For those of you that never heard of National City Bank I will give you some idea of their size and scope. The Cleveland, Ohio bank is one of the ten largest banks in the country in terms of deposits and mortgages. But the bank has heavy mortgage exposure in Michigan and Florida, two states hit hard by declining housing prices. they are singing the mortgage blues, and here is why:

Midwestern lender National City Bank is the latest victim of the subprime mortgage crisis. Bad loans caused third quarter net income to plunge 80% to $106 million, or $0.18 per share, from $526 million, or $0.86 per share a year earlier. Analysts has projected earnings per share of $0.31. Shares of National City fell 5.4% by afternoon to $22.60, their lowest price since November 2000.

National City’s mortgage banking business lost $152 million, or $0.25 per share as the value of write-downs increased from $117 million to $141 million. Lending and non-interest income together fell 15%, while expenses increased by 3%.