National City Corp. disclosed in a regulatory filing that it is the subject of an "informal" Securities and Exchange Commission investigation related to matters including loan underwriting, bank regulatory matters and the $1.3 billion sale of a subprime subsidiary in 2006.

In the filing, the Cleveland-based bank said the SEC's Chicago office on June 30 asked that the company provide "certain documents concerning its loan underwriting experience, dividends, bank regulatory matters and the sale of First Franklin Financial Corporation."

The $154-billion asset National City sold San Jose, Calif.-based subprime lender First Franklin to Merrill Lynch & Co. for $1.3 billion in late 2006.

A spokesman for the SEC declined to comment.

National City said in the filing that it is cooperating fully, but didn't address the nature of the investigation or what the outcome might be. The SEC "has not asserted that the company has acted improperly or illegally," according to the filing.

National City spokeswoman Kristen Baird Adams said Friday that the bank expects "no impact on our operations or ability to serve customers."

"Given the volatility in the market and our stock price in particular, this type of action is not surprising," she said.

National City has been reeling from the housing slump and a portfolio of souring loans. It lost a record $1.76 billion in the second quarter, $171 million in the first and $333 million in the fourth quarter of 2007. In April, the company raised $7 billion from an investor group. Its Tier I capital — a key measure of financial soundness — is 11%, well above the regulatory minimum of 6%.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.