The PNC Financial Services Group Inc. and National City Corp. have signed a definitive agreement for PNC to acquire National City for $2.23 per share. The merger will create the fifth largest U.S. banking deposit.
PNC plans to issue to the U.S. Treasury $7.7 billion of preferred stock and related warrants under the Troubled Asset Relief Program, subject to standard closing requirements. According to PNC, the Treasury approval of PNC's participation enables the company to further strengthen its capital position.
PNC's fair-value adjustments and provisions for future losses of National City's current loan portfolio will bring the cumulative impairment of these loans to approximately 17.5%. PNC will continue to liquidate non-core and impaired loans.
PNC intends to merge National City's banking affiliates into PNC Bank and re-brand them with the PNC name. The transaction is currently anticipated to close by the end of the year.
Source: The PNC Financial Services Group Inc.