Big banks turn focus to Atlanta

Not only has the state led the nation in bank failures since mid-2008 — mostly small community outfits — but there have also been a lot of changes the past few years here among the national players.

Wachovia sold out in 2008, the same year Washington Mutual folded. Royal Bank of Canada announced in June that it was selling its American retail bank.

Enter Wells Fargo, Chase and soon PNC.

Wells Fargo has taken over the No. 2 position in the Atlanta market and actually hired about 300 people since its acquisition of Wachovia. Chase landed in the Top 20 here when it picked up the dying WaMu.

Pittsburgh-based PNC Financial Services Group is the latest new name, and it’s not wasting any time getting to know metro Atlanta.

Fresh off its June splash to buy Raleigh-based RBC USA, PNC announced it would acquire 27 Georgia branches from Michigan-based Flagstar Bank in a deal expected to close this December. The RBC acquisition is expected to close in March.

Chris Marinac, a bank analyst with FIG Partners in Atlanta, said the region is too important a Sun Belt market for the big names to ignore.

“It’s 5 million people,” Marinac said, “and in the next 10 or 15 years, Atlanta could be 6 million people.”

Newcomers have historically found the metro area to be a tough market to crack. The top three players currently in Atlanta – SunTrust Banks, Wells Fargo and Bank of America – control nearly 60 percent of the market’s deposits. The three banks or their predecessors have staked claims in the Top 3 for ages.

A PNC spokesman was mum on the company’s long-term plans for Atlanta.

“It’s too early to get into our plans for Atlanta, but we plan to compete,” PNC’s Fred Solomon said.

Jim Rohr, chairman and CEO of PNC, told The Atlanta Journal-Constitution in June that his bank would retain virtually all frontline staff and look to expand RBC’s product offerings, including wealth management and treasury services.

The RBC deal would make PNC the fifth-largest bank in the country. PNC would replace RBC as the No. 7 bank in metro Atlanta by deposits, according to the latest data from the Federal Deposit Insurance Corp.

PNC’s move to buy up even more metro Atlanta branch locations on the heels of buying RBC USA is an indicator it’s serious about being here, Marinac said. PNC and other competitors still on the outside could buy out other Southeastern banks to get a piece of the Atlanta market.

While PNC is shy about discussing its plans, Chase isn’t.

Chase, the retail arm of JPMorgan Chase & Co., has been on a branch-building and hiring spree. And JPMorgan is also hiring in its private bank for clients with high to ultra-high net worth.

Chase is currently at 1,100 employees in metro Atlanta, up from between 800 and 900 a year ago.

The New York-based company will finish 2011 with 74 branches in metro Atlanta after adding a dozen this year.

Chase expects to build a dozen more in 2012, fewer than it earlier projected because of the complexities of branch development. But Chase officials said branch construction should expand in 2013.

“Our plans in 2013 and beyond are even more aggressive than what we experience in 2011 and 2012,” said David Balos, Chase’s Georgia market president.

Chase ranked No. 16 among banks in metro Atlanta with $653.6 million in deposits, or 0.6 percent of the market, as of June 2010, according to the latest FDIC data available.

Chase’s plans for Atlanta also hinge on attracting large and midsize corporate banking clients, as well as attracting the wealthy through JPMorgan Private Bank.

David Amar, managing director of JPMorgan Private Bank in Atlanta, said revenue from his division in Atlanta is up 40 percent year over year. The bank is looking to hire 10 advisers over the next 18 months.

“Atlanta is a top priority,” Amar said. “If you look at the footprint of our organization on a national basis ... the two areas of emphasis are the Southeast focused around Atlanta and the West Coast.”

Given the distress in Georgia, including 67 bank failures since mid-2008 and many more distracted by credit problems, Marinac said there are openings here to gain market share.

“These new entrants may very well see this as a market on sale,” he said.

But the three market leaders — SunTrust Banks, Wells Fargo and Bank of America — and stronger community banks aren’t going to give up easily, he said.

Mindy Mercaldo, Wells Fargo’s community bank president for the city of Atlanta, said Wells Fargo and the city’s other top institutions already have the branch network and built-in customer base. Wells Fargo continues to look to gain market share, too, she said, particularly in business banking, credit cards, consumer loans and auto loans.

“We certainly welcome the competition,” she said.