After 11 months and 100,000 hours of local training, PNC Financial Services Group reopened 231 Baltimore-area branches yesterday in the PNC orange and blue, officially deepening the physical presence of Pittsburgh's largest bank in key markets throughout Maryland, Virginia, Washington, D.C., and Delaware.
PNC closed on its $6 billion acquisition of Mercantile Bankshares in March but decided to wait until September for the official conversion of names, signs and systems. In the meantime, more than 400 Mercantile jobs have been cut, more than 500,000 accounts have changed to PNC's control, and more than 400 extra PNC employees were sent to make sure all went smoothly.
PNC's takeover of Mercantile is a sensitive topic in Baltimore, where Mercantile has been overseeing assets of local elites since the Civil War. For that reason, a "legacy" project is being planned to preserve some of the history in selected branches. PNC also contributed $25 million to a Mercantile charitable fund, hoping to allay concerns about a drop-off in support to local charities and development projects.
"We have worked hard to overcome the No. 1 concern of Mercantile customers, that the local flavor would disappear," said PNC spokesman Fred Solomon.
PNC, which now has almost 1,100 branches, is adding to its footprint in the wealthiest and fastest-growing parts of the Northeast at a time when the subprime-mortgage fallout is roiling the financial markets. But PNC Chief Executive Officer James Rohr said last week at a New York investors conference that PNC has "minimal exposure" to the problems because "we have not been a subprime . . . player" -- unlike Cleveland-based National City, the No. 2 bank in the Pittsburgh area after PNC, which said yesterday it expects a third-quarter mortgage banking loss of around $160 million.
At the New York investment conference, one analyst asked Mr. Rohr about Mercantile's portfolio, which is heavy with real estate loans.
"They did have a significant real estate exposure, " Mr. Rohr said, but "it's done extraordinarily well." When PNC purchased Mercantile, the bank had "no" non-performing loans and since then there has been a "very, very tiny deterioration," Mr. Rohr said.
Mercantile, he added, stayed away from the largest deals, with average loans below $1 million, and benefitted from a significant presence in the nation's capital.
"Washington, D.C., has not suffered the way some of the other markets have," Mr. Rohr said. "There's nothing like the federal government to continue that growth. It's a wonderful market."
First Published: September 18, 2007, 8:00 a.m.
