PNC's western NC president on the bank's first year in Charlotte

It’s been a little more than a year since Pittsburgh-based PNC Financial Services Group entered Charlotte by acquiring RBC Bank’s Raleigh-based U.S. business.

The anniversary of the deal was in March. In September, PNC hired Weston Andress to oversee the bank’s western North Carolina operation, which is composed of 57 branches, including 17 in the Charlotte area.

On Wednesday, in an interview with the Observer, Andress talked about PNC’s progress in the Charlotte area over the past year and the bank’s plans for the coming months, including where it is considering opening branches. According to the Federal Deposit Insurance Corp., PNC is No. 10 in the city of Charlotte when ranked by deposits.

One of the bank’s focuses has been building a wealth-management business in western North Carolina. RBC’s wealth-management operation was not part of the sale.

Andress said that, since the bank set foot in western North Carolina, the past year or so has "been as good as or better than we would have expected.”

But in a market flush with banks, PNC’s aware of the challenge.

“As you would have imagine, the competition is fierce, to say the least,” Andress said.

Below are edited excerpts from the interview:

On PNC’s initial focus since entering the western North Carolina market
Initially, given the lack of (PNC) branches and the lack of a retail network here, our business and focus has really been on the commercial and corporate sector. It’ll be nice when we have some more branches, because that’s additional advertising. But … the retail (banking industry) ... is really not very profitable, if profitable at all, right now.

We’re making much more headway on the commercial and the corporate and our wealth-management business, areas where we lend money but there’s also a heavy dose of sort of fee generation or fee services that … can increase our return. RBC had a very strong commercial banking business, and what we’ve tried to do is increase that to a scale that is more proportional to what PNC is used to and the kind of business we want to have here. We’ve also brought in a number of commercial corporate bankers to service our larger, middle-bank-market customers. That business is really well; you don’t go out and take customers away from what is some very good competition out there on a daily basis, but we’ve had our share of wins there.

On plans to add more branches in Charlotte
We expect to build some more. That’ll take time, and those branches that we do decide to build may not be the full-fledged branches that you see out there. They could take a different shape or form; all that’s still very much under consideration. You would have full-service branches and then maybe some other minibranches with interactive capabilities so that you can talk to somebody in the mortgage department or talk to a specialist in a particular area.

We’re looking right now at a number of different locations in areas around Charlotte, certainly south Charlotte, which would be a primary growth area, but in other areas as well. South Charlotte, obviously, is where the growth is for now.

On PNC’s role in giving back to the community
We’re very community-oriented, which to Charlotte, if you’re not community-oriented, you can forget about it. PNC is a do-the-right-thing company. We have an (early childhood) initiative called Grow Up Great: The company has a commitment of $300 million, over a 10-year period, to contribute in the various markets around the country. What we do in the community is well beyond that: We’ve given to the arts. We’ve given to community development. Just this year we’ve given away $1 million to various groups.

It’s hard to say, from a dollars perspective, that we are going to be a rival to BofA or Wells Fargo here. That’s a difficult proposition from where we sit. What we’re going to do is pick out certain areas where we can be very involved and play a meaningful role. Obviously, we want to be recognized and get our name out there, as BofA or Wells or anybody else would. We gave half a million dollars last year to Discovery Place, Community School of the Arts and the Bethlehem Center. We’re involved with most of the arts groups, whether it’s the Mint Museum or the Bechtler. That really puts us more in the position, I would say, of sponsoring programs and exhibits versus building buildings.

On whether there’s room for more super-regional banks in Charlotte
We think there’s room for us. Charlotte’s economy is growing. It’s not growing as fast as we might like. It still has a high unemployment rate. Part of that’s because people keep moving here. The job growth hasn’t kept up with all the people that continue to move here. We feel like this is a market … (that’s) very community- or philanthropically oriented, and that’s the kind of bank that PNC is. There’s clearly a role for another big bank, and maybe more, to step in and play meaningful roles in the community.

On building a wealth-management business in western North Carolina
We’ve built out a team, led by a guy by the name of Mike York, who had been at Wells Fargo wealth management. And he now has a full team in place of 12 or 13 people. We are slowly but surely – not really that slowly – building that business. The lending side of it comes a little faster than the asset-management side and some of the other sides of the business. We are introducing that to our existing customer base – commercial and corporate executives – as well as using some relationships we have that are really not part of our customer base right now.

We also have a (family wealth) group called the Hawthorn group … and there are a number of well-known families in this area that that group does business with. It’s not as if we’re starting up this thing from scratch. It’s a matter of taking what’s been successful elsewhere and growing it in this market. It’ll take time, but we’re going to get there.

On advertising plans
You’re likely to see more of that, rather than less advertising. We won’t sustain this forever. But certainly we’re trying to build momentum, and we’ve got some momentum. We’re trying to sustain that, for sure. The more branding, the better.

On PNC’s value proposition to corporate clients
It’s not price. Today competition is fierce, and loans are priced very aggressively. I would say that we are competing on service. We think we’ve got some of the best people in the business focused on the middle-market sector of the market. We’re trying to grow a middle-market commercial and corporate banking business. We’re aggressively trying to grow this franchise. So, our argument is they’re going to get more attention from us than they certainly would from one of the bigger guys.

We have spent the technology dollars on things, like treasury management, that some of the big guys have. But we have the decision-making and the focus that you would get from maybe one of the community bank competitors here. Our value proposition is we’re sort of the best of both worlds: a community-oriented bank with support from a very big parent that is aggressively trying to make this work. And, again, so far, so good.

On PNC in general
This is a company that’s been around for 160 years and really is about the size today of NationsBank and Wachovia and First Union back in the 1990s, almost in the heyday of Charlotte banking, when those institutions still had real cultures, personalities. There are a lot of personalities within PNC. Our recently retired CEO, Jim Rohr, who now is the chairman, really sort of established this culture. It seems that Bill Demchak is following in his footsteps and plans to keep a lot of that.

That’s what we’re trying to do in this market: We’re trying to take that type of culture and focus solely on the banking business. We don’t have aspirations to be out in the equity business or the bond business in a huge way. We do have some capital markets operations in the bond area. But we’re not going to go out and buy an investment bank, in all likelihood.