PNC makes Colorado play with $4.1B deal for FirstBank

• Key Insight: PNC's latest acquisition agreement is part of a larger strategy to significantly scale up its presence.
• What's at Stake: The deal is part of a larger trend of increased bank M&A activity in 2025.
• Forward Look: PNC's banking footprint in Colorado and Arizona will more than triple as part of the transaction.

Update: This story has been updated to include comments from interviews with a PNC executive and a bank analyst.

PNC Financial Services Group has notched another acquisition agreement on its mission to build national scale.

The Pittsburgh-based bank announced Monday that it has agreed to buy FirstBank Holding Company in a cash-and-stock deal valued at $4.1 billion. PNC's purchase of the $26.8 billion-asset bank will significantly expand its footprint in Colorado and Arizona, where the national bank had been looking to bulk up its presence.

Alex Overstrom, head of retail banking at PNC, told American Banker that the acquisition will effectively "take 10 years of investments, and bring it forward to today" in those markets. He said PNC and FirstBank will be complementary to each other, as PNC uses the Colorado bank's reach to offer new services to its customers, like wealth management and brokerage.

"FirstBank hasn't made a lot of the same investments we have in our technology platform and our product platform," Overstrom said. "What we're able to do is bring our product set to their customer base and our technology platforms to really allow FirstBank clients and the company to continue to grow with their customers."

PNC, which has $559 billion of assets, has ambitiously targeted growth for years. Chairman and CEO Bill Demchak has repeatedly talked about his interest in buying another bank, though he had signaled earlier this year that valuations were still too high and uncertainty had tabled acquisition talk at that moment.

But he left the door open for the longer term.

"In the long run, I think there's going to be big consolidation," Demchak said on the company's first-quarter earnings call. "In the course of that consolidation, if we outperform in our organic growth, we will have the right to be an acquirer."

Merger and acquisition activity among banks had been muted for several years due to high interest rates, economic uncertainty and a less-friendly regulatory environment. But in 2025, deals have rebounded, with more than 100 announced.

Overstrom said deal conversations with FirstBank started heating up this summer.

He added that the Denver and Phoenix markets where FirstBank is concentrated are areas where PNC had been planning to increase its density due to the markets' strong population growth and affluence. PNC plans to retain all 95 of FirstBank's branches and its customer-facing teams.

The combination will more than triple PNC's branch footprint in Colorado, to 120. In Arizona, the bank's branch count will grow to more than 70.

PNC is aiming to expand in regions like the South, Southeast and Southwest that are outpacing the growth in its legacy markets, said Gerard Cassidy, co-head of global financials research at RBC Capital Markets. Cassidy added that the FirstBank deal will boost PNC's market share in Denver and Phoenix to levels that will likely enable the bank to outperform peers.

The bank announced plans last year to invest some $1.5 billion on building more than 100 new branches and renovating 200 across its footprint, including 16 new branches in Denver and 10 in Phoenix, Overstrom said.

Now that PNC will adopt FirstBank's footprint, Overstrom said the bank can redirect some of those resources into building branches in other cities across the South and Southeast.

FirstBank CEO Kevin Classen will become PNC's Colorado Regional President and Mountain Territory Executive, covering a region that also includes Arizona and Utah. The company, which ranked second in its asset-size tier on American Banker's latest list of top-performing banks, has $23 billion of deposits and $16 billion of loans.

"In PNC, we have found a partner that not only values this legacy but is committed to building on it," Classen said in a prepared statement Monday. "Their scale, technology and breadth of financial services will allow us to offer even more to our customers, while ensuring that our employees and communities continue to thrive."

The deal will follow a similar playbook to PNC's acquisition of BBVA USA in 2021 — a major transaction, also overseen by Overstrom, that propelled the company into markets across the South and Southeast.

Cassidy said PNC has demonstrated for 15 years that it can smoothly fold in its acquisitions with limited risk.

"Integrations are never easy, but because the size of this deal relative to the size of PNC, the integration here should be relatively easier," Cassidy said.

The company expects the FirstBank transaction to close in the first quarter of 2026, and plans to integrate its systems that June.

PNC said the deal should be immediately accretive to earnings, with roughly a 25% internal rate of return. The bank also estimates that the transaction will result in 3.8% tangible book value dilution, with an earnback in 3.3 years, which Cassidy called "manageable."

He said that although the price to tangible book value is "steep," the deal will enhance PNC's growth in strong markets and should be positive for shareholders over time.

"When you buy a BMW or Mercedes, you pay more than you do for Ford or Chevrolet," Cassidy said. "They're not buying a bank that is a mediocre bank. They're buying a high-quality bank with high profitability, strong credit culture, and as a result, you have to pay a higher price than you would for a mediocre bank."

He added that PNC can afford the deal — paid for through a 70-30 stock-cash mix — because of its massive size relative to FirstBank.

Going forward, PNC still has the door open for other acquisitions that may arise, Overstrom said, but the bank isn't finished with its organic strategy.

"When deals like this happen, these are great opportunities for us," Overstrom said. "There's nothing in this deal that precludes us from doing something else, but we're laser-focused on our organic growth strategy…But if another one of these came around, we would obviously pursue it for the right deal."