PNC Shares Rise on National City Purchase

PNC Financial Service Group shares jumped more than 5 percent after it said it would purchase Cleveland’s National City Corp. for $5.6 billion.

The acquisition was made with help from the $700 billion financial bailout plan. PNC agreed to issue $7.7 billion in preferred stock and warrants to the U.S. Treasury, to strengthen its position, the Pittsburgh Post-Gazette reported Friday.

The deal propels PNC to fifth on the list of the nation’s largest banks ranked by deposits. It involves a transfer of $5.2 billion in PNC stock to National City shareholders on terms that valued National City at $2.23 per share, compared with Thursday’s closing price of $2.75 per share.

“In today’s environment, deposits are really important,” said PNC Chairman and Chief Executive Officer James E. Rohr. “Balance sheet strength is vital and the key element of that is a large, stable deposit base,” he said.