Industry News

Mortgage-hedging losses drive down profits at National City

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National City Corp. reports its second-quarter profits fell 24 percent from a year ago, attributing the decline to hedging losses on mortgages. The Cleveland, Ohio-based bank reported net income for the quarter was $473 million, up $14 million from last quarter but down from the $625 million reported in second-quarter 2005. Profits for the first half of the year are $932 million, compared with $1.1 billion in the first six months of 2005. At 77 cents, earnings per share for the second quarter of 2006 are up from 74 cents the preceding quarter, but off from 97 cents per share in the second quarter of 2005. National City, which last week announced plans to sell its First Franklin mortgage lending unit in California and move into retail banking in Florida, reported $115 million in second-quarter losses from mortgage servicing rights hedging, compared with $157 million in gains during the same period last year. MSR hedging losses for the year now stand at $243 million, National City s...