Bill Demchak: No, I was. Look, if you just look back at what happened this year on top of kind of eight or nine years of history post the financial crisis. We’ve seen, your words Goliath win, in terms of organic deposit share growth. That trend line has accelerated as a function of the mini crisis in March, where corporates bluntly don’t necessarily trust the regulatory environment to ensure that their deposits at a bank are safe. And so we’ve seen those deposits flow uphill. And if you aren’t a primary relationship with that corporate deeply embedded with treasury management and other services you net-net lose corporate deposits. I think when you combine that with the cost of technology, the removal of some of the tiering and regulation and capital requirements and liquidity, scale matters.
I think we are — on net benefited from the mini crisis, but just barely. And I think below us, people struggle with that conversation with corporate clients. Above us, perhaps it’s easy but I think we need to move into that next level such that we are seen coast-to-coast is a ubiquitous standard brand with the quasi support that the giant banks have in terms of times of crisis. I think it’s critical.
Mike Mayo: So what does that mean — okay, so you’ve identified the need and desire. So what does that mean, does it mean…
Bill Demchak: So naturally, over time, we are gaining share on our newer markets at a rapid pace. And we see that client acquisition and growth in all forms from deposits to loans to fees to so forth. I think through time, you’re going to see a clear differentiation of this dynamic played out across the market. But I think there’s going to be banks that are looking for strong partners, and I think we are a strong partner. I’m not going to force that issue. But I think longer term, we are a natural player in the consolidation of an industry where scale matters.
Mike Mayo: And if you can’t get the deals done and you’ve been opportunistic with National City and et cetera, since then. Organic ubiquity, how can you get there? Do we start seeing you advertise during the Super Bowl, do you double or triple your marketing spend? What do you do then?
Bill Demchak: You just have to execute. I mean there’s a — which simplifies the process. If you think about what’s happening in the banking industry today, there’s a couple or some other issues with the large banks. But on the deposit share side, there’s a couple of clear winners. There’s one that probably should be over time. There’s some people neutral and there’s people losing. There’s 5,000 banks in the country that I can take from and grow, right? That’s just a longer period of time, which we will pursue than what we might see if there’s inorganic opportunities when people come to the realization that they’re kind of riding something down in a deteriorating franchise. I can see the trends. I know how we would react to opportunities and the trends. I know what we’ll do to execute on our own, and I’m confident in that. But I’ll go all the way back, scale matters. We’re going to have to play that…
Mike Mayo: Just one follow-up. I got several e-mails from people saying, well, I don’t know if I want to own PNC stock because I’m afraid of what kind of deal they might do. What do you say to that?
Bill Demchak: I think they should look at our history is my simplest explanation. I think somebody asked that question once before, and I assure everybody, I still don’t want to do math and I think the opportunities will come our way. I don’t think we’ll have to chase them. One of the reasons people say why am I as vocal about this as I am. And part of the reason is to make the public aware, the public being regulators, politicians, boards of other banks aware of what’s happening in the banking industry and the need for consolidation. It doesn’t mean I’m going to do something stupid in the pursuit of it. I just think it’s going to happen.
Operator: Our next question comes from Ebrahim Poonawala with Bank of America.
Ebrahim Poonawala: I guess just maybe one to follow up on your discussion with Mike around M&A. I guess do you think the regulatory backdrop today is conducive for doing M&A or do we need a very different sort of DoJ just philosophical approach towards larger bank deals before we could see a pickup in deal activity?
Bill Demchak: I don’t think there’s a simple answer to that, because I think if you listen carefully to the various speeches that have been done that they’ll talk about the recognition of the need for M&A, but they’ll also talk about good mergers and bad mergers, good outcomes and bad outcomes along several metrics. So put differently, I think certain deals will get approved and others wouldn’t. I think we have proven as an acquirer that we know what we’re doing and that the result in institution is, in fact, stronger than the one we might acquire.
Ebrahim Poonawala: And I guess just taking a step back around your view around the mild recession. I’m just wondering how much of that is just theoretical informing your reserving model versus the weakness that you are seeing across your customers and that leads you to believe that we will have a recession in the middle of the year. Because once we go down that path, who knows how bad things could get. So I just would love to hear whether the recession assumption is just your conservatism or are you seeing weakness across your customers?
