National City Cecures $7 Billion Infusion, Reports Earnings

The Cleveland-based bank said its Board of Directors unanimously approved the $5 a share deal, with Corsair providing $985 million and a group of institutional investors and stockholders offering up the remaining $6 billion. Corsair will also receive a seat on the board of directors and said it intends to appoint Corsair Capital Vice Chairman Richard E. Thornburgh.

National City reported a net loss of $171 million for the first quarter Monday, or 27 cents per share, compared to a net loss of $333 million, or 53 cents a share, during the fourth quarter of 2007. - By New Banking News

In a press release the National City says that "The capital raise includes $985 million of private equity capital from Corsair Capital, a highly regarded private equity firm with a successful track record of global long-term investing in the financial services industry, particularly the banking sector, and one other private equity investor. The balance, or $6.015 billion, of equity capital is being purchased by other investors, including several of National City's largest current institutional stockholders.

"The capital infusion is expected to increase National City's capital ratios well above the high end of the company's targeted ranges. That includes its Tier 1 risk-based capital ratio, which will increase to 11.40 percent pro forma for this transaction from 6.65 percent at March 31, 2008. The 11.40 percent pro forma ratio places National City well above its peer group with respect to this important measure. To further strengthen its capital position, National City's Board also approved a reduction in its common dividend to $0.01 per share from $0.21 per share, payable May 16, 2008, to holders of record May 1, 2008."