By Mark Williams
PNC’s bargain-basement deal to take over what once was Ohio’s largest bank is paying big dividends, says the Pittsburgh-based bank’s top executive.
“It’s been a wonderful marriage,” said James Rohr, PNC’s chairman and CEO, of PNC’s acquisition of National City.
“To take National City, combine it with PNC, it has been a terrific home run,” Rohr said.
PNC bought 163-year-old National City in 2008 as the financial crisis froze credit markets and the tumbling housing market devastated banking assets across the country. The tide that swept over National City also took down other major banks, including Washington Mutual and Wachovia.
PNC was able to buy National City for $2.23 per share, or about $5 billion. The bank’s shares once topped $40.
PNC was about the same size as National City at the time, and the two were practically neighbors — National City’s headquarters was in Cleveland.
“National City was a great core bank,” Rohr said, with solid customer service and good credit quality for the most part.
What had gotten National City in trouble was bad investments in mortgages, most of which were in California and Florida, said Rohr, who was at Ohio State University last week to receive the Executive Pace Setters Award, the top honor at the university’s Fisher College of Business. Rohr, 64, received a master’s in business administration from Ohio State in 1972.
The acquisition allowed PNC to gain customers, sell more products to existing customers and leverage its technological advancements, such as “Virtual Wallet,” which allows consumers to better manage their finances, across more regions, he said.
“We’re building market share,” said Rohr, who is stepping down as the bank’s CEO next month at the bank’s annual meeting. He’ll take the new position of executive chairman for one year to ease the transition.
The deal for National City has helped turned PNC, previously a minor player in Ohio, into one of the biggest banks in the state and country.
Federal Deposit Insurance Corp. data show PNC was fourth in Ohio in market share with a total of 10.1 percent of deposits as of June 30, trailing Fifth Third Bank, Huntington Bancshares and U.S. Bank.
Rohr said PNC has come through the financial crisis in solid shape.
“We just can’t be in any better position,” he said.
Bruce Clapp, president of Market Match, a Dayton-based financial-marketing company, said PNC’s deal for National City has worked well for the bank, and National City customers haven’t been hurt.
“They got a diamond at a cubic zirconia price,” Clapp said, noting National City’s mostly solid business that PNC got at such a distressed price.