The PNC Financial Services Group, Inc. (PNC) Earnings Call Transcript & Summary

Greetings, and welcome to The PNC Financial Services Group Q3 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. [Operator Instructions] It's now my pleasure to turn the call over to Bryan Gill, Executive Vice President and Director of Investor Relations. Bryan, please go ahead.

Well, good morning, and welcome to today's conference call for The PNC Financial Services Group. I am Bryan Gill, Director of Investor Relations for PNC and participating on this call are PNC's Chairman and CEO, Bill Demchak; and Rob Reilly, Executive Vice President and CFO. Today's presentation contains forward-looking information. Cautionary statements about this information as well as reconciliations of non-GAAP measures are included in today's earnings release materials as well as our SEC filings and other investor materials. These are all available on our corporate website, pnc.com, under Investor Relations. These statements speak only as of October 15, 2026, and PNC undertakes no obligation to update them. Now I'd like to turn the call over to Bill.

Thank you, Bryan, and good morning, everyone. The PNC delivered another strong quarter, reflecting the consistent execution of our strategy and the strength of our franchise. As you saw, we generated $2.1 billion of net income or $5.09 per diluted share as adjusted, while delivering a return on tangible common equity of more than 18%. Rob is going to take you through the financial results in more detail in a second. But I wanted to start off by highlighting the substantial client momentum we've been experiencing all year, which has continued through the third quarter. All of our businesses are experiencing robust growth, in part driven by the high growth rates of our expansion markets and most recently, the successful conversion of First Bank. In Corporate and Institutional Banking, our national platform continues to generate impressive growth. Expansion markets have added approximately 500 new client relationships year-to-date, contributing materially to a 5% average C&IB loan growth during the quarter, a 17% growth year-over-year. Beyond loans, capital markets fees are up 40% year-to-date, and treasury management revenue is up 8%. In Retail Banking, we continue to grow clients organically, adding 215,000 net new check-in accounts so far in 2026 with total accounts up 2% year-over-year, including 6% growth in our Southwest markets. And we continue to deepen relationships with credit card balances up 12% and brokerage assets, up 9% year-over-year. At the same time, we continue to invest in capabilities to enhance our franchise with the introduction of both the new mobile app and total rewards program as well as our continued branch expansion. Asset management fees are up approximately 10% year-to-date and assets under administration totaled $0.5 trillion. Favorable equity markets have obviously helped here. But once again, our expansion markets have accelerated our growth. In these markets, AUM is growing 5x faster than our legacy markets, albeit off a smaller base. When we step back and look at the year as a whole, we have grown considerably faster than we anticipated coming into 2026. We are bringing new clients into the franchise, expanding relationships across businesses and markets and converting that activity into durable growth in loans, deposits and fee income. As we enter the final quarter of the year, we remain focused on disciplined growth, prudent risk management and continued investment in the capabilities that strengthen our competitive position. As always, I would like to thank our employees for their hard work and commitment. And with that, I'll turn the call over to Rob to take you through the details of the quarter. Rob?

Thanks, Bill, and good morning, everyone. Our balance sheet is on Slide 5 and is presented on an average basis. For the linked quarter, loans of $372 billion grew by $9 billion or 2%. Security balances increased 3% to $151 billion. Average deposits increased $4 billion or 1% to $461 billion, and the borrowings increased $7 billion to $86 billion. However, on a spot basis, deposits increased $17 billion and borrowed funds declined $6 billion, reflecting continued optimization of our funding mix. Our tangible book value was $108 per common share, down 3% linked quarter, entirely driven by the decline in AOCI and was stable compared with the same period a year ago. We remain well capitalized with an estimated CET1 ratio of 9.8%. We continue to be well positioned with capital flexibility. During the quarter, we returned $1.4 billion of capital to shareholders, which included approximately $800 million of common dividends and $560 million of share repurchases. Going forward, we expect fourth quarter repurchases to approximate the same level. And our return on tangible common equity was more than 18% in the third quarter. Slide 6 shows our loans in more detail. During the third quarter, average loans increased $9 billion or 2% to $372 billion. C&I balances increased $9 billion or 4%, reflecting broad-based growth across our businesses and higher utilization. Commercial real estate balances increased $2 billion or 4%, driven by strong new production. Consumer loans declined $1 billion or 1% as growth in credit card was more than offset by lower residential mortgages as well as the transfer of our student loan portfolio to held for sale. You may recall, we stopped originating student loans last year. and the transfer represents the final step in exiting this nonstrategic business. We expect the sale to have a de minimis financial impact. In regard to loans overall, Spot loans grew $11 billion in the quarter, contributing to the strong loan growth we've had throughout the year, all of which substantially exceeded what we expected at the beginning of the year. Through the first 9 months of 2026, we've added $47 billion or 14%, while approximately $15 billion came through the First Bank acquisition, more than $30 billion of the growth has been generated organically, reflecting strong client activity and execution across our franchise. Slide 7 details our investment securities and swap portfolios. We continue to maintain a high-quality short duration position. During the third quarter, average investment securities increased $4 billion or 3%. Our securities yield was 3.59%, an increase of 14 basis points. And as of September 30, our duration was 4.1 years. Looking ahead, we expect approximately $5 billion of fixed rate securities to run off during the fourth quarter at a weighted average yield of 2.65%. Our received fixed swap portfolio totaled $83 billion at quarter end, with an average received fixed rate of 3.92%, which increased 17 basis points from last quarter. Importantly, we have a clear path for continued fixed rate asset repricing over the next several years. Overall, we remain well positioned for a rising rate environment, which will support net interest income, capital generation and balance sheet flexibility. Slide 8 covers our deposit balances in more detail. Average deposits increased $4 billion to $461 billion during the third quarter, driven by growth in interest-bearing balances. Noninterest-bearing deposits were $101 billion and represented 22% of total deposits. Notably, period end deposits increased $17 billion or 4% compared to June 30. The strong growth was driven by commercial interest-bearing deposits, which increased $11 billion or 7%. In addition, brokered CDs grew $7 billion. The commercial deposit growth was due in part to seasonality, but also reflective of both new and expanded client relationships. In regard to deposit costs, our total rate paid on interest-bearing deposits increased 7 basis points to 1.98%, including brokered CDs. Excluding brokered CDs, the rate paid increased 5 basis points to 1.96%. The increase was primarily driven by mix as growth was concentrated in interest-bearing balances. Turning to Slide 9. We highlight our income statement trends, comparing the third quarter to the second quarter of 2026. Total revenue was $6.6 billion, a decrease of $313 million or 5%, while noninterest expense decreased $347 million or 8% to $3.8 billion. Excluding integration costs and significant items from both quarters, revenue declined $61 million or 1% as higher net interest income was more than offset by lower noninterest income. On the same basis, noninterest expense decreased $113 million or 3%, reflecting disciplined expense management. We generated positive operating leverage and grew PPNR. Provision was $189 million, stable with the previous quarter. Our effective tax rate was 20%. Third quarter net income was $2.1 billion or $5.09 per common share as adjusted to exclude the impact of $48 million of after-tax integration costs and significant items. Importantly, we continue to demonstrate strong momentum across the franchise. Through the first 9 months of the year, PPNR increased $1.2 billion or 17% compared to the same period last year, driving 19% growth in diluted EPS. Turning to Slide 10, we detail our revenue trends. Third quarter net interest income of $4.2 billion increased approximately $100 million or 2%, driven by commercial loan growth and higher yields on interest-earning assets, partially offset by increased funding costs. Our net interest margin was 2.94% and decreased 2 basis points. The modest decline in net interest margin was largely a function of the mix in loan growth and to a lesser extent, increased funding costs. Consistent with what we've seen throughout the year, loan growth during the third quarter continued to be concentrated in high credit quality, lower spread loans. Again, while these loans generate attractive overall economics through fee income and broader client engagement, by definition, they constrain NIM. Importantly, the underlying drivers of NII growth remained strong, and based on our expectations for loan growth, we calculate that our net interest margin will reach 3% or above in the fourth quarter. Fee income was $2.1 billion and decreased $137 million or 6%. Looking at the details. Asset management and brokerage increased $7 million or 2%, driven by higher average equity markets and increased client activity. Capital Markets and Advisory revenue decreased $144 million or 25%, reflecting elevated second quarter activity. Card and Cash Management revenue decreased $3 million as higher treasury management product revenue was more than offset by First Bank integration-related fee waivers. Lending and deposit services increased $12 million or 3%, reflecting increased client activity. Mortgage revenue decreased $9 million or 6%, primarily driven by lower residential volumes. And other noninterest income was $214 million and included a negative $25 million impact from significant items related to net fees activity. Notably, we continue to see strong momentum across our lines of business and throughout our markets. And through the first 9 months of the year, our noninterest income totaled $7.3 billion, up $979 million or 15%, compared to the same period last year. Turning to Slide 11. Third quarter expenses decreased $347 million or 8% compared with the second quarter. Third quarter results included $27 million of integration costs compared to $261 million of integration costs and significant items in the second quarter. Excluding these items from both quarters, noninterest expense decreased $113 million or 3%. We remain focused on expense management, and we're on track to reach our goal to reduce costs by $350 million in 2026 through our continuous improvement program, which, as a reminder, is independent of the First Bank acquisition. And this program will continue to fund significant portions of our ongoing business and technology investments. Our credit metrics are presented on Slide 12. Overall, credit quality remained strong. Nonperforming loans increased $167 million or 8% to $2.2 billion. The increase was primarily driven by the pull-through of previously reserved CRE office loans as well as one large commercial credit. Total delinquencies declined $135 million to $1.3 billion and now represent 0.34% of total loans, down from 0.39% last quarter. Net charge-offs were $257 million or 28 basis points of average loans and included $35 million associated with the student loan transfer. Excluding that impact, underlying net charge-offs remained consistent with our prior quarter. At the end of the third quarter, our allowance for credit losses totaled $5.4 billion or 1.42% of total loans. To summarize, PNC reported a strong third quarter of 2026, and we're well positioned for the remainder of the year. Regarding our view of the overall economy, our base case assumes GDP growth to be above 2% in 2026, with continued modest job gains and the unemployment rate holding steady. We expect the Fed to increase rates to additional times with a 25 basis point increase at the December 2026 and March 2027 meetings, ultimately reaching a range between 4.25% and 4.5%. For ease of comparability with our prior guidance, our full year outlook excludes the impact of First Bank integration charges and significant items. Considering our reported 9-month operating results, fourth quarter expectations and current economic forecasts, our outlook for the full year 2026 compared to 2025 results is as follows: We expect the full year average loan growth of approximately 13.5%. We expect full year net interest income to be up 15.5%. We expect noninterest income to be up approximately 10.5%. Taking the component pieces of revenue together, we expect total revenue to be up approximately 13.7%. Noninterest expense to be up approximately 9.5%, and we expect our effective tax rate to be approximately 19.5%. Our outlook for the fourth quarter of 2026 compared to the third quarter of 2026 is as follows: We expect average loans to be up approximately 2.5%. Net interest income to be up approximately 4%. Fee income to be up approximately 3.5%. Other noninterest income to be approximately $250 million. We expect adjusted noninterest expense to increase approximately 5%, and we expect fourth quarter net charge-offs to be approximately $250 million. With that, Bill and I are ready to take your questions.

[Operator Instructions] Our first question today is coming from John Pancari from Evercore ISI.

Appreciate the color that you gave on the margin dynamics. You saw the compression in the quarter and deposit costs up 70 bps or 5 bps ex the brokered. Can you maybe discuss, given the deposit dynamics, but also your continued growth in the lower spread, higher-quality loans. Maybe just discuss the confidence in that or higher margin by the fourth quarter. And maybe just as you think of that, those dynamics impacting the margin as you look at 2027. And I guess maybe just a little bit of color on what the trade-off is, how you're looking at lower spread quality loans in terms of the impact on NII and as you look out from here.

Thanks, John. I'll hit it. I'm not going to talk about NIM because it's an outcome. So Rob, kind of says, "Hey, we'll be over [ 3 on a ] forecast." Many things could change that. I will talk about NII though. A couple of things happened, one is 50% of our loan growth occurred in the last 2 weeks of the quarter. So we didn't get the benefit of that in NII even though we sort of saw it in pipeline. So that rolls forward and kind of Rob's forecast. The other thing somewhat surprisingly is spreads overall, where spreads on average decline was up 3 basis points-or-so. And some of that was kind of high-yielding loans paying down. And some of it was just new production, as we've talked about in kind of higher quality stuff dropping the average, which has surprised us at the margin. And then the third piece, we didn't have some escrow balances we thought we'd have, which would impact noninterest bearing. So like you stick a calendar end date on this stuff and you miss something and you get it back. We're confident with the momentum and where we're going and the growth and all of the above...

Which is part of our guide.

Yes. All that's embedded in kind of what we put out there forward.

Yes. John, I just would add to that a little bit. In terms of NIM generally speaking, everything that we thought would happen in the quarter happened, Rate paid went up exactly what we thought on core deposits. The brokered CDs added to that a bit. But we didn't expect to do brokered CDs. As you know, we just toggle between the cheapest wholesale funding. The difference was the high credit quality low-spread loans came in hotter than what we thought, and that constrained. And that's the biggest difference in terms of NIM relative to our expectations. When we go forward, into the fourth quarter, our calculation is to reach 3 or higher on NIM, even though we don't give NIM guidance. But the reason and the easy way to understand that is we see loan yields going up. We see that offset by deposit costs going up. So they offset each other. And then the securities fixed rate repricing will be the delta that lists NIM. And that's just a calculation.

Got it. All right. I appreciate it. And then on the lower spread lending and higher quality loans, could you just maybe elaborate a little bit more in terms of the type of lending, and you gave a little bit of color there on the spread, but maybe the average origination yield. And I know you've talked about the trade-off on fee income as well and then higher quality from the credit side. Maybe give us an idea of the type of credit loss assumption as you put these loans on your books.

Sorry, credit loss assumption?

Very low.

Yes.

It's a lot of growth in the corporate finance book broadly. I think every category in our breakdown of corporate loans increased this quarter.

Except other.

Yes, except other. Growth -- based by growth in real estate on a percentage basis. Also, just paydown of higher spread loans had an impact right? It's hard for new production to actually drop the total average spend by 3. And so what we saw was the mix of our existing loans to pay downs bias towards riskier stuff paying off, which is kind of a good thing, but it drops our spread.

Yes. No, that's right. And we're a leader in trade receivables asset-backed. That's been strong all year. But what we point to, John, and we said this on the second quarter call, you got to see capital market fees are up 40%. So when you put that together, a lot of those loans are driving those fees. So together, accretive to NII accretive to earnings accretive to ROTCE, not necessarily NII because of the fee portion of that. So if you just look at NII and NIM in isolation, you're not seeing the whole transaction.

Next question is coming from Scott Siefers from TD Cowen.

I guess the first question, so you guys have had -- there's a lot of really good lending momentum, particularly in C&I. I was hoping you could speak sort of broadly to client sentiment and how if at all, their thinking is being impacted by higher rates. I'm guessing -- I think, Bill, you mentioned a second ago, like half of the quarter's total loan growth occurred in the last two weeks. So I guess, I'm guessing not much. But I would love to hear your thoughts there. And then is there sort of a tipping point in your mind where higher rates do start to impact the growth dynamic and client health, et cetera. How do you think about those cross rents?

Rob and I were talking about this last night actually. Just the -- what is the spurt at the end of the quarter necessarily mean or not mean I don't think we came to a conclusion. I would tell you, part of the outsized, if not we had loan growth everywhere. I was going to say part of the upside, if not all of it, though, just the pace of it is in our new markets. The new clients that we are onboarding that are a record pace and our model is working. So that's just driving volume. Intuitively, higher rates this goes forward is going to crimp CapEx and otherwise slow borrowing, but we're not seeing any instance of that yet, and our pipelines remain strong.

And we'll see. You got to imagine some of that is in anticipation of rates going up on the margin, at least a piece of it, but we don't know...

The pipeline is still strong.

Yes, the pipeline is strong. That is true.

Okay. Perfect. And then maybe to drop it down, I guess, a little bit of a follow-up on some of the fee dynamics. I think at the the larger banks, this notion of sort of a cooling in capital markets activity since, call it, post Labor Day has been a big factor. Just curious how you're thinking about things like particularly at Harris Williams. It seems like very good activity, but just how you're thinking about the overall capital markets trajectory.

Yes. No, we feel good about it. Like I said, we've had a very good year-to-date. We had a really strong second quarter that we didn't expect to continue into the third quarter. But the pipelines are good. We expect -- I imagine we'll get into the fee walk down, but we expect capital markets fees to be up almost 15% quarter-over-quarter in the fourth quarter, reflecting those pipelines. So it looks good.

Your next question is coming from Erika Najarian from UBS.

Just as a follow-up on that, I got a few questions on the run rate of expense growth in the fourth quarter, but it sounds like I'm going to be answering my own question, Rob, with the capital markets trajectory up 15% quarter-over-quarter, that's really related to cat market. So that's not necessarily a pull for as we think about expense growth in 2027, right? .

Yes, that's right, that's right. We'll...

Got it. Yes, Goldstar. And just on net interest income, some of your peers, unfortunately, JPMorgan going to be a vague previews on net interest income growth for the year. And correct me if I'm wrong, Rob, but I'm calculating something like 10% First Bank net interest income growth for 2026. The Street is at about 6.5%, given the momentum that you have in your new markets, and you mentioned that you're well positioned for a rising rate environment. Should the rate of NII growth slow down by that much in '27?.

Did you say, unfortunately, the peers that talked about 2027...

Unfortunately, they've already previewed the '27. So now we kind of have to ask you about '27, even though it's still October.

So that was a very long way to ask whether we had guidance on NII for 2027.

I got to try. I got to shoot my shot.

I think I can help you out there. So as you mentioned, in regard to 2027 NII, obviously, that's out there a ways. So it's a bit premature for guidance, certainly precision guidance. But in fairness, given the certainty around the fixed rate asset repricing, which has been part of our story in '26, will be in '27 and beyond that. And the magnitude of that, it does add some certainty that you typically wouldn't have this far in advance. So when we look at it, clearly, in '27, we'll exceed in net interest income, our annualized run rate of what we project to finish '26. And when we look at the consensus in terms of where you are, you sort of hit it, that's $1 billion to $1.1 billion above 2026 in terms of growth. And I think we would agree with that range. When we get out into January, of course, we'll have more precision around it. But the fixed rate asset repricing and the mechanical nature of that is real. It continues for PNC and the magnitude is big.

Our next question today is coming from Manan Gosalia from Morgan Stanley.

Can you talk about some of the deposit beta dynamics you expect from here, just given that the rate paid on core deposits was up, we're going to get further Fed tightening. Anything different going on with the start of this rate hike cycle relative to the prior one?

Good morning, Manan. No, I don't think so. I think in terms of our expectations in terms of betas, within an increasing rate cycle, we'll see what we've seen in the past. So on the front...

One exception, though, Rob, you got to remember the track in whatever it was [ 23%, ] I try to forget change was driven by noninterest-bearing moving to interest-bearing. Most of that, right, the excess deposits out of the system, coupled with the kind of base balances are, I would say, pretty constant. And so now we're going to see face interest rate betas move in conjunction with history probably. The impact of that being a lot less than it once was.

Yes. I mean that was a special time for all of us when rates went up 5 basis points. So set that one aside in terms of the typical rising rate environment. We'll see increased betas on the corporate side for sure on the wealth side, less so on the lower end consumer retail side. But I think we'll settle out in some sort of cumulative beta in the mid-50s like we've done in the past.

And part of this -- part of that drive is just deposit flows from corporates, which come in naturally a higher beta, higher rate. And we've seen growth. Some of it is seasonal, some of it just coming on the back of loan growth in effect, growth in deposits coming through corporate flows that at the margin raise your interest-bearing deposit cost, even though it's all profitable, as part of that big junk you said for [ stuff, ] that's at the end of the quarter.

Yes. That's right, that's right. And that's good stuff.

Yes. Got it. So I guess as we think about that comment you made on 50% of the growth coming in the last 2 weeks of the quarter, any more color on what drove that? Was it because the long end of the curve went up, it became more expensive to borrow in the capital markets? Any comment on the sustainability of that level of growth.

You got to remember that somebody doesn't wake up and say I'm going to do a syndication today. So they're in the works, and it's a pipeline and they kind of hit on that point. So I can't things just don't happen quickly enough for one of the economic factors to have caused everybody to go in two weeks in the lending market, right? That happens in the bond market, but not in the lending market.

Our next question is coming from Ken Usdin from Autonomous Research.

Just one quick follow-up. And Rob, I'll take you up on the fee line breakdown. But as relates to capital markets were going to be up, but wouldn't that have been already contemplated in your full year guide. So just wondering on that 5% step-up the expenses. Are you also just maybe pulling forward some other investments into the fourth quarter, too? Or is there some seasonality in there as well? Just wanted to kind of flesh that out. And then yes, if you can give the fee lines, that would be great too.

Sure, of course, Ken, why don't we do that complete the fee forecast. So for the fourth quarter, we say fees will be up approximately 3.5%. Inside of that relative to our categories, Capital Markets is the big mover up about 15%. Mortgage will be down. Mortgage has been a big category for us, but obviously, given where rates are and the seasonality, that will be down. And then the other categories, asset management, credit card, treasury management, lending and deposit services, I would say, are all stable. Maybe they could do a little better, but that's just what we're thinking at the moment. So that's the fees. On the expenses, part of it is taking up actually what we expect to do not only in capital markets, but also in our private equity, you'll see that our other noninterest income guide is up for the fourth quarter. We'll do a little bit better there than we thought. So there's some revenue-driven expenses as part of that, but also some seasonality. The important part, obviously, and you know this is the positive operating leverage that we're pointing to still in excess of 4% between 4.5%, which is fantastic.

Absolutely. And just a follow-up. With the AOCI move, it's no longer in your materials, but do you have what the CET1 was with AOCI? And I heard -- so on the deck that you're going to keep the $600 million buyback in the fourth quarter. Anything to think about as we go forward, you're obviously generating a lot of organic capital and the push and pull between where your capital ratios are and your ability to continue that type of buyback.

Yes, sure. So we feel good about our capital position. We rounded down to 9.8%. Our target is and that was simply a result of loans coming in higher than we expected, which drove up RWA. So we did have a meaningful repurchase in the third quarter. We expect to do something similar to that in the fourth quarter. So feel good about capital. On the AOCI front, naturally, you got to think about the Basel III rules that are just around the corner or somewhere along those lines, which will increase us, including AOCI, but obviously, the benefit of the private ratings will increase our capital ratings by about a point or so. So feel good about that positioning. Loading AOCI into the CET1 ratio is a little bit of a stale measure because of those Basel III considerations. But if we did that we dropped to low 9s, but certainly above 9% and still a pretty healthy TCE ratio.

Next question is coming from Ebrahim Poonawala from Bank of America.

I just wanted to go back, Bill, I think you mentioned -- you gave two stats in your opening remarks 500,000 -- 500 new commercial clients and 215,000 checking account -- clients year-to-date. Just talk to us in terms of, one, should we measure low-cost deposits as a way to measure whether or not that strategy is working out and client conversion has been successful. And tied to that, how difficult is it to convert those clients into driving core deposit growth -- low-cost deposit growth?

So separate the two, retail share has been a real focus, and so we're proud of the DDA growth. Part of that is coming on the back of the branch builds and just for presence in markets part of it's being good at what we do. Ultimately, yes, that drives growth in noninterest-bearing and interest-bearing and full relationships. You'll hear, as we go forward, some of the things we're going to do in credit card that kind of cement the full relationship with these new clients, but that's to come on the C&IB side we're adding the same kind of clients we always have had, right? We don't -- this isn't sort of a new segment of something we're trying to do. We're just doing what we've always done in new markets and gaining share, all of which kind of just builds the franchise. So my whole point in the introduction is the client momentum and growth in this company has never been as fast as as good as this, we're executing. And that growth effectively replicates right? We're not changing what we do. So it just replicates who we are in a larger size, which is what we've been pursuing.

Got it. Got it. And I guess maybe just moving to expenses, I think we debate whether AI deployment is going to boost productivity and maybe that will lead to lower expense growth for the banks versus there's a lot of discussion about spend on cyber risk due to AI. Just if you don't mind, where do you shake out on sort of at least as we think about the next 12 to 24 months, is the cost drag a bigger thing -- bigger deal than the productivity gains?

No. I mean it's such a long answer to that. I want to figure out. We've -- look, the incremental cyber costs associated with the AI frontier models, I think you see in our run rate today. The cost as we work towards going to call it an genic workforce, the fundamental transformation of the company into one that has an ability to deploy agents across workloads. Today, you see that mostly in creeping depreciation expense on the back of all of our data center rebuilds, remembering that we put GPU chips in our data centers. Much of the work in preparation for all this was done in past years. So our data lake and data configuration, all in one place, one source of truth digitized policies, procedures, papers, HR systems, they recognize agent's employees, the risk framework, on access control, all of that stuff has been built. What comes next is the reengineering of the company using AI harnesses, which would speed the development and ultimately lower the cost associated with technology development and maintenance followed quickly by product development delivery that aids revenue. We've been purposely quiet on all of the above. I think one of our peers said it will show up and we have something positive to show you and quit talking about that until it shows up. But I would sure everyone that we have a well thought-out program that isn't about bells and whistles that will ultimately allow for a transformation in this company.

Well, especially when you talk about it in a 2-year or 3-year time frame.

Yes.

And that's helpful because I think there's a sense of banks kind of falling behind on agent, especially on the revenue and the client side, but it sounds like you are already far along in terms of maybe we wait and watch in terms of what's to come.