PNC Financial Services has returned to its traditional banking roots. Its flagship PNC Bank subsidiary operates about 2,500 branches in more than a dozen states in the mid-Atlantic, the Midwest, and Florida. In addition to retail and corporate banking, the company offers insurance, investments, personal and institutional asset management, and capital markets products and services. It owns boutique investment bank Harris Williams and about a quarter of money management giant BlackRock. PNC acquired RBC Bank (USA) from Royal Bank of Canada in 2012. The nearly $3.5 billion acquisition extended PNC's retail banking franchise in the Southeast and cemented its place among the five largest banks in the US.
The purchase of RBC Bank USA, which included some 400 branches, is the latest in a series of transformational deals for the company. The company acquired troubled rival National City for some $6.1 billion of cash and stock after months of speculation that the two companies would join. The purchase doubled PNC's branch network and extended it westward to Chicago and Milwaukee. Following the completion of the deal in late 2008, the US Treasury bolstered the combined firm by investing some $7.6 billion through the acquisition of preferred shares in the company; PNC repaid the money in 2010.
In 2011 PNC bought the operations of BankAtlantic in the Tampa-St. Petersburg area. The deal included about 20 locations, as well as assets and deposits, and marked the bank's first foray into Florida. Later that year, the company expanded in the Atlanta market with the acquisition of 30 branches there from Flagstar Bank.
PNC divested about 60 National City bank branches in western Pennsylvania in a 2009 sale to First Niagara Financial in order to settle antitrust concerns stemming from the larger deal. It also sold the Ohio, Kentucky, and Missouri offices of National City Insurance, a retail employee benefits insurance brokerage business, to USI Holdings. In 2010 PNC sold its Global Investment Servicing unit to Bank of New York Mellon for some $2.3 billion in cash. Proceeds from the sale helped PNC to repay the money it received from the government as part of the Troubled Asset Relief Program (TARP).
As evidenced by its flurry of acquisitions and divestitures, PNC has recommitted itself to its core retail, corporate, and mortgage banking activities (it offers the latter two services nationwide). Though the company lost a main source of noninterest income in the sale of PNC Global Investment Servicing, it intends to bolster that revenue stream by emphasizing other fee-based activities, such as treasury and asset management. PNC is also focusing on adding new clients through relationships with employers and universities. However, the company's revenue was down in both 2010 and 2011, and its bottom line fell in the latter year. While PNC reduced its provisions for loan losses, it continued to be plagued by residential mortgage foreclosure-related expenses. – less