National City Corp. to Acquire Provident Financial Group for 1.28 Times Revenue

Weekly Corporate Growth Report, Feb 23, 2004

The Deal: National City Corporation has agreed to acquire Provident Financial Group in a stock transaction valued at $2.1 billion. Under the terms of the deal, each share of Provident Financial will be exchanged for 1.135 common shares of National City Corporation. The deal, which remains subject to shareholder and regulatory approvals, is expected to close in the second quarter of 2004.

Discussion: Provident Financial Group is the holding company for Provident Bank, which operates about 65 branches in Ohio and Kentucky. Other divisions of Provident include Information Leasing, which leases equipment; Capstone Realty Advisors, which originates and services commercial mortgages; and Red Capital Group, which finances multifamily housing and health care facilities.

National City is the largest bank-holding corporation in the state of Ohio. National City operates more than 1,100 bank branches in Illinois, Indiana, Kentucky, Michigan, Ohio, and Pennsylvania. In addition to traditional banking services, National City offers investment banking, asset management, trust services, and leasing. The company also owns 85 percent of National Processing, a company that processes credit card transactions.

The acquisition will expand National City's market presence in Cincinnati and other markets across the Ohio River in northern Kentucky.