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Good morning. My name is Pama, and I will be your conference operator today. At this time, I would like to welcome everyone to the PNC Financial Services Group Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions]. As a reminder, this call is being recorded.
I will now turn the call over to the Director of Investor Relations, Mr. Bryan Gill. Sir, please go ahead.
Well, thank you Pama, and good morning, everybody. 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 July 14, 2021, and PNC undertakes no obligation to update them.
Now, I'd like to turn the call over to Bill.
Thanks, Bryan, and good morning, everybody. As you’ve seen, we accomplished a lot in the second quarter and most important was the closing of the acquisition of BBVA USA on June 1. Obviously this created a fair amount of noise in our reported results adding one month of BBVA USA operating results and the impact of purchase accounting adjustments as well as merger-related impacts. Rob's going to take you through all of that in a couple of minutes, but putting those things aside, we had a pretty good quarter driven by solid net interest income, strong fee growth,, continued improvements in credit quality and announcement of higher capital returns.
While loans increased primarily due to the acquisition, we did have spot loan growth from both consumer and C&I in the legacy PNC balance sheet. We've seen loan utilization rate stabilized within our corporate institutional banking business. However, they remain near historic lows and while new loan approvals have rebounded actually to the highest level in a couple of years that's been offset by continued pay downs.
Within the legacy -- within the PNC legacy consumer book, we saw loans grow in the quarter, which was encouraging and we're confident that strong economic growth is ultimately going to drive strong loan growth, but it remains an open debate as to the timing of that loan growth relative to the second half of '21 and into '22.
During the quarter, we continued to deploy excess liquidity through $10 billion of net security purchases. Going forward and considering the significant recent rally in treasuries will be disciplined as we look to reduce our elevated cash position. You saw that our results underscore the strength of our balance sheet and our commitment to returning capital to shareholders following the results we announced a 9% increase in our quarterly common stock dividend and a $2.9 billion share repurchase program. Importantly, we're well positioned with substantial capital and liquidity to continue to support our customers and invest in our businesses.
Regarding BBVA, I couldn't be more pleased with where we are. PNC and BBVA employees have hit the ground running and are making great progress in preparing for successful conversion and integration. The deal significantly expands our footprint and gives us access to 29 MSAs of the top 30 MSAs across the country with a coast-to-coast franchise and it provides us with an opportunity for growth for years to come.
All of our original deal metrics are the same or better than we estimated and Rob's going to take you through those and finally the underlying growth opportunities in the new markets are outstanding. Across this footprint, employees are making joint calls and we are seeing deal pipelines build, especially as we present our enhanced capabilities and skills of new markets.
We continue to believe the revenue synergy opportunity is significant as we look to drive BBVA's US -- BBVA USA's noninterest income contribution to total revenue closer to legacy PNC's mid-40% level. On the integration front, we're leveraging our past investments in technology and automation to expedite the process, drive synergies and reduce complexity, removing the data for more than 600 BBVA USA applications to PNC applications taking a lift and shift approach allows us to simplify the customer convert.
I also want to mention that our continued rollout of low cash mode which was available to 2.5 million virtual wallet customers as of the end of June, we're planning to roll it out to the remaining 1.1 million virtual wallet customers by the end of this month and look forward to making it available to BBVA customers upon conversion later this year.
Since announcing the product in April, we've delivered over 10 million low cash mode alerts and have seen strong engagement with the experiences it helps to address the major frustration for many of our customers across the industry. Over time, we expected to drive significant growth in new and existing customer relationships as we execute our national expansion strategy.
Finally, I'd like to close by thanking our legacy PNC and the new BBVA USA employees for all of their hard work the allowed us to close this deal early and prepare for conversion and long-term success.
And with that, I'll turn it over to Rob for a closer look at our results and then we'll take your questions.
Thank Bill good morning, everyone. As Bill just mentioned and notable during the second quarter, we successfully completed our acquisition of BBVA USA, significantly expanding our footprint which now includes growth market throughout the Sun Belt region. Our balance sheet is on Slide four and is presented on a spot basis while we typically cover our average balance sheet that will focus this quarter on spot balances due to the timing of the June 1 closing of the acquisition.
Overall, linked quarter balance growth was driven by the acquisition of course which contributed $60 million in loans, $18 billion of investment securities and $82 billion in deposit at quarter end. Excluding those editions during the quarter, legacy PNC loan balances declined $3 million, investment securities increased $10 million and deposits declined by $4 million and I'll cover the drivers in more detail over the next few slides.
We ended the quarter with a tangible book value of $93.83 per share and an estimated CET1 ratio of 10%, substantially above the levels we anticipated at the time of the deal announcement. As a result, we're well positioned with significant capital flexibility and as Bill just mentioned, we recently announced the $0.10 increase to our quarterly cash dividend on common stock, raising the dividend to a $1.25 per share. Additionally, we reinstated our share repurchase programs of up to $2.9 billion for the fourth quarter period beginning in the third quarter of 2021.
Slide 5 shows our period end loans and deposits accounting for the acquisition and highlighting the relative contributions. Total loans were alone for $295 billion at quarter end and with the acquisition, our loan mix remained consistent at approximately two thirds commercial and one third consumer. Total deposits were $453 billion at June 30 and our rate paid on interest-bearing deposits is now five basis points, a one basis point decline linked quarter.
Taking a closer look at loans, commercial loan balances of $200 million increased $35 billion. BBVA contributed $39 billion and spot PNC legacy growth of approximately $1 billion was offset by a $4.5 billion decline in PPP loans. Consumer loans were up $23 billion represented by $22 billion of acquired loans as well as growth in legacy PNC consumer loan, primarily in the residential real estate portfolio. The yield on loan balances with stable at 3.38% compared to the first quarter and reflected the combined loan portfolio.
Slide six details the change in our spot securities and Federal Reserve balances over the past year. Securities balances were $127 million at the end of the second quarter, a $28 million increase linked quarter due to the addition of $18 million of securities from the acquisition and $10 million in net purchases. Our fed cash balances decreased $14 million linked quarter reflecting continued deployment in the securities and the payment of $11.5 million for the acquisition. Despite the linked quarter decline, our liquidity position remains in excess of our LCR requirements.
As you can see on Slide seven, our second quarter income statement includes the impact of the acquisition. Our reported EPS was $2.43, which included an initial provision for BBVA USA of $1 billion and integration cost of $111 million. Adjusted for these items, EPS was $4.50 in the second quarter. Second quarter revenue was $4.7 billion up $447 million compared with the first quarter, reflecting the acquisition as well as strong organic fee growth. Expenses increase $476 million or 18% linked quarter, including $181 million of significant items related to integration expenses and litigation reserves as well as one month of BBVA operating expenses and higher legacy PNC business activity.
The provision of $302 million included a provision recapture of $704 million related to improved credit quality and macroeconomic factors as well as balance reduction, which was more than offset by $1 billion initial provision in connection with the acquisition. As a result, total net income was $1.1 billion in the second quarter. Now let's discuss the key drivers of this performance in more detail.
Turning to Slide eight, these charts illustrate a diversified business mix with noninterest income representing 45% of total revenue in the second quarter. Net interest income of $2.6 million was up $233 million or 10% and net interest margin of 2.29% was up two basis point both of which reflect the impact of the acquisition. Second quarter fee income of $1.6 billion increased $229 million or 16% linked quarter. Within that legacy PNC fees grew by $167 million and BBVA USA's one month of operations contributed $62 million.
Taking a more detailed look at the performance in each of our fee categories; asset management revenue increased $13 million or 6% as a result of higher average equity markets. Consumer services fees grew $73 million or 19%, primarily due to increased transaction volume and higher merchant services revenue. Corporate services increased $133 million or 24% driven by higher M&A advisory activity and treasury management product revenue. Service charges on deposits grew $12 million or 10% due to the addition of BBVA USA.
Other noninterest income of $468 million declined $15 million linked quarter and included a negative visa derivative adjustment, lower securities gains as well as higher private equity revenue. In total, noninterest income of $2.1 billion increased $214 million or 11% compared to the first quarter, driven primarily by legacy PNC fee growth as well as $80 million of noninterest income from the acquisition.
Turning to Slide 9, our second quarter expenses were up by $476 million or 18% linked quarter and included a $181 million of significant items related to integration expenses and the addition to legal reserves. The remainder of the increase was driven by BBVA's one month operating expenses of $179 million as well as increased business activity and marketing for legacy PNC.
Obviously with the acquisition, our operating expenses are going to be higher going forward. Nevertheless, we remain disciplined around our expense management and as we've previously stated, we have a goal to reduce PNC 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 of BBVA USA's expense base in 2022.
Our credit metrics are presented on Slide 10 and reflect the impact of the acquisition. Apart from the addition of the acquired loans, credit performance improved considerably within the legacy PNC portfolio. Nonperforming loans were $2.8 billion at June 30 and $871 million related to the acquired loans. PNC legacy nonperforming loans declined $230 million due to decreases in both commercial and consumer. Legacy PNC delinquencies declined $147 million.
Net charge-offs for legacy PNC were $58 million, the lowest level since 2007 with an annualized charge-offs to total loans ratio of 10 basis points. Acquired loan net charge-offs were $248 million which was largely a result of required purchase accounting treatment for the acquisition.
Slide 11 shows the change in our allowance for credit losses during the second quarter. Within our legacy portfolio, we released reserves by approximately $700 million related to both improved credit quality and macroeconomic factors. Upon closing the acquisition, we established a $2.2 billion APL for the acquired loans or 3.5% through fair value loan marks of $1.2 billion related to purchase credit deteriorated loans and an initial provision of $1 billion related to non-PCB loans.
The initial BBVA USA APL to total length of 3.5% were subsequently reduced to 3.1% at the end of the quarter as a result of portfolio changes. So in total as a result, our total quarter yearend reserves for the combined entity were $6.4 billion representing 2.16% of consolidated loans outstanding.
Turning to Slide 12, now that we closed the BBVA USA acquisition, I wanted to provide an update to some of the deal metrics, all of which are the same rate or have improved since our deal announcement. As you know, the purchase price was an all cash fixed price and was approximately $11.5 billion at closing and as I've already mentioned, tangible book value per share in the CET1 ratio are favorable relative to our original expectations.
We continue to project an internal rate of return in excess of 19%, earnings per share accretion of more than 20% and an annualized expense reduction of $900 million in 2022. Additionally, our expectations for nonrecurring merger and integration cost is approximately $980 million, the majority of which we expect to be recognized in 2021 consistent with our initial expectations.
Taking a look at the credit metrics, these have all improved since we've announced the deal and as a result, the APL to total loans for BBVA USA is better than our original expectations. In addition, and as anticipated, our net purchase accounting adjustment is nominal with a net fair value premium of $322 million, the majority of which will be amortized over the next several years. For the second quarter, due to the maturity of some short dated acquired assets, we realize the $30 million benefit to net interest income, which will not recur.
In summary PNC reported a strong second-quarter highlighted by the successful acquisition of BBVA USA. We expect this transaction to add significant value to our shareholders as we begin to realize the potential of the combined franchise. In regard to our view of the overall economy, our current expectations are for GDP to surpass prerecession levels sometime during the third quarter and for the fed funds rate to remain near zero throughout 2021.
Looking at the third quarter of 2021, which will now include the full quarter impacted BBVA USA operations compared to the second quarter of 2021. We expect total spot loan balances to be up modestly which include the $3.5 billion decline in PPP loans. On a percentage basis, we expect NII to be up in the mid teens. We expect fee income to be up in the mid-single-digit.
We expect total non-interest expense, excluding integration expenses to be up in the high single digits. We expect other non-interest income to be between $325million and $375 million excluding net securities gains and visa activity.
And we expect third quarter net charge offs to be between $150 million and $200 million. For annual guidance, taking into account our first half operating results and the addition of six more months of BBVA USA forecasted operating results.
Plus our expectation for modest loan growth, in the second half of the year, we expect revenues to be up between 12% to 14% and expenses excluding integration costs to be up between 13% and 15% for the full year 2021, compared with PNC standalone 2020.
We acknowledged some upside exists in spot loan growth during the second half of the year, but that remains to be seen and as a result is not included in our guidance.
And with that, Phil and I are ready to take your questions.
Thank you. [Operator Instructions]Your first question comes from the line of Betsy Graseckwith Morgan Stanley. Please go ahead.
Hi, good morning.
Hey, good morning. Betsy.
So it's great to see the loan growth start to pick up here. The first question I have is just on how we should think about the loan growth in your book. Now that BBVA USA has come in, is there going to be a churn period here where you've got some loans in that book that, you're likely to be exiting and then, growing through that churn or would you suggest that that's not really big enough to matter when we're thinking about the loan growth?
Well, it's the margin it's going to matter, but it's extended over a bunch of years. We're not -- we're not going to sell portfolios or -- or rapid exit. So, through time we will mature things and those balances will likely run off from certain industries, as we grow bounces from, from other target industries, but that stretches over, 2, 3, 4 years.
Okay, Great. All right and then separately, your house loans business obviously is already national, but does the BBVA footprint that you've added now do anything for them in their business with middle-market?
It's at the margin, right. It just adds a larger network of potential clients and conversations. So, yes, now they obviously are in all of these markets to some already, but now we have more clients and will therefore have more dialogue, so I would expect it well.
Yeah, for sure, so we'll be able to introduce our new commercial clients who BBVA USA to Harris-Williams if they haven't already been introduced.
Yeah, all right. That was a really strong result from them this quarter. And then just lastly, the dividend hike that you recently announced how you do -- how do you think about that from the perspective of payout ratio? And I'm just wondering, should we expect that your, full run rate of the BBVA USA expenses coming out is already in, how in, in your earnings outlook, when you were thinking about setting that dividend up?
I'm trying to think of the simple way to answer this. So long story short there's room on the dividend on our forward income. We were in a bit of a fire drill because, we, we managed to close the deal a month sooner than we thought, which meant that we kind of had CCAR results in the deal closed, which then threw us into the fire drill to figure out what we could do and I'm not going to say in a hurry, but on short notice which is what we did and coloration acceleration of kind of what we've thought.
So, so there's room on that. certainly as we go forward and we just thought it was important to get something done and not miss this cycle which is, which is what we acted on.
Okay.
I'm sorry. We said for years that we expect, with this model and this business mix that a 40% to 50% payout ratio on the dividend is in our target range.
Okay, great all right. Yeah, no, that was my gut. Feel that there was room there. So appreciate the commentary. Thanks so much.
And thank you for your question up next. We have a question from the line of Bill Carcache with Wolfe Research. Please proceed with your question.
You guys have made an impressive progress in your national expansion strategy. As you look ahead, how integral is the acquisition of additional branches to your furthering your national expansion on paper? It's easy to do a traditional analysis where you look at PNCs revenues per branch and BBVA rev -- BBVAs revenues per branch, to isolate the opportunity to improve productivity and what that would mean in terms of incremental revenues per branch?
But when you try to sell the idea of acquiring additional branches to generalists, there's a natural pushback on why those branch acquisitions are necessary in the first place, given what we're seeing with the digitization of the business.RBC is a great example where we saw your branch count rise sharply in 2012 before falling significantly for the better part of the next decade.
How important was it to acquire those branches to begin with, I know there's a lot there, but I was hoping you could speak to that point in general?
I wouldn't focus so much on branches as I would on clients. So in the future, could you see us do smaller deals in market to gain greater share? Possibly now the values today just seemed way too high to me, but possibly, but the purpose of that wouldn't be to get branches per se, instead it would be to get clients and then we would optimize the branch network and was we did with RBC after the fact.
And some natural conversion to solution centers, foundational branches which we, to your point Dell we've been doing.
Okay, all right. Understood with separately with the curve, having flattened a bit since your comments last quarter has there been any change to your thought process around deploying a larger percentage of your liquidity into securities and within that, how worried are you about giving up some of your future assets sensitivity in exchange for the near term? And I benefit we're hearing different philosophies from, from different banks, but would just love to get your thoughts?
Well, I guess first off as you saw we went at it pretty aggressively before we saw the, the, the, the big rally here. We still have a lot of liquidity. We barely put it down in our liquidity, even after writing the check for BBVA. So we're still very asset sensitive. Having said that the recent rally is going to cause us to slow down and be more tactical than we had, we had been during the last quarter and w we'll watch how this plays out.
I personally believe that that, that the current rally is way overdone and I don't fully understand it. And we're likely to, or not likely we will slow down relative to what we saw in the last quarter.
And our expectations of that are built into our guidance.
Got it. And then if I could squeeze in one last one I wanted to ask, if you could look ahead a bit longer-term at the opportunity to drive efficiency improvements if the forward curve is right and we get one hike around the end of 2020 to one another in the middle of '23 and assume no further steepening there, there are a lot of moving parts there, but could you just speak to your competence level and being able to drive your efficiency ratio into that sort of know, high, 50% range?
The math takes you there. The question is simply a function of it, when we look out to '22 function that tailing integration costs as to whether you see it what period of time you'll actually see it, but the map takes you there. Once we get the costs out of the BBVA franchise and what we would expect that revenue environment to look like.
Thank you. And up next, we have a question from the line of Mike Mayo with Wells Fargo Securities, please go ahead, sir.
Hi .So, I guess I have a short-term question, a long-term question. The long-term question is what inning are you in, in your tech transformation? And you spent seven years getting your common infrastructure together, and that prepares you well for the BBVA integration. So that's kind of the, the good news and what inning are you in? But then I think the bad news is you're guiding this year for slightly negative operating leverage the last slide. And I know you don't like having that. And why is that worse than expected when you should be having some synergies from BBVA banks?
Well, I just, the short term one, they I'm glad you asked that question, Mike, cause at first raid, you might conclude that, but that's not what we're saying, what we're saying in the guidance for full year with revenues percentages going up less than expense percentages. That's simply the overlay of the BBVA USA acquisition six months into our results. They are, they have a higher efficiency ratio. So that's, if you think about it, that's that largely the opportunity there.
And PNC standalone we said at the beginning of the year, it was going to be stable. We were going to fight for a positive operating leverage, halfway through revenues up low single digits expenses are up low single digits, so we're still fighting.
And as I mentioned in my comments prior to the Q&A, we're going to keep fighting until, I don't know if you want to do that long-term.
Do you follow that my event, it's, it's simple. We layered on a less efficient organization on top of us and it's causing them out to be what it is. That's a legacy PNC business is kind of a target for what we said. And then the opportunity set is to drive, the new organization down to, to the level of efficiency. Yeah, we're better.
Okay.
Yeah. The issue on technology, I mean, think about look we're 80% of the way along where we would like to be in terms of what I would just call a modern platform across everything from data centers to the way we develop, to the way we do automated testing and deploy and so on and so forth.
So we're pretty far along. I think what happens down the road with technology is much more about client facing technology and the ability to compete effectively in the new ecosystem of fintechs and where payments are going and all of that stuff.
And we're prepared for that. We're going to invest hard into that. We have the core technology behind us to allow us to play in that space, but that's where the fight is going to be. And I think that game is just getting started.
And we'll start to extend the metaphor the games going into explaining technology is going to be around for a while.
And where do you think, I mean, you're, I appreciate a number like 80% and building a modern platform, but again, after seven or eight years of doing that, where do you think the, the average bank is in that transformation because you've been talking about this more than others?
Yeah. I look, I don't know. I don't have an informed view. It's, it's hard to figure out what other people are actually doing. If I just think about our ideal state compared to where we are. PNCs ideal state might be different than some plus somebody else's spires to, I still see us with certain applications that, that need to be re-engineered to, to kind of be plug and play through API. Other people may or may not care about that.
So you we're, we're playing our own game. Our goal obviously is to, to be able to use technology as an advantage, not just in terms of cost, but also in terms of speed of market and creativity as to what we can offer to clients and we're well on our way right there.
Thank you for your question. And now we have a question from the line of John Penn Carey with Evercore ISI. Please go ahead, sir.
Good Morning. Want see if you can give a little more color on loan demand particularly on the commercial side, or are you starting to see any signs of CapEx activity beginning to influence a line draw down? And if you are aware in what areas are you seeing some strength and what borrower segments? Thanks.
Yeah. Hey, John, it's Rob and I can give you a little bit of color there. The generally speaking utilization rates were up a little bit quarter over quarter, though, not much where we are seeing continued growth that we started to see as green shoots in the first quarter is in our business credit to asset base book.
Real growth there that is encouraging because that tends to be a leading indicator of, of loan demand. So that's, that's largely where we've seen the growth. But on the margin, we would expect to see in terms of getting to where strong loan growth would be coming more utilization across the, the general middle market book which has yet to show up.
I mean, the good news inside all of that is we're actually winning a lot of clients and we're extending facilities at a pace beyond that. where we've been for a bunch of years. The problem is they're just not drawing under the credit facility.
So we're, we're, we're in a good place for, for, when loan demand comes back and we continue to grow client share, and we see that by the way, on the fee growth that we're getting through TM and other activities picked up again.
So we definitely advanced in the first quarter.
And then on the M&A front and they are still digesting the BBVA deal and everything, but as you look at other markets, are there any other markets geographically that you think a deal would make sense to give you a more critical mass just like you look at the southeast that way? I just wanted to see if you could talk a little bit about your footprint and how you think about that?
And then separately Bill I am curious what your take is on Pres. Biden's Executive Order particularly implying more scrutiny around bank mergers. Does that change how you think about deals? Thanks.
You asked to the second -- on the first issue, you should just assume that we look at all the same stuff that you do. I am not going to give you area of the country when you look and you’ve seen us through time make decisions based on value creation for shareholder so that may or may not mean additional geographies and may or may not mean filling in an existing geography. It will very likely mean we'll continue to do small add-on acquisitions that give us product capability of clients.
The executive order looking at competition amongst banks, it's a practical matter that would actually have to change for the bank approval process to change would be more about the feds rules on approving mergers than I think it would be coming out of what President Biden's order. I'm not expert on it, but I think it is safe to say that a larger deal in today's environment would get much more political scrutiny and noise than we did with the BBVA deal that weighs on us.
We now have a question from the line of Scott Siefers with Piper Sandler. Please go ahead sir.
Rob I can back in the things based on the guidance but just would be curious to hear your thoughts on how the net interest margin rate moves from here? Just lots of moving parts between shifting some of the cash and the securities letting a full quarter BBVA and then you’ve got the fair value premium amortization as well. So any thoughts there would be appreciated.
There a lot there Scott. We in fact in the first quarter, we had said we call the drop in NIM. We're still holding that and I do think NIM will drift higher not necessarily by a lot, but I think we've seen the bottom.
And then just on the reserves I think pre-adjustments that were made for COVID but CECL, I think you guys were around the 145-ish reserve. Is that a good number to assume you'll gear down toward even with BBVA now in the mix?
Well our day one was 154, not 145 and that was standalone and then if you do some of the math you'll find that BBVA day one we're going to be a little bit higher on average. So as we said and to clearly answer that question if you consider those times normal back to normal would be somewhere in that neighborhood.
Okay. Perfect. All I appreciate the thought.
Thank you. [Operator instructions] We now have a question from the line of Gerard Cassidy with RBC. Please go ahead sir.
Bill, can you share with us when you think back to the National City deal and the RBC deals that you guys delivered 10 years ago and granted they're different than the BBVA deal, but obviously that experience has given you confidence on this deal. Can you share with us when you think the BBVA gets fully integrated based upon the experiences that you guys have with those prior two deals? Is it three years out, four years out? How long does it really become seamless where you can't tell everything is running very smoothly?
There's a lot embedded in that question. I mean that the basic service structure, so what happens in a branch, the applications the product delivery, all of that stuff, basically will be done by the end of this year.
Right, so the real question then becomes, how do we get the client penetration and growth rates in the newer markets. the fee penetration to, to grow to legacy PNC markets. And what we found in RBC is in some of those newer markets that, that took are somewhere around three years, I guess, Rob, we expect it'll be faster.
Today first, because BBVA actually had a reasonable book of business that we could cross sell into immediately. And secondly, we just kind of have a better playbook. We've been at it for a while. So we have the teams built today. They're calling today and I, I generally would expect we'd yeah, I think I'd be a little fast. And I think that the receptivity to the PNC brand is probably a little more than it was 30 years ago, so that, that helps too.
Very good and then I apologize if you addressed this or already in your comments, but Robert, do you guys have any timing on the share repurchase program? I think you said it's going to be over four quarters, but I know, there's no restriction now, like the old CCAR tests and you guys had limits on how many gigabytes, you given any thought on how you want to calibrate the repurchases?
Well, we're going to do it opportunistically chart, so we will do it ideally we'll, put together, like we always have some autopilot program. And then on top of that, some discretionary piece and the discretionary piece will be that the variable obviously.
That's what we've done in the past. That's what we'll continue to do. So there's some more flexibility there obviously and we'll take advantage of that.
Thank you. And next question comes from the line of Terry McEvoy from Stephens Inc. Please proceed with your question. Go ahead.
Thanks. Good morning. Just two questions here, I wonder if you could discuss the strength and consumer services fees. Last quarter was up what $442 million just on a standalone basis. And I know in the release, it said increased business activity, was wondering if you could provide any more color there?
Yeah. Hey Terry, this is Rob. Yeah, we did, we saw a lot of activity there. And most of that is just more consumer activity is that as you'd expect, as the economy comes back on track. Inside of that, where we saw particular strength was debit card spend. It is debit card spend is a big component of it. And the acceleration there was really strong.
Maybe more color than you want, but what showed up this quarter or they set in debit card spends. What our team was telling us was a lot of micro purchases that had gone away. So cups of coffee and morning purchases on the, on the way to work are now part of the, part of the volume again.
Perfect and then there's a, follow-up just the corporate service fees. Maybe you could talk about the pipelines there and is the quarterly run rate now, is that a $600 plus million in revenue quarterly run rate today?
Well, I would say just in terms of the color, so you got to take a look at it now, obviously with him combined form and put in a full three months of BBVA, but corporate -- corporate fees. Also, as we said earlier, showing increased activity, we are a little elevated in the second quarter because of Harris Williams, which had twice the volume of the first quarter. So you got to take that into account, but you’re mass in the right run rate place.
Thank you. And we now have a follow-up question from the line of Bill Carcachewith Wolfe Research. Please proceed.
Thanks for the follow-up. I just had a quick, quick one on the money transfer business and the opportunity that you see there. Some investors that have expressed concerns over disintermediation risk in that business as the cost of transferring money continues to fall and competitors in the space, leverage technology to help consumers transfer money more cheaply. Is disintermediation risk and legacy BBVA's money transfer business, a concern for you guys? And if you could discuss how you're thinking about the growth outlook for that business and the opportunities that you guys may have to maybe leverage technology and just speak, speak to that opportunity in general, that'd be helpful.
I think the whole product; including the business transfer services is disintermediated product. It was what we have is the same thing that other people are building and frankly doing and more scale. The key to success on it is to make sure that you have distribution receiving networks, which we do have through Latin America and Europe and that you have compliance to be able to build it.
So it's a competitive space. I'm glad we have the product. I think the actual product is going to be table stakes for banks. Our ability to grow it and scale it, we're going through different use cases that bring on potential corporate disbursements and other things that we hadn't thought of before.
But I think it becomes a table stakes products that started through disintermediation kind of to your original question, right? This was built outside of the banking system. BBVA just happened to have built one, that we're now integrating into our core platform.
So, so we're pretty excited by it. And I think time will tell how that product evolves and who uses it.
And the financial impact isn't large, it's more of the upside in anything under, so thank you.
Thank you. There are no further questions.
All right. Well, very good. Thanks everybody. And we'll -- we'll see at the end of the third quarter. Thank you.
Thank you. This concludes today's conference call. You may now disconnect.