Is National City A Falling Star Or Falling Knife?
National City Corp., which actually has more deposits on its books than PNC, lost $729 million, or 85 cents per share, excluding a special dividend, in its most recent quarter. The stock traded at $2.75 per share at the time of the sale last week, but it had been as high as $23.90 in the last year, and had traded in the high $30s over the last two years. Its market cap has shriveled to under $5 billion. (To learn how to decipher a bank’s complicated financial statements, read Analyzing A Bank’s Financial Statements.) PNC estimates that losses on the remaining $113.4 billion in National City’s loan portfolio will amount to $19.9 billion. National City had moved aggressively into the risky subprime mortgage loan area and away from commercial and industrial lending the last few years, so the slump in the housing and mortgage industry has caused steep losses. National City announced last week it will cut 4,000 jobs. Federal Funding for the Deal PNC used the $7.7 billion in funds from the T
