Wells Fargo acquired five banks from United Bancorp of Wyoming Inc. of Jackson, Wyo., in January and has expressed interest in purchasing more. Meanwhile, National City put itself up for sale, succumbing to exposure to bad loans. As a result, National City's earnings have taken a hit, and the bank was forced to cut its dividend 49% to preserve capital.
Meanwhile, investors have been fleeing National City's stock, which is trading in the $15 level, down from a 52-week high of $38.32, giving it a market cap of $8.9 billion. Additionally, National City has also stopped buying its stock to conserve money, but the strategy has also fueled the loss of investor confidence.
For Wells Fargo, National City's stock weakness would most likely be a motivating factor to make a deal. In addition, the bank's tier-one capital designation -- a ranking of a bank's financial strength -- is just a half-percentage point above what regulators require for such a designation and could be another motivating reason to pursue a deal. - Gerald Magpily
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Times have been rough for banks during this credit crisis, but for some like Wells Fargo & Co. the shaky climate has been a growing opportunity to pursue deals at deep discounts. 
