PNC Announces Agreement to Buy RBC Bank (USA)

The PNC Financial Services Group, Inc. PNC and Royal Bank of Canada RY today announced that they have signed a definitive agreement for PNC to acquire RBC Bank, the U.S. retail banking subsidiary of Royal Bank of Canada, for $3.45 billion, or $112 million discount to tangible book value. "The addition of RBC Bank provides PNC a great opportunity to enter attractive southeast markets in a way that will create value for our shareholders," said James E. Rohr, PNC's chairman and chief executive officer. "The success of our recent acquisitions demonstrates that when we bring our innovative products and services to new markets we have the proven ability to win clients and take out costs. This transaction represents an outstanding growth opportunity for PNC." With approximately $25 billion of assets, Raleigh, N.C.-based RBC Bank has 424 branches in North Carolina, Florida, Alabama, Georgia, Virginia and South Carolina. When combined with PNC's existing network, the company will have 2,870 branches, ranking it 5th among U.S. banks. PNC expects the transaction to be accretive to earnings by the end of 2013 or sooner depending on the amount, if any, of the $3.45 billion purchase price paid in the form of PNC common stock. Under terms of the agreement, PNC will have the option to deliver to Royal Bank of Canada at closing up to $1.0 billion of the consideration in common stock, or 3 percent of PNC's outstanding common shares based on PNC's closing price of $57.79 on June 17, 2011.