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Pittsburgh banks brace for BofA, JPMorgan | American Banker 1/4
Pittsburgh banks brace for BofA, JPMorgan
By Ken McCarthy
Published July 10 2019, 1∶47pm EDT

Pittsburgh is becoming a crowded market as two big banks, and a number of smaller institutions, target a city that has long been dominated by PNC Financial Services Group.

Bank of America entered the Steel City in September, and JPMorgan Chase announced plans in March to open three branches there by the end of this year.

The megabanks will intensify competition in a market that already has nearly 50 banks sparring over $137 billion in deposits, according to June 2018 data from the Federal Deposit
Insurance Corp.

“We already have enough competition,” said Vince Delie, chairman and CEO of F.N.B. Corp. in Pittsburgh. The $34 billion-asset F.N.B. was the city’s fourth-biggest holder of deposits in mid-

Still, Delie said he views the arrival of bigger banks like Bank of America as a positive for Pittsburgh because they will provide more capital to a city that could use more investment.

“I don’t think their physical presence is a barrier to us being successful,” Delie said, adding that other banks have entered the market before backing away.

Fifth Third Bancorp in Cincinnati tried to establish a retail presence in Pittsburgh but eventually gave up. The regional bank, which had 17 branches and $728 million in deposits in
mid-2015, sold those operations to F.N.B. in April 2016.

Bank of America, for its part, intends to stick around.

The Charlotte, N.C., company has seven branches in the city. It plans to open three more offices this year.

The market has so far exceeded Bank of America’s expectations, and client reception has been strong, said Brian Ludwick, the company’s Pittsburgh market president. Merrill Lynch, which
Bank of America bought during the financial crisis, has catered to business banking and wealth management clients in Pittsburgh for 80 years.

“I can’t think of anything that’s disappointed me,” Ludwick said. Digital banking, a product that Bank of America introduced to the market before building its first branch, has been a “clear
differentiator,” he added.

It makes sense that PNC — chartered just outside of Pittsburgh in 1864 — would feel some pressure from other big banks, industry experts said.

Bank of America has one of the best online banking platforms in the country, said Jon Winick, CEO of Clark Street Capital. While Bank of America may not be overly aggressive in lending,
particularly with commercial credits, he said the company will likely go after low-cost funding around the city.

Winick predicted that Bank of America will expand modestly, take some market share and force PNC to pay a little more for deposits.

The regional bank has held its own in its hometown. Its deposits around Pittsburgh, excluding those in its corporate office, rose by 12% between mid-2013 and mid-2018, according to FDIC
data. Those gains came even though the company shed nearly 30 branches in the market over that period.

Bank of America has managed to book nearly $800 million in commercial loans in the market, Ludwick said. While he said specific data wasn’t readily available, Ludwick said Bank of
America is ahead of schedule when it comes to bringing in deposits. Ludwick said he views JPMorgan Chase’s effort as validation for what Bank of America is doing.

Bank of America already competes with JPMorgan Chase in other markets, so it won’t have to adapt its strategy in Pittsburgh. Rather, the company is investing in all business lines in the
market, recently adding commercial bankers from Wells Fargo and hiring 24 employees for its Merrill Lynch operations.

Pittsburgh is a solid example of a Rust Belt city reinventing itself, Winick said. The city has seen a rebirth, led in part by a growing focus on technology. Pittsburgh was also a
finalist as the site of Amazon’s second headquarters that ultimately went to Northern Virginia. Delie, who grew up in Pittsburgh’s Northside neighborhood when the unemployment rate was
as high as 17%, said he understands the city’s revitalization better than most.

“Everybody that I knew, their parents were unemployed because of the demise of the steel industry,” Delie said.

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