PNC Financial Services Group Inc. on Monday said it struck a deal to buy Royal Bank of Canada's U.S. retail banking operations for $3.45 billion.
The deal will allow PNC to beef up its footprint in southeastern markets, where the $25 billion-asset RBC Bank has 424 branches in North Carolina, Florida, Alabama, Georgia, Virginia and South Carolina.
"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," James Rohr, PNC's chairman and chief executive, said in a press release.
As a result of the acquisition, which had been reported by news organizations last week and is expected to close in March, PNC will have 2,870 branches and add about $19 billion of deposits and $16 billion of loans, PNC said. The purchase price represents a $112 million discount to RBC Bank's tangible book value.
The deal has already been approved by the boards of directors of the two companies but needs regulatory approval. PNC plans to convert RBC Bank's customers to its platform and rebrand RBC branches under the PNC name. PNC also said it plans to keep most of RBC's "customer-facing employees" and "sees opportunities to add new positions as it extends its full breadth of retail, corporate, mortgage and wealth management products and services into the acquired markets."
PNC reportedly beat out BB&T Corp. for RBC Bank. In addition, PNC said it also agreed to buy some of RBC Bank's credit card assets.
The deal is the second major bank acquisition in recent days. On Thursday, Capital One Financial Corp. said it was buying the U.S. online banking operations of ING Groep NV for $9 billion.