PNC Bank Corp. has spent millions of dollars in the last three years to outfit its mortgage representatives with laptop computers, modems, and tie- lines.

But when it recently brought about 100 of its best lenders to a posh Arizona resort for a five-day meeting, it made one request: Leave the hardware home.

"This meeting is about the most important thing-the people and creating the right environment for them," said Saiyid T. Naqvi, chief executive of PNC Mortgage Corp.

The comment is provocative because PNC Bank Corp. is known in the industry for its emphasis on, even an obsession with, technology as a way of building business.

"They're clearly using technology aggressively to get costs of delivery down," said David Partridge, a director at Towers Perrin, a financial consulting firm in Valhalla, N.Y.

But PNC is also finding that an even bigger edge comes from encouraging employees to use the systems innovatively. For instance, loan officers at the meeting in Scottsdale, Ariz., said they frequently use their laptops to take applications in borrowers' homes, giving the transaction a cozy touch.

"Most financial products and services have an anxiety element to them," Mr. Partridge said. "You need the right people to smooth the way."

PNC announced to those in Scottsdale an ambitious expansion of its retail lending network, especially in the western part of the country. And it has made the technology investment to facilitate that growth, it said. Now it will need effective people.

Indeed, for all the muscle it supplies, technology can only take the company so far, Mr. Naqvi said. "Like fuel, you have to replenish it."

And PNC looks to its sales force for fresh energy. At the Arizona resort, top executives of the parent bank and its mortgage company asked scores of loan officers, plus support staff, for ideas about pumping up the mortgage unit's strength.

It was not unusual to see Mr. Naqvi or PNC Bank Corp. president James Rohr at poolside, asking a salesperson how the system could be improved.

"The people who touch the customer are the people who can tell you what's going right and wrong," Mr. Rohr said. "They make mortgage banking a growing business for us."

All told, the Vernon Hills, Ill., mortgage unit produced $5.6 billion of loans last year and has a $39.5 billion servicing portfolio. That volume puts PNC about No. 20 among mortgage lenders.

Industry experts said now is the time for PNC Mortgage to push its pedal to the metal or risk being left by the wayside.

"They've got to grow this thing," said Thomas D. McCandless, who follows the lender as an analyst at Natwest Securities Corp., New York. "The industry is in a rapid consolidation phase," he said, and companies that don't get bigger won't do well.

PNC Mortgage is looking to the group in Scottsdale-an equal mix of men and women-to spur growth. Each earned the right to attend by being strong in both loan volume and customer satisfaction during 1996. No exceptions were made. That's why the No. 7 producer wasn't present-he hadn't scored well enough with customers.

But a broad swath of salespeople made the grade. PNC's mortgage lenders include two former schoolteachers, a psychologist, a former rock 'n' roll singer, and a onetime operative for the Central Intelligence Agency.

Although their backgrounds are diverse, members of the group shared traits like drive and flexibility that allowed them to excel, said Rick Lovett, the mortgage unit's executive vice president.

Diplomacy is another important attribute, said Alber Saleh, who, by booking $96 million of loans last year, set a company record and was among the top producers in the industry.

"Growing up in a family of eight, you learn how important it is to negotiate," said Mr. Saleh, who is based in San Francisco.

Although regularly courted by other mortgage companies, Mr. Saleh said he stays with PNC because it strikes the right balance between technology and personal commitment.

"They've given me the tools I need to do my job more quickly and efficiently," Mr. Saleh said. "And they're very supportive in helping me see sales through."

Mr. Saleh is a convert to the computer system. Initially, he was "scared" to make the switch. But now, if Mr. Naqvi asked him to give up his laptop-and the myriad of information it puts at his fingertips, "I'd say, 'Sy, what's going on?'"

Indeed, Mr. Naqvi gets high marks from his troops for being a technology maven who pushes the mortgage unit to improve its processes continually. He is also highly regarded as a nurturing leader.

Those attributes appealed to PNC Bank Corp., which acquired the mortgage unit and Mr. Naqvi's services from Sears, Roebuck and Co. in 1993.

Back then, top PNC management "had a very open and candid discussion" with Mr. Naqvi and then-mortgage unit chairman Walter C. Klein Jr., who has since left to head operations at First Nationwide Mortgage.

The PNC executives came away satisfied that Mr. Naqvi had the necessary vision and commitment to make the mortgage company successful, Mr. Rohr said.

The parent company has not been disappointed, he added.

Neither has Mr. Naqvi, who said the banking company's management has lived up to its word.

"If you really go for productivity and customer satisfaction, you need a hefty market capitalization behind you," Mr. Naqvi said. "The payoff is a better company with a more effective sales force than anyone else."

Cohesion has never been more important for the mortgage unit. The company is poised for dramatic expansion, in which it plans to spend the next few months opening 40 offices-mostly on the West Coast.

Each new sales representative will be outfitted with a $3,000 laptop and software that PNC has developed. To set the stage for greater productivity, the unit last year switched its operating system from DOS to more flexible Windows software. Now, in addition to giving the latest rate information, the systems let loan officers organize their days by setting up calendars, programming in reminders for follow-up calls, and printing professional- looking letters.

The tweaking helped the mortgage unit to record annual core earnings of $156.7 million from a polished system in which salespeople take applications on laptops and zap the information to a central processing center for follow-up and closing.

Such automation is only a glint in the eye of most mortgage companies, whose salespeople still fill out pages of applications and, instead of moving on to new loans, spend days going back and forth with borrowers to collect information.

PNC's experience over the past three years can offer these lenders some insights. For instance, a lot of PNC's salespeople didn't want to put down their pens and pick up computers.

"Many did not make the conversion, and we parted ways," Mr. Naqvi said. "But we knew what we were doing was right for our customers."

Mr. Naqvi said events have proved him correct. The system has allowed PNC Mortgage to be quick and accurate-two attributes that busy borrowers look for, he said. "We're doing business in a way that focuses on our customers and ensures their satisfaction."

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