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US bank PNC has agreed to buy smaller peer FirstBank in a deal worth $4.1bn, as the country’s largest regional banks try to bulk up to compete with national rivals.
The cash and stock deal will increase Pittsburgh-based PNC’s presence in the west of the country, adding assets and branches in Colorado and Arizona. The deal marks the first regional bank merger since US President Donald Trump’s election opened the door for greater consolidation in the industry.
FirstBank’s “deep retail deposit base, unrivalled branch network in Colorado, growing presence in Arizona, and trusted community relationships make it an ideal partner for PNC”, William Demchak, chair and chief executive of PNC, said on Monday.
The deal would accelerate PNC’s previous commitment to expanding its branch presence in the south and allow it to bring wealth management, private banking and treasury services for small businesses to FirstBank customers.
The Pittsburgh-based bank is one of the country’s largest lenders with nearly $560bn in assets. Demchak, who was previously one of the pioneers of credit derivatives at JPMorgan, has led the bank since 2013.
The Pennsylvanian bank also poached long term BlackRock executive Mark Wiedman to become its president in April.
The boards of both banks have approved the transaction, which is expected to close in early 2026.
The merger comes amid growing speculation that a looser regulatory environment, a more favourable political climate and growing competition will spark a surge in mergers as lenders seek scale to compete with the country’s largest banks. The US has one of the world’s most fragmented banking sectors with just under 4,500 lenders.
“We’ve seen the new guidance come out from the regulators to streamline the regulatory approval process,” said Alex Overstrom, PNC’s head of retail banking. “It creates more certainty [and] allows us to move quickly and bring the FirstBank franchise into the PNC fold seamlessly as possible.”
Lawyers and analysts have said that Trump’s election sparked a major shift in regulators’ attitude towards banking consolidation compared with his predecessor, Joe Biden.
Michelle Bowman, vice-chair of supervision at the Federal Reserve, has also indicated a friendlier approach, promising to minimise delays to acquisition approvals and to overhaul the “large financial institution ratings” system that has proved a hurdle to bigger banking deals.
One early beneficiary of the more relaxed approach has been Capital One’s $35.5bn takeover of Discover Financial in April, the first major US banking merger in more than five years.
Earlier this year, custodian bank BNY — launched in 1784 by US founding father and first Treasury secretary Alexander Hamilton — also held talks with its smaller rival Northern Trust about a potential merger. While the discussions did not result in a deal, BNY chief executive Robin Vince has since indicated that he was open to acquisitions.
Source: ft.com
