PNC Financial Services Group Inc., the second-largest U.S. regional bank, named William S. Demchak to succeed Jim Rohr as chief executive officer of the Pittsburgh-based lender that has Akron operations.
Demchak, 50, also joins the board of directors, with Rohr taking the new title of executive chairman, PNC said in a statement. The management change takes effect at the annual shareholders meeting on April 23. Rohr, 64, who currently serves as chairman, will retire from the company next year, PNC said.
The promotion caps a decade-long tenure at PNC for Demchak, who joined in 2002 from JPMorgan Chase & Co. to become Rohr’s chief financial officer. Demchak will inherit a bank whose performance has consistently beaten its peers, said Terry McEvoy, an Oppenheimer & Co. analyst.
“If it’s not broken, don’t fix it,” McEvoy said. “It’s not like this is a broken model. The company delivered during the financial crisis like few banks were able to deliver.”
In 2005, Demchak became head of corporate and institutional banking at PNC and was said to be among candidates considered for the top job at Bank of America Corp. in 2009 as fallout from the credit crisis pushed CEO Kenneth D. Lewis from office. Instead, Demchak was named head of all PNC businesses in 2010 and president last April.
“You could consider him one of the architects of the company’s current strategy along with Jim [Rohr],” said R. Scott Siefers, an analyst at Sandler O’Neill & Partners LP. Demchak’s background as head of structured finance at New York-based JPMorgan made him “quantitative and very objective,” Siefers said.
Revenue at PNC increased 8.3 percent in 2012 to $15.5 billion, while profit slipped 2.3 percent to $3 billion, or $5.30 a share. PNC’s stock has beaten both the Standard & Poor’s 500 Index and the KBW Bank Index this year by posting a 10 percent total return including dividends.
With $305 billion in assets, PNC ranks seventh among U.S. commercial banks and employs about 50,000 people. Acquisitions in the past two calendar years included Royal Bank of Canada’s U.S. operations and outlets of Bank-Atlantic Bancorp and Flagstar Bancorp in the South.
Demchak has said PNC must reassess the role of its approximately 2,900 branches. While branches build the brand and attract customers, “they’re really expensive,” accounting for 62 percent of retail banking costs, Demchak has said.