National City Corp.
National City Corporation was a regional bank holding company based in Cleveland, 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. Subsidiary National City Mortgage is credited for doing the first mortgage in America. The company operated through an extensive banking network primarily in Ohio, Illinois, Indiana, Kentucky, Michigan, Missouri, Pennsylvania, Florida, and Wisconsin, 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 abbreviated NatCity, with its investment banking arm even bearing the official name NatCity Investments.
In 2007, National City Corp. ranked number 188 on the Fortune 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, its purchase of National City 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, 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.
Regulatory scrutiny
The Wall Street Journal reported on June 6, 2008, that National City Corp. had entered into a memorandum of understanding with federal regulators, effectively putting the bank on probation. Terms of the confidential agreement, entered into a month earlier with the Office of the Comptroller of the Currency, were not known.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.
History
National City Bank was founded on May 17, 1845, when a group of Cleveland, Ohio businessmen pooled $50,000 to organize the City 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. 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.National City Corporation was one of the principal players in the Dawes Plan to rebuild Germany in the post World War I period, contributing $173,000,000 in loans. Part of which included a $30,000,000 insurance on the securities of Allgemeine Elektrizitäts-Gesellschaft, aka German General Electric, and $35,000,000 to American I.G. Chemical.
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 of Cuyahoga County through the purchase of other banks.
In February 1992, National City announced that all member banks would change over to operate under the National 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.
Expansion in Ohio
In February 1975, National City Corp. announced that it was seeking to acquire the assets of the failed Northern Ohio Bank from the Federal Deposit Insurance Corporation. The acquisition was completed by March 1975.In March 1975, National City Corp. announced that it was acquiring the Clevelandbased Bank of Cleveland for an undisclosed amount. The acquisition was completed in January 1976.
In December 1975, National City Corp. announced that it was acquiring the Elyriabased First National Bank of Elyria for $4.6 million in cash. The acquisition was completed in August 1976.
In April 1977, National City Corp. announced that it was acquiring the Daytonbased First National Bank of Dayton for $40 million.
In July 1979, National City Corp. announced that it was acquiring the Norwalkbased Huron County Banking Company for an undisclosed price. The acquisition was completed in May 1979.
In September 1981, National City Corp. announced that it was acquiring the Akronbased Goodyear Bank for an undisclosed price.
In December 1981, National City Corp. announced that it was acquiring the Toledobased Ohio Citizens Bancorp for $64 million in cash and notes.
In March 1984, National City Corp. announced that it was acquiring the Columbusbased BancOhio Bancorp for $310 million in stock and cash.
In May 1986, the troubled Clevelandbased Broadview Savings & Loan Company announced that it was selling 18 of its 38 offices to National City for $24 million.
In June 1989, National City Corp. announced that it was acquiring the insolvent Daytonbased Gem Savings Association without the assistance of federal aid. The acquisition was completed in January 1990.
In April 1993, National City Corp. announced that it was acquiring the Youngstownbased Ohio Bancorp for $200 million in stock and cash and integrating it into National City Bank, Northeast. The acquisition was completed in October 1993.
In February 2004, National City Corp. announced that it was acquiring the Cincinnatibased Provident Financial Group, with its lead bank Provident Bank and offices located in Southwestern Ohio and Northern Kentucky, for $2.1 billion in stock. The acquisition was completed in July 2004.
In June 2004, National City Corp. announced that it was acquiring the Woosterbased Wayne Bancorp for $180 million in cash. The acquisition was completed in October 2004.
Expansion in Kentucky
In January 1988, National City Corp. announced that it was acquiring the Louisvillebased First Kentucky National Corporation for $660 million in stock. The acquisition was completed in July 1988 and it gave National City a strong presence in Kentucky plus a token presence in southern Indiana.In February 1993, First Kentucky National Corp., a wholly owned subsidiary of National City Corp., was renamed National City Bank Kentucky.
In January 1995, National City Corp. announced that it was acquiring the Lexingtonbased United Bancorp of Kentucky Inc. for $63 million in stock.
Expansion in Indiana
In October 1991, National City Corp. announced that it was acquiring the Indianapolisbased Merchants National Corporation with its lead bank Merchants National Bank and Trust Company of Indianapolis and 14 other banks for $604 million in stock. The acquisition was completed in May 1992.In July 1994, National City Corp. announced that it was acquiring the Kokomobased Central Indiana Bancorp for $48 million in stock.
In January 1998, National City Corp. announced that it was acquiring the Fort Waynebased Fort Wayne National Corporation for $800 million in stock. The acquisition was completed in March 1998.
Expansion in Pennsylvania
In August 1995, National City Corp. announced that it was acquiring the Pittsburghbased Integra Financial Corporation for $2.1 billion in stock. The acquisition was completed in May 1996 for $2.4 billion in stock.Expansion in Michigan
In December 1997, National City Corp. announced that it was acquiring the Kalamazoobased First of America Bank Corporation, with offices in Michigan, Illinois and Indiana, for $7.1 billion in stock. The acquisition was completed in March 1998.Expansion in Missouri
In November 2003, National City Corp. announced that it was acquiring the St. Louisbased Allegiant Bancorp for $475 million in stock. The acquisition was completed in April 2004 for $500 million in stock.Expansion in Florida
In July 2006, National City Corp. announced that it was acquiring the Fort Piercebased Harbor Florida Bancshares for $1.1 billion in stock. The acquisition was completed in December 2006.In July 2006, National City Corp. announced that it was acquiring the West Palm Beachbased Harbor Fidelity Bankshares for $1 billion in stock. The acquisition was completed in January 2007.
Expansion in Illinois and Wisconsin
In May 2007, National City Corp. announced that it was acquiring the Clarendon Hillsbased MAF Bancorp, with offices in Chicago and Milwaukee, for $1.9 billion in stock. The acquisition was completed in September 2007.Recent transactions
National City went on an acquisition spree from 2004 through 2008, headed by its $2.1 billion purchase of Cincinnatibased 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 to government-sponsored enterprises or other institutional investors. After the acquisition, National City renamed the division National 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 the St. 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 to Bank of America its 83% stake in National Processing Company, which earns fees from processing merchant credit card transactions. The sale of San Jose, California, based First Franklin origination franchise and related servicing platform to Merrill 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 the Chicago metropolitan area 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.