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PNC Buys National City and Hits the TARP

October 24, 2008 RSS Feed Print

After weeks of speculation as its share price headed toward the floor, Cleveland-based regional bank National City goes to PNC Financial Services.

The deal creates the country's fifth-largest bank by deposits.

The deal:
PNC will pay $5.58 billion in stock and cash for National City and get $7.7 billion through the government's bailout plan. The deal values National City at about $2.23 a share, or about 19 percent below yesterday's closing price (it traded around $23 a year ago). PNC says its Tier 1 capital ration will be about 10 percent, and the combined firm will be well above regulatory standards for a "well-capitalized" bank.

Why this is good:
A couple of reasons: First, National City was probably the biggest regional at risk as the credit crisis spreads. Second, the use of the Troubled Asset Relief Program (TARP) funds is encouraging. It's a positive sign that banks are using the government's lending offer to get markets moving again.

And lastly, a quick note to National City's press team who just yesterday chided me for saying that the bank was up for sale: We won't be running that correction.

Tags:: Wall Street Journal,; banking,; PNC Financial Services,; Wall Street

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I started a dialogue with Nat City in Sept., 09 for a modification based on a 40% reduction in income. They offered a 14% reduced trial mod payment beginning Dec., 09. I told them that this was not enough, but there was a take it or leave it attitude. Anyway, I was able to make the first 2 trial payments but cannot make the third. I have requested the assistance of the NACA to help. They sent a request to National City (now PNC) on Jan. 7, asking to restructure my payment based on a tight and releastic budget. As of Jan. 23, PNC has not responded. Every time I call PNC, I get different answers to my questions. My intent is to call PNC tomorrow and if necessary, retain an attorney to request a court mediation settlement re: all the correspondence between PNC and myself date.

Tom of NJ 4:19PM January 24, 2010

Billions of taxpayer dollars so one bank can gobble another at 10 cents on the dollar? All facilitated by regulators/politicians controlled by bankers? It's the perfect crime: the perp is also the cop.

Steve of MI 9:06AM October 11, 2009

I guess I just don't understand all this tarp money. I thought it was to save the banks so that they could help get the economy going. With.. guess what, money! such as business loans, mortgage loans, and and other types of loans. This is the major business of banks.
Why, with perfect credit, income, etc. would National City refuse to subordinate what was already a 2nd lien. This stopped us from rewriting our first mortgage for a much lower rate and saving thousands of dollars which would have gone back in the economy. This wasn't a troubled mortgage, and we were not going to get any cash out. All that had to transpire was for National City to remain as 2nd lien holder.
I guess what I am getting at is, they used our money as taxpayers, collected and are continuing to collect interest on our loan, but are unwilling to allow us to save some money by lowering our interest rate. By the way, the first lien holder had already approved the loan, only if they would remain as first lien holder. I have no doubt NC would have no problem doing the first mortgage. We would absolutely refuse to do this.
Bailout, Tarp, government stimulus, or whatever you wish to call it is a well intentioned program being misused by some of the very same financial institutions that it is saving.
Be it PNC or National City, this and some of their other practices should be illegal.

Ron of FL 6:01PM September 23, 2009

PNC Buys National City and Hits the TARP

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