National City Corp.
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National City Corp.
Type: Public Company
Address: 1900 East 9th Street, Cleveland, Ohio 44114-3484, U.S.A.
Telephone: (216) 575-2000
Fax: (216) 575-2509
Employees: 20,306
Total Assets: $2.91 billion (1994)
Stock Exchanges: New York
Incorporated: 1845 as City Bank of Cleveland
SIC: 6712 Bank Holding Companies; 6021 National Commercial Banks; 6022 State Commercial Banks; 6035 Federal Savings Institutions
With more than $32 billion in assets and over 600 branch offices in Ohio, Kentucky, and Indiana, National City Corp. is the third-largest bank holding company headquartered in Ohio and ranks among the top twenty banks in the United States in terms of assets. While the 150-year-old institution grew rapidly in the late twentieth century era of bank consolidation, its leaders professed no urge to build National City into a nationwide entity. Acquisitions have therefore focused on garnering "super-regional" status and maintaining independence. Reflecting its long-term, ongoing shift from commercial to retail banking, National City hoped to boost market share within its Ohio, Kentucky, Indiana, and (beginning in 1995) Pennsylvania markets by expanding its auto leasing and credit card businesses and boosting phone, computer, and video banking technology.
The company was founded in 1845, shortly after the Ohio Bank Act of that year brought a measure of stability to the state's banking system. Cleveland had endured three years without a bank of any kind and the City Bank of Cleveland, as National City Bank was initially known, was the first to be chartered under the new law. Ruben Sheldon and Theodoric C. Severance, both of the Fireman's Insurance Company, led the new institution. Formerly president of Fireman's Insurance, Sheldon assumed those same duties at City Bank. Severance, formerly secretary at the insurance company, started his career in banking as a teller.
City Bank opened for business in July, providing its clients with secured paper money, a safe place to deposit savings, and a source of funds for commercial loans. Its function as a lender supported the oil, iron, steel, shipping, and railroad industries that would be vital to Cleveland's development as an important Midwestern city. During its first five years in operation, the City Bank's capital stock tripled from $50,000 to $150,000. Lemuel B. Wick served as president in the 1850s, during which time the bank's growth propelled two moves to successively larger headquarters.
Rampant inflation during the Civil War crystallized formerly divided opinions on a unified currency structure, prompting the 1863 ratification of the National Banking Act. The new law created a national currency secured by United States bonds, as well as a new system of federally regulated banks. These "national" banks were required to purchase bonds worth up to one-third of their capital stock and to deposit those bonds with the U.S. treasury as security for a new system for national currency. City Bank waited until its original state charter expired in 1865 before complying with the new law and becoming National City Bank that year.
W. P. Southworth succeeded Lemuel Wick as president upon the latter's death in 1873. In 1889 long-time employee John F. Whitelaw became president. A 1995 company history credited Whitelaw with establishing the conservative character that would continue to distinguish National City Bank throughout its history.
National City Bank grew and profited throughout the late nineteenth century, but remained one of the smaller commercial banks. Assets rose steadily, passing the $1 million mark in 1881, $1.5 million in 1890, and $2 million in 1901. This consistent rate of growth would have been admirable during a normal period, but was especially extraordinary given the severe panic (or national recession) of the mid-1890s, when almost 500 banks failed nationwide.
Whitelaw died in 1912 after serving the bank for more than half a century. His abrupt departure opened the door to a takeover by James M. Hoyt, who purchased a total of 1,000 shares (including Whitelaw's 842) to gain control of National City. The new stockholder moved the business, increased its capital stock to $500,000, expanded the board of directors from 5 to 25, and got Charles A. Paine elected president by the end of the year. National City opened an imposing new headquarters in 1913, replete with tile floors, marble, and luxurious fixtures. Rapid asset growth during this period seemed to reflect the bank's new image, doubling from $2.5 million in 1912 to $5.7 million in 1914. By that time, National City Bank ranked fourth among Cleveland's banks in terms of combined capital and surplus, and sixth in deposits and total assets. Nevertheless, a centennial history characterized the institution at this juncture as "plodding along nicely, but down among the minors," having not participated in the wave of mergers and acquisitions that characterized this period in banking history.
In an effort to decentralize and stabilize the nation's monetary system (which was then concentrated in New York City) the U.S. government ratified the Federal Reserve Act in 1913, creating a system of 12 regional banks. This new organization bolstered the public's confidence in national banks by requiring all, including National City, to deposit three percent of their capital and surplus with the regional Reserve bank for safekeeping. Although many bankers initially opposed the creation of the Federal Reserve, the agency helped prevent panics and runs on banks, gave the federal government more control over the country's money supply, made commercial credit more available, and inhibited venturesome banking practices.
National City grew quickly during World War I, and shared its good fortune by purchasing $100 million in U.S. bonds in support of the country's war effort. Assets increased from $4.5 million in 1913 to $15.5 million in 1919. Bank President Paine was elected to the newly created title of CEO and Chairman in 1918, and Hoyt V. Shulters, formerly of East Ohio Gas Co., advanced to the presidency.
Assets nearly doubled to $30.6 million by 1925 and totaled about $40 million by the end of this prosperous decade, when National City ranked second among Cleveland's national banks and fifth overall. The institution's conservative management sheltered it from the financial crisis of October 1929 and the devastating depression that followed. While over 30 percent of America's banks failed from 1929 to 1933, National City fared considerably better: its assets only declined 25 percent, to $29 million. In fact, National City was Cleveland's only major bank to maintain full access to accounts and was first to reopen after the March 1933 bank holiday.
The company also endured an unexpected management shakeup during this period. In 1932 President Hoyt Shulters died, and was replaced on an interim basis by Charles B. Reynolds. Sidney B. Congdon, who had served as a national bank examiner for the Cleveland, Pittsburgh, and Cincinnati region throughout the fiscal crisis, was elected president of National City in 1933. His long list of credentials, including Chief Examiner of the Reconstruction Finance Corporation, further bolstered National City's reputation for stability. The bank quickly resumed its rapid growth pattern, with assets ballooning from $35 million in 1932 to $475.5 million by 1944.
Like many other national commercial banks, National City began to move decisively into full-service retail banking in the post-World War II era, adding a trust department, personalized checks and check sorting, home service representatives, and 24-hour depository services at each branch. The company also began investing in automation, purchasing its first computer in 1959. By the 1960s, National City had 24 branch offices and had crossed the $1 billion asset mark.
The bank took its first step toward becoming a major regional player in 1973, when it created National City Corp. as a holding company and made National City Bank its primary subsidiary. This new corporate structure enabled the company to bypass some of the most stringent banking regulations and begin what it called a "cautious, well-planned strategy of acquiring affiliate banks." The charge was led by Julian McCall, who had begun his banking career at First National Bank of New York (later Citibank) in 1948 and joined National City as a first vice-president in 1971. He advanced to president and was elected to the board of directors within five months, and became chief executive in 1978 and chairman a year later. McCall guided National City Corp. through an intense series of in-state acquisitions. From 1974 to 1984, National City acquired eleven relatively small ($300 million to $750 million asset) banks, thereby increasing its asset level to about $6.5 billion. Unlike many of its competitors, National City maintained its affiliates' historical names and autonomous marketing programs, forming a federation of banks with unified back office operations.
Throughout this period of expansion, however, the Cleveland bank remained unable to break into Ohio's vital Columbus and Cincinnati markets. Then, in 1984, National City burst onto the state capital scene through the $315 million purchase of Columbus's BancOhio Corp. This union of Ohio's second- and third-largest banks created a $12.5 billion asset powerhouse that was 30 percent bigger than its next largest rival, BancOne. BancOhio also gave National City a leading 35 percent share of Columbus's deposits. The combination of National City's strength in commercial banking with BancOhio's retail forte more than doubled the resulting entity's number of branches and expanded its geographic reach to 53 of Ohio's 88 counties, or over 80 percent of the state's population. While McCall acknowledged that these increases were important, he characterized the union as an anticipation of the industrywide shift to interstate banking that occurred throughout the late 1980s. By 1990, federal strictures against interstate banking became practically irrelevant. The merger with BancOhio not only shielded National City from acquisition by an out-of-state bank, but also set the Cleveland institution up as a regional leader.
Aside from these positives, however, Forbes pointed out a few drawbacks to the union, including BancOhio's marginal profitability in the early 1980s (.32 percent, compared to a peer group average of .8 percent), and the fact that National City's long-term debt doubled to $200 million with the acquisition. The new parent addressed these problems quickly, closing 70 branches and furloughing 700 full-time employees in an effort to cut costs by reconciling overlapping operations. By 1985, BancOhio contributed $30 million of National City's $108 million in earnings, and helped it become Ohio's second bank to be listed on the New York Stock Exchange in 1986. During this period, cautious Midwestern banks like National City began to attract analysts' attention because many did not buy into the risky lending and investment strategies that ruined so many financial institutions in the 1980s.
In the meantime, National City had shored up its internal operations through joint ventures in electronic banking, including charter membership in Money Station, Ohio's largest system of automatic teller machines, as well as point-of-sale debit cards. The company forged strong ties with its locales by creating National City Community Development Corp., a for-profit development corporation that infused low and moderate income neighborhoods in the bank's key metropolitan markets with almost $50 million from 1982 through 1995. This and other community-conscious efforts earned the bank an outstanding rating from the Office of the Comptroller of the Currency for complying with the Community Reinvestment Act.
J. Robert Killpack, National City Corp. president since 1980, succeeded Julian McCall upon his 1986 retirement. Killpack only served in that capacity until the fall of 1987, when he retired and was succeeded by Edward B. Brandon. Called "the most popular executive at National City Corp." in an August 1986 article in the Plain Dealer, Brandon had earned his undergraduate degree in economics at Northwestern University and an MBA from the Wharton School of Banking and Finance. He moved up through National City Bank's ranks, becoming president of National City Corp.'s largest affiliate in 1984 and CEO one year later. He advanced to the parent company's presidency in 1986, and had a brief wait in the wings until Killpack's retirement. According to an October 1987 article in the Plain Dealer, Brandon's "one overriding priority" was "an interstate bank merger to get back into the running for status as a super-regional bank."
In pursuit of that goal, Brandon engineered several major acquisitions, both within and across Ohio's borders, in the late 1980s and early 1990s. One of the most significant of these came in 1988, when National City beat out four other bidders to win the hand of $6 billion (asset) First Kentucky National Corp. of Louisville. Like the BancOhio acquisition, the addition of First Kentucky boosted National City's size (making it America's eleventh-largest bank, according to market capitalization) and helped it remain independent of the even larger national banks then moving into the Midwest.
Nevertheless, the acquisition drew criticism from some industry analysts and stockholders because it diluted National City's stock by 11 percent during a "banking bust" that Fortune magazine characterized as the industry's most difficult period since the Great Depression. Over one thousand American banks failed from 1985 to 1992. Non-performing loans and correspondingly high loan loss provisions during this period battered National City's net. Earnings flattened, then started to erode in 1989, as non-performing assets rose to peak at $468 million in 1991.
Brandon incurred more criticism that year when, after eight months of behind-the-scenes negotiations, National City pursued a hostile, highly publicized takeover of Ameritrust Corp., another Cleveland bank. National City was soon joined by Society Corporation, NBD, and BancOne in competition for Ameritrust. Society won the rivalry in September, and the rebuffed National City acquired Merchants National Corp. of Indianapolis in October. In the two months that followed, Wall Street registered its disapproval, driving the bank's stock down by 20 percent.
While Brandon continued to defend his acquisition strategy, he acknowledged some of the criticism, telling Brian Hellauer of American Banker that "We had acquired an awful lot of banks in a ten-year period, and in the process had gone from one of the most efficient banks in the industry to where we were at best mediocre." National City hired top consulting firm McKinsey & Co. to help guide a two-year reorganization dubbed the "Vision" plan. Economizations--especially at BancOhio, where costs ran up to 20 percent higher than National City's other subsidiaries--helped cut from $65 million to $120 million in annual operating costs. Between 1992 and 1994, all of the holding company's major affiliates took on the National City name, presenting a unified marketing front. National City also continued to decrease its dependence on interest income (already battered by loan losses) and focus more strongly on fee income. Interest income declined 24 percent from 1990 to 1993, while non-interest income increased by 48 percent. During this same period, National City's overall net grew by over 72 percent, from $249 million to $430 million. By early 1993, the company's stock price reflected these improvements, having recovered 71 percent from its late 1991 low. Brandon had repudiated his detractors by mid-1995, having boosted National City's stock 178 percent from 1985 to 1995 and increased assets from $14 billion to $35 billion.
David A. Daberko succeeded Brandon as president of National City Corp. in 1993 and CEO in 1995. The Phi Beta Kappa graduate of Denison University with an MBA from Case Western Reserve University had made his entire professional career at National City, advancing through the investment and corporate banking ranks of National City Bank. Upon his ascension to the presidency in 1993, Daberko asserted that "There will always be strong regional banks, and we will be one of them."
Although Daberko had previously maintained that market share gains would fuel National City's growth in the mid-1990s, the $2.1 billion acquisition of Pittsburgh's Integra Financial Corp. announced in August 1995 pushed the Cleveland bank over the $50 billion asset mark and into the list of the nation's top twenty banks. Faced with a new chorus of criticism, Daberko quickly announced a 29 percent cut in Integra's staff and rationalization of its 260 western Pennsylvania branches. If the new CEO continued to follow in his predecessors' footsteps throughout the late 1990s, National City could be expected to enjoy the double-digit earnings increases forecast for Midwest banks in the years leading up to the turn of the twenty-first century.
Principal Subsidiaries
Buckeye Service Corp.; Circle Equity Leasing Corporation of Michigan; Circle Leasing Corp.; Gem America Realty & Investment Corp.; Madison Bank & Trust Co.; Merchants Capital Management, Inc.; Merchants Mortgage Corp.; Merchants Service Corp.; Money Station, Inc.; Mortgage Company of Indiana, Inc.; National Asset Management Corp.; National City Bank; National City Bank, Ashland (99.5%); National City Bank, Columbus; National City Bank, Dayton; National City Bank, Indiana; National City Bank, Kentucky; National City Bank, Northeast; National City Bank, Northwest; Naional City Bank, Southern Indiana; National City Capital Corp.; National City Community Development Corp.; National City Credit Corp.; National City Financial Corp.; National City Holding Co.; National City Investments Capital, Inc.; National City Life Insurance Co.; National City Mortgage Co.; National City Processing Co.; National City Trust Co.; National City Venture Corp.; NC Acquisition, Inc.; NCC Services, Inc.; Ohio National Corporation of Columbus; Second Premises Corp.
Further Reading
Andrews, Greg, "Merchants Deal 'a Blockbuster'," Indianapolis Business Journal, November 4, 1991, p. 1.
Bennett, Robert A., "Brandon Dreams Expansion," United States Banker, March 1992, p. 27.
Benton, Elbert J., A Century of Progress: Being a History of the National City Bank of Cleveland from 1845 to 1945, Cleveland: National City Bank, 1945.
"Buckeye Banker," Barron's, November 24, 1986, p. 54.
Byrne, Harlan S., "National City Corp.," Barron's, September 17, 1990, p. 56.
Foster, Pamela E., "National City Sharpens Ax," Business First Columbus, August 12, 1991, pp. 1, 9.
Fuller, John, "BancOhio, National City Wed," Cleveland Plain Dealer, September 29, 1984, p. 3B.
------, "A Tale of Two Bankers," Cleveland Plain Dealer, September 30, 1984, p. 1E.
------, "Banks Map Big Future with Merger," Cleveland Plain Dealer, October 2, 1984, p. 1E.
Hellauer, Brian, "National City's Vision: A Strong, Independent Regional Bank," American Banker, November 8, 1993, p. 1A.
Hill, Miriam, "National City Chief Pushes Bid," Cleveland Plain Dealer, May 16, 1991, p. 1A.
------, "Mergers Help Bank Industry," Cleveland Plain Dealer, May 22, 1991, p. 1G.
------, "National City to Slash Costs, Jobs," Cleveland Plain Dealer, August 14, 1991, p. 1H.
------, "National City to Buy Ohio Bancorp," Cleveland Plain Dealer, April 3, 1993, p. 1C.
------, "National City CEO Passes the Baton," Cleveland Plain Dealer, July 25, 1995, p. 1C.
------, "National City Becomes 17th Largest Bank with Purchase," Cleveland Plain Dealer, August 28, 1995, p. 1A.
Klinkerman, Steve, "National City's Brandon Is Winning Bet in Indiana," American Banker, March 23, 1993, pp. 1, 13.
------, "It's Back to Basics for National City Chief," American Banker, November 29, 1993, p. 4.
Mahoney, Mike, "Brandon Is Contender," Cleveland Plain Dealer, August 5, 1986, p. 1D.
------, "Deregulation Will Test New Leaders of Banks Here," Cleveland Plain Dealer, October 13, 1987, p. 1E.
"National City Bank 150th Anniversary," Cleveland Plain Dealer, May 17, 1995, p. S1.
Serwer, Andrew E., "Banking Boom in the Heartland," Fortune, July 18, 1988, p. 21.
Shingler, Dan, "Same Bank, Two Views," Crain's Cleveland Business, p. 11.
Tippett, Karen, "National City: Noallrills Banking," FW, August 21, 1990, p. 19.
Weberman, Ben, and John Heins, "The Doughnut or the Hole," Forbes, December 17, 1984, p. 94.
— April Dougal Gasbarre
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National City Corp.
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National City Corp.
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| Former type | Public (NYSE:NCC)[1] |
|---|---|
| Industry | Super regional banks |
| Fate | Acquired by PNC Financial Services |
| Founded | 1845 |
| Defunct | 2008 |
| Headquarters | Cleveland, Ohio, USA |
| Products | commercial and retail banking, mortgage financing and servicing, consumer finance and asset management |
National City Corporation was a regional bank holding company based in Cleveland, Ohio, USA, 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,[2][3] with its investment banking arm even bearing the official name NatCity Investments.[4]
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,[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.
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Contents
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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 (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]
History
National City Bank was founded on May 17, 1845, when a group of Cleveland 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.[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]
Recent transactions
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 to government-sponsored enterprises (GSEs) 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 dollar 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 (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.[10]
Strategic changes and subsequent downfall
In the late 1990s, under former CEO David Daberko, National City began a strategy to increase the yields on it assets. In 1999, the company purchased First 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.[11][12]
Acquired by PNC
For more details on this topic, see National City acquisition by PNC.
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. The article named Pittsburgh-based PNC Financial Services, Toronto-based Scotiabank, and Minneapolis-based U.S. Bancorp as the leading contenders. A spokesperson for National City declined to comment on the report.[13][14] On October 24, 2008 PNC announced that it had finalized a purchase agreement for National City.
The acquisition was a stock purchase transaction completed before the end of 2008. National City will be merged into PNC, and the National City brand is to eventually be dissolved.[15][16] The deal was approved by shareholders of both banks on December 23, 2008.
The deal made PNC the largest bank in Pennsylvania, Ohio, and Kentucky, as well as the second largest bank in Maryland and Indiana. It greatly expanded PNC's presence in the Midwest as well as entering the Florida market. Pittsburgh, Louisville, Kentucky, and Cincinnati were the only three markets before the acquisition deal that both banks had a major presence in.
In the case of Pittsburgh, the two banks had significant overlap to the point it would pose antitrust issues in Western Pennsylvania, since both banks had the top two market shares in the Pittsburgh region.[17] As a result, the United States Department of Justice required PNC to sell off 50 National City branches in the Pittsburgh area and 11 more branches in and around Erie to competitors.[18] On April 7, 2009, PNC reached a deal with Buffalo-based First Niagara Bank to buy 57 of the branches,[19] and officially took over those branches on September 8 after the signs were changed over from National City during Labor Day Weekend.[20] The branches not purchased by First Niagara were the four in Crawford County, Pennsylvania that PNC had to divest; of those four, one branch in Titusville was sold to Emclaire Financial Group[21] while the other three (one in Conneaut Lake, the other two in Meadville, including the branch inside Wal-Mart) were sold to Marquette Savings Bank.[22] Although employees at the branches being sold off were retained, there were still heavy layoffs at National City's headquarters in Cleveland.
The National City name, as expected, lasted well into 2009 since it would take PNC some time to integrate the two banks together.[23] Despite the branch closures and the sale of others to First Niagara, PNC still ended up with a 46% market share in Pittsburgh,[24] over three and a half times the market share of second-place Citizens Financial Group with 13%.[19] PNC began to convert the National City branches that were not sold off or closed on November 7, 2009,[25] starting with Pennsylvania (where the two had the most overlap), Florida, and the Youngstown & Steubenville, Ohio regions.[24] The conversion of National City to PNC was completed in June 2010, in the following phases:[26]
- February 19, 2010[27] Central & Southern Ohio (including Cincinnati, Dayton, and the state capital of Columbus[28]), Southeastern Indiana, and all of Kentucky.
- April 12, 2010[29] Northern Ohio (including National City's home market of Cleveland,[30] Akron, Canton, and Toledo) and all of Michigan.
- June 14, 2010[31] The rest of Indiana and all of Illinois,[32] Missouri, and Wisconsin.
Combined PNC and National City Facts[33]
- One of the nation’s top five banks by deposits and branches
- 60,000 employees across the United States and abroad
- 6,000 ATMs
- 2,600 branches
- $279 billion in assets
- $181.1 billion in deposits
- Shareholder equity $27.5 billion
- Assets Under Mgmt. $121 billion
- Customers- Approximately 5 million consumer and small business customers.
Historical timeline[34]
From pioneer times to the Great Depression
- 1845: Reuben Sheldon and Theodoric C. Severance, formerly of the Fireman's Insurance Company, organize The City Bank of Cleveland.
- 1865: City Bank of Cleveland becomes National City Bank of Cleveland, receiving a national charter that includes the right to print federal money. This responsibility lasts until the 20th century, when the Federal Reserve assumes the function of printing all U.S. currency.
- 1881: National City Bank records more than $1 million in assets.
- 1901: National City Bank passes $2 million in assets.
- 1912–1913: National City Bank's assets rise from $2.5 million to $4.5 million.
- 1914–1918: National City Bank purchases $100 million in U.S. Bonds to help finance World War I and sees its own assets increase to $15.5 million.
- 1929: National City Bank accumulates $40 million in assets.
- 1933: National City Bank is the only bank in Cleveland giving 100 cents on the dollar to its depositors, while for several weeks most other banks are providing only five cents on the dollar.[citation needed] When many other banks are forced to shut down permanently following Roosevelt's banking moratorium, National City Bank is deemed to be solid, and is permitted to resume full operations.
Grows throughout much of Ohio
- 1945: Nearing $500 million in assets, National City Bank celebrates its 100th Anniversary.
- 1972: National City Bank's assets pass $2 billion.
- 1973: A new holding company, National City Corporation, is created with National City Bank (its name shortened from National City Bank of Cleveland) as its lead bank and primary subsidiary.
- 1975: National City Bank purchases the assets of the failing Northern Ohio Bank for $3.7 million.
- 1976: National City Bank spends $3.8 million acquiring The Bank of Cleveland.
- 1977: The First National Bank of Dayton is the corporation's first major acquisition. Two banks had merged to create the Dayton Bank in 1961: Merchant's National Bank (1871) and People's Bank & Trust Co. (1957).
- 1978: The Huron County Banking company in Norwalk, Ohio, is acquired. The bank is renamed National City Bank, Norwalk in 1985.
- 1980: National City Bank moves its headquarters to the newly constructed 35-story National City Center, as does its parent company, National City Corporation.
- 1982: Ohio Citizens Bancorp in Toledo is acquired.
- 1982: The Goodyear Bank in Akron is acquired. Founded in 1933 by the Goodyear Tire & Rubber Company, it was Ohio's first company-owned bank.
- 1982: Beginning in May, National City Bank becomes one of two Cleveland banks to link its Visa and MasterCard credit card interest rates to the cost of money, changing interest fees every six months according to the fluctuations of Treasury Bill Rates.
- 1982: National City Bank reports a resumption of growth in annual earnings.
- 1984: National City Corporation acquires BancOhio Corporation of Columbus to create the state's largest bank holding company. Together their assets total $12.5 billion, with a banking network encompassing 350 branches in 52 of the state's 88 counties.
- 1986: National City Bank acquires 14 area offices and $460 million in deposits of the Broadview Savings and Loan Company.
Becomes interstate bank
- 1988: National City Corporation expands into the Kentucky market by acquiring First Kentucky National Corporation of Louisville. Member banks of First Kentucky include First National bank of Louisville (1863); American National Bank & Trust Company, Bowling Green (1886); Crestwood State Bank (1896); Central Bank and Trust Company, Owensboro (1890); third National Bank of Ashland (1916); and First National Bank of Indiana, New Albany (1904). The largest, Commerce National in Lexington, resulted from a merger of Bank of Commerce (1911) and Second National Bank (1883).
- 1989: National City Mortgage Company acquires Shawmut Mortgage Company in Miamisburg, Ohio.
- 1990: National City corporation establishes National City Investment Corporation, allowing the corporation to offer investment choices equal to that of a full-service brokerage.
- 1990: Gem Savings Association, a $1.6 billion asset savings and loan company with 25 branches in Dayton and Cincinnati, is acquired.
- 1991: In October, National City Corporation announces it has reached an agreement with Merchants National Corporation to acquire the Indianapolis-based holding company. Member banks of Merchants National consist of: Anderson Banking Company (1890); Batesville State Bank (1889); Central National Bank of Greencastle (1883); Citizens National Bank of Tipton (1904); Elston Bank & Trust Company (1853); Farmers National Bank of Shelbyville (1886); Fayette Bank and Trust Company (1902); First National Bank of East Chicago (1909); First National Bank of Indiana, Logansport (1931); Hancock Bank & Trust Company, Greenfield (1874); Madison Bank & Trust Company (1833); Mid State Bank, Zionsville (1882); Mid State Bank of Hendricks County, Danville (1904); The National Bank of Greenwood (1934); The Seymour National Bank (1891); and Union State Bank[disambiguation needed
], Carmel (1923). - 1993: National City acquires Ohio Bancorp, Youngstown. Its member banks are: The Dollar Savings and Trust Company, Youngstown (1887); The Potters Bank and Trust Company, East Liverpool (1881); Peoples Banking Company, Martins Ferry (1891); Bank 2000, Minerva (1915); and The Miners and Mechanics Savings and Trust Company, Steubenville (1913).
- 1995: Central Indiana Bancorp, Kokomo and United Bancorp of Lexington, Kentucky are acquired.
- 1995: National City celebrates its 150th Anniversary with $32 billion in assets, 640 branches and 20,000 employees.
- 1995: National City purchases Integra Bank of Pittsburgh, and expands into the Pittsburgh market.[35]
The final years: a banking conglomerate
- 1997: National City merges with First of America creating the 13th-largest banking organization in the U.S. at that time in terms of total assets. First of America is a $22 billion asset bank holding company headquartered in Kalamazoo, Michigan. The combined company had assets of $74.4 billion, deposits of $48.4 billion and stockholders' equity of $6.1 billion.
- 1997: National City purchases certain assets of the mortgage loan origination businesses owned by First National Mortgage Corporation and Eastern Mortgage Services, Inc, and American Mortgage Source, Inc.
- 1998: National City acquires Fort Wayne National Corporation with assets of $3.3 billion.
- 1999: National City closes on acquisition of First Franklin Financial Companies.
- 2004: National City completes $2.1 billion purchase of Cincinnati-based Provident Financial Group.
- 2004: National City acquired Wayne Bancorp, a bank holding company headquartered in Wooster, Ohio which operated 26 branches and had $825 million in assets. Also acquired Allegiant Bancorp to enter the St. Louis market, adding 36 branch locations to National City's network of 1,100 retail offices located throughout the Midwest.
- 2006: National City sells First Franklin group to Merrill Lynch & Co. for $1.3 billion.
- 2006: National City acquires Fidelity Bankshares. Headquartered in West Palm Beach, Fidelity had $4.2 billion in total assets and operated 52 branches.
- 2006: National City acquires Harbor Florida Bancshares, the holding company for Harbor Federal Savings Bank. Harbor Florida is the fifth-largest publicly traded banking institution based in Florida. Headquartered in Fort Pierce, Harbor Florida has total assets of $3.2 billion and 40 branches.
- 2007: National City acquires MAF Bancorp, Inc., the holding company for MidAmerica Bank, which operated 82 branches throughout Chicago and Milwaukee and surrounding areas. MidAmerica was the 11th largest banking institution in the Chicago market with $5.7 billion in deposits and 58 branches and the fifth largest in Milwaukee with $1.3 billion in deposits and 24 branches.
- 2007: Peter Raskind succeeds David A. Daberko as President and CEO of the company, after Daberko was criticized for his expansion into subprime mortgages, bank acquisitions and share buybacks.
Merger with PNC and last actions as independent bank
- 2007: National City announces that their Wholesale Mortgage Division will cease operations effective December 31, 2007 in the face of record foreclosures. Employees were notified via email and conference call from Buck Bibb, head of National City Mortgage.
- 2008: National City Corp. disclosed in a regulatory filing that it is the subject of an "informal" Securities and Exchange Commission investigation related to matters including loan underwriting, bank regulatory matters, and the sale of a subprime subsidiary, First Franklin Financial Corporation, to Merrill Lynch & Co. for $1.3 Billion in 2006.
- 2008: On October 24, 2008 PNC Bank announced that it had purchased National City. The deal was approved by shareholders of both banks on December 23, 2008. According to a press release by PNC group, PNC intends to merge National City's banking affiliates into PNC Bank and they will assume the PNC Bank name. The merged entity will have its headquarters in Pittsburgh, PA.
- 2008: On December 9, 2008 Shareholders of National City Corp. filed lawsuits to halt the sale of the commercial bank to PNC Bank [36]
- 2008: On December 31, 2008 PNC completed the acquisition of National City, and is ordered by the United States Department of Justice to sell off 61 National City branches in Western Pennsylvania for antitrust reasons.
- 2009: On April 7, 2009 PNC agrees to sell off 57 National City branches in the Pittsburgh and Erie areas to First Niagara Bank, while the remaining four needed to be sold off—all in Crawford County, Pennsylvania--are sold to locally-based independent banks.
- 2009: By the end of Labor Day Weekend, the branches sold off were taken over by their respective buyers.[20][37][38] The remaining National City branches still remain under PNC for a few more months before their own conversion to PNC.[20]
- 2010: The National City name is retired in June 2010.
References
- ^ http://nccstock.com/
- ^ http://www.wkyc.com/video/default.aspx?playerId=newsmaker&maven_playlistId=87da15935a90222c7a4a61fb968c8b00cd945787&maven_referrer=mrss&maven_referralPlaylistId=87da15935a90222c7a4a61fb968c8b00cd945787&maven_referralObject=902996792
- ^ http://rds.yahoo.com/_ylt=A0geu5SXNdNKEUIAA4JXNyoA;_ylu=X3oDMTE3dHQ0aXUzBHNlYwNzcgRwb3MDOARjb2xvA2FjMgR2dGlkA0Y5MTlfNzIEaXQDMQ--/SIG=1e93h45e4/EXP=1255442199/**http%3a//rdre1.yahoo.com/click%3fu=http%3a//feedpoint.net/r/redir.jsp%253Fengine%253DINK%2526pcid%253D586926%2526fid%253D1520317%2526url%253D8vOqlbKq1Wr0HP0nSxmdB2VMr0jhgkSY45MI4R41xTslarRlTJTVZOz0YZ1B1TsKVaZ2Za8i1-vhhzT-S0C7n7u0-A%253D%253D%26y=04F164E4DB078C7D41%26i=482%26c=33406%26q=02%255ESSHPM%255BL7Q~k%255Cvkf6%26e=utf-8%26r=7%26d=wow~Metro-en-us%26n=D6I4G7GK379KL2D0%26s=13%26t=%26m=4AD33597%26x=05CA896C889927FCF44EAC6819E4B2FB2B
- ^ https://accounts.natcity.com/Summary.asp
- ^ http://blog.cleveland.com/business/2008/10/national_city_moves_up_to_7th.html
- ^ National City under U.S. regulatory scrutiny: report, Rueters, June 6, 2008
- ^ National City confirms agreements with regulators, MarketWatch.com, June 10, 2008
- ^ National City 150th Celebration Book Team: National City – 150 Years, 1995
- ^ http://www.answers.com/topic/national-city-corp National City Corp.: Information from Answers.com
- ^ http://www2.fdic.gov/sod/sodMarketBank.asp?barItem=2 FDIC, Deposit Market Share – Pro Forma HHI Report Selection
- ^ http://www.crainscleveland.com/article/20080317/FREE/590006312/1099
- ^ http://blog.cleveland.com/pdextra/2008/04/national_city_corp_went_from.html
- ^ Pittsburgh Post-Gazette National City stock jumps on rumors of sale
- ^ http://blog.cleveland.com/business/2008/11/pncnational_city_bank_deal_dra.html
- ^ Pittsburgh Post-Gazette PNC acquiring National City
- ^ kdka.com PNC Financial Services To Buy National City
- ^ http://www.post-gazette.com/pg/07252/815602-28.stm
- ^ http://www.usdoj.gov/opa/documents/branches-divested.pdf
- ^ a b http://kdka.com/business/PNC.First.Niagara.2.978660.html
- ^ a b c http://kdka.com/consumer/first.niagara.switchover.2.1170342.html
- ^ http://www.bloomberg.com/apps/news?pid=20601208&sid=afGesS_sXPd4
- ^ http://www.marquettesavings.com/MarquetteAcquisitionRelease040709.pdf
- ^ http://kdka.com/business/National.City.PNC.2.894007.html
- ^ a b http://post-gazette.com/pg/09303/1009385-28.stm
- ^ http://www.post-gazette.com/pg/09248/995688-28.stm
- ^ http://www.welcometopnc.com/docs/first_phase_successfully_completed.html
- ^ http://www.kentucky.com/103/story/1121523.html
- ^ http://www.dispatch.com/live/content/business/stories/2009/11/13/PNC_Branding.ART_ART_11-13-09_A10_O1FLEH2.html?type=rss&cat=&sid=101
- ^ http://www.crainscleveland.com/article/20100219/FREE/100219800
- ^ http://www.crainscleveland.com/article/20091105/FREE/911049959/1099/RSS01&rssfeed=RSS01
- ^ http://jobmag.com/news/2010/0301/1000016021070.htm
- ^ http://www.chicagobusiness.com/cgi-bin/news.pl?id=36114&seenIt=1
- ^ http://www.welcometopnc.com/docs/PNC_WelcomePackage.pdf
- ^ http://blog.cleveland.com/pdextra/2008/04/national_city_through_163_year.html
- ^ http://www.nytimes.com/1995/08/29/business/a-cleveland-bank-is-buying-in-pittsburgh.html
- ^ http://blogs.financialcontent.com/financial_stock_news/2008/12/national-city-faces-shareholde.html
- ^ http://finance.yahoo.com/news/Farmers-National-Bank-of-bw-1460591361.html?x=0&.v=1
- ^ http://www.meadvilletribune.com/local/local_story_233144822.html
External links
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Gale Directory of Company Histories
International Directory of Company Histories. Copyright © 2006 by The Gale Group, Inc. All rights reserved.
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