- Key insight: PNC wanted to close the deal on an accelerated timeline. FirstBank agreed, but there was a catch.
- What's at stake: The Pittsburgh bank has been chasing scale for years, and the $28.6 billion-asset company it will acquire adds heft in the Rocky Mountains.
- Supporting data: PNC's original offer price was $3.75 billion, or about 9% less than the price tag it ultimately agreed to.
After flirting with selling itself for years, FirstBank ended up in something of a shotgun marriage, hammering out the terms of its acquisition by
PNC announced on Sept. 8 that it
"We just effectively bought Colorado,"
His company had been chasing avenues for scale across high-growth markets in recent years. And PNC was willing to pay for it.
The $559 billion-asset bank originally pitched a $3.75 billion price tag for FirstBank, and Demchak wanted to move fast. On Aug. 29, he met with FirstBank CEO Kevin Classen and said that PNC "could move quickly to enter into a strategic transaction." Two days later, Classen told Demchak that FirstBank would be willing to pursue "an accelerated time frame" if PNC upped its offer.
The companies soon landed on $4.125 billion — a deal value 10% higher than PNC's starting offer — made up of a 70%-30% stock-cash mix.
Analysts have noted that the deal has a steeper price-to-tangible book value than many other acquisitions announced this year, but they have also said that FirstBank, which has $26.8 billion of assets, is a solid acquisition.
In the three days leading up to Sept. 5, when the two banks executed the proposed merger agreement, they met numerous times for due diligence purposes.
The latest regulatory filing includes various new details about the deal's terms.
One notable disclosure: FirstBank will pay PNC a $100 million cash termination fee if the deal is called off due to factors such as FirstBank soliciting other deals, the transaction not being completed prior to the termination date or a breach of the merger agreement.
Another new detail from the regulatory filing: FirstBank first put out feelers for a sale in 2022. That process yielded four bids, but PNC wasn't among the bidders.
FirstBank "continued to discuss potential strategic alternatives" in 2024 and the first part of 2025, the filing stated. The company's previous CEO, Jim Reuter, retired in March 2024 after seven years at the helm, during which the company's assets increased by more than 60%. Classen was named chief executive upon Reuter's departure.
When FirstBank restarted gauging buyer interest in late June and early July, its representation reached out to eight possible buyers. The bank received six bids in mid-August, and it engaged with three of them, including PNC, until just a couple of days before it signed the agreement to sell.
PNC has been on investors' radar as a potential acquirer throughout 2025, as more bank M&A deals have been hatched.
"When deals like this happen, these are great opportunities for us," Alex Overstrom, head of retail banking at PNC, told American Banker on the day the deal was announced.
Demchak said the next day that his bank wouldn't make a habit of buying smaller banks, because of how highly most of them are currently valued. Still, he added that it's tough to find large financial institutions that are for sale.
"People don't want to sell," Demchak said at an industry conference on Sept. 9. "They're all buyers."
Earlier this week,
Before the Fifth Third deal was announced, analysts and investors had floated the possibility that PNC might buy Comerica.
When PNC's planned acquisition of FirstBank was announced, Overstrom said the company would now focus on organic growth rather than more M&A. But he also said the company would consider other deals, and that there was nothing in the FirstBank agreement that prevented PNC from pursuing another acquisition.
However, the new regulatory filing, first reported by the Bank Slate blog, states that the covenants in PNC's agreement with FirstBank prohibit the buyer from inking any other transactions that would materially delay or prevent its deal with FirstBank from closing on time.
PNC's acquisition of FirstBank is expected to close in the first quarter of 2026.
As part of the agreement, FirstBank's Classen will become PNC's Colorado regional president and Mountain Territory executive, also covering Arizona and Utah.
Other FirstBank executives, including Chief Operating Officer Kelly Kaminskas, Chief Banking Officer Adam Sands and Chief Credit Officer John Markovich, also entered into offer letters with PNC as part of the merger agreement.
