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Banking industry

PNC Financial Services Group Agrees to Sell PNC Mortgage to Washington Mutual

Strategic Insights

— 2 min read

PNC Financial Services Group, one of the nation's largest diversified financial services organizations, has agreed to sell its mortgage arm, PNC Mortgage Corp., to Washington Mutual, Inc. The acquisition will give Washington Mutual a significant boost in its residential mortgage business, with PNC Mortgage holding approximately $7 billion in assets and a primary servicing portfolio of approximately $85 billion as of June 30, 2000. The sale price is $605 million in cash, subject to closing adjustments.

The acquisition is expected to close in the first quarter of 2001, pending regulatory approvals and customary closing conditions. PNC anticipates that the transaction will result in an after-tax gain of approximately $250 million. PNC plans to use the capital made available by the sale to redeploy in various ways, including repurchasing shares of common stock, reducing balance sheet leverage, and making targeted investments in high-growth businesses such as asset management and processing.

Key Takeaways:

  • PNC Financial Services Group is selling its mortgage arm, PNC Mortgage Corp., to Washington Mutual, Inc. for $605 million in cash.
  • PNC Mortgage Corp. holds approximately $7 billion in assets and a primary servicing portfolio of approximately $85 billion as of June 30, 2000.
  • The sale is expected to close in the first quarter of 2001, pending regulatory approvals and customary closing conditions.
  • PNC anticipates that the transaction will result in an after-tax gain of approximately $250 million.
  • PNC plans to use the capital made available by the sale to redeploy in various ways, including repurchasing shares of common stock, reducing balance sheet leverage, and making targeted investments in high-growth businesses.
  • The acquisition will enhance Washington Mutual's residential mortgage business and provide it with a broad national footprint.
  • Both companies plan to make a smooth transition for PNC Mortgage customers, with existing mortgage terms unaffected and a continued delivery of residential mortgage products through an agreement with Washington Mutual.
  • PNC Financial Services Group, Inc. is one of the nation's largest diversified financial services organizations, providing regional banking, corporate banking, real estate finance, asset-based lending, asset management, global fund services, and mortgage banking.

Statistics:

  • $605 million: The sale price of PNC Mortgage Corp. to Washington Mutual, Inc.
  • $7 billion: The assets held by PNC Mortgage Corp. as of June 30, 2000.
  • $85 billion: The primary servicing portfolio of PNC Mortgage Corp. as of June 30, 2000.
  • $36 billion: The master servicing portfolio of PNC Mortgage Corp. as of June 30, 2000.
  • $250 million: The after-tax gain anticipated by PNC from the sale.
  • First quarter of 2001: The expected closing date of the sale, pending regulatory approvals and customary closing conditions.

Sources:

  • The PNC Financial Services Group, Inc.
  • Washington Mutual, Inc.
  • PRNewswire
  • The Private Securities Litigation Reform Act

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