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

This is Jason Goldberg, and I cover the U.S. large-cap bank stocks here at Barclays, and this is our 19th Annual Global Financial Services Conference. Next up, very pleased to have PNC Financial Services Group. From the company, we have Bill Demchak, Chairman and CEO; and Rob Reilly, CFO. Good morning, gentlemen.

Morning, gentlemen.

Morning, Jason.

Obviously, a lot of industry-wide topics. We just kind of ran through offline that we could cover and we'll get to them today. But I wanted to start off with the BBVA USA acquisition just because it provides some unique aspects for PNC relative to peers. Can you maybe just update us on the deal? I think you're supposed to convert it next month when you're on track for that. And just what have you been doing to prepare?

Well, we are on track for that. We've just completed our third mock conversion, Jason. And as you would expect, as we go from 1, 2 and 3, we have less or fewer and fewer issues. We've done -- we've moved the data. We've parsed the data. We've run it in our applications under stress in terms of volume. At this point, we don't see any major issues in terms of being able to do this over the long weekend in October.

Got it. And you guys have been, I guess, recently reiterated your cost save expectations for the deal, I don't know, I feel like it could be a bigger number. I don't know if you have a view on that. Also, it feels like there's probably a lot of opportunities on the revenue side that could even exceed that. So maybe just talk about how you're approaching some of these revenue synergies across your businesses from the deal and just how long does it take to actually realize those post-conversion.

So let's talk about costs just real quickly. We've put that $900 million number out there, and we're sticking to that number. One of the differences with this deal than past other deals, Jason, is those numbers are kind of identified today. We know exactly where we're getting them and when they're going to happen. It doesn't really speak to how we then optimize the franchise on a go-forward basis. So the $900 million is kind of this mechanical -- we're shutting this down, this down, this down. We're going to have this -- these fewer people. We don't have these vendors that adds up to this amount of money, right? It doesn't really get to optimizing the organization as we always do on a go-forward basis. And to the extent we have updates on that, we'll do it. On the revenue side, back to the day of the announcement, that's obviously what has us, in many ways, most excited by this opportunity. And it comes in 2 forms. The first is simply increasing the fee mix in their existing client base to match closer to what we've seen at PNC Legacy. And we've done that historically, first with National City and then with RBC, and we think we're going to actually have high confidence. We'll be able to do that with the BBVA clients. That number, by the way, they run -- they've historically run kind of in the high 20% and we run in the low 40s. To put that in context, if you go backwards and just look at the revenue streams from the last 3 years and say, all right, let's just take what they earned but put our fee percentage in it, that's worth $650 million a year just kind of moving them to where we are. But that doesn't include client wins, right? So that's just with our existing client base. The other thing that we have high confidence in is our ability to grow new clients, particularly on the C&I side in these markets as we were able to do, again, with National City and RBC. And we'll see what that adds to, but that's all on top of this kind of $650 million plus or minus a year, mechanical outcome simply getting them to our fee percentage. So we're really bullish on it.

I guess one product that -- or one of the products that PNC was viewed as being really good at, it is treasury management. I guess maybe talk to the opportunity of taking that to the BBVA customers. And just maybe talk to the sales cycle and the onboarding process with that.

I mean we had to lead off with -- BBVA had very rudimentary TM capabilities. And in fact, capabilities across -- rudimentary capabilities across most fee streams. But in TM in particular, they had the most basic stuff. As you know, our platform is kind of #1 ranked platform by Phoenix-Hecht for years running. We invest a lot of money in it. We're kind of leading edge in real-time payments, integration into financial software that our clients run and ease of integration. So your point on onboarding, our small business and commercial clients, we actually can onboard, do the sale and onboard virtually, directly linked through APIs into their financial software. So it's very fast. As you get to larger-sized corporates, it becomes more involved because there's customization and so forth, and that can take in the order of months. But none of those time frames -- if you go back to RBC, we did all this with RBC in the course of kind of 3 years without teams on the ground when we closed the deal. With this deal, we largely have our TM and corporate banking teams built out -- had been built out by the time we mechanically closed, and they're on the ground calling jointly today to win business. And of course, once we go through conversion, we're all one firm, and we can go at this pretty hard. So again, this is -- we have the capability to do it. We have products that clients want. When you extend credit, you have the right to have the conversation to pitch fee-based business. And our products are good, so we're confident we're going to be able to capitalize on this.

Many times at this conference, you talked about 3 new organic markets we can go to next year, and you actually were on a nice organic growth trajectory prior to the BBVA deal. As we look ahead 2022, 2023, can you continue like that new market expansion effort? Or does that kind of get put on hold as you integrate and realize the BBVA opportunity?

Well, the only major I'm going to say, we're not in, I think, at this point is Vegas, Rob, and I don't think we have...

That's right. Yes. No immediate plan.

No immediate plans to go there. But we have a lot of work to do in the existing markets, particularly once we just acquired. To give you an idea, I think we will have built as many as 35 solution centers. I think we opened 30 year-to-date. We'll have 35 by the end of the year as we build out markets. And those are in Boston, where we have a fairly new presence there. We built a lot in Dallas and Houston, Kansas City, Nashville. We've got work to do in Denver and Phoenix. And we haven't even talked about California yet, not just on the retail side, but rather the build-out and the opportunity set on the corporate side. BBVA, of all the markets we got, California was their weakest market. And we think we have a lot of opportunity there, and we'll be building into that.

Yes. In other words, Jason. There's a lot of organic expansion on top of this increased footprint.

Got you. For those that are listening in, just keep in mind in the upper right-hand corner of your screen, there are several buttons. One of them is ask a question. If you'd like to ask the question, click on that, and if we have the time, we'll get to them. And also there's a survey. Please respond to our IR's questions. We'll be publishing those results tonight. I want to talk about loan growth. But before I get there, can you maybe just talk about your thoughts on the overall economy, the pace of the recovery. We've seen some positive trends so far this year, but a lot's still up in the air. And just maybe just talk about your economic outlook over the next 12 months or so.

Yes. Look, I think the economy continues to be very strong, robust. I think the consumer is -- continues to be flush with cash. We see it in our own accounts in terms of balances. We're probably going to see a little bit of a slowdown from trend in the third quarter and then a pickup in the fourth, just combination of delta's impact on some of the service economy and then this continued supply chain dimension that is just slowing output. I think we'll weigh on the economy a little bit. But we're otherwise very constructive on the economy, very constructive on credit quality. I think the Fed is going to have their conversation on paper. I don't know -- personally, I'm not so sure that that's actually going to have an impact on long-term rates. I think the bid is so strong right now for duration that there's a technical imbalance. And frankly, I think the Fed could be out of the market today, and it wouldn't necessarily impact where rates are, at least for a period of time.

Got you. Any guess on when the Fed begins to taper?

Look, they're going to have conversations, I guess, next month, and we're going to see it into the -- by the fourth quarter, I think. But think about what that means, right? They're just -- they're going to slow down their outright purchases. They're going to -- that just means they're beginning the conversation as to when they might actually tighten. It's not really a tightening. It's kind of this long-end playbook. And the real impact on it through time as they shrink their balance sheet will be deposits leaving the system. And that will stretch out over multiple years, I think.

Now that's there. So as we talked about the economy, we talked about rates. Maybe we could jump into loan growth. You pointed the modest loan growth off the June 30 spot balance for the back half of the year. Is that holding true today? And maybe just talk about how utilization is trending so far this quarter.

Yes. So, and Rob can jump in here, long story short, our revenue guidance is on track, but kind of same story as last quarter where fees are outperforming and loans are a little bit soft or NII is a little bit soft. We've actually managed to grow loans in the Legacy -- on the Legacy PNC balance sheet, absent PPP runoff, but the combination of PPP runoff and then select exits from the BBVA balance sheet, we'll have our loan balances down on a spot basis, some small amount as we print the third quarter.

Yes. We had called, Jason. We have called for third quarter up modestly, and Bill just mentioned, because of those dynamics, it's likely to be more like down modestly.

Yes. Offset by stronger fee performance.

Offset by the fees, that's right.

Yes. And interestingly, Jason, utilization is actually down quarter-on-quarter by about 8 basis points. So we haven't seen any pickup on that. And by the way, you can -- that's foreshadowed by the lack of growth in inventories that we see across the economy.

Okay. I guess a lot in there to unpack. But I guess you talked previously about C&I seeing growth in secured lending businesses, and I think what you called kind of new money deals. There's obviously opportunities in the BBVA markets, but it sounds like the environment is maybe a bit softer than you would have thought. I guess kind of looking beyond the third quarter, maybe just talk to your expectations there.

The environment isn't softer. Our actual -- so the commitments we're putting out in the business we're winning, Jason, is as high as it's ever been. So we're winning a lot of new clients. We're putting new commitments out. They're just not funded, right? And so as I've said for a couple of quarters now that big upside here in loan growth ultimately comes from utilization increasing across the balance sheet, which we just -- we don't see happening yet, I think, doesn't happen until we get control of some of the supply chain and demand dimensions that ultimately will allow corporates to build inventory loans. Today demand is so strong and supply chains are so stretched, nobody can actually build inventory even if they're trying to.

Got you. And then maybe on the consumer side, maybe talk about some of the near-term puts and takes and then kind of looking out, I suspect there's opportunities in that BBVA footprint.

Yes. No, there definitely is. They're underpenetrated kind of across all the broad-based consumer categories. So we've seen momentum in card. We've seen the momentum -- continued momentum in brokerage. Mortgage has been doing well. We've opened up home equity now to the broader footprint with a digital capability. So I think you will see the same way we kind of ground our way higher in Legacy PNC on the consumer side in terms of penetration, we'll be able to do that with the BBVA customers as well.

Got it. And then just as we try to round out net interest income, obviously, a lot of excess liquidity on the balance sheet. Deposit growth has been stronger during the pandemic. Just how are you thinking about the position of commercial and consumer deposits? And what do you think of the stickiness of those deposits?

Yes, I think, ultimately, the deposit stock, I'll call it that, in the banking system is driven by the size of the Fed's balance sheet by fiscal stimulus and ultimately by loan growth. As loans grow, you kind of cycle through the multiplier capital more and more deposits. So just the base stock of deposits in the system is very high today. I think the Fed's balance sheet is going to be large for a period of time. So I think that stock of deposits is going to be large. I think consumers remain flush and those deposits are sticky. I think to the extent we've seen variation on our own balance sheet, it's been basically pushing corporate deposits off to government money funds as the Feds kind of opened up their repo activity, right? So we kept pricing down, pricing down. We call them surge deposits to the point where you kind of basically don't pay anything. And what we've seen is some of those deposits move over time into money funds as the Fed increases the size of the repo facility. Practically, our deposits are actually up quarter-to-quarter, more in retail, slightly less in corporate. And those corporate deposits are the ones you can get as many as you want for 2 basis points and lose as many as you want if you pay 0. It's kind of as simple as that.

Got it. And I guess in that vein, you talked about putting 25%, 30% of earning assets into securities. Tenure is still quite low. I guess any kind of updated thoughts around that expectation?

Well, I think, Rob, what do we get to? 24%...

We're 24% right now. So we're still tracking to that range.

Yes. And we did that -- we went at it pretty hard earlier in the year when rates were appreciably higher. We've obviously slowed down. So I think through time, just given -- again, given how much liquidity is in the system, that notion of 25% to 30% is an accurate statement. But I think you'll see us in the moment where we've decelerated, and I think you'll see that change to the extent we get a spike in rates and can take advantage of it. So think of that as a range we're 24% to 30% because we're 24% today. Will pop around inside of that as opportunities present themselves.

That's right.

Stay nimble. I guess I've got a couple of questions from the audience around kind of our discussions. I'll just try to marry it all together. But it was -- one of them was kind of -- you talked about mid-teens NII growth for the year. It sounds like we could be a bit under that -- or for the quarter -- for the third quarter, do you plan to -- do you want to get more granular? And then secondly, what's the impact of purchase accounting accretion in the back half of the year?

All right. That's all you, Rob.

I don't think we need to get more granular than that. We still got -- we still have some time on the clock here to finish out the quarter. But we'll be softer in the NII for the reasons that Bill had mentioned. And purchase accounting accretion, as we said in the beginning, isn't a real material part of this deal. So that shouldn't be a big issue.

One way or the other. Yes.

One way or the other, that's right.

Okay. And just as a follow-up to that, do you still expect the net interest margin to trend upwards? What would you call the low point, I think, back in the first quarter?

Yes. It's -- we're struggling. We're likely to lose a couple this quarter, I think, simply, again, on the back of liquidity and the rate rally and no loan growth. We've got to be bouncing around the bottom here as a practical matter. And of course, if we get loan growth back, that will change. But for now, we're kind of bouncing around at the low point, I think.

Yes, that's right. And in that range. So not a huge change. And the biggest sort of driver against us at the moment is the excess liquidity. So if that continues, that's actually a headwind, obviously. And if it abates a bit, we'll get some lift.

Got it. And I think earlier we talked about the fee income opportunities in the BBVA footprint. You mentioned, maybe fee income in this quarter a bit better than expected. So maybe just talk about what's driving that and I suspect that's coming from the Legacy PNC businesses and just what could you do from that front.

I mean Rob can jump in here. We've had momentum in the fee businesses, largely across every category for a fairly sustained period of time. It's obviously accelerated somewhat this year on the back of the advisory businesses. Record performance from Harris Williams from Solebury, 6 points, having a great deal. A lot of that kind of products and services we brought in on the margin on the advisory side. Capital markets continues to be very strong. Those businesses are somewhat cyclical, as you would expect. But the stable businesses, the treasury management, card fees, all of those things continue to grow at mid-single to high single digits and now should accelerate because we'll be doing that across the broader footprint with new clients.

Yes. The -- just to add to that, Jason. Bill is right, we're seeing growth -- consistent growth across all the categories. So asset management is doing well with the equity markets, the consumer fees with the increased consumer activity, not necessarily consumer loans, but the consumer spend corporate for the reasons that Bill mentioned, both treasury management and the advisory and our residential mortgage, which is smaller, continues to do well. So the fees are very, very strong.

Got it. So you gave full year guidance for revenues on the second quarter earnings call. It included obviously BBVA but also had kind of additional growth beyond that. We talked about NII, a bit softer than expected. I would think the income a bit better than expected. Does that more than offset, equal, less than, maybe help us kind of round out that discussion.

I would say, largely offset.

Got it. And then I guess moving to the expense side of the house. Obviously, BBVA is a cost-save opportunity over the next couple of quarters. I guess, first off, do you expect to get all of those expense saves realized? I think you wanted to do in a pretty -- or thought you could do in a pretty quick time frame. And then from there, how do you think about the kind of expense trajectory, particularly against kind of some of the investment spend that you've been doing? And then just -- you hinted at this, but PNC Legacy has done well with that CIP program. What's the opportunity to kind of import that onto the BBVA franchise?

So let's break the whole conversation and for that conversation into some buckets. The $900 million of mechanical spend cost save that we get largely this year. I think some of it will roll into next year, but not much. On the spend side, we don't have backlogged investments, Jason. We've -- you've heard us talk about this before. We've kind of invested fairly aggressively for the last 5 and 6 years in things that we needed to do. And that's in our run rate. So every year, we have a new bucket of things we do, but you already see that inside of the run rate that we have today. As we move forward, we're going to have a bit of a trade-off because we'll have a continuous improvement program, which will allow us to optimize what we're doing in some of our operating environments. Think about physical space as more workers go virtual, a lot of things that will play in the continuous improvement. But those are going to be somewhat offset by this real wage pressure. At the moment, you saw our announcement to bring all incoming employees to $18 an hour. And there's also the build-out of the markets. So we put in our preliminary build plans into the $900 million total save, and we've largely spent that -- those dollars today. But back to your really early -- your early on question on continuing to build markets and market expansion. We'll continue to invest in that stuff, right? Ideally, fund it with growth. So a whole bunch of moving pieces in there. We're not going to get into a game here and it's the worst time to do so where we're going to somehow stop what has been our historical run rate on investments. And we'll be -- and by the way, when you run all that math, we'll end up being more efficient over time. If you're staring at the efficiency ratio simply because of the scale we get from BBVA and the fact that they were running at a much higher ratio than we were.

And that's really been -- what Bill just described, as you know, Jason, has been our approach for the last 7 or 8 years, using -- recycling those expenses to fund ongoing investments, and it's worked well and we're going to continue to take that approach.

And at all times, targeting positive operating leverage, which in these markets and the growth opportunity, we ought to be able to accomplish.

That's right. Yes.

No, it makes sense. Maybe shift gears to credit quality. It's about your kind of perspective, as in your expectations going forward, just given the incredibly low level of losses, does it make sense that you can eventually see some normalization to a slightly higher level? Or do you kind of expect losses to remain low for a while?

Okay. I think if we dig through our book, our upgrade/downgrade ratio is massively skewed to upgrades at this point. Consumer charge-offs are as low as they've ever been. The one worry point continues to be real estate. We're reserved pretty heavily against it as we roll forward. We always get the question, when will you continue to release reserves? What will your reserve ratio look like at the end of August? Look, I think for C&I, you're going to see reserves continue to drop, not necessarily true for real estate until we see how some of this plays out across hotel, retail and office space. The other thing you have to keep in mind is we're really set up for loan growth here in an economy that should have loan growth. So you had this big upside bubble of net interest income when loan growth comes back. Remember, that will be offset by reserves for those new loans. So we otherwise have this trend down that would come from the improving economy, the upgrade ratio. But if we grow balances, which we think we will do at some point, your -- because of CECL, you're reserving for the life of the loan when that shows up. So you'll have a little bit of attention against releases and loan growth on one side. There's no loan growth and reserves will come out. We'll see what happens.

A lot of people have talked to kind of CECL day 1 reserve levels. Do you have a sense of just how low reserve [ ratios ] could go? And then you said something interesting on CRE reserves. Maybe just expand on that. And obviously, you have a unique perspective, given you guys are on Midland and just what you're seeing there.

Look, it's less of an observation on Midland. The nonperformance at Midland get cured pretty quickly because there's a lot of capital on the sidelines. What's interesting about office, I mean, I'll tell you our own dilemma and I think this is going to apply to a lot of major cities around the country, with flexible work arrangements, coupled with the groups that will end up going virtual. So think care centers, many of our operating environments can be permanently virtual. Our space needs, while it will take a long time to get there, practically, our space needs are going to drop a lot. And Jason, the longer we stay in this virtual world that we're working in today, the work-from-home world, the more -- the larger the expectation we're building in the way the workforce works that it's going to continue. So when we started this conversation in the middle of last year about, is this just going to change how office work is. We all said, no, no, no, this is all going to be behind us, and then we're going to come back to work. All of a sudden, we're 18 months into this thing, and this is how work works. And I think it's creating this tail on real estate risk that we just -- we don't know how long it's going to take to sort out, but we're worried about it, which is why we're reserved against it.

And I guess against this credit normalization, you talked about kind of running off some of the BBVA portfolios. Can you just talk about -- I guess, I've got a couple of questions from the audience. Can you size kind of what's going on there and how quickly that portfolio could wind down?

It's not a huge amount, and it happens over time. Some of it is simply between the two companies. We have too much to one counterparty. So whenever that loan renews, the collective new entity would take down less, will syndicate more than we otherwise might have. Some of it is just -- is places where we want to exit. So they had a decent-size franchise, fast food financing activity, which we historically haven't liked. By the way, that banking team went to another small bank and they're picking all those loans. As they mature, they're putting them on this other small bank. That's terrific. So you're going to see this play out over time. We're not selling any loans. We're just going to let them mature and not renew them. And it's not a substantial amount. And our original assumptions, we thought we could grow new loans easily at a pace that would be bigger than the runoff. What's happening is we're putting new money out at that pace, but they're not drawn. So that's what's showing up in our numbers.

And importantly, we don't -- as Bill mentioned, we don't have any plans for a dynamic or significant sale of assets or loans or -- we'll do it over time.

Got it. And maybe shift to capital. On the July call, you got a question about the dividend. I think then more room to increase it. Obviously, with this [ SCB ] construct, you have a bit more flexibility. Should we expect another increase kind of prior to the formal next CCAR cycle? Or how you're just thinking about that?

You should expect that we will have a dialogue internally about it, to be honest with you. We haven't had that dialogue at all. We're in the middle of this conversion. We want to get it behind us. We want to make sure the risk is buttoned down. We obviously have the capacity to do that, Jason, both from an ability from a capital standpoint and an earnings standpoint. So let us get through this next month successfully and then we'll turn our focus and think about how we optimize capital. But we have capacity on buyback and dividend, which we'll look at.

I guess you mentioned capacity on buyback. You have a $2.9 billion authorization. Stocks at 2x tangible book. I guess just thoughts around, are you still buying back stock? And how do you view that?

Yes. So we're executing our program that we have out there. I get a little schizophrenic on the notion of where you buy back stock when you're a 2x book. Because historically, buying back stock at 2x book is never a good idea, just given the way the market cycles. But I contrast that with what I think our growth opportunity is in a consolidating industry, and it's massive. This notion of -- if, in fact, we end up with have and have-nots as it relates to scale and capability and product offering for clients, you'll see more consolidation, we'll take share. We'll have the opportunity to consolidate share organically and inorganically. And in that instance, our stock looks cheap. So there lies my schizophrenia, which is why we probably have a middle-of-the-road stock buyback program in right now.

And then the difference, too, in terms of the lack of the cycle on the credit side. So credit is very strong, and typically that's what has the valuation volatility, and we don't see that occurring.

Got it. And I know you kind of said you want to get to the conversion to think about dividends, buyback. But you're still certainly ahead of that 8.5% CET 1 target that you've talked about. And besides those 2 levers, could we -- I mean can you maybe just talk about how that plays and tell us your thoughts on acquisitions. I think you've talked about wanting to be a national franchise and now you've done it for a lot of the country. But I guess, is it -- are there more inorganic opportunities to do and just kind of when -- what is your appetite for future bank acquisitions?

Yes. So we've been and will always be in the market for the small product add-ons, tech add-ons. We just bought a payment gateway, a whole bunch of other stuff. As it relates to bank acquisitions, I think there is going to be opportunity. I think prices are unrealistic for some of the players that don't bring anything really new to an acquirer other than accounts. And I think the political environment for a scale acquisition and the regulatory environment is going to be challenging for a period of time. So if you look at Biden's executive order to the DOJ and then separately the instructions to the Fed and the OCC to review bank merger criteria, I think it's going to be tougher. But inside of that tough environment, I continue to think that smaller institutions will struggle to remain relevant and, therefore, are going to be for sale or simply their share is going to be absorbed.

Got it. So I guess maybe we can get your early impressions for 2022. You talked about kind of the schizophrenia, PNC being expensive on a valuation or not. I think the same could be true for the industry. I think a lot of positives out there, but also some concerns, whether it's COVID or lack of loan growth or -- I'd love to hear other potential headwinds that are on your mind. But just maybe just extrapolate on that as well as how do you think PNC is positioned relative to the others in the industry? And why should we be excited at 2x tangible book?

So for the industry, right, while multiples in theory are a little expensive relative to history, they're not relative to the broader market. And more importantly, they're not higher relative to the opportunity set, right? So we're sitting right now in a benign credit environment with credit utilization at all-time lows and rates at all-time lows. Credit utilization has to change. It's a function of time, it's an if now or it's a when, not if. And I think rates, there's going to be some amount of relief. My own view, not massive, but some amount of relief on race as well. So you have this massive bold-up position already built into the balance sheet. We're all massively long liquidity and we all have balance sheets that are -- where utilizations are too low. So that's all upside, whether you do anything right or wrong, and that's just a generic. It's going to happen to you mechanically as we go through this economy. PNC-specific, I think we're all of that on steroids, right? We're in all of these new markets, able to grab share, able to cross-sell with a new fee-based product into existing clients. On a path, it isn't just about '22, but for years down the road. So I think we're in a really great position. I think the industry itself is in a good position and is worthy of where it trades today.

Got it. We have about 2, 3 minutes remaining. There's a couple of questions from the audience all around crypto, obviously, coin-based whether you wanted them or not, kind of mentioned you guys as a potential partner and a couple asking you kind of seem to embrace crypto more than peers. Just maybe talk about your strategy around crypto, the opportunities, what you're doing with them and just where you see that headed?

Yes. So look, our clients are interested in crypto. We can track the volume -- the [indiscernible] volume that's going to crypto exchanges, and then through our wealth business, we've done a survey and you should assume 15% of our clients are moving money in and out of crypto exchanges on any given day. And in our wealth client base, the people interested in crypto investments probably tops 20% based on the surveys we've done. What we've talked to coin-based about is the ability to white label a product both for nonfiduciary execution. So go ahead and trade crypto and then separately for cold custody, offline custody. [ It issue ], we're fairly far down that path. We could turn the thing on in short order. [ It issue ] for us and, frankly, everybody who's having this conversation is the regulation around crypto and the simplest question will make this somewhat obvious to you. If they come out and they say that stable coin is a security or as a money market fund and therefore security, then where we would have to offer crypto trading from changes as a function of legal organization, right? All of a sudden, okay, well, now that's a brokerage. If you're going to offer security, it's got to be from a brokerage [ arm ]. If it's not a security than we can do it from the bank platform. Nobody knows what it is. So we're kind of ready to do this if clients demand it. Right now it exists and operates in an environment that's completely unregulated. So nobody has had to think about it. We need a little bit of guidance as does the industry on exactly where they should sit and how we should think about it. But client demand is there, our ability to offer it in a clean and simple and easy form on mobile is built and ready. We're just answering a few questions.

Great. We have 1 minute left, and there was a question. Can you provide an update on the rollout of low cash mode? What's been the feedback been like? I know you're seeing clients -- are you seeing it help client acquisition efforts at all?

Feedback has been phenomenal. I'm going to get all the stats wrong, but we've had, I don't know, is it around 10 million or something moments.

[ 1 million ].

We have almost 4 million accounts on it right now. We have -- we've seen a dramatic reduction in overdraft fees on the order of 50%, we've seen, which is what we told you before. And we've seen a 70% plus decrease in call volume on complaints on overdraft, which is important. We've seen most people sure actually by just moving money. So it kind of goes to this thesis that it happened to them by accident. So they transfer money in, they sell money, they do whatever they do, but they cure the balance in our extra time. And then we've seen not massive volume, but a fair amount of volume on just payment control, where people reorder their existing -- low cash flow is the only thing out there that allows you to reorder your view of payments. There's still -- other companies are still talking about sort of high to low, we just let you do it any way you want, and swipe left, swipe right and shut them off. And so there's been increased activity in that as well. In terms of account acquisition, I don't know that we've seen a statistical big jump in new accounts as we've converted our old accounts. We do expect -- since we're going to convert all of the BBVA clients into this product that some of their historical attrition numbers will go down. Historically, they had by 2 or 3 points higher attrition than PNC had. One of the reasons we rolled this out when we did and the reason we want to roll it out to BBVA is we want to drop that attrition on the retail side, and we think we'll be able to do that.

Yes. So it's all going well as we expected, and the financial impact in terms of overdraft fees that we don't collect are all within our expectations. So, so far, it's been very, very successful.

Good to hear. I think that's a good place to leave it. Bill, Rob, thank you so much for joining us again this year, and look forward to speaking again soon.

Good to see you, Jason. Thanks, everybody.

Good to being with you. Yes. Thank you.