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O'Brien retiring, Rohr to lead PNC

Friday, February 18, 2000

By Patricia Sabatini, Post-Gazette Staff Writer

PNC Bank Corp. announced the end of an era yesterday, saying long time Chief Executive Officer Thomas H. O'Brien would step down as CEO May 1 and as chairman a year later. He will be succeeded by long time confidant James Rohr, who has been PNC's president since 1992.

  James Rohr, left, will succeed Thomas H. O'Brien as chief executive of PNC Bank Corp. (Darrell Sapp, Post-Gazette)

The selection of Rohr, confirmed by the board yesterday, was expected. Rohr, 51, has been O'Brien's top lieutenant for the last decade, and the two have worked together for nearly 30 years. O'Brien has made it no secret that the congenial Cleveland native and fellow Notre Dame graduate was his intended heir.

The timing of O'Brien's departure was a bit of a surprise, however. The 63-year-old Penn Hills native, who has been running the company since 1985, had suggested in an extensive interview with the Post-Gazette last summer that he would stick around until PNC's mandatory retirement age of 65.

Yesterday, O'Brien said the time was right. He said he actually had wanted to retire a year earlier but didn't feel the company's transition from a regional bank to a diversified financial services firm was far enough along.

Today, "the company is doing remarkably well," he said at an afternoon news conference at One PNC Plaza, Downtown. "I'm great, the bank is great and it's a perfect time to turn over the reins to an extremely talented group of people," including Rohr and Vice Chairman Walter Gregg.

Rohr said yesterday not to expect any big changes under his stewardship.

"We'll be executing the plan that we've put in place," he said. "The same management team is in place, and it's working."

He said one of the biggest challenges he faces is ensuring that PNC harnesses the power of the Internet.

"E-commerce is probably the biggest change any of us has seen in the last 25 or 30 years, maybe in the century. It's important that we keep pace and actually move ahead of the competition. That will be a big challenge for us."

Although the banking industry has been undergoing rapid consolidation, Rohr said PNC was "very committed" to remaining independent.

"We're very optimistic about that. That's clearly the strategy we have committed to."

Rohr, known for his disarming sense of humor and aggressiveness, has been with PNC his entire career, joining the bank in 1972 as a management trainee.

After making a name for himself in the corporate lending arena, he was elected a vice chairman of the corporation in 1989, and chairman and CEO of the bank's Pittsburgh operations in 1990. He was named president of the corporation and heir apparent in 1992, and named chief operating officer in 1998.

O'Brien, currently the city's longest-serving corporate chieftain, has been with PNC since joining the corporate lending division in 1962. He took over as chairman and CEO of the Pittsburgh region in 1984, and was named president and CEO of the corporation in April 1985. He stepped in as chairman in June 1988.

PNC has grown dramatically under his tenure. Assets have more than quadrupled, from roughly $15 billion to about $75 billion, vaulting the bank from the 26th largest in the nation to 14th.

Profits, which hovered at around $150 million when he took over, have topped $1 billion in each of the last three years, and are higher than at any other major corporation in Pittsburgh.

There also have been some major stumbles under his watch. Most notably, sour commercial real estate loans in the early 1990s resulted in PNC's first quarterly loss since it was formed through the 1983 merger of Pittsburgh National Bank and Philadelphia's Provident National. And bad bets on the direction of interest rates slashed profits in 1995.

Still, by most accounts, O'Brien leaves Pittsburgh's largest banking company in its best shape in years, having posted record profits in each of the last four years.

Wall Street greeted news of the changing of the guard in stride. PNC's stock closed at $41.75, down 25 cents.

Rohr is the "logical choice" for the job, said veteran banking analyst James Schutz of Stephens Inc. in Chicago.

"His experience is right, he knows the people at the bank, and has signed onto the plan that I think Wall Street likes." After he steps down as chairman next year, O'Brien said he plans to continue serving on several other corporate boards and to stay active in the community.

"I have a lot to do frankly, and I want to play a continuing role in the community."

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