National City Reports $1.8 Billion Loss For Q2

Cleveland, OH (AHN) - National City Corp. announced Thursday a $1.76 billion loss in the second quarter as the bank took a large one-time charge for previous acquisitions.

The regional bank said it lost $1.76 billion, or $2.45 a share, compared to a profit of $347 million or 60 cents a share the same period a year ago.

Excluding the one-time charge, the bank said it lost 94 cents a share. The charge was for goodwill impairment in the amount of $1.1 billion. Goodwill charges generally represent intangible assets.

Analysts polled by Thomson Financial were expecting a loss of 26 cents a share, excluding the charge.

Second quarter write-downs were $740 million, sharply higher than the $98 million a year ago. The bank said $527 million in write-downs were for loans related to subprime mortgages and construction loans to individuals.

"Reported earnings per share was much worse than we expected, due to a loan loss provision that was more than three times higher than we anticipated, a steep decline in net interest margin and much higher non-performing assets and net charge-offs in the quarter," RBC Capital Markets analyst Gerard Cassidy wrote, according to the Associated Press.

Provisions for loan losses were increased to $1.59 billion from $145 million last year.

The bank raised $7 billion in cash during the second quarter from an investor group led by Corsair Capital LLC.

"We have more than enough capital to see us through this period," National City's chief executive, Peter Raskind, said in a conference call, according to AP. "We have no intention or plan or need at this point to raise capital."

Shares of National City traded 3.8 percent higher in afterhours action on Thursday.