In taking over Riggs National Corp., PNC Financial Services Group Inc. inherits a company that has underwhelmed Wall Street, fallen behind in serving customers and incited the wrath of Capitol Hill.

But Pittsburgh-based PNC also gains entry into one of the most lucrative banking markets in the country, where it hopes to turn the bank of presidents into a bank for average citizens and mom-and-pop stores, too.

"Riggs is a broken bank. This is not a company that you just acquire, throw your name on it, and be done with it," said Gerard S. Cassidy, managing director of RBC Capital Markets. "There's a lot of hard, heavy lifting that has to be done."

PNC is buying a bank with problems including out-of-date technology and continuing questions about its failure to prevent possible money laundering by embassy customers.

In a conference call with analysts yesterday, PNC's leadership said much will change when Riggs joins the PNC fold. Chief executive James E. Rohr said the turnover rate in Riggs management may be as high as 50 percent when PNC takes over. But he said PNC is up to the challenge of turning Riggs around and capitalizing on the company's foothold in what he described as "one of the most appealing, if not the most appealing, markets in the nation."

PNC has been moving aggressively to expand its retail business in recent years, and Rohr said PNC's menu of products for consumers and small businesses is a major selling point that will help it expand in the Washington region. Riggs long ignored broader consumer markets, Rohr said, choosing instead to focus on the capital's elite.

Rohr said Riggs plans to divest itself of most of its international and embassy business before the deal goes through. Those divisions got a lot of attention from Riggs management, but turned little profit in recent years. Now, they have become a major liability. Allegations that Riggs helped hide the fortune of former Chilean dictator Augusto Pinochet came in the wake of revelations that Riggs had flouted money-laundering rules in its handling of the accounts of foreign embassies, including those of Saudi Arabia and Equatorial Guinea. Earlier this year, Riggs was slapped with a $25 million fine.

Rohr said he expects that before PNC closes on the acquisition in the first quarter of 2005, regulators will already have uncovered any other possible improprieties at Riggs.

"We will be acquiring a clean company, to the best of our knowledge," Rohr said.

PNC also has had several clauses written into the deal that allow it to walk away in the event of further disclosures that result in "a material adverse change" before the closing date.

PNC is no stranger to run-ins with regulators. Last year the company reached an agreement with the Justice Department under which it agreed to pay $25 million in penalties and create a $90 million investor restitution fund to resolve regulatory problems resulting from its accounting of certain loans and investments in 2001.

In addition to reworking its accounting and paying the fine, PNC was required to get approval from the Federal Reserve for most major business decisions for more than a year. At the time, PNC was rumored to be a potential takeover target for larger companies looking to snap up the struggling bank.

But since then, analysts say, PNC has made major changes and revived its fortunes.

"They got clobbered. But they learned their lesson," Cassidy said.

Cassidy said PNC is seen by regulators as an example of how a company can transform itself from bad boy to model citizen.

Still, not everyone thought the merger of two companies with recent regulatory troubles is a good thing. Richard X. Bove, managing director of Hoefer & Arnett Inc., said that given PNC's own problems, he is surprised the bank would be willing to take on another company that faces potential legal and monetary penalties. "I don't think they're really clear about what they're doing here. I think it's a terrible mistake," he said.

The Riggs purchase marked the second major acquisition by PNC in less than a year. Last year it acquired United National Bancorp of New Jersey. And PNC has let it be known that it is on the prowl for opportunities to grow. PNC had $74.1 billion in assets as of March 31 and consumer and business banking branches in Pennsylvania, New Jersey, Delaware, Ohio, Kentucky and Indiana.

Like Riggs, PNC has a long history, though its roots in blue-collar Pittsburgh stand in stark contrast to Riggs's background among ambassadors, members of Congress and presidents in the nation's capital. PNC dates its birth to 1852 with the founding of the Pittsburgh Trust and Savings Co., which subsequently merged with other banks and expanded with the iron, steel, glass and coal industries. The modern PNC came into being in 1982 when Pittsburgh National Corp. joined forces with Provident National Corp. in what was then the largest bank merger in U.S. history.

By buying Riggs, PNC hopes to go head-to-head against larger competitors such as Bank of America Corp. and Wachovia Corp. for dominance in one of the nation's most affluent markets. When the deal is complete, PNC will install its name on Riggs's 51 branches. It will also go forward with Riggs's existing plan to add 30 branches over the next three years, many in Northern Virginia and Southern Maryland.

Although Riggs has been trying of late to improve its status among average customers, its technology and range of product offerings has lagged behind those of other banks. PNC will have a chance at a fresh start with a brand that is new to most area residents.

"It adds to the competition for the retail and small business customers, and that might help pricing and customer service," said Claire M. Percarpio, a banking industry analyst with Janney Montgomery Scott LLC. "Of course, it was a competitive market already."

PNC plans to put its name on all 51 Riggs branches, including this one in Georgetown, as well as go ahead with plans to open 30 branches.PNC started in Pittsburgh, where its bank and processing hub, PNC Firstside Center, is located.