PNC Financial Services Group Inc (PNC) 2004 Q1 法說會逐字稿

Good morning.

My name is Mandy and I will be your conference facilitator today.

At this time, I would like to welcome everyone to the PNC Financial Services Group first quarter 2004 earnings conference call.

All lines have been placed on mute to prevent any background noise.

After the speaker's remarks, there will be a question and answer period.

If you would like to ask a question during this time, simply press star, then the number 1 on your telephone key pad.

If you would like to withdraw your question, press star, then the number 2 on your telephone key pad.

As a reminder, this call is being recorded.

I will now turn the call over to the Director of Investor Relations, Mr. Bill Callahan.

Sir, please go ahead.

Thank you, operator, and good morning, everyone.

Thank you for joining our call this morning.

Participating in this call will be PNC's Chairman and Chief Executive Officer Jim Rohr, and Bill Demchak, the Company's Vice Chairman and Chief Financial Officer.

As a reminder, the following comments contain forward-looking information.

Results or future events could differ materially, possibly materially, due to a variety of factors, including those described in this call, in today's earnings release and supplementary financial information, and in our 2003 Form 10-K and other SEC reports.

These statements speak only as of April 21, 2004, and PNC undertakes no obligation to update them.

The following comments also include discussion of non-GAAP financial measures, which to the extent not so qualified in the comments, is qualified by the GAAP reconciliation information included in our earnings release, financial supplement 2003 Form 10-K and other documents available on our website at pnc.com in the "For Investor" section.

At this point, I would like to now turn the call over to Jim Rohr, our Chairman and Chief Executive Officer.

Thank you, Bill, and welcome to everyone joining us this morning.

I'm pleased with the results that we're reporting today.

Overall, they indicate that our strategy is working and our businesses are growing.

Before Bill Demchak takes you through the details, I'd like to give you some highlights.

I'd like to focus on our acquisition and integration of United National, and then I'd like to take briefly about our position for a higher interest rate environment.

It was a good quarter for PNC.

We earned $328 million, or $1.15 a share, which is a 25% increase over the first quarter of last year and a 17% increase over the sequential quarter.

We posted a return on equity of 19% and asset quality improved further from the very strong levels we reported last quarter.

Year over year, earnings were up in our banking businesses, Black Rock and PFPC.

As we look forward, the economic prospects are positive for the banking industry.

The national economic picture is clearly better.

All the major indicators are improving and the same is true for PNC's primary banking footprint.

Last week, we presented our semi annual survey of small-and-medium-size business owners ,and their outlook for their own businesses was sharply more positive than a year ago.

Most of them expect to hire, and they expect stronger sales and profits.

More employees and more products would require investment, which leads to more demand for loans, and economic expansion leads to higher interest rates.

All of those trends are positive for PNC.

The complex-- the complexity (phonetic) in our first quarter results has me very encouraged in that we were are in a good position to benefit from these improving economic conditions.

Customer growth is up in every business.

We're retaining customers very well and we're bringing more products to each of our customers.

In each of our businesses, we're ahead of budget for the quarter.

Our non-interest income in total was up 15% year over year, and even when adjusted for a $34 million gain for the sale of our modified coinsurance contracts, net interest income was up 10% year over year.

I can tell you that I continue to be optimistic for further growth.

As most of you know, our strategy is to grow the businesses while maintaining a moderate risk profile.

We're executing that strategy and I'm pleased to tell you that it's working.

Non-interest income, which accounts for 65% of our revenue, is up substantially.

Our pipelines are up across the board and the company-wide sales were meaningful above planned for the quarter.

Now, those sales are not necessarily reflected in today's results, but it does bode well for the quarters ahead.

Let me give you some highlights from each our businesses.

In wholesale banking, which we are now reporting as a consolidated business, because that's the way it's managed, we're seeing a slight uptick in loan demand after three very soft years.

Additionally, we're winning big new customers in Prairie View Management (phonetic), including Toyota Financial Services during the first quarter because we provide the best top notch technology and tailor-made products.

In fact, we won two important awards during the quarter; the Phoenix Hecht Award for the highest quality treasury management service in the United States, and an award from the Veterans Administration.

PFPC, our processing business, is showing client growth.

That business is winning important clients, expanding to new markets and building assets, even as it's cost base remains relatively stable.

Sales were strong at PFPC.

In fact, through the first quarter, sales were already higher than the entire first half of 2003.

While net earnings for the quarter were impacted by the increase in seasonal compensation expenses, PFPC's accounting and custody assets were up 19& and 18%, respectively.

Moving on to PNC Advisors, this business is improving.

Our relatively new open architecture product is winning new customers, and our function in (inaudible) is improving and we're seeing stronger sales, which does not have an immediate impact on revenue, but it will in subsequent quarters.

Our acquisition of United National, which closed on the first day of the year, provides fertile new turf for Advisors and gives us greater access to appealing demographics of New Jersey.

Our Black Rock was another exceptional quarter.

Assets under management rose to $321 billion and Black Rock earned $55 million for the quarter.

That total, I might note, was helped by a $9 million gain that resulted from consolidating Black Rock's tax returns with PFPC's for the certain years since 1998.

We're taking advantage of more synergy from Black Rock too.

We're using Black Rock's listing analytics to manage our balance sheet and we're seeing more color ross pollinization of talent, such as Hugh Frater's coming over to PNC to lead our Commercial Real Estate business.

The Regional Community Bank also produced a solid quarter.

Our customer retention is at 95%, which is the highest in my memory, and we've gained a lot of traction in alternative delivery vehicles, like University Banking and Instore Banking, and it has great success for the most recent Chairman's Challenge.

The Chairman's Challenge gives non-sales employees incentives for bringing in new business, and the challenge brought in $500 million in new deposits.

With the addition of United National, we have substantially increased our presence in New Jersey, which is the fastest growing area within the RCB footprint.

You'll recall that we finalized our acquisition on January 1 and they brought us $2.2 billion in deposits and $1.9 billion in loans.

I'm pleased to report the integration of United, which has been driven by PNC's President, Joe Guyaux, has been as seamless as any integration I've seen.

Our combined integration team has done a fantastic job and this acquisition has created almost no senior management destruction.

The conversion of United to our systems occurred about a month ago and it went very well.

The success of the conversion is a good example of our utilization of our best-in-class technology platform.

That's what we're most excited about, is the synergies we're discovering.

Let me give you a couple of quick examples.

An ATM at the former United Ranch in Morris Township dispensed an average of $20,000 a day before the acquisition.

Now that average is up to $50,000, because existing PNC customers and new customers are finding the branch more convenient.

In business banking, we closed a $3 million term loan for a motorcycle retailer, a United customer after PNC delivered access to capital markets products that United could not provide to the business owner.

Our Capital Markets Group set up a derivative arrangement to back up the loan, giving the retailer increased protection.

So, we're seeing signs that the strategy is clearly working and that we are growing our businesses and we're doing this while maintaining a very disciplined approach to risk capital and expenses.

Now I'd like to turn briefly to a topic that's been on a lot of people's minds recently, the potential for rising interest rates.

We show the beginnings of a rate rise with last month's employment numbers and we anticipate further increases as the year progresses.

In fact, Stuart Hoffman, our chief economist, expects the Fed to raise rates in August and again after the election.

So, how is PNC positioned to deal with rising rates?

I can tell you that we're looking forward to it.

First, I should note that interest rates are less of an issue for us than a lot of our competitors since we generate two-thirds of our revenues from non-interest sources.

But it's still important.

That said, rising rates will be good for most of our activities.

We have managed our interest rate risk to a neutral position which has cost us revenues we could have gained from cash-and-carry trade.

We simply did not want to take the incremental interest rate risk associated with those transactions.

We believe our investment book is short compared to other banks.

The average life of our book is under three years, which gives us a great deal of flexibility to take advantage of the rising rate environment.

Higher rates would also have a positive impact on our other businesses.

The deposit franchise would be more valuable because our focus has been on non-interest bearing accounts, which gives us an incremental advantage when rates rise.

Our loan demand has been soft for three years.

Rising rates indicate economic expansion, which should move a higher loan demand, and I might just add that we're seeing a slight uptick (phonetic) in commercial demand right now.

And one example is that if loan demand increases our credit utilization by 1%, we would generate an additional $10 million of net interest income.

Finally, we have assembled a world-class team to manage our balance sheet.

We've brought on board some of the best talent in the business, like Bill Parsley, our new Treasurer and Chief Investment Officer, who brings to us a very sophisticated approach to asset and liability management, and he is also working very closely, as I said, with Black Rock.

While the perceptions seems to be that banks are not well positioned for rising rates, I think just the opposite is true for PNC.

Higher rates should benefit just about all of our business activities.

So to sum up, this was a very good quarter for PNC.

We're building momentum towards the business growth that we've set out to achieve.

We've folded in United National with great success and we continue to strengthen the team we need to succeed in the banking environment of today and tomorrow.

We're feeling good about the rest of the year and we're completely committed to growing our businesses.

Now I'd like to turn it over to Bill Demchak.

Bill?

Thanks, Jim.

We did have a good quarter, and as Jim said, the strategy's working.

We're growing our businesses and we're staying true to our disciplined approach to balance sheet management.

Today I want to briefly review the first quarter's financial highlights, and then I'm going to focus on the factors driving our performance in each business and spend a little bit of time on the interest income lines.

I'll also give you a view of what we expect for the rest of the year.

But for the quarter, as you have seen, we reported net income of $328 million, or $1.15 per diluted share.

Now there are several special items in these numbers, and most of them are gains.

Our normalized earnings, which account for certain special items as well as for business results that we just view as unusual, were $283 million or 99 cents a share.

These items are enumerated in the normalization table in the press release, but I should note that the largest of them was a $34 million gain, related to the sale of our modified coinsurance contracts.

And, as we discussed in the 10-K, we are evaluating strategic alternatives relating to reinsuring our annuity contracts that we sell to retail clients.

During the first quarter we chose to discontinue this reinsurance of new annuity contracts, and we sold our existing book of business because we determined it was not part of our core business mix and because it introduced a degree of volatility that was inconsistent with our strategic objectives.

I should note - and this is important - that we're still in the annuity brokerage business.

It's a great product for our retail client base and we're good at it.

We've simply exited the reinsurance element of this business.

So, that's the noise.

The substance is that the business segment earnings were up over the first quarter of last year and all of our businesses were ahead of their budgets for the year.

Their performance allowed us to post return on common equity of almost 19 % versus 15 3/4% of last year.

And a return of assets of 1.81%, which is 20 basis points higher than last year's first quarter.

Of course, these figures are lower if you consider our normalized results, but they are encouraging, nevertheless, and they are consistent with what was a seasonally strong fourth quarter.

Briefly, here are a few of the other key metrics by which we measure our business.

Total revenue was $1.4 billion, up $107 million or almost 8% over last year.

Non-interest was up $911 million, which is up $116 million over the first quarter of last year and represented 65% of our total revenues.

Total business segment earnings were $226 million, or up $56 million over the first quarter of last year.

Consolidated expenses were relatively flat when adjusted for the United National acquisition.

Finally, net interest margin was 3.3%, down 8 basis points versus the fourth quarter of last year, but we think that the margin is stabilized, finally.

Now I'd like to turn to the factors driving our performance.

First, the business earnings are growing because our businesses grew their customer bases.

It's pretty simple.

Customer retention has improved and deposits grew.

We're seeing positive trends in our core businesses, with increased sales in pipelines across the board.

I'll turn briefly to the balance sheet.

Total assets increased to $74 billion, up almost $6 billion over the sequential quarter.

Now, the bulk of the increase came from growth in the loan book, with net loans up 10% over last quarter to $36.9 billion, most of which was attributable to the addition of United National.

If I turn to net interest income, which, as you know, has been essentially flat for several quarters, we produced net interest income of $497 million.

It was a 1% increase over last quarter, but 4% lower than the year-earlier period.

We've been telling you for sometime that we have taken a fairly conservative stance in this market for managing our balance sheet, and we're not deviating from that stance as yet.

Rates are still low and loan demand, while improving is still soft.

If we remove the impact of the United National acquistion, our loan book is down $500 million since a year ago and our utilization rates are in the mid -30s, which is very low by historical standards.

So, we've positioned the balance sheet for moderate risk and to generate strong incremental earnings as rates increase and loan demand picks up.

In the meantime, the good news is that our asset qualities continue to improve, and it's excellent.

You'll see in the release that our provision for credit losses was reduced to $12 million this quarter.

We reported $62 million in net charge-offs for the quarter, but I should note that 24 of that total is due to a change in the way we charge off small, non-performing commercial loans.

Excluding that impact, net chargeoffs as a percentage of loans was 35 basis points.

And, as we've said in the past, through the cycle, we expect chargeoffs to be in the 40-50-basis-point charge.

Clearly, we did better this quarter as a result of initiatives to improve asset quality.

During the quarter, non-performing loans as a percentage of total loans fell to less than half of one percent, and non-performing asset as a percent of the total assets start at 0.31%, both exceptionally low levels.

The bottom line is that our balance sheet continues to be very strong and asset qualities continue to improve.

Obviously, we won't continue to see improvements in non-performing assets of the magnitude we saw during the first quarter, but the trend is still positive.

We move to the business segments.

First, I should remind you that the segment reporting in today's results reflects the changes to our methodology that we announced on April 5th.

If you missed that call, you can listen to a replay and still view the slides on pnc.com.

Let me start with the Regional Community Bank, where revenues increased to $501 million, which is up $55 million over the first quarter of last year.

Earnings decreased to $102 million, a decline of $4 million over the year-earlier period.

Again, due primarily to the change in the way we account for small non-performing commercial loan chargeoffs.

In fact, if we normalize the RCB's results for the overall change in provision and the one-time cost from the United National acquisition, earnings are up 16% year over year.

Total deposits grew 6% to 36.6 billion over last quarter.

While most of this is from the United National acquisition, if you dig a level deeper into the deposit book, we're seeing some solid trends.

Business deposits were down 4% quarter-over-quarter, while year over year business deposits were up 12%.

The recent dip in business deposits could indicate that we will start seeing stronger improvements in loan demand, as businesses tend to drive down their available liquidity to fund expansion before they seek new financing.

Another potential leading indicator that we see is that in our suite balances, which are primarily at Black Rock for the large corporates, they are up 6% compared with the fourth quarter of last year.

And this might also indicate businesses starting to use their liquidity.

On the other hand, consumer deposits in the RCB are showing a good growth trend.

They are up 4% over linked quarter and 18% year over year, so we're feeling good about the trend in deposits overall.

Also in the RCB, checking relationships grew 8% year over year and customer retention has reached 95%.

We attribute the successes to several factors, one of which is our very high online banking penetration rate.

Today, nearly half of our retail banking customers use PNC Account Link, and that number is growing quickly.

We're also seeing growth in our University Banking and Instore Banking products.

United National's results were in line with our expectations, and, as Jim said, we're thrilled with that integration and the business opportunities that United brings us.

New Jersey is the fastest growing area within the RCB footprint and its financial services market is very fragmented.

We think we have strong opportunities for growth there.

In the wholesale banking segment, we reported revenues of $317 million, which was a decrease of 2% over a year ago.

And net income of $122 million, which is up 30% over last year.

Every client segment within wholesale was ahead of planned for the quarter, despite the impact of low demand for business loans, and our stronger results in the segment were driven primarily by improved asset quality.

The substantial increase in income, even as revenues were relatively flat, highlights the quality of our assets, which is the result of the work we've done to improve the credit risk in our book.

The improvement in asset quality resulted in a lower level of provision for credit losses in this business, which has delivered substantial value to the bottom line.

In Advisors, revenues grew $26 million over last year to $170 million for the quarter.

This increase reflects market appreciation and solid improvements in sales, highlighted by our Wealth Management and Institutional Investor groups.

Also the Hawthorne transaction, if you remember, we sold a portion of its business, including$ 6 billion of assets under management to that firm's principals.

That resulted a $10 million gain.

We're seeing good signs for Advisors.

With the shift to open architecture, account management is progressing well.

We've changed employee incentive plans so we've made a significant investment in training and the early results are encouraging.

Black Rock, as you saw yesterday, turned in another outstanding quarter and reported $182 million of revenues and $55 million of earnings, which represented increases over a year ago of 27% and 57%, respectively.

Black Rock's assets under management rose to $321 billion.

Fixed income performed particularly well, posting an increase in assets under management of $34 billion over last year.

I should remind you that Black Rock's results benefited from a $9 million gain related to the resolution of the New York State tax audit.

Also, as we discussed in the 10-K, it is possible that we will begin seeing the impact of Black Rock's long-term incentive plan in the first quarter of next year.

Remember, the full vesting of the plan occurs if Black Rock Trades above $62 for any 90-day period between January 1st of '05 and March 31st of '07.

And I will tell you, we all hope that Black Rock meets the vesting criteria because it would be a great thing for PNC.

This would cause us to take charges totaling approximately $114 million after tax.

It would also mean that the value of our holdings in Black Rock have increased in value by almost-- by approximately $1 billion since the plan was instituted.

If I turn to PFPC briefly, PFPC produced revenues of $203 million, which is up $10 million versus the first quarter of '03.

Earnings at PFPC were $16 million, which were up $3 million versus of the first quarter of last year, and asset growth continues to outpace the growth in expenses.

Results were bolstered by improving customer retention and some important new customer relationships, but they felt pressure from price compression and an increase in operating expenses related to compensation expense.

You'll notice, by the way, that head count was up for PFPC for a period at first (phonetic), and this increase primarily reflects an increase in temporary workers associated with the preparation of client tax returns.

We anticipate that that head count, the head count in this business, will return to something closer to fourth quarter '03 levels as the year progresses.

Now, I'll turn briefly to expenses.

Non-interest expense is up 4% ,versus the trailing quarter and last year to $895 million.

The increase is primarily due to the additional of United National, and some of their expenses, one time.

We continue to exert strong expense control in all of our businesses and we anticipate that total expenses, even including United National, will be relatively flat versus 2003.

So, on balance, it was a very good quarter for PNC, and it was a quarter in which we saw good early momentum from our strategy for business growth.

Recent economic data have been strongly positive, which bodes well for the rest of the year.

We anticipate that interest rates will continue to rise throughout the year and that the economic conditions that create rising rates should also increase loan demand, which if our expectations come to fruition, will provide improvements in net interest income.

But the more important story here is the growth in our lines of business.

We expect it to continue as our business loaders focus on bringing in new customer relationships and retaining and growing existing relationships.

So, we're feeling good about the momentum for this year.

Clearly, this quarter had some unusual items, but even if we go from the normalized earning number, we're seeing growth in our businesses and the economic wind is finally starting to blow at our backs.

And with that, we would be happy to take your questions.

Operator, go ahead.

I'm sorry, sir.

At this time, I would like to remind everyone, if you would like to ask a question, please press star, then the number 1 on your telephone keypad.

We'll pause for just a moment to compile the Q&A roster.

We are pausing to compile the Q&A roster.

Your first question comes from Roger Lister with Morgan Stanley.

Yeah, Roger?

Good morning.

With everybody opening up branches all over the place, what are you seeing in terms of this sort of on-the-ground competition, and is that varying between the regions?

Well, I think-- I think we've seen some branches open up in different markets.

I don't think we've seen a great deal of incremental competition in the region.

It's-- when you add them all up, they are relatively spotty in different markets.

I don't see a great deal of increased competition from new branch openings.

And then, secondly, in terms of the sort of recovery in the business sector, how is it differing between the mid-Atlantic states versus the more sort of Midwestern part of your franchise?

We just did this survey in a presentation we made last week and the-- it's kind of interesting.

The strongest part of our region is now the Philadelphia-New Jersey area.

If you went back 10 years ago, the Philadelphia region was the weakest, and I think it's very important for us, because obviously that's the largest population base that we have in our footprint.

And, you know, 10 years ago, you saw the Cincinnati-Louisville-Lexington region be one of the strongest in the entire nation.

Now you find that the Philadelphia-New Jersey area is really moving along nicely.

Actually, that region is moving along a little more rapidly than the nation as a whole.

So we're pleased about that.

That helps us.

You talked about benefitting from rising rates.

Does it make a difference how fast the rates go up?

That seems to be part of the fear factor out there, is people are concerned that all of a sudden the Fed has to raise rates dramatically.

Does that have a much bigger impact?

Let me ask Bill Demchak to comment.

Yes.

I mean, both the speed that they go up and also the shape of the curve as they go up is important.

Frankly, you know, the faster the better for us at this point.

Our mortgage holdings are very low.

We're very conservative in the short convexity (phonetic) to positions we have on them.

So, if they went up in a hurry, particularly if that came along with a steep yield curve at the same time, we would be pretty excited about that.

Okay.

Thank you.

Next question, operator?

At this time, sir, if anyone would like to ask a question, please press star, then the number 1 on your telephone keypad .

Your next question comes from Dennis Laplante with KBW.

Hi, Dennis.

Good morning.

Question, your guidance related to flat expenses, are you assuming flat expenses off of the non-recurring items in the previous year, or is it from an operating expense number?

Basically, when we did that, we were just kind of talking about total expenses year on year, because as we normalized out all the one-off items and then normalized out all the one-off items we might have this year, they both sort of stayed flat.

So, we're giving guidance based on last year's printed expense line.

Okay.

Have you done recent modeling on your asset liability where, for a given 100 basis point increase in rates, whether it's off the forward curve or a parallel shift, whatever, what the increase in spread income would be?

The answer is we model that and think about it every day.

The-- you know, what we would do or what increase in income would be, would be a function of how quickly it changed the steepness and how we would react to it.

So, you know, put differently, if rates just went up and we did nothing, we just held our existing positions, there wouldn't be much of a change.

But, as we've said, we are very under-levered relative to what we can do with capital and our liquidity.

So, it kind of depends when and how it happens and then how we react.

Part of the problem with the way we show those stimulations and everybody does it, it assumes you get this parallel shift and it assumes you sit there and do nothing as a result of it, which are kind of the two least likely outcomes.

Right.

Are you more asset sensitive today than you were, say, six months ago?

Yes.

Okay.

Great.

Thank you.

Thanks, Dennis.

Next question, please?

Your next question comes from Jennifer Thompson with Oppenheimer.

Good morning, Jennifer.

Hi.

Good morning.

Could you discuss a little bit your outlook for PFPC, particularly in regard to the operating margin?

Well, I think the PFPC is-- there is a number of ways to look at PFPC, and one is the sales have gone very well.

We've been adding new customers, and I think their technology platform has really been validated by a number of new customers that have come on in the first quarter and it looks good for the second quarter.

As you know, those customers, once you win the business, the revenue actually doesn't get added for quite sometime, because it takes a while to convert them over.

The other part is that we're controlling expenses at PFPC.

You saw the head count tick up.

That's a seasonal issue.

We think those will come back in the second quarter.

So we're optimistic about that.

The one item is that we've got a contract that's rolling off at the end of the second quarter, which we've discussed in some detail, and Bill, you may want to comment on the exact dollar amount.

I don't know that we have the exact number put out there yet, so I'm not going to guess it over the phone.

But, basically, we do have a contract which is currently a contra revenue that's booked in there.

There are line items that will cause performance to dip briefly in that business.

I think what's important is that the basic operating business, in terms of business coming in coupled with the expense initiatives that they have gone through, have frankly shown core growth in the underlying business over the last couple of years.

So, absent sort of the noise of the roll-off of the contra revenue, the underlying business is performing very well.

And, in fact, despite pricing pressures, make an argument that the margin is improving, given their efficiency initiatives on costs.

Great.

Thanks very much.

Thanks, Jennifer.

Next question, please.

Your next question comes from Joe Duwan with Fox-Pitt Kelton.

Good morning, Joe.

Yes, good morning, everyone.

Could you comment on the prospect of future reserve releases?

Obviously, credit quality continues to improve, but the $12 million provision in your 99 cent number was fairly low.

Yeah.

You know, first thing, and we have said this a bunch of times, that the provision itself is driven largely by model-based assumptions on sort of an expected loss calculation for the loan portfolio.

So, clearly, non-performers down, things getting upgraded, economy getting better, it's not surprising that we would have a low provision this quarter.

I think that, you know, as we've said before, we would expect kind of through the cycle of 40-50 basis points of loans charge-off number and that provision would roughly equal charges through the cycle.

We're operating below that.

We'll probably continue to be somewhat below that for the next, you know, couple of quarters, anyway.

But I don't know that that means provision release as much as it just means that we'll be operating below our sort of charge-off threshold, because things feel pretty good in the portfolio.

Okay.

Thank you.

Thank you, Joe.

Next question, please?

Your next question comes from Tom Price With MFP Investors.

Good morning, Tom.

Tom?

My question has been answered.

Thanks.

Thank you.

Again, at this time, if you would like to ask a question, please press star 1 on your telephone keypad now .

Well, if there are no further questions, thank you very much for joining us.

We've got another question?

Thank you.

We can't cut off Rodrigo.

Go ahead.

Is there a question, Operator?

Sir, the question has been withdrawn.

Okay.

All right.

Thank you very much for joining our call today, and, as always, I'll be around to take any questions subsequent if you need to know any other details.

Thank you.

Thank you for participating in today's PNC Financial Services Group earnings conference call.

You may now disconnect.