WASHINGTON — The Department of Justice announced today that The PNC Financial Services Group Inc. and National City Corporation have agreed to sell 61 of National City’s branch banking offices in western Pennsylvania, with deposits that totaled approximately $4.1 billion as of June 30, 2008, in order to resolve competitive concerns about the companies’ pending merger. The Department said that, with the divestitures, the merger would not have a significantly adverse effect on competition in local markets for retail banking, small business banking and middle market banking services. As a result of the acquisition, PNC will become the fifth largest bank in the nation, with about $289 billion in assets and about $180 billion in total deposits.
Under the agreement with the Department’s Antitrust Division, the companies will divest 50 branches with $3.35 billion of deposits in Allegheny County and four other counties in the Pittsburgh area; six branches with $249 million in deposits in Erie County, serving the Erie area; four branches with $186 million deposits in Crawford County, serving the Meadville and Titusville areas; and one branch with $120 million in deposits in Warren County, serving the Warren area. The divestitures will include the commercial loans associated with the divested branches.
In addition, the agreement requires the companies to divest approximately half of National City’s lending and related business with middle market customers –generally, businesses with lending needs of more than $1 million –in the Pittsburgh area, and virtually all of that business in the Erie area, and give the acquirer of those middle market customer relationships the opportunity to hire the National City personnel who manage those relationships.
"The divestitures in western Pennsylvania will ensure that consumers, small businesses, and middle market businesses in that area will continue to have choices for banking services and to enjoy the benefits of competition, while allowing PNC’s acquisition of National City to proceed," said Deborah A. Garza, Acting Assistant Attorney General in charge of the Department’s Antitrust Division.
Garza added that the Department reviews proposed bank mergers to ensure that, consistent with the Nation’s antitrust laws, they do not harm consumers by reducing competition substantially.
The proposed merger is subject to the final approval of the Board of Governors of the Federal Reserve System. The Department said that it will advise the Federal Reserve Board that it will not challenge the merger provided that: the parties divest the branch offices, associated loans and deposits, and middle market banking relationships specified in the agreement; the parties commit to the Federal Reserve Board that they will comply with the agreement with the Department; and the parties’ commitments to the Department are included as a condition in the event the Federal Reserve Board enters an order allowing the transaction.
The PNC Financial Services Group Inc. is a financial holding company headquartered in Pittsburgh with approximately $128 billion in assets. It serves 2.9 million consumer and small business customers through more than a thousand branches and 3,900 ATMs in Delaware, Indiana, Kentucky, Maryland, New Jersey, Ohio, Pennsylvania, Virginia and the District of Columbia.
National City Corporation is a financial holding company headquartered in Cleveland with approximately $151 billion in assets. It operates banking centers in Florida, Illinois, Indiana, Kentucky, Michigan, Missouri, Ohio and Pennsylvania, and also serves customers in selected markets nationally. Its core businesses include commercial and retail banking, mortgage financing and servicing, consumer finance and asset management.
A list of the branches to be divested is attached.