PNC Financial Services to buy BBVA's U.S. operations for $11.6bn
Topics: PNC FINANCIAL
BBVA USA Bancshares, with $104 billion in assets and headquartered in Houston, Texas, 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.
When combined with PNC's existing footprint, the company will have a coast-to-coast franchise with a presence in 29 of the 30 largest markets in the U.S.
PNC expects the transaction to be approximately 21% accretive to earnings in 2022 and to substantially replace the net income benefit from PNC's passive equity investment in BlackRock that was divested in May 2020.
The estimated allowance for credit losses to total loans for the combined entity is 2.85%, including reserves for the acquired loans from BBVA USA of 3.85%.
PNC expects to incur merger and integration costs of $980 million, inclusive of approximately $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. ■