PNC conversion was a 'grand slam'
It’s been about a month since the PNC Financial Services Group completed its conversion of 420 former National City Bank branches with 1.5 million customers in northern Ohio and Michigan. Thirteen of those offices are in Kent County.
The change-over here was the third of the four-phased conversion process that PNC mapped out after it announced in October 2008 that it would acquire National City. The fourth phase is expected to be complete by mid-June. It involves converting 390 National City branches with 1.6 million customers in Indiana, Illinois, Missouri and Wisconsin.
When the process finishes next month, more than 2,400 branch offices in 15 states and the District of Columbia will be flagged with the PNC logo — making it the nation’s fifth-largest bank based on total deposits and branches.
PNC Regional President Sean Welsh said the local conversion went smoothly without any challenges and was completed on time, largely because it was properly planned.
“If you look at the conversion process, we spent Jan. 1, 2009, the day after the legal merger, preparing for that. So we put a whole lot of work and a whole lot time, carefully and thoughtfully, making sure that we were communicating with our clients, listening to the community and listening to our employees,” he said.
“When it happened over that weekend, when the signs changed, everything was just a grand slam. It just went fantastically well. Everything was exactly on schedule.”
But as Welsh pointed out, a conversion isn’t just about changing the signs and then opening the doors. It’s about integrating two companies with potentially different business philosophies and practices, technical systems, and perhaps, most importantly, corporate cultures into one entity.
“There is a lot of cultural integration that goes into it because when clients pick banks, they award a trust factor to that provider. So we spent a lot of time through our community activities, through our employee communications, through our client communications preparing for that,” said Welsh, who held the same title here with National City for seven years and is responsible for a region that stretches from Allegan County into Northern Michigan.
Welsh said being part of the bank’s third phase was a benefit to the local conversion because two other regions with 560 branches and nearly 3 million customers were successfully integrated before the process was fully under way here.
“The good thing was, wave one went fantastically well, and by the time we got to wave three, we knew how to do it. We actually knew how to do it with wave one, so we knew how to communicate. You’ll see a lot more communications in the market around some of the things that the bank stands for,” he said.
“I think communications is key. A lot of attention and a lot of time go into the mechanical conversion of a bank, and that went very well. The communications part of it is just as critical because people in the community want to know who PNC is and how they’re going to be a credit to the community. We’ve already started that.”
Welsh was referring to the bank’s Mobile Learning Center that will be on hand at an array of community activities throughout West Michigan this year. The learning lab is part of PNC’s Grow Up Great program, a 10-year, $100 million initiative aimed at helping children up to the age of 5 become early learners to better prepare them for success in school and life.
The Mobile Learning Center is actually a large semi-truck that folds into an interactive station kids can walk through. It was in Holland during the Tulip Festival earlier this month.
“It’s an investment in making a difference in early child development,” said Welsh. “It’s a big commitment, and you’ll see a lot more of that from us as we go forward.”
PNC, which a number of analysts regard as one of the nation’s stronger regional banks, posted a better-than-expected first quarter as revenue grew to $3.8 billion from $3.7 billion a year earlier. The bank also repaid the federal government $7.6 billion. Its shares rose by 2.3 percent to $66.80. PNC issued $3.45 billion in shares in the quarter to repay money it borrowed from the Troubled Asset Relief Program. The bank reported earnings from continuing operations of $1.11 a share, which beat the analyst projections of 71 cents a share.
“Throughout the couple years here of economically challenging times, the bank has been very profitable. We’ve been very active in our communities. We’ve been supporting our clients. And I think we’ve been able to do a lot of things for our clients that our strength and stability allows us to be able to do,” said Welsh.
“PNC is a significantly sized company but it’s very locally focused. For example, all our donations and charitable gifts are all decided by the business leadership group that is here in West Michigan. So we determine as a region where the high points are that we can make a difference, and those investments are primarily along early childhood development. We really want to make an impact on getting kids ready for school.”