Maybe I was too hasty last quarter in saying that Motley Fool Income Investor recommendation National City (NYSE:NCC) wasn't the sort of place I wanted to be. After all, management is trying to implement some fairly substantial changes, and those could make a big difference in terms of the company's capital requirements in the future (meaning, perhaps, more cash for dividends and share buybacks). And it doesn't hurt, too, that these shares have lagged those of other banks active in the Midwest like U.S. Bancorp (NYSE:USB), KeyCorp (NYSE:KEY), and Comerica (NYSE:CMA).

Even still, the first quarter wasn't all that great. National City's reported net income fell 5%, and both returns on equity and assets slid from year-ago levels. Though net interest income was up slightly, and the net interest margin did improve, non-interest income was hurt by lower mortgage-related income, which masked a 13% rise in banking fees.

More concerning to me, the balance sheet didn't look so great again. Loan growth was all of 4% and core deposit growth came in at 1%. On a more positive note, consumer and small businesses deposits rose at a better rate (up 5%); growth in brokered deposits also was only about 1% this quarter.

While National City's mortgage business was tough this quarter -- reported earnings fell 77% -- the whole approach to this line is changing. The company is moving away from an originate-and-hold model for some of its mortgages and home equity loans and toward an originate-and-sell model. That can be a tricky switch, but it would free up more capital. Also, the company is putting forth a real effort to become more competitive and attractive in the retail banking marketplace -- a move that will take time and money before it bears fruit.

When it's all said and done, I think this stock is trading about where it should, though I can understand why some would see it as a potential value. After all, if these new efforts work, the rewards should be significant. And even if they don't, National City could still possibly be a target for a larger financial company looking to get into the Midwest marketplace. Still, I have my doubts here, and there are just too many other interesting bank investment opportunities for me to settle on one where I'm not totally comfortable today.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).