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
( 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,
shareholders voted in favor of
acquisition of the Charlotte, N.C.-based bank.
Wachovia shareholders approved the Wells Fargo merger by approximately 76% of the vote entitled to be cast, the bank said.
"We believe our combined company will be a compelling value for Wachovia shareholders -- and today's vote shows they agree," Wells Fargo CEO John Stumpf said in a statement. "The actual merger integration of our companies' systems, operations, products and services will be done very thoughtfully and deliberately over the next two to three years. I want to assure all customers of both companies that we'll approach every discussion on the integration and conversion from the standpoint of what's best for our customers."
Wachovia has felt mounting pain from the housing meltdown through its 2006 acquisition of Golden West. The company was near failure in late September when
agreed to acquire the lender's banking operations, with the Federal Deposit Insurance Corp. agreeing to take on the majority of risk in Wachovia's loan portfolio.
Less than a week later, Wells Fargo put up a better offer that required no federal assistance. The transaction is expected to close by the end of the year.
Wells also elected four new directors to its board, including Wachovia CEO Robert Steel. Steel, former undersecretary of the Treasury, was chief executive of Wachovia for less than four months before agreeing to a sale.