NewsPNC Financial 2Q EPS down; to buy Sterling Financial
07/20/07 - newratings.com
NEW YORK, July 20 (newratings.com) – US regional bank PNC Financial Services Group (PNC) Thursday announced that it was buying smaller rival Sterling Financial Services for $565million in cash and stock. PNC Financial Services also reported disappointing results for the second quarter.
The $19 per share deal, which involves the payment of $224 million in cash and the issuance of 4.5 million shares to Sterling Financial Services’ shareholders, is expected to close in the first quarter of 2008, PNC Financial Services stated. The company added that it expects to take a onetime after-tax charge of $28 million related to the closing of the deal. The acquisition is expected to be accretive to PNC Financial Services’ earnings in 2009.
PNC Financial Services’ net income rose to $423 million in the second quarter, from $381 million in the year-ago period. The company’s earnings per share declined, however, to $1.22, from $1.28 a year earlier, with a larger number of outstanding shares. PNC Financial Services’ revenues after adjusting for an accounting change at BlackRock Inc declined to $1.72 billion in the latest quarter, from $1.79 billion in the same period a year earlier. Profits at the company’s consumer banking operations were up 23% at $227 million, while corporate and institutional banking profits rose 6% to $122 million.