PNC Financial Expands Advisory Arm, To Buy Fortis Advisors

The PNC Financial Services Group’s (NYSE:PNC) banking services arm, PNC Bank, announced a definitive agreement to acquire Fortis Advisors. The deal is expected to be completed in February 2018.

Fortis Advisors provides shareholder representative services upon closure of mergers and acquisitions. Since 2011, it has been involved in about 750 transactions.

PNC Bank plans to make Fortis a subsidiary of its Corporate & Institutional Banking business, which offers products and services to middle market businesses.

Also, co-founders and managing directors along with the remaining Fortis team would be continuing to operate the business out of San Diego.

What the Executives Have to Say

Executive vice president and head of PNC Corporate & Institutional Banking, Mike Lyons, believes this transaction to be favorable for its fee income and deposits balance. The company seeks to “leverage Fortis' distinct advisory services” to offer its customers a wide variety of service options.

On the other hand, people at Fortis eye this as a lucrative proposition to be part of one of the largest banks in the United States. Rick Fink, CEO and co-founder of Fortis Advisors said, "We look forward to expanding our M&A services and product set, leveraging PNC's strong treasury management and advisory capabilities."

Prior Acquisitions in 2017

In November, PNC Bank had announced to acquire The Trout Group, LLC, an investor relations and strategic advisory firm, providing services to the healthcare industry.

The deal fulfils PNC Financial’s aim to provide a term relationship-based advice to clients through a major communications and advisory practice firm.

Moreover, in April, the company had acquired ECN Capital Corp, a commercial and vendor finance company, in an all-cash transaction, valued at $1.1 billion. The deal is anticipated to be marginally accretive to the company’s earnings in 2017.

The acquisition is estimated to enable PNC Financial to offer financing solutions to leading vendors in several growing industries.

Our Take

PNC Financial’s acquisition spree reflects its strong grip on its capital position. Such strategic efforts to grow along with cost-saving schemes assure us of its growth potential. Moreover, these tactful initiatives will continue to drive the fee income higher going forward.

Shares of PNC Financial have rallied 23.9% year to date, outperforming the 18.6% growth of the industry it belongs to.

Zacks Rank & Key Picks

The stock carries a Zacks Rank #3 (Hold). Some better-ranked banking stocks are Hancock Holding Company (NASDAQ:HBHC) , Capstar Financial Holdings (NASDAQ:CSTR) and First Bancorp (NASDAQ:FBNC) , all carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Hancock Holding has seen the Zacks Consensus Estimate for current-year earnings being revised slightly upward in the last 60 days. The company’s share price has risen almost 10% over the past six months.

Capstar Financial’s current-year earnings estimates have been revised 24% upward over the last 60 days. Also, its shares have gained 18.9% in the past six months.

The Zacks Consensus Estimate for First Bancorp’s current-year earnings has moved 9.7% upward over the last 60 days. In the past six months, its share price has climbed 19.2%.

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