PNC Buys National City and Hits the TARP
After weeks of speculation as its share price headed toward the floor, Cleveland-based regional bank National City goes to PNC Financial Services.
The deal creates the country's fifth-largest bank by deposits.
The deal:
PNC will pay $5.58 billion in stock and cash for National City and get $7.7 billion through the government's bailout plan. The deal values National City at about $2.23 a share, or about 19 percent below yesterday's closing price (it traded around $23 a year ago). PNC says its Tier 1 capital ration will be about 10 percent, and the combined firm will be well above regulatory standards for a "well-capitalized" bank.
Why this is good:
A couple of reasons: First, National City was probably the biggest regional at risk as the credit crisis spreads. Second, the use of the Troubled Asset Relief Program (TARP) funds is encouraging. It's a positive sign that banks are using the government's lending offer to get markets moving again.
And lastly, a quick note to National City's press team who just yesterday chided me for saying that the bank was up for sale: We won't be running that correction.
Tags: Wall Street | Wall Street Journal | banking | PNC Financial Services
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Reader Comments
What The
I am sure that since PNC picked up all those mortgages for 10 cents on the dollar they will kindly go back to troubled homeowners who got beat up by National City and the economy, modify their loans so that both PNC and the homeowners can share in the bailout...... I am waiting for their call
the heck
with you National city employees. I am glad u are all gone. You are crooks and deceived the sharehlders. Good riddens!
pnc
pnc was doing well before that and should have got dime from the government. perhpas national city should have been saved. those people at pnc are very deceitful.
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