The PNC Financial Services Group, Inc. (NYSE:PNC.PRQ) Q4 2016 Earnings Conference Call - Final Transcript
Jan 13, 2017 • 11:00 am ET
(Operator Instructions). Scott Siefers, Sandler O'Neill & Partners.
Let's see. Either Bill or Rob, I was hoping you could just sort of address the idea of the pace at which you would anticipate deploying liquidity say over the course of the year. I guess I can get a directional sense for what you've been doing in the earning asset base, but just curious philosophically how are you thinking about legging into higher interest rates as we look throughout 2017?
I mean, look, there is no magical answer to that. Through the course of the last bunch of years, even with rates largely flat inside of up-and-down cycles, we invest opportunistically small bits. We remain very short today, so we have a big opportunity, but we're not going to bet on red all in one rate move. So you'll see us through the course of the year, if rates continue their path and what we expect, to deploy liquidity and reduce our asset sensitivity, but there's no perfect answer to that and it certainly isn't programmatic.
And then maybe skipping over to the volume side of the NII equation. I think the first quarter guidance is still for more modest growth, but then you've got the stronger growth outlook for the full-year on overall loan growth. Just curious how you see things building as it relates to overall loan growth and some of the actual favorable impact of some of these newer initiatives on both the consumer and commercial side.
Yes, as it relates to the first quarter issue on NII, that's largely a day count issue. What are we? Two days?
On the NII, yes, they are stable -- the loans are --
So back that out. I mean loans, just in terms of our guidance, we assume flat across the year, but I would tell you, inside of that, we have continued fourth quarter pace for C&I and we have continued fourth quarter pace for what we had in consumer. Inside of consumer, as you know, we've got a number of initiatives that ought to allow us to accelerate that through time, not changing our credit box so much, it's just improving our process.
And inside of C&I, a couple of soundbites. December was the highest sales month ever for our corporate bank. The fourth quarter inside of middle market is the first quarter in multiple quarters where we actually had growth in plain-vanilla middle-market loans. And so maybe we're doing a great job, but maybe some of the sentiment you're hearing and feeling coming out of corporate America actually plays out and what we have in our forecast didn't really build in that impact. So there's probably upside to that. The consumer piece, there is upside, too, but that plays out over the course of years, frankly, as we change technology operations and some of the way we go about approving things.
And that consumer lift probably being more, just in the spirit of your question, more on the