We're going to get going here. My name is Dick Manuel, Equity Research Analyst with Columbia Threadneedle Investments. I'm pleased to be joined on this stage by Mike Lyons, recently appointed President of PNC Bank, and Rob Reilly, the much-loved CFO, longtime CFO of PNC Bank. Welcome back to Boston, and thank you for being here.
Great to be with you, Dick.
Great. So the way this is going to work is Mike is going to take us through some slides, then we're going to circle back to do some Q&A first with me, and then we'll open it up. So with that, Mike.
Thank you. Thank you, Dick. Good morning, everyone. It's great to be back. This is my hometown, so it's always good to be back in Boston, and we appreciate the opportunity today to update you on our national expansion efforts, which continue to exceed our expectations and offer a significant amount of upside to PNC, which we'll show you today if we continue to execute. I came here in 2013 just following our acquisition of RBC's U.S. franchise to introduce this concept of national expansion, so it's especially fun to come back to update you on the progress, and given that it's been 11 years, there's a fair amount to catch up on, but before we get into that, provided on this slide and on our website are cautionary statements regarding forward-looking and non-GAAP financial information, which I urge you to read.
The presentation is also available on our corporate website, PNC.com, under Investor Relations, so before digging in on national expansion, just a quick update on our businesses. While we publicly report these three segments separately, they are deeply interconnected. In fact, our entire relationship-based value-added model is built off and thrives off, built on and thrives off extensive collaboration across these businesses, and this allows us to go to market, harnessing all the power of PNC with a focus solely on our clients' needs, which we think is an important competitive differentiator. On the performance side, we've seen momentum increase across all of these businesses post-Silicon Valley as customers rethink their banking relationships with a focus on size and quality.
This is an ideal backdrop for PNC as a large and now Brilliantly Boring, if you've seen our new brand, bank within, and we've got this great track record of delivering for our clients through both good times and bad. We believe this flight to high-quality banks will only accelerate from here, creating an exciting growth opportunity for us. As we've said many times, scale matters more today than ever before in banking, as it drives accelerated growth, incremental margins, and higher returns on capital. So our focus is squarely on profitable and responsible growth, not shrinking or divesting, and there are really only two ways to do that: M&A and organic investment. Acquisitions of good franchises at the right price are attractive, and we've proven ourselves to be an accomplished acquirer with National City, RBC, and BBVA as the most recent examples.
However, current valuations of well-suited targets exceed what we think they're worth, so we don't see a logical deal in the near term. So our focus and what we'll cover today is all on investing for organic growth. We have a number of different initiatives going on here, including new online and mobile banking platforms, enhanced payment and service capabilities in our treasury management business, a full overhaul of our credit card business, a new mass affluent effort, and a new loyalty program. And importantly, continuing to invest in our expansion markets, including this morning's announcement, if you got a chance to see it, where we more than doubled the number of branches that will open in the attractive Southeast and Southwest markets.
While the organic path requires investment and may be slower than M&A, when done right, it comes with very attractive returns that are much higher than what we can get in the M&A market today. And it allows us much greater control. We get to choose the employees who work for us, the clients we bring on, and the assets that we put onto our balance sheet. And importantly, our pursuit of organic growth doesn't preclude us from doing a strategic acquisition at an attractive price if one happens to materialize. We're just not going to sit around waiting for that to happen. With that, we'll dig in, and the rest of the presentation will really be on the national expansion efforts. And to ground everyone in the history here, our national expansion was initially focused on our Corporate & Institutional Banking business, or C&IB, as we call it.
We've long differentiated ourselves in this business by going after a unique combination of bringing our clients everything that they tell us they love about a regional bank. So local presence, high-touch service, immediate coverage, community investment. We combine that with all the things that they need from a really large national bank: scale, capital, sophisticated products and services, talent, and all the other factors. And this model, when we've executed over the years, has resonated with our clients as we consistently rank number one for Net Promoter Score in mid-market, mid-corporate, large corporate banking. And within this model, critical to our success, and you can see it in the middle here, has been our treasury management platform, which is both large at $4 billion in annual revenues and highly regarded for the quality of its products and services.
So we had this great C&IB business leveraging this terrific treasury platform. And when we were looking back strategically in 2011, you're taking this, but you're operating in some of the slower-growing and smaller markets in the U.S. So in 2012, we were thrilled when we had the opportunity to acquire RBC's U.S. banking operations and start to move that franchise into demographically attractive Southeast markets. And it was this deal that really spurred on our national expansion efforts. Because RBC's credit box was very different than ours, sorry, Gerard, wherever you are, we essentially had to rebuild each of their corporate banking markets that we bought from scratch, hiring all new people, rebuilding it from the client side, replicating what we had done in our legacy markets.
And because we did this in a lot of markets where they didn't have a heavy branch presence, thinking Atlanta or Charlotte, it gave us the confidence that we could go into markets that had no PNC branches and create our C&IB franchise across the country. So in 2016, we changed the model and started going de novo, meaning just building a franchise where there's no prior PNC presence. And we did that. Our goal in doing that was to have a full C&IB presence in the top 30 largest markets in the country and the top 10 fastest-growing markets. And I say this term full C&IB presence. There are several businesses, specialty lending businesses or advisory businesses, so real estate, asset-based lending, Harris Williams, which is our advisory firm, where we had always operated nationally.
But we had not taken our traditional middle-market, mid-corporate franchise to anywhere where there wasn't a PNC branch. And taking those national was really the heart of our effort. The ground rules from Bill were clear from the beginning: no change in strategy, no change in credit box, and stay core deposit funding. And as you can see here from the two maps, we've completely transformed the PNC franchise since 2011. On the C&IB side, we've met our goal of a full presence in the top 30 and the 10 fastest-growing markets. And with that, we've tripled the number of prospects that we're exposing that top-ranked business and treasury platform to. Our Asset Management Group has followed C&IB across the country, leveraging the tight partnership between those businesses, especially on the institutional asset management side.
And today, we have $24 billion of assets under management in the new markets despite a very short period of time. And on the Retail side, we're now in 26 of the top 30 markets and nine of the fastest 10 growing markets. And obviously, with this morning's announcement, we're accelerating branch builds into these attractive markets. As a result of all this, we've doubled the branch-weighted average population growth of our footprint, and we're adding branches into the highest-growth markets. So the concept here is relatively simple: same time-tested business model, same credit box, just operate it in bigger and faster-growing markets. And despite being in a lot of these now, we're really just getting started, just scratching the surface on what we can do with our model in these markets.
If you look across the country, we're proud to see today that PNC's brand's on display coast to coast in the expansion markets post-2011, the markets, 930 branches, $109 billion in deposits away from that legacy footprint. This concept of de novo expansion in the banking sector has a mixed reputation, and we've always sort of fought that as we've gone the last 13 years, with banks constantly opening and closing what are called loan production offices or LPOs. With the LPO or production office, banks tend to do exactly what they are charged with: produce loans. And you obviously want to show results quickly, so you produce a lot of loans quickly, and sometimes that impacts your client selection. And often, these efforts end poorly, with banks subsequently exiting. Our goal when we went into these markets and how we execute in these markets is the complete opposite.
We're building a new term called RPOs, which are relationship production offices. We're going in to build relationships with the best businesses, and having the patience and the time it takes to do that, and along those lines, in all 25 of the markets we've entered since I was last here, we've implemented our long-standing regional president model, and the regional president is almost always the first hire we make in these models, and they play a critical role for leading our franchise, embedding us deeply into communities, attracting talent, and then driving this playbook that we've showed every time we've talked about national expansion. It never changes, and the main attributes of it are investing great people, and we've been able to hire almost anyone we want in the new markets in terms of talent, and that continues today. We compensate them to collaborate with a client-first mindset.
And then we spend a bunch of time on client selection, making sure we're going after the best businesses in a market, not just the available ones or the easy ones. And then we bring them value-added ideas. And the key to the whole thing has been being patient, persistent, and consistent. We keep telling our bankers in the new markets they should keep calling on great companies with great ideas until you either get business or a restraining order. And so far, we don't have any restraining orders, and we're going to keep it that way. But we're joking on this, but it highlights the fact that we have such conviction in the model. The only risk we have to screwing up this model is giving up on it. And that's a really, really important point. You'll see it in some examples we talk about later.
So some numbers on how we're doing here. Through disciplined execution on this playbook, we've grown rapidly and exceeded our own expectations. This chart on the left, you can see on the C&IB AMG side, these are sales. New market sales, in-year sales have grown at a 25% CAGR and now represent nearly half of our total sales. So markets that we've entered since 2011 is half of the sales we make on the C&IB AMG franchise in about 13 years, some of them very short time before that. To us, this has been remarkable because we are just scratching the surface of what we can do in so many of these markets, and the model I just talked to you about takes a lot of time to develop. And you can see on the right how our franchise is changing.
Texas and California are quickly closing in on Pennsylvania as our largest growth states, and we've only been in these markets. We've been in Pennsylvania 159 years. We've been in Texas eight and California four, so the power here is incredible. On the Retail side, DDA sales in our expansion markets are accelerating, as you can see on the left, and now represent nearly 40% of our total production. After a series of flattish DDA production years, this recent momentum is exciting to us and reflects the investments we've made in the branches and technology, much better and enhanced execution on behalf of our customers in the branches, and then obviously the strong underlying natural growth rates of the markets that we're operating in. You can see on the right here, Texas is our largest DDA production state now.
And as far as we can tell in our record book, that it beats the 159-year winning streak by the state of Pennsylvania. So you can see how the nature of the franchise is changing. To generate this growth, it all goes back to the playbook that we talked to you about and just adhering to it and executing off of it. And you can see some of the attributes of this here on the left. Hire and retain great people. We've hired 175. These are very senior salespeople from the outside in the new markets on the C&IB side since 2011. So it's been 13 years, and 90% of them are still with us. This type of consistency of getting great talent and holding great talent is incredibly powerful.
If you go in and try to cover great businesses and keep turning over your staff, it's like you go back to the same starting point over and over again. We're pursuing and winning great clients. You can see the cumulative number of client adds in the middle, and again, can't overemphasize the focus on client selection here. We want our bankers only focused on the best businesses in the market. We have no legal obligation to go into a market and bank every company, and we can go in and select the best businesses. And if you select the best businesses and recognize it's going to take a long time to build a deep relationship with them and commit to that, you get to basically cling on and hook onto them and grow with them forever, so finding great businesses drives our long-term growth.
Importantly, on the right, we're growing responsibly within the credit box, which was one of the rules. The width and the height of our credit box never changes. It doesn't matter what part of the cycle we're in, and it doesn't matter what geographic market we're in. It's always the same size. On the left, an unbelievably important tenet of the playbook is to build deep relationships based on value-added solutions. Remember, we don't want to be a Loan Production Office. So given that, we're very, very proud of this chart, which shows that more than 60% of our sales in the new markets are coming from non-credit sources. We're not just producing loans.
As part of that, and I talked about treasury management earlier, you can see in the middle that we're exposing that business, which is our largest non-credit business, to new clients and increasing penetration rates very, very quickly. We're especially happy with TM's penetration rate of legacy BBVA clients, which we talked to you at the start of the deal as one of the main areas of synergies. When we bought BBVA, TM had penetrated 43% of their clients with treasury management. That's now at 70% on a growing client base. And on the right, the other rule we live by, you can see PNC's consolidated loan-to-deposit ratio, which reflects that commitment to remaining core deposit funded.
To try to bring the model to life, we thought we'd tell you a story about a relationship that we built from scratch with a $15 billion services company in one of our expansion markets. This is a business that clearly made it through the filter for being a great company. We started covering them in 2014, and of course, they had a very large bank group and for sure probably did not think they needed another bank covering them. But we've seen time and time again, great companies love great ideas, so we started calling with value-added ideas, running the playbook. To show them we were serious, we purchased a piece of their revolver in the secondary market, as most large companies like them have credit as a prerequisite to getting any of the other ancillary non-credit businesses, and then we called and called.
You can see on the chart, despite these efforts, we made no money for five years: 2015, 2016, 2017, 2018, 2019, 2020. But we could see and monitor, and this is how we run these markets, the quality of the relationship growing and the appreciation from the client of the hard work and good ideas that were coming. Said another way, they had not yet given us a restraining order. This is a critical aspect of the model, as I've told you before, that patience, persistence, and consistency. I can assure you, as we went through those five years, it's not easy. It looks good on a piece of paper at a conference afterwards, but going five years with no incremental revenues takes a lot of confidence and fortitude and commitment.
And that wouldn't be possible both without the support from Bill and our board to run this type of model, and then without the quality of teams we have on the ground. Again, the recruiting efforts have been extraordinary to execute upon it. Breakthrough moment with this client came in COVID when they wanted to execute a large securitization, receivable securitization, a solution that we had pitched to them many times because of their business model, and we delivered on that. It was a very significant commitment. The same year, they redid their revolver. We stepped up into a lead position. Follow that, they gave us our first treasury mandate, which was very small. More business came in 2022. More business came in 2023. More business has come this year. Now it's a $10 million plus a year revenue client with a massive return on economic capital.
If we do our job, we get to ride along with this company. They're growing at a 20% annual rate. As we get into the fee-based businesses on treasury management, you just grow at the same rate that their sales grow at. We can do this over and over again if we just continue to stick and execute upon the model. To create more great stories like this, our Retail Bank needs to scale with C&IB in order for us to stay core deposit funded. And the good news is we're very well positioned to do this now, generating a record number of net new DDAs in our franchise this year, and one of the best in the industry.
In February, as you may have seen, we announced a $1 billion investment in our branches that included roughly 100 new builds and a lot of renovations across the country, including 70 openings that you can see here in the attractive Southeast and Southwest markets. And then this morning, we're even more excited to announce that we're doubling that expansion to over 200 new branches, reflecting both the momentum in our business and the incredible opportunity that we continue to see in these new and highly attractive markets. The planned openings are very calculated and are based on the goal of getting all of these attractive markets to at least a 7% branch market share, a level where we see a high correlation to accelerated DDA growth and getting more than a fair share of deposit share.
With these branches and our recent retail investments, we also believe that these new openings give us a meaningful opportunity to deepen customer relationships through value-added offerings, including credit cards, investments, home lending, and auto loans sold to DDA customers, and on the right, you can see that we have tons of upside if we can actually execute upon this because we're below peer levels here. We haven't tried to quantify this upside in retail as part of today's presentation since we're just getting started, but you can keep it in the back of your mind. What we have tried to do today is give you some sense of the revenue upside in C&IB and AMG if we continue to execute upon our model.
To start on this, C&IB AMG revenues in our expansion markets are on pace to be roughly $2 billion in 2024, having grown at a 20% CAGR since we started in 2012. And in 2025, we'll add Salt Lake City as another new market. We're sort of getting towards the end of the new market piece, but we'll add Salt Lake City next year, which is exciting. You've heard about the model, and you understand that it takes time to mature and develop. Remember the case study. But if we do that, there's significant upside in the markets. Collectively today, our expansion markets are only 30% as productive as our legacy markets, as measured by revenue per capita.
You can see this on this slide as we execute, and this shows productivity over time in each of the new market segments versus the legacy markets. And importantly, we're still increasing productivity in the legacy markets. But as we execute in the new markets and our relationship-based model matures, our share of wallet grows and the productivity consistently accelerates, which you can see here. And we've done that every year we've been in each of the new buckets, De Novo, BBVA, and Southeast RBC. Every single year, we've done that consistently on the productivity side. And you can see in the Southeast that we've tripled the productivity of RBC since doing that deal with accelerating gains in each time period shown.
By executing on and achieving these productivity gains, we see a well-defined path for our C&IB AMG expansion market revenues to grow from $2 billion- $3.5 billion in the near term. More importantly, and over time, we expect our new markets to be at least as productive as our legacy markets. There's no reason they shouldn't be. It just takes time for our model to develop. And when that happens, the potential revenue gain increases to $6 billion. And for fun, we showed if we executed at the Pittsburgh level, which has taken us 159 years to get to, but the number was so big we didn't even put it on here. I'd also add that the incremental margin on these expansion market revenues is extremely high. We have built all the infrastructure. You don't need new systems. You don't need new back offices and new risk functions.
Very scalable as you grow revenues and the margins. So as we grow, we'll achieve significant positive operating leverage. So that's why we're excited and focused about these markets. Of course, we must execute, and that's what the priority is now. You saw the Salt Lake opening, but basically, nearly 100% of our focus is on increasing productivity in the markets that we've entered, and that just comes back to consistently running and executing against the playbook. And as a reminder, this doesn't include any of the potential revenue upside that would come from cross-sell opportunities and lending opportunities in the branches that we're opening. So I'll conclude with four points. We're well into the national expansion efforts and are excited about the progress we've made and what it means for PNC's long-term growth.
C&IB and AMG have meaningful upside in near-term financial upside with productivity gains, and this comes with operating leverage. We're now complementing that by accelerating our retail branch expansion both to drive DDA growth, to support C&IB's loan growth, but also introduce its own revenue upside through the branches. And then finally, while this organic strategy takes time, it comes with very attractive returns on capital. So we appreciate you listening and your time and attention. Rob and I are happy to answer any of your questions.
Great. Thank you, Mike. Compelling slides. I guess I'll go back to slide 20. Perhaps you guys could drill down on what you mean by near-term target. And in your mind, sort of what are the risks to executing on delivering on the playbook that makes the revenue go from potentially $2-$3.5? What are the risks there in executing?
But firstly, what do you mean by near-term? 2025, I think.
So let's get right to it.
I thought you were going to say you wanted to know the Pittsburgh number.
Well, I was building up to it.
Which we're not prepared, yeah, to do. Hey, you saw it in Mike's presentation. We're really excited about the organic growth opportunity that we have, which is, I've been at the company for 37 years. It's easily the best organic growth opportunity our company's ever had. And you're seeing the early returns on it. A lot of it is driven off of the BBVA acquisition, which was three years ago. And everything that we've done, Mike just showed you in the slides, and every business is, we're ahead of where we expected to be. So we're excited about it.
We're investing in this organic growth opportunity at an accelerated rate than what we would have thought three years ago. So when you talk about time frames, it relies on execution, which we've done. So we have a reasonable expectation that near-term would be three to five years that you've seen if we do it right sooner than that. But of course, the economy is going to play a part in that too. But we're in it for the long haul. I mean, we're in these markets. You've seen the success that we've had. Investing in this from a CFO's perspective is pretty easy because it's proven. We just need to stick to it.
So I believe in the first expansion, 100 branches, a billion-dollar investment. Is there an equivalent number to the $1 billion as you're kind of getting a little bit more aggressive on the strategy?
I think that, Mike, you mentioned also that you're renovating some of the existing branches in the original plan. Is there a renovation, like a more aggressive renovation number that we should be thinking about as well?
Well, sure. So we put it on an announcement this morning in terms of dialing up the former $1 billion investment, now $1.5 billion, with even more branches in all the places that you'd expect. So the previous $1 billion announcement was in Dallas, Houston, Austin, so on, Denver, so on and so forth. And now we're adding to that the Southeast component of it, really, with Phoenix, not technically in the Southeast, but part of that vintage.
So yeah, we're going for it. Great.
And to your point, Dick, there's new branch builds, there's renovations, about 1,400 renovations, 200 new branch builds. And then within the $1.5 billion, there's other capital upgrade ATMs and other stuff you do around the infrastructure.
And the technology that's part of these branches, naturally.
How should we be thinking about the expense base? I mean, I know that you made the observation that the incremental margins are really attractive based on your experience. How should we be thinking? And you've laid out kind of the revenue profile potential. How should we be thinking about sort of the interaction with the base level of expenses, given some of the lags that we sometimes see in the payout?
Yeah, no, there's a component of that. I mean, we manage, in terms of our strategies, the positive operating leverage, which, as you know, we've delivered in the last several years, including we're positioned for it in 2024. And no change to our guidance, by the way.
So you can all relax in that regard. Our expectations with these investments is that we would be able to maintain positive operating leverage, which is really important. But of course, there is an investment component to it that if you didn't invest, your expenses would be even lower. But we invest all the time, and this is the right bet for us to make.
And to your earlier question on the confidence of the revenue gains, the risk to that is not executing on our playbook. And that's not the plan. I mean, the playbook is set. So keep the people, go after great companies, patient, persistent, consistent, bring great ideas, leverage our treasury platform. And I think the productivity chart showed just year after year the gains come through. So all we're doing is extrapolating the math out. So feel good about the revenue profile.
On one of the slides, you drew a line at 7% market share as sort of the target, 17, yeah. Could you just sort of flesh that out a little bit about what's important about the 7% and what benefits come once you get to 7%?
Sure. We've seen over time there's what we call a fair share line that should your branch share be equal to your deposit share. And what we see around that line is an S-curve develop with an inflection point at around 7%. At that point, once you get to 7% branch share, there is a high correlation, think like 0.8 R-squared type numbers between accelerated checking account growth, accelerated DDA growth, and accelerated deposit share, deposit share becoming bigger than your branch share. It doesn't last forever. It's an S-curve, so it rolls back over in the 11%-12% range.
But if you've spread peanut butter in your branches across lots and lots of markets, you never get to that critical share. So the investment here is to get us there and to see those outsized benefits. Of course, we have to execute against it, but that's where we're focused on it.
Or in simple terms, critical mass, and then you get the gravitational pull once you have sufficient mass.
Great. So one more from me, and then we'll open it up to the rest of the folks here. On one of the slides, you laid out build or buy, and there was an underscore on the or. This seems to be an indication that the CSAW is a little bit heavier on the build side. Could you talk a little bit about you mentioned that the prices are a little bit high on the buy side of the CSAW?
Just could you talk a little bit about that? What could change that? Your currency is certainly quite valuable, as it should be, in my opinion, but [crosstalk]
That's a good thing.
Oh, thank you. I owe that to you. But so I would imagine that's part of the equation. I would think that maybe you could take advantage of that. But just sort of your thoughts on build versus buy and where it works with the cycles that you've seen in terms of valuations.
Yeah, sure. So we've been very, very clear in terms of our intention to continue to drive scale. And we're still there. There's two ways to do that. Mike highlighted that in his comments, obviously acquisitions and/or organic growth.
Right now, I would say our emphasis is leaning heavier towards the organic growth simply because even though we're a competent buyer, we're an interested buyer, we're a capable buyer. Right now the valuations of likely acquisition candidates, in our view, exceed what they're worth. But you know, Dick, we've been around a long time. That changes. So we need to be in a position for if and when that changes. But it doesn't crowd out making other investments in terms of an opportunity that's staring us right in the face with this organic growth. So that's where our emphasis is right now, and we're excited about it.
Great. All right. So I'm going to look for hands. Mike. Oh, Mike McDowell.
So I mean, you showed 2011 to now and the success you've had and you're went from nine to 30 of the 30 largest markets, fastest growing.
You said no change in guidance. You're still going to have positive operating leverage. But I think the bear case here could be an admission that a skinny branch network doesn't necessarily work and that density is more important than scope. So if you could address kind of that bear case argument that you're saying, "Hey, we thought it would work with what we had, and now we're going to have to really increase that density, and therefore we have to spend maybe more than we thought we originally had to."
Yeah, we don't look at it that way. In our view, in terms of the expansion that we made largely through the acquisition, we got into these markets and our expectations were, "Let's settle it down. Let's get established, and everything happened faster than what we expected.
So at the beginning, we always thought then we would build density based on success. It's just that that success has shown up sooner. So we're advancing sort of our long-term plans that we had three years ago to now based off of the success, the momentum that we have.
And loan, even with the growth we've had to date above that and the branches still to come, the loan-to-deposit ratio is just where it's always been. So there's been no governor on the growth.
Ryan?
Hi, Ryan Kenny, Morgan Stanley. So I heard the comments on approaching M&A with the framework of valuations are kind of high right now. Is there any scenario in which PNC would pay a premium for a deal? And how should we think through the framework in which you would approach a potential deal?
Yeah, oh, sure.
So we've been a successful acquirer, and everything that we did, we paid a premium. So we don't have a problem with paying a premium. Our issue today is we think the premium's already priced in, so you're paying a premium on top of the premium, which makes it unappealing. So that's the way that we think about it.
Thanks. This is Joe Capone at Soros Fund Management. I actually have a follow-up to that exact statement. So when you look at the returns on capital for this organic expansion strategy into new markets, how do you look at that relative to the returns you would get on an acquisition or for loan portfolio acquisitions or for whatever the Pittsburgh number is, which is huge, non-quantifiable, but doesn't require expansion?
It's in our 160-year guidance.
Right. It's longer than our horizon.
But can you just give us some of the numbers of how you evaluate these various avenues? I'm not impugning the strategy. I'm just wondering how you compare.
Yeah, sure. Thanks, Joe. The returns relative to acquisitions and organic growth, in the long run, the returns are very similar. There's advantages and disadvantages to both. The acquisitions just happen faster, sort of the way that we think about it. This, from an investment perspective, all of you would do. The returns are very, very good, but it's going to play out over three to five years, and then, to Mike's point, be an exponential along those lines. So there's no return hurdles or anything that's in the way of that or that would preclude us from making an acquisition during that timeframe.
That includes loan portfolios like we did with the Signature Bank loans, which was a phenomenal return transaction. So Rob's fine. But the focus is on executing here because the returns, as Rob said on this, are phenomenal.
John?
John Pancari, Evercore ISI. I guess, so this is great in terms of the franchise expansion and maybe a little accretes a bit more to the right side of the balance sheet. I guess on the left side, in terms of complementing this expansion with growth efforts, can you maybe talk about your expansion efforts in some of your lending areas, whether it be CIB or the Corporate side of the business to complement this, then maybe even on the capital market side, just regarding the business expansion? Thanks.
Sure. I'll start, and Rob can join in. The core of all of our lending strategies is relationship-based business.
So when we talk about card specifically as a full overhaul of our card business, we want to continue to grow DDA clients, the DDA being so critical to a bank strategy, and you've heard it throughout the week here. Today, we are not sufficiently penetrating our core DDA customer base with our credit card. So our goal when we think about building card is not to build loans outstanding. If that happens, great. It's to make sure our core DDA customers are doing their daily spending off both our debit card, which naturally comes with it, and our credit card piece of it. And we showed you the penetration charts in here. We just haven't done as well as we have done over time. So we'll build that. If loan growth comes with it, then we would expect it would.
But the goal isn't loan growth, and let's build a card business to get it so you won't see us on co-branded card portfolios or some of the other things you would normally see in a full card company. This is in the context of relationship-based banking. With respect to overall loans on the consumer side, if we do a better job, and you saw some of the accelerating DDA growth numbers, and we talked about a relative position in the industry, we are performing much better today in retail than we ever have before. And if that momentum continues, you'll see our penetration on auto, direct auto, student, home equity, mortgage, credit card, all the areas where we've underperformed go up, and that will drive loans up on an outstanding base.
But I don't want anyone to think we're going in and saying, "Hey, we're going to be a big consumer lender and try to operate that business nationally." On the Corporate side, it is just this maturity curve. We introduced ourselves to that company that we talked about today, and five years later, made a loan. We have thousands of those ships out to sea right now where we're in those periods to build it. And based on we're not making it up. It's been 13 years that we've watched this over and over again. So again, the single best and biggest thing we can do is stay after the model, execute in a maniacal way, cover these clients, and good things happen.
We've seen it just play out so many times before, and we have the full and steadfast support from Bill to go do that, whatever that pace takes.
I think that's a great point to end on. Thank you both very much.
Thank you, Dick. Thank you, everyone.