Lucille Ingalls remembers going to work as a teller at an affiliate of Mercantile Bankshares Corp. in Virginia during World War II. She stayed even after the soldiers returned from abroad, rising to the post of senior vice president and watching the banking industry evolve through the dawning of the automated teller machine.
J. Donald Henyon, head of Mercantile's affiliate in Laurel for more than a decade, remembers life as a community pillar, firing up the popcorn machine for customers on Saturdays and making it a point to never be seen gambling at the nearby horse tracks. He is, after all, a banker. He doesn't like to lose money.
The stories of Ingalls and Henyon - normally not considered ones for the history books - are being captured by historians as Mercantile's name is disappearing, not only from bank statements but from Baltimore's skyline and from 240 branches. It will be replaced by PNC Financial Services Group, a Pittsburgh-based bank that acquired Mercantile in its expansion southward and that launched a "legacy project" to preserve its history.
PNC is trying to ingratiate itself with the customers and employees in Mercantile's Mid-Atlantic footprint, and has spent nearly a year working on a smooth integration of the two institutions. The process culminates tomorrow when Mercantile's operational systems will be converted to PNC's platform and the blue-and-orange PNC logos will be unveiled on the branches.
While Pittsburgh executives are taking pains to acknowledge Mercantile's past, which stretches back more than 140 years to the Civil War, they are also promoting what they believe are PNC's far superior technology and services.
PNC's highly orchestrated opening has two aims: show potential customers that there's a new player in town and retain Mercantile customers being wooed by local competitors trying to capitalize on the fact that PNC is run by out-of-towners.
To prepare for the Mercantile conversion, PNC has mailed new checks, debit cards and explanatory materials to more than 500,000 account holders, though Mercantile cards will work until October and checks will be accepted indefinitely. Account numbers will change, but direct deposits and automatic transfers will continue. PNC's online banking system will be available to Mercantile customers starting Monday.
All Mercantile branches closed for the last time Friday and are set to reopen as PNC branches tomorrow. PNC has put Mercantile employees through extensive training, as many as 50 hours for certain jobs, and more than 400 employees from other PNC locations will be on hand to help. PNC, the 11th-largest bank in the United States, has branches in eight states and the District of Columbia.
"We come into the integration at Mercantile with a lot of confidence but without arrogance," said PNC Executive Vice President Joseph E. Rockey, who is overseeing the operation. "On Monday morning, our customers will wake up and see PNC. We're confident everything is working and will be working."
As part of Mercantile's transition to a new owner, PNC has hired historians to not only preserve artifacts dating to the Revolutionary War, including handwritten ledgers and rare currency, but also to capture oral histories of longtime employees and customers. The project is part public relations and part civic duty, PNC Chief Executive Officer James E.Rohr said.
"In every community banks were the key economic development driver," Rohr said. "If you went back and researched the history of an individual bank, you end up learning a heck of a lot about the town, who the people were and what happened there."
Bank officials must tread carefully in mergers to ensure retention of customers who may be loyal to the old brand. They also are conscious of the famously bungled acquisition of CoreStates Financial in the late 1990s by First Union, now part of Wachovia. At the time, it was the largest banking merger in U.S. history, but problems arising from poor training and computer glitches led to an exodus of customers.
"Badly handled conversions can generate some bad publicity. They tick off customers who leave," said Bert Ely, a banking consultant in Alexandria, Va. "There's been enough experience with these things that we know it never goes perfectly. Basically, it's a damage control exercise."
PNC has moved relatively slowly on the conversion of Mercantile, known for its conservative style and for catering to Baltimore's blue-blooded elite. It has been six months since PNC closed the $6 billion deal. In contrast, PNC closed its $643 million acquisition of Riggs National Bank and converted its branches to the PNC platform over a single weekend in May 2005.
Washington-based Riggs had been mired in a money laundering scandal, and Rockey, the executive vice president, said PNC wanted to quickly install its own internal controls for detecting fraud and accounting errors. With Mercantile, Rockey said, PNC wanted to ease employees and customers into their new employer and bank.
PNC has tried to put a Baltimore-friendly bent to many of its actions. To assuage fears about losing Mercantile's philanthropic contributions in the region, PNC's charitable arm donated $1 million this year to underwrite discounts on Baltimore Symphony Orchestra tickets and has pledged to donate a total of $25 million to Baltimore-area charities.
900 jobs eliminated
PNC eliminated 900 Mercantile positions this summer. The company offered severance packages and is working to move employees to openings elsewhere in the PNC network. So far, 75 Mercantile employees who would have lost their jobs have moved into PNC slots.
PNC officials emphasize that the products and services they offer are an improvement over Mercantile's lineup. That includes free access to any ATM, including those outside the PNC network, with certain checking accounts. The company also offers 120 proprietary mutual funds.
On the commercial banking side, the Mercantile-turned-PNC offices will have a larger lending capacity, said J. Marshall Reid, regional president of the greater Baltimore area for PNC. He said Mercantile's commercial lending officers were "feeling very strained" because the bank's syndication department, which packages loans to be sold to Wall Street, was "rudimentary" and impeded their ability to extend bigger lines of credit.
Yours to lose
Still, he added, there is a wait-and-see attitude among clients toward the conversion to PNC. "Customers on the commercial side have a lot of loyalty," he said. "Their reaction has generally been it's your business to lose. So don't screw it up."
For other area banks, Mercantile's transition has presented an opportunity to poach customers.
Provident Bankshares Corp., which becomes the largest bank based in Maryland with the Mercantile acquisition, has held focus groups and found that some customers prefer a local bank, said Nancy Alperstein, director of marketing. The bank has tailored its advertising to emphasize its local roots.
Henyon, the former Mercantile executive at the Citizens National Bank affiliate in Laurel, said he was concerned at first about PNC's takeover: "I thought that some of the bank's history might be lost. With a big bank coming in, I thought they weren't going to care," he said. "But I was wrong."
Henyon said he was "delighted" to participate in the history project. Ingalls, who has retired, also said she was flattered. She initially thought she would be part of a forum but found herself alone in front of a microphone telling her story. "It was a good job and something I enjoyed doing," she said. "I had an opportunity to get promoted, and I just made a career out of it."
The interviews with historian Dean Krimmel will be one of more than 35 that have been captured on video. They will be paired with artifacts uncovered by archivist Mary Beth Corrigan, such as a balance scale that dates to the early 20th century and was used to weigh currency and detect counterfeits. The items will be put on display starting in November at the Baltimore headquarters and a handful of branches.
PNC officials came to better appreciate the profound historical significance banks have on communities when it bought Riggs, called "the bank of presidents." Riggs kept extensive archives, which included personal checks written by President Abraham Lincoln on his Riggs account. "These give you a personal insight into Lincoln," Corrigan said.
Krimmel said he was at first skeptical of the project because he wondered whether the history of banking would resonate with the public. But he had a personal tie to the business; his mother worked her way up from teller to executive vice president at Maryland National Bank, itself gobbled up in an acquisition years ago. And he thought there would be "poignancy" to this chapter in Mercantile's history.
"Once a name is changed, things are in danger of disappearing from people's memory. At the same time, the conversion presented the perfect time to ask people to reflect," Krimmel said. "The purpose behind it is to capture a slice of mostly ordinary history and the experiences of people that are not often documented."
Past to present
The Safe Deposit Co. is incorporated as a secure repository for valuables.
Mercantile Trust and Deposit Co. is founded.
The Safe Deposit company and Mercantile Trust merge.
Mercantile Bankshares Corp. becomes Maryland's first registered multibank holding company, moves to new headquarters in Hopkins Plaza.
Mercantile sale to PNC Financial Services Group is announced.
PNC completes acquisition of Mercantile.
Sept. 14-17, 2007:
Mercantile branches close early for the weekend on Friday, opening as PNC Bank branches at their normal times on Monday.
[Sources: Mercantile Bankshares Corp., PNC Financial Services Group, Sun reporting]