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Mellon accounts switch Aug. 16

| Thursday, Aug. 8, 2002

Don't worry. Citizens Bank will not change your personal identification number for the cash machine, and you won't have to memorize a new account number.

That's some of the good news for former Mellon Bank customers come Aug. 16. That's when Citizens will add to its information systems hundreds of thousands of old Mellon accounts in the Pittsburgh and Philadelphia areas.

"If you knew your old account number, the system will cross-reference it," said Citizens Bank Chairman Stephen Steinour on Wednesday. "We'll keep that around for years."

There also will be more places to bank. Steinour said Citizens will open "a half-dozen" more branches inside Giant Eagle grocery stores in the Pittsburgh area in September and October.

Citizens has about 740 branches in New England and the Mid-Atlantic region. That includes the roughly 120 offices acquired from Mellon in this region and its 225 elsewhere in Pennsylvania, New Jersey and Delaware.

"The conversion will go fine," Steinour said. "You know, we've done 20 of these (bank acquisitions) now."

The bank is converting former Mellon accounts worth $6 billion in loans and $14 billion in deposits, said Citizens spokesman Mike Jones.

Several months ago, customers were mailed new automated teller machine cards for immediate use, and new checks for use after Aug. 16.

Accounts of customers in central Pennsylvania, New Jersey and Delaware were converted in June, Jones said.

Meanwhile, Citizens' parent reported record earnings during its bank's first half-year here. Citizens Financial Group reported net income of $245 million for the six months ended June 30. The results include $110 million in current and amortized expenses related to the $2.1 billion Mellon acquisition, which closed last December.

The former Mellon assets had grown to $17.5 billion by June 30 from $16.4 billion when the deal was announced 12 months earlier. Deposits in that time increased by about $1 billion to nearly $41.5 billion.

"Normally when you do acquisitions of this size, you'd expect deposits to run off, instead of new business coming in," Lawrence Fish, chairman and CEO of Citizens Financial, said in an interview.

"Consumer and small-business lending has been strong," Fish said, explaining the asset growth. "Those are specialties of ours."

Don't expect Citizens to acquire another big bank or forge into new business lines this year.

"I've never been a believer that the customer is looking to buy their insurance where they have their checking account, or do their brokerage where they borrow money," Fish said.

Citizens Financial is owned by the Royal Bank of Scotland Group, the United Kingdom's second-largest bank.

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