PNC FINANCIAL SERVIC

PNC
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PNC FINANCIAL SERVICES GROUP, INC. : Entry into a Material Definitive Agreement, Financial Statements and Exhibits (form 8-K)

11/19/2020 | 04:05pm


Item 1.01 Entry into a Material Definitive Agreement.
Stock Purchase Agreement
On November 15, 2020, The PNC Financial Services Group, Inc. ("PNC") entered
into a Stock Purchase Agreement (the "Stock Purchase Agreement") with Banco
Bilbao Vizcaya Argentaria, S.A. ("BBVA"). Upon the terms and subject to the
conditions set forth in the Stock Purchase Agreement, PNC will purchase from
BBVA 100% of the issued and outstanding shares of BBVA USA Bancshares, Inc. (the
"Stock Purchase"), a financial holding company ("BBVA USA Holdco") conducting
its business operations primarily through its U.S. banking subsidiary, BBVA USA,
an Alabama-chartered bank ("BBVA USA Bank"), for $11.6 billion in cash on hand
in a fixed price structure, subject to certain adjustments related to
transaction expenses and tax matters. PNC is not acquiring BBVA Securities,
Inc.
, Propel Venture Partners Fund I, L.P. and BBVA Processing Services, Inc.
(the "Carve-Out Transactions"). Immediately following the closing of the Stock
Purchase, PNC intends to merge BBVA USA Holdco with and into PNC, with PNC
continuing as the surviving entity. Post-closing, PNC intends to merge BBVA USA
Bank
with and into PNC Bank, National Association, an indirect wholly owned
subsidiary of PNC ("PNC Bank"), with PNC Bank continuing as the surviving
entity.
The completion of the Stock Purchase is subject to certain conditions,
including, among others, the absence of any injunction or other legal
prohibition on the completion of the Stock Purchase, the receipt of required
governmental approvals and/or the expiration of certain waiting periods, the
accuracy of the representations and warranties of the other party (generally
subject to a material adverse effect standard), material compliance by the other
party with its obligations under the Stock Purchase Agreement, and the
completion of the Carve-Out Transactions prior to closing.
Under the Stock Purchase Agreement, BBVA has agreed to take or refrain from
taking certain actions, including, among others, (i) to cause BBVA USA Holdco
and its subsidiaries, including BBVA USA Bank, to operate in the ordinary course
of business consistent with past practice and not to enter into certain types of
transactions between the execution of the Stock Purchase Agreement and the
closing of the Stock Purchase and (ii) subject to certain exceptions, not to (a)
engage in a retail banking business in the U.S. for two years following the
closing of the Stock Purchase, or (b) solicit or hire any employees of BBVA USA
Holdco or its subsidiaries, including BBVA USA Bank, for one year following the
closing of the Stock Purchase.
Under the Stock Purchase Agreement, PNC has agreed to take or refrain from
taking certain actions, including, among others, (i) to use reasonable best
efforts to obtain any necessary regulatory consents and (ii) subject to certain
exceptions contained in the Stock Purchase Agreement, not to solicit or hire any
BBVA employees retained by BBVA for one year following the closing of the Stock
Purchase.
The Stock Purchase Agreement contains customary representations and warranties
of BBVA and PNC. The Stock Purchase Agreement also contains certain
indemnification obligations of each party with respect to breaches of
representations, warranties and covenants and certain other specified matters.
The Stock Purchase Agreement contains certain termination rights for PNC and
BBVA, as the case may be, applicable upon, among other events, (i) the Stock
Purchase having not been completed on or prior to November 15, 2021 (subject to
extension in certain circumstance), or (ii) a breach by the other party that is
not or cannot be cured within 45 days' notice of such breach or is not capable
of being cured by November 15, 2021, which breach would result in the failure of
the conditions to the terminating party's obligations to complete the
transactions contemplated by the Stock Purchase Agreement.
The foregoing description of the Stock Purchase and the Stock Purchase Agreement
does not purport to be complete and is qualified in its entirety by reference to
the Stock Purchase Agreement, which is filed as Exhibit 2.1 hereto, and is
incorporated into this report by reference. The Stock Purchase Agreement and the
above description of the Stock Purchase Agreement have been included to provide
investors and security holders with information regarding the terms of the Stock
Purchase Agreement. It is not intended to provide any other factual information
about PNC, BBVA or their respective subsidiaries and affiliates. The Stock
Purchase Agreement contains representations and warranties of each of PNC, on
the one hand, and BBVA, on the other hand, made solely for the benefit of the
other. The assertions embodied in those representations and warranties are
qualified by information in confidential disclosure schedules that the parties
have exchanged in connection with signing the Stock Purchase Agreement. The
disclosure schedules contain information that modifies, qualifies and creates
exceptions to the representations and warranties set forth in the Stock Purchase
Agreement. In addition, such representations and warranties may apply standards
of materiality in a way that is different from what may be viewed as material by
security holders of, or other investors in, PNC or BBVA. Moreover, the
representations and warranties in the Stock Purchase Agreement were used for the
purpose of allocating risk between PNC, on the one hand, and BBVA, on the other
hand, and not necessarily for establishing matters as fact, and information
concerning the subject matter of the representations, warranties and covenants
may change after the date of the Stock Purchase Agreement, which subsequent
information may or may not be fully reflected in the parties' public
disclosures. Security holders and investors are not third-party beneficiaries
under the Stock Purchase Agreement. Accordingly, you should read the
representations and warranties in the Stock Purchase Agreement not in isolation
but only in conjunction with the other information about PNC and BBVA, or any of
their respective subsidiaries or affiliates



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that the respective companies include in reports, statements and other filings
they make with the Securities and Exchange Commission, and you should not rely
on the representations, warranties and covenants or any descriptions thereof as
characterizations of the actual state of facts or condition of PNC or BBVA, or
any of their respective subsidiaries or affiliates.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This Report contains forward-looking statements regarding our outlook or
expectations with respect to the planned acquisition of BBVA USA Holdco, the
combination of BBVA USA Holdco into PNC and BBVA USA Bank into PNC Bank, and the
impact of the transaction on PNC's future performance.
Forward-looking statements are necessarily subject to numerous assumptions,
risks and uncertainties, which change over time. Future events or circumstances
may change our outlook and may also affect the nature of the assumptions, risks
and uncertainties to which our forward-looking statements are subject. The
forward-looking statements in this Report speak only as of the date of this
Report, and we assume no duty, and do not undertake, to update them. Actual
results or future events could differ, possibly materially, from those that we
anticipated in these forward-looking statements. As a result, we caution against
placing undue reliance on any forward-looking statements.
Forward-looking statements in this Report are subject to the following risks and
uncertainties related both to the acquisition transaction itself and to the
integration of the acquired business into PNC after closing:
• The business of BBVA USA Holdco, including its U.S. banking subsidiary,



BBVA USA Bank, may not perform as we currently project or in a manner
consistent with historical performance. As a result, the anticipated
benefits, including estimated cost savings, of the transaction may be
significantly harder or take longer to achieve than expected or may not be
achieved in their entirety as a result of unexpected factors or events,
including those that are outside of our control.


• The combination of BBVA USA Holdco, including its U.S. banking subsidiary,
BBVA USA Bank, with that of PNC and PNC Bank may be more difficult to
achieve than anticipated or have unanticipated adverse results relating to
BBVA USA Holdco, including its U.S. banking subsidiary, BBVA USA Bank, or
our existing businesses.


• Completion of the transaction is dependent on the satisfaction of
customary closing conditions, which cannot be assured. The timing of
completion of the transaction is dependent on various factors that cannot
be predicted with precision at this point.



These forward-looking statements are also subject to the principal risks and
uncertainties applicable to our businesses generally that are disclosed in PNC's
2019 Form 10-K and 2020 Form 10-Qs and in PNC's subsequent SEC filings. Our SEC
filings are accessible on the SEC's website at www.sec.gov and on our corporate
website at www.pnc.com/secfilings. We have included these web addresses as
inactive textual references only. Information on these websites is not part of
this document.



Item 9.01 Financial Statements and Exhibits.



(d) Exhibits.




Number Description Method of Filing
Stock Purchase Agreement dated as Filed herewith
2.1 of November 15, 2020*
The cover page of this Current
Report on Form 8-K, formatted in
104 Inline XBRL




*The schedules and similar attachments to this exhibit have been omitted
pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to provide a
copy of the omitted schedules and similar attachments on a supplemental basis to
the Securities and Exchange Commission or its staff, if requested.





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