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 TheNational City Center (now PNC Center) formerheadquarters of National City Corp. inCleveland, Ohio | |
| Company type | Public |
|---|---|
| NYSE: NCC | |
| Industry | |
| Founded | 1845; 180 years ago (1845) |
| Defunct | December 31, 2008; 16 years ago (2008-12-31) |
| Fate | Acquired byPNC Financial Services |
| Successor | PNC Financial Services |
| Headquarters | , |
Area served | Regional |
| Products | Consumer banking,Corporate banking,Private banking,Financial analysis,Insurance,Investment banking,Mortgage loans,Private equity,Wealth management,Credit cards |
| Divisions | NatCity Investments |
| Subsidiaries | National City Mortgage |
| Website | Official website at theWayback Machine (archive index) |
National City Corporation was aregional bank holding company based inCleveland, Ohio, founded in 1845; it was once one of the ten largest banks in America in terms of deposits, mortgages and home equity lines of credit. SubsidiaryNational City Mortgage is credited for doing the first mortgage in America. The company operated through an extensive banking network primarily inOhio,Illinois,Indiana,Kentucky,Michigan,Missouri,Pennsylvania,Florida, andWisconsin, and also served customers in selected markets nationally. Its core businesses included commercial and retail banking,mortgage financing and servicing, consumer finance, and asset management. The bank reached out to customers primarily through mass advertising and offered comprehensive banking services online. In its last years, the company was commonly known in the media by the abbreviatedNatCity,[1][2] with itsinvestment banking arm even bearing the official nameNatCity Investments.[3]
In 2007, National City Corp. ranked number 188 on theFortune 500 list, and 9th in terms of revenue in the U.S.commercial banking industry with total assets of about $140 billion.
PNC Financial Services announced October 24, 2008, itspurchase of National City[4] for about $5.2 billion in stock with funds from the U.S. Treasury. At the time of the acquisition, National City had been the 7th largest bank in the United States,[5] two spots ahead of acquirer PNC. The deal was finalized on December 31, 2008, and the National City name was retired on June 14, 2010.
The Wall Street Journal reported on June 6, 2008, that National City Corp. had entered into amemorandum of understanding with federal regulators, effectively putting the bank onprobation. Terms of the confidential agreement, entered into a month earlier with theOffice of the Comptroller of the Currency (which regulates nationally chartered banks), were not known.[6]
On June 10, 2008, National City Corp. confirmed that it had reached agreements with regulators"regarding capital levels, risk-management practices and other aspects of its business." The company stated that there had been no material developments in these areas since these memorandums of understanding were signed in April and May 2008.[7]
National City Bank was founded on May 17, 1845, when a group ofCleveland, Ohio businessmen pooled $50,000 to organize theCity Bank of Cleveland, the first bank opened under the Ohio Bank Act of 1845 in a small town with no gas, electricity, public waterworks, or railroad.[8] Reuben Sheldon and Theodoric C. Severance, formerly of the Fireman's Insurance Company, organized The City Bank of Cleveland. The city's only bank at the time, opened its doors to the public at No. 52 Superior Street.[9]
National City Corporation was one of the principal players in the Dawes Plan to rebuild Germany in the postWorld War I period, contributing $173,000,000 in loans.[10] Part of which included a $30,000,000 insurance on the securities of Allgemeine Elektrizitäts-Gesellschaft (A.E.G.), aka German General Electric, and $35,000,000 to American I.G. Chemical (I.G. Farben).[11]
In April 1973,National City Corporation was formed as the holding company for the National City Bank of Cleveland to allow the company to expand outside ofCuyahoga County through the purchase of other banks.[12]
In February 1992, National City announced that all member banks would change over to operate under theNational City name within three years. Until this time, all acquired banks had continued to operate under the same name that they were using at the time of their acquisition. This change would allow a unified brand through the company and simplify advertising.[13]
In February 1975, National City Corp. announced that it was seeking to acquire the assets of the failed Northern Ohio Bank from theFederal Deposit Insurance Corporation.[14] The acquisition was completed by March 1975.[15]
In March 1975, National City Corp. announced that it was acquiring the Cleveland–based Bank of Cleveland for an undisclosed amount.[16] The acquisition was completed in January 1976.[17]
In December 1975, National City Corp. announced that it was acquiring theElyria–based First National Bank of Elyria for $4.6 million in cash.[18] The acquisition was completed in August 1976.[19]
In April 1977, National City Corp. announced that it was acquiring theDayton–based First National Bank of Dayton for $40 million.[20]
In July 1979, National City Corp. announced that it was acquiring theNorwalk–based Huron County Banking Company for an undisclosed price.[21] The acquisition was completed in May 1979.[22]
In September 1981, National City Corp. announced that it was acquiring theAkron–based Goodyear Bank for an undisclosed price.[23][24]
In December 1981, National City Corp. announced that it was acquiring theToledo–based Ohio Citizens Bancorp for $64 million in cash and notes.[25]
In March 1984, National City Corp. announced that it was acquiring theColumbus–based BancOhio Bancorp for $310 million in stock and cash.[26]
In May 1986, the troubled Cleveland–based Broadview Savings & Loan Company announced that it was selling 18 of its 38 offices to National City for $24 million.[27]
In June 1989, National City Corp. announced that it was acquiring the insolventDayton–based Gem Savings Association without the assistance of federal aid.[28][29] The acquisition was completed in January 1990.[30]
In April 1993, National City Corp. announced that it was acquiring theYoungstown–based Ohio Bancorp for $200 million in stock and cash and integrating it into National City Bank, Northeast.[31] The acquisition was completed in October 1993.[32]
In February 2004, National City Corp. announced that it was acquiring theCincinnati–based Provident Financial Group, with its lead bank Provident Bank and offices located in Southwestern Ohio and Northern Kentucky, for $2.1 billion in stock.[33] The acquisition was completed in July 2004.[34]
In June 2004, National City Corp. announced that it was acquiring theWooster–based Wayne Bancorp for $180 million in cash.[35] The acquisition was completed in October 2004.[36]
In January 1988, National City Corp. announced that it was acquiring theLouisville–based First Kentucky National Corporation for $660 million in stock.[37][38] The acquisition was completed in July 1988 and it gave National City a strong presence in Kentucky plus a token presence in southern Indiana.[39]
In February 1993, First Kentucky National Corp., a wholly owned subsidiary of National City Corp., was renamed National City Bank Kentucky.[40]
In January 1995, National City Corp. announced that it was acquiring theLexington–based United Bancorp of Kentucky Inc. for $63 million in stock.[41][42]
In October 1991, National City Corp. announced that it was acquiring theIndianapolis–basedMerchants National Corporation with its lead bankMerchants National Bank and Trust Company of Indianapolis and 14 other banks for $604 million in stock.[43][44] The acquisition was completed in May 1992.[45]
In July 1994, National City Corp. announced that it was acquiring theKokomo–based Central Indiana Bancorp for $48 million in stock.[46][47]
In January 1998, National City Corp. announced that it was acquiring theFort Wayne–based Fort Wayne National Corporation for $800 million in stock.[48][49] The acquisition was completed in March 1998.[50]
In August 1995, National City Corp. announced that it was acquiring thePittsburgh–basedIntegra Financial Corporation for $2.1 billion in stock.[51] The acquisition was completed in May 1996 for $2.4 billion in stock.[52]
In December 1997, National City Corp. announced that it was acquiring theKalamazoo–based First of America Bank Corporation, with offices in Michigan, Illinois and Indiana, for $7.1 billion in stock.[53][54] The acquisition was completed in March 1998.[50][55]
In November 2003, National City Corp. announced that it was acquiring theSt. Louis–based Allegiant Bancorp for $475 million in stock.[56] The acquisition was completed in April 2004 for $500 million in stock.[57]
In July 2006, National City Corp. announced that it was acquiring theFort Pierce–based Harbor Florida Bancshares for $1.1 billion in stock.[58] The acquisition was completed in December 2006.[59]
In July 2006, National City Corp. announced that it was acquiring theWest Palm Beach–based Harbor Fidelity Bankshares for $1 billion in stock.[60] The acquisition was completed in January 2007.[61]
In May 2007, National City Corp. announced that it was acquiring theClarendon Hills–based MAF Bancorp, with offices in Chicago and Milwaukee, for $1.9 billion in stock.[62] The acquisition was completed in September 2007.[63]
National City went on an acquisition spree from 2004 through 2008, headed by its $2.1 billion purchase of Cincinnati–based Provident Financial Group. Provident Financial Group's banking arm, Provident Bank, specialized in warehouse lending facilities whereby it extended commercial credit lines to mortgage banking firms so that the mortgage banking firms could make loans to their customers and either keep those loans or sell them in the secondary market togovernment-sponsored enterprises (GSEs) or otherinstitutional investors. After the acquisition, National City renamed the divisionNational City Warehouse Resources. The warehouse lending division was a profit center and did not contribute to the bank's downfall. In addition, in 2005, National City acquired Allegiant Bancorp to secure a presence in theSt. Louis, Missouri, market. In 2006, they acquired Fidelity Bankshares Inc. for an estimated $1 billion deal that was half cash, half stock. The bank also acquired Harbor Florida Bancshares Inc. through a $1.1 billion stock deal, with both acquired banks located in Florida; these acquisitions gave National City $7.4 billion of assets and 94 branches in Florida.
On the other side of the ledger, National City sold toBank of America its 83% stake in National Processing Company, which earns fees from processing merchantcredit card transactions. The sale ofSan Jose, California, based First Franklin origination franchise and related servicing platform toMerrill Lynch & Co. was completed on December 30, 2006, for $1.3 billion.
In May 2007, National City announced the purchase of MAF Bancorp Inc., the holding company for MidAmerica Bank. As of June 30, 2006, MidAmerica Bank had the 9th-ranked market share in theChicago metropolitan area (Chicago-Joliet-Naperville) at 2.18%. Following the merger using the same dataset, the combined National City and MidAmerica Banks were expected to rank 4th in the Chicago market with a market share of 3.96% and deposits of more than $10 billion.[64]
In the late 1990s, under former CEO David Daberko, National City began a strategy to increase the yields on its assets. In 1999, the company purchasedFirst Franklin Financial Corp., a large subprime mortgage lender. Instead of selling the loans, as most mortgage companies do, National City retained many of the loans to enhance its net interest spreads. It also aggressively originated loans brought to the company by third-party mortgage brokers, as well as originating a large number of home equity loans. The amount of residential mortgage loans grew rapidly and came to exceed the level of commercial loans. By 2003, National City was the sixth-largest mortgage lender in the country. The company did sell its First Franklin Financial subsidiary in December 2006, but retained a large volume of loans that had been originated by the subsidiary. Management failed to recognize the extent of problems in the subprime market and did not take sufficient aggressive actions to reduce its real estate mortgage portfolio. National City subsequently made several other strategic mistakes, including buying back $3 billion of its stock in early 2007, thereby reducing its level of capital, and expanding into the Florida market in late 2006, just before the real estate market there went into a severe decline. As the subprime mortgage market began going into free fall in mid-2007 and continued into 2008, loan losses mounted. In the third quarter of 2007, the company suffered a net loss of $19 million. By the second quarter of 2008, the company had a net loss of $1.8 billion.[65][66]
On October 9, 2008,The Wall Street Journal ran an article citing unnamed sources indicating that National City was in talks with several other banks for a possible sale.[citation needed] The article namedPittsburgh-basedPNC Financial Services,Toronto-basedScotiabank, andMinneapolis–basedU.S. Bancorp (U.S. Bank) as the leading contenders. A spokesperson for National City declined to comment on the report.[67][68] By taking over National City, Scotiabank would be able to "obtain a larger presence in the U.S. regional banking arena than theirCanadian peers", however Scotiabank CEORick Waugh declined after they could not properly value National's mortgage assets.[69]
On October 24, 2008, PNC announced that it had finalized a purchase agreement for National City. The acquisition was a stock purchase transaction to be completed before the end of 2008. National City would be merged into PNC, and the National City brand would be dissolved.[70][71] The deal was approved by shareholders of both banks on December 23, 2008, and the acquisition was completed on December 31.[72]
The deal made PNC the largest bank inPennsylvania,Ohio, andKentucky, as well as the second largest bank inMaryland andIndiana. It greatly expanded PNC's presence in theMidwest, as well as entering PNC into the Florida market.Pittsburgh,Louisville, Kentucky, andCincinnati were the only three markets before the acquisition in which both banks had a major presence.
In the case of Pittsburgh, the two banks had significant overlap, to the point that it would poseantitrust issues inWestern Pennsylvania, since both banks had the top two market shares in that region.[73] As a result, theUnited States Department of Justice required PNC to sell off 50 National City branches in the Pittsburgh area and 11 more branches in and aroundErie to competitors.[74] On April 7, 2009, PNC reached a deal withBuffalo-basedFirst Niagara Bank to sell 57 of the branches;[75] First Niagara officially took over those branches on September 8, after the signs were changed over from National City during that year'sLabor Day Weekend.[76] The branches not purchased by First Niagara were the four inCrawford County, Pennsylvania, that PNC was still required to divest: one branch inTitusville was sold to The Farmer's National Bank of Emlenton,[77] with the other three (one inConneaut Lake, and the other two inMeadville, including the branch insideWalmart) were sold toMarquette Savings Bank.[78][79]
Although employees at the branches being sold off were retained, there were still heavy layoffs at National City's headquarters in Cleveland. PNC originally stated that 5,800 employees would be laid off corporate-wide across the new organization. In actuality, over 15,000 employees were laid off, all of them from the previous National City, with PNC losing customer and deposit market share in the Cleveland area as a result. National City Bank had been the largest bank in the Cleveland market and held the largest deposit share of all of its competitors. After the PNC merger, crosstown rivalKeyBank became the largest bank in Cleveland, gaining a significant share of deposits once held by National City; KeyBank would later buy First Niagara and move into PNC's home market of Pittsburgh with the former National City branches PNC had to sell off.
The National City name lasted into 2010, since it would take PNC some time to integrate the two banks together.[80] Despite the branch closures and the sale of others to First Niagara and Emclaire, PNC still ended up with a 46% market share in Pittsburgh,[81] over three times the market share of second-placeCitizens Financial Group, with 13%.[75] PNC began to convert the National City branches that were not sold off or closed on November 7, 2009,[82] starting withPennsylvania (where the two had the most overlap), Florida, and theYoungstown &Steubenville, Ohio regions.[81] The conversion of National City to PNC was completed in June 2010, in the following phases:[83]
National City Bank of Cleveland holders approved the previously proposed formation of a multibank holding company known as National City Corp. Officials said two shares of the new company would be exchanged for each outstanding share of the bank, subject to approval of regulatory authorities. Effective date is expected to be April 30, they added.
Northern Ohio Bank, a five-year–old Cleveland bank with assets of over $100 million, collapsed Feb. 14 under loans that exceeded its capital and net worth. A number of the defaulted loans reportedly were made to Michigan firms. Northern Ohio Bank has been purchased by National City Bank of Cleveland, and the Federal Deposit Insurance Corp. has taken charge of the loans, amid reports that some of them were secured by worthless stock and $200,000 in stolen municipal bonds.
National City Bank of Cleveland, which a month ago acquired the most illiquid bank in Cleveland, yesterday disclosed plans to acquire a bank that claims to be the most liquid in the country.
National City Corp. said it completed the acquisition of Bank of Cleveland. Terms weren't disclosed, but the company said the bank has assets of $29.7 million.
National City Corp. said it reached an agreement in principle with First National Bank of Elyria, Ohio, to acquire the Elyria bank for about $4.6 million in cash.
National City Corp said it completed the previously reported acquisition of First National Bank of Elyria, Ohio. for $4.6 million in cash.
National City Corp. said it agreed in principle to acquire First National Bank of Dayton. Ohio. for stock currently valued at more than $40 million.
National City Corp. and Huron County Banking Co. said they agreed in principle on National City's acquisition of Huron for cash.
National City Corp. said it completed the previously announced acquisition of Huron County Banking Co., Norwalk, Ohio.
The National City Corporation, the holding company of Cleveland's second–largest bank, said it intended to buy the Goodyear Bank of Akron, a subsidiary of theGoodyear Tire and Rubber Company, for an undisclosed price.
Goodyear Tire & Rubber Co. said it agreed in principle to sell its banking subsidiary, Goodyear Bank, to National City Corp., a Cleveland-based bank holding company.
National City Corp. said it agreed to acquire Ohio Citizens Bancorp, a Toledo–based bank holding company, for about $64 million in cash and notes.
National City Corp. said it signed a definitive agreement to acquire BancOhio Corp., a Columbus-based bank holding company, for about $310 million.
Broadview Savings & Loan Co. has agreed to sell 18 offices, almost half its branch network, to subsidiaries of National City Corp., including the National City Bank of Akron... The sale of the Akron and Stow offices would give National City Bank of Akron 30 branches. The Broadview offices in Twinsburg and Brunswick would become part of the National City Bank of Cleveland. The transfers would leave Broadview with 19 branches in Cuyahoga County and one in Geauga County, as well as service terminals at Pick–N–Pay and other grocery stores in the Cleveland area.
National City Corp. of Cleveland announced Friday, an agreement to acquire Gem Savings Association, an insolvent savings and loan in Dayton, in a deal valued at up to $102 million.
National City Corp. moved to enter the thrift business by agreeing to acquire Gem Savings Association, a troubled Dayton, Ohio, thrift.
National City Corp. agreed to acquire First Kentucky National Corp., Louisville, in an exchange of stock valued at $660 million.
The National City Corporation of Cleveland, the second-largest bank holding company in Ohio, announced yesterday that it had reached agreement to acquire the First Kentucky National Corporation of Louisville, the largest banking company in that state. If the $660 million transaction is completed, as expected, the combined institution would be the 34th-largest bank holding company in the United States, with about $20 billion in assets.
On March 29, First Kentucky National Corp. will be dissolved as a holding company and replaced by National City Bank Kentucky, which will serve as an umbrella for the banks that are currently part of First Kentucky National.
Eight banks in Central and southeast Kentucky controlled by Lexington businessman James L. Rose will become branches of National City Bank under an agreement announced yesterday. National City's parent company, Cleveland–based National City Corp., plans to issue 2.5 million shares of its common stock, valued at about $63 million, in connection with the merger with Rose's United Bancorp of Kentucky Inc... The United banks will be merged into National City Bank, Kentucky, which has $6.6 billion in assets. National City has banks in Ashland, Bowling Green, Lexington, Louisville, Oldham County and Owensboro in Kentucky, and Corydon, Jeffersonville, New Albany and Salem in Indiana.
National City Corp, Cleveland, said that it reached a definitive agreement to acquire Lexington Kentucky–based United Bancorp of Kentucky Inc, a $600 million–asset bank holding company, by issuing to United Bancorp 2.5 million common shares.
National City Corp agreed to buy Merchants National Corp in a stock swap valued at about $604 million.
National City Corp completed its $604 million acquisition of Merchants National Corp through a stock transaction. The merger gives National City assets of about $30 billion.
National City Corp. has announced plans to purchase Central Indiana Bancorp in Kokomo in a deal valued at $48 million. National City, based in Cleveland, will expand its presence in Indiana from 11 to 13 counties with its latest purchase. The company first entered the market with the 1992 purchase of Merchants National Bank in Indianapolis. Central Indiana Bancorp is the thrift holding company of First Federal Savings Bank, which has five branches in Howard and Miami counties. The holding company's assets total $243 million... The deal is expected to close early next year.
National City Corp. agreed to acquire Fort Wayne National Corp., a $3.3 billion-asset bank in Indiana, in a stock transaction valued at about $774.5 million.
National City Corp. will buy Fort Wayne National in a stock swap valued at $800 million. With the acquisition, National City will leap from a small–market presence in supermarket branches to one of the largest banks in the city and the second-largest bank in the state.
Integra Financial Corp., one of the largest banks in Erie and western Pennsylvania, reportedly will be sold to National City Corp. of Cleveland, Ohio. The two banks planned a teleconference from the Pittsburgh Hilton at noon today to announce the $2.1 billion stock acquisition.
The signs won't come down until May 31, but Integra Bank and $14.4 billion-asset parent Integra Financial Corp. officially ceased to exist yesterday. National City Corp. said it had completed the $2.4 billion acquisition, making it Pittsburgh's new No. 3. The Cleveland-based bank said it expects to finish paring 1,200 of Integra's 5,200 workers by month's end.
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