PNC, National City Holders Approve Merger

Updated from 12:45 p.m. EST

Two large bank deals received shareholder approvals Tuesday, marking the final nod in what has become one of the most transformative years ever for the banking sector.

Early in the day, shareholders of both PNC Financial Services (PNC) and National City (NCC) approved a merger between the two banking institutions.

Pittsburgh-based PNC said in a press release that both shareholder groups approved the deal by a "substantial margin." The companies expect to close the transaction on Dec. 31.

National City has been hamstrung by the real estate downturn after it forayed into some of the more risky home loans such as broker-originated home equity and subprime mortgages, as well as troubled geographic areas such as Florida. Many of those loans have since been put into a separate portfolio which the bank was in the process of winding down.

PNC announced in late October it would acquire the Cleveland-based bank for roughly $5.6 billion. PNC agreed to pay $5.2 billion, or $2.23 a share, for National City and $384 million in cash to certain warrant holders. National City shareholders will be entitled to 0.0392 share of PNC common stock for each share of the Cleveland-based bank.

As part of the deal, PNC said it had been accepted to take part in the U.S. Treasury's $250 billion capital initiative under the Troubled Asset Relief Program, or TARP, by selling $7.7 billion of preferred stock and related warrants to the government.

Also on Tuesday, Wachovia (WB) shareholders voted in favor of Wells Fargo's (WFC) acquisition of the Charlotte, N.C.-based bank.