PNC scores 1st bailout takeover by buying National City

— -- In announcing the purchase Friday, PNC also said it will get $7.7 billion in cash by selling preferred shares to the U.S. Treasury — showcasing a direct effect of the unfolding bailout. "In essence, PNC bought National City for a very inexpensive price and with taxpayer money," says Matthew Schultheis, analyst at Boenning & Scattergood.

The Treasury's role — which made PNC the 10th bank to get a bailout infusion — was hailed as a much-needed shot in the arm that will help thaw credit. "The deal fits in with the overall goal that the Treasury has announced, which is to facilitate increased lending," says Wayne Abernathy, executive vice president at the American Bankers Association.

Focus shifted to which banks will be next in line for the infusions that the Treasury is expected to start announcing shortly. "This is a rolling process, and we expect to approve applications as quickly as we can work through them," Treasury spokeswoman Michele Davis says.

Some insurance companies also could be eligible for capital injection because of their federally regulated holding companies.

The Financial Services Roundtable, which represents banks, insurers and others, has asked Treasury to make assistance available to a broader array of companies.

The PNC-National City deal could be a harbinger of how Treasury will operate its Capital Purchase Program. It plans to buy $250 billion of senior preferred shares in financial institutions, with $125 billion set aside for community and regional banks.

Many regional banks have said they plan to apply for the Treasury's infusion — from the relatively small, such as Michigan's Dearborn Bancorp, with just $1 billion in deposits, to the relatively large, such as Atlanta's SunTrust Banks, with $100 billion in deposits.