PNC Corp Buying National City for $5.2 Billion

Bank acquisitions, which slowed a bit after the Wells, Wachovia, and Citi dance are now back in force. PNC Corp. announced today that it was buying National City for approximately $5.2 billion. In 2007, National City had $150 billion dollars in assets and was one of largest financial companies in the United States. In the past year, National City's stock has taken a tremendous beating falling from a 52 week high of $24 to $2. It displayed many of the sympoms we've seen of many distressed bank - dividend cuts, capital raises, cratering stock price, and suddenly high interest rates on cds and savings accounts. National City suffered from a bad loan portfolio in Ohio, a state that has been hard hit by foreclosures. To make matters worse, National City recently spent $2.1 billion buying up banks in Florida, one of the hearts of the housing meltdown.

PNC is significantly healthier. While its stock price has fallen from a 52 week high of 89, it is now trading at 59. That's hardly the collapse we've seen with distressed banks. PNC is also tapping the TARP Capital Purchase Program and plans to sell $7.7 billion of preferred stock to the U.S. Treasury to help with the deal.

The FDIC must be breathing a bit easier since that removes National City from its radar of potential failed banks.