FEDERAL RESERVE SYSTEM 

National City Corporation 

Cleveland, Ohio 

Order Approving the Acquisition of a Bank Holding Company 

 National City Corporation (“National City”), a financial holding 

company within the meaning of the Bank Holding Company Act (“BHC Act”), has 

requested the Board’s approval under section 3 of the BHC Act (12 U.S.C. § 1842) 

to acquire Provident Financial Group, Inc. (“Provident”) and its subsidiary bank, 

The Provident Bank (“Provident Bank”), both in Cincinnati, Ohio. National City 

also has requested the Board’s approval under sections 4(c)(8) and 4(j) of the 

BHC Act (12 U.S.C. §§ 1843(c)(8) and 1843(j)) and section 225.28(b)(6) of the 

Board’s Regulation Y (12 C.F.R. 225.28(b)(6)) to acquire a nonbanking subsidiary 

of Provident and thereby engage in permissible investment advisory activities. 

 Notice of the proposal, affording interested persons an opportunity to 

submit comments, has been published (69 Federal Register 8,660 (2004)). The 

time for filing comments has expired, and the Board has considered the proposal 

and all comments received in light of the factors set forth in sections 3 and 4 of the 

BHC Act. 

 National City, with total consolidated assets of $116.4 billion, is the 

11th largest depository organization in the United States, controlling deposits of 

$75.2 billion, which represents approximately 1.3 percent of total deposits in 

insured depository institutions in the United States.1

 National City is the third 

largest insured depository organization in Ohio, controlling deposits of 

$23.7 billion, which represents approximately 11.2 percent of total deposits in 

 

1

 Asset, nationwide deposit, and ranking data are as of December 31, 2003, and 

statewide deposit and ranking data are as of June 30, 2003. 
-1-

insured depository institutions in the state (“state deposits”). National City also 

operates subsidiary insured depository institutions in Illinois, Indiana, Kentucky, 

Michigan, Missouri, and Pennsylvania. 

Provident, with total consolidated assets of approximately 

$17.1 billion, is the seventh largest insured depository organization in Ohio, 

controlling deposits of $10.3 billion, which represents approximately 4.9 percent 

of state deposits. Provident Bank operates branches in Ohio and Kentucky. 

On consummation of this proposal, National City would become 

the tenth largest insured depository organization in the United States, with total 

consolidated assets of $133.5 billion, and would control approximately 1.4 percent 

of total deposits in insured depository institutions in the United States.2

 

National City would become the largest insured depository organization in Ohio, 

controlling deposits of approximately $34 billion, which represents approximately 

16.1 percent of state deposits. 

Interstate Analysis

 Section 3(d) of the BHC Act allows the Board to approve an 

application by a bank holding company to acquire control of a bank located in a 

state other than the home state of such bank holding company if certain conditions 

are met. 3 For purposes of the BHC Act, the home state of National City is Ohio, 

 

2

 All data include National City after consummation of the proposal to acquire 

Allegiant Bancorp, Inc., St. Louis, Missouri (“Allegiant”). The Allegiant proposal 

was approved by the Board on March 15, 2004. See National City Corporation, 

90 Federal Reserve Bulletin 236 (2004) (“National City/Allegiant Order”). 

3

 A bank holding company’s home state is that state in which the total deposits 

of all banking subsidiaries of such company were the largest on the later of 

July 1, 1966, or the date on which the company became a bank holding company. 

12 U.S.C. § 1841(o)(4)(C). 
-2-

and Provident is located in Kentucky and Ohio.4 Based on a review of all the facts 

of record, including relevant state statutes, the Board finds that all the conditions 

for an interstate acquisition enumerated in section 3(d) are met in this case.5

 In 

light of all the facts of record, the Board is permitted to approve the proposal under 

section 3(d) of the BHC Act. 

Competitive Considerations

Section 3 of the BHC Act prohibits the Board from approving a 

proposal that would result in a monopoly or would be in furtherance of any attempt 

to monopolize the business of banking in any relevant banking market. The 

BHC Act also prohibits the Board from approving a proposed bank acquisition that 

would substantially lessen competition in any relevant banking market, unless the 

Board finds that the anticompetitive effects of the proposal clearly are outweighed 

in the public interest by the probable effect of the proposal in meeting the 

convenience and needs of the community to be served.6

 

National City and Provident compete directly in the Cleveland, 

 

4

 For purposes of section 3(d) of the BHC Act, the Board considers a bank to be 

located in the states in which the bank is chartered, headquartered, or operates a 

branch. 

5

 See 12 U.S.C. §§ 1842(d)(1)(A) and (B), 1842(d)(2)(A) and (B). National City 

is adequately capitalized and adequately managed, as defined by applicable law. 

In addition, on consummation of the proposal, National City would control less 

than 10 percent of the total amount of deposits of insured depository institutions 

in the United States and less than 15 percent of the total deposits of insured 

depository institutions in Kentucky, the only applicable state limitation on the 

amount of deposits a bank holding company can acquire in this transaction. 

See Ky. Rev. Stat. Ann. § 287.900 (Supp. 2003). 

6

 12 U.S.C. § 1842(c)(1). 
-3-

Columbus, Dayton, and Springfield banking markets, all in Ohio.7 The Board has 

reviewed carefully the competitive effects of the proposal in each of these banking 

markets in light of all the facts of record. In particular, the Board has considered 

the number of competitors that would remain in the markets, the relative shares of 

total deposits in depository institutions in the markets (“market deposits”) 

controlled by National City and Provident,8

 the concentration level of market 

deposits and the increase in this level as measured by the Herfindahl-Hirschman 

Index (“HHI”) under the Department of Justice Merger Guidelines (“DOJ 

Guidelines”),9

 and other characteristics of the markets. 

 

7

 These banking markets are described in Appendix A. 

8

 Market share data are as of June 30, 2003, and are based on calculations 

in which the deposits of thrift institutions are included at 50 percent. The 

Board previously has indicated that thrift institutions have become, or 

have the potential to become, significant competitors of commercial banks. 

See, e.g., Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989); 

National City Corporation, 70 Federal Reserve Board 743 (1984). Thus, the 

Board regularly has included thrift deposits in the market share calculation on 

a 50 percent weighted basis. See, e.g., First Hawaiian, Inc., 77 Federal Reserve 

Bulletin 52 (1991). 

9

 Under the DOJ Guidelines, 49 Federal Register 26,823 (1984), a market is 

considered moderately concentrated if the post-merger HHI is between 1000 and 

1800 and highly concentrated if the post-merger HHI is more than 1800. The 

Department of Justice has informed the Board that a bank merger or acquisition 

generally will not be challenged (in the absence of other factors indicating 

anticompetitive effects) unless the post-merger HHI is at least 1800 and the 

merger increases the HHI by more than 200 points. The Department of Justice 

has stated that the higher than normal HHI thresholds for screening bank 

mergers for anticompetitive effects implicitly recognize the competitive effects 

of limited-purpose lenders and other nondepository financial institutions. 
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 Consummation of the proposal would be consistent with Board 

precedent and the DOJ Guidelines in each of these banking markets.10 After 

consummation of the proposal, the Dayton banking market would remain 

moderately concentrated, as measured by the HHI, and numerous competitors 

would remain in the market. Although the Cleveland, Columbus, and Springfield 

banking markets would remain highly concentrated, the change in market shares 

would be small and numerous competitors would remain in the markets. 

 The Department of Justice also has conducted a detailed review of the 

competitive effects of the proposal and has advised the Board that consummation 

of the proposal would not have a significantly adverse effect on competition in the 

Cleveland, Columbus, Dayton, or Springfield banking markets or in any other 

relevant banking market. 

Based on all the facts of record, the Board concludes that 

consummation of the proposal would not have a significantly adverse effect on 

competition or on the concentration of banking resources in any relevant banking 

market and that competitive considerations are consistent with approval. 

Financial, Managerial, and Supervisory Considerations

Section 3 of the BHC Act requires the Board to consider the 

financial and managerial resources and future prospects of the companies and 

banks involved in the proposal and certain other supervisory factors. The Board 

has carefully considered these factors in light of all the facts of record, including 

reports of examination, other confidential supervisory information received from 

the primary federal banking agency that supervises each institution, information 

provided by National City, and public comment on the proposal. 

 

10 The effects of the proposal on the concentration of banking resources in these 

markets are described in Appendix B. 
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National City is well capitalized and will remain so on consummation 

of the proposal.11 In addition, the Board has consulted with the Office of the 

Comptroller of the Currency (“OCC”), the primary federal supervisor of 

National City’s lead banks, about the proposal.12 The Board also has considered 

the managerial resources and the examination records of National City and 

Provident and the subsidiary depository institution to be acquired, including its risk 

management systems and other policies.13 Based on all the facts of record, the 

Board has concluded that considerations relating to the financial and managerial 

resources and future prospects of National City, Provident, and Provident Bank are 

consistent with approval, as are the other supervisory factors under the BHC Act. 

Convenience and Needs Considerations

In acting on a proposal under section 3 of the BHC Act, the Board is 

required to consider the effects of the proposal on the convenience and needs of the 

communities to be served and to take into account the records of the relevant 

 

11 A commenter alleged that the compensation under severance agreements for 

Provident’s senior management is excessive. The Board notes that the severance 

agreements have been disclosed to shareholders and that National City will remain 

well capitalized on consummation of the proposal. 

12 A commenter also expressed concern that Provident restated its earnings for the 

years 1997 through 2002. The Board monitored the restatement by Provident and 

has consulted with the Securities and Exchange Commission regarding this matter. 

13 One commenter criticized National City for lobbying against state and local 

efforts to enact and enforce anti-predatory lending laws and ordinances. Two 

commenters expressed concern that the proposal might result in a loss of jobs. The 

Board notes that the commenters do not allege and have provided no evidence that 

National City engaged in any illegal activity or other action that has affected, or 

may reasonably be expected to affect, the safety and soundness of the institutions 

involved in this proposal or other factors that the Board must consider under the 

BHC Act. 
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insured depository institutions under the Community Reinvestment Act (“CRA”).14 

The CRA requires the federal financial supervisory agencies to encourage financial 

institutions to help meet the credit needs of local communities in which they 

operate, consistent with their safe and sound operation, and requires the 

appropriate federal financial supervisory agency to take into account an 

institution’s record of meeting the credit needs of its entire community, including 

low- and moderate-income (“LMI”) neighborhoods, in evaluating bank 

expansionary proposals. 

 The Board has considered carefully the convenience and needs factor 

and the CRA performance records of the subsidiary banks of National City and 

Provident in light of all the facts of record, including public comment on the 

proposal. The Board recently considered the convenience and needs factor in 

National City’s proposal to acquire Allegiant. In that proposal, the Board 

conducted a detailed review of the CRA performance records of the insured 

depository institutions controlled by National City, the lending records of all the 

National City bank and nonbank lending subsidiaries, including an analysis of data 

reported by National City under the Home Mortgage Disclosure Act (“HMDA”),15

and the branch closing policies of National City and found the record of the 

Allegiant proposal to be consistent with approval. 

A. Summary of Public Comments on Convenience and Needs 

Considerations

In response to the Board’s request for public comment on this 

proposal, approximately 56 commenters submitted their views. Of these 

commenters, approximately 51 commenters supported the proposal by generally 

 

14 12 U.S.C. § 2901 et seq.

15 12 U.S.C. § 2801 et seq.
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commending National City or Provident for providing financial and technical 

support to their community development organizations or businesses. Other 

commenters related their favorable experiences with specific programs or services 

offered by National City or Provident. 

 Five commenters opposed the proposal. These commenters expressed 

concern about the subprime lending activities of First Franklin Financial 

Corporation, San Jose, California (“First Franklin”), a subsidiary of 

National City Bank of Indiana, Indianapolis, Indiana (“NC Indiana”), that 

originates home mortgage loans, including subprime loans. Commenters also 

asserted, based on data reported under the HMDA, that National City engages in 

discriminatory treatment of African-American and Hispanic individuals in its home 

mortgage lending operations. In addition, commenters expressed concern about 

potential branch closings resulting from this proposal and the percentage of 

Provident Bank branches in LMI and predominantly minority areas. 

B. CRA Performance Evaluations

As provided in the CRA, the Board has evaluated the convenience and 

needs factor in light of the evaluations by the appropriate federal supervisors of the 

CRA performance records of the relevant insured depository institutions. An 

institution’s most recent CRA performance evaluation is a particularly important 

consideration in the applications process because it represents a detailed, on-site 

evaluation of the institution’s overall record of performance under the CRA by its 

appropriate federal supervisor.16 At their most recent CRA evaluations by the 

OCC, National City Bank, Cleveland (“NC Bank”), National City’s largest bank as 

measured by total deposits, received an “outstanding” rating, and NC Indiana, 

 

16 See Interagency Questions and Answers Regarding Community Reinvestment, 

66 Federal Register 36,620 and 36,639 (2001). 
-8-

National City’s largest bank as measured by total assets, received a “satisfactory” 

rating.17 In addition, National City’s six other subsidiary banks received either 

“outstanding” or “satisfactory” ratings at their most recent CRA evaluations.18 

The Board has carefully reviewed the CRA performance records of 

the insured depository institution subsidiaries of National City. A summary of the 

most recent CRA evaluations of NC Bank and NC Indiana was included in the 

National City/Allegiant Order. Based on its review of the record in this case, the 

Board hereby reaffirms and adopts the facts and findings detailed in the National

City/Allegiant Order. 

NC Bank’s most recent CRA evaluation characterized its overall 

record of home mortgage and small business lending as excellent19 and praised the 

bank’s level of community development lending. Examiners noted favorably the 

use of several flexible lending products designed to address affordable housing 

needs of LMI individuals and commended the bank’s level of qualified 

investments. In addition, examiners reported that NC Bank’s community 

development services were excellent and praised the distribution of the bank’s 

branches. At NC Indiana’s most recent CRA performance evaluation, examiners 

 

17 Both ratings are as of February 22, 2000. 

18 Appendix C lists the most recent CRA ratings of National City’s bank 

subsidiaries, including the recently acquired Allegiant Bank, St. Louis, Missouri. 

19 In evaluating the records of performance under the CRA of NC Bank and 

NC Indiana, examiners considered home mortgage loans by certain affiliates in the 

banks’ assessment areas. The loans reviewed by examiners included loans 

reported by National City Mortgage Corporation, Miamisburg, Ohio 

(“NC Mortgage”) (a subsidiary of NC Indiana); National City Mortgage Services, 

Kalamazoo, Michigan (“NC Mortgage Services”) (a subsidiary of 

National City Bank of Michigan/Illinois, Bannockburn, Illinois); and other bank 

and nonbank affiliates of NC Bank. 
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commended the bank’s record of home mortgage lending among borrowers of 

different income levels and its community development lending. NC Indiana’s 

most recent evaluation also commended its strong level of qualified investments 

and characterized the distribution of the bank’s branches throughout its assessment 

area, including LMI geographies, as excellent. 

Provident Bank, Provident’s only subsidiary bank, received an 

“outstanding” rating at its most recent CRA performance evaluation by the Federal 

Reserve Bank of Cleveland, as of March 11, 2002. National City has indicated that 

its CRA and consumer compliance programs would be implemented at Provident 

on consummation of the proposal. 

At Provident Bank’s most recent CRA performance evaluation, 

examiners concluded that the bank’s lending activity reflected an excellent 

responsiveness to assessment-area credit needs. Examiners commended 

Provident Bank’s home mortgage lending record and noted that it demonstrated 

an excellent geographic distribution of HMDA-reportable loans, especially in 

LMI areas and among borrowers of different incomes. They also reported that 

the bank had a good geographic distribution of small business loans. In addition, 

examiners commended the bank for its significant level of community 

development lending and investments and reported that such investments 

supported the development of LMI housing. They indicated that Provident Bank 

has taken a leadership role in community development services, noting that the 

bank provides services that promote affordable housing and economic 

development. In addition, examiners stated that Provident Bank’s branches and 

automated teller machines are reasonably accessible to all segments of the bank’s 

assessment areas. 
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C. HMDA Data, Subprime Lending, and Fair Lending Record

The Board has carefully considered the lending record of and 

HMDA data reported by National City in light of public comment. Based on their 

review of HMDA data, commenters primarily contended that National City’s 

lending operations are organized in a manner to direct First Franklin’s higher 

priced loans disproportionately to minority and LMI borrowers and in LMI and 

predominantly minority communities, as compared with the other subsidiaries of 

National City engaged in home mortgage lending, including National City’s bank 

subsidiaries, NC Mortgage, and NC Mortgage Services (collectively, “National 

City Lenders”).20 In addition, commenters criticized other aspects of the lending 

activities of First Franklin and the National City Lenders.21

 The Board reviewed HMDA data reported by all of National City’s 

bank and nonbank lending subsidiaries in the MSAs identified by the commenters 

and focused its analysis on the MSAs that comprise the assessment areas of the 

National City Lenders in Ohio, Illinois, Indiana, Kentucky, and Michigan. The 

 

20 Two commenters asserted that First Franklin’s market share is 

disproportionately concentrated in LMI and predominantly minority areas in 

Ohio and that the National City Lenders have ignored these areas. Another 

commenter asserted that, in 2002, First Franklin originated a higher volume 

and a larger percentage of its HMDA-reportable loans to African-American or 

Hispanic borrowers than NC Bank. The commenter compared 2002 HMDA 

data reported by First Franklin and NC Bank in the Metropolitan Statistical 

Areas (“MSAs”) of Cincinnati, Columbus, and Dayton, but did not include 

HMDA data reported by other National City lending subsidiaries in those areas. 

21 Commenters criticized First Franklin’s use of loan brokers to distribute its 

products, including the payment of yield spread premiums to brokers. Another 

commenter criticized the level of due diligence performed by Provident in 

providing warehouse lines of credit to subprime lenders and criticized 

National City for financing payday lending operations. 
-11-

analysis included a comparison of the HMDA data of First Franklin with combined 

data submitted by the National City Lenders.22 

An analysis of 2002 HMDA data does not support the contention that 

National City disproportionately directs First Franklin’s loans to minority and 

LMI borrowers and in LMI and predominantly minority communities as compared 

with the National City Lenders. The 2002 HMDA data indicate that the National 

City Lenders extended a larger number of HMDA-reportable loans to AfricanAmerican borrowers than did First Franklin in the MSAs reviewed. In addition, 

the percentage and number of HMDA-reportable loans by the National City 

Lenders to Hispanics were generally comparable with or exceeded the percentage 

and number for First Franklin in each of the MSAs reviewed. The HMDA data 

indicate that the percentage of total HMDA-reportable loans made to AfricanAmerican and Hispanic borrowers and in LMI and minority census tracts23 by 

the National City Lenders generally remained the same or increased from 

2002 to 2003. The HMDA data also indicate the National City Lenders generally 

performed favorably when compared with the aggregate lenders. The percentage 

of total HMDA-reportable loans originated to African-American and Hispanic 

borrowers by the National City Lenders was comparable to the aggregate lenders 

in most of the MSAs reviewed. 

 

22 The Board analyzed HMDA data for 2001 through 2003 for National City and 

HMDA data for 2001 and 2002 for the aggregate of lenders in the areas reviewed 

(“aggregate lenders”). The 2003 HMDA data are preliminary and 2003 data for 

the aggregate lenders are not yet available. 

23 For purposes of this HMDA analysis, minority census tract means a census tract 

with a minority population of 80 percent or more. 
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Moreover, the denial disparity ratios24 of the National City Lenders 

for African-American and Hispanic applicants for total HMDA-reportable loans 

were generally comparable to or lower than those of aggregate lenders in a 

majority of the MSAs reviewed.25 In addition, the National City Lenders’ 

origination rates for total HMDA-reportable loans to Hispanics and African 

Americans were comparable to or exceeded the rates for aggregate lenders in each 

of the MSAs reviewed.26

The Board recognizes that HMDA data alone provide an incomplete 

measure of an institution’s lending in its community because these data cover only 

a few categories of housing-related lending and provide only limited information 

about covered loans. Because of the limitations of HMDA data, the Board has 

considered these data carefully in light of other information, including public and 

confidential supervisory information, information on the use of loan brokers by 

First Franklin to distribute its loans, and information submitted by National City on 

its policies and procedures to ensure compliance with fair lending laws and to 

guard against abusive lending practices. 

Examiners found no evidence of prohibited discrimination or other 

illegal credit practices at any of National City’s subsidiary banks or the lending 

subsidiaries of these banks at their most recent CRA performance evaluations. The 

 

24 The denial disparity ratio equals the denial rate for a particular racial category 

(for example, African American) divided by the denial rate for whites. 

25 Two commenters also alleged that the denial disparity ratios of some of 

National City’s bank subsidiaries in certain markets indicated that the banks 

disproportionately denied African-American or Hispanic applicants for home 

mortgage loans. 

26 The origination rate equals the total number of loans originated to applicants of 

a particular racial category divided by the total number of applications received 

from members of that racial category. 
-13-

Board also consulted with the OCC, which has responsibility for enforcing 

compliance with fair lending laws by national banks and their subsidiaries, about 

this proposal, the comments received by the Board criticizing the lending activities 

of First Franklin, and the record of performance of National City’s banks and their 

subsidiaries since the last examination. 

As discussed in the National City/Allegiant Order, National City has 

taken several affirmative steps to ensure compliance with fair lending laws and to 

prevent abusive lending practices at First Franklin and the National City Lenders. 

National City represented that all loan applicants are evaluated individually on 

their credit qualifications and the loans they receive are based on those 

qualifications. National City has a centralized compliance function and has 

implemented corporate-wide compliance policies and procedures to help ensure 

that all the business lines of National City, including First Franklin, comply with 

fair lending and other consumer protection laws and regulations. Compliance 

officers and staff are responsible for compliance training and monitoring. 

National City also conducts file reviews for compliance with federal and state 

consumer protection rules and regulations for all product lines and origination 

sources, including First Franklin. In addition, National City regularly performs 

self-assessments of its fair lending law compliance and fair lending policy training 

for its employees. National City represented that its corporate consumer 

compliance program will be implemented at Provident Bank after consummation 

of the proposal.27

 

27 Based on a review of a sample of First Franklin’s loans that ended in 

foreclosure, one commenter expressed concern about certain terms, such as high 

interest rates with balloon payments, prepayment penalties, and adjustable interest 

rates, including “teaser rates,” and other lending practices of First Franklin. In 

addition, commenters criticized National City for not having procedures for 

referring to the National City Lenders loan applicants of First Franklin who qualify 
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The Board also reviewed the use of loan brokers by First Franklin in 

distributing its loan products and concluded that this practice does not appear to 

have resulted in the disparate treatment of minorities or LMI individuals. National 

City represented that First Franklin has implemented a detailed program for 

establishing relationships with brokers, which includes the review of a prospective 

broker’s license status, financial condition, and background. In addition, National 

City stated that, although the National City Lenders and First Franklin have 

relationships with brokers and correspondents that provide subprime credit as some 

portion of their business, National City does not pursue business relationships with 

brokers or correspondents that originate subprime loans exclusively. National City 

also represented that loan brokers are not chosen based on their geographic 

location or the income, race, or ethnicity of residents in the brokers’ locations. 

 The Board also has considered the HMDA data, subprime lending, 

and fair lending record of National City in light of other information, including the 

CRA performance records of National City’s subsidiary banks discussed above and 

in the National City/Allegiant Order, and public comment. These records 

demonstrate that National City is active in helping to meet the credit needs of its 

entire community. 

D. Branch Closings

One commenter expressed concern about the effect of branch closings 

that might result from this proposal. The Board has considered those concerns in 

 

for credit at those affiliates. As discussed above, National City has represented 

that all loan applicants are evaluated individually on their credit qualifications and 

the loans they receive are based on those qualifications. In addition, National City 

has a substantial compliance program in place to ensure that First Franklin does not 

engage in abusive lending practices. The Board also notes that the terms of loans 

offered by First Franklin that were criticized by the commenter are not, in and of 

themselves, abusive, and the fact that some of these terms are present in foreclosed 

loans does not itself indicate that these terms are inappropriate or abusive. 
-15-

light of all the facts of record. National City represented that it is in the process of 

determining whether to close branches in markets where there is overlap and that 

any closures or consolidations of branches will be conducted in accordance with 

National City’s Branch Closing Policy and Procedures. The Board carefully 

considered National City’s branch closing policy and its record of opening and 

closing branches in the National City/Allegiant Order. In addition, examiners 

reviewed National City’s branch closing policy as part of the most recent CRA 

evaluations of each of National City’s banks and found that it complied with 

federal law. 

 The Board also has considered the fact that federal banking law 

provides a specific mechanism for addressing branch closings.28 Federal law 

requires an insured depository institution to provide notice to the public and to the 

appropriate federal supervisory before closing a branch. In addition, the Board 

notes that the OCC, as the appropriate federal supervisor of NC Bank, will 

continue to review the bank’s branch closing record in the course of conducting 

CRA performance evaluations. 

E. Conclusion on Convenience and Needs Factor

The Board has carefully considered all the facts of record, including 

reports of examination of the CRA records of the institutions involved, information 

provided by National City, public comments on the proposal, and confidential 

supervisory information. Based on a review of the entire record, and for the 

 

28 Section 42 of the Federal Deposit Insurance Act (12 U.S.C. § 1831r-1), as 

implemented by the Joint Policy Statement Regarding Branch Closings 

(64 Federal Register 34,844 (1999)), requires that a bank provide the public with at 

least 30 days’ notice and the appropriate federal supervisory agency and customers 

of the branch with at least 90 days’ notice before the date of the proposed branch 

closing. The bank also is required to provide reasons and other supporting data for 

the closure, consistent with the institution’s written policy for branch closings. 
-16-

reasons discussed above and in the National City/Allegiant Order, the Board 

concludes that considerations relating to the convenience and needs factor, 

including the CRA performance records of the relevant depository institutions, are 

consistent with approval. 

Nonbanking Activities

National City also has filed a notice under sections 4(c)(8) and 4(j) of 

the BHC Act to acquire Provident Investment Advisors, Inc., also in Cincinnati 

(“Investment Advisors”), which engages in investment advisory activities. The 

Board has determined by regulation that this activity is permissible for bank 

holding companies under the Board’s Regulation Y,29 and National City has 

committed to conduct these activities in accordance with the Board’s regulations 

and orders for bank holding companies engaged in these activities. 

 To approve the notice, the Board must determine that National City’s 

acquisition of Investment Advisors and the performance of the proposed activities 

“can reasonably be expected to produce benefits to the public . . . that outweigh 

possible adverse effects, such as undue concentration of resources, decreased or 

unfair competition, conflicts of interests, or unsound banking practices.”30 As part 

of its evaluation of these factors, the Board has considered the financial and 

managerial resources of National City, its subsidiaries, and the company to be 

acquired, and the effect of the proposed transaction on those resources. For the 

reasons noted above, and based on all the facts of record, the Board concludes that 

financial and managerial considerations are consistent with approval of the notice. 

 The Board also has considered the competitive effects of 

National City’s proposed acquisition of Provident’s nonbanking subsidiary in 

 

29 See 12 C.F.R. 225.28(b)(6). 

30 See 12 U.S.C. § 1843(j)(2)(A). 
-17-

light of all the facts of record. National City and Provident engage in activities 

related to investment advice. The market for the activity is regional or national in 

scope and unconcentrated. The record in this case also indicates that there are 

numerous providers of these services. Accordingly, the Board concludes that 

National City’s acquisition of Investment Advisors would not have a significantly 

adverse effect on competition in any relevant market. 

 National City has indicated that the proposal would allow 

National City to provide an expanded array of services to individuals, businesses, 

and governmental units in a wider geographic area and provide customers of 

Provident a full array of brokerage services. Based on all the facts of record, the 

Board has determined that consummation of the proposal can reasonably be 

expected to produce public benefits that would outweigh any likely adverse effects 

under the standard of section 4 of the BHC Act. 

Conclusion

Based on the foregoing and all the facts of record, the Board has 

determined that the application and notice should be, and hereby are, approved. 31 

 

31 A commenter requested that the Board extend the comment period on this 

proposal. The Board has accumulated a significant record in this case, including 

reports of examination, supervisory information, public reports and information, 

and public comment. In the Board’s view, interested persons had ample 

opportunity to submit views on the proposal and, in fact, the commenter has 

provided written submissions that the Board has considered carefully in acting on 

this proposal. The commenter’s request for additional time to comment does not 

identify extraordinary circumstances that would justify an extension of the public 

comment period for this case. Moreover, the BHC Act and Regulation Y require 

the Board to act on proposals submitted under those provisions within certain time 

periods. 12 U.S.C. § 1842(b); 12 C.F.R. 225.15(d). Based on a review of all the 

facts of record, the Board has concluded that the record in this case is sufficient to 

warrant Board action at this time and that an extension of the comment period is 

not warranted. Accordingly, the request for an extension of the comment period is 

denied. 
-18-

In reaching its conclusion, the Board has considered all the facts of record in light 

of the factors that it is required to consider under the BHC Act and other applicable 

statutes.32 The Board’s approval is specifically conditioned on compliance by 

National City with the conditions imposed in this order and the commitments made 

to the Board in connection with the application and notice, including compliance 

with state law. The Board’s approval of the nonbanking aspects of the proposal is 

also subject to all the conditions set forth in Regulation Y, including those in 

sections 225.7 and 225.25(c) (12 C.F.R. 225.7 and 225.25(c)), and to the Board’s 

authority to require such modification or termination of the activities of a bank 

holding company or any of its subsidiaries as the Board finds necessary to ensure 

 

32 Commenters also requested that the Board hold a public meeting or hearing 

on the proposal. Section 3(b) of the BHC Act does not require the Board to hold 

a public hearing on an application unless the appropriate supervisory authority 

for the bank to be acquired makes a timely written recommendation of denial 

of the application. The Board has not received such a recommendation from 

the appropriate supervisory authorities. Under its regulations, the Board also 

may, in its discretion, hold a public meeting or hearing on an application to 

acquire a bank if a meeting or hearing is necessary or appropriate to clarify 

factual issues related to the application and to provide an opportunity for 

testimony. 12 C.F.R. 225.16(e). Section 4 of the BHC Act and the Board’s 

regulations provide for a hearing on a notice to acquire nonbanking companies 

if there are disputed issues of material fact that cannot be resolved in some other 

manner. 12 C.F.R. 225.25(a)(2). The Board has considered carefully the 

commenters’ requests in light of all the facts of record. In the Board’s view, the 

commenters had ample opportunity to submit their views and submitted written 

comments that have been considered carefully by the Board in acting on the 

proposal. The commenters’ requests fail to demonstrate why written comments 

do not present their evidence adequately and fail to identify disputed issues of 

fact that are material to the Board’s decision that would be clarified by a public 

meeting or hearing. For these reasons, and based on all the facts of record, the 

Board has determined that a public meeting or hearing is not required or warranted 

in this case. Accordingly, the requests for a public meeting or hearing on the 

proposal are denied. 
-19-

compliance with and to prevent evasion of the provisions of the BHC Act and the 

Board’s regulations and orders issued thereunder. The commitments made to the 

Board in the application process are deemed to be conditions imposed in writing 

by the Board in connection with its findings and decisions and, as such, may be 

enforced in proceedings under applicable law. 

 The acquisition of Provident Bank may not be consummated before 

the fifteenth calendar day after the effective date of this order, or later than three 

months after the effective date of this order unless such period is extended for good 

cause by the Board or the Federal Reserve Bank of Cleveland, acting pursuant to 

delegated authority. 

 By order of the Board of Governors,33 effective June 8, 2004. 

(signed) 

 

Robert deV. Frierson 

Deputy Secretary of the Board 

 

33 Voting for this action: Chairman Greenspan, Vice Chairman Ferguson, and 

Governors Gramlich, Bies, Olson, Bernanke, and Kohn. 
-20-

APPENDIX A 

Ohio Banking Market Definitions 

Cleveland 

Cuyahoga, Lake, Lorain, and Geauga Counties; Sagamore Hills, Northfield Center, 

Twinsburg, Richfield, Boston, and Hudson townships in Summit County; Medina 

County, excluding Homer, Harrisville, Westfield, Guilford, Wadsworth and Sharon 

townships; Aurora and Streetsboro townships in Portage County; and the City of 

Vermillion in Erie County. 

Columbus 

Franklin, Delaware, Fairfield, Licking, Madison, Pickaway, and Union Counties; 

Perry township in Hocking County; and Thorn township in Perry County. 

Dayton 

Montgomery, Miami, and Greene Counties; Bethel and Mad River townships in 

Clark County; and Clear Creek, Wayne, and Massie townships in Warren County. 

Springfield 

Clark County, excluding Bethel and Mad River townships. 
-21-

APPENDIX B 

Ohio Banking Markets in which National City 

and Provident Compete Directly 

 

Cleveland 

National City operates the second largest depository institution in the Cleveland 

banking market, controlling $15 billion in deposits, representing 25.8 percent of 

market deposits. Provident operates the 25th largest depository institution in the 

market, controlling $65.8 million in deposits, representing less than 1 percent of 

market deposits. On consummation of the proposal, National City would operate 

the second largest depository institution in the market, controlling deposits of 

$15 billion, representing approximately 25.9 percent of market deposits. The HHI 

would increase 6 points to 1,990. Thirty-seven bank and thrift competitors would 

remain in the market. 

Columbus 

National City operates the fourth largest depository institution in the Columbus 

banking market, controlling $2.3 billion in deposits, representing 8.3 percent of 

market deposits. Provident operates the 40th largest depository institution in the 

market, controlling $29.4 million in deposits, representing less than 1 percent of 

market deposits. On consummation of the proposal, National City would operate 

the fourth largest depository institution in the market, controlling deposits of 

$2.3 billion, representing approximately 8.4 percent of market deposits. The HHI 

would increase 2 points to 1,996. Fifty-one bank and thrift competitors would 

remain in the market. 

Dayton 

National City operates the third largest depository institution in the Dayton 

banking market, controlling $1.4 billion in deposits, representing 15.3 percent of 

market deposits. Provident operates the sixth largest depository institution in the 

market, controlling $446.5 million in deposits, representing 5 percent of market 

deposits. On consummation of the proposal, National City would operate the 

second largest depository institution in the market, controlling deposits of 

$1.8 billion, representing approximately 20.4 percent of market deposits. The HHI 

would increase 155 points to 1,657. Twenty-six bank and thrift competitors would 

remain in the market. 
-22-

Springfield 

National City operates the third largest depository institution in the Springfield 

banking market, controlling $187 million in deposits, representing 19.3 percent of 

market deposits. Provident operates the seventh largest depository institution in 

the market, controlling $36.6 million in deposits, representing 3.8 percent of 

market deposits. On consummation of the proposal, National City would operate 

the third largest depository institution in the market, controlling $223.5 million in 

deposits, representing approximately 23.1 percent of market deposits. The HHI 

would increase 146 points to 1,967. Eight bank and thrift competitors would 

remain in the market. 
-23-

APPENDIX C 

 CRA Performance Evaluations of National City 

 Subsidiary Bank CRA Rating Date Supervisor

1. National City Bank, Outstanding February 2000 OCC 

 Cleveland, Ohio 

2. National City Bank Satisfactory February 2000 OCC 

 of Indiana, 

 Indianapolis, Indiana 

3. The Madison Bank and Outstanding May 1999 FDIC 

 Trust Company, 

 Madison, Indiana 

4. National City Bank Satisfactory February 2000 OCC 

 of Kentucky, 

 Louisville, Kentucky 

5. National City Bank Outstanding February 2000 OCC 

 of Michigan/Illinois, 

 Bannockburn, Illinois 

6. National City Bank Outstanding February 2000 OCC 

 of Pennsylvania, 

 Pittsburgh, Pennsylvania 

7. National City Bank Satisfactory February 2000 OCC 

 of Southern Indiana, 

 New Albany, Indiana 

8. Allegiant Bank, Satisfactory October 2001 FDIC 

 St. Louis, Missouri