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Updated to include stock chart, latest share price.



) --

PNC Financial

(PNC) - Get Free Report

shares have been on a tear of late with accounting-related benefits stemming from its December acquisition of

National City

prompting investors and analysts to be far more bullish in their assessment of the company.

When PNC bought National City, it wrote down the assets dramatically. This created the possibility for substantial benefits to the bottom line if the impaired loans are paid off, a scenario that has for the most part played out.

Similar benefits from this accounting method, known as "purchase accounting" have provided big gains for

JPMorgan Chase

(JPM) - Get Free Report

in its acquisition of

Washington Mutual


Wells Fargo

(WFC) - Get Free Report

for its purchase of


, according to a report from

Bloomberg News

earlier this year.

The acquisition is also looking better because of the expiration of high-yielding CD obligations held by National City. In a move that is typical of failing banks, the company opted to pay a high rate to hang onto depositors as concerns about its solvency mounted.

PNC has also managed to wring $460 million in cost savings from the deal, and it says in its latest filing with the Securities and Exchange Commission that it's on track to reach its $1.2 billion goal. A recent note from Sandler O'Neill quoted management as saying it will exceed that target.

PNC shares took off after the bank's

third-quarter report

on Oct. 22, and the stock spiked higher last week after positive comments by management at a banking conference in Boston.

As a result, the shares were up nearly 20% since the close of trading on Oct. 21 through Tuesday. Shares of other large banks, including


(C) - Get Free Report


Bank of America

(BAC) - Get Free Report

, and

U.S. Bancorp

(USB) - Get Free Report

are all down over that same period.

Though the accounting-driven benefits of the acquisition are a big part of the story, PNC has shown progress in other areas.

Rochdale Securities analyst Dick Bove says losses in its loan book excluding what it bought from Nat City, while high, are better than the average regional bank.

PNC itself expects its capital position to improve after it books an anticipated after-tax gain of more than $700 million related to an investment in


(BLK) - Get Free Report


In the wake of the run-up, it is difficult to see a catalyst for significant further upside, according to Matthew Schultheis, analyst at Boenning & Scattergood. Schultheis is concerned about eventual shareholder dilution as PNC looks to pay off its $7.6 billion preferred investment from the U.S. Treasury.

Schultheis thinks this will take at least two years. CEO Jim Rohr said on the company's third-quarter conference call that he "would expect we will be beginning conversations with the regulators to pay

TARP back perhaps over the next 15 months."

Rohr said the bank will repay the funds "in a shareholder friendly manner," but a bank spokesman could not find anyone to elaborate on what that meant late Tuesday afternoon ahead of the Veteran's Day holiday.

PNC shares were up less than 1% to $54.37 in late afternoon action. The stock is still down more than 20% for the past 52 weeks, but it's seen a significant bounce from its early March low of $16.20 over the same period.


Written by Dan Freed in New York