FNB won't buy National City units
Three PNC, under construction along Fifth Avenue in this December picture, rises to join One PNC, right, and Two PNC, left.
Share with others:
At least one local bank that looked at buying some of the National City branches in Western Pennsylvania put up for sale by new owner PNC Financial Services Group has pulled out of the running.
"We are not an active buyer at this time," said Stephen Gurgovits, chairman and acting chief executive officer of FNB Corp., parent of First National Bank of Pennsylvania in Hermitage.
"We did have an interest in it," he said yesterday. "But for us to do it in these times, we would have had to raise capital to support the assets, and we didn't feel the capital markets are attractive enough now. So, unfortunately, we are going to have to pass."
The $8.4 billion-asset Mercer County bank reported a loss of $19 million for the fourth quarter and in January received a $100 million investment from the U.S. Treasury's emergency bailout fund.
Pittsburgh-based PNC, which acquired ailing Cleveland-based National City Corp. Dec. 31, is selling 61 National City offices in Western Pennsylvania with deposits of $4.1 billion to settle antitrust concerns. Fifty of the branches, located in the five-county Pittsburgh region, must be sold to a single buyer. The remaining 11 branches are further north in Erie, Crawford and Warren counties.
In February, PNC said it expected to have deals in place for the branches by the beginning of this month.
Yesterday, banking analyst Gerard Cassidy said he wasn't surprised that deals have yet to be announced.
"In view of the economic conditions that the banks are operating in, this may not be the most opportune time to sit down and look to buy branches," said Mr. Cassidy, who covers PNC for RBC Capital Markets in Portland, Maine. "Buyers may be more focused on their own issues rather than going out and buying 50 branches."
Other financial institutions that have looked into buying the branches include JP Morgan Chase, Wells Fargo, Key Corp., Fifth Third, Huntington Bancshares and First Niagara Financial, according to a source close to the situation.
Initially, analysts identified Columbus, Ohio-based Huntington and Cincinnati-based Fifth Third as the most likely candidates for the majority of the branches. Both have operations in this region and have stated their desire to grow here.
"Huntington remains very committed to the Pittsburgh area," spokeswoman Maureen Brown said in an e-mail yesterday. "We continue to seek ways to grow the bank here," she said, declining further comment. Huntington entered the Pittsburgh market in 2007 with the purchase of Sky Financial Group and its 65 branches in the region.
A spokeswoman for Fifth Third declined comment.
But Mr. Cassidy said he didn't consider Huntington or Fifth Third to be leading candidates to buy the branches, saying both are struggling financially.
He also discounted the probability of San Francisco-based Wells Fargo stepping in, saying the country's fourth-largest bank was too busy digesting troubled Wachovia Corp., which it swallowed in December. Wells Fargo declined comment.
Of the group, New York-based JP Morgan, the nation's second biggest bank, and Cleveland-based Key Corp., No. 18, would be the most likely buyers, Mr. Cassidy said. Neither has a presence in Western Pennsylvania, but an expansion into the state would make sense geographically, he said. JP Morgan acquired a presence in the Midwest through its 2004 purchase of the old Chicago-based Bank One franchise.
Spokesmen for both JP Morgan and Key Bank declined comment yesterday.
A spokeswoman for Lockport, N.Y.-based First Niagara also declined comment.
First Niagara, which operates 114 branches in upstate New York spanning from Buffalo to Albany and has assets of $9.3 billion, presumably would be most interested in buying branches in Erie, Crawford and Warren counties near the New York boarder.
PNC spokesman Fred Solomon also declined comment yesterday. He said the announcement of any deals would be left up to the buyer.
First Published March 21, 2009 12:00 am