PNC is staking its claim on the Baltimore banking market.
A financial services organization, the Pittsburgh-based PNC recently finished its acquisition of Mercantile Bankshares Corp., a Baltimore-based holding company. This means that come next fall, there will be a new major player in the Maryland banking scene.
“We need to seed ourbrand, and we know that not enough people know the PNC name in Baltimore,” said Brian Goerke, spokesman for PNC. “We are going to do some unique things.”
To acquire Mercantile Bankshares, PNC Financial Services Group Inc. reimbursed shareholders with more than 0.4 of a share of PNC common stock and $16.45 in cash per share of Mercantile owned, The Examiner reported Feb. 17. This compensation translated into a nearly $6 billion acquisition.
As for making a niche in a market that already contains household names such as M&T Bank, K Bank, First Mariner and Columbia, PNC looks to build its reputation off of community involvement. Most notably in Baltimore, the PNC Foundation, the charitable arm of PNC, donated about $1 million at the beginning of the month to the Baltimore Symphony Orchestra to help cut ticket costs to $25 per seat.
PNC is also taking a consumer-friendly approach by offering free ATM services to all Mercantile customers at its own existing branches. With early fall as a potential target date, a local account holder with Mercantile will see the change-over to a PNC account, along with branches and signs changing to fall under the company umbrella in mid-September.
The long-term success of PNC in the area market remains to be seen. PNC is currently on the borderline of “out performance [buy]” and “market performance [hold],” said a report from Friedman, Billings, Ramsey & Co. Inc., a national investment banking and analysis firm. While straddling the border, the report stated that PNC will have market hurdles to deal with, such as a “sustained low interest rate environment” and “substantial competition in PNC?s primary markets.”
“PNC will be an effective competitor,” said Gary Townsend, a senior vice president at FBR. “They are pretty big in the area, especially after the Mercantile acquisition, and should be a strong competitive source in the Maryland area.”
