Ralph S. Michael 3d faces weighty management responsibilities and outside pressures as PNC Bank Corp.'s top corporate banking officer.

But he doesn't let that break the informality. First, just call him Mike.

"I always thought 'Ralph' was a little more formal and 'Mike' is a little more casual," he said. "I am a casual kind of guy."

The native of Kansas City, Mo., relies on his easygoing nature to get through the day.

In keeping with the spirit of these times at PNC, Mr. Michael and his colleagues insist that the Pittsburgh-based institution is not interested in being bought.

Mr. Michael-executive vice president, chief executive officer of corporate banking, and head of PNC Capital Markets-said he is a firm believer that no banking company can be all things to all financial customers. The mergers happening all around are only likely to complicate the relationships that banks have forged with corporate customers.

"Disruptions," as he called them, "create magnificent opportunities for us."

"It is tough on customers," Mr. Michael said. A merger can "break apart long-term alliances and can really level the playing field" in a PNC's favor.

Mr. Michael joined the $75 billion-asset superregional as a commercial banking officer in 1979, soon after receiving an MBA degree from the University of California at Los Angeles. (He was a Stanford University undergraduate.)

He advanced steadily through what was then called Pittsburgh National Bank. In 1992 he became president and chief executive officer of PNC Bank Ohio, getting exposure to retail banking operations.

He returned to Pittsburgh in 1996 to assume his current role, an active one that includes direct participation in several PNC initiatives handed down from the office of the chairman, Thomas O'Brien.

Mr. Michael expresses enthusiasm about one move in particular, the recent acquisition of a minority share of Friedman, Billings, Ramsey Group Inc., an Arlington, Va.-based investment bank.

The $47 million price for the 4.9% stake had been considered high by some, but others see the deal as a way to quickly build capital markets expertise for Mr. Michael's competitive arsenal.

"It's a conservative move," said Sally Pope Davis, analyst at Goldman, Sachs & Co. PNC could not "justify buying a securities firm."

Mr. Michael said the benefits of the "exclusive" affiliation with Friedman Billings will soon be apparent. A bit young, at 43, to be talking in these terms, he said the deal will prove to be "my legacy in this business."

"It is an inexpensive, low-risk, high-return strategy that gets us into the equity and high-yield debt markets a lot farther and a lot faster than most people," he said.

Making another potentially long-lasting contribution that may help define his own future, Mr. Michael is spearheading a reorganization of operations around the needs of customers. He said he has hired or promoted the key people he needed for PNC to effect those changes.

PNC has shed what he termed a "monolithic" structure in favor of one built according to lines of businesses. Each unit has a chief executive officer with authority meant to bring the necessary talent, resources, and capital to bear.

In Mr. Michael's area, the priorities are in cash management, lending, asset management, and 401(k) services for corporate customers.

"This company is basically remaking itself and taking the capital that has traditionally been invested in thin-spread large-corporate lending and is redirecting it to better position itself in the middle market," said Anthony R. Davis, analyst at SBC Warburg Dillon Read & Co.

The emphasis on midsize clients-with sales under $250 million-suggests that a relationship banking strategy is hard to pull off with larger corporations.

A relationship strategy requires ties that bind businesspeople to their bankers with bundled credit and operational services. But large corporations have direct access to commercial paper and other nonbank alternatives, and investment banks are increasingly meeting their credit needs.

Technology-intensive cash management and other transactional products can be bank strengths-and also the main services corporations turn to banks for, said Lawrence Forman of Ernst & Young LLC, New York.

More of an issue for smaller businesses, the consultant said, is: "Who will give me the loan? Who will give me a $100,000 credit line when a couple of clients are late on their payments and I still need to meet my payroll?"

PNC's Mr. Michael said, "What we are seeing is not that relationship banking is on the demise.

"Rather, relationships are being concentrated among fewer and fewer larger players."

But "as you go down market," he added, "relationships become even more important."

SBC Warburg's Mr. Davis said relationship management "is a misnomer in large-corporate lending."

"Increasingly," he said, the business "is spread-driven. There is not a lot of value to get paid for unless you have state-of-the art cash management, corporate trust, foreign exchange, derivatives, or something else that is unique in the capital markets."

Mr. Davis said PNC is focusing more attention on niche areas like the fixed-income money management unit BlackRock Inc., mutual fund processing, electronic data interchange, and other specialized treasury management services. Commoditized credit businesses are receding.

"The correct strategy is what they are doing, and it will take them a while," Mr. Davis concluded.

Mr. Michael said his bank is by no means "deemphasizing" its large- corporate sector. "It is still a very important market to us," he said, "and we are still committed to make credit commitments there."

But PNC is trying to "optimize" the use of its capital in ways that are more efficient than traditional banking practices, he said.

For example, PNC is increasingly "intermediating credit risk," Mr. Michael said, when a lending opportunity might be more profitable if funded in the capital markets and backed by PNC off the balance sheet, perhaps through a letter of credit.

"It's called balance-sheet management," Mr. Michael said. "We will see less and less dependence in utilizing the bank's balance sheet as the funding vehicle for that intermediation of credit risk.

"I think the more talented among us are developing conduits, as we have, and developing other methods of utilizing other people's balance sheets to meet the needs of customers," he said.

Indicating the shift, PNC's first-quarter revenues from lending and securities rose 1%, to $644.2 million, but noninterest revenues rose 24%, to $538.9 million.

Mr. Michael said the goal is to raise the more stable noninterest sources to at least 50% of total revenue by 2000, from 45% currently.

Ms. Davis at Goldman Sachs said there can be an overemphasis on fee income. "We are not seeing a lot of growth in net interest income; clearly we would like to," she said. "But banks do make their incomes from corporations in a variety of different ways, and a lot of that is in the fee area."

As he faces revenue-growth challenges and assesses the post-merger landscape, Mr. Michael said the most crucial factor is individuals.

"The ability of an organization is only as strong as the people that make it up," he said. That means "the quality of the individuals that are delivering services, how much they think about the needs of their clients, and how creative they can be in meeting those needs."

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