Stock Alert: PNC Shares Up On Acquisition News

Shares of PNC Financial Services Group Inc. (PNC) are currently trading at $125.56, up $2.78 or 2.26% Monday morning, after the company announced that it would buy BBVA USA Bancshares Inc., including its U.S. banking subsidiary, BBVA USA, for $11.6 billion.

PNC stated that this all-cash deal significantly accelerates its national expansion strategy, and makes the Pittsburgh, Pennsylvania-based bank the nation’s 5th largest bank by asset size.

BBVA USA Bancshares provides commercial and retail banking services through its banking subsidiary BBVA USA and operates 637 branches in Texas, Alabama, Arizona, California, Florida, Colorado and New Mexico.

The acquisition adds about $86 billion of deposits and $66 billion of loans. The transaction, which is expected to close in mid-2021, is expected to be about 21% accretive to PNC earnings in 2022.

PNC anticipates to incur merger and integration costs of $980 million, inclusive of about $250 million in write-offs of capitalized items, and achieve cost savings in excess of $900 million, or 35% of BBVA USA’s 2022 estimated annual noninterest expense through operational and administrative efficiency improvements.

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