Regional bank National City ( NCC) posted a sharp decline in second-quarter profits as the company took a hit from hedging mortgage losses. Profits at National City fell 24% in the second quarter, although they still topped Wall Street forecasts. Excluding the mortgage losses, the bank's profits rose from the previous year's quarter. The company earned $473 million, or 77 cents a share, down from $625 million, or 97 cents a share, a year ago. Analysts expected the company to earn 73 cents a share, according to Thomson Financial. The company's results had a $115-million loss from mortgage servicing rights, compared to a $157-million gain in the second quarter last year. The company also set aside $60 million for bad loans, more than doubling the $26 million set aside in the same period last year. Net charge-offs rose slightly to $76 million from $72 million. Despite the rise in bad loans, Chairman and CEO David A. Daberko called the credit quality "sound," and said that he was pleased with the earnings. "We were very pleased with the results for the second quarter. Corporate loan growth has been strong. Our retail banking business had its best quarter ever with excellent revenue growth," Daberko said. "Net income comparisons to the prior year are affected by the large mortgage servicing hedging gains recorded in the second quarter of 2005, compared to net hedging losses this year." The company is also contemplating selling various units. Among them, the company mentioned First Franklin Financial, a subprime residential mortgage unit; National City Home Loan Services Inc.; and NationPoint, a mortgage lender. Recently, the company said it would buy Harbor Florida Bancshares, Inc., a banking company located along the central east coast of Florida that operates 40 branches in the area.