By JOE MILICIA
Associated Press Writer
CLEVELAND (AP) - Shares of National City Corp. plunged Monday amid broad fears about the health of the nation's regional banks, and the company was forced to issue a statement reassuring investors of its soundness.
The Cleveland-based company said it has experienced no unusual depositor or creditor activity and has more than $12 billion in excess short-term liquidity.
Investors have been worried about the solvency of some banks amid the sharp downturn in the mortgage market. Late Friday the government seized IndyMac Bancorp, marking the second-largest failure of a financial institution in U.S. history.
National City has been among those hit hardest by rising mortgage defaults. It recently raised $7 billion in cash to shore up its capital base. The bank said the recent cash infusion has helped it to maintain a strong capital ratio.
Shares of National City fell to their lowest level in decades before rebounding slightly, and were down 22 percent at $3.45 in mid-afternoon trading.
National City spokeswoman Kristen Baird Adams said the statement was meant to quash speculation that "indicated that there was perhaps some kind of unusual activity at National City today."
The statement "just reiterated a couple of messages about our capital ratios which are important," she said.
National City was among many bank stocks to tumble three days after the government stepped in to save IndyMac.