PNC Financial Services Group Inc (PNC) 2024 Q1 法說會逐字稿

Greetings and welcome to the PNC Financial Services Group Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Bryan Gill. Thank you, Bryan. You may begin.

您好，歡迎參加 PNC 金融服務集團收益電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。現在我很高興向大家介紹你們的主持人布萊恩吉爾。謝謝你，布萊恩。你可以開始了。

Well, good morning and welcome to today's conference call for the PNC Financial Services Group. I am Bryan Gill, the Director of Investor Relations for PNC and participating on this call are PNC's Chairman and CEO, Bill Demchak; and Rob Reilly, Executive Vice President and CFO.

早安，歡迎參加今天的 PNC 金融服務集團電話會議。我是 PNC 投資者關係總監 Bryan Gill，參加本次電話會議的有 PNC 董事長兼執行長 Bill Demchak；以及執行副總裁兼財務長 Rob Reilly。

Today's presentation contains forward-looking information. Cautionary statements about this information as well as reconciliations of non-GAAP measures are included in today's earnings release materials as well as our SEC filings and other investor materials. These are all available on our corporate website, pnc.com, under Investor Relations. These statements speak only as of April 16, 2024 and PNC undertakes no obligation to update them.

今天的演示包含前瞻性資訊。有關此資訊的警告性聲明以及非公認會計原則措施的調節包含在今天的收益發布資料以及我們向 SEC 提交的文件和其他投資者資料中。這些都可以在我們公司網站 pnc.com 的「投資者關係」下找到。這些聲明僅截至 2024 年 4 月 16 日，PNC 不承擔更新義務。

Now I'd like to turn the call over to Bill.

現在我想把電話轉給比爾。

Thank you, Bryan and good morning, everyone. In the first quarter, we executed well and delivered solid financial results. We generated $1.3 billion in net income and adjusting for the FDIC special assessment, $3.36 per share. Rob will provide details on our results in a moment but I'll start with a few thoughts.

謝謝布萊恩，大家早安。第一季度，我們執行良好，並取得了穩健的財務表現。我們產生了 13 億美元的淨利潤，並根據 FDIC 特別評估調整為每股 3.36 美元。羅布稍後將提供有關我們結果的詳細信息，但我將首先談論一些想法。

First, we continue to grow our business. In the first quarter, we added new customers across our segments and increased deposits on a spot basis. We're continuing to invest heavily in our franchise to drive growth and gain share, particularly in our retail banking technology platform, our payments businesses and our expansion markets. To that end, in the first quarter, we announced a multiyear investment of nearly $1 billion in our branch network to renovate more than 1,200 locations and open new branches in key locations, including Austin, Dallas, Denver, Houston, Miami and San Antonio.

首先，我們繼續發展我們的業務。第一季度，我們在各部門增加了新客戶，並增加了現貨存款。我們將繼續大力投資我們的特許經營業務，以推動成長並獲得份額，特別是在我們的零售銀行技術平台、支付業務和擴張市場方面。為此，我們在第一季宣布對分支機構網絡進行近10 億美元的多年投資，以翻新1,200 多個分支機構，並在關鍵地點開設新分支機構，包括奧斯汀、達拉斯、丹佛、休斯頓、邁阿密和聖安東尼奧。

Second, expenses were well managed during the quarter. As we've indicated, expense discipline remains a top priority and we are on track to maintain stable core expenses in 2024. Third, credit quality remained stable during the quarter. The office portfolio remains an area of focus but we are adequately reserved overall and particularly with respect to CRE. We believe our thoughtful approach to managing risk, customer selection and long-term relationship development will continue to serve us well. And fourth, we continue to build on our strong liquidity and capital position during the quarter, providing us with the financial strength and flexibility to help us support our clients, grow our businesses and capitalize on future opportunities.

其次，本季的費用管理良好。正如我們所指出的，費用紀律仍然是重中之重，我們預計在 2024 年保持穩定的核心費用。辦公室組合仍然是一個重點領域，但我們總體上有足夠的保留，特別是在商業房地產方面。我們相信，我們在管理風險、客戶選擇和長期關係發展方面的深思熟慮的方法將繼續為我們提供良好的服務。第四，我們在本季繼續鞏固強大的流動性和資本狀況，為我們提供財務實力和靈活性，幫助我們支持客戶、發展業務並利用未來的機會。

In summary, we delivered solid results during the first quarter and positioned ourselves well for the balance of 2024 and beyond. Last month, we launched a brand campaign celebrating our boring approach to banking. Now obviously, we're using humor in the campaign to have a little fun and grab the public's attention. But inside of that humor, is honesty about who we are, how we think about risk and how we run our company. In short, it is everything we do to be steady and predictable. Finally, I just want to thank our employees for everything they do for our customers, for each other and for all of our stakeholders.

總而言之，我們在第一季取得了穩健的業績，並為 2024 年及以後的剩餘時間做好了準備。上個月，我們發起了一場品牌活動，慶祝我們無聊的銀行業務方式。顯然，我們在競選活動中使用幽默來獲得一點樂趣並吸引公眾的注意。但在這種幽默的背後，是對我們是誰、我們如何看待風險以及我們如何經營公司的誠實。簡而言之，我們所做的一切都是為了穩定和可預測。最後，我只想感謝我們的員工為客戶、彼此以及所有利害關係人所做的一切。

And with that, I'll turn it over to Rob to take you through the quarter. Rob?

接下來，我將把它交給 Rob，讓他帶您了解這個季度的情況。搶？

Thanks, Bill and good morning, everyone. Our balance sheet is on Slide 4 and is presented on an average linked-quarter basis. Loans of $321 billion decreased $4 billion or 1%. Investment securities declined $2 billion or 1%. And our cash balances at the Federal Reserve were $48 billion, an increase of $6 billion or 13%. On a spot basis, our cash at the Fed was $53 billion, up from $43 billion in the prior quarter, reflecting higher period-end deposits. Deposit balances averaged $420 billion, a decline of $4 billion or 1%, reflecting seasonally lower commercial deposits. However, on a spot basis, deposits were up $4 billion, reflecting growth in both commercial and consumer deposits.

謝謝比爾，大家早安。我們的資產負債表位於投影片 4 上，並以平均關聯季度為基礎呈現。貸款 3,210 億美元減少 40 億美元，即 1%。投資證券下跌 20 億美元，或 1%。我們在聯準會的現金餘額為 480 億美元，增加了 60 億美元，即 13%。以現貨計算，我們在聯準會的現金為 530 億美元，高於上一季的 430 億美元，反映出期末存款增加。存款餘額平均為 4,200 億美元，下降 40 億美元或 1%，反映出商業存款季節性下降。然而，以即期計算，存款增加了 40 億美元，反映了商業和消費者存款的成長。

Borrowed funds increased $3 billion to $76 billion, primarily driven by parent company debt issuances early in the quarter. At quarter end, AOCI was a negative $8 billion compared to a negative $7.7 billion at December 31, reflecting the impact of higher interest rates. Our tangible book value increased to $85.70 per common share, an 11% increase compared to the same period a year ago. We remain well capitalized with an estimated CET1 ratio of 10.1% as of March 31.

借入資金增加 30 億美元，達到 760 億美元，主要是由本季初母公司債券發行的推動。截至季末，AOCI 為負 80 億美元，而截至 12 月 31 日為負 77 億美元，反映了利率上升的影響。我們的有形帳面價值增至每股普通股 85.70 美元，與去年同期相比成長 11%。截至 3 月 31 日，我們的資本充足，預計 CET1 比率為 10.1%。

While we recognize the likelihood of potentially substantial changes to the Basel III endgame NPR, under the currently proposed capital rules, our estimated fully phased-in, expanded risk-based CET1 ratio would be approximately 8.3% as of March 31, 2024. We continue to be well positioned with capital flexibility, share repurchases approximated $135 million or roughly 1 million shares. And when combined with $624 million of common dividends, we returned $759 million of capital to shareholders during the quarter.

雖然我們認識到巴塞爾協議III 最終NPR 可能發生重大變化，但根據目前擬議的資本規則，我們估計截至2024 年3 月31 日，完全分階段、擴大的基於風險的CET1 比率將約為8.3%。我們繼續為了保持資本彈性，股票回購額約 1.35 億美元或約 100 萬股。加上 6.24 億美元的普通股息，我們本季向股東返還了 7.59 億美元的資本。

Slide 5 shows our loans in more detail. Compared to the fourth quarter, average loan balances decreased 1% primarily driven by lower commercial loan balances. Commercial loans were $219 billion, a decrease of $3.4 billion, driven by lower utilization as well as soft loan demand. Within the corporate and institutional bank, utilization rates have remained below 2023 year-end levels and have not increased in the first quarter as is historically typical.

幻燈片 5 更詳細地展示了我們的貸款。與第四季度相比，平均貸款餘額下降了 1%，主要是由於商業貸款餘額下降。由於利用率下降以及貸款需求疲軟，商業貸款為 2,190 億美元，減少 34 億美元。在企業和機構銀行內部，利用率仍低於 2023 年底的水平，並且第一季的利用率並未像歷史上典型的那樣出現增長。

We expect utilization to increase throughout the year. Notably, each percent of utilization within C&IB equates to $4 billion of loan growth. Consumer loans declined approximately $600 million, driven by lower credit card and home equity balances. And total loan yields increased 7 basis points to 6.01% in the first quarter. Slide 6 details our investment security and swap portfolios. Average investment securities of $135 billion decreased 1%, as curtailed purchase activity was more than offset by portfolio paydowns and maturities.

我們預計全年利用率將會增加。值得注意的是，C&IB 內的每一個利用率都相當於 40 億美元的貸款成長。由於信用卡和房屋淨值餘額減少，消費者貸款減少了約 6 億美元。 第一季貸款總收益率上升7個基點至6.01%。投影片 6 詳細介紹了我們的投資安全和掉期投資組合。平均投資證券為 1,350 億美元，下降了 1%，因為購買活動的減少被投資組合的償還和到期所抵消。

The securities portfolio yield increased 3 basis points to 2.62% reflecting the runoff of lower-yielding securities. As of March 31, the securities portfolio duration was 4 years. Our receive fixed swaps pointed to the commercial loan book totaled $37 billion on March 31. The weighted average receive fixed rate of our swap portfolio increased 20 basis points to 2.3% and the duration of the portfolio was 2 years. Through the end of 2024, 13% of our securities and swap portfolio is scheduled to mature, which will allow us to reinvest into higher-yielding assets, providing a meaningful benefit to net interest income in the second half of the year.

證券投資組合殖利率上升 3 個基點至 2.62%，反映出低收益證券的流失。截至3月31日，證券投資組合久期為4年。截至 3 月 31 日，我們的接收固定掉期商業貸款總額為 370 億美元。 我們掉期投資組合的加權平均接收固定利率增加了 20 個基點，達到 2.3%，投資組合的久期為 2 年。到 2024 年底，我們 13% 的證券和掉期投資組合計劃到期，這將使我們能夠再投資於更高收益的資產，為下半年的淨利息收入帶來有意義的好處。

Accumulated other comprehensive income was negative $8 billion at March 31, which will accrete back as our securities and swaps mature, resulting in continued tangible book value growth. Slide 7 covers our deposits in more detail. Average deposits decreased $4 billion to $420 billion during the quarter as growth in consumer deposits was more than offset by a seasonal decline in commercial deposits. Regarding mix, consolidated noninterest-bearing deposits were 24% in the first quarter, down slightly from 25% in the fourth quarter.

截至 3 月 31 日，累計其他綜合收益為負 80 億美元，隨著我們的證券和互換的成熟，該收益將回升，從而導致有形帳面價值持續增長。幻燈片 7 更詳細地介紹了我們的存款。本季平均存款減少 40 億美元，至 4,200 億美元，因為消費者存款的成長被商業存款的季節性下降所抵消。從結構來看，第一季綜合無息存款為 24%，略低於第四季的 25%。

Notably, on a spot basis in the first quarter, noninterest-bearing deposits had the smallest dollar decline since the Fed began raising rates in 2022, which gives us confidence that the noninterest-bearing portion of our deposits has largely stabilized. Our rate paid on interest-bearing deposits increased to 2.6% during the first quarter, up from 2.48% in the prior quarter. And as of March 31, our cumulative deposit beta was 45% and consistent with our expectations.

值得注意的是，從第一季的現貨來看，無息存款的美元跌幅是自聯準會 2022 年開始升息以來最小的，這讓我們相信我們存款的無息部分已基本穩定。第一季我們的計息存款利率從上一季的 2.48% 上升至 2.6%。截至 3 月 31 日，我們的累計存款貝塔值為 45%，與我們的預期一致。

We believe our deposit betas have approached their peak levels, although we do expect some potential drift higher through the period leading up to a Fed rate cut, which we currently expect to occur in July. In regard to the timing and amount of potential rate cuts, we recognize there's a lot of fluidity and uncertainty. However, our 2024 NII will largely be unaffected by any short-term interest rate movement or lack thereof. This is because our floating rate assets are aligned with our floating rate liabilities, including our high beta commercial interest-bearing deposits and our long-term debt, which is almost entirely swapped to floating rates.

我們相信我們的存款貝塔值已經接近峰值水平，儘管我們確實預計在美聯儲降息之前的一段時間內可能會出現一些走高的情況，目前我們預計降息將在 7 月份發生。關於潛在降息的時間和幅度，我們認識到存在著很大的流動性和不確定性。然而，我們 2024 年的 NII 基本上不會受到任何短期利率變動或缺乏短期利率變動的影響。這是因為我們的浮動利率資產與浮動利率負債一致，包括我們的高貝塔商業有息存款和長期債務，這些債務幾乎全部轉換為浮動利率。

Importantly, going forward, we remain well positioned for the NII benefit of repricing low-yielding fixed rate securities and loans maturing during the latter half of 2024 and into 2025. Turning to the income statement on Slide 8. First quarter net income was $1.3 billion or $3.10 per share which included a pretax noncore, noninterest expense of $130 million or $103 million after tax related to the increased FDIC special assessment. Excluding noncore expenses, adjusted EPS was $3.36 per share. Total revenue of $5.1 billion decreased $216 million or 4%, compared to the fourth quarter of 2023. Net interest income declined by $139 million or 4%. And our net interest margin was 2.57%, a decline of 9 basis points, resulting primarily from higher funding costs. Noninterest income decreased $77 million or 4%. Noninterest expense of $3.3 billion declined $740 million or 18% and included $130 million FDIC special assessment.

重要的是，展望未來，我們仍然處於有利地位，可以從對2024 年下半年到2025 年到期的低收益固定利率證券和貸款重新定價的NII 收益中獲益。 。不包括非核心費用，調整後每股收益為 3.36 美元。總收入為 51 億美元，與 2023 年第四季相比減少 2.16 億美元，即 4%。淨利差為2.57%，下降9個基點，主要是由於融資成本上升。非利息收入減少 7,700 萬美元，即 4%。非利息支出為 33 億美元，減少了 7.4 億美元，即 18%，其中包括 1.3 億美元的 FDIC 特別評估。

Importantly, core noninterest expense was $3.2 billion and decreased $205 million or 6%. Provision was $155 million in the first quarter, reflecting portfolio activity and improved macroeconomic factors. And our effective tax rate was 18.8%. Turning to Slide 9. We highlight our revenue trends. First quarter revenue was down $216 million or 4%, driven by lower net interest income and in part a seasonal decline in fee income. Net interest income of $3.3 billion declined $139 million or 4%, reflecting increased funding costs, lower loan balances and 1 less day in the quarter. Fee income was $1.7 billion and decreased $74 million or 4% linked quarter.

重要的是，核心非利息支出為 32 億美元，減少了 2.05 億美元，即 6%。第一季撥備金額為 1.55 億美元，反映了投資組合活動和宏觀經濟因素的改善。我們的有效稅率是18.8%。轉向投影片 9。第一季營收下降 2.16 億美元，即 4%，原因是淨利息收入下降以及費用收入季節性下降。淨利息收入為 33 億美元，下降 1.39 億美元，或 4%，反映出融資成本增加、貸款餘額減少以及本季減少 1 天。費用收入為 17 億美元，季減 7,400 萬美元，即 4%。

Looking at the detail. Asset management and brokerage revenue was up $4 million or 1%, reflecting higher average equity markets. Capital markets and advisory fees declined $50 million or 16%, driven by lower M&A advisory activity off elevated fourth quarter levels, partially offset by higher underwriting fees. Card and cash Management decreased $17 million or 2% driven by seasonally lower consumer transaction volumes, partially offset by higher treasury management fees. Lending and deposit-related fees declined $9 million or 3%, reflecting the reduction of customer fees on certain checking products.

看細節。資產管理和經紀收入成長 400 萬美元，即 1%，反映了股票市場平均水準的上升。資本市場和諮詢費用下降了 5000 萬美元，即 16%，原因是併購諮詢活動較第四季度的高水平有所下降，但部分被承銷費用上升所抵消。由於消費者交易量季節性下降，銀行卡和現金管理業務減少了 1,700 萬美元，即 2%，但部分被較高的財務管理費所抵銷。貸款和存款相關費用下降了 900 萬美元，即 3%，反映出某些支票產品的客戶費用減少。

Residential and commercial mortgage revenue declined $2 million or 1% and included lower residential mortgage activity. Other noninterest income of $135 million decreased $3 million or 2%, reflecting lower gains on sales. The first quarter also included a negative $7 million Visa fair value adjustment compared to a negative $100 million adjustment in the fourth quarter.

住宅和商業抵押貸款收入下降了 200 萬美元，即 1%，其中住宅抵押貸款活動減少。其他非利息收入 1.35 億美元減少了 300 萬美元，即 2%，反映出銷售收益下降。第一季還包括 700 萬美元的 Visa 公允價值負調整，而第四季的負調整為 1 億美元。

Turning to Slide 10. Our core noninterest expense of $3.2 billion, decreased $205 million or 6% linked quarter, reflecting strong expense management. Importantly, compared to the first quarter of 2023, core noninterest expense declined $117 million or 4%, with a decline in every expense category. This broad-based result reflects the impact of expense actions taken in 2023. As we previously stated, we implemented expense management actions that will drive $750 million of cost savings in 2024. These actions include the $325 million workforce reduction effort last year, which was realized in our first quarter expense run rate and our $425 million 2024 continuous improvement program goal, which we're well on track to achieve.

轉向投影片 10。重要的是，與 2023 年第一季相比，核心非利息支出下降了 1.17 億美元，即 4%，每個支出類別均下降。這項廣泛基礎的結果反映了2023 年採取的費用行動的影響。 ，這是我們在第一季的費用運行率和 2024 年 4.25 億美元的持續改進計劃目標中實現了這一目標，我們正在順利實現這一目標。

We remain diligent in our expense management efforts and these actions give us confidence that we'll keep our year-over-year expenses stable. Our credit metrics are presented on Slide 11. While overall credit quality remains resilient, the pressure we anticipated within the commercial real estate office sector has continued. Nonperforming loans increased $200 million or 9% linked quarter, almost entirely driven by commercial real estate, which increased $188 million. And inside of that, approximately $150 million was related to the CRE office portfolio.

我們仍然勤奮地進行費用管理工作，這些行動讓我們有信心保持年比費用穩定。我們的信用指標如投影片 11 所示。不良貸款增加了 2 億美元，季增了 9%，幾乎完全由商業房地產推動，增加了 1.88 億美元。其中，約 1.5 億美元與 CRE 辦公大樓投資組合相關。

Total delinquencies of $1.3 billion decreased $109 million or 8% linked quarter, driven by lower consumer and commercial delinquency. Net loan charge-offs were $243 million in the first quarter and our annualized net charge-offs to average loans ratio was 30 basis points. Our allowance for credit losses totaled $5.4 billion or 1.7% of total loans on March 31, stable with December 31.

由於消費者和商業拖欠率下降，拖欠總額 13 億美元減少了 1.09 億美元，較上季下降 8%。第一季的淨貸款沖銷額為 2.43 億美元，年化淨沖銷額與平均貸款比率為 30 個基點。 3 月 31 日，我們的信貸損失準備金總額為 54 億美元，佔貸款總額的 1.7%，與 12 月 31 日持平。

Slide 12 provides more detail on our CRE office credit metrics. While NPLs have increased over the past few quarters, our criticized balances have remained relatively consistent. The migration of criticized loans to nonperforming status is an expected outcome as we work to resolve the occupancy and rate challenges inherent to this portfolio. In the first quarter, net loan charge-offs within the CRE office portfolio were $50 million, essentially in line with the previous quarter level.

投影片 12 提供了有關我們的商業房地產辦公室信用指標的更多詳細資訊。儘管不良貸款在過去幾季有所增加，但我們批評的餘額仍然相對穩定。在我們努力解決該投資組合固有的入住率和利率挑戰的過程中，受批評的貸款轉為不良貸款是預期的結果。第一季度，商業房地產辦公室組合內的淨貸款沖銷額為 5,000 萬美元，基本上與上一季水準持平。

Ultimately, we expect continued charge-offs on this portfolio. And accordingly, we believe we are adequately reserved. As of March 31, our reserves on the office portfolio were 9.7% of total office loans. And inside of that, 14.4% on the multi-tenant portfolio. Importantly, we continue to manage our exposure down. And as a result, our balances declined 3% or approximately $200 million linked quarter.

最終，我們預計該投資組合將繼續沖銷。因此，我們相信我們有足夠的保留。截至 3 月 31 日，我們的辦公室投資組合準備金佔辦公室貸款總額的 9.7%。其中，14.4% 屬於多租戶投資組合。重要的是，我們繼續控制我們的風險敞口。結果，我們的季度餘額下降了 3%，約 2 億美元。

In summary, PNC reported a solid first quarter 2024 and we're well positioned for the remainder of the year. Regarding our view of the overall economy, we're expecting economic expansion in the second half of the year, resulting in real GDP growth of approximately 2% in 2024 and unemployment to increase modestly to 4% by year-end. We expect the Fed to cut rates 2x in 2024 with a 25-basis point decrease in July and another in November.

總之，PNC 報告 2024 年第一季業績強勁，我們為今年剩餘時間做好了準備。關於我們對整體經濟的看法，我們預計下半年經濟將擴張，到2024年實際GDP成長約為2%，失業率將在年底小幅上升至4%。我們預計聯準會將在 2024 年降息 2 次，其中 7 月降息 25 個基點，11 月再降息 2 次。

Looking at the second quarter of 2024, compared to the first quarter of 2024, we expect average loans to be stable. Net interest income to be down approximately 1%. And as I mentioned previously, we expect NII and net interest margin to trough in the second quarter. Fee income to be up 1% to 2%, other noninterest income to be in the range of $150 million and $200 million, excluding Visa activity.

展望2024年第二季度，與2024年第一季相比，我們預期平均貸款將保持穩定。淨利息收入下降約1%。正如我之前提到的，我們預計NII和淨利差將在第二季觸底。費用收入將成長 1% 至 2%，其他非利息收入將在 1.5 億至 2 億美元之間，不包括 Visa 活動。

Taking the component -- pieces of revenue together, we expect total revenue to be stable. We expect total core noninterest expense to be up 2% to 4%. We expect second quarter net charge-offs to be between $225 million and $275 million. As a reminder, PNC owns 3.5 million Visa Class B shares with an unrecognized gain of approximately $1.6 billion. Under the terms of Visa's current exchange program scheduled to close on or about May 3, Class B shareholders will have the opportunity to monetize 50% of their holdings. We've not included the impact of monetizing the Visa gain in our forecast.

將各部分收入放在一起，我們預計總收入將保持穩定。我們預計核心非利息支出總額將增加 2% 至 4%。我們預計第二季淨沖銷額將在 2.25 億美元至 2.75 億美元之間。需要提醒的是，PNC 擁有 350 萬股 Visa B 類股票，未確認收益約 16 億美元。根據計劃於 5 月 3 日左右結束的 Visa 目前交換計畫的條款，B 類股東將有機會將其 50% 的持股貨幣化。我們的預測中沒有包括 Visa 收益貨幣化的影響。

Turning to Slide 14. Our full year 2024 guidance is unchanged from our January earnings call. And as a reminder, for the full year 2024 compared to the full year 2023, we expect average loan growth of approximately 1%. Total revenue to be stable to down 2%. Inside of that, our expectation is for net interest income to be down in the range of 4% to 5% and noninterest income to be up 4% to 6%. Core noninterest expense, which excludes the FDIC assessment is expected to be stable and we expect our effective tax rate to be approximately 18.5%.

轉向投影片 14。提醒一下，與 2023 年全年相比，2024 年全年的平均貸款成長約為 1%。總收入穩定下降2%。其中，我們預期淨利息收入將下降4%至5%，非利息收入將成長4%至6%。核心非利息支出（不包括 FDIC 評估）預計將保持穩定，我們預計有效稅率約為 18.5%。

And with that, Bill and I are ready to take your questions.

至此，比爾和我準備好回答你們的問題了。

(Operator Instructions) Our first questions come from the line of Betsy Graseck with Morgan Stanley.

（操作員說明）我們的第一個問題來自摩根士丹利的 Betsy Graseck。

The first question has to do with how you're thinking about the NII indicating 2Q, the trough improving from there. And I would think that the majority of that improvement is coming from loan growth. But correct me if I'm wrong, how you're thinking about that NII trajectory into the second half of the year? And then, well, I'll start there.

第一個問題與您如何看待表示 2Q 的 NII（低谷從那裡開始改善）有關。我認為大部分改善來自貸款成長。但如果我錯了，請糾正我，您如何看待下半年的 NII 軌跡？然後，好吧，我將從這裡開始。

Betsy, this is Rob. So in terms of NII and the trajectory that we're on, we knew at the beginning of the year that we would trough around this time in the second quarter and that's what's happening. We expect to grow from that trough level based on the repricing of our fixed rate assets, as rates settle down. There is some reliance on the back half for loan growth but overall consistent with our full year guidance. Average loan is up 1%.

貝特西，這是羅布。因此，就 NII 和我們所處的軌跡而言，我們在今年年初就知道我們將在第二季度的這個時候陷入低谷，而這就是正在發生的事情。隨著利率穩定下來，我們預計將根據固定利率資產的重新定價從該低谷水準開始成長。貸款成長在一定程度上依賴下半年，但總體與我們的全年指引一致。平均貸款成長1%。

And just on that loan growth fees...

就貸款增長費用而言......

I was just going to say that the largest driver is repricing of fixed rate assets. We expect some loan growth but it's not a heroic number in there. It's simply rolled out of our securities book.

我只是想說最大的推動因素是固定利率資產的重新定價。我們預計貸款會有所成長，但這並不是一個驚人的數字。它只是從我們的證券帳簿中推出。

Okay. Got it. Yes. All right. And on the loan side, it is interesting to see the utilization rates sticking down here. Do you think that's just a function of -- Fed funds is 5.5% and that's the base rate from which C&I is priced off of? Or is there other dynamics there besides just rate?

好的。知道了。是的。好的。在貸款方面，有趣的是，利用率一直在下降。您是否認為這只是聯邦基金利率為 5.5% 而 C&I 定價的基本利率的函數？或者除了利率之外還有其他動力嗎？

It's a variety of things. So I think the capital markets activity in the first quarter in investment-grade debt put a lot of cash into the system and you just -- you saw companies that could hit that market, pay down revolver. So that was sort of a near-term impact to it. There's -- as we look out, there hasn't been any real inventory build, which I would expect given retail sales, there hasn't been much CapEx and capacity utilization has been holding constant at a pretty high level. So at some point, this needs to turn but I think the first quarter kind of surprised us. And my best guess was that was on the back of just how liquid the public markets were.

這是各種各樣的事情。因此，我認為第一季投資等級債務的資本市場活動向系統注入了大量現金，您看到可能進入該市場的公司償還了左輪手槍。所以這對它來說是一種近期影響。正如我們所看到的，沒有任何實際的庫存增加，考慮到零售銷售，我預計不會有太多的資本支出，而且產能利用率一直保持在相當高的水平。因此，在某些時候，這種情況需要轉變，但我認為第一季讓我們感到驚訝。我最好的猜測是，這是基於公開市場的流動性。

Our next questions come from the line of John Pancari with Evercore ISI.

我們的下一個問題來自 Evercore ISI 的 John Pancari。

On the expense front, it looks like within expenses, they came in a bit better than expected, maybe on the comp side and certain other areas. And you cited the solid expense management and your cost save efforts. Is there -- would you say that the trends are coming in perhaps a bit better than you had forecasted as you look at your expenses? And is there any thought process that potentially your full year '24 outlook could prove conservative in terms of your stable expectation?

在費用方面，看起來在費用範圍內，他們的表現比預期要好一些，也許是在比較方面和某些其他領域。您還提到了可靠的費用管理和節省成本的努力。您是否會說，在考慮您的支出時，趨勢可能比您預測的要好一些？是否有任何思考過程表明您的 24 年全年展望可能會證明您的穩定預期是保守的？

John, this is Rob. So I'd say, for the full year we're still planning and guiding towards stable. In the first quarter, you're right, we're off to a good start in terms of realizing the expense actions that we took last year and the CIP program that we have this year. But it's a little early in the year to roll that all forward. And like I said, we're off to a good start and we're well positioned for stable.

約翰，這是羅布。所以我想說，全年我們仍在規劃和指導以實現穩定。在第一季度，你是對的，我們在實現去年採取的費用行動和今年的 CIP 計劃方面有了一個良好的開端。但現在推進這一切還為時過早。就像我說的，我們有了一個好的開端，並且已經做好了穩定的準備。

Okay. That's helpful. And then just separately, on the credit side, we could see the commercial real estate stress that you mentioned and you prudently added to the office reserve in the quarter but relatively stable or down a little bit in terms of your firm-wide reserve. Are you seeing -- could you maybe talk about the progression in credit and other areas? Are you seeing any mounting stress at all in C&I that could keep you -- potentially keep the reserve currently stable? Or could you continue to, from a firm-wide perspective, bleed the reserve here?

好的。這很有幫助。然後，在信貸方面，我們可以看到您提到的商業房地產壓力，並且您在本季度謹慎地增加了辦公大樓儲備，但就整個公司的儲備而言，相對穩定或略有下降。您是否可以談談信貸和其他領域的進展？您是否看到工商業領域有任何日益增加的壓力可以讓您保持儲備目前的穩定？或者，從整個公司的角度來看，您可以繼續耗盡這裡的儲備金嗎？

Bleed is a bad word. The credit action at the moment is in the real estate book and specifically inside of office, consumer at the margin, a little bit worse. But there isn't anything systematic going on in C&I that would cause us to have any different expectations of what we see now and we're reserved for the moment based on our economic forecast.

流血是一個不好的字。 目前的信貸行動是在房地產方面，特別是在辦公室內部，消費者處於邊緣狀態，情況更糟。但工商業領域並沒有發生任何系統性的事情，不會導致我們對現在所看到的情況產生任何不同的預期，並且我們根據我們的經濟預測暫時保留。

Yes, the pressure is in the CRE book, specifically the office book.

是的，壓力來自 CRE 書籍，特別是辦公書籍。

Okay. And then just related to that, are you seeing migration in the office book that is surprising, given your forecast and we added notably to the office reserve. Is there anything there that surprised you in terms of your reappraisals or your work on that front?

好的。與此相關的是，考慮到您的預測以及我們顯著增加的辦公室儲備，您是否在辦公簿中看到了令人驚訝的遷移。就您的重新評估或這方面的工作而言，有什麼事情讓您感到驚訝嗎？

No surprises there. Yes, everything is progressing as we expected. We started with the criticized. The NPLs are up a little bit but everything is consistent with what we've been seeing.

那裡沒有什麼驚喜。是的，一切都在按照我們的預期進行。我們從批評者開始。不良貸款略有上升，但一切都與我們所看到的一致。

Our next questions come from the line of Matt O'Connor with Deutsche Bank.

我們的下一個問題來自德意志銀行的馬特·奧康納。

Looking at Slide 6 here where you show the runoff of the fixed rate securities and swaps. Any way to size the revenue pickup from this, either anchoring to the forward curve or current rates? You put out some crude analysis that showed about a $2 billion impact and just said it was linear, so half this year, half next. But obviously, it's a rough cut at it. So I don't know if you have any comments on that or frame it on -- using your estimates.

請看此處的投影片 6，其中顯示了固定利率證券和掉期的徑流。有什麼方法可以確定由此帶來的收入成長，無論是錨定遠期曲線還是當前利率？你做了一些粗略的分析，顯示了大約 20 億美元的影響，只是說它是線性的，所以今年一半，明年一半。但顯然，這是一個粗略的削減。所以我不知道你是否對此有任何評論或根據你的估計來構建它。

No, I would say -- so we laid it out in the slides in terms of what we see in terms of runoff. And obviously, the projected AOCI burned down as it relates to capital. But all of that's in our guide. So in terms of what our expectations are in terms of that behavior, that's in our full year NII guide, which is down 4% to 5%. But it does make the point in terms of what we were saying earlier, going forward, the biggest variable is the repricing of our fixed rate assets and in this case, securities.

不，我想說 - 所以我們根據我們在徑流方面看到的情況在幻燈片中列出了它。 顯然，由於與資本相關，預計的 AOCI 被燒毀了。但所有這些都在我們的指南中。因此，就我們對這種行為的期望而言，這是我們全年 NII 指南中的內容，該指南下降了 4% 至 5%。但這確實顯示了我們之前所說的觀點，展望未來，最大的變數是我們的固定利率資產（在本例中為證券）的重新定價。

Matt, I think what everybody is struggling with here is this notion of what's the Fed going to do in the next period of time. Is it 2 cuts or no cuts or 3 cuts. When we started out it was 6 cuts.

馬特，我認為每個人都在糾結聯準會在接下來的一段時間內將採取什麼行動。是2切還是不切還是3切。當我們開始時，有 6 次剪輯。

We didn't.

我們沒有。

Yes, we did not but the market did. We know based on forward curve, the repricing of our fixed rate assets, the amount of money, incremental money we will earn from that has increased because term rates have increased. At the same time, the assumption that the Fed will maintain rates here longer causes us to pause on what happens to deposit pricing through time, right? So there's a trade-off. Higher rates in the long run obviously help us on our fixed rate assets. Deposit repricing continues on, if the Fed holds longer, a much slower pace than it's been in the past. But I think it's -- it would be a bit of a heroic assumption for anybody to say that deposit costs won't continue to creep up in the face of a steady Fed. And So that's the trade-off in the near term. Longer term, the repricing of the fixed rate assets dwarfs the repricing of deposits. And that's kind of why we say, look in the second quarter, we trough and then we pick up from there.

是的，我們沒有，但市場做到了。我們知道，根據遠期曲線，我們的固定利率資產的重新定價、金額、我們將從中賺取的增量資金都增加了，因為期限利率增加了。與此同時，聯準會將維持利率更長的假設讓我們停下來思考存款定價隨著時間的推移會發生什麼，對嗎？所以需要權衡。從長遠來看，較高的利率顯然對我們的固定利率資產有幫助。如果聯準會維持更長時間，存款重新定價將繼續下去，而且步伐將比過去慢得多。但我認為，對任何人來說，面對穩定的聯準會，存款成本不會繼續攀升，這都有點英雄主義的假設。 這就是近期的權衡。從長遠來看，固定利率資產的重新定價使存款的重新定價相形見絀。這就是為什麼我們說，看看第二季度，我們會經歷低谷，然後我們會從那裡開始反彈。

And then to '25?

然後到'25？

Yes.

是的。

That makes sense. And then sorry if I missed it earlier but did you reiterate your view that 2025 net interest income would be record level? And if you did, what would derail that? If the higher for longer, it doesn't sound like that will change it. Is there still a loan growth component or if rates go down too much, just what would be the risk of achieving that if you still have that view?

這是有道理的。如果我之前錯過了，抱歉，但您是否重申了您的觀點，即 2025 年淨利息收入將達到創紀錄水平？如果你這樣做了，什麼會破壞它？如果更高的時間更長，聽起來不會改變它。是否仍然存在貸款成長成分，或者如果利率下降太多，如果您仍然持有這種觀點，那麼實現這一目標的風險是什麼？

I mean the biggest risk would be a massive curve inversion, such that we were repricing fixed rate securities at lower yields than...

我的意思是，最大的風險將是大規模的曲線倒掛，以至於我們以低於......的收益率重新定價固定利率證券。

Than they are today.

比他們今天還多。

Well, I mean, than what they were 3 months ago. No. We had -- our original assumptions in that forecast yields were [100] lower than they are right now. If they were to fall well below that, we would be at risk at that record number, although it's still a high number.

嗯，我的意思是，與三個月前相比。不。如果它們遠低於這個數字，我們將面臨創紀錄數字的風險，儘管它仍然是一個很高的數字。

And Matt, it's Rob. I'll take the opportunity to reiterate our view that 2025 will be a record NII.

馬特，是羅布。我將藉此機會重申我們的觀點，即 2025 年 NII 將創歷史新高。

Our next questions come from the line of Gerard Cassidy with RBC Capital Markets.

我們的下一個問題來自加拿大皇家銀行資本市場部的 Gerard Cassidy。

Rob, you talked about the utilization of the C&I loans, that it was lower in the first quarter and normally it kind of picks up a bit. Question on that. Is it -- do you think your customers are just uncertain about their outlooks, which has kind of held them back from drawing down on lines of credit? Or do you think that they're having access to other lenders, meaning private credit market or the public markets that has taken away opportunities for banks to have these companies increase those lines of utilization?

羅布，您談到了工商業貸款的利用率，第一季較低，通常會有所回升。對此提出疑問。您是否認為您的客戶只是對自己的前景不確定，這在某種程度上阻礙了他們提取信貸額度？或者您認為他們可以接觸其他貸方，這意味著私人信貸市場或公共市場剝奪了銀行讓這些公司增加利用率的機會？

Yes.

是的。

I think it's a...

我認為這是一個...

Both. Yes. It's -- the capital markets activity in the first quarter, we're not -- the private credit side on leveraged finance doesn't really impact us. But the public markets were wide open. By the way, our fees were up in that space for serving clients that way. But naturally it's the margin that causes our utilization to go down. The other issue, you can't ignore, right, we've seen capital spend and inventory build be next to nothing, even though capacity utilization is high. Retail sales are high. At some point, that's got to give. But I do think there continues to be hesitancy on manufacturers in particular, just in the face of this economy. And I think that's part of it.

兩個都。是的。第一季的資本市場活動，我們不是——槓桿融資的私人信貸方面並沒有真正影響我們。但公開市場是敞開的。順便說一句，我們以這種方式為客戶提供服務的費用增加了。但自然是利潤率導致我們的利用率下降。另一個問題，你不能忽視，對吧，我們已經看到資本支出和庫存建設幾乎為零，儘管產能利用率很高。零售額很高。在某些時候，這必須給予。但我確實認為，面對當前的經濟狀況，製造商仍然會猶豫不決。我認為這就是其中的一部分。

I'm looking for a stability factor which will help.

我正在尋找一個有幫助的穩定因素。

Very good. And then I know, Rob, I think you touched on in an answer to a question about the commercial real estate outlook, office in particular. And you guys, everything appears to be going in your expectations, what kind of pricing declines -- in appraisals that have come up and where you've had to reappraise certain properties, are you seeing price declines 10%, 15%, 20% on those appraisals or more? Any color there?

非常好。然後我知道，羅布，我想你在回答有關商業房地產前景（尤其是辦公室）的問題時談到了這一點。你們，一切似乎都在你們的預期中進行，價格下降了多少——在已經出現的評估中，以及你必須重新評估某些房產的地方，你是否看到價格下降了10%、15%、20 %關於那些評估或更多？那裡有什麼顏色嗎？

I mean, much higher than that.

我的意思是，比這個高得多。

Well, variance. There's...

嗯，方差。有...

The variance is all over the place. But as a practical matter, if we were underwritten at the start at $0.50 to $0.55 on whatever the appraised value was at that point in time, a big chunk of the book right now is effectively at par. When we look at resolutions that we've gone through, we've had everything from, we get a hold till we lose $0.75 on the dollar on a given loan.

差異無所不在。但作為一個實際問題，如果我們一開始就以 0.50 至 0.55 美元的價格承保，無論當時的評估價值是多少，那麼現在這本書的很大一部分實際上是平價的。當我們查看我們已經通過的決議時，我們已經得到了一切，從我們持有到我們在給定貸款上損失 0.75 美元。

That's the variance (inaudible)

這就是差異（聽不清楚）

So it's building specific, it's market-specific, that's driving this but loss rates are a lot higher. If you looked at office and said, "Hey, how much of value has fallen?" It's a lot higher than 15%. I mean, I -- personally across the space, in my view, it's closer to 30% or 40% or even higher.

因此，它是針對特定的建築，針對特定的市場，這推動了這一點，但損失率要高得多。如果你看著辦公室說：“嘿，價值下降了多少？”比15%高很多。我的意思是，我個人認為，整個空間的比例接近 30% 或 40% 甚至更高。

You're thinking ahead in terms of where we're going.

你正在提前考慮我們要去的地方。

Well, it's not showing up in appraisals here. We're just seeing it in actual resolution of properties.

嗯，這裡沒有出現在評估中。我們只是在屬性的實際解析中看到它。

Our next question comes from the line of Dave Rochester with Compass Point.

我們的下一個問題來自 Dave Rochester 和 Compass Point 的線路。

Just back on the NII guide, you mentioned the largest driver of the growth you're looking for in the back half of the year is coming from the repricing. And then you got the loan growth as another factor. Was just wondering what you're assuming for deposit flows within that as well? I would assume that those could be a little bit better just from a seasonal perspective in the back half of the year. And then on the securities rolling off, how much of that liquidity is getting ploughed back into the securities book? And what kind of yields you're looking at there at this point on purchases?

剛才回到 NII 指南，您提到下半年成長的最大動力來自重新定價。然後你得到了貸款成長作為另一個因素。只是想知道您對其中的存款流量有何假設？我認為，從下半年的季節角度來看，情況可能會好一些。然後，在證券轉存時，有多少流動性被重新註入證券帳簿？您目前在購買時看到的收益率是多少？

So I'll let Rob hit deposits in a second. The assumption -- I mean, we have rolled off of both fixed rate loans and fixed rate securities. And the yields we assume in our forecast at this point are just forward curve, adjusted for whatever the right spread is of the asset we're replacing. So like-for-like.

所以我會讓羅布立即存款。我的意思是，假設我們已經取消了固定利率貸款和固定利率證券。此時我們在預測中假設的報酬率只是遠期曲線，根據我們要替換的資產的正確利差進行調整。如此相似。

Yes. And then just on the deposits, back at the beginning of the year, we expected deposits to decline year-over-year, low single digits. We still expect that, albeit in the first quarter, we did outperform that a bit but our expectations are for slightly lower deposits through the balance of the year.

是的。然後就存款而言，早在今年年初，我們預計存款將同比下降，較低的個位數。我們仍然預計，儘管在第一季度，我們的表現確實略勝一籌，但我們的預期是今年剩餘時間的存款略有下降。

Okay. And then on the loan growth outlook, which you talked about, I guess, on an end-of-period basis last quarter. Does higher for longer impact that expectation at all? And what's your outlook for the longer end of the curve through the year?

好的。然後是關於貸款成長前景，我想您是在上個季度的期末基礎上談到的。更長的時間更高是否會影響這種期望？您對今年曲線較長端的前景有何看法？

No, I don't know that I thought much about how higher for longer impacts loan growth or not. The outlook we have for rates at this point, our official outlook is, we have, what did we say, 2 cuts starting in July at this point with the curve largely staying where it is. Our forecast, whether we're using current forward curve or even when rates were lower, our NII forecast isn't terribly sensitive to what we're assuming at least for this year because the incremental amount we make from higher yields on bonds and loans repricing, we're assuming is largely offset on the deposit cost leakage that occurs if the Fed doesn't cut rates.

不，我不知道我是否考慮過長期較高的水平對貸款成長有何影響。目前我們對利率的展望，我們的官方展望是，我們說過，從 7 月開始有兩次降息，曲線基本上保持在原來的位置。我們的預測，無論我們使用當前的遠期曲線，還是在利率較低的情況下，我們的NII預測對我們至少今年的假設並不是太敏感，因為我們從債券和貸款收益率上升中獲得的增量金額我們假設重新定價很大程度上抵銷了聯準會不降息時發生的存款成本洩漏。

So we're not making heroic assumptions on rates. We don't really care where they go in the near term. What we know is once we get through the second quarter here that the repricing of fixed rate assets simply starts to dwarf the potential repricing on deposits, independent on where rates are.

因此，我們不會對利率做出大膽的假設。我們並不真正關心他們短期內會去哪裡。我們知道，一旦進入第二季度，固定利率資產的重新定價就開始讓潛在的存款重新定價相形見絀，而與利率水準無關。

Our next questions come from the line of Ebrahim Poonawala with Bank of America.

我們的下一個問題來自美國銀行易卜拉欣·普納瓦拉 (Ebrahim Poonawala) 的電話。

I guess maybe the 10th question on your loan growth outlook for the back half. I think -- I guess the macro concern is that higher for longer will eventually tip this economy into a recession. Would love to hear Bill, Rob, your perspective based on what you are hearing from your bankers' clients. If we don't get any rate cuts for the year, based on what you're seeing, like, could we have a blind spot where the economy really kind of tails off where a lot of these things catch up, we enter some version of a stagnation. Just how do you handicap that downside risk heading into the back half of the year?

我想第十個問題可能是關於下半年貸款成長前景的。我認為，宏觀擔憂是，長期走高最終將使經濟陷入衰退。很想聽聽比爾、羅伯根據您從銀行家客戶那裡聽到的情況的看法。如果我們今年沒有任何降息，根據你所看到的情況，例如，我們是否會出現一個盲點，即經濟確實會放緩，而許多這些事情會迎頭趕上，我們會輸入某個版本的停滯。您如何因應下半年的下行風險？

Look. I think that's a possibility. One of the peculiar things about utilization is, when credit conditions tighten, utilization increases. It's actually one of the primary drivers of utilization. So bizarrely, loan growth would increase if you ran -- because utilization would increase if you ran into that scenario. But I do worry about that. Look, eventually it's the only way to get rid of inflation, is to really hurt the economy. I worry less about loan growth and more about long-term credit losses for the whole industry, just as right now, everybody is planning for a soft landing.

看。我認為這是有可能的。利用率的奇特之處之一是，當信貸條件收緊時，利用率就會增加。它實際上是利用率的主要驅動因素之一。奇怪的是，如果你跑步，貸款成長將會增加——因為如果你遇到這種情況，利用率就會增加。但我確實擔心這一點。看，最終擺脫通貨膨脹的唯一方法就是真正傷害經濟。我不太擔心貸款成長，更擔心整個行業的長期信用損失，就像現在，每個人都在計劃軟著陸。

Got it. And you still think soft landing is base case in terms of most likely outcome right now?

知道了。您仍然認為軟著陸是目前最有可能出現的結果的基本情況嗎？

Yes.

是的。

Got it. And separately, one, I think -- thanks for your advocacy on bank M&A. Just wanted to follow up on the letter you wrote to the OCC. One, are you finding any kind of sympathy within the regulatory apparatus around the case for allowing for larger bank M&A? And is there any possibility that we see deal making pick up ahead of the elections?

知道了。另外，我認為，感謝您對銀行併購的倡議。只是想跟進您寫給 OCC 的信。第一，您是否發現監管機構對允許更大規模的銀行併購表示同情？我們是否有可能在選舉前看到交易增加？

Sorry. And any possibility of what?

對不起。還有什麼可能性？

Of deal-making picking up ahead of the November elections?

11 月選舉前交易是否會加速？

Look, the letter was self-explanatory and we've kind of beaten the topic to death. I guess what I would suggest is, I think the banking industry, by and large, is set up to do well over the next 18 months or so, simply through rates normalizing, assuming you didn't have debt concentrations to real estate and office. And I think everybody in the near term is focused on that.

看，這封信的意思是不言自明的，我們已經把這個話題搞得一乾二淨了。我想我的建議是，銀行業總體而言將在未來 18 個月左右的時間內表現良好，只需透過利率正常化，假設沒有債務集中於房地產和辦公室。我認為近期每個人都會關注這一點。

I think long term, some of the charts we've put in that letter, it's just hard to ignore. You see the 2 largest banks in the country, who in the last 4 years grew of size larger than Truist, U.S. Bank and PNC put together. I don't know what the regulators think or don't think about that. The intent of the letter was to just point out that if what they wrote in the OCC comment letter was to freeze M&A across the country for any bank over $50 billion. I think you can see the outcome that we'll have in this country, which is a massive consolidation with the giant national banks. So all my point was...

我認為從長遠來看，我們在那封信中放入的一些圖表很難被忽視。你會看到全國最大的兩家銀行，在過去 4 年裡，它們的規模成長超過了 Truist、美國銀行和 PNC 的總和。我不知道監理機關是怎麼想的，或是不怎麼想。這封信的目的只是指出，如果他們在 OCC 評論信中所寫的內容是凍結全國範圍內任何一家價值超過 500 億美元的銀行的併購活動。我想你可以看到我們在這個國家將會得到的結果，那就是與大型國家銀行的大規模整合。所以我的全部觀點是...

Got it. And do you see the backdrop conducive for deal making over the coming months, quarters or...?

知道了。您認為未來幾個月、幾季或…的背景是否有利於達成交易？

What?

什麼？

If anything near term.

如果近期有什麼的話。

For us?

為了我們？

Or the industry.

或行業。

No. I think most banks are -- tend to hang out the next 18 months because their earnings are going to improve and their internal forecasts are going to look good and everything is rosy. I worry about the out years. But in the near term, I imagine everybody's internal looks pretty good.

不會。我擔心未來幾年。但在短期內，我想每個人的內心看起來都不錯。

And we don't control others timing(inaudible)

我們不控制其他人的時間（聽不清楚）

Our next questions come from the line of Bill Carcache with Wolfe Research.

我們的下一個問題來自沃爾夫研究中心的比爾·卡卡什（Bill Carcache）。

Following up on your comments around soft loan demand and utilization rates. Assuming we avoid recession and the soft landing scenario plays out, how would you respond to the view that the ingredients may not be in place for a for a reacceleration in loan growth, given this environment where Fed funds is running above CPI and the Fed can't cut amid sticky inflation. We spent most of the post-GFC era with Fed funds running below CPI and had mid-single-digit loan growth. But I'd just love your thoughts on the risk that loan growth may not go up much if the Fed can't cut below CPI. And do you lean more heavily into your fee-based businesses if that happens?

跟進您對軟貸款需求和使用率的評論。假設我們避免了經濟衰退並且實現了軟著陸，那麼考慮到聯邦資金運行高於消費物價指數且聯準會可以在通膨高漲的情況下不要降息。在後全球金融危機時代的大部分時間裡，聯邦基金的運作速度低於消費者物價指數，貸款成長處於中位數。但我只是想聽聽您對如果聯準會不能將消費者物價指數降到以下的風險，貸款成長可能不會大幅上升的想法。如果發生這種情況，您是否會更傾向於收費業務？

I'm not sure Fed funds versus CPI necessarily has much to do with loan growth. I think loan growth ultimately is driven by the economy and the economy has been running hotter than that most people had assumed, that it's been running hotter than most people had assumed without big inventory builds. If you look at fourth quarter GDP, there was a drawdown on inventories. Inventories are directly correlated with the utilization of loan growth. And CapEx has been muted. So the economy slows, if the Fed has to slow the economy to a point where it's not a soft landing in order to get inflation under control, that can hurt loan growth. But if the economy is strong -- you just saw retail sales, eventually, it's going to translate into loan growth. I don't know if -- whether they're not, there's positive real rates.

我不確定聯邦基金與消費者物價指數之間的關係是否一定與貸款成長有很大關係。我認為貸款成長最終是由經濟推動的，而經濟的運行速度比大多數人想像的要熱，在沒有大量庫存增加的情況下，經濟的運行速度比大多數人想像的要熱。如果你看一下第四季的 GDP，你會發現庫存減少。庫存與貸款成長的利用率直接相關。而且資本支出已經被抑制。因此，經濟放緩，如果聯準會必須將經濟放緩至不能軟著陸的程度，以控制通膨，這可能會損害貸款成長。但如果經濟強勁——你剛剛看到零售銷售，最終它將轉化為貸款成長。我不知道實際利率是否為正。

Yes. I think there's correlation there.

是的。我認為那裡存在相關性。

That's helpful. And then as a follow-up on your comments about the Visa B shares. How should we think about the dollar amount and the use of proceeds?

這很有幫助。然後作為您對 Visa B 股票的評論的後續行動。我們該如何考慮美元金額和收益的用途？

Well, so yes, as I mentioned in our comments on May 3, we'll have the opportunity to monetize 50% of our holdings, which -- our holdings are roughly $1.6 billion in unrealized gains. And that will just be capital. And we'll look at how we apply everything in terms of our excess capital but we'll wait until we get the capital to do that. We'll monetize half of the $1.6 billion.

嗯，是的，正如我在 5 月 3 日的評論中提到的，我們將有機會將我們持有的 50% 貨幣化，我們持有的未實現收益約為 16 億美元。這只是資本。我們將研究如何利用我們的過剩資本來應用一切，但我們會等到我們獲得資本後再這樣做。我們將把 16 億美元中的一半貨幣化。

Our next questions come from the line of Ken Usdin with Jefferies.

我們的下一個問題來自肯·烏斯丁 (Ken Usdin) 和傑弗里斯 (Jefferies) 的電話。

Just a follow-up on the fee side. I think when you spoke in January, you talked about expected slowness in capital markets and M&A to begin the year. And then, I think you were thinking about a 20% growth overall. Just wondering just how that's looking in terms of the body language you're getting from those middle market clients in Harris Williams? And then also, if you have any other color on what you think the other drivers of fees are going to be?

只是費用方面的後續行動。我想當你在一月份講話時，你談到了資本市場和併購在年初的預期放緩。然後，我認為您正在考慮 20% 的整體成長。只是想知道從哈里斯威廉斯 (Harris Williams) 的中端市場客戶那裡得到的肢體語言來看，這看起來怎麼樣？另外，您對其他費用驅動因素有何看法？

All right. I mean, the Harris Williams pipeline at the moment is larger, larger than it's ever been. But it's larger than it was last year, which is, their first quarter relative to their fourth quarter is light and that's what drove the quarter-on-quarter change in our total fees.

好的。我的意思是，哈里斯威廉斯的管道目前比以往任何時候都更大。但它比去年更大，也就是說，他們的第一季相對於第四季度來說是清淡的，這就是推動我們總費用環比變化的原因。

Yes, we had -- so Ken, to answer your question, we are sticking to the 20% expectation for growth in capital markets year-over-year. Bill's right, first quarter was off, elevated fourth quarter levels. But in terms of the comp, last year in the second and third quarter, capital markets was really soft. Harris Williams is really soft and the pipeline suggests we are not going to repeat. That we'll be well above those levels.

是的，我們——所以肯，為了回答你的問題，我們堅持資本市場同比增長 20% 的預期。比爾是對的，第一季表現不佳，第四季水準有所提高。但從比較來看，去年第二季和第三季度，資本市場確實疲軟。哈里斯威廉斯真的很軟，管道表明我們不會重複。我們將遠高於這些水平。

Okay. Got it. All right. And last one, just on the asset and wealth side, I think you've had some pretty good flows and things like that, that first quarter starting point was more of the markets. I know you put a lot of effort into that business. Any sense of just change in terms of like asset flows and new business wins and incremental potential revenue growth out of that business specifically?

好的。知道了。好的。最後一個，就資產和財富方面而言，我認為你已經有了一些相當好的資金流動和類似的事情，第一季的起點更多的是市場。我知道你為這項事業付出了很多努力。在資產流動、新業務獲勝以及該業務的增量潛在收入成長等方面，有什麼公正的變化嗎？

We have had success over the last year kind of repositioning who and what we are in the market, bringing in new assets. To accelerate that to a level where it becomes a meaningful part of our company, I think, is a bit of a challenge. It's a service to our clients and we're good at it. But the trends are going the right way.

去年，我們成功地重新定位了我們在市場上的角色和產品，並引入了新資產。我認為，要將其加速到成為我們公司有意義的一部分的水平，這是一個挑戰。這是為我們的客戶提供的服務，我們很擅長。但趨勢正在朝著正確的方向發展。

Yes. I would just add to that, Ken. Obviously, the business is doing well with the equity markets supporting that. The growth opportunity is in the new BBVA markets in the Southwest, where you'll recall BBVA really didn't have a wealth management business. So we're de novo, so to speak, in all those markets. But we're up and running with teams, inflows -- asset inflows are occurring. And long term, that's where the incremental growth will come from.

是的。我想補充一點，肯恩。顯然，在股市的支持下，該業務表現良好。成長機會在於西南地區的新 BBVA 市場，您會記得 BBVA 在那裡確實沒有財富管理業務。所以可以說，我們在所有這些市場都是從頭開始的。但我們正在與團隊一起運行，資金流入——資產流入正在發生。從長遠來看，這就是增量成長的來源。

And one more to follow up. Is that an area that you could add to inorganically over time? I know it's tough just because of multiples and whatnot but you've done it organically, as you just said.

還有一個要跟進。隨著時間的推移，這是一個你可以無機地添加的領域嗎？我知道這很困難，只是因為倍數之類的原因，但正如你剛才所說，你已經有機地做到了這一點。

That's a tough business, in my view, to add to inorganically. Cultural difference is the way you go to market, the outright price and the goodwill associated with the return on equity that comes with that, makes it all really difficult to do. And at least historically, the opportunity to grow organically is much stronger than going out and trying to add to it through purchase.

在我看來，這是一項很難透過無機方式進行補充的業務。文化差異是你進入市場的方式、直接價格以及隨之而來的股本回報率相關的商譽，使得這一切變得非常困難。至少從歷史上看，有機成長的機會比走出去並試圖透過購買來增加成長的機會要強得多。

(Operator Instructions) Our next questions come from the line of Mike Mayo with Wells Fargo.

（操作員說明）我們的下一個問題來自富國銀行的麥克‧梅奧（Mike Mayo）。

It looks like you were leading into the expense control this quarter but I'm just trying to figure out ahead. So you mentioned $750 million of cost savings for this year. How much of that was in the first quarter? But you also mentioned $1 billion of extra spending for branches, how much of that was in the first quarter? And how should we think about those offsets? And I know it's a tough fight to get positive operating leverage this year. Do you feel better, worse, or the same as you did 3 months ago?

看來您在本季度開始進行費用控制，但我只是想提前弄清楚。您提到今年可以節省 7.5 億美元的成本。第一季有多少？但您也提到了10億美元的分行額外支出，其中第一季有多少？我們應該如何考慮這些抵消？我知道今年要獲得積極的營運槓桿是一場艱苦的戰鬥。與 3 個月前相比，您感覺更好、更糟還是一樣？

Well, (inaudible) that down. So we'll start with the positive operating leverage for the full year. We still think that's pretty tough, not including any Visa gains, of course, simply because of the NII and the rate issues and those run rates. We do feel good about our expenses. We've projected and guided to being stable year-over-year. We're off to a good start in the first quarter, a little bit ahead of where we expected to be but we still got a long way to go. So all of the items that you talked about, they're in there but the guidance is stable over -- year-over-year, which is important to us.

好吧，（聽不清楚）那就下來了。因此，我們將從全年的積極營運槓桿開始。我們仍然認為這相當困難，當然不包括 Visa 的任何收益，這僅僅是因為 NII 和費率問題以及運行費率。我們確實對我們的開支感到滿意。我們預計並指導其與去年同期保持穩定。我們在第一季取得了良好的開局，比我們預期的要領先一些，但我們還有很長的路要走。因此，您談到的所有項目都在那裡，但指導意見逐年穩定，這對我們很重要。

Okay. I'll shift gears back though. You were talking about commercial real estate, look, you reserved 10% for office. And you said the value of the underlying properties are probably down 30% to 40% or more. So I guess that is reflected in your reserving, which I think is more than the average bank. Do you see a difference by -- and I know it changes by region and subregion and property and type and all that but do you see a difference by region, whether it's the big cities. What -- give a little sense of that variance because it's all over the place. If you can just spell out a few data points around that, that would be great.

好的。不過我會換回來。你說的是商業房地產，你看，你預留了10%用於辦公室。你說基礎資產的價值可能會下降 30% 到 40% 甚至更多。所以我想這反映在你的準備金上，我認為這比一般銀行要多。你是否看到了差異——我知道它會因地區、次區域、財產和類型等因素而變化，但你是否會看到因地區而異，無論是大城市。什麼——稍微了解一下這種差異，因為它無所不在。如果您能列出一些相關的數據點，那就太好了。

Yes. Well, no surprise, parts of California are the worst. But it really comes down to the building in the market. I mean you could have a building that's in the right place in Pittsburgh and it's doing absolutely fine and you could have a building that's in the wrong place in Pittsburgh and it's literally worth 0. And that's the market we're playing with right now. Now inside of that whole thing, we do feel that we've been ahead of this game that we are reserved correctly, that we are conservatively taking marks and we have the opportunity to do so. But it's -- this is going to play out over time and your eyes aren't lying to you when you look out and see vacancies.

是的。嗯，毫不奇怪，加州的部分地區是最糟糕的。但這實際上取決於市場上的建築。我的意思是，你可以在匹茲堡的正確位置擁有一棟建築，而且它的表現絕對很好，也可以在匹茲堡的錯誤位置擁有一棟建築，它的價值實際上為0。玩的市場。現在，在整個事情中，我們確實覺得我們已經領先於這場比賽，我們的保留是正確的，我們正在保守地記分，我們有機會這樣做。但這會隨著時間的推移而發生，當你向外看並看到空缺時，你的眼睛不會騙你。

And I think ourselves and the large banks have been pretty open about it's going to be an issue. It's not a massive book of business for us. I'm not particularly worried about it. We're well reserved. But it's going to roll through the country and impact some of the smaller banks, I think in a way that is probably larger than people (inaudible)

我認為我們自己和大型銀行對於這將是一個問題持相當開放的態度。對我們來說，這並不是一本厚重的商業書。我並不特別擔心。我們預留得很好。 但它將席捲全國並影響一些較小的銀行，我認為其影響可能比人們更大（聽不清楚）

We still working on that.

我們仍在努力。

And just 1 short follow-up on that one. The longer rates stay higher, do you expect this to bleed over from office to other areas of commercial real estate?

對此只有 1 個簡短的跟進。利率維持較高水準的時間越長，您是否預期這種情況會從辦公大樓蔓延到商業房地產的其他領域？

With the margin, yes but it is kind of just at the margin. So you see debt service coverage ratios decline as interest costs take more of the cash flow out. In multifamily, for example, rents aren't increasing at the pace they once were. The massive difference, though, Mike, is that all other types or virtually all other types of real estate are cash flowing. So there's a value to them, right? They just might not cash flow to support the original amount of debt they had. The problem you have in office is, in many instances, there's no cash flow at all. It's really a unique animal at the moment.

就邊際而言，是的，但也只是處於邊際。因此，隨著利息成本帶走更多的現金流，您會看到償債覆蓋率下降。例如，在多戶住宅中，租金的成長速度不再像以前那樣了。然而，麥克，最大的區別在於所有其他類型或幾乎所有其他類型的房地產都是現金流的。所以他們有價值，對嗎？他們可能只是沒有現金流來支持他們原來的債務金額。在很多情況下，你在辦公室遇到的問題是根本沒有現金流。目前它確實是一種獨特的動物。

Our next questions come from the line of John McDonald with Autonomous Research.

我們的下一個問題來自自治研究組織的約翰‧麥克唐納 (John McDonald)。

Just wanted to just touch base on how you're thinking about capital build. Obviously, you're building organically. You've got some Visa that will add 14, 15 bps next quarter, I guess, are you just kind of thinking of gradually kind of building from this 10% reported and the 8.3% fully loaded to get to 9% or 10% or so over the next year, do a little bit of buybacks? Just kind of what's the plan there?

只是想談談您對資本建設的看法。顯然，您正在有機地建造。我猜你有一些 Visa 會在下個季度增加 14、15 個基點，你是否只是想從報告的 10% 和滿載的 8.3% 逐漸增加到 9% 或 10% 或者那麼明年會進行一些回購嗎？那裡有什麼計劃嗎？

Well, you phrased the question almost exactly correctly.

嗯，你提出的問題幾乎完全正確。

Congratulations.

恭喜。

If you think about it, inside, we have always moving pieces. So inside of the NPR on Basel III end game. The one thing, it's all up in the air but one thing that you got to believe is going to stick is AOCI. And so if that's the case, then our printed [8.3%] number is kind of a real number and that would be otherwise too low for us if we want to build that through time. Some of that will happen just from the rundown of the book and some of that will happen through us building capital. The ultimate, where should we be Basel III end game, everything settled out number, I don't know that we've necessarily set yet, other than it's higher than where we sit today on the 8.3% .

如果你仔細想想，我們內在總是有移動的部分。因此，NPR 報導了巴塞爾協議 III 的最終結果。有一件事，一切都還懸而未決，但你必須相信 AOCI 會持續下去。因此，如果是這樣的話，那麼我們印製的 [8.3%] 數字就是一個實數，如果我們想隨著時間的推移建立這個數字，那麼這個數字對我們來說就太低了。其中一些將在本書的概要中發生，而另一些將透過我們建立資本而發生。最終，我們應該在巴塞爾協議 III 的最後階段進行什麼，一切都已經確定了，我不知道我們是否已經確定了，除了它比我們今天的 8.3% 更高。

I think that's fair. That's fair. And we've got capital flexibility, as you know, John and that's where you want to be right now with the fluidity of everything.

我認為這是公平的。這很公平。如你所知，約翰，我們擁有資本彈性，這就是你現在想要的，一切都具有流動性。

And so for the near term, Rob, is this kind of the ballpark, $100 million a little bit north of that? Is that kind of the ballpark until you get a little more clarity?

Rob，從短期來看，1 億美元這個大概值是不是有點偏高了？在你看得更清楚之前，這就是大概的情況嗎？

Yes, that's right.

是的，沒錯。

Yes.

是的。

Thank you. There are no further questions at this time. I would now like to turn the floor back over to Bryan Gill for closing comments.

謝謝。目前沒有其他問題。我現在想把發言權交還給布萊恩·吉爾（Bryan Gill），請他發表結束語。

Well, thank you all for joining the PNC call this morning. And if you have any follow-up questions, please feel free to reach out to the IR team. Take care.

好的，感謝大家今天早上參加 PNC 電話會議。如果您有任何後續問題，請隨時聯絡 IR 團隊。小心。

Thank you.

謝謝。

Sorry about that. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation. Enjoy the rest of your day.

對此感到抱歉。今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與。享受你一天剩下的時間。