Getting out while the getting is good at National City…

July 15, 2008

It’s been a tough few days for National City (NCC), the large Cleveland-based bank that has offices in 9 states. Yesterday, it took the unusual step of issuing this release to say that the bank was still solvent and that there was no unusual depositor activity. Of course, they weren’t the only bank to issue that kind of statement: Washington Mutual (WM) did too. Both banks fell on the release of a research report from Richard Bove, titled, “Who Is Next?” that mentioned several other potential problem banks. Later in the day, Bove sought to clarify his initial research.

But the interesting thing about National City is that it comes on the heels of this 8K filed late Friday. While the company announced CFO Jeffrey Kelly’s retirement back in July, it waited until Friday to file Kelly’s release agreement, which shows that he’ll continue to collect a hefty paycheck from the bank through September 2010 — $60K a month through the end of December and then $54K a month through Sept. 2010. There’s also a $1.1 million lump sum payment that will be paid next April. Assuming there is a next April for National City. Surprisingly, the release doesn’t really delve into what happens to those payments if the worst should happen

To be fair, Kelly is a long-time employee of National City having worked at the bank for 29 years. But given the current state of the bank, it still seems like a mighty rich send-off.

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