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PNC sells mortgage unit
October 2, 2000: 1:06 p.m. ET

Washington Mutual buys residential loan portfolio for $605M cash
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NEW YORK (CNNfn) - Washington Mutual Inc. agreed Monday to acquire PNC Financial Services Group Inc.'s residential mortgage business for $605 million cash, making it the third-largest mortgage lender in the nation.

Washington Mutual will buy PNC Mortgage Corp. and PNC Mortgage Securities Corp. at a 54 percent premium above the "agreed-upon fair-market value of PNC's equity," the company said.

After completion of the acquisition, Seattle-based Washington Mutual (WM: Research, Estimates) will manage a mortgage servicing portfolio of about $291 billion.

"In one move, we have greatly accelerated Washington Mutual's progress in achieving one of its key business initiatives: combining the strengths of a portfolio lender and mortgage banker to enhance our capacity to originate loans throughout the entire interest-rate cycle and to do so through a broad national footprint," Washington Mutual Chairman, President and CEO Kerry Killinger said.

Pittsburgh-based PNC (PNC: Research, Estimates) said it will use proceeds of the sale for various corporate purposed, which could include repurchasing shares of common stock.

Shares of Washington Mutual rose 19 cents to $40 in midday trading, while shares of PNC rose 50 cents to $65.50. Back to top


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