PNC ready to grow public finance footprint with BBVA acquisition

Bonds

PNC Financial Services Group’s footprint in the public finance space will grow coast-to-coast after its acquisition of BBVA USA closed in early June, expanding its business with state and local governments.

Pittsburgh-based PNC completed its acquisition of Birmingham, Alabama-headquartered BBVA USA Bancshares, Inc., including its U.S. banking subsidiary BBVA USA, on June 1, making it the fifth largest U.S. commercial bank, with more than $560 billion of assets, and a national franchise with retail customers and business clients in 29 of the top 30 largest markets in the country.

Robert Dailey, executive vice president and head of public finance at PNC, said that for public finance at PNC in particular, “this means dedicated teams and support for our clients across the western part of the country, as well as a large presence in Texas, where we will be fourth in deposit market share across the state, according to FDIC data.”

PNC plans to expand its banking reach, as well as its capital markets activities across the Southwest and Western regions.

Robert Dailey, executive vice president and head of public finance at PNC

“Over the last several years, PNC has focused on organic growth driven by the ongoing expansion of its middle-market corporate banking business, which PNC Public Finance was certainly a part of,” Dailey said. “But, PNC’s acquisition of BBVA USA accelerates these expansion efforts considerably, effectively establishing a PNC presence in 29 of the nation’s top 30 largest markets, representing 65% of the U.S. population. And ultimately, propelling the growth of our Public Finance business years into the future.”

That also means “a plethora of business opportunities,” he said. “We believe that this unique model — having public finance investment banking and commercial banking together in one business — will continue to be attractive to clients, as our capabilities align more squarely with their needs.”

So far in 2021, PNC ranks 23rd with $1.444 billion of senior-managed deals in 73 transactions, according to Refinitiv data. In 2020, PNC came in `19th with $4.021 billion in 189 deals. PNC was 19th in the top senior managers in 2019 to the tune of $3.461 billion in 151 transactions.

Dailey, who is responsible for PNC’s public finance banking and capital markets activities in government, higher education and nonprofit sectors, said in addition to potential new hires, “we have many new colleagues from BBVA USA, who we are welcoming to PNC and will be working alongside to grow our business.”

Many of the BBVA bankers are veterans in the public finance field and “are already embedded in the new communities where PNC will be growing, which is key for our local delivery model,” Dailey said.

PNC also has been a direct lender to state and local governments and with the expansion, its direct-lending capabilities grow.

“We will have the opportunity to serve and provide the right financial solutions for a whole host of new cities and states, including areas of California, Arizona and New Mexico, where we previously haven’t had a local presence,” he said. “Growing in these geographies enables us to deliver PNC’s full financial services ecosystem to our clients, including large bank resources, industry-leading technology and our differentiated approach as a solutions provider.”

In addition, as environmental social and governance (ESG) continues to be a critical topic for many in public finance, it also is of PNC’s clients — municipalities being no exception, Dailey said.

“As a company we try to lead by example and have taken considerable steps to further our work in this space, including most recently announcing an $88 billion Community Benefits Plan to help meet community needs, advance economic empowerment and address systemic racism,” he said.

Along with this work, PNC formalized its approach to sustainable finance in 2018, forming a cross-functional Sustainable Finance Working Group to develop its philosophy and goals for PNC’s business.

“Outside of our own commitments, we also provide resources and expertise to help our clients pursue more sustainable business practices through the establishment of an ESG specialty in our advisory firm, Solebury,” Dailey said.

Until conversion of bank systems and branches, expected to occur in October 2021, PNC and BBVA USA customers will continue to be served through their respective PNC and BBVA USA branches, websites and mobile apps, financial advisors and relationship managers, the firms said. PNC will provide comprehensive information to BBVA USA customers prior to the conversion.

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