Pittsburgh’s rise as a national player in financial services continued to accelerate with the recent announcement of PNC Bank growing to the fifth largest in the country with another major purchase.
PNC acquired the U.S. operations of the Spanish bank BBVA, rocketing the Pittsburgh bank to the largest regional bank in the country. PNC also moved up from seventh to fifth in total assets of all U.S. banks, trailing only the four nationals – JP Morgan Chase, Bank of America, Citigroup and Wells Fargo.
The $11.6 billion deal expands PNC’s footprint to the West Coast and throughout the Sun Belt, growing its assets to $564 billion, bypassing U.S. Bancorp in Minneapolis and Truist Bank in Charlotte. PNC now has a presence in 29 of the 30 largest metro markets.
“This transaction is an opportunity to navigate our future from a position of strength, accelerating PNC’s national expansion strategy while drawing on our experience as a disciplined acquirer,” said William Demchak, PNC’s chairman, president and CEO.
The move is good news for Pittsburgh, as one of the region’s largest employers continues to grow while playing on a national and global stage.
“This deal helps PNC become a national bank based in Pittsburgh,” Wells Fargo analyst Mike Mayo told the Pittsburgh Post-Gazette.
PNC’s purchase is the third major acquisition in the last dozen years. It acquired Cleveland-based National City during the financial crisis in 2008, which approximately doubled the size of PNC, and Royal Bank of Canada’s U.S. retail banking in 2011, expanding the bank in the Southeast.
And in an interview with the Financial Times, Demchak said PNC would continue to look for acquisitions in the future as the U.S. banking industry consolidates. According to the Financial Times, he said PNC already competes with the four megabanks and is in the process of acquiring deposit licenses “across Europe and Asia”.
BBVA USA is headquartered in Houston and has 637 branches across seven states, including Texas, Arizona, Florida and California. Combined with PNC’s existing $462 billion in assets and footprint across the eastern half of the country, the BBVA USA acquisition means PNC will have branches coast to coast.
The move “would bolster PNC’s existing southeastern presence and jump-start the bank’s forays into Texas, where it currently employs a branch-lite model in Dallas and Houston,” Herman Chan, a Bloomberg Intelligence analyst, told Bloomberg.
The deal, which has been approved by both companies’ boards of directors, is expected to close in mid-2021, subject to customary closing conditions, including regulatory approvals.