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PNC Financial Services

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PNC Financial Services Group, Inc.
Company typePublic
NYSE: PNC
S&P 500 Component
IndustryFinancial services
PredecessorPittsburgh National Corporation
Founded1852
Headquarters
Pittsburgh, Pennsylvania
,
U.S.
Key people
Jim Rohr (Chairman and CEO)
RevenueDecrease US$ 14.326 billion (2011)[1]
Increase US$ 4.069 billion (2011)[1]
Decrease US$ 3.071 billion (2011)[1]
AUMDecrease US$ 210 billion (2011)[1]
Total assetsIncrease US$ 271.205 billion (2011)[1]
Total equityIncrease US$ 37.246 billion (2011)[1]
Number of employees
51,891 (2011)[1]
WebsitePNC.com

PNC Financial Services Group, Inc. is a U.S.-based financial services corporation, with assets (as of December 31, 2011) of approximately $271.205 billion.[1] PNC operations include a regional banking franchise operating primarily in nineteen states and the District of Columbia, specialized financial businesses serving companies and government entities, and leading Turnkey Asset Management Program and processing businesses.

PNC is currently the seventh largest bank by deposits in the United States, as well as the sixth largest by total assets[2], fifth in total branches,[3] and is the third largest bank off-premise ATM provider.[4] PNC is based in Pittsburgh.

History

PNC's corporate headquarters in Downtown Pittsburgh.
PNC's offices in Troy, Michigan.

PNC Financial Services traces its history to the Pittsburgh Trust and Savings Company which was founded in Pittsburgh, Pennsylvania, in 1852. In 1858, the company located its corporate offices at the corner of Fifth Avenue and Wood Street in Pittsburgh where they remain to this day. The bank changed its name to First National Bank of Pittsburgh in 1863, after it became the first bank to receive a national charter as part of that year's National Banking Act.[5]

By 1959, after a series of mergers, the bank had evolved into the Pittsburgh National Corporation. Another branch of the current bank, the Philadelphia based Provident National Corporation, dates back to the mid-19th century.[5]

In 1982, Pittsburgh National Corporation and Provident National Corporation merged into a new entity named PNC Financial Corporation.[5] Between 1991 and 1996, PNC purchased over ten smaller banks and financial institutions that broadened its market base from Kentucky to the Greater New York metropolitan area.[5] In 2005, PNC acquired Washington, D.C. based Riggs Bank.[5] PNC completed the acquisition of Maryland-based Mercantile Bankshares on March 2, 2007.[5] On June 7, 2007, PNC announced the acquisition of Yardville National Bancorp, a small commercial bank centered in central New Jersey and eastern Pennsylvania. The transaction was completed in March 2008.[5] On July 19, 2007, PNC announced the acquisition of Sterling Financial Corporation, a commercial and consumer bank with accounts and branches in central Pennsylvania, northeastern Maryland and Delaware. The transaction was also completed in 2008.[5]

National City acquisition

Further information: National City acquisition by PNC

In an October 9, 2008 article in the Wall Street Journal, PNC was cited by unnamed sources as one of the leading contenders to acquire Cleveland based National City Bank. On October 24, 2008, PNC announced that it would acquire Cleveland based National City Bank for US$5.2 billion in PNC Stock.[6] The acquisition, which helped PNC double in size and to become the sixth largest bank in the United States by deposit and fifth largest by branches, came hours after PNC sold 15% of its stake to the United States Treasury as part of the $700 billion bailout plan, which it repurchased within 2 years. The deal was approved by shareholders of both banks on December 23, 2008,[7] and completed on December 31, 2008.[8]

The deal made PNC the largest bank in Pennsylvania, Ohio, and Kentucky, as well as the second largest bank in Maryland and Indiana. It also greatly expanded PNC's presence in the Midwest as well as entering the Florida market. National City complemented PNC's presence, as Western Pennsylvania, Cincinnati, Ohio and Louisville, Kentucky were among the few markets before the acquisition deal in which both banks had a major presence.[9]

PNC completed the conversion of the National City branches on June 14, 2010, having its footprint stretch from New York City to St. Louis, with branches as far south as Miami and as far north as the Upper Peninsula of Michigan.

Recent acquisitions

A report in the December 15, 2010 issue of the American City Business Journals reported that PNC was looking to expand its Florida presence and that it was in talks to acquire Birmingham, Alabama-based Regions Financial Corporation, which would have greatly increased PNC's presence in the Southern United States.[10] Since the December 15 report, the Dow Jones has reported through the Wall Street Journal, that Regions Financial was never in talks to be acquired by PNC.[11] After PNC moved into Regions home market of Birmingham through the RBC Bank deal in March 2012, rumors of a potential PNC-Regions deal down the road came up again.[12]

It has also been reported that PNC has been in discussions with BankAtlantic,[10] which later came to be on January 31, 2011 when PNC bought BankAtlantic's Tampa Bay Area branches.[13] The BankAtlantic deal, which will not include its South Florida branches where PNC already has a presence, closed in June 2011.

Flagstar Bank

On July 26, 2011, it was announced that PNC would acquire 27 branches in the northern Atlanta suburbs from Flagstar Bank.[14] The deal is estimated to be worth about $42 million, and PNC will assume about $240 million in deposit accounts. The deal is complete as of December 2011.

RBC Bank

On June 19, 2011, PNC agreed to purchase RBC Bank from Royal Bank of Canada for $3.45 billion.[15] With 426 branches total, RBC Bank has a significant presence in southern Virginia, North Carolina, South Carolina, Georgia, Alabama, and Florida. Of these regions, PNC had existing branches only in Florida which were rebranded when the National City merger occurred. Although announced over a month before the Flagstar Bank deal, the sale of RBC Bank didn't close until on March 2, 2012, three months after the Flagstar deal. BB&T, which later acquired the parts of BankAtlantic that PNC didn't buy, was also in talks to acquire RBC Bank.[15]

The acquisition allowed PNC to enter the growing markets in the Southeastern U.S. such as Birmingham, Charlotte, Norfolk/Virginia Beach (Hampton Roads), Mobile, North Florida, Richmond, Greensboro/Winston-Salem (Piedmont Triad), and Raleigh/Durham (Research Triangle). At the same time, it expands PNC's presence in South Florida, Tampa Bay Area to Orlando, and Atlanta. This acquisition filled a gap in PNC's market footprint between northern Virginia and central Florida, adding about 900,000 customers and 483 ATM locations. It made PNC the fifth-largest bank by branches behind Wells Fargo, Bank of America, Chase, and U.S. Bank and the sixth-largest by total assets behind the aforementioned four banks and Citibank.[3]

New corporate headquarters

On May 23, 2011, PNC unveiled plans for a new $400M corporate headquarters building in downtown Pittsburgh.[16] The new building, known as the Tower at PNC Plaza, will be a 40-story, 800,000-square-foot (74,000 m2) skyscraper approximately 600' tall at the intersection of Fifth Avenue and Wood Street. PNC will own the building and occupy all the space except for street-level storefronts which it will lease to retail tenants.

The Tower at PNC Plaza plans to be one of the world's most environmentally friendly skyscrapers. Some of its features will include a double glass facade to reduce cooling costs and promote natural airflow into the building, a high-efficiency climate-control system to heat or cool specific zones of the building as needed, and a pair of living rooftops to collect and channel rainwater and reduce heat gain. Alternative energy sources such as fuel cells, and solar and geothermal power, are being considered in an effort to reduce carbon emissions.[17]

PNC Bank

PNC Bank branch, located in the historic National Bank of Washington building, in Washington, D.C.

PNC Bank NA. is the principal subsidiary of the PNC Financial Services Group, Inc. Based in Pittsburgh, Pennsylvania, PNC Bank offers consumer and corporate services in over 2,500 branches in Alabama, Delaware, the District of Columbia, Florida, Georgia, Kentucky, Indiana, Illinois, Maryland, Michigan, Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Virginia, West Virginia, & Wisconsin.[18] PNC owns about 35% of publicly traded fund manager BlackRock, which specializes in fixed-income products. BlackRock merged with Merrill Lynch Investment Managers in October 2006, and is now co-owned between PNC, Bank of America, and Barclays. BlackRock's ties to PNC are evident in that company's logo, as they use the same typeface as PNC does in its own logo.

In June 2003, PNC Bank agreed to pay $115 million to settle federal securities fraud charges after one of its subsidiaries fraudulently transferred $762 million in bad loans and other venture-capital investments to an AIG entity in order to conceal them from investors.[19] PNC acquired the former United National Bancorp based in Bridgewater, New Jersey in 2004, and later announced that it would buy the Riggs National Bank which operated in the Washington, DC area. Among other offenses, Riggs had aided Chilean dictator Augusto Pinochet in laundering money. PNC successfully completed the acquisition of Riggs in 2005 after the banks resolved a disagreement on the acquisition price.[20]

PNC Bank was forced to reissue hundreds of debit cards to customers in March, 2006 when their account information was compromised.[21] In the same month, PNC Bank was sued by Paul Bariteau who was an investor in the Military Channel. Bariteau claimed PNC let the channel’s chairman make unauthorized withdrawals of millions of dollars from the channel's account for personal use. The counter-claim is that Bariteau was only trying to recoup losses from a bad investment.[22]

PNC Bank branch, located in Georgetown, Washington, D.C.

In April 2006, the J.D. Power Consumer Center released the results of its New York Retail Banking Satisfaction Study indicating that PNC Bank had an average number of satisfied customers.[23] PNC has also subcontracted with American Express, Discover, ABN-AMRO, and Washington Federal to do home equity loans. The operation sends out bulk mailings with offers and has a call center in Pennsylvania to handle this business.

In the fall of 2006, PNC announced its purchase of Mercantile Bankshares, a Maryland bank with an extensive branch network throughout suburban D.C., Baltimore and northern Virginia. On September 17, 2007, PNC successfully completed the merger with Mercantile, making PNC the 8th largest bank in the United States by deposits.[24]

On August 14, 2009, PNC took over Dwelling House Savings & Loan and its only location in Pittsburgh's Hill District after Dwelling House failed and was placed under receivership by the Federal Deposit Insurance Corporation.[25] Although PNC was still in the process of integrating National City into its own system at the time, the bank agreed to assume all of Dwelling House's assets, and the branch became a PNC branch on August 17. Dwelling House had been known in Pittsburgh to provide low-income African Americans loans that other banks would deny, and had fended off receivership from the FDIC as recent as June 2009 through community fundraisers. PNC closed the former Dwelling House branch shortly after assuming Dwelling House's assets, with accounts transferred to the pre-existing PNC branch in the Hill District.[26] The failure of Dwelling House is the only bank failure in Pennsylvania--a state otherwise relatively stable with banks—since the beginning of the financial crisis of 2007–2010,[27] although two out-of-state banks with strong Pennsylvania ties (National City and Wachovia) were reportedly close to failing at the time they were acquired by PNC and Wells Fargo, respectively.

Primary operations

PNC Bank branch, located in the former headquarters of Riggs Bank on Pennsylvania Avenue, Washington, D.C.

Retail banking

The corporation operates a leading community bank in its major markets and is a top-ten Small Business Administration lender. Operations include the third-largest bank automated teller machine network in the U.S. The corporation claims to operate environmentally friendly "green" bank branches and is a major wealth management firm.

PNC Merchant Services

In 1998, PNC sold its credit card business to Metris Companies[28] and MBNA.[29] In 2003, PNC's check cards (not credit cards), which had a Visa logo, were reportedly hacked in February, causing PNC to deactivate 16,000 cards.[30] In 2006, PNC got back into the credit card business by marketing and issuing credit cards, including one for small business, under the MasterCard brand[31] by using a third-party vendor to handle its credit card business,[32] partnering with Minneapolis-based U.S. bank.[31] PNC offers small business owners who have accounts at PNC bank a chance to let customers pay with credit cards, but requires business owners to sign three–year contracts with substantial penalties for early termination, often in excess of the standard $15 monthly fees, sometimes with criticism for lack of transparency.[32] PNC's director Dan Tuccillo planned to offer the service in eight states plus Washington, D.C., according to a report in the Pittsburgh Post-Gazette in 2006.[31]

Corporate and institutional banking

PNC operates a top-ten treasury management business and the U.S.'s second-largest lead arranger of asset-based loan syndications. Its subsidiary Harris Williams & Co. is one of the U.S.'s largest mergers and acquisitions advisory firms for middle-market companies.[citation needed]

PNC footprint, as of March 2012

PNC Mortgage

PNC Mortgage (formerly National City Mortgage) is the mortgage division of PNC. Acquired through the National City deal, PNC Mortgage is credited with the first mortgage in the United States, and has offices across the country.

This is the second mortgage division to be named PNC Mortgage. PNC had sold off the original PNC Mortgage to Washington Mutual in 2001 due to volatility in the market despite the fact that the market was in a "boom" period at the time,[33] then subsequently outsourcing mortgages to Wells Fargo until the National City deal.[34] PNC has no plans to enter the subprime lending market that plagued National City Mortgage.[35]

PNC Global Investment Servicing

The corporation's Global Investment Servicing subsidiary was the second-largest full-service mutual fund transfer agent in the U.S and the second-largest full service accounting & administration provider to U.S. mutual funds. PNC Global Investment Servicing had provided services to the global investment industry since 1973. With 4,700 employees, PNC Global Investment Servicing operates from Ireland, the United States and the Cayman Islands, PNC International Bank Limited operates from Luxembourg. PNC Global Investment Servicing services $1.9 trillion in total assets and 58 million shareholder accounts. In 2007 PNC Global Investment Servicing Trustee & Custodial Services Limited was awarded a banking licence by financial regulators allowing it to expand further into Europe. As a result the name changed to PNC Global Investment Servicing. PNC Global Investment Servicing was formally known as PFPC until July 2008.

On February 2, 2010, longtime crosstown rival The Bank of New York Mellon announced a definitive agreement to acquire PNC’s Global Investment Servicing.[36] PNC sold it off in order to pay back its TARP funds, which were used to buy National City Corp., which PNC at the time was still in the process of converting branches over to PNC.

BNY Mellon closed the purchase of PNC Global Investment Servicing on July 1, 2010.

BlackRock

PNC has an equity stake of around 21.7%[37] in BlackRock, the world's largest publicly traded asset management firm by AUM.

Midland Loan Services

Midland Loan Services is a third-party provider of service and technology for the commercial real estate finance industry. It specializes in commercial loan and CMBS portfolio servicing. Founded in 1991, its headquarters are in Overland Park, Kansas.

Community initiatives

The corporation has sponsored a number of initiatives to improve education, health and human services, and cultural and arts activities. These include a "PNC Grow Up Great" commitment to early childhood development, the "PNC Foundation", and community development investments.[38]

Since 1984, PNC Financial Services has compiled the Christmas Price Index, a humorous economic indicator which estimates the prices of the items found in the song The Twelve Days of Christmas.

Controversy

In regard to PNC's Midland Loan Services, in late 2001 commercial mortgage loans held by First Chicago Capital Corporation were transferred to Midland Loan Services and Lennar Partners, Miami, Florida. Lennar Partners [Arne L. Shulkin], on behalf of Midland, proceeded to declare commercial loans in default by calling in such loans for full payment, without giving borrowers ample opportunity to secure new financing. Most borrowers had been previously assured by Midland that their loans would continue as they had prior to the acquisition of First Chicago Capital Corporation. When borrowers made their usual mortgage payment to Midland, they soon after received notices of default and foreclosure.

In October 2011, PNC temporarily closed two of its branches in Downtown Pittsburgh as a result of protesters going into those branches to protest. The protesters were part of the Occupy Wall Street movement.[39]

Notable corporate buildings

Future corporate headquarters
Site preparation to begin in fall 2011, with construction to start in spring 2012 and finish in summer 2015
Current corporate headquarters
PNC is currently a major tenant
Former headquarters of National City Bank
PNC is a major tenant
PNC is a major tenant
  • PNC Bank Building in Orlando, FL[1] at Capital Plaza One - 201 E. Pine Street.

Naming rights

PNC owns corporate naming rights to the following:

See also

References

  1. ^ a b c d e f g h "2011 Form 10-K, PNC Financial Services Group, Inc". United States Securities and Exchange Commission. Cite error: The named reference "10K" was defined multiple times with different content (see the help page).
  2. ^ http://www2.fdic.gov/idasp/main_bankfind.asp: click More Search Options, under Size or Performance choose Total Deposits and under Equal or Greater than enter $100,000,000,000. (It's necessary to perform the search manually on each occasion due to the website's configuration). Updated April 16, 2012.
  3. ^ a b http://pittsburgh.cbslocal.com/2011/06/20/pnc-to-acquire-rbcs-united-states-unit/
  4. ^ "PNC Bank Profile Information". Rate Rush. Maugans Corp. 2010. Retrieved 2010-06-13.
  5. ^ a b c d e f g h "Corporate History". PNC Financial Services Group, Inc. 2010. Retrieved 2010-06-12.
  6. ^ kdka.com PNC Financial Services To Buy National City
  7. ^ http://kdka.com/business/National.City.PNC.2.894007.html
  8. ^ PNC completes National City acquisition, Associated Press via Yahoo! News, December 31, 2008
  9. ^ "PNC to Acquire National City" (Press release). PNC Financial Services Group, Inc. 2008-10-24. Retrieved 2010-06-12.
  10. ^ a b Bandell, Brian (December 16, 2010). "PNC looking at Regions, BankAtlantic".
  11. ^ "2nd UPDATE: PNC Not In Discussions To Buy Regions -Sources". The Wall Street Journal. December 15, 2010. [dead link‍]
  12. ^ http://blog.al.com/businessnews/2012/02/pnc_bank_buys_rbc_branches_in.html
  13. ^ http://www.pittsburghlive.com/x/pittsburghtrib/business/s_720631.html
  14. ^ "PNC to buy Atlanta Flagstar Bank branches". June 26, 2011. {{cite news}}: Text "Atlanta Journal-Constitution" ignored (help)
  15. ^ a b "Reuters: PNC to buy RBC unit for $3.45 billion". June 19, 2011. {{cite news}}: Text "Pittsburgh Tribune-Review" ignored (help)
  16. ^ a b http://multivu.prnewswire.com/mnr/pnc/42893/
  17. ^ https://www.pncsites.com/pnctower/
  18. ^ Cite error: The named reference annualreport was invoked but never defined (see the help page).
  19. ^ "Cincinnati Enquirer". Retrieved 2006-09-17.
  20. ^ O'Hara, Terence (February 11, 2005). "Washington Post". The Washington Post. Retrieved 2006-10-27.
  21. ^ "USA Today". March 16, 2006. Retrieved 2006-09-17.
  22. ^ "Louisville Courier-Journal". Retrieved 2006-09-17. [dead link‍]
  23. ^ "J.D. Power". Retrieved 2006-09-17.
  24. ^ "Pittsburgh Post-Gazette". Retrieved 2006-10-27.
  25. ^ Boselovic, Len (August 14, 2009). "PNC to take over troubled Dwelling House". Pittsburgh Post-Gazette.
  26. ^ Grant, Tim (August 18, 2009). "Dwelling House accounts moved to PNC". Pittsburgh Post-Gazette.
  27. ^ http://www.fdic.gov/bank/individual/failed/banklist.html
  28. ^ "COMPANY NEWS; METRIS TO BUY $1 BILLION IN CREDIT CARD LOANS FROM PNC". The New York Times. September 9, 1998. Retrieved 2010-12-07. The Metris Companies, a credit card concern, agreed to buy $1 billion of credit card loans from the PNC Bank Corporation... {{cite news}}: Italic or bold markup not allowed in: |publisher= (help)
  29. ^ "COMPANY NEWS; MBNA IS BUYING PNC BANK'S CREDIT CARD OPERATIONS". The New York Times: Business Day. December 24, 1998. Retrieved 2010-12-07. The MBNA Corporation, the nation's third-largest credit card lender, said yesterday that it would buy the credit card operations of the PNC Bank Corporation, which is exiting the business. MBNA will pay $443 million, a 15 percent premium, for PNC's $2.9 billion in credit card receivables. {{cite news}}: Italic or bold markup not allowed in: |publisher= (help)
  30. ^ "PNC Bank cancels check cards following hacker incident". USA Today. 2003-02-21. Retrieved 2010-12-07. PNC Bank deactivated about 16,000 check cards tied to the Visa brand after it was notified that a hacker gained access to millions of credit card numbers nationwide by breaking into a processing company's computer system. {{cite news}}: Italic or bold markup not allowed in: |publisher= (help)
  31. ^ a b c Patricia Sabatini (August 29, 2006). "PNC tries new credit cards, old strategy". Pittsburgh Post-Gazette. Retrieved 2010-12-07. Starting Friday, PNC will market and issue credit cards -- including one for small businesses under the MasterCard brand -- in partnership with Minneapolis-based U.S. Bank, w... Mr. Tucillo said using U.S. Bank, a leader in the field, will help PNC control costs. {{cite news}}: Italic or bold markup not allowed in: |publisher= (help)
  32. ^ a b Bill Toland (December 21, 2008). "PNC races to wrap up National City takeover". Pittsburgh Post-Gazette. Retrieved 2010-12-07. PNC sold its mortgage-origination business to Washington Mutual in 2002, and likewise uses a third-party vendor to issue credit cards. {{cite news}}: Italic or bold markup not allowed in: |publisher= (help)
  33. ^ http://www.allbusiness.com/banking-finance/banking-lending-credit-services-mortgage/6048203-1.html
  34. ^ "PNC Bank and Wells Fargo Home Mortgage Form Joint Venture To Make Homeownership Easier" (Press release). PNC Financial Services Group, Inc. 2005-09-14. Retrieved 2010-06-12.
  35. ^ Fitzpatrick, Dan (September 12, 2007). "CEO says PNC 'not a player' in subprime loan fallout". Pittsburgh Post-Gazette.
  36. ^ "BNY Mellon to Acquire PNC's Global Investment Servicing" (PDF).
  37. ^ "About Us". BlackRock, Inc. Retrieved 2011-06-18.
  38. ^ "About PNC Grow Up Great". PNC Financial Services Group, Inc. 2010. Retrieved 2010-06-12.
  39. ^ http://www.wnep.com/sns-ap-pa--wallstreetprotest-pittsburgh,0,1272125.story

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