NATIONAL CITY BANK was, in 1993, one of Ohio's top 5 banking organizations in terms of assets. It started in 1845 when a new state banking act ended the banking privileges of organizations such as the Fireman's Insurance Co. of Cleveland. Its leading officers, Reuben Sheldon and Theodoric C. Severance, sought a way out of liquidation by reorganizing the firm as a bank. The City Bank of Cleveland was granted a state charter on 17 May 1845 and opened in July at 52 Superior St. with 2 employees. Three years later it moved to 21 Superior St. near Water (W. 9th) St. City Bank had capital of $150,000 in the 1850s, and when it was reorganized as the National City Bank of Cleveland in 1865 capital had increased to $200,000. The bank grew steadily, moving to the PERRY-PAYNE BLDG. on Superior Ave. in 1888 and then to larger quarters in the Leader-News Building on E. 6th St. in 1913.
National City, chiefly engaged in commercial banking, grew rapidly during World War I through war-industry financing. In 1921 it moved into the renovated Garfield Building at E. 6th St. and Euclid and renamed it the National City Bank Building. The bank expanded its services during the prosperous 1920s and survived the Depression in good financial shape. In the post-World War II period, National City initiated an extensive branch banking program, acquired several small local banks, and introduced new customer services. The National City Corp. was formed as a holding company in 1973 with National City Bank as its major subsidiary, and the corporation began to acquire banks throughout Ohio. The corporation had 111 statewide offices, 2,800 employees, and $4 billion in assets in 1980 when National City Center, at E. 9th St. and Euclid Ave. opened as its new headquarters. The multibank holding company, guided by Chairman Julien L. McCall, merged with the Columbus-based BANCOHIO NATIONAL BANK in 1984, increasing its assets to over $12 billion. In 1988 National City Corp. expanded into the Kentucky market by acquiring First Kentucky National Corp. of Louisville. Three years later, National City Corp. announced it had reached an agreement with Merchants National Corp. to acquire the Indianapolis-based holding company. Continued acquisitions by Natl. City increased them to $33 billion by 1995. The corporation's principal banking subsidiaries were in Cleveland, Columbus, Indianapolis, and Louisville. Other member banks are in Akron, Dayton, Lexington, Toledo, and Youngstown.
During the mid-1990s the provision of mortgages accounted for roughly five percent of National City's profits. At the end of the decade the bank decided to increase their involvement in mortgages, particularly the more risky aspects like variable rate and subprime loans. This led to National City's acquisition California-based subprime lender First Franklin in 1999. By 2003 the bank was the nation's sixth largest mortgage lender at which time home loans accounted for almost half of its $2.1 billion annual profit. Between 2000 and 2006 National City accumulated $13 billion in mortgage profits.
There were more than 30,000 subprime loans given to borrowers by various lending institutions in Northeast Ohio during 2006; nearly 30 percent of all loans in Cuyahoga and the surrounding counties. It was around this same time that foreclosures started to rise sharply in the Cleveland region. National City chose to sell First Franklin in 2006, but kept some of what became termed "toxic" mortgages. By the third quarter of 2008 National City posted a $729 million loss, just one aspect of a national financial crisis at the end of 2008. The Federal Government instituted the Troubled Asset Relief Program (TARP) in an attempt to stabilize the stock market, improve the strength of financial institutions, and encourage market liquidity. After the Pittsburgh-based PNC Bank received $7.7 in government funds through this program at the end of 2008, they announced the purchase of National City. Before National City entered the subprime market, their stock shares sold for $30 each. During the sale to PNC, their shares sold for $2.23 each.
Before the sale, National City employed more than 7,000 people in Northeast Ohio. Of the bank's 29,000 employees, 3,400 positions were cut during 2008 and plans were announced to eliminate another 4,000 positions by 2012. As of 2009 PNC planned to phase out the National City name and move its headquarter operations to Pittsburgh.
Benton, Elbert J. A Century of Progress: A History of Natl. City Bank.