Pnc Financial Services Group, Inc. (PNC) September 2026 Conference Transcript

We're going to get going. Next up, very pleased at PNC Financial Services. From the company making his debut performance on stage at this conference, Mark Wyman, their president. As you know, who's been here umpteenth consecutive years or so, Rob Riley, Chief Financial Officer. Thank you both for joining. Yeah, at least 17, yeah. I don't want to call you out. I guess, Mark, maybe we'll start with you, given this is your first time here as part of PNC. Just maybe share a little bit about your background and how you wound up at the company.

Well, I spent 21 years in a former subsidiary of PNC called BlackRock, and there I did two things that connected me to PNC over time. One is I spent a large part of my career there advising banks, including actually P&C along the way, on balance sheet questions. So healthy banks like a P&C. And then some not-so-healthy where I led the work in restructuring AIG's credit book, credit derivative book, Morgan Stanley's Recapitalization and the like during the crisis. I actually started a company called PennyMac as part of that. We saw the opening that, frankly, banks were going to create was, for the non-banks, the creation of PennyMac back in 2008. And then separately, I spent time at BlackRock, I would say, scaling and growing businesses in the capital market space generally, like, for example, iShares. All that came together back in 23 when PNC and BlackRock jointly looked to acquire a bank we did not acquire, quite famously, in 2023 in the crisis. And so when Bill called and said, would you consider working with an organization I'd known for years and years, it felt very natural.

And maybe as the follow-up, can you give us some insight into what you've learned about PNC since you've joined the company and just what you see as the biggest opportunities where you can make an impact and maybe what are your top priorities for the next 12 to 18 months?

I think where we see the opportunities is really about doing what we do really well better. So, two things I think we're really good at that will lead to further growth are, one, we're very good at putting the client at the center of the business. And then the second is being local. Because we think that what our clients are looking for is an organization, a bank that will work with them, that has national capabilities, but keeps it local. And that's the challenge that we face, the opportunity. In terms of, like, getting closer to the client, there are areas where we're super strong, where we understand the client intimately and put the client first as we organize. And we're really good, for example, in real estate or in treasury management, and I'd put those capabilities up against anybody. Then there's places where we can be a lot larger, and it's really about understanding who our clients are and deepening. So cards, an area where we've underperformed. Fundamentally, this is about developing a deeper relationship with our customers, retail customers. And if you look at us compared to peer banks, we should be at least able to double our penetration with clients. It's just left where we haven't fought them as a client. On the corporate side, thinking about sponsors as clients is an opportunity for us. More and more, they own a lot of the portfolio companies we lend to. So you've got to talk to them at the peak and bring it all together. treat them as a client. Many of our treasury management clients have one complaint with us. They think we're really, really good, but there's one thing we can't do, which is follow them internationally in payments and lending. So we're going to be building out those capabilities, helping those U.S. clients, their needs in other places, whether it be lending into a global revolver or simply making payments for them in other spots in the world, particularly in Europe. So that's where the opportunity is for us. It just literally is following the client to their needs, and that's where the growth comes from.

Maybe just talk big picture, you know, the 10-year broke 5% this morning, bed meets on Wednesday, a lot of debate in terms of what the rate backdrop looks like. Maybe just talk about kind of what you're thinking, how you're positioned.

Sure, sure. So a couple things on that. I mean, we're now basically with where the world is. I didn't see what are the probabilities now of a rate hike, 90 plus or so. So we're in that camp. And, you know, for us, beyond that, probably another 25 basis point increase in December and then another in March is sort of our current thinking. For us, for 26, though, it's pretty neutral. As you know, we're in a neutral spot. So not a big impact in terms of anything that we see in 26, maybe marginally a little bit better, but significant in the outer years as the yield curve steepens, as you mentioned.

And I guess, you know, you spend a moment just on the more macro environment, which does feel much different today than when we spoke here a year ago. Just how are you thinking about the outlook of the U.S. economy in that backdrop?

Do you want to take a shot at that, Mark, and then I can fill in?

You know, I think the big surprise for this year is how strong the economy has been. And I'm sure we're going to talk about AI and AI CapEx, but I'd emphasize broad-based earnings growth where earnings year-on-year are up 36% in the S&P 500. We're seeing it in our non-public customers. And the consumer. The consumer is surprising us. She's resisting gas prices. She's resisting worries about tariffs. And she's spending. And so what we're seeing in every income cohort, including low-income cohorts, they're up 4% year-on-year. They have the much-rumored post-COVID wall that the consumer was going to hit didn't happen. And so what we're seeing is their spending and their balance sheets are improving. So if you look at their balance sheets versus 2019, what they have with us in current accounts, they're up 20% post-inflation since 2019. So it's a story, basically, of a very strong, resilient consumer who's willing to pay more, which is what's leading to that earnings growth on the company side. So overall, that's leading to a lot, very broad lending demand across almost all the sectors that we're working with. So I'm feeling pretty strong about the underlying real economy.

Yeah, I think, you know, we're a little surprised, like the world is, how strong the economy is, and actually improved incrementally here in the third quarter with the labor numbers. To Mark's point about the consumer, like other peers, we've seen consumer delinquencies decline. So it's strong.

I guess you both mentioned a strong consumer. I guess kind of double-clicking within that, any kind of notable changes in behavior kind of worth pointing out recently?

Well, gambling. Fastest-growing area that we're seeing in spending is gambling. Upscaling, increasing their spending on travel and entertainment at a higher end. not so much money on home improvement. Those are examples, but that reflects broader trends that we're seeing.

Yeah, like I said, you've seen all the data. The consumer is surprising that the consumer spend rate is up even ex-gasoline. And then on the commercial side, we were talking about it earlier, credit's in very good shape. There's a risk-on environment across our commercial base that we're seeing, and that's reflected in our results.

So you mentioned broad-based lending demand, resilient consumer, increased spending. You know the next question, Rob.

Yeah, guidance. Our four-year guidance and third-quarter guidance stays the same. We expected a good third quarter, and we're tracking to it. Give us just within the ranges? Yeah, I think the ranges are pretty good. You take a look at the numbers. Like I said, we're on track to have a very good year. We've had a good year. We're on track to continue to have a very good year, and we're sticking to it. All right.

We're going to have to double-click one by one now. Let's start with loan growth. So the first half was strong, as you noted. You know, we talked about strong levels of new production, higher utilization rates. Third quarter guidance actually implies a slowdown. Just maybe spend a moment on what you're seeing in terms of barter demand, client activity across the commercial book.

Yeah, sure. So, to your point, the first half of 26 was really strong for us in terms of loan growth, even independent of the first bank acquisition, which we announced at your conference here last year, which successfully closed in January. But even that aside, saw a really strong commercial growth, predominantly commercial growth, in our higher credit quality names that we've talked about. And that continues. We expect further growth, but at a rate a little bit less than what we saw in the first half, more in line with historical growth in strong economies, which we sort of target to GDP range. So still good growth. The pipelines support that growth. It's broad-based. One thing that we point out is commercial real estate as a loan category is inflected to growth after how many years, Jason, of the other way? Long stretch of declines. So it's constructive and, again, congruent with the growth in the economy. And that's on the commercial side. On our consumer side, we see some growth. We've got some offsets there. Credit card, as Mark pointed out, is our emphasis. A little bit less in terms of balance sheeting mortgages. We're still originating them, but we don't balance sheet them as aggressively. And auto is an area that, you know, isn't a real emphasis for us at the moment.

I guess when you think about the consumer side, is that intentional due to the environment?

Well, yeah, I'd say so. The credit card is intentional relative to the opportunity that we have. And we've made a lot of great strides there. Everything else is intentional. Auto loans, as I mentioned, if you take a look at PNC over the years, our box doesn't really change. It's one of our lower return assets. And when a lot of people are doing auto loans, we're not doing them. And when they're not doing them, we are doing them.

And that's just where we are right now. Got it. And then, you know, Mark talked about AI-related capex spending, you know, earlier. Maybe just kind of one of the themes that you've been debating is just, you know, how is that spilling over into the broader economy? I was at some of your markets, whether it's Texas, Pennsylvania, Virginia, the mid-Atlantic, should benefit from this data center infrastructure development. Are you seeing any meaningful opportunities emerge and how that impacts you?

Yeah, so a lot of dimensions to that, obviously. In terms of the credit book and the loan book, I would say we're participating in that, but my words, gradually rather than transformationally, and very selective in terms of the credit quality, the high-end credit quality, consistent with our book. There is the ecosystem aspects, like you said, in terms of power, transportation, construction. That's all part of our borrowing base. So we're participating in that, but not to an extent that that's driving our overall growth.

Maybe shifting gears to deposits, kind of receive heightened attention of late. Just maybe an update what you're seeing in terms of mix and balances and pricing and credit landscape.

So our deposits are good. Our deposit story for the third quarter is that our deposits on a spot basis are growing faster than our loans. That is coming from the commercial side, which is in part seasonal, because consumer tends to sort of flatten out during the third quarter for us. Our rate paid will go up, as we talked about, consistent with what we talked about on our second quarter call, consistent with first quarter levels, all of which is due to mix. So it's commercial pays higher. So we'll be up that five basis points or so that we talked about, very much in line with everything that we talked about. Yeah, the strength of PNC, obviously, is the granularity of our consumer interest-bearing book, which holds the rate paid down. And I would expect with some rate hikes that we'll see some more action on the CD front. We're starting to see some of that in longer terms, and that portends in our future, but that's a good thing.

I guess at the Fed hikes on Wednesday, how do you think about deposit betas over this?

Well, I think the deposit base will be about what they've been historically, about 50%. Typically, they lag, as you know, so we can move a little bit in front of that. But I think it will be very consistent. The big thing for us will be with the higher rates will be over and above the deposit dynamics will be the repricing of our fixed-rate asset securities. So outside of the deposits, we still have a lot of that to do. And obviously, in a higher-rate environment, that will be conducive. Correct, right. Right. Yeah.

I guess maybe thinking about net interest income, I know the second quarter audience call you and Bill are both pretty direct that you don't manage the NIM. Yeah. But can you maybe discuss, you know, why your strategy historically emphasized generating, you know, net interest income rather than maximizing NIM?

Yeah, sure. So, I mean, so NIM is important. We're sticking to that we'll go about 3% by the end of the year, so you can relax in terms of that. The conversation really was, though, just about our fundamental business approach. So as I had mentioned in terms of our loan growth, it has been disproportionately at the high credit quality lower spread side, which has a tendency to compress your NIM. But that's just looking at the transaction in isolation. The vast majority of the time when we book those loans, we also book capital market fees or treasury management or something along those lines, that when you look at it together in terms of that transaction, it's accretive to revenues, it's accretive to NII, It's accreted to EPS, it's accreted to ROA, et cetera, but compresses NIM a little bit. So it's too narrow of a view for what we do. That's what we do. If you take a look, I think, Jason, if you go back, other than right after the crisis, there's no time in our history where the credit alone provides sufficient enough return for the capital applied. You need those alternative revenue sources. That's PNC's business model. So we'll do our business model all day long. if that's a couple of basis points of NIM compression, so be it.

But you're still going to exit the year with a NIM 3% plus. You talked about a better fixed-rate asset repricing opportunity given the back-up of rates. You're already going to do 15% NII growth, over 15% NII growth this year for bank benefiting. I guess as you start to think about kind of the 2027 outlook for NAI and NIM, as you're putting together your budget, just how are you circling all that up?

Yeah, so, you know, not to get into guidance. We'll get into that in terms of 27 and 28. But, you know, we're constructive. You know, in a higher rate environment, all else being equal, and assuming that the economy holds in there with a steeper yield curve, we're going to do better.

Maybe shifting gears to the fee income side of the balance sheet.

You know, just maybe where do you – The income side of the balance sheet? The fee income side. Oh, okay, fee income.

Okay, yeah, okay, gotcha. The income side of the income statement. this is my sixth in a row. But, you know, as you think about the next few years, you know, just where do you see the greatest incremental fee-income opportunities developing? Sure.

So it's all about going, deepening our relationships with our existing customers and expanding into our expansion markets. And in that take on the corporate side, it's about capital markets activities, debt and derivatives associated almost always with some kind of lending situation. Second, our M&A advisory business with Harris Williams and treasury management. And put all that together, that's 40% of a corporate bank. And it's up dramatically on last year, and we're seeing clients wanting to do more and more with us going forward. So that's a huge driver for us. On the consumer side, it is about cards, debit cards, expander, credit card business. All these are fee generating together. It feels pretty good, and it's all about an integrated relationship with the customer as opposed to just looking at the lending relationship.

I'd say if you take a look at the way that we report it, our fee businesses are having a good year, and we expect that to continue. You know, asset management, obviously, because of the equity markets is benefiting, although we don't rely completely on the equity markets, but that's helpful. This is just the order that we report them. Capital markets is having a record year. You know, we're aware of that. We're a little bit different, and Mark mentioned this, is a big percentage of our capital markets business is M&A advisory through Harris-Williams, which is having yet again another record year. The card in cash management, you know, it's a steady eddy, and we see growth there. The only fee category that's, you know, flat, and that's within our expectations, is mortgages, where there's not a whole lot of that. But we're not big in mortgages and particularly reliant on that. So fee businesses are healthy, and I think, you know, you didn't ask this, but they're big businesses in and of themselves where we're making investments and in these growth markets, the application, particularly in First Bank most recently, and the receptivity of the client base to those fees is really strong.

I guess we've heard about investments in CARD, needed investments, international payments, investing in these new markets. We've got to spend on technology, we've got to spend on AI. Just how should we think about balancing between kind of maintaining positive operating leverage and investing in the franchise for the next several years?

Well, positive operating leverage is the table stakes for us. You know, I think if not the longest record in delivering positive operating leverage year to year, we're pretty close to the best. So that remains an objective. And we've got a continuous improvement program in place that you know that has been successful in terms of being able to offset what we invest in. And we're investing at a pretty good clip. There's no question about that. So I think we'll be able to maintain that. This isn't 27 guidance or 28 guidance, but positive operating leverage is really important, and, you know, we'll sustain it.

And maybe just talk about your kind of approach to AI, just how do you plan to leverage it over time? You know, where do you expect it to ultimately drive efficiencies across the company?

Well, let you start, Mark, and then I can add in.

So, a few key levers that we see as being big opportunities for us and potentially for banks generally. One is continual automation. About 15 years ago, we had the same number of employees we have today. We doubled the bank. Productivity growth has been automation. And we know there's a lot more to be unlocked with AI. We've got a big five program, which is the areas that we're targeting for improvements, including retail operations, commercial loan servicing, fraud, et cetera. And what we're seeing is the deeper and deeper we go, we find more and more applicable capabilities across the bank. I think that's a pretty generic story across all banks of some scale that are thinking about where they can automate and where there's opportunity for them to actually get more efficient and actually fund a number of the things you described. The area where I think we are turning, a couple of areas we're turning, on the positive side, and then I'll give a little bit of what we're concerned about, is around technology spend and software development, where in the last year, we implemented agent assistance to developers, and we're able to put out our mobile app and our total rewards, which is basically treating our retail customers as an integrated client as opposed to individual products. Pulling all that together, we're able to do that about 40% more efficient than we've been able to do software development in the past. What we're seeing now as we think about using agents as the center of how we develop software, as opposed to just assisting, is 5 to 10x productivity improvements. So things that would have taken 10 weeks get done in a week or less. That changes the scale dynamics we think in the industry. It's going to over time benefit, we think, banks that actually have the ability to build that software in-house, that can actually alter their relationship with vendors, for example, early days, and that's a big frontier for us, and so that's a big priority. We are taking control of our destiny also in how we spend money on compute, both by owning our own data centers and actually owning our own GPUs and actually bringing in our own actually proprietary LLMs, actually SLMs, small language models, because it turns out you don't need the whole kit and caboodle for most of the problems we have to solve. Put all that together, that's a lot of opportunity. Where's the worry? The worry is risk management, cyber, obviously. But I'd also say, as we've seen very notably in public discourse in the last few days, Making sure our agents are doing what they're supposed to do and not doing something else is a top priority for us. So we've got to walk cautiously because that's going to be a challenge, I think, for every large organization using AI, is the agents going to be a little bit too aggressive in what they're trying to get done. So we're trying to make sure we keep that under control. But broadly, it's a big opportunity. Over time, that creates margin. Does it get competed away? Reasonable question. But that is a huge priority for us, for the bank.

I think, you know, what I've added to that is just from a P&C perspective. So last year, and we talked about it last year, you know, out of the box, we just said, hey, there's a big cost-save opportunity, but let's focus on the biggest impact areas. And as Mark mentioned, that was the big five that we talked around, which was coding, operations, AML, et cetera. I think the update this year and what we've been working on that I think you'll find interesting, and Bill talked a little bit about this on the second quarter earnings call, was this decision to do more in-house and driving it ourselves as opposed to relying on vendors is where we're going. So as Mark said, you know, we're doing our own compute. We're using the frontier models with the hyperscalers, but we've got open-wave models in our data centers with no data sharing than that Chinese model. And what we're doing developing, you know, When you talk about agentic development of harnessing capabilities, we're doing that in-house, too, and not relying on vendors. And there's two reasons for that. One is it appeals to our general high-control nature of our own data. But Mark alluded to it. There's a big difference in terms of the efficiencies in terms of being able to focus on the task, which might not require the highest-cost approach, which often vendors either deliberately or non-deliberately or can't do. And that's a big thing for us in terms of just our approach and our thinking.

Interesting. Maybe shift gears, credit environment, somewhat unique, strong loan growth, credit quality very benign. Just any industries where you're intentionally being more selective or underwriting standards remain particularly important?

I'd say generally, and you've heard it over and over again, credit is really good, both commercial and consumer. On the commercial side, no big pockets, nothing that is thematic or bubbles building. Obviously, there's some pressure with health care, with changes in the Affordable Care Act. We were talking about we have some distilleries around a secular change and people drinking less. Maybe some on the margin transportation-oriented, obviously, in terms of the price of fuel. But nothing that you point at and say, hey, something's really going on here, which is good. And we were talking earlier about the economy improving. In the quarter, our criticized assets have come down, our nonperformance. All the leading indicators are improving. So things are good.

So just to add in addition, there's one sector, and Rob, you touched on this earlier, where we've been very selective relative to the broader credit activity. not so much in banking, but broadly in the financial system, which is around AI infrastructure and data centers, where we've been very selective around extremely well-structured credits that have the protection of a hyperscaler behind them and a high-credit-quality hyperscaler and a contract that we see as bulletproof. And what that's meant is we've been selective, we've invested in a number of projects, but we are doing so very carefully because one worry we have is a lot of contracts may end up not actually being so bulletproof and we don't want to be involved in that kind of lending. We'll leave that to others. So we've been very selective there. Broadly, however, in most of our sectors, almost all, credit keeps improving from a pretty healthy pace even at the beginning of the year.

Sounds good.

I guess shifting to capital, you know, the regulatory environment, more constructive than it's been in several years. Just how are you thinking about kind of long-term capital retargets, you know, if regulatory reform ultimately reduces required capital across the industry? You know, is it realistic to expect a reduction?

Yeah, well, I'd say, you know, a couple things there. One is, you know, where we are right now, you know, roughly 10% in our CET1 ratios. It feels like the right place to be right now. So the Basel rules, when they get completed and if they get completed along the lines of what everybody thinks, we're likely to add a point of capital. You know, at some point we'll have to select whether it's the expanded risk-based approach or the standardized approach. Right now the expanded approach looks a little better, which makes sense because of the discount on the private middle market credits that is sort of our wheelhouse. So that sort of fits logically. So that will add a point. We'd obviously work that down. Ideally, the way that we do that is through loan growth. But beyond that, capital return, which has been part of our story for a while, will continue. Ultimately, to ask your question in terms of, hey, where does it ultimately, can you come down from those levels? We'll see. The stress test certainly suggests that we can as an industry. And if that's the case, because we stress better than most, if not the best stance, reason, whatever it will be, we'll be the lowest, right?

I guess you've talked about exiting this year with an 18% ROTCE based on your guidance update. Sounds good. But as you kind of book beyond BRN, do you see opportunities for further improvement or is kind of maintaining that level a more appropriate way to think about the business over time?

Yeah, well, when I came up at the end of last year, we said, hey, we would expect to exit 26 at 18% ROTCE, even though we don't provide targets. But we needed to work through our first bank. We don't provide NIMM either, but I always provide that, too, because they're outcomes. And in all seriousness, what we really wanted to point to was, based on our business composition, we have a higher return businesses. And that's why whatever the industry is and wherever the industry is, we're at the high end of that range in terms of those ROTCEs. So we said, okay, throw out 18%. We think we're comfortable with 18%. I'll point out we reached 17.9% in the second quarter. So I'd argue that we're in that neighborhood. And all else being equal, you know, it's going to ebb and flow depending on where you are, but we would see that increasing. but the point is the key point is we have on average better than average high return businesses got it and maybe just update us on the branch expansion efforts in the past we've talked about 7% branch share in those markets why is that the right number yeah I can start marketing fill in a little bit so yeah we have an aggressive plan in terms of building out our branches we've committed to building another 300 on top of the 2300 that we have and all the places that you would expect in these high-growth markets that we've entered in the last handful of years, either organically or through acquisition. The key is, though, we're furthering our investments in those markets as opposed to entering those markets. And that's a big distinction because going in cold is a lot different than going in on a base of success. In a lot of those markets, we've established a 3% market share, branch market share. We think if we can get to 7%, and we know this through the markets where we have seven, you get an exponential lift in terms of that critical mass in terms of business. So that's the next step of a multi-year plan that we've had in place as we've gone into those markets, now investing into the success of those markets to reach exponential gains. And it's happening.

Just to add, branch builds is one of the legs of our broader national expansion. The other legs are marketing. So if you've been seeing our ads, which we think are pretty funny, hopefully you think so too, and actually having a really good digital offering, which we didn't have before. All those three pieces are working together. And what we're discovering is, one, last year we did about 25 branches. This year we're doing about 55.

We're learning we can do it.

We've picked the right sites, that the revenue we're picking up in those branches is tracking above or at the targets we had. So we kind of know what we're doing. And we see that leading through the end of the decade. So we'll get to about our big challenge is we're in lots of states, but we're not thick enough in those states. And so just to give you an example, when we reach above that 7%, really an S curve, you start to see increasing returns to deepening your branch presence. and below it, you have to kind of get up there to get up to maybe 20% increase in productivity simply by hitting that 7%. That's the upside we get. It also leads when we have branches, and this is a little counterintuitive. Our marketing to purely digital customers is six times more effective if there's a branch nearby, even if the customer never walks in the branch because Americans like to see the branch. You put that together with the marketing and a good digital experience, and we see growth in the southeast, in the southwest, and obviously in our east owner or home markets as well.

And then I guess on First Bank, you maybe touched on it, but you converted in June. Maybe just give us an update, you know, how things are going so far, any notable kind of early wins, and just what's been the reception of the PNC products and services to that customer base in Colorado?

Yeah, I'd say, so we announced it here last year. We closed in January and we converted in June. And I would say every financial measure that we expected last September, we've either hit or exceeded, which feels good. The cultures of the two companies, which we suspected were very compatible when we met, proved to be very true. And Mark was pointing this out earlier when we were talking about it. Many of the first bank executives and folks are now part of BNC's executive team, taking on greater responsibilities across the organization. And so that's really good. The surprise to the upside has been we knew that First Bank had a high profile in Denver and the surrounding communities. And the whole idea was to our products and services that First Bank didn't provide, we'd be able to leverage the high profile nature. That's happened much faster than what we would have thought. So a lot more looks in our commercial book and prospects, a lot more looks in our asset management products and services, which is actually the fastest-growing market right now in our footprint for asset management. Those types of things we expected to happen, but not as quickly as they have.

I mean, it's really the private bank. First Bank had all these relationships, but didn't have wealth management, private banking capabilities. And so what we found is by literally, I mean, much faster than, for example, we found with BBVA and RBC is that actually introducing them to PNC capabilities has led to Colorado now being our fastest-growing market, which was not what we expected. We did not expect to see such fast growth. But that reflects really on the quality of the team that we brought into PNC, and we aim to retain 100% of the client-facing staff. That's what you get when you make that kind of commitment.

So there's, you know, I would say PNC's obviously consistently highlighted significant organic growth runway. But as you look at over the next several years, is that organic opportunity sufficient enough to achieve your long-term objectives? Or is there a point where M&A becomes an attractive way to accelerate growth? What would transactions need to look like to clear that hurdle? And Mark, I saw you quoted in an Ohio paper a couple weeks ago talking about national banking. Quoted out of context. Keep going. But just let me just talk to just M&A and M&A in general.

Yeah, I'd say, you know, our response to that is very consistent with what we've been saying. So no big updates there. We do have a very aggressive organic growth strategy in place that we feel will be very successful in a reasonable amount of time. And that's what we do every day when we go into the office every day. That's what we do. So I do think it's sufficient. On the acquisition front, you know, when a bank deal comes up, you know, would we look at it? Of course we would look at it, and so would everybody else, even if they tell you that they wouldn't. You know, the key is that we would be very disciplined about that. You know, part of the issue is – so all I can say is take a look at our track record in terms of our discipline. Part of the issue in proving the risk is seeing the deals we do, but you don't get to see the deals that we don't do. And if you did, I think you'd be very assured that we have the shareholders' interests in mind, that if we do anything, it absolutely has to be the best move for the shareholders, or we don't do it, and we're not reliant on it. So if an opportunity presents itself, of course, like I said, we'd establish it. I would say right now in terms of current valuations of these potentially what you would logically sort of determine as an acquisition target or an acquisition candidate, I think the valuations are very high right now, and I think the bar to get over is really high. So I think it's unlikely.

I'll just add on organic growth. It's kind of an abstract word. It's pretty simple. It's about clients asking us to do more with them. So in the corporate bank, what we're finding is, particularly in the southwest, in the west, in the southeast, which are our expansion markets companies are saying could you do more for us in reality i only have two large national competitors that i deal with can you be that third can you work with us and that's why it's led to today more than half of our geographically tied loans are actually in our expansion markets that's continuing to grow and in the expansion markets we're growing double the speed of our keystone or legacy markets. So it's that client pull forward is the reason we emphasize the organic growth.

I want to be clear on this, Jason, because we get asked this a lot. So the question is, is our organic growth sufficient enough for our purposes? Yes. Are we reliant on acquisitions to meet our objectives? No. Are we capable of buying somebody? Yes. Is that price right now in terms of those dynamics conducive to that? No. And then I'd add to that, which probably would slow us down, is if anything in terms of the acquisitions were to impede our AI priorities, we would pass on the acquisition because we wouldn't want to miss out in terms of everything that AI has potentially to deliver by being distracted by some big acquisition. So I just want to be very clear about that.

That's helpful. So I guess maybe as we kind of begin to wrap up, you know, good environment for banks, PNC in particular. What do you think is still an underappreciated aspect of PNC's earning story today, and why should investors be excited about the next several years?

To me, it's about the compounding effects of our expansion markets. We have done it in the southeast, more to go. We're doing it in the southwest and the west. And it's not really about where our retail footprint is, and obviously that will expand. Our corporate bank is a national bank, and in the retail footprint where we're expanding, all these are places where we have lots and lots of client-driven growth ahead of us. That, I would say, is whether it's underappreciated or appreciated, that's the center of what we're focused on every day. That and the AI transformation, those are the two things we're talking about in every management meeting.

Yeah, and I would add to that, obviously, these growth markets, we're really excited about it, and we're investing in them. And I think the first bank acquisition has only increased our enthusiasm in terms of what we can do. I mean, it's a great banking environment. Banks are doing well. But inside of that at PNC, a lot of energy and a lot of enthusiasm that just continues to compound, that's the right word, that has us really excited.

I guess, Mark, in the final minute, your biggest positive surprise joining PNC and maybe one thing that I'm honestly disappointed, but biggest opportunity.

Biggest positive surprise, the culture of the bank runs deep. I was a little surprised to find that. Most financial institutions, culture is a pretty thin thing that is on the wall. And what surprised me is whether I'm sitting in, like, an office in San Diego or Raleigh, People talk about the same reasons they're at the bank. They care about the bank, which, you know, I met the top management and the board when I interviewed, but I didn't know that would be there. That's really great because I go to sleep thinking no one's going to – people care about the institution. They're going to mess with it in the dark. That's really important. I'd say the biggest opportunity is we are a very client-oriented bank that haven't been 100% consistent in that application and how we've gone to market. So there are products where we've led with the product, not the client relationship. That's in the retail bank. It's about simply bringing the entire customer relationship together. That's an obvious opportunity with the launch of our total rewards, which has gotten take-up from customers much faster than we expected because customers want more from us, but we've got to treat them as a customer. Same thing would be true with sponsors or with TM clients who want us to actually, for example, do your own sterling. As long as we meet those needs, which are right in front of us, I actually think that organic growth path we talked about is ours to lose.

On that note, please join me in thanking Mark and Rob for the time today.