PNC Bank Corp plans to use its acquisition of Midlantic Corp. to market its broad array of investment products in the Northeast.
The purchase will give Pittsburgh-based PNC, already a major bank marketer of mutual funds and annuities, access to new customers in New Jersey and greater Philadelphia.
"This plays perfectly into our investment capabilities," said Joel Calvo, president of PNC Brokerage Corp.
"We have a lot of sophistication in money management as well as in packaged products," he said.
PNC is already making plans to increase trust services and sales of its PNC Funds through the 324 branches it will acquire from Edison, N.J.-based Midlantic.
A proprietary asset allocation service, trading in individual stocks and bonds, and enhanced 401(k) capabilities are among additional offerings that PNC expects for Midlantic branches, Mr. Calvo said.
The offerings should come in handy as PNC - which currently has 590 branches in Pennsylvania, Delaware, Kentucky, Ohio, and Indiana - makes its move into the competitive New Jersey market.
UJB Financial Corp., CoreStates Financial Corp., and other banks with investment programs already lay claim to the Garden State.
And First Union Corp., an ambitious mutual fund marketer, entered this battleground last month by agreeing to purchase First Fidelity Bancorp., Lawrenceville, N.J.
PNC officials acknowledge the area is well banked but say they are up to the competition. "Our approach is to have a well-trained group of representatives," Mr. Calvo said.
Analysts say PNC buttresses its brokers with top-notch materials. The bank is "very strong" in investment products and support services, said Mike Diana, an analyst with Bear, Stearns & Co. "Midlantic will definitely give them distribution."
Mr. Diana added that PNC will further its presence in the Garden State next fall, with the planned acquisition of 84 South Jersey branches from Chemical Banking Corp.
While PNC officials are already eyeing expanded services for Midlantic branches, they are still grappling with some thornier issues.
These concerns include:
*How Midlantic's Compass Funds, with $2.1 billion of assets under management, will be handled. Midlantic uses SEI Corp. as fund distributor. Most observers expect the five-year-old fund family to be merged with PNC's own funds, which had $22.4 billion of assets as of March 31.
*What PNC will do about Midlantic's sales program, which uses Essex Corp., a New York investment product marketer, to oversee 47 brokers. PNC operates an in-house brokerage with 200 representatives, and could fold the Midlantic group into this force.
*Executive fallout as duplicate positions are cut. Brokerage chief Peter Crowley and trust head Barbara Parker are among the top investment executives at Midlantic.
Mr. Calvo said it was too early to say how personnel and structural matters would pan out.
One industry observer recommended that PNC do its cutting judiciously, given the talent they are inheriting from Midlantic. "They're getting some key people on the fund and brokerage side," said Kenneth Hoffman, president of Optima Group, Darien, Conn. "I hope they make the most of them."
