PNC Financial Services Group Inc. Chairman, President and CEO William Demchak has confirmed that if his company uses its capital stockpile on an acquisition, it will likely target another bank.

But it could be a while before PNC pulls the trigger, and the decision to do a deal will ultimately depend on the length and severity of the economic downturn caused by the coronavirus pandemic.

PNC cashed in on its roughly $15 billion stake in BlackRock Inc., selling its shares in a transaction that analysts have estimated could lift its common equity Tier 1 ratio by about 200 basis points to over 11%. The sale means that PNC will forgo its share of BlackRock's earnings, prompting expectations that the bank will ultimately seek to fill the hole with a major acquisition. Speculation about potential targets has ranged from banks including Comerica Inc., Regions Financial Corp. and First Horizon National Corp. to payments companies.

PNC is most interested in a bank, according to Demchak.

"In its most likely form, it would be another bank," he said in an interview with CNBC. "We're not veering off from our strategic direction of wanting to establish a national presence on both the retail and [commercial and industrial] side." Demchak noted that PNC has been pursuing such an expansion through its "branch thin" de novo and digital strategy.

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"The ability to accelerate that strategic direction through acquisition would be attractive. It's a game we know well and it's a game we execute on well and it's in a market that's wildly fragmented," the CEO said.

Demchak also pushed back on the idea that PNC would consider a merger of equals. "We're going to be in a position given our capital base, given the strength of the company, given our track record, to be the drivers in this outcome," he said.

PNC's last whole-bank deal was the 2012 acquisition of North Carolina-based RBC Bank (USA), which had $27.17 billion in assets at completion. It also bought National City Corp. with $145.03 billion in assets at completion during the 2008 financial crisis.

In a May 17 note, Keefe Bruyette & Woods analysts estimated that PNC could buy a bank with $90 billion to $100 billion in assets without issuing stock, and noted that the bank could acquire a bigger target if it uses stock as part of the consideration. In a May 12 note, the KBW analysts said the deal math would be attractive if PNC bought Citizens Financial Group Inc., with $176.7 billion in assets at March 31, or KeyCorp, with $156.2 billion in assets. KBW estimated that both transactions could produce double-digit EPS accretion for PNC under the assumptions it used.

Many analysts think uncertainty about the future will continue to put bank mergers on hold for some time, though the recession could create motivated sellers before clarity emerges.

"We have solidly entered a cycle of depressed and defensive merger activity that may continue for several quarters even after the crisis has eased," analysts at Compass Point wrote in a May 19 note. They said that credit risk at potential sellers will remain hard to understand until large numbers of borrowers given payment deferrals either recover or default, and buyers' stock currencies are being held down by credit concerns and low interest rates.

Demchak said that delinquency and charge-off levels have been "pretty benign" so far, in part because of expanded unemployment insurance for millions of laid-off workers, stimulus checks and hundreds of billions of dollars in aid to small businesses.

However, "behind the scenes, we and all the banks are deferring payments from consumers and small business and commercial and real estate," he added. "We're kind of biding our time, and all of this is set up under the assumption that a month or so from now, everything is going to come roaring back and all those deferments become current. Right now, there's not a whole lot to look at. The question is, if this extends out further, the deferments become real, and they become permanent, in the sense that people won't have an ability to catch up. That's what we're fearful of."