PNC Acquires $16.6 Billion Asset Portfolio from Signature for a Considerable Sum
In a significant move, PNC Bank has acquired a portion of an $18.5 billion portfolio from the now-closed Signature Bank. The deal, which was a cash transaction that took place on Monday, includes $9 billion of funded loans and is expected to be immediately accretive to PNC's earnings, representing about 10 cents per share in the fourth quarter.
The facilities in the deal are primarily fund subscription lines to private-equity investors, used for managing liquidity and bridge financing. New York's Department of Financial Services closed Signature Bank in March to protect depositors, and the Federal Deposit Insurance Corp. (FDIC) was appointed as the bank's receiver at the time.
According to the FDIC report, Signature's board and management pursued growth without adequate risk management practices. The FDIC plans to post the complete sales results of the $18.5 billion portfolio shortly.
Interestingly, the license rights for the portfolio consisting of 201 loans to private equity companies were acquired by Blackstone. This latest transaction with First Internet Bancorp is part of Blackstone's growing holdings in U.S. commercial real estate loans.
Meanwhile, a significant portion of Signature was acquired by New York Community Bank subsidiary Flagstar for $2.7 billion. PNC Bank has purchased a portion of the portfolio, but further details are yet to be disclosed.
Further details about the financial impact of the transaction will be provided on PNC's earnings call on Oct. 13. The FDIC is also seeking bids for a $33 billion portfolio of commercial real-estate loans from Signature by Nov. 1.
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