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

Thanks, everybody, for joining us. First, disclosure statement. For important disclosures, please see Morgan Stanley research disclosure website at morganstanley.com/researchdisclosures. And if you have any questions, please see your Morgan Stanley sales representative. Okay. With that out of the way, we're delighted to have with us today Rob Reilly, CFO of PNC.

Betsy, good morning. It's great to be with you in person here after a couple of years' layoff.

Yes, exactly. Right.

Virtual anyway. Yes.

Right. In person is better than virtual.

In-person's way better. Way better.

All right. So I just wanted to start with a few questions on strategic outlook here.

Sure.

You've accomplished a lot in the last year. You've converted and integrated BBVA USA, right?

Right.

And on top of that, it seems like you're already seeing some great momentum in these newer geographies. I know last -- a couple of weeks ago, Bill spoke a bit about some of the opportunities that you're benefiting from some uptick in revenues better than expected. Could you talk a little bit about what's driving that?

Yes, sure. The -- so the BBVA USA acquisition has been great. And if you think about the milestones that we've had, just to back up a little bit, and then I'll get to your question, we announced the deal in November of 2020 at what was a very attractive price. And most everybody remembers that, what they might not remember is that it was literally the day before the vaccine came out. So it was literally the last day before things sort of shifted. So the purchase price was good, and it got even better as a result of that. So that's a check on that milestone. And then in June of last year, we closed -- I know this is -- in today's context, you might not remember. We actually closed ahead of expectations. We received regulatory approval sooner than we thought. So that was a check. And then as you mentioned, we spent the better part of latter half of last year converting fully within 4 months. Deciding and decisioning the expense saves -- so it was important for the transaction that we realize the full $900 million of expense savings in our 2022 run rate, check, check. And of course, most importantly, getting to know our new teammates in the Southwestern United States. So we did all of that roll forward to the first quarter of this year and where we are now. The teams are in place. We're staffed up. We're running our plays. As expected, commercial is sort of leading the way in terms of the traction and maybe a little bit better than we expected. So check, check plus, may be there. If we could be more excited about the deal we are. As Bill mentioned, our pipeline growth in the commercial space has grown dramatically, off a small base, but dramatically and probably faster than we would have thought. New sales are double what they were the previous month. We're on those kinds of trajectories. And importantly, the majority of those revenues are in the noncredit space, which is what we expected. That's full PNC products and services coming through. So the same is on the consumer side in terms of the activity of the branches. So we just -- we feel great. And I think where we're ahead on the traction, what are the reasons for that. I think one is hitting the ground fast fully staffed, clearly. The receptivity to the PNC brand in the Southwestern U.S. has been strong and the growth dynamics of these markets. These are the fastest-growing markets, obviously, in the United States, maybe the world. So I think there's an element of that, too. But whatever the reason, we're very pleased.

And the noncredit sales that you're getting, what is that primarily in treasury?

Primarily in treasury management, yes, which we have a third-party recognized differentiation there in terms of being a leader. And that is -- and we've seen that in past acquisitions. That's typically what gets going the fastest soonest, and that's the case here.

Okay. So given that you've got a faster ramp in rev growth, client acquisition than you had been expecting, are you going to be investing more to deliver even more revenue growth?

Not as a result of that. I mean we've invested -- like I said, we're largely staffed. We have a little bit more to go in California, but most of the investing has been done. And this accelerated activity doesn't rely on more investing. So we don't see a big change there. I mean, we'll continue to invest in the normal course as we always do, but not in response to this activity.

So operating leverage outlook should...

Still very good. Yes, still very good.

Now given the success in the BBVA USA footprint, what about next steps on strategic?

Yes. So we get that question, obviously, in terms of future acquisitions, in terms of major bank acquisitions. And the short answer is we don't see that as likely anytime soon, largely due to the regulatory environment, which at the moment isn't real supportive of that. We're fully capable of doing it. But in the meantime, I think we'll be focused on our organic growth that this acquisition has provided for us. We'll do small bolt-on acquisitions, which we've done, which aren't that small in the absolute sense, but are in the relative sense, largely in the payment space that we've done. So we'll continue to do that, and we'll see what develops.

Small bolt-on, nonbank?

Nonbank, yes. Right. Nonbank. Like Tempus, which we did. Those types of transactions that fill out our product set and then offer an ability to scale those businesses across our customer base. We like those types of opportunities a lot.

So given that we're most of the way through the quarter, do you have any updates for guides, rough guides?

Well, I don't want to disappoint anybody, but I have no change to guidance.

No change. [ Fees ] are higher...

No change in terms of our second quarter guidance. A couple of pieces in there just in terms of some color. On the balance sheet, we did see -- relative to 90 days ago or so, we did see and have seen commercial loan growth a little better than what we expected, offsetting that securities balances are flat to down-ish maybe just -- and that's deliberate on our part in terms of just this rising rate environment, we'll choose to invest more aggressively on the higher rates that we see coming. So that's on the asset side. Deposits are still pretty steady despite everything that you're hearing and all the fluidity, and I'm sure you want to talk a little bit about betas. Our deposits are behaving within their sort of seasonal levels. The big question for the guidance a quarter ago was the capital markets activity. If you remember, our capital markets activity was softer than we expected in the first quarter. We guided to a pickup in the second quarter that would put us back to what we thought originally for the full year, and that's happened. So -- and within our capital markets, and I know that's a little bit different than some other banks, but in our case, the big driver there is Harris Williams, our merger and acquisition advisory business, which has had a very strong quarter and continues to have a very strong quarter in the second quarter. So in very short terms, what we expected for the first half of Harris Williams in 2022 back in January has happened. It just didn't happen uniformly in the quarters.

Okay. So you're up in 2Q versus 1Q on that line?

Yes, yes.

And then for the full year?

As we guided.

Right. Exactly. Okay. And for the full year, it's?

For the full year, we're down, but that was coming off of '21. So we had expected to be down 20% or so for the full year. So we're still tracking to that. And then for the full year guidance, because that's probably your next question, we'll have more for you on our earnings call. So once we see the full first half come in, take into account all the macro environmental issues that are occurring, we'll have a read for you in the full year here in a couple of weeks or a month.

And your current -- yes. Got it. And your current 2Q guide for fee is up 6% to 8% Q-on-Q that's holding steady.

Yes, it's good. Yes, yes.

And just I want to -- anything else to unpack there, like we heard this morning from...

Yes. Yes, I heard -- there's going to be some talk in terms of mortgage. And in our case, we did -- as part of our guidance, we had mortgage going down a bit. As you know, mortgage isn't a big business for us. We had -- or I had mentioned on the first quarter call that we said maybe mortgage could be down as much as 30% for the full year. Again, we'll update that in another month or so. But that's a function of rates, obviously. And in our business mix, higher rates and how much we benefit from higher rates is worth the exchange of less mortgage.

Yes. And then any other puts and takes in the fee categories to speak to?

Well, nothing for the quarter per se in terms of the guidance. If we just go through the categories, we are seeing pressure on asset management, obviously, with the equity markets in terms of what they're doing. So that would probably be a bigger concern for the balance of the year. Mortgage, we just talked about. Capital markets, the pipelines are still pretty good. We're back in position. We'll see how that goes. But the other categories, card and cash management will be steady. Lending and deposit services steady. So that's all the categories. That's how I view it at the moment.

Okay. Great. Can we talk a little bit about how you're managing the securities book? Obviously in 1Q, there was a hit in the AOCI. The industry felt that.

Yes, right. Right. That's right.

And I know you've done a bit to try to reduce that impact this quarter. Could you walk us through what you've done and if rates ended where they are today, what kind of impact we should be...

Yes, sure, sure. So in the first quarter, you referenced it in terms of the way the rates rose and most of our securities were categorized as available for sale, we had about a 15% decrease in tangible book value. Since that time, we have moved about 60% of our securities to held to maturity. So that part of that AOCI is locked in. But of course, we still have a portion there, 40% or so that's still open to AOCI moves relative to rates. So the short of it is, what we see for the second quarter would be -- because of those movements would be a further decline of a little bit less than half of what we saw in the first quarter. So if first quarter was 15%, maybe it's down 6% or 6% or so, plus or minus, to just sort of give you a sense of that. I know I don't need to give you the lecture that as a Category 3 bank, we run our capital on regulatory capital, so the AOCI hit the tangible book value, we're unfortunate from an optic standpoint is really accounting. It's not a decision driver for us per se. They're not permanent losses. I'm sure you've -- I've already heard this in your conference, but I'll tell you again. We'll accrete back that as those securities pulled apart. Another simple way to think about it is if we had moved -- if we had, had the benefit of hindsight and moved the majority, if not all of our securities to held to maturity on January 1, don't change anything in our securities portfolio, we'd have 0 AOCI. The economics are exactly the same. But similar to my point on mortgage, this is a function of a rapidly rising rate environment that we're beneficiaries of. So if that's the expense of it, that's easily worth the exchange.

Okay. And maybe you can give us a sense on how you are looking to deploy any excess liquidity you have from here? Is it...

Yes, mostly -- obviously, we look to loan growth and that's our priority. In regard to the securities portfolio that I spoke about, we've slowed down. We slowed down the purchases in terms of growing those simply because we think we can invest at a higher rate here in the short course. And we'll keep an eye on that. But we've got a lot of liquidity and that's a good thing.

Okay. On deposits, you touched on that a little earlier. And deposits are top of mind this environment. Could you just give us a sense as to how you're thinking PNC is going to perform relative to peers in terms of deposit pricing?

Yes. So our total deposits have been pretty steady. We hit a high point back at the beginning of the year of around $457 billion or so in deposits, roughly half commercial, half consumer. We finished the first quarter at $450 billion. And right now, we're tracking at somewhere around $445 billion, $446 billion. So sort of flattish to down. And again, well within sort of the seasonal swings that we see. So that's fairly steady. The strength of our deposit base is, obviously, in the consumer, which is the bulk of our interest-bearing deposits. And that's pretty steady through the cycle. So in regard to beta increases, we haven't increased deposit rates paid measurably. Nobody really has in the banking industry. You've seen some in the digital. We expect that we will do that, but we're well positioned for it. And like I said, higher rates are a good thing.

Now you do have a digital offering, right?

We do. Yes, but it's pretty small, Betsy. It's pretty small.

Okay. Are you keeping pace with what's going on there?

Yes. We're close. But to put that in sort of dimension, that's a couple of billion of deposits against that $450 billion. So it's pretty small.

Got it. Okay. The other point here is that your 10-Q identifies your rate sensitivity for the first 100 basis points. I think we all know that. But how should we think about the impact of rising rates on the NII outlook, the next 100, the next 200?

Yes, it's tough. That's tough. I know -- and I know it frustrates you all in terms of those disclosures because not everybody is the same and you're holding all these other variables constant. Clearly, higher rates are better for us. We'll see some lift if rates continue to rise at a rate faster than we think. But it's really hard to just give you that number because you do get into the rates paid and how that is offset.

Okay. You used to give it.

Yes, it's tough. We weren't very good at it. Yes.

Okay. And I guess, just lastly on this whole thing is how are you thinking about the loan-to-deposit ratio? I mean clearly, it's down because QE drove a lot of deposits growth in the system...

That's right. Yes, that's right.

So how should we be thinking about how high you're comfortable with letting that go?

Yes. So we're running right now at 65% -- sub-70% loan-to-deposit rate, which is very low based on sort of historical averages. Through time, we sort of lived in that 85% range plus or minus 5%, very rarely above 90% because core funding is a pillar of our strategic plan that is with high conviction that I say that. So we've got some room to run up. And I do think that variable alone does speak to maybe a little bit slower than what would otherwise be with the betas for obvious reasons.

Okay. And you're not expecting much in the way of QT impact on deposits?

Not immediate. Not immediate. Of course, we watch it. It's a big system and there are big numbers that are being thrown around and trillions of dollars that are moving. But just -- and Bill mentioned this a couple of weeks ago at the conference, and it's our belief that it's -- it might be a little bit slower. Even all these actions might be a little bit slower than you think in terms of deposits exiting the system. But we'll keep an eye on it.

Okay. Turning to loan growth. C&I has been accelerating. You've got line utilizations up, new customer wins. Give us a sense of sustainability here over the next few quarters.

Yes. I think it looks pretty good. We -- the commercial loan growth has been positive year-to-date, most of that coming from increased utilization, which, as you know, had gotten very low, at least by historical standards last year. So we've gone somewhere into the high 40s. Normal for us is mid-50s. We're back right now in the 51%, 52% range. So I do see maybe not necessarily at the same rate, but certainly an increase in utilization here going forward.

Okay. And what about CapEx? Anything?

Not a whole lot on the capital expenditures right now. There's a lot of talk that there's some pent-up demand for that just in terms of coming out of the pandemic where there was like none. So I think it's typical of everything else. We're similar to everything else, just coming back to sort of normal levels. And then, of course, in the energy space, that can open up capital expenditures pretty fast if these prices hold and the energy companies decide they want to produce more.

Right. One of the questions I get just on the C&I side is the question around recession fears and inventory pressures. Is that -- are you hearing any of that from your customers?

Yes. Yes. We get some of that. Most of it is inventory pressures in terms of not being able to get the inventory. Retailers aside, which we don't have a whole lot of retailers in terms of having the wrong inventory, most of the frustration that we get from our commercial clients, which tend to be middle market-type private companies just being able to source it because of the supply chain aspect. So we do see the need or the desire to build those inventories contributing to that higher utilization.

All right. What about commercial real estate?

Well, commercial real estate is good right now. We've got a little bit of a mixed view looking forward in terms of what the possible ramifications of commercial real estate will be, should we go into a downturn. Our biggest component of commercial real estate is multifamily housing, which looks good, has been good. All expectations will continue to be good. So our eyes sort of go to the office component of commercial real estate, which for us is about $10 billion or $11 billion. So not real big. Again, tracking very well, but the obvious concern around the outlook with return to office and what all that means. We're well reserved as a result.

What about on the consumer side, where do you want to grow most there?

Well, we'd like to grow our consumer loans, and we're not doing a whole lot of that right now because our consumer loans do deliver it in terms of our approach tend to the prime space and the consumers pretty flushed with cash. But we've got a very solid credit card offering, very solid auto, very solid residential. I like all 3 in terms of growth. And we do think with the BBVA component into the Southwestern markets, we'll get some lift there.

Is it mostly on the mortgage side or?

Yes. Most of what we're doing is in residential, yes, mortgage. We're starting to see a little bit of a tick up in home equity, which we haven't seen for a while. Card balances are sort of flattish because of that flushed cash position. And then auto loans are sort of flattish to down in our case because, one, there's not a lot of autos; and two, we won't stretch. So in some instances, we're seeing some early indications of some lenders stretching on either loan-to-value or term or even price, and we won't do that. So we're very comfortable with that approach.

On home equity, are you involved in both home equity loans and home equity lines of credit, or you do both sides, right?

Yes, yes. Sure. Yes, we do both sides. And we put a lot of technology investment into our home lending over the last handful of years. So the technology is there, the ability to deliver the products there in a seamless way and a customer experience that's positive. So that's encouraging. Naturally, we've got to fight against these higher interest rates that we talked about earlier in terms of some of the mortgages and the factor there. But we're ready to go.

Right. And you do both, first and second?

Yes. Yes.

Okay. Is the portfolio skewed one way or the other?

No, no. Very high quality.

Okay. On ESG...

And Jumbo. Most of what we hold on our balance sheet is Jumbo. Yes.

Right. On ESG, last year you announced a 5-year, $20 billion environmental finance commitment. How are you progressing on this?

Yes. We're doing well. So that $20 billion over 5 years, we're already halfway there, 1 year into it. So we're active in this space. I mean this is a highly, highly visible, obviously, topic within the financial services industry and even broader beyond that. So this is that $20 billion is one component of a lot of other things that we're doing. We're proud of our record in that regard. You've known us -- followed us for a long time in terms of what we've done to support our communities. So we've done a lot. We feel great about it, and we're signed up and totally committed to doing more.

And $10 billion, that's in commitments or it's...

Well, it's broad way -- largely commitment and -- but outstandings inside that. And again, that's a function of our own conviction to support this and also the growing space that ESG has become and will be for some time.

I just want to turn to...

And that's the E part largely. Yes, yes.

Environmental of ESG.

Yes, yes. Right.

Yes. I mean there's a debate out there as to whether or not the E part of ESG from a loan growth perspective is additive or replacing.

Yes. Yes. Well, we're going to be talking about that for the next couple of years, I think. So you could probably provide us with some insight. We'd like it to be additive, of course, but it's so complex. Maybe that's a topic for the next conference along those lines. But like I said, it's very complex and a lot of the directions even with the best intentions are often at conflict. And we have -- as an industry, we haven't sorted that out.

Okay. Let's move to credit. Something we can sort out more easily.

Okay. Yes, sure. Right, right.

What would you say you're through the cycle average losses are now post BBVA USA acquisition?

We've always pointed to 50 basis points of net charge-offs, which we're not anywhere close to now -- and also, we never are actually at 50 basis points. That's the average. I don't know if we were ever at 50 basis points. So net charge-offs are very low right now, ridiculously low really on the commercial side. I mean our net charge-offs on a $200 billion loan outstandings is like $10 million, $15 million a quarter. I mean literally nothing. So that's got to normalize a bit. We're seeing a little bit of normalization on the consumer, not a lot. But I mean, the answer is in short, and I know this is consistent with some of the other presenters, credit's good. Credit's very good, and the outlook is good, if not for all these macroeconomic warning signs that has everybody concern.

So how should we think about the CECL reserve ratio? I mean the reason I ask is because your CECL reserve is reflecting over a cycle. Your losses are really low. Should we anticipate that we're going to be going through normalization, meaning net charge-offs go up, but the reserve ratio stays flat?

Yes. Well, so in regard to CECL reserve, we're appropriately reserved.

Yes. Always.

Always, always. The -- but yes, you're right, we're going to learn what that means in a downturn because it's forward-looking rather than the historical losses along those lines. So we'll see where we end up. But I mean, releases, which is basically what we've been doing for the last handful of -- well that can't last forever. But to your point, you might not see the build in percentages because it's forward-looking as opposed to the historical extrapolation or historical loss. But we'll see.

Right. Okay.

But I feel good about reserves. Like I said, they're appropriate. They're higher than our day 1 CECL. And we think we are adequately reserved.

Right. Okay. So we should keep the ratio flat?

Well, we'll see. Yes, we'll see.

All right. good. All right. Let's move to expenses. All right?

Okay. Yes.

Bill mentioned...

That's usually your favorite topic, Betsy. I don't -- that's usually question 1.

We're getting to it.

Okay. Okay. Okay.

I'm soft falling my way there.

I got you. I got you. Okay.

So last week, Bill mentioned that wage spiral inflation is real. Okay. That got some headlines. And it's not going to go away anytime soon. So I wanted to understand from your perspective, how are you managing to that at PNC.

Yes. Right. Yes. So at the beginning of the year when we laid out our full year guidance and our expectations and our budget, we said we fully expected to see wage inflation, and we budgeted for that. The good news is half of our way through 2022, we're inside of that, meaning we forecasted and budgeted correctly. So that feels good. And that's all part of our guidance. That's all part of our positive operating leverage. So that part is good. I think what Bill was alluding to was if inflation stays at these levels -- and you got to put it in the context. It wasn't that long ago that the Fed's view was that inflation was transitory, then we went to non-transitory, then we went to broad and now we're persistent and broad. I think Bill's point was, if that stays persistent, that's going to be an issue for everybody. Maybe not necessarily in 2022 because like I said, we're well positioned halfway through the year. But if we get into '23 and '24, that just won't be PNC, that just won't be the banking industry, that will be the world.

Okay. It doesn't impact your cost saves. Does it?

No. No. No. That's all done.

Right. There was also a recent story about how PNC Retail Bank was looking to reconfigure about 60% of the branches to a digital-first layout by 2026.

Yes.

Could you help us understand what that means? Is there any investment spend required? Are there cost savings at that time?

Yes. There'll be some investment spending. There'll clearly be some cost savings. But I think what that really is, is -- it's a continuation of the evolution that we've been on for some time, which is increasingly within the branches, smaller footprints, square footage, more technology to handle the routine transactions so that the interaction with the branch employees is on much higher value products and services, consumer loans, et cetera. So we've been on that path for some time. And we're getting to the point where in the next couple of years, it's not just going to be sort of the new way, it's going to be the total way.

And I think you also have used quite a bit the automated ATM that also acts as like a mini branch.

Yes, that's right. Yes. No, we've got a lot of experimentation going on, solution centers. There's a constant experimentation that goes to that. But the broad view and the broad objective is to -- as I described. There'll be some experimentation along the way.

Right. Okay. So can we drill down a little bit on the tech side of expenses, just understand what's the tech annual budget and what's the mix in terms of how has the expense...

Yes, yes. I always start this, and this is speaking on behalf of CFOs what's tech and what's not tech? It seems to me everything is tech. So I just -- I sort of plant that thought in everybody's mind because when expenses come through, they don't just say this is technology, this is not technology. But everything seems to be technology. But the quick answer to your question is our tech budget is about $2.5 billion in terms of within our technology and operations that we have as a budget. And roughly half is build the bank and half is run the bank, which is high. That's the highest that we've been running, is consistent with our objectives to continue the technology build-out and the technology investments. I think where PNC is different is we've been at it a little bit longer. And every year that I've been at your conference, I've been talking about it going way back, Betsy. So we've completed a lot of the infrastructure. Most of our tech investment is on the client-facing and enhancing all the aspects. People -- I get asked all the time, and I know you do a lot of the asking is, how can you prove it every bank gets up here and says they're investing a lot of money and they're doing well. And that's probably true. But I'd say, you do get these moments of truth in terms of proving it. And for us, that was the conversion of the BBVA USA to be able to do all of that in 4 months, which was a record time for us, I think, a record time for banks. That's a moment of truth. You can't do that if you don't have the tech.

And your core systems are entirely retooled at this stage?

Yes, yes, yes.

Okay. So with that behind you, does that give you the opportunity to reduce this line item?

No. I think technology is going to continue to be an increasing part of our business. So we'll continue to invest aggressively. There could be some cost saves on -- along the way, which would be great. But the real objective is to stay relevant to our clients in terms of delivering best-in-class products and services through technology.

And is there any more you need to do with regard to API integration, cloud migration?

There's always work to do, but the heavy stuff around, like you said, the infrastructure is complete. So most of it is building out the client experience, which is the fun part. And being able to do that in an agile manner, be able to do it in real time without shutting everything down while you do that, that's where we are right now.

Okay. I'll just see if there's any questions from the room before we move on to the last section here. Okay.

I think you mentioned some treasury sales as part of some of the cross-sell progress with BBVA at the beginning of your comments. I'm wondering if that's just a fee opportunity? Or is there may be some deposit growth kind of outperformance possible as part of that?

Yes, sure. The good answer to that is it's both because our treasury management products and services, obviously, goes through the fee line, but there's a lot of deposits related with that business that are part of the NII driver. We like both. We like when it is both because that, by definition, is a more genuine relationship in terms of the operating business or beyond. It's highly successful. Our treasury management -- and we've spoken about in conferences, you know it's highly successful. It's desirable products and services. So it does make that commercial calling effort on prospects that much easier when you're delivering a value-add idea that doesn't require a whole lot of change on the part of the customer. They can just do it right away without changing everything. It's quite effective.

It's interesting because -- I get questions on this because it's -- most banks have a treasury services offering. So what makes yours unique? And...

Right. Well, we've been at it a long time, and we've invested aggressively in it for a long time. And the breadth of our products and services is as strong as anybody and the depth is probably stronger than everybody. So -- and that's not just me talking, like I mentioned third parties look at us. In terms of third-party rankings and treasury management services, PNC comes out on top.

And I know you have a particular strength in the health care sleeve.

Yes, sure. Yes. No, that's a big part of it, too.

And there's a lot of hospitals in that BBVA USA footprint.

Yes, yes. There's a lot of hospitals everywhere. Yes.

Just a question turning to capital. Could you just give us a sense as to how quickly you want to get your CET1 into your target zone?

Yes. So we've targeted and this hasn't changed. We targeted our CET1 in that 8.5%, maybe 8.5%, 8.75%. And we've always exceeded it, including in terms of where we are today. We do a 5-year strategic plan every year that we update. And every 5 years has us getting to that target. What's happened historically is we've always outperformed our strategic plan. So we always end up above that target, which is a good outcome along those lines. So we're not on a schedule. We're on a plan to get to that target range. But if we miss on the high side because of outperformance, we'll take that.

And any insight into how CCAR has been going this year? Any difference from last year?

No, not a lot to add there. In terms of our submission -- we've talked about that. I think where PNC is a little bit different, though, and I'm glad you asked this, is with the change in the rules and the stress capital buffer, we were allowed to sort of leave that July period post CCAR stress test when you announced your capital actions. So you'll recall, we pulled our dividend actually forward to a more natural time for us, which is April. So it used to be -- we have to wait for the submission response and then we'd pick up what -- would wreck your day because all the banks would just blast out their capital actions and you'd have to pull them all together. This year, PNC was pulled forward. So whenever that day is this, in this next coming month or so, PNC won't have an announcement because our capital actions are already sort of out there.

Okay. Got it. It's Thursday, by the way.

Next Thursday? Okay. Well, I won't plan a holiday on that day.

All right. Just to wrap things up, could you talk a little bit about your view on the competitive environment and where PNC is positioned?

Yes, sure. So I mean, the competition is fierce. It's always been fierce. I don't think it's any stronger than or any weaker than it's ever been. But for us, the BBVA USA acquisition is transformative in terms of providing us a multiple year, maybe 10-year bona fide organic growth path. And we've got all the right people. We're staffed up. We've got all the right products and services. We're confident that we can compete in those markets successfully. So that's got us naturally excited and sort of where we led off. That's a check plus.

Okay. So 10 years?

At least, I would say. Yes.

That's a positive operating leverage?

Well, we'll give you the annual guidance in pieces along those 10 years. But PNC has a very strong track record of delivering positive operating leverage. And that's certainly our strategy going forward and our intention.

Okay. Great. Thanks so much, Rob.

Yes. Thank you, Betsy. Great to be with you.