The PNC Financial Services Group, Inc. (NYSE: PNC) Q3 2021 earnings call dated Oct. 15, 2021
Corporate Participants:
Bryan K. Gill — Executive Vice President & Director, Investor Relations
William S. Demchak — Chairman, President & Chief Executive Officer
Robert Q. Reilly — Chief Financial Officer
Analysts:
David A. George — Baird — Analyst
John Pancari — Evercore ISI — Analyst
R. Scott Siefers — Piper Sandler — Analyst
Betsy Graseck — Morgan Stanley — Analyst
Gerard Cassidy — RBC Capital Markets — Analyst
Mike Mayo — Wells Fargo Securities, LLC — Analyst
John E. McDonald — Autonomous Research — Analyst
Bill Carcache — Wolfe Research — Analyst
Ken Usdin — Jefferies — Analyst
Terry McEvoy — Stephens Inc. — Analyst
Matt O’Connor — Deutsche Bank Equity Research — Analyst
Presentation:
Operator
Good morning, my name is Jennifer, and I’ll be your conference operator today. At this time, I would like to welcome everyone to The PNC Bank’s Third Quarter Conference Call. [Operator Instructions]
I will now turn the call over to the Director of Investor Relations, Mr. Bryan Gill. Sir, please go ahead.
Bryan K. Gill — Executive Vice President & Director, Investor Relations
Thank you, Jennifer, and good morning, everyone. Welcome to today’s conference call for The PNC Financial Services Group. Participating on this call are PNC’s Chairman, President and CEO, Bill Demchak; and Rob Reilly, Executive Vice President and CFO.
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 materials are all available on our corporate website, pnc.com under Investor Relations. These statements speak only as of October 15, 2021, and PNC undertakes no obligation to update them.
Now I’d like to turn the call over to Bill.
William S. Demchak — Chairman, President & Chief Executive Officer
Thanks, Bryan. Good morning, everybody. I imagine you have seen that earlier this week we completed our conversion of BBVA USA. And I got to say, I’m really proud of the team and our ability to sign, close and convert $100 billion banking institution within a year. The dedication of our employees and our sustained investments in technology allowed us to convert roughly 9,000 employees, 2.6 million customers and nearly 600 branches across seven states. BBVA USA is now integrated into PNC and its customers can bank with us from coast-to-coast. We’re bringing our technology, talent and the full suite of best-in-class products and services to 29 of the nation’s 30 largest markets with attractive growth opportunities, as you’ll hear me talk about for years to come.
Now while we still have some more work to do, which is to be expected for a bank conversion of this size, we’re making solid progress with our staffing levels and the branch operations in BBVA USA legacy markets. In addition, we’re encouraged to see the teams build pipelines and importantly growing new clients. Now with BBVA legacy employees now on PNC systems, we believe our momentum is going to continue to accelerate as we previously were following the same game plan that we’ve used in previous acquisitions. And we know what to do, we just have to execute on it.
With respect to our third quarter results, we had a solid quarter highlighted by strong revenue growth, which included record fee income in our PNC legacy businesses and continued improvements in credit quality. Similar to last quarter, and pretty much as expected, we had a lot of moving parts in our reported results, and of course, Rob will take you through those in a few minutes.
Loan growth continues to be impacted by supply chain issues and the continued run-off of PPP loans and also the strategic repositioning of the BBVA portfolios, which is consistent with our acquisition projections. That said, total PNC legacy loans, if we back out the PPP run-off, actually grew almost $5 billion with growth in both commercial and consumer categories. And while the environment is still challenging, we’re actually pretty encouraged by what we’re seeing on the corporate side with spot utilization rates stabilizing and even rising a little on the back of strong new originations in our secured lending and corporate banking businesses. And on the consumer side, we’re also seeing promising origination activity, particularly in the residential real estate business.
Importantly, and as you see, our balance sheet remains very strong and we’re well positioned with substantial capital and liquidity to continue to support our expanding customer base while making strategic investments in our technology and businesses. Another exciting development this quarter was the announcement of our integration with Akoya Data Access Network. This is through an Application Programming Interface. The integration is going to allow millions of our customers, if they choose to do so, to safely share their financial information with fintechs and data aggregators. It’s an important step in our efforts to help our customers protect their data, while also giving them the choice to share their data with third-party applications. Similar to Low Cash Mode, this integration positions us as a leader in technology and innovation and enables us to best serve our customers.
And I’d like to close just by thanking our employees throughout the newly combined franchise for all their hard work, which enabled this conversion. Our significant collaboration across all divisions is impressive. And it gives me great confidence that we’ll capitalize on the enormous opportunities ahead of us.
And with that, I’m going to turn it over to Rob for a closer look at our results and then we’ll take your questions.
Robert Q. Reilly — Chief Financial Officer
Thanks, Bill, and good morning, everyone. As Bill just mentioned and notable during the third quarter, we converted the BBVA USA franchise to the PNC platform in less than 11 months following the announcement of the deal. PNC’s increased scale from this acquisition underscores the opportunity we have with the BBVA USA franchise. We have a proven track record of acquiring attractive strategic opportunities, identifying and reducing inherent risks and successfully growing franchises to deliver enhanced shareholder value. And as Bill just mentioned, we’re well on our way to accomplishing this with BBVA USA.
Due to the June 1 closing of the acquisition, our average balance sheet growth for the third quarter reflected the full quarter impact of the acquisition as loans grew $36 billion, securities increased $12 billion and deposits grew $53 billion. For comparative purposes to the second quarter, which you’ll recall included just one month of BBVA USA results, our balance sheet on Slide 3 is presented on a spot basis. Total spot loans declined $4.5 billion or 2% linked-quarter. Excluding the impact of PPP forgiveness, loans grew, and I’ll cover the drivers in more detail over the next few slides.
Investment securities declined approximately $900 million or 1% as we slowed purchase activity throughout much of the quarter during the relatively unattractive rate environment. Our cash balances at the Federal Reserve continued to grow and ended the third quarter at $75 billion. On the liability side, deposit balances were $449 billion at September 30 and declined $4 billion, reflecting the repositioning of certain BBVA USA portfolios.
We ended the quarter with a tangible book value of $94.82 per share and an estimated CET1 ratio of 10.2%, both substantially above the pro forma levels we anticipated at the time of the deal announcement. During the quarter, we returned capital to shareholders with common dividends of $537 million and share repurchases of $393 million. Given our strong capital ratios, we continue to be well positioned with significant capital flexibility going forward.
Slide 4 shows our loans in more detail. Average loans increased $36 billion linked-quarter to $291 billion, reflecting the full quarter impact of the acquisition. Taking a closer look at the linked-quarter change in our spot balances, total loans declined $4.5 billion. The PNC legacy portfolio excluding PPP loans grew by $4.7 billion or 2% with growth in both commercial and consumer loans. PNC legacy commercial loans grew $3.7 billion driven by growth within corporate banking and asset-based lending. This growth in balances has been aided by a slight uptick in spot utilization. And whilst still near historic lows, utilization did reach its highest level since December 2020. Growth in PNC’s legacy consumer loans linked-quarter was driven by higher residential real estate balances.
Within the BBVA USA portfolio, loans declined $4.4 billion, primarily due to intentional run-off relating to the overlapping exposures and non-strategic loans. Looking ahead, we have approximately $5 billion of additional BBVA USA loans that we intend to let roll off over the next few years, which is in line with our acquisition assumptions. Finally PPP loans declined $4.8 billion due to forgiveness activity. And as of September 30, $6.8 billion of PPP loans remain on our balance sheet.
Moving to Slide 5. Average deposits of $454 billion increased $53 billion compared to the second quarter, driven by the acquisition. On the right, you can see total period end deposits were $449 billion at September 30, a decline of $4 billion or 1% linked-quarter. Inside of this, PNC legacy deposits increased $5.4 billion as deposits continue to grow reflecting the strong liquidity position of our customers. BBVA USA deposits declined approximately $9.4 billion during the third quarter, which was anticipated as we rationalized the rate paid on certain acquired commercial deposit portfolios and exited several non-core deposit-related businesses. Overall, our rate paid on interest-bearing deposits is now 4 basis points, a 1 basis point decline linked-quarter.
Slide 6 details the change in our period end securities and Federal Reserve balances. And as most of you know, we have been disciplined in deploying our excess liquidity with rates at historically low levels. Back at the beginning of the year, as the yield curve steepened, we accelerated our rate of purchasing activity. However, towards the end of the second quarter, we deliberately slowed our purchases as yields declined.
With the increase in rates at the end of the third quarter, we’ve resumed our increased levels of purchasing, including $5.4 billion of forward settling securities, which will be reflected in the fourth quarter. Average security balances now represent approximately 24% of interest-earning assets, and we still expect to be in the range of approximately 25% to 30% by year end.
As you can see on Slide 7, our third quarter income statement includes the full quarter impact of the acquisition. Reported EPS was $3.30, which included pre-tax integration costs of $243 million. Excluding integration costs, adjusted EPS was $3.75. Third quarter revenue was up 11% compared with the second quarter, reflecting the acquisition as well as strong organic fee growth. Expenses increased $537 million or 18% linked-quarter, including $235 million of integration expenses and two additional months of BBVA USA operating expenses. Legacy PNC expenses increased $76 million or 2.7%, virtually all of which was driven by higher fee business activity.
Pre-tax pre-provision earnings excluding integration costs were $1.9 billion, an increase of $25 million or 7%. The provision recapture of $203 million was primarily driven by improved credit quality and changes in portfolio composition, and our effective tax rate was 17.8%. For the full year, we expect our effective tax rate to be approximately 17%. As a result, total net income was $1.5 billion in the third quarter.
Now let’s discuss the key drivers of this performance in more detail. Turning to Slide 8. These charts illustrate our diversified business mix. In total, revenue of $5.2 billion increased $530 million linked-quarter. Net interest income of $2.9 billion was up $275 million or 11%, reflecting the full quarter benefit of the earning asset balances acquired from BBVA USA. Inside of that, interest income on loans increased $277 million or 13%, while investment securities income declined $9 million, driven by elevated premium amortization on the acquired BBVA USA portfolio.
Net interest margin of 2.27% was down 2 basis points, driven primarily by lower security yields. Importantly, in the fourth quarter, we expect premium amortization to decline meaningfully and the yield on securities — the yield on the securities portfolio to increase. Third quarter fee income of $1.9 billion increased $274 million or 17% linked-quarter. BBVA USA contributed fee income of $184 million, an increase of $122 million linked-quarter, driven by two additional months of operating results.
Legacy PNC fees grew by $152 million linked-quarter or 10%, driven by higher corporate service fees related to record M&A advisory activity as well as growth in residential mortgage revenue. Other non-interest income of $449 million decreased $19 million linked-quarter as higher private equity revenue was more than offset by the impact of $169 million negative Visa derivative adjustment. This adjustment relates to the extension of the expected timing of litigation resolution.
Turning to Slide 9. Our third quarter expenses were up by $537 million or 18% linked-quarter. The increase was primarily driven by the impact of higher BBVA USA’s expenses of $327 million and higher integration expenses of $134 million. PNC legacy expenses increased $76 million or 2.7% due to higher incentive compensation commensurate with the strong performance in our fee businesses, including a record quarter in M&A advisory fees. Our efficiency ratio adjusted for integration cost was 64%.
Obviously, with the acquisition, our expense base is now higher, but nevertheless, we remain disciplined around our expense management. And as we stated previously, we have a goal to reduce PNC’s standalone expenses by $300 million in 2021 through our continuous improvement program, and we’re on track to achieve our full year target. Additionally, we’re confident we’ll realize the full $900 million in net expense savings off of our forecast of BBVA USA’s 2022 expense base and expect virtually all of the actions that drive the $900 million of savings to be completed by the end of 2021. We still expect to incur integration costs of approximately $980 million related to the acquisition. Since the announcement of the acquisition, we’ve incurred approximately half of these integration costs. And as Bill mentioned, we appreciate all the hard work our teammates have done to keep us on track and to achieve these goals.
Our credit metrics are presented on Slide 10 and reflect strong credit performance. Non-performing loans of $2.5 billion decreased $251 million or 9% compared to June 30 and continue to represent less than 1% of total loans. Total delinquencies of $1.4 billion at September 30 increased $106 million or 8%. However, this increase includes approximately $75 million of operational delays in early stage delinquencies, primarily related to BBVA USA acquired loans. Subsequent to quarter end, all of these operational delinquencies have been or are in the process of being resolved. Excluding these, total delinquencies would have increased $31 million or 2%.
Net charge-offs for loans and leases were $81 million, a decline of $225 million linked-quarter. The second quarter included $248 million of charge-offs related to BBVA USA loans, mostly the result of required purchase accounting treatment for the acquisition. Our annualized net charge-off to average loans in the third quarter was 11 basis points. And during the third quarter, our allowance for credit losses declined $374 million, primarily driven by improvement in credit quality as well as changes in portfolio composition. At quarter end, our reserves were $6 billion, representing 2.07% of loans.
In summary, PNC reported a strong third quarter, and notably, earlier this week, converted the BBVA USA franchise. With this step completed, we expect to add significant value to our shareholders as we continue to realize the potential of the combined company. In regard to our view of the overall economy, after somewhat slower growth during the third quarter of 2021, due in part to the delta variant and supply chain problems, we expect GDP to accelerate to about 6% annualized in the fourth quarter. We also expect the Fed funds rate to remain near zero for the remainder of the year.
Looking at the fourth quarter of 2021 compared to the recent third quarter results, we expect average loan balances excluding PPP to be up modestly. We expect NII to be up modestly. On a percentage basis, we expect fee income to be down between 3% and 5%, mostly reflecting the elevated third quarter M&A activity. We expect other non-interest income to be between $375 and $425 million, excluding net securities and Visa activity. On a percentage basis, we expect total non-interest expense to be down between 3% and 5% excluding integration expense, which we approximate to be $450 million during the fourth quarter. And we expect fourth quarter net charge-offs to be between $100 million and $150 million.
And with that, Bill and I are ready to take your questions.
Questions and Answers:
Operator
Thank you. [Operator Instructions] Your first question comes from the line of Dave George with Baird. Please go ahead with your question.
David A. George — Baird — Analyst
Hey, guys, good morning. I had a question on loans…
Robert Q. Reilly — Chief Financial Officer
Good morning, Dave.
David A. George — Baird — Analyst
Good morning, Rob. I had a question on loans. So you said, on the BBVA, there is an additional $5 billion of declines to come, can you kind of give us a sense with respect to the timing and how you see that portfolio running off? And then I’ve got a follow-up.
Robert Q. Reilly — Chief Financial Officer
Sure. Yeah, again, good morning, Dave. So of the $5 billion that we’ve identified going forward that we intend to run off, $2 billion of that we expect to run off in the fourth quarter, and that’s part of our guidance. The remainder likely over the next couple of years.
David A. George — Baird — Analyst
Great. Thanks for that. So in terms of kind of the legacy PNC C&I businesses, obviously, it was encouraging to see a little bit of kind of organic growth in the third quarter. Can you give us a sense — and this may be difficult, but clearly supply chain is weighing on working capital needs. And I’m curious if you can contrast the growth in commitments relative to the growth in outstandings in commercial? And just kind of curious how the commercial business is doing with respect to adding new names and new commitments and that we’re obviously not seeing the benefit of that at least today in terms of outstandings because of that inventory issue?
William S. Demchak — Chairman, President & Chief Executive Officer
Hi. It’s Bill. We’ve been — for the last couple of quarters, our new money commitments have been, I think maybe a record levels, Rob, but increasing each quarter. And so new business, new clients, in some cases, just upsizing what we already had. In the quarter, we had a little bit utilization, but most of this was kind of new client growth.
David A. George — Baird — Analyst
Yeah, that’s great.
Robert Q. Reilly — Chief Financial Officer
And as you know, Dave, like we had mentioned, utilization ticked up a little bit. Still at historic lows, but a little bit, and that was part of it too.
David A. George — Baird — Analyst
Sound good, guys. Thanks.
Robert Q. Reilly — Chief Financial Officer
Sure.
Operator
Thank you. Our next question is from the line of John Pancari from Evercore ISI. Please go ahead.
John Pancari — Evercore ISI — Analyst
Good morning.
Robert Q. Reilly — Chief Financial Officer
Good morning, John.
William S. Demchak — Chairman, President & Chief Executive Officer
Hey, John.
John Pancari — Evercore ISI — Analyst
On your — on the loan growth topic, that tick up in utilization and then also the new clients that you mentioned, could you give us a little more detail on what areas and what business areas, which industries that you’re starting to see that momentum start to build?
William S. Demchak — Chairman, President & Chief Executive Officer
Yeah. They’re kind of related. I mean, the growth in our secured lending areas sort of stood out and they traditionally have higher utilization. So in some ways, it was an increase in the overall average because we grew the book with the highest individual average rate. But even in the straight middle market corporate book, it finally stabilized and I guess went up a couple of basis points there.
Robert Q. Reilly — Chief Financial Officer
Just a little bit, yeah. So basically, business credit, our asset-based lending group and corporate banking.
John Pancari — Evercore ISI — Analyst
Got it. Okay. And then on the expense side, just wondered if you could talk a bit about wage inflation, if you’re starting to see any signs of that in your franchise? And also, if so, is there any risk to how we’re thinking about the merger cost or the $900 million in net cost saves? Thanks.
William S. Demchak — Chairman, President & Chief Executive Officer
With respect to wage inflation, you might have seen an announcement that we increased our base rate to at least 18 and beyond that in some cases in certain markets. So…
Robert Q. Reilly — Chief Financial Officer
About $18 an hours.
William S. Demchak — Chairman, President & Chief Executive Officer
Yeah, sorry. And it’s — so that is real, but that was kind of already assumed in our financial assumptions. It doesn’t have anything to do with our assumed cost saves, but there is real pressure there. And the only way through time to kind of offset that pressure is through increased automation and frankly control on overall headcount.
John Pancari — Evercore ISI — Analyst
Okay. So fair to say though, longer term impact on how you view the long-term efficiency ratio for the bank?
William S. Demchak — Chairman, President & Chief Executive Officer
Too early to tell, right? We’re on this — so average wages per employee are going to go up. An issue is how quickly we — how we scale our franchise through automation so we become larger without more employees. And that’s played out for a period of time here, John, if you just go through our financial statements even going back for five years. We just need to continue that trend to be able to continue our pursuit on positive operating leverage.
Robert Q. Reilly — Chief Financial Officer
And offset what is real in terms of wage pressure.
William S. Demchak — Chairman, President & Chief Executive Officer
Yeah.
John Pancari — Evercore ISI — Analyst
Yeah, got it. All right. Thank you.
Operator
Thank you. Our next question is from the line of Scott Siefers with Piper Sandler. Please go ahead.
R. Scott Siefers — Piper Sandler — Analyst
Good morning, guys. Thanks for taking the question. Rob, was hoping to drill into the expense dynamics a little more. So your fees, excellent this quarter. Though that will come down, but still appear to remain very strong. As it relates to the kind of the related cost outlook, how much of your expense guide contemplates sort of ongoing costs related to that strong fee momentum? And then can you maybe sort of size up how the $900 million in BBVA-related cost savings fit into the fourth quarter guide? In other words, how much starts to come next quarter or comes next quarter and then how much is into 2022 still?
Robert Q. Reilly — Chief Financial Officer
Sure. So that’s a lot there, Scott. But the easy answer to that is, that’s all in the guidance for the fourth quarter. So we — to your point, fee businesses have been — they were good in the third quarter. They’ve been good all year across the board; asset management, consumer services, corporate services, particularly in the third quarter as well as residential mortgage. And with the exception of the elevated levels of M&A activity and corporate services, we see all of that continuing into the fourth quarter, and that’s part of the guide. So there will be expenses that are obviously associated with that.
In terms of the $900 million in savings, we are achieving savings presently. We got some in the third quarter. We’ll get some more in the fourth quarter. That’s part of the guide. But the bulk of the savings will be in 2022. So reaffirming the $900 million in savings, a portion of which we’ll recognize in 2021 and then of course going forward into 2022. All in our guidance.
R. Scott Siefers — Piper Sandler — Analyst
Perfect. Thank you. And then you touched on this in your prepared remarks, but that elevated premium amortization at BBVA that weighed on the consolidated company’s securities portfolio yield, can you just expand upon that a little please?
William S. Demchak — Chairman, President & Chief Executive Officer
It was painful. In its simplest form, we marked that securities book when we closed the deal.
Robert Q. Reilly — Chief Financial Officer
June 1.
William S. Demchak — Chairman, President & Chief Executive Officer
Yeah, at really low rates that then continued through, in fact, rallied through the quarter. So the prepay rates on their CMOs increased. And we had — so you think about it. We mark a book to whatever the yield was that’s at a premium, all of that prepays because of the low rates. Hopefully, we expect that to abate as rates have now kind of gone back up. But we marked them as premium securities and then got caught by the…
Robert Q. Reilly — Chief Financial Officer
And it was a function of the timing of the acquisition setting up those securities as premium securities.
William S. Demchak — Chairman, President & Chief Executive Officer
Yeah. In its simplest form, what we did, if you think about it is, it knocked down goodwill in the way when we marked the book because we had a higher valued asset. So it took — in effect took in income upfront, and we paid for it a little bit this quarter.
Robert Q. Reilly — Chief Financial Officer
That’s right.
R. Scott Siefers — Piper Sandler — Analyst
I mean, Rob, the securities yield, the guide on that, like that book yielded 50 basis points or something?
Robert Q. Reilly — Chief Financial Officer
Yeah. That has, yeah.
William S. Demchak — Chairman, President & Chief Executive Officer
Yeah. And it’s — and we expect going forward the total book to increase.
Robert Q. Reilly — Chief Financial Officer
That’s right. Which is what I said in my comments. That’s right.
R. Scott Siefers — Piper Sandler — Analyst
Yeah. And glad to kind of hear that.
Robert Q. Reilly — Chief Financial Officer
[Speech Overlap] and it is acquisition-related.
William S. Demchak — Chairman, President & Chief Executive Officer
That was painful.
R. Scott Siefers — Piper Sandler — Analyst
All right. Well, perfect. I appreciate the color.
Operator
Thank you. Our next question is from the line of Betsy Graseck with Morgan Stanley. Please go ahead with your question.
Betsy Graseck — Morgan Stanley — Analyst
Hey, good morning.
Robert Q. Reilly — Chief Financial Officer
Good morning, Betsy.
Betsy Graseck — Morgan Stanley — Analyst
Hey, I know we’ve had a lot of expense discussions already, but I’m just looking at what you’ve done so far in the quarter. When I look at your detail around the run rate of expenses at BBVA in 2Q, the one month there that you had and the three months, three, four months that you had in 3Q, it already looks like you’ve brought down expenses a bit. And I’m just trying to understand what you’ve done so far and what’s left from here, because you’ve already executed a bit it seems, right? Am I missing something there?
Robert Q. Reilly — Chief Financial Officer
No, no. You’re right. You’re right. Hey, Betsy, this is Rob. You’re right. Now we’ve started, as we said we would. So we have begun to realize expense savings pretty much across all the categories, but we’re just getting started. So what you see in that [Technical Issue] we still have work to go.
Betsy Graseck — Morgan Stanley — Analyst
Okay. And then when I’m thinking about the pace of that expense save from here, part of it’s a function of the conversion, the lift and shift, obviously. But then, can you talk us through what comes after the lift and shift in terms of expense save trajectory?
William S. Demchak — Chairman, President & Chief Executive Officer
I don’t think anyone talked about it. I mean…
Robert Q. Reilly — Chief Financial Officer
Why don’t you talk about the activities and then I can…
William S. Demchak — Chairman, President & Chief Executive Officer
Line items? I mean, we have…
Betsy Graseck — Morgan Stanley — Analyst
No, like, branch closures and what — really the question is, it’s a lift and shift.
William S. Demchak — Chairman, President & Chief Executive Officer
Well, some it’s branch closures, some of it will be in the form of people who have stayed with us through conversion on stay bonuses. There will be shutdown of systems and vendor contracts and all sorts of different things that will roll through depending on time. Some of which we leave around for a bit as sort of back up for, notwithstanding the fact, we’ve converted, we’ll leave some stuff up and running for a little bit of time just in case.
Robert Q. Reilly — Chief Financial Officer
I think that’s right. And probably, at least in terms of the pickup in the fourth quarter activity, we will have the mix, we will pick up more vendor savings. We’ve already started that and we’ll start to pick those up, but at an accelerated rate.
Betsy Graseck — Morgan Stanley — Analyst
Yeah. And I guess the question really is, lift and shift as a percentage of total cost saves, like round numbers.
William S. Demchak — Chairman, President & Chief Executive Officer
It gives — that’s the wrong way to think about it. The fact that we get that done at one point in time allows us to then aggressively move costs, right, because legacy systems shut down, legacy vendors shutdown, related people who were supporting old applications all of that stuff now starts rolling through the system.
Betsy Graseck — Morgan Stanley — Analyst
Yeah, yeah. And my point is, it’s not the one and done. It’s a portion of the total expense save that you’ll be generating.
William S. Demchak — Chairman, President & Chief Executive Officer
Yeah. And look, at the end of the day, the guidance is the guidance, right? We’re going to get some more in the fourth quarter and then we’re going to get it all next year.
Robert Q. Reilly — Chief Financial Officer
Yeah. And I’d just say…
William S. Demchak — Chairman, President & Chief Executive Officer
We’re on track. We will get it all. We know the line items where it will come from.
Robert Q. Reilly — Chief Financial Officer
I just think — I think the way to think about it, Betsy, is it’s sequential. So the conversion and the lift and shift clears the deck so to speak to get started sooner rather than later unrealizing those savings.
Betsy Graseck — Morgan Stanley — Analyst
Got it. All right. Thank you.
Operator
Thank you. Our next question is from the line of Gerard Cassidy with RBC. Please go ahead.
Gerard Cassidy — RBC Capital Markets — Analyst
Good morning, Bill. Good morning, Rob.
Robert Q. Reilly — Chief Financial Officer
Hey, Gerard.
William S. Demchak — Chairman, President & Chief Executive Officer
Hey, Gerard.
Gerard Cassidy — RBC Capital Markets — Analyst
Can you guys share with us — you’ve mentioned a few times within the corporate services numbers that the advisory business — I think you said in the press release it was at record levels, but you, Rob, in your guidance, you expect it to come down. Other than the obvious pipeline that you guys see in your book, can you share with us what else your guys on the front lines are saying about M&A? Is it just that there’s just not as much — as many companies that are left to do M&A going into ’22?
William S. Demchak — Chairman, President & Chief Executive Officer
Look, in its simplest form, you set a record, you assume you won’t keep setting records. There is nothing out there that suggest necessarily that it’s going to weaken from here. But by the way, inside of that, we obviously, we have Harris Williams, but we also had breakout quarters for Solebury and Sixpoint and related advisors.
Robert Q. Reilly — Chief Financial Officer
Yeah.
William S. Demchak — Chairman, President & Chief Executive Officer
And if the market continues then we’ll continue to have great fee income out of it. But it’s hard to keep saying we’re going to bunch it a record upon a record. I think it’s as simple as that.
Robert Q. Reilly — Chief Financial Officer
That’s right.
Gerard Cassidy — RBC Capital Markets — Analyst
Got it. And what does it represent now of corporate services or what did it represent in the third quarter?
Robert Q. Reilly — Chief Financial Officer
Well — yeah, no, I know. The — let’s say, I’ll do the quick math in my head. 20%.
Gerard Cassidy — RBC Capital Markets — Analyst
Got it. Okay. And then a question on the loan-to-deposit ratio. You and your peers of course have incredible amounts of liquidity and that ratio has come down. Looks like the Fed now is going to enter into a tapering phase, and clearly they will still be adding to the deposits of the banking system until tapering is over. How are you guys looking at — and I know there’s a lot of moving parts with loan growth and maybe some deposit shrinkage. But when you look out over the end of ’22 and into ’23, BBVA as fully integrated, what do you think is an optimal loan-to-deposit ratio for you folks and when do you think you could get there?
William S. Demchak — Chairman, President & Chief Executive Officer
There’s too many variables.
Gerard Cassidy — RBC Capital Markets — Analyst
Yeah, okay.
William S. Demchak — Chairman, President & Chief Executive Officer
I mean, it’s — if you go back in history, people would operate, I don’t know where we were 80%, 85% or something.
Robert Q. Reilly — Chief Financial Officer
85%. Yeah, 85% to 90%.
William S. Demchak — Chairman, President & Chief Executive Officer
And that was kind of a liquidity safety function. So if you were short liquidity at that point, you’d raise wholesale liquidity to kind of keep your ratio at that point. Today we are so flushed with reserves into the system, wholesale funding is next to zero. And until the Fed, forgot about tapering, actually shrinks its balance sheet, that’s not going to change. Now loan growth even accelerated and exaggerated loan growth will absorb some of that. But I think you’re going to see loan-to-deposit ratios low for a long period of time. And therefore, I think you’re going to see security balances as a percentage of the balance sheet, and we’ve already talked about this, increase across the industry, and I think it’s going to take years to play out.
Gerard Cassidy — RBC Capital Markets — Analyst
Very good. I appreciate the color. Thank you.
Operator
Thank you. Our next question is from the line of Mike Mayo from Wells Fargo Securities. Please go ahead with your question.
Robert Q. Reilly — Chief Financial Officer
Hey, Mike.
William S. Demchak — Chairman, President & Chief Executive Officer
Hi, Mike.
Mike Mayo — Wells Fargo Securities, LLC — Analyst
No good deed goes unpunished. So since you — from announcement to conversion under 11 months, it’s probably a record why aren’t you increasing your $900 million cost savings? But more generally, having completed the lift and shift conversion over the weekend, what parts of your technology do you think are further validated, whether it’s your use of the cloud or Data Lakes or something digital that you’re doing that you think others haven’t advanced as far as you have?
William S. Demchak — Chairman, President & Chief Executive Officer
Well look, with the first question. At the end of the day, we’re always in the business of figuring out how to become more efficient. I think of the $900 million as line items we know we can get. We actually know where they’re coming from and when they’re going to show up. So you’re right, at the margin, we’ll find some other stuff. By the way, we’ll probably find some stuff we need to invest in too. So we just — we’ve put that into our guidance. We say, look, we’ll get the $900 million. We’ll talk to you about ’22 when we get closer, but we haven’t lost focus on the primary objective.
Robert Q. Reilly — Chief Financial Officer
And the $900 million, you know that, Mike, the $900 million was estimated off the expectation that we convert and when we did. So we didn’t convert sooner than we thought, we did it on time.
William S. Demchak — Chairman, President & Chief Executive Officer
But that was a number that, how to say this, visual until we can see it. We know the line items, it’s very precise. The technology, look, it worked. We had at the margin some confusion with retail clients on password resets and some other things, but the basic technology moving it over, turned it on, it all worked. It’s just this phenomenal effort by our team and validates the investment we’ve made over the years. I don’t know what people have or don’t have in terms of their ability to do that. But the biggest element for us, Mike, and I think we’ve talked to you about this was in effect this Data Lake idea where since our applications don’t hold their own data, they call from a Central Lake and they’re linked through API and they’re cloud-native, it just makes it very easy to move data and you onboard a new client. It’s not much different than is if we just got a couple of million new clients overnight.
That — and I make it sound very easy and all my technologists are ripping their hair off right now. But that’s what we did, and it worked. The investment in that was everything from the Data Lake, to Cloud Native to API and everything. And frankly to having businesses and technology [Technical Issue] So technology at PNC is not in the back office somewhere doing its job, they’re actually side-by-side in an agile teams working with their business partners to develop product, and importantly, to execute the conversion, which we did. That cultural element is probably as important or more important than all the rest.
Mike Mayo — Wells Fargo Securities, LLC — Analyst
So just in the final look at this, how many apps did you eventually keep from them or how much in gigabytes did it add or just one more time what you added?
William S. Demchak — Chairman, President & Chief Executive Officer
Well, we ended — I think we ended up keeping two or something.
Mike Mayo — Wells Fargo Securities, LLC — Analyst
Two is the the last number I think.
William S. Demchak — Chairman, President & Chief Executive Officer
Yeah. One was the business transfer, the personal foreign currency transfer business. I don’t know what the other one was, and that’s kind of it.
Mike Mayo — Wells Fargo Securities, LLC — Analyst
And that was — I’ll just try and — I have the numbers right. Was that out of 600 and you have 300 or something like that? And I mean, you thought this company is much smaller?
William S. Demchak — Chairman, President & Chief Executive Officer
We went through that before and I can’t remember them off the top of my head, but they had twice the number that we have. That feels roughly…
Robert Q. Reilly — Chief Financial Officer
It was 600. They had more than 600.
William S. Demchak — Chairman, President & Chief Executive Officer
They had 600, we run the whole bank on 300.
Robert Q. Reilly — Chief Financial Officer
A little more than 300.
William S. Demchak — Chairman, President & Chief Executive Officer
Yeah. A little more.
Robert Q. Reilly — Chief Financial Officer
Yeah. Why is — why was that? I mean, that’s the number that stands out. They’re so much smaller, yet they had twice as many apps and we haven’t got that stake.
William S. Demchak — Chairman, President & Chief Executive Officer
Yeah. I mean, I think once you start using API-based programs, it’s almost kind of a click and drag, right? You don’t have to recreate functionality across multiple applications. You can simply bring in whatever functionality you need from a library of API. So let’s say you have an application that just needs a checking account balance, rather than you write a full application that goes and finds a checking account balance off your core ledger, we just have an API you drag in and produce it. I think that’s a big part of it. It’s also credit to the team way back when we did National City, we moved everything on to a single application. A lot of times, and BBVA might have done this, you’ll do an acquisition, you just keep too many applications alive because you don’t want to choose between one or between the two of them.
Mike Mayo — Wells Fargo Securities, LLC — Analyst
Got it. All right. Thank you.
Operator
Our next question is from the line of John McDonald with Autonomous Research. Please go ahead with your question.
John E. McDonald — Autonomous Research — Analyst
Hi, good morning, guys.
Robert Q. Reilly — Chief Financial Officer
Hey, John.
John E. McDonald — Autonomous Research — Analyst
PPP dynamics are confusing to all of us, and I just wanted to ask a little bit about that. So Rob, on the outlook, I think it’s helpful that you give the core loan growth and it excludes PPP, but maybe you could give us a sense of what you expect for PPP pay-offs in the fourth quarter and then beyond? And then also on the NII, is PPP included in that? And what kind of PPP contribution have you had to NII like this quarter? What happens to that going forward?
Robert Q. Reilly — Chief Financial Officer
Yeah. In simple terms, John, and you’re right, it is confusing. But simply put, we expect PPP to be down on average about $4 billion in the fourth quarter. In the third quarter — and net interest income contribution from PPP was about $100 million, and we expect that to go down approximately 25 to 30, and that is in our guidance — our NII guidance.
John E. McDonald — Autonomous Research — Analyst
Yeah. Okay. Got you. Great. Another clean-up question here. On the securities — redeployment of cash into securities, 25% to 30% is the target for this year. Over time, and this could get into discussion that you had with Gerard about loan-to-deposits, but could that go higher over time if loan growth doesn’t surface as much as we think?
William S. Demchak — Chairman, President & Chief Executive Officer
I think it could. I think that depends on opportunity set, where the yield curve is and how we think about long-term risk. I mean, part of the issue today, John, is you have this long tail risk, maybe it’s not such a long tail that you end up with a spike in long rates because inflation becomes real which causes you at the margin to be slower than you otherwise might be in deploying that cash. I think as that risk normalizes, if we don’t see loan growth, you’ll see balances increased.
John E. McDonald — Autonomous Research — Analyst
Got it. Okay. Thanks, guys.
Robert Q. Reilly — Chief Financial Officer
Sure.
Operator
Thank you. Our next question is from the line of Bill Carcache with Wolfe Research. Please go ahead with your question.
Bill Carcache — Wolfe Research — Analyst
Thank you. Good morning, Bill and Rob.
Robert Q. Reilly — Chief Financial Officer
Good morning.
Bill Carcache — Wolfe Research — Analyst
Following up on Gerard’s question as we look ahead to spend tapering and eventually rate hikes, how are you thinking about deposit betas relative to when we exited the last reserve cycle?
William S. Demchak — Chairman, President & Chief Executive Officer
I think they’re going to be a lot lower simply because there’s so much cash slush around. Remember, even when the Fed tapers, they’re not necessarily shrinking. And so with the cash in the system, that competition for deposits just won’t be as great as it once was. So I think at the margin, they’ve got to be lower.
Robert Q. Reilly — Chief Financial Officer
And another way of answering that, with all the deposits we have, we’re not thinking a lot about betas right now.
Bill Carcache — Wolfe Research — Analyst
Right. No, that makes sense.
Robert Q. Reilly — Chief Financial Officer
Yeah, yeah.
Bill Carcache — Wolfe Research — Analyst
Understood. That’s helpful. And I guess, going back to the momentum you’re seeing in new money commitments, what’s your sense from your discussions with your customers, the extent to which utilization rates are going to remain relatively depressed as long as the supply chain problems that we’re seeing remain unresolved versus the potential for continued improvement even if the supply chain problems were to extend well into next year say? Just trying to get a feel for how big that — how much of an impact it’s having?
William S. Demchak — Chairman, President & Chief Executive Officer
It varies across industries. I mean, they — I shouldn’t say without question, but the vast majority of our clients talk about the need and desire to build inventory and do more capex, which is why some of the lines have been increasing. Their ability to execute on that is somewhat dependent on supply chain and it depends what industry you’re in. If you’re dependent on chips for your manufacturer, it’s a struggle. Other businesses are not and could build immediately and maybe we are already seeing the benefit of that.
Bill Carcache — Wolfe Research — Analyst
Got it. And then if I can switch to BBVA and the revenue synergy opportunities, when you think about those, how does your confidence level around the timing and magnitude of realizing those differ relative to what you signed RBC? It seems you guys have the playbook, but just trying to get a sense for differences that you may see and the execution this time around?
Robert Q. Reilly — Chief Financial Officer
Yeah. Hey, Bill, it’s Rob. In terms of contracting with RBC, just set that aside, in terms of the BBVA, we’re very confident in terms of the numbers, as Bill mentioned, that we’ve laid out and the plans to get there. It’s probably on the increment better than RBC just because it’s bigger. We know what we do, it’s very familiar to [Technical Issue], of course, RBC was successful, but this is more of magnitude.
William S. Demchak — Chairman, President & Chief Executive Officer
Mike, let’s say, my clients who runs a CNIB business would say, it’s as much as perhaps a year faster. And he gets there largely because the teams are in place much faster than we had them in place with RBC, and we’ll see how that plays out. But we’re hitting the ground faster in terms of teams who are out calling on clients. And then we also have a book of business with BBVA that is better than what we had with RBC. So we have the ability to upsell that book of business on the fee side. You’ll remember us talking about just their percentage of fees to total revenue being very low. So we have an opportunity for fee momentum early on, we have teams in place and we ought to be able to grow clients a little bit faster than what we saw in RBC just because we’re on the ground already.
Robert Q. Reilly — Chief Financial Officer
That’s the revenue aspect. So the revenue aspect of it is significantly higher than RBC. The expense side, I thought was the question, the magnitude that I mentioned is the answer.
Bill Carcache — Wolfe Research — Analyst
Understood. That’s really helpful. If I could squeeze in one last quick one. Bill, you’ve talked about having teams inside of PNC studying crypto, and love to hear your thoughts on a couple of areas. First, is there a revenue opportunity for PNC as you’ve taken a poster, look at it? And then second, from a risk perspective, how concerned are you about the risk of disruption from a decentralized finance?
William S. Demchak — Chairman, President & Chief Executive Officer
So what we talked about or what we are contemplating offering we literally have built today to our clients. And look, our clients are interested in it. It is an ability for them to trade crypto in a safe fashion through mobile app at PNC. I don’t have to opine on whether I think that’s a good investment or not a bad investment. We know with certainty that we have 10% to 15% of our clients who are moving money into and out of crypto exchanges. So they’re interested in it, and our surveys confirm that.
The financial disruption of crypto broadly and probably inside of that stable coin is a real threat, and it depends on how that plays out through time. There’s the risk I think that people are aware of with certain of the stable coins having, let’s call it, suspicious collateral behind them. But there is also the risk through time that a substantial portion of savings, either domestic savings or even emerging market savings get absorbed into a stable coin and not on the traditional money transmission system and that would affect the economy and the ability to control the money supply long-term. And I think that’s what — I know, that’s what the various regulatory bodies are looking at to figure out how to get their arms around. But that’s independent of whether we let our clients trade Bitcoin.
Robert Q. Reilly — Chief Financial Officer
Right, right.
Bill Carcache — Wolfe Research — Analyst
Yeah. But there is a revenue opportunity from that portion of it even by simply just providing the service to them. So is that a fair conclusion?
William S. Demchak — Chairman, President & Chief Executive Officer
Sure. I mean, at the margin, I — at the margin.
Robert Q. Reilly — Chief Financial Officer
We don’t see it as a big driver.
Bill Carcache — Wolfe Research — Analyst
Right. Got it. That’s super helpful. Thank you again for taking my questions.
Robert Q. Reilly — Chief Financial Officer
Sure.
Operator
Thank you. Our next question is from the line of Ken Usdin with Jefferies. Please go ahead.
Ken Usdin — Jefferies — Analyst
Hey, thanks. Good morning, guys. Can I come back, Rob, on the premium amortization question? I’m just wondering if you can help us understand in the 1.45 for securities yield, what either the basis point impact was or if you even have total dollars of premium aim for the company and what you expect that to look like going forward?
Robert Q. Reilly — Chief Financial Officer
That’s all in our guidance in terms of the dollar amounts. But I’d say, if you took a look at it in terms of the yields, you can see the decline in yields. If it wasn’t for the elevated premium amortization expense, we would be close to down a little bit from those second quarter levels.
Ken Usdin — Jefferies — Analyst
Okay. That’s fair. And that was my second question is, what are you seeing just on core front book, back book and relative to these forward settlings? And just what you’re seeing in the market today and what you can get your hands on?
Robert Q. Reilly — Chief Financial Officer
Well, it’s looking better is what we said relative to the…
William S. Demchak — Chairman, President & Chief Executive Officer
Relative to the yields we’re buying today. But we expect the yield on the total book to increase pretty substantially next quarter largely because of it’s decrease in the amortization costs.
Robert Q. Reilly — Chief Financial Officer
That’s right.
Ken Usdin — Jefferies — Analyst
Yeah. And then lastly, just purchase accounting accretion, you said it was 30 in the second quarter. Do you have anything in the third? And how do you expect that to look like to?
Robert Q. Reilly — Chief Financial Officer
Max to de minimis in the third and going into the fourth quarter, which is a good thing.
Ken Usdin — Jefferies — Analyst
Yeah. Okay, great. Thanks.
Operator
Thank you. Our next question is from the line of Terry McEvoy with Stephens. Please go ahead.
Terry McEvoy — Stephens Inc. — Analyst
Thanks. Good morning. Bill, you mentioned at an industry event last month that California was an underperforming franchise, I believe at Legacy BBVA U.S. What are your thoughts on turning that around? Is it build, is it buy or is it just internally work to improve the franchise?
William S. Demchak — Chairman, President & Chief Executive Officer
It’s building, and I mean, it was underperforming largely because they didn’t have the products and services to cover the corporate opportunity that’s in California. And by the way, that opportunity is massive. So the big effort for us and we’re fairly far along in the process is to get feet on the ground on the corporate side, who can cover clients, and in some cases, bring relationships with them. So we don’t need to buy anything at the margin, we might rearrange some of the branches there. But the real opportunity set in California is to get corporate bankers and TM coverage and capital markets players on the ground in California.
Robert Q. Reilly — Chief Financial Officer
Which in many instances we’ve done already.
William S. Demchak — Chairman, President & Chief Executive Officer
Yeah.
Terry McEvoy — Stephens Inc. — Analyst
Thanks. And then just as a follow-up question, could you maybe talk about the rollout of Low Cash Mode? Is that allowing you to play more offense or is that more defense? And then is that — was the 125 to 150 the decline in overdraft fees? Is that still the right way to think about the impact of that product on fees? Thank you.
William S. Demchak — Chairman, President & Chief Executive Officer
So the rollout has been somewhat seamless. And of course, we just — with the conversion of BBVA, we’ve put all of their customers or enabled that Low Cash Mode on all other products who converted over. I forget the current stats, but it’s millions and millions and millions of alerts that have gone out. It’s millions of people who have been able to transfer money before they get hit with a charge. Its people being able to choose the order at which they want to pay a bill and return items with no return fee. And look, we — in some ways, we kind of led the industry into this discussion, and you’ve seen how people have reacted.
Part of our lead was in what we charge customers, but a big part of our lead was on technology, in simply empowering customers. And most everyone who has followed is kind of doing it through brute force and just cutting fees as opposed to offering different solutions, which is the most important thing about Low Cash Mode, I think. So we’re happy with what it’s doing. It’s not our complaint volume into the Care Center down by — I don’t know what the number is on overdraft, over 50% or something.
Robert Q. Reilly — Chief Financial Officer
Yeah. On overdraft even higher than that.
William S. Demchak — Chairman, President & Chief Executive Officer
Yeah. So it’s done exactly what we thought it would do.
Terry McEvoy — Stephens Inc. — Analyst
Great. Thank you.
Operator
Thank you. Our next question is from the line of Matt O’Connor with Deutsche Bank. Please go ahead.
Matt O’Connor — Deutsche Bank Equity Research — Analyst
Good morning. It seems like the loan portfolio at BBVA USA will be mostly de-register, run-off by the end of 4Q if we’re just a couple of billion less the next two years. Is there an opportunity to kind of fill that bucket kind of relatively quickly? I guess, what I’m getting at is, maybe you can take down bigger holds because you’re a bigger company versus legacy PNC or just some low-hanging fruit to fill some of that loan run-off between this quarter and next?
William S. Demchak — Chairman, President & Chief Executive Officer
It’s embedded in our guidance. I mean, you got to appreciate, Matt, we’re not — if loans are up or down by $1.25 billion in a quarter, we’re not going to putty over the organic result by doing something we otherwise wouldn’t do. It will follow its ordinary flow. We’ll grow clients. We are a larger company so we can take larger holds if we want to. Utilization will hopefully go up. And as we always do, we’re sensitive to risk and they have some books of business that are both in some cases riskier than we’d like to be in. And in other cases, they just have no cross-sell opportunity. And so the return on the equity you deploy to hold those loans is just really low.
Robert Q. Reilly — Chief Financial Officer
But I would add, Matt, I mean, obviously, Central Premise’s acquisition, these are growth markets. So we would expect through time to generate above-average growth, not necessarily in the next 90 days, but that’s obviously a big opportunity for us.
Matt O’Connor — Deutsche Bank Equity Research — Analyst
Okay, yeah. And I wasn’t so much looking for just a fourth quarter or I guess I was just thinking like the next few quarters do you get outsized loan growth given [Speech Overlap]
William S. Demchak — Chairman, President & Chief Executive Officer
If we get a tailwind at all, you’re definitely going to see that. And I think, and most importantly, if you go back and look at our loan growth through the period of RBC, so kind of two plus years after we did RBC, we started to really accelerate the corporate loan growth. And everybody said, how are you doing that? It’s all new customers and new markets, and we fully expect that we’re going to be able to do that in all of these new markets that we just developed admittedly with some noise in the front because we’re going to run off a little bit out of BBVA and outright loan growth is, as we’ve seen, fairly tepid at the moment.
Matt O’Connor — Deutsche Bank Equity Research — Analyst
Okay. Thank you.
Operator
Thank you. [Operator Instructions] Our next question is a follow-up from Gerard Cassidy from RBC. Please go ahead.
Gerard Cassidy — RBC Capital Markets — Analyst
Hi. Thank you for taking the follow-up question. I’m feeling — you guys mentioned about raising the entry-level wage or minimum wage for your folks, some of your peers have done the same. Bank of Montreal raised their wages 20% last week and Bank of America has got that 25 and 25 program. So the question is this, can you share with us what it means for the people right above the entry-level — excuse me, in the entry-level worker, meaning like a branch manager? How far up does that ripple go in terms of the inflation on wages because of the minimum wage going up?
William S. Demchak — Chairman, President & Chief Executive Officer
It goes straight up through the pay grades. I mean, most of the cost is actually in the compression as opposed to the initial jump for the people who are at the lowest level. So a part of the work set to go through is to figure out, in fact, how you move people up who are today at $18, but tomorrow — if the $15 person went to $18, the $18 person goes to $20, $50 or so, and I’m making up numbers here, but that’s the majority of the cost. And by the way, it’s a majority of the work set to get right.
Gerard Cassidy — RBC Capital Markets — Analyst
Good. Okay. No, I appreciate it. Thank you.
William S. Demchak — Chairman, President & Chief Executive Officer
Yeah.
Operator
Thank you. Our next question is a follow-up from the line of Mike Mayo with Wells Fargo Securities. Please go ahead.
Mike Mayo — Wells Fargo Securities, LLC — Analyst
Hi. Can you put a ribbon around your expectations for loan growth? That seems to be like the big question going into the quarter. And in the past, you mentioned over half your commercial clients are private companies which don’t have the same access to capital markets, and therefore, they might come back first. So just one final thought on loan growth. When do you think we get the big burst of loan growth? Is it a quarter away? Is it three quarters away? Is it a year away? What do you think and why?
William S. Demchak — Chairman, President & Chief Executive Officer
You know Mike, I think you asked me this nine months ago. And I said, I can wish and hope for it, but I’m not sure I can predict it any better than the next guy. What we’re seeing for the first time, right, is not just the new money going out the door, which we’ve been growing clients and growing committed money, but we’re starting to see them move in utilization. And if that is foreshadowing what happens into the fourth quarter into next year then we’re going to have really accelerated loan grown. If we bounce around where we are then it’s going to be somewhat muted. And by the way, that’s kind of what you see in our guidance. It’s far…
Mike Mayo — Wells Fargo Securities, LLC — Analyst
And I know you said it was the…
William S. Demchak — Chairman, President & Chief Executive Officer
It’s kind of — you’re asking me to go out and say, hey, supply chain is going to be fixed and loan growth is going to rip. And I hope it does, but I’m not the expert to answer that.
Mike Mayo — Wells Fargo Securities, LLC — Analyst
Okay. Well, maybe just specific numbers in the utilization a little bit more. You said it’s at the highest level since the early last year or so, but what’s a normal level of utilization? What was the level and where is it now?
William S. Demchak — Chairman, President & Chief Executive Officer
It’s still what, 15 points?
Robert Q. Reilly — Chief Financial Officer
If you go, we’re at 49-ish and we had 54, 55 sort of normalization.
William S. Demchak — Chairman, President & Chief Executive Officer
So at least 10 points off and we’re probably 15, 20 points off the peak in March of last year? There’s a lot of room here.
Operator
All right. Thank you. There are no further questions.
William S. Demchak — Chairman, President & Chief Executive Officer
All right. Well, thank you, everybody. Look forward to talking to you in the fourth quarter. Thanks.
Robert Q. Reilly — Chief Financial Officer
Thank you.
Operator
[Operator Closing Remarks]