PNC Buys Book of Signature Bank’s Private Equity Loans From FDIC

PNC Financial Services Group Inc. bought a $16.6 billion portfolio of capital-commitments facilities, mostly to private equity sponsors, that were arranged by failed Signature Bank.

(Bloomberg) — PNC Financial Services Group Inc. bought a $16.6 billion portfolio of capital-commitments facilities, mostly to private equity sponsors, that were arranged by failed Signature Bank.

The portfolio includes $9 billion of funded loans, and the purchase is being funded with cash on hand, Pittsburgh-based PNC said in a statement Tuesday. The acquisition from the Federal Deposit Insurance Corp. — appointed as receiver of Signature Bank in March — is expected to add to PNC’s earnings immediately, representing about 10 cents a share in the fourth quarter, the buyer said.

Signature was seized by the New York State Department of Financial Services after the regulator lost faith in management and depositors fled. The bank was handed over to the FDIC, which later sold Signature’s deposits and some of its loans to a unit of New York Community Bancorp Inc. It was one of a series of regional-bank failures, which also included Silicon Valley Bank and First Republic Bank, earlier this year.

The Signature facilities being acquired by PNC are primarily made up of fund subscription lines to private equity sponsors to help them manage liquidity and bridge financing for investments. PNC said it’s long participated in the capital-commitments business, and the portfolio “is highly complementary” to its business.

The purchase won’t have a material impact to PNC’s total assets, capital ratios or tangible book value on a per-share basis, the bank said. PNC acquired the commitments and loans without any funding, guarantees or loss-sharing agreements from the FDIC.

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