Banking Opportunities Pop Up in Western Pennsylvania
If you are looking to set up banking in the land of the Pittsburgh Steelers, Iron City beer and venison sausages, then opportunity is knocking on your door.
Sixty-one branches in Western Pennsylvania owned by National City Bank are up for sale so that Cleveland-based bank can be bought by PNC Financial Services Group of Pittsburgh. Federal anti-trust regulators have mandated that the sale must proceed so that the $5.6 billion merger can be accomplished.
The feds have also said that National City must sell half of its lending and middle market business customers which typically borrow up to $100 million around Pittsburgh and Erie.
These mandates have other banks scramlbing to come up with acquisiton plans. Among those interested are Cincinnati’s Fifth Third Bank, First Commonwealth Bank in Indiana, Pa., and others. Bank branches for sale include ones in Allegheny, Westmoreland, Erie, Washington, Crawford, Butler, Fayette and Warren counties. The 61 branches account for $4.1 billion in busines and consumer deposits.
The PNC case is just one more example of how the federal financial bailouts are directly or indirectly affecting the banking industry.
Citigroup Inc., for instance, must face another level of decision-making since the federal government has bought a 7.8 percent stake in the ailing, global bank. Decisions must be vetted by the Federal Reserve and the Office of the Comptroller of the Currency. For example, Citi had been interested in buying Chevy Chase Bank but the sale went to Capital One Financial after Citi officials realized that federal regulators would not have approved the sale.
PNC has tapped federal bailout money to help it buy National City.
Peter Galuszka is a Virginia-based journalist with more than three decades of experience, including 15 years at BusinessWeek, during which he was twice Moscow Bureau Chief and International News Editor in New York.
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