PNC Deal for Nat City Could Set Trend

PNC Financial Services' (PNC Quote) acquisition of struggling National City (NCC Quote) could mark the first in another run of deals for regional banks.

PNC on Friday said it agreed to buy National City for $5.6 billion in cash and stock, after receiving a $7.7 billion preferred equity investment from the federal government. With almost two dozen other regional banks expected to also receive government investments, the money will be there to make deals.

"I expect more consolidation," says Roger Cominsky, a partner in Hiscock & Barclay's financial institutions and lending practice area. "The Treasury is using the $250 billion to prop up the capital of the surviving banks. Those banks are going to be under immense pressure to acquire the sick, but not dead banks." ...