in any kind of economic environment. They may have a discretionary spending, may go up or down. And they were shut down. So we had a 20% deferral rate in that book. Again, we expect that to bounce back the dentists. We go out and survey them. Recently, 70% of them are now open, seeing patients. And they will come right back, and they'll pay us. It just was a momentary and complete surprise interruption of cash flow. That's what drives the numbers of deferrals in our business banking book. The rest of it is really relatively modest in middle market and those types of things, it's really focused at -- in the piece around that Practice Solutions group.

Okay. And how about on corporate draws and paydowns? Have you seen the pace of drawdowns slow significantly and have customers been able to pay down their lines as capital markets have gotten more open?

Yes. So I think you need to sort that by capital markets-oriented issuers and sort of back balance sheet lended to issuers. And so in our business banking, which is a $50 million under revenue segment, our middle market being the latter, the former being the multinationals we serve. We had $70 billion of loans outstanding in the -- really in the last 3 weeks of March. You've seen about, I don't know, $30-odd billion of that paid down. If you go sort that out, what's really going on in the larger clients is access to capital markets has pushed the people drawing their lines to support the commercial paper coming due. Then termed it out, and you've seen recent articles about that. We're seeing that phenomenon. The capital markets, they have record high-grade issuance. Over the last couple of months, high yield. The team has led that, and our team has done a great job under Matthew Koder. So that's sort of taken that down. The other side of it then in the business banking and global commercial banking, you saw in the middle market the revolver draw rate went from the 40th -- 40-ish to 50, low 50s, and then now it's back down to the low 40s. Again, that's all good news. And not that I don't like loan balances because it's the way we make money, but we don't want people that's borrowing out of fear, in nervousness. You want them to borrow out of strength and need to -- the supply chain and pay their employees and things. And so it's good to see them settle back into a more normalized event. Business banking is likewise, just a little different starting point, high 30s, up to high 40s and back down. But all that's good. Now that runoff will be offset by the PPP balances coming on for this quarter, and then we'll see how it plays out as we move to the rest of the year. But it -- we stood up as an industry, we stood up as a company and supported corporate America -- corporate world, corporate America, middle market, small business America and had a lot of outstanding balances. The good news is as markets stabilized, as people's view of what they needed stabilized, they've been able to pay that back down. And if we actually surveyed some of our $50 million and under revenue clients, and only about 20% of them say they think they need financing over the next 6 months or a year. Most of them are fairly sanguine about where they stand. We'll see how that plays out given the economy, but they feel good about it right now.

Okay. So we shift gears to credit quality. It's on a lot of folks' minds. You took a big reserve build in the first quarter. What are some of the factors we need to think about in sizing up what might be needed for the provision coming up in the second quarter?

Well, you got to walk the economic environment forward. And if you go look at the -- where people were at the end of March, it was different than it turned out to be as we went through April, [ including our own economies ]. And so you'd expect that all be factored in. But what you're also starting to see is the -- sort of a tug of war impact between the 2 major things -- 2 or 3 major things going on. One is, obviously, an unfortunate spike in unemployment as this crisis and the shutdowns hit. You're seeing that offset by the amount of fiscal stimulus that's unprecedented, it's gone directly to consumers to offset it. In addition to that, you've seen the PPP. And a lot of that is only really in the system for 3 or 4 weeks. The CARES Act only passed 2 months ago yesterday. So it's not like this has been around for a long time, so it's getting through the system. So that's the other thing. And then you have the monetary stimulus and rate structure, which has caused you to refinance, things like that. So as you put that all together, the unemployment and people's behavior, it's not necessarily what happens in the second quarter is where you stay in and what the future projections are, obviously. And the good news is we took, as you said, a sizable provision of the first quarter charge-offs of $1 billion and change. And we've added reserves $3 billion plus, still earned $4 billion after tax. And so we feel the earnings power, the PPNR this company has to absorb additional reserve builds as needed is there. And that's the way we build it to balance the risk structure. So that when these times come, we can still earn enough to pay the dividend and keep making progress and keep building capital on.

Understanding that it's -- we've still got a few more weeks in the quarter, obviously, and things need to be fine-tuned, do you think the first quarter level of reserve build is a decent guide, ballpark of where 2Q provisions could end up?

I wouldn't -- it's built so differently, but we'll see when we get there. But it's -- you got to remember that people in the first quarter tried to relate it back to the CECL build at year-end and stuff, they're just unrelated factors. But you'd expect that we'll be in a great position with a strong reserve heading into the third quarter when we complete the second quarter.

Okay. And as you manage your commercial exposures, what are some of the segments that you're most concerned about as we go through the cycle? And if people ask, does BofA have any outside exposure -- outsized exposure to some of the hard-hit COVID sectors like restaurants, retail, energy and travel?

No. We don't I don't have outsized exposures to anybody because -- remember, the distribution of our book is for commercial and consumer. We worked hard over the last decade to balance the book, so sort of 50-50 on the consumer side is dominated by secured mortgages, home equity, cars and things like that. On the commercial side, we have really strong client selection. So we don't really have big exposure in real estate relative to the whole. We have exposure in real estate. We don't have real exposure on energy relative to the whole. We have exposure, but those portfolios are 6% to 8% of the total. So the unique thing about this is it affects a lot of sectors, but we feel very good about the commercial book in terms of what we've done. And frankly, the team has done a great job, along with our colleagues in the industry, to take the companies that were most hard hit by this. Obviously, the travel industry and things like that, and get them financing to basically push them out for a fair amount of time until they can cope, reopen. And so it won't be pleasant to go through a deep downdraft in the GDP on any -- on the consumer or commercial side, but the balance will get us there. And so we don't feel any exposure. We took care of some gas company, gas production-type stuff for the first quarter and built the reserves on the energy portfolio with prices up. It's a different thing. Usage is going up. Demand's starting to build in energy. So we'll see how it plays out, but we feel pretty balanced.

And you've had the responsible lending mantra that you've had your troops on for a few years now. How will that manifest itself in this crisis or this credit cycle versus kind of the great financial crisis when Bank of America is -- how it's positioned relative to the industry to go through a credit cycle?

Well, the -- we're going to find out here in a few weeks with the -- I'm sure you're going to ask about it, where the next round is, stress test results. But if you look historically, our results in the stress tests were -- the last 8 or 9 times it was done, 9 years or whatever it's been, we've been the best overall credit results with the percent of portfolio of all our -- all the major companies doing it and for 1 year, I think. And so we feel good about that, it did come down each year. And so we built the thing to be tested in that kind of domain, both on the credit card book being high -- very high prime borrowers and only -- that started this $90-odd billion. And then you go on the commercial book, just being careful on exposure by industry, the stuff we just talked about. So we feel very good that the objective case is already in the file and we'll see what comes out of this one, but my guess is we'll be at the higher quality end of portfolios because that's how we built the company. And meanwhile, it's allowed us to keep originating even in these times. So if you go back to activity, you saw -- if you think about the last 12 weeks as the -- sort of the environment, you saw origination of items dropped to the lowest point about 5, 6 weeks ago, say from 500 down to 200 and now the back of the mid-300s and growing again, all super prime. So you're seeing that pick up again. You're never going out of the home equity business. You fall -- saw that fall down, and that's now probably 30% off the bottom. Mortgages because the rate-driven a bit more constant, honestly, $2 billion last week alone of mortgages in -- done. And so the origination that we're doing now with $2 billion of small business loans in the first quarter, the originations we're doing now are consistent with that strategy. And so we feel good about the ability for us to keep supporting our clients during this time, not only on draws and things like that, but also in origination of credit.

Great. And just kind of back to the idea of the stress and investor mindset, you and the other banks have suspended buybacks, you did that proactively as a group. And now the question on dividend and sustainability of the dividend payouts, and you just mentioned that, the ability to continue that. How do you think about the dividend question? And what factors do you and the Board consider when deciding to maintain the dividend payout where it is?

So I think that the Board looks at -- on the question of what our capital levels relative to what we think we need for the risk of the company and the regulatory risk, what's the earnings power, what's the going forward in the projections and are we building capital, depleting capital and things like that. And if you think about just the first quarter of the window, we put up a substantial provision. We earned twice the dividend, and we bought back $6 billion of stock in the first quarter. And the capital ratios were down from [ 11.10% to 10.80% ] something. Without that buyback, frankly, and with the PPNR we have, we've got a lot of room to absorb and store in excess of dividend. And as long as we're doing that, that means we're building capital or at least neutral on capital and probably building because the risk of the company continues to improve from a low point at the end of the quarter. And so that's the way the Board thinks. We've got our risk covered in capital, and we have excess capital that we should redeploy to the shareholders. Right now, buybacks are off the table because we all agree that we wouldn't do it until we saw some clarity in the other side of this. But from the standpoint of dividends, we earned twice our dividends in the toughest quarter we've had in many years.

And the Fed's apparently doing a COVID-19 overlay to this usual stress test this year. Do you have any insight of how they're going to do that? And what might be involved with that?

I don't. Not -- other than what you heard [ Vice Chair Clarida ] will speak about the public domain, about how they're doing it. He's talked about it relatively openly, but we adjusted our baseline to a sensitivity around this. We've shown additional sensitivities. We look at it every single day, ranges of sensitivities in terms of our capital and liquidity out several quarters in advance. I mean literally every day, the CFO and the CRO and myself and the Treasurer and Head of Credit make sure that we will continue to, frankly, have neutral to build capital, even with some [ trick on this -- discordant ] sort of scenarios you can build and can make yourself out there. So I think that whatever they come up with, I think if you actually think about our life, if we can look -- Bank of America's life, you can look at what happened in the prior stress test and our relative strength of performance, our relative excess capital, and I think we'll be in good shape. But I don't know exactly what they're doing.

Yes. Do you see any benefit or harm in the Fed making the banks act altogether on a dividend question? Or should it be an individualized decision based on the bank's unique circumstances?

Yes. Let me flip that around, which is we just had our shareholders meeting at the end of April, over 1 million accounts voted separate shareholders, 1,040,000, which was higher than last year even with the -- what we're in the middle of. So our dividend supports people -- it's -- everybody thinks it goes to institutional investors, but who those people manage money for, they manage it for the retirement savings of the American world. And so it's a major cash flow out to our retirees and our retail shareholders. And I think it'd be a short -- I don't think it would be a good policy to restrict dividends across the board because every company is different, let the test take place, let the capital management process that we've invested a decade in to build, saying how a Board managed -- how we manage a company, how the Board that manages governs us, how the shareholders govern the Board, all that's been worked through. So there's triggers that requires us to stop if we hit certain things, let it play out. And -- but the important thing is we have a strength that we can -- that we're out earning the dividend. We're not depleting capital through the dividend. We have a lot of retail investors who benefit by the cash flow and institutional investors, too, but all investors, but especially retail households, it would be sort of counter to -- there would be not a benefit. And -- but the real question is, do you need it to lend to your customers? At the end of the day, we just absorbed $70 billion of loans in 3 weeks without a problem. And we have plenty of capacity to lend to our customers and support the economy. And in fact, we're doing it every day. We've taken hundreds of billions of dollars of people to capital markets this quarter. We've extended revolver lines. The reason why loans have come down is the customers don't need the money, which is a very good thing right now. And that's the piece that people have to realize when these facilities aren't -- by the Fed aren't used or when people are taking the revolvers down at time of stress, that's actually good news.

That makes sense. Thanks, Brian, on that. Just turn to some of the PPNR drivers that you're seeing right now. In terms of net interest income, you have the biggest deposit franchise out there that serves you very well over time, but it also does make you a bit more asset sensitive in this kind of environment. On your April earnings call, you indicated net interest income could drop $1 billion or so in the second quarter and then kind of stabilize from there. Any change in that outlook? What are the dynamics there?

No real change in what we said back then. John, you mentioned at the outset, I've been CEO since the first of 2010. So 7 of those 10 years have been in a basically zero-rate environment. And so the team knows how to manage a company in this area, but we'll have to have that NII decline because the floor is on deposits. It's -- and we've grown deposits dramatically. Even savings account sales are only 25% down this year versus last year. Think about that. And we've had 1,600 to 4,300 branches that have been closed and so we feel good about our ability to generate core deposit growth, not only in all the stuff you hear about corporate in both money movement as money comes in the economy, it ends up in the bank balance sheet, it still circulates around. This is just core, more checking customers out signing on to us and more cash management on the commercial side. So we're going to [ fall ] $1 billion, and that will be the life. But unfortunately, the good news is we can grow deposits and grow loans and overcome it, we just got to get the economy back on track.

Yes. I think that's a good perspective that you've been dealing with low rates for a lot of the last 10 years. Is that kind of the hope, if rates do stay flat from here, which is an investor concern that your balance sheet growth, maybe in 2021, can get NII growing again with that deposit growth and loan growth?

Yes. As you look out, you cross over 4, 6 quarters out type of things, and that just -- it just comes and catches itself. But maybe if you grant me a wish, John, I'll come back at a higher rate environment in the next time, in my next afterlife. But right now, this is all we know. And that thing takes us to the efficiency and keeping the expenses relatively flat, keeping the credit quality in shape and just running the company well and making serious investments in digitization and efficiency and, frankly, serious investments in expanding the customer base that fits our responsible growth mantra.

On the other side of the house, the markets business, it had a strong -- across the board, strong quarter in the first quarter. Has the environment remained favorable for rating?

Yes. We -- it's not -- obviously, the first quarter, second quarter is always less just because of the way the world works, and you're used to that, obviously, a lot of volatility in the equities business in the latter part of the first quarter. But it looks, right now, will be high single digits, up year-over-year on both total FICC and equity trading revenue, probably closer to 10% type of numbers. And we'll have to see what June brings. But assuming June doesn't have some untoward event, then that's kind of the run rate we're at. And the team has done a spectacular job of managing the risk. I think we -- with all the volatility, less money, I think [ 4 ] days is -- and in the first quarter -- and they've done fine since. And so [ Jimmy and Bernie and Sav ], the team have done a great job.

And is that 10% combined sales and trading? Any difference between FICC and equity? Is FICC a little stronger than equities within that 10% or any dynamic to note there?

Yes. Yes. FICC is -- you've seen the volatility come down in the market, and so equity is down and FICC's up a lot. And that's just the ebbs and flows of the business. So we -- Tom Montag obviously manage that business well for us. So sometimes FICC wins, sometimes equity wins in terms of growth rates. But at the end of the day, with a kind of -- not only the stabilization of the FICC market, but also the secondary market activity with all these issuance and stuff, it's -- they've done very well this quarter.

What kind of outlook would you have on the investment banking revenues and the trends between issuance and M&A?

The team has done a very good job. You've seen the lead tables, Matthew Koder and the team working for Tom. And so I think we're sort of thinking a 10% up year-over-year. I think it's kind of where we're at. But we're hoping to get -- you've got to remember, it's -- even though it feels like the quarter is over, you got another month and these things can bounce around on you.

Yes. Yes. And you mentioned the -- on the expense front, your ability to hold expenses flat for the last few years as you transition to digital and all those investments, how should we think about expenses for this year? Obviously, there's some COVID-related headwinds, there's probably some tailwinds as well. What are the puts and takes around the expense comp [ here ]?

I'd say -- we said -- we told you guys, I think, 53%, 53.5% is a range. We're at the upper end of that range, plus or minus a little bit, maybe exceeded a bit. It's all going to be easily point-out-able COVID-related, PPP-related expenses to get done what the government wanted us to do in PPP. We had to put on several thousand extra people through consultants and others and the process of 320,000-plus completed loans we have, including -- it's -- the team has done a fabulous job, again, in 8 weeks, if you think about it. So we had to rush a lot of investment. And then you have the expenses of operations, we had to basically come up with 100 -- well, not come up with, but we had to deploy 100,000 laptops across the company, screens and all that stuff. So that's all one time. But when you add up all this year, we'll be at the upper end of the range, but we're working it down. So the team does a good job on that, but it's a little hard to make up for it in a single quarter when you had the -- everything from the extra charitable giving to the extra run-rate expenses to the extra people to do the work to help 300,000-plus small businesses, medium-sized businesses, get the money to pay their employees. It's a wonderful job by team but costs some money.

Yes. And what are some of the levers of flexibility that are enabling you to kind of keep them contained? I guess T&E is obviously going to be a lot lower and travel across the company. Are there some other investment projects that might defer or elongate over a few years to balance things out?

Right now, we think it's core that we invest in technology and keep driving it. And even during this time frame, we deployed like a major digital enhancement in our platform in the middle of [ second deploy ], in the, what we call, the May release. And so that tied together the Private Bank Merrill and the bank in the better platforms. These are major releases going in, thousand, thousand, thousand lines of codes. So the $3 billion we spent there, plus or minus, we'll stay in the run rate until we don't get returns until investors tell us. But it -- if some of the projects get pushed out a little bit, we had a conversion that we're going to do and something that pushed out, say, there's some money, but those are all temporary. The real question is people and comp at the end of the day, and obviously, those are things that we can adjust to a given time. We have an absolutely no layoff between -- for the year, and we told people that. So it may take us a little longer to let attrition help us get the headcount back down on the other side of it, but that's fine. That's fine. It's the right thing to do. It's -- to serve our clients, we needed -- we've actually got a few thousand people.

And you were a lender -- a leader in the digital area before the crisis. And you touched on this earlier, but how is this shutdown environment accelerated the [indiscernible] digital across your businesses, consumer and commercial?

Well, I think -- yes, the trends of digitization just inevitable. And so you see trend lines, so just project them out. But interestingly enough, during the crisis, during April, I think it was 23% of all the first-time digital users were seniors and boomers. So what you saw is a reason for people to use it, and they used it and they liked it, making 20-odd percent of the first time check depositors on mobile check deposit, again, were seniors and boomers by sort of generation labeling. So that's good news. Meanwhile, we're basically -- keep pushing, the sheer numbers are just growing at 30.5 million -- 39.5 million total active digital users. Erica moved up to 13.5 million users, Zelle moved up 11 million. We had record days on Zelle. Mobile check deposit moved to 8.3 million active check depositors in a month, again, that's up double-digit percentages. So it's just all good stuff. It -- but I don't mean to -- the belief that this trend got changed because of the behavior. We may have opened some people's eyes to the future functionality. We made a nice step change in digital distribution of statements during this time frame. But these are trends that are going to go on. They just may have moved in, stuff that may take 2 or 3 years, a little faster, but we're just on a relentless push. The more interesting side of that ultimately is the sales side. And so given the inevitabilities of what can be done and couldn't, it's -- just reality is that checking account sales, as I said before, were down 30% in April '20 versus April '19, and are down less in the May time frame, just to give you a sense. That's 43% -- they went from 18% digital in April '19 to 43% digital. Now part of that was a trend where we're becoming more digitally confident during the time frame, but also it's inevitable people when they work from home. On the small business side, you saw it go from 16% of the sales to 40% of sales. Those are good statistics. That's good fundamental usage. Now the reality is some of that became because digital stayed flat. You saw a decline around it, but -- if someone came from digital growth. But I feel -- so you went from, say, 60,000 digital checking units to 80,000 sold in the month of April, that's a positive growth [ '19 of '20 ]. Those are good trends to have. So whether it's usage, whether it's digital statements and things, which take paper out of the system or whether it's sales, which is important, mortgage sales and things like that, we feel very good about having a little bit of a step-change impact on all this. It won't change, of course, the history unless we keep following it on with more and more and more throughput and feature functionality. And during the time the world has been shut down, we've seen our teammates recognized as top class, and -- by various raters, so to speak, and graders of digital competency, and the team does a great job. The real exciting news is that digitization on the Wealth Management side, which was good, and we were investing a lot and actually starting to come through. And I think that will help. And I think the FAs in Merrill and the PCAs in the Private Bank, both just learned a lot more digital interaction with the clients due to the same reason why we're conducting this session, the way we're conducted, that's all good news. And then our cash flow, which is our cash management platform [Audio Gap] the amount of transaction initiates, session logins and everything went. So all this did a good job to expose clients who may have been on the fence to it. That will speed it up, but it doesn't stop from the relentless changes occurring and our need to [Audio Gap] occurs. And so if you say what's the counter of that, we still had 43 million over-the-counter transactions in the branches since March 1. So in a 3-month period of the story [indiscernible].

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All these trends, it takes a little longer to accomplish them. I wish I could just snap my fingers, day 1, and gotten rid of the 30 million square feet but we hadn't been -- get [ re-leases ] or at least negotiate our way out, let these run off, and now we're down 50 million square feet. If I had told people at the time we're going to do that, they said you couldn't have done it, but we did it, and it was just by relentless execution. So I think these trends will take longer than we expect.

And there's another question on here, Brian. Just a comment about the credit card business. I know you don't think of it like a separate business, but a product you offer to your customers. But just can you talk about the positioning of the credit card business now for you and some of your key strategies there?

It -- our credit card business is obviously as core to our consumer business that provides not only on the payment side -- not only on the lending side but on the payment side. And so we continue to originate cards as we speak. We -- there's -- the credit quality is very high. Obviously, the lack of charging brought the balances down. We'll see them replaced as people start using -- more activity. But we're not going to change the position of the business and the reality. It's -- we've been at this for a long time to get deeper penetration. We have 60-odd percent of the customers who meet our credit scores have a card and then 60-odd percent of that use it as a primary card. That's what we're after. And we keep improving that, improving that, improving that to get there. And so I feel -- we feel very good about the business. So I'm not sure what -- if anything we've seen here changes any viewpoint we have at all. [ Pure ] volumes being originated, they don't have -- obviously, dropped in this just because of the activity level overall. But we were doing 200,000 apps in -- 12 weeks ago, 160,000. That came all the way down to around the 80,000, and we've been running around 82,000, just on consumer credit card a week. So the business is there, and it will be strong.

Great. And kind of similar questions come up on Wealth Management. I know earlier -- Andy spoke earlier in the week, but just your strategic priorities for Wealth Management and how you feel about the competitive positioning and wealth. And how has that business been handling market volatility?

They don't have -- Andy and Katy, Andy Sieg and Katy Knox, who run Merrill Lynch and the Private Bank have done a fabulous job at just customer engagement. Just backing up more generally. One of the things that's been remarkable is our customer scores are the highest they've ever been in a broad consumer base, which includes Wealth Management. And so even in the middle of all the stuff going on, the engagement, the reaching out, we made 5 million phone calls outbound in the consumer world. Likewise, in the Wealth Management world, the engagement that Katy and Andy have shared through this crisis has been very strong. And so those businesses are core to what we do. They continue to grow. The deposit base have grown strongly in this, obviously, the investor -- you heard Andy talk about new households have been 1,000 a week or something like that was the statistic, I think, he threw out the other day. And so the people out there building, it's suboptimal to not be able to do face-to-face meetings in that business. Let's be realistic about it. That's -- that stock and trade is to meet with clients and do in-depth planning, but they are -- they've been working around it with the types of meetings we're all doing, et cetera, and that's fine. And they can't wait to get back to work and see clients, and we got to make sure they do it safely.

Okay. Another one that's coming up and we're asking folks across the conference is just how you're bringing the idea of inclusive capitalism and ESG into your business activities. I think you issued a social bond recently. Maybe just talk about how that's been indoctrinated into your business across ESG.

So we always believe we have to do a great job for all the stakeholders, our customers, our teammates, our shareholders and our communities because the data, the strength of our communities is key to how we're going to grow and prosper, so whether that's in the United States or globally around the world. We -- if you -- recently, you may have seen, we started doing some marketing about what we've done as a company. We've done that through our 92 market presidents, with supporting them as leaders in the market, the $100 million of contributions they gave away. But -- so if you think about it along all the various elements, it's the way we work on the environmental matters, it would be a $400 billion to $300 billion -- $400-some billion commitment if you add it all up. It's the way we work on -- across everything. But what we're trying to do is align the company in a way that it does the right things and produces. And it's an and, and that's what I always stress, "and" produces for the shareholders not or. And if it's or, it won't work. It has to be and. And the reason why it has to be and is capitalism has the ability to solve these big problems. The industry in 2, 3 weeks' time, basically took on $700 billion as an industry -- or $600 million to $700 million, whatever it was, balances, that $500 million -- excuse me, $500 million of balances for their clients because it was in the shape to do it. It's client-centric, client-focused, then turned around and did $500 million of PPP loans, then turned around and kept going on all these different [ indicia ] in terms of guarantees of [ appointing ] for the people. Paying extra for people, the frontline-risk teammates that we have in all our companies around the country because they are in -- have been -- we've been open every day at the branches and like our colleagues in the industry. And so that's a strong thing for the industry. But we run the company this way because we think it produces the best long-term value for everybody. And that's the way we think good corporations are run. And that helps you deal with the brand, with the teammates and with the customers and with the shareholders because at end of the day, they only get as much return as we can get out of having great clients and great customers and great teammates.

Great. Well, Brian, I've got one more question left in the queue here. It's the opposite of the wish I hope to grant you on higher rates. And it's just really the question of, what would be the challenge for banks if we did see negative rates? It doesn't seem like the Fed wants to go there, but if we did have to operate that, what are some of the challenges that we'd -- you'd have?

I -- well, I think operationally, you can always do it. But the reality is that the lesson learned in negative rates in other economies is they don't get transmitted to the economy in the way people think. So if you look at places that negative rates -- the savers don't -- if the savers and consumers generally don't absorb it in the rate structure on the credit side, it's actually not as low as [ being applied ] by the negative rate structure, quite frankly. And that's because there's just practical realities of being the intermediary between that rate and the structure. So I don't think it produces -- in a fair study that our experts would say it doesn't produce the economic benefits, it has big economic judgments in terms of savings and people's views of what you do. So I think that's the winning question right now in our country, and I don't think it's a high probability at all. And at the end of the day, we will take whatever scenario comes at us and deal with it. But it's just -- I just don't think it's a wise policy. I think what the Fed has done with the standby facilities to stabilize markets across the whole platform, what the administration and Congress have done in terms of direct -- keeping direct consumer cash flow up, money in the households with unbelievable numbers on unemployment and speed at which it came on to keep these households' ability (sic) [ abilities ] to continue to participate in the economy until they come back to work, that's the way to go out fixing this crisis. And the rate structure's not going to make people take activity if they don't have the cash and confidence to do it. And so I think focusing on what the administration and Congress are focused on and focused on what the Fed -- they've done an extremely good job right now of taking the sting out of an unprecedented drop in GDP.

Well, Brian, thanks very much for your thoughtful comments and perspective today. For those who are listening, please participate in the Procensus poll that you can see on your screen, and you can see the live results. And Brian, thanks again for participating in the conference.

Thanks, John. Be safe and be well.

Thanks. You too.