National City was close to bankruptcy, PNC says

National City Corp., the Cleveland-based bank being acquired by PNC Financial Services Group, may have faced bankruptcy if it didn't find a buyer. Without a "definitive transaction" to provide liquidity, the Cleveland-based bank "would face additional regulatory actions, including intervention by the United States federal banking regulators, and/or be required to seek protection under applicable bankruptcy laws in the very near future," PNC said yesterday in a regulatory filing. PNC said last month it would buy National City for about $5.2 billion in stock.

U.S. Steel pulls back on Alabama plant project

U.S. Steel will delay plans to build a $450 million coking-coal substitute plant in Alabama because of slowing steel demand. Construction hasn't begun because environmental permits the company applied for in April, when the project was announced, haven't been issued, John Armstrong, a U.S. Steel spokesman, said yesterday. U.S. Steel said in April that it would invest $150 million in the project's first phase.

Earnings

Michael Baker Corp. reported record third-quarter earnings that were boosted by gains in its engineering and energy operations and nonrecurring items, including reimbursement of fees and favorable tax settlements. Net income totaled $11.8 million, or $1.33 per diluted share, vs. $4.5 million, or 51 cents, a year ago. Contract revenue rose to $181 million from $176 million, helped by engineering work for the Department of Homeland Security and a joint venture in Iraq.

Fannie Mae posted a $29 billion loss in the third quarter as it took a massive tax-related charge, and said it might have to tap the government's $100 billion lifeline as early as next year. The mortgage finance company, seized by federal regulators more than two months ago, posted a loss of $13 per share for the quarter, mainly due to a $21.4 billion noncash charge to reduce the value of tax assets. A year ago, it lost $1.4 billion, or $1.56 a share. Analysts surveyed by Thomson Reuters had expected a loss of $1.60 per share. Fannie Mae's net worth -- the value of its assets minus the value of its liabilities -- fell to $9.4 billion as of Sept. 30 from $44.1 billion at the end of last year.

Starbucks Corp. said its profit dropped 97 percent in the fiscal fourth quarter mainly because of the costs of closing underperforming stores and also falling sales in the United States. The coffee retailer said net income fell to $5.4 million, or a penny a share, from $158.5 million, or 21 cents, a year ago. Excluding the cost of closing stores, Starbucks earned 10 cents a share, vs. the 13 cents estimated by analysts polled by Thomson Reuters.

Also in business ...

South Side-based Precision Therapeutics Inc. said it received $43 million in venture capital funding for further development of ChemoFx, a diagnostic test used to determine the type of chemotherapy for cancer patients. Longitude Venture Partners L.P., a new investor, led the funding round ... Spectrum Control said it received a $1.2 million order for a microwave integrated assembly used in military communications.