New Pittsburgh headquarters for flourishing PNC ready for business
Bill Demchak watched from a conference room window at the top of One PNC Plaza as workers arranged furniture in the company's nearly completed headquarters across the street.
His white shirt sleeves rolled to just below his elbow, Demchak extended his arm and pointed out the office he will soon occupy. It was about halfway up the 33-story high rise known as The Tower at PNC Plaza. Executives weren't getting the top-floor suites.
“I moved the executive stuff in the middle of the building for a whole bunch of reasons,” said Demchak, the president and CEO of PNC Financial Services Group. “One, it's less elitist.”
City officials have called the tower, which will open Thursday and is the tallest structure built Downtown since 1988, a metaphor for Pittsburgh's transformation. It is sophisticated, a “green” building that represents how the city has moved beyond its industrial past toward a “clean” economy based around finance, health care and technology.
The $400 million project also represents the ambitions of the bank that will inhabit it.
The new headquarters was needed to accommodate additional employees amid PNC's tremendous growth and provide a modern workplace for a new era of digital banking.
It will provide room for about 2,000 employees, or a quarter of PNC's Downtown workforce, many of whom are sprinkled among random office buildings and will be brought closer together at the four-building complex at the corner of Fifth Avenue and Wood Street.
The tower is nearly complete, with some interior work remaining, and employees will gradually transition there starting in two weeks. Demchak plans to move in late October.
PNC has grown from a mid-sized regional bank to one of the nation's largest financial institutions, ranking sixth by assets last year, up from 18th in 2000. Its workforce has more than doubled to nearly 54,000 in that time.
But don't expect that rapid expansion to continue, Demchak said. He insists that, like the office he will occupy, PNC does not aspire to be at the top in size.
“Strategically, we don't have a need to be bigger,” Demchak said. “We have the scale today to be able to control our destiny.”
Fifteen years ago, PNC was a very different bank. It was an established brand in Pennsylvania and New Jersey and had a nominal presence in three other states. Now, its branch network spans 19 states and the District of Columbia. Annual revenue has tripled since 2000, increasing to $15.8 billion last year.
PNC fared better than other banks during the mortgage crisis and was able to acquire companies that fed its expansion. Those include the purchase of National City in 2008 and the U.S. retail business for Royal Bank of Canada in 2012.
PNC has outshined its peers as banks generally are struggling under increased pressure from regulators and low interest rates that have crimped their ability to make money, said Dan Werner, a Morningstar analyst.
“It's hard to see where they would have done better,” Werner said. “They've made some savvy acquisitions ... and they continue to look for ways to really manage their expenses.”
Some of the cost cuts have come through hundreds of branch closures, changes Demchak says are driven by a consumer shift toward digital banking services. PNC has been a leader in this industry-wide change, Werner said, continuing to enhance online and mobile banking options while transforming its existing branches into more tech-focused banking centers.
This technological transformation has been a larger priority than further expansion, Demchak said. The bank's tech-centered focus is reflected in the tower's design, which PNC calls the “world's greenest skyscraper.” It uses renewable technologies to reduce energy consumption and will have the highest level of certification under the U.S. Green Building Council's Leadership in Energy and Environmental Design program.
It is an open environment, with more collaborative work spaces, reflecting the ways in which a new generation of bankers prefers to work, Demchak said.
“Everything's Wi-Fi. They bring their laptops, they work around a table, they work as teams to get things done,” he said. “The new building is set up that way. It's open and airy and lots of collaborative spaces. Much more conducive to the way business gets done today.”
Amid all this change, PNC has kept its strongest presence in Western Pennsylvania, where it employs 12,000 people and can trace its roots to 1852.
The greatest potential for growth is in the Southeast and particularly Florida, where PNC is a relatively new player, Demchak said. But the Downtown tower underscores the company's commitment to the region as it expands elsewhere, said Allegheny County Executive Rich Fitzgerald.
“I don't think there's any question, it's a symbol of their commitment to the region and a symbol of their commitment to their employees,” Fitzgerald said. “As they've acquired more banks and other financial institutions, it's really brought more jobs here. This is the heart of where they operate.”
Demchak acknowledges the symbolic importance of the building's opening, but gives practical answers to questions about its meaning for the company. Its design, high-tech features and location were business decisions, plain and simple.
“I like that this represents the future of our company. Maybe it signifies growth and stability and whatever else,” he said. “But mostly, I like the fact that we're going to give people a good place to work.”
Chris Fleisher is a staff writer for Trib Total Media. He can be reached at 412-320-7854 .