EX-99.1 2 l24854aexv99w1.htm EX-99.1 EX-99.1
 

Exhibit 99.1
(NATIONAL CITY LOGO)
Unaudited
Mid-Quarter Update to Financial Supplement
February 28, 2007
Table of Contents
         
REVIEW OF FINANCIAL TRENDS
     3  
CONSOLIDATED SELECTED AVERAGE BALANCES
     5  
CREDIT QUALITY STATISTICS
     6  
CAPITALIZATION
     7  
FULL-TIME EQUIVALENT EMPLOYEES BY LINE OF BUSINESS
     7  
CONSUMER AND SMALL BUSINESS FINANCIAL SERVICES PERFORMANCE MEASURES
     8  
WEALTH MANAGEMENT PERFORMANCE MEASURES
     9  
NATIONAL CITY MORTGAGE STATISTICS
     9  
NATIONAL HOME EQUITY STATISTICS
     9  
RUN-OFF LOAN PORTFOLIO STATISTICS
     10  

 

 

Table of Contents (continued)
Mid-Quarter Update to Financial Supplement
SUMMARY OF PRESENTATION CHANGES
Presentation changes made to this Mid-Quarter Update to Financial Supplement are as follows:
Consolidated Selected Average Balances
The presentation of residential real estate portfolio loans was expanded to separately identify First Franklin originated nonconforming mortgage loans, and home equity installment loans from all other bank portfolio loans.
Credit Quality Statistics
This new section shows credit quality statistics including charge-offs and recoveries, nonperforming assets, and loans 90+ days past due still accruing interest.
Full-Time Equivalent Employees By Line of Business
Effective January 1, 2007, the Corporation announced a reorganization of its management structure resulting in the identification of the following five reportable segments: Consumer and Small Business Financial Services, Commercial Banking — Regional, Commercial Banking — National, Mortgage Banking, and Wealth Management. This schedule has been updated to reflect this new management structure.
National Home Equity Statistics
Origination data for home equity loans and lines of credit has been added to this section.
Run-Off Loan Portfolio Statistics
This new section presents statistics on the First Franklin nonconforming residential real estate loan portfolio and National Home Equity home equity loans and lines of credit portfolios. These portfolios are in run-off.

2

 

National City Corporation
Review of Financial Trends
This review contains forward-looking statements. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance, nor should they be relied upon as representing management’s views as of any subsequent date. The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties. Although management believes the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include, without limitation, the Corporation’s ability to effectively execute its business plans; changes in general economic and financial market conditions; changes in interest rates; changes in the competitive environment; continuing consolidation in the financial services industry; new litigation or changes in existing litigation; losses, customer bankruptcy, claims and assessments; changes in banking regulations or other regulatory or legislative requirements affecting the Corporation’s business; and changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies. Additional information concerning factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements is available in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2006, and subsequent filings with the United States Securities and Exchange Commission (SEC). Copies of these filings are available at no cost on the SEC’s Web site at www.sec.gov or on the Corporation’s Web site at www.NationalCity.com. Management may elect to update forward-looking statements at some future point; however, it specifically disclaims any obligation to do so.
Earning Assets, Net Interest Margin, and Net Interest Income
Net interest margin was approximately 3.70% for the first two months of the year, consistent with expectations for the first quarter as a whole. Loan growth in the core portfolios (including the effect of acquisitions) has been offset by declines in the nonconforming mortgage and national home equity run-off portfolios. As a result, net interest income is expected to decline slightly in the first quarter relative to the fourth quarter.
Loan Sales and Servicing
Gain-on-sale margins at National City Mortgage have been relatively stable in the 1% area, while those at National Home Equity have averaged around 3.3%. With respect to nonconforming (First Franklin) loans, the remaining $1.6 billion of loans held for sale are currently not saleable at what management considers an acceptable price due to adverse market conditions. Accordingly, the decision has been made to retain these loans, and they will be transferred back into portfolio in March. Fair value writedowns of $11 million have been recorded through February, and a further writedown is likely prior to the transfer of these loans back into portfolio.
Mortgage servicing right (MSR) net hedging results were a net loss of approximately $45 million pre-tax through the first two months of the quarter.

3

 

Credit Quality
Credit trends in the core commercial and consumer portfolios continue to be stable. The Corporation’s largest nonperforming exposure at December 31, a series of residential development and construction loans totaling $46 million and involving a single developer, has been or is expected to be sold prior to the end of the first quarter at a discount slightly less than the allocated allowance. No new problem loans of significance have been identified in the commercial, commercial real estate, and residential real estate development sectors.
With respect to the run-off portfolios, National Home Equity has seen some increase in delinquency and loss rates consistent with a decreasing portfolio balance and observed stresses in the housing markets. In the nonconforming mortgage (First Franklin) portfolio, delinquency trends and losses have thus far been consistent with the expectations embodied in the year-end loan loss reserve. As previously disclosed, a sub-portfolio of second mortgages, totaling $2.2 billion at December 31, is covered under lender paid mortgage insurance written by two different carriers, and these policies are in turn subject to 50% reinsurance by a National City subsidiary. While one of the insurers has been paying submitted claims promptly, the other has been rejecting a meaningful number of claims filed for reasons that National City believes are inappropriate under the insurance contract. Should this situation not be resolved through negotiation by the end of March, National City plans to pursue all available contractual and legal remedies to achieve payment of valid claims. In this circumstance, all such loans in dispute will be fully charged off or equivalently reserved. Further, the allowance for loan losses is subject to adjustment based on changing expectations of insurance recoveries from the carrier. The exact amount of the required adjustment to the allowance for loan losses arising from these circumstances has not been determined; however, it is currently estimated to be on the order of $50 million, which could be partially offset by a reduction in reinsurance expense at the insurance subsidiary.
Capital
The completion of the tender offer for 75 million shares at the end of February resulted in the repurchase of 40.3 million shares at $38.75 per share, totaling $1.6 billion. The company has remaining authority to repurchase up to 43.5 million additional shares through conventional open market or accelerated methods. At February 28, pro forma for the settlement of the tender offer, the tangible equity to assets ratio was 6.6%, well above the ongoing target. Subject to maintenance of capital targets, regulatory limitations, and price considerations, National City expects to be an active buyer of its shares in the coming weeks and months.
Other
On January 5, 2007, National City completed its previously announced acquisition of Fidelity Bankshares, Inc. for cash of $506 million and issuance of 14 million shares of National City common stock. As of the acquisition date, Fidelity had loans of $3.5 billion and deposits of $3.4 billion. Goodwill associated with this transaction was $679 million. Fidelity is scheduled to convert to National City systems on April 14. The Corporation’s other Florida acquisition, Harbor Federal, closed in late December and is scheduled to convert on March 17. Non-interest expenses for the first quarter will include an estimated $30 million of integration and related costs associated with these transactions.

4

 

Unaudited
National City Corporation
Mid-Quarter Update to Financial Supplement
CONSOLIDATED SELECTED AVERAGE BALANCES
($ in millions)
                                                                                                         
    February   January   December   November   October   September   August   July   June   May   April   March   February
    2007   2007   2006   2006   2006   2006   2006   2006   2006   2006   2006   2006   2006
         
ASSETS
                                                                                                        
Available for sale securities, at cost
   $ 7,762     $ 7,923     $ 7,709     $ 7,854     $ 7,856     $ 7,897     $ 7,915     $ 7,810     $ 7,854     $ 7,889     $ 7,661     $ 7,635     $ 7,744  
 
                                                                                                        
Portfolio loans:
                                                                                                        
Commercial
   $ 30,847     $ 30,968     $ 30,617     $ 29,918     $ 29,775     $ 29,594     $ 29,514     $ 29,530     $ 29,045     $ 28,656     $ 28,429     $ 27,644     $ 27,447  
Commercial construction
     4,733       4,623       4,282       3,994       3,896       3,798       3,739       3,636       3,585       3,520       3,415       3,410       3,456  
Commercial real estate
     13,021       13,022       12,376       11,861       11,954       11,992       12,015       12,172       12,197       12,119       11,981       11,922       11,964  
Residential real estate:
                                                                                                        
Bank portfolio and other
     12,832       12,185       10,652       8,993       9,086       8,479       8,291       8,125       8,143       7,939       7,819       7,878       7,897  
First Franklin(1)
     6,789       7,438       7,685       8,046       8,117       9,672       15,627       16,290       16,934       17,571       18,103       18,482       18,717  
Home equity installment
     6,368       6,397       6,408       6,247       6,260       6,274       6,285       6,291       6,291       6,332       6,303       6,530       6,504  
         
Total residential real estate loans
     25,989       26,020       24,745       23,286       23,463       24,425       30,203       30,706       31,368       31,842       32,225       32,890       33,118  
Home equity lines of credit
     14,115       14,707       14,721       14,861       15,104       15,401       15,696       15,784       16,798       17,070       17,400       20,524       20,932  
Credit card and other unsecured lines of credit
     3,046       3,061       2,859       2,803       2,747       2,710       2,645       2,610       2,577       2,529       2,479       2,484       2,505  
Other consumer
     5,498       5,484       5,462       5,253       5,358       5,393       5,283       5,234       5,902       6,033       6,101       6,050       6,057  
         
Total portfolio loans
   $ 97,249     $ 97,885     $ 95,062     $ 91,976     $ 92,297     $ 93,313     $ 99,095     $ 99,672     $ 101,472     $ 101,769     $ 102,030     $ 104,924     $ 105,479  
         
 
                                                                                                        
Loans held for sale or securitization:
                                                                                                        
Commercial
   $ 38     $ 35     $ 33     $ 35     $ 36     $ 44     $ 52     $ 50     $ 100     $ 66     $ 39     $ 13     $ 11  
Commercial real estate
     149       250       91       39       172       167       92       90       107       108       213       136       47  
Residential real estate:
                                                                                                        
National City Mortgage
     6,279       6,283       5,843       5,547       5,513       5,395       5,674       5,830       5,850       5,825       5,605       5,220       5,327  
First Franklin(1)
     1,671       1,703       5,571       8,936       9,571       9,099       3,799       3,745       3,133       2,693       2,481       2,278       2,061  
National Home Equity
     926       1,306       959       581       654       1,043       775       471       652       592       427       258       124  
         
Total residential real estate loans held for sale
     8,876       9,292       12,373       15,064       15,738       15,537       10,248       10,046       9,635       9,110       8,513       7,756       7,512  
Credit card loans
     425       425       253       —       —       —       —       —       —       —       —       398       425  
Home equity lines of credit
     2,789       3,109       2,682       2,236       3,509       3,289       2,928       2,736       3,746       3,574       3,055       407       613  
Student loans
     —       —       1       4       8       14       18       12       4       3       4       4       4  
         
Total loans held for sale or securitization
   $ 12,277     $ 13,111     $ 15,433     $ 17,378     $ 19,463     $ 19,051     $ 13,338     $ 12,934     $ 13,592     $ 12,861     $ 11,824     $ 8,714     $ 8,612  
         
 
                                                                                                        
LIABILITIES
                                                                                                        
Deposits:
                                                                                                        
Noninterest bearing
   $ 16,268     $ 16,566     $ 17,101     $ 16,507     $ 16,473     $ 16,593     $ 16,804     $ 16,818     $ 16,960     $ 16,861     $ 17,355     $ 16,830     $ 16,607  
NOW and money market accounts
     32,549       31,800       30,343       29,370       28,895       28,819       28,842       28,771       28,865       28,731       29,023       28,603       28,201  
Savings accounts
     2,459       2,366       1,889       1,790       1,820       1,854       1,895       1,960       2,012       2,038       2,077       2,098       2,089  
Consumer time
     24,459       24,338       23,641       22,198       22,096       22,049       22,025       21,826       21,671       21,534       21,188       20,959       20,684  
         
Core deposits
     75,735       75,070       72,974       69,865       69,284       69,315       69,566       69,375       69,508       69,164       69,643       68,490       67,581  
Other
     3,952       4,179       4,320       4,375       4,714       5,278       5,259       5,095       5,249       6,167       6,136       6,453       6,553  
Foreign
     7,575       7,968       7,840       10,147       10,042       8,933       9,232       8,469       8,696       7,383       6,478       6,771       8,976  
         
Total deposits
   $ 87,262     $ 87,217     $ 85,134     $ 84,387     $ 84,040     $ 83,526     $ 84,057     $ 82,939     $ 83,453     $ 82,714     $ 82,257     $ 81,714     $ 83,110  
         
 
                                                                                                        
Federal funds borrowed and security repurchase agreements
   $ 5,264     $ 4,681     $ 6,405     $ 7,100     $ 8,356     $ 7,903     $ 6,625     $ 6,130     $ 5,759     $ 4,773     $ 4,811     $ 5,684     $ 5,891  
Borrowed funds
     1,232       1,223       1,290       2,098       2,428       2,168       1,846       1,772       2,373       3,602       2,298       1,968       2,635  
Long-term debt
     25,018       26,229       26,251       25,839       25,566       27,451       29,132       31,648       32,925       32,940       33,402       33,128       31,374  
 
                                                                                                        
Memo:
                                                                                                        
Noninterest bearing escrow balances
   $ 3,379     $ 3,329     $ 4,004     $ 4,169     $ 4,037     $ 4,129     $ 4,273     $ 4,343     $ 4,218     $ 4,006     $ 4,031     $ 3,824     $ 3,620  
Interest bearing escrow balances
     153       150       135       136       131       128       134       148       144       139       133       134       135  
Noninterest bearing deposits excluding escrow balances
     12,889       13,237       13,097       12,338       12,436       12,464       12,531       12,475       12,742       12,855       13,324       13,006       12,987  
Core deposits excluding escrow balances
     72,203       71,591       68,835       65,560       65,116       65,058       65,159       64,884       65,146       65,019       65,479       64,532       63,826  
 
(1)   Represents nonconforming residential real estate loans originated by the former First Franklin and/or Altegra/Loan Zone business units. These portfolios are in run-off.

5

 

Unaudited
National City Corporation
Mid-Quarter Update to Financial Supplement
CREDIT QUALITY STATISTICS
($ in millions)
                                                                                                         
    February   January   December   November   October   September   August   July   June   May   April   March   February
    2007   2007   2006   2006   2006   2006   2006   2006   2006   2006   2006   2006   2006
         
CHARGE-OFFS & RECOVERIES
                                                                                                        
Charge-offs:
                                                                                                        
Commercial
   $ 4     $ 3     $ 25     $ 10     $ 5     $ 24     $ 9     $ 4     $ 9     $ 15     $ 4     $ 30     $ 5  
Commercial construction
     —       —       6       —       2       1       —       —       —       —       2       —       —  
Commercial real estate
     1       —       5       (1 )     2       1       —       1       6       1       (2 )     7       —  
Residential real estate
     12       12       25       14       13       47       21       14       19       15       13       15       16  
Home equity lines of credit
     9       13       12       7       4       8       7       5       5       5       5       6       8  
Credit card and other unsecured lines of credit
     12       12       10       8       8       7       7       6       7       7       6       9       9  
Other consumer
     5       4       5       5       5       4       4       4       3       4       4       7       9  
         
Total charge-offs
     43       44       88       43       39       92       48       34       49       47       32       74       47  
         
 
                                                                                                        
Recoveries:
                                                                                                        
Commercial
     2       4       5       4       4       6       3       6       5       3       2       6       7  
Commercial construction
     —       —       —       —       —       —       —       —       —       —       —       —       —  
Commercial real estate
     —       —       1       —       2       1       1       —       —       —       1       1       1  
Residential real estate
     2       2       4       4       6       10       7       6       7       7       5       5       4  
Home equity lines of credit
     2       1       1       1       2       2       2       1       2       2       1       1       1  
Credit card and other unsecured lines of credit
     2       1       1       1       1       1       1       1       2       1       1       4       1  
Other consumer
     2       3       1       2       2       2       2       5       3       6       4       5       4  
         
Total recoveries
     10       11       13       12       17       22       16       19       19       19       14       22       18  
         
Net charge-offs
   $ 33     $ 33     $ 75     $ 31     $ 22     $ 70     $ 32     $ 15     $ 30     $ 28     $ 18     $ 52     $ 29  
         
 
                                                                                                        
NONPERFORMING ASSETS
                                                                                                        
Commercial
   $ 134     $ 123     $ 124     $ 152     $ 146     $ 142     $ 157     $ 189     $ 178     $ 154     $ 157     $ 165     $ 187  
Commercial construction
     43       37       38       44       55       55       36       35       36       37       26       27       26  
Commercial real estate
     115       109       111       96       103       97       102       106       108       112       114       117       116  
Residential real estate:
                                                                                                        
National City Mortgage
     97       82       77       82       82       79       75       81       82       85       89       86       94  
First Franklin (1)
     68       67       65       65       59       62       61       61       60       63       63       62       61  
Other(2)
     85       94       85       82       31       35       25       22       25       26       25       26       24  
         
Total real estate — residential
     250       243       227       229       172       176       161       164       167       174       177       174       179  
         
Total nonperforming portfolio loans
     542       512       500       521       476       470       456       494       489       477       474       483       508  
Other real estate owned (OREO):
                                                                                                        
Commercial
     —       1       1       —       —       —       —       1       2       2       2       2       2  
Residential real estate:
                                                                                                        
National City Mortgage(3)
     113       107       105       89       90       88       84       82       78       83       77       77       27  
First Franklin (1)
     95       98       116       122       111       104       99       90       84       79       74       69       67  
Other
     9       6       4       4       4       3       4       3       1       2       1       1       1  
         
Total real estate — residential
     217       211       225       215       205       195       187       175       163       164       152       147       95  
         
Other
     6       6       3       1       1       2       2       2       2       2       2       2       7  
 
                                                                                                        
Total OREO
     223       218       229       216       206       197       189       178       167       168       156       151       103  
 
                                                                                                        
Mortgage loans held for sale and other
     7       6       3       24       23       22       16       14       11       13       11       13       9  
         
Total Nonperforming Assets
   $ 772     $ 736     $ 732     $ 761     $ 705     $ 689     $ 661     $ 686     $ 667     $ 658     $ 641     $ 647     $ 620  
         
 
                                                                                                        
LOANS 90+ DAYS PAST DUE ACCRUING INTEREST
                                                                                                        
Commercial
   $ 28     $ 27     $ 31     $ 48     $ 46     $ 73     $ 36     $ 28     $ 51     $ 21     $ 39     $ 35     $ 29  
Commercial construction
     2       7       9       14       5       10       9       15       —       1       2       2       5  
Commercial real estate
     21       22       18       22       14       16       23       22       17       13       8       5       24  
Residential real estate:
                                                                                                        
National City Mortgage and other
     166       156       141       141       126       137       135       115       109       113       112       110       117  
First Franklin (1)
     581       565       567       582       508       501       460       454       407       389       382       365       402  
         
Total real estate — residential
     747       721       708       723       634       638       595       569       516       502       494       475       519  
         
Home equity lines of credit
     49       44       37       41       38       24       25       21       21       19       20       20       24  
Credit card and other unsecured lines of credit
     37       37       35       31       29       24       23       21       21       22       21       20       28  
Other consumer
     10       11       11       10       11       11       9       8       8       8       8       8       13  
Mortgage loans held for sale and other
     117       108       89       81       73       53       50       45       40       25       21       29       30  
         
Total Loans 90+ Days Past Due
   $ 1,011     $ 977     $ 938     $ 970     $ 850     $ 849     $ 770     $ 729     $ 674     $ 611     $ 613     $ 594     $ 672  
         
 
(1)   Represents nonconforming residential real estate loans originated by the former First Franklin and/or Altegra/Loan Zone business units. These portfolios are in run-off.
 
(2)   Includes loans to residential real estate developers whose loans are collateralized by real estate.
 
(3)   Effective March 31, 2006, a change in regulatory reporting requirements resulted in a reclassification of residential real estate loans in foreclosure, which are insured by GNMA, to Other Real Estate Owned (OREO).

6

 

Unaudited
National City Corporation
Mid-Quarter Update to Financial Supplement
CAPITALIZATION (Period End)
(In millions, except per share data)
                                                                                                         
    February   January   December   November   October   September   August   July   June   May   April   March   February
    2007   2007   2006   2006   2006   2006   2006   2006   2006   2006   2006   2006   2006
         
COMMON STOCK ROLLFORWARD
                                                                                                        
Beginning balance
     648.1       632.4       602.6       602.2       601.9       603.3       604.9       605.1       609.9       609.5       610.0       610.3       613.8  
Shares issued under stock award plans
     2.2       2.2       .4       .6       1.0       .6       .2       .6       .9       1.9       .8       .9       1.3  
Shares issued for acquisitions
     —       13.7       29.5       —       —       —       —       —       —       —       —       —       —  
Shares repurchased under repurchase authorizations
     —       —       —       —       (.6 )     (2.0 )     (1.7 )     (.6 )     (5.6 )     (1.2 )     (.9 )     (1.0 )     (4.4 )
Shares exchanged for stock award plans
     (.4 )     (.2 )     (.1 )     (.2 )     (.1 )     —       (.1 )     (.2 )     (.1 )     (.3 )     (.4 )     (.2 )     (.4 )
         
Ending balance
     649.9       648.1       632.4       602.6       602.2       601.9       603.3       604.9       605.1       609.9       609.5       610.0       610.3  
         
 
                                                                                                        
COMMON STOCK REPURCHASE ACTIVITY
                                                                                                        
Number of common shares repurchased
     —       —       —       —       .6       2.0       1.7       .6       5.6       1.2       .9       1.0       4.4  
Average price per share of repurchased common shares
     —       —       —       —     $ 37.02     $ 36.21     $ 36.32     $ 36.31     $ 36.12     $ 37.00     $ 34.92     $ 34.62     $ 34.05  
Total cost
     —       —       —       —     $ 22.7     $ 71.1     $ 62.4     $ 22.3     $ 204.3     $ 44.4     $ 30.6     $ 35.8     $ 149.6  
Common shares remaining under authorization(1)
     43.5       43.5       43.5       13.5       13.5       14.1       16.1       17.8       18.4       24.0       25.2       26.1       27.1  
 
                                                                                                        
Shares outstanding:
                                                                                                        
Average basic
     648.2       643.3       631.2       602.4       601.8       602.7       603.7       605.1       608.9       610.3       609.8       609.6       610.9  
Average diluted
     657.6       651.9       640.0       611.2       610.7       611.0       611.9       613.3       617.5       619.4       617.7       617.7       618.6  
 
(1)   In December 2006, National City’s Board of Directors authorized the repurchase of an additional 30 million shares of issued and outstanding common stock.
FULL-TIME EQUIVALENT EMPLOYEES BY LINE OF BUSINESS(1)
                                                                                                         
    February   January   December   November   October   September   August   July   June   May   April   March   February
    2007   2007   2006   2006   2006   2006   2006   2006   2006   2006   2006   2006   2006
         
Line of business staff:
                                                                                                        
Consumer and Small Business Financial Services
     12,550       12,599       12,477       12,360       12,312       12,377       12,400       12,426       12,395       12,109       12,126       12,130       12,070  
Commercial Banking-Regional
     1,834       1,833       1,827       1,822       1,831       1,834       1,843       1,797       1,815       1,820       1,829       1,845       1,846  
Commercial Banking-National
     595       596       586       602       593       583       591       591       576       582       583       577       572  
Mortgage Banking:
                                                                                                        
National City Mortgage
     6,813       6,788       6,804       6,843       6,764       6,837       6,860       6,937       7,088       7,268       7,344       7,305       7,345  
National Home Equity
     408       405       404       406       408       408       405       406       439       438       444       454       458  
         
Total Mortgage Banking
     7,221       7,193       7,208       7,249       7,172       7,245       7,265       7,343       7,527       7,706       7,788       7,759       7,803  
Wealth Management
     1,510       1,514       1,513       1,508       1,501       1,489       1,508       1,516       1,521       1,529       1,535       1,523       1,514  
 
                                                                                                        
Corporate support staff(2) (3)
     8,567       8,511       7,659       10,210       10,067       10,093       10,084       10,065       10,117       10,037       10,001       10,014       10,001  
         
Total Employees
     32,277       32,246       31,270       33,751       33,476       33,621       33,691       33,738       33,951       33,783       33,862       33,848       33,806  
         
 
(1)   Represents period-end, active, full-time equivalent employees.
 
(2)   Personnel expense associated with corporate staff are allocated to the lines of business either directly based on usage or indirectly as part of the general overhead allocation process.
 
(3)   Periods prior to December 2006 include full-time equivalent employees associated with the First Franklin and National City Home Loan Services business units which were sold in December 2006.

7

 

Unaudited
National City Corporation
Mid-Quarter Update to Financial Supplement
CONSUMER AND SMALL BUSINESS FINANCIAL SERVICES PERFORMANCE MEASURES
($ in millions)
                                                                                                         
    February   January   December   November   October   September   August   July   June   May   April   March   February
    2007   2007   2006   2006   2006   2006   2006   2006   2006   2006   2006   2006   2006
         
Average Total Deposits(1)
   $ 57,270     $ 56,820     $ 56,932     $ 56,486     $ 56,102     $ 56,096     $ 56,081     $ 56,139     $ 56,220     $ 55,723     $ 55,777     $ 55,237     $ 54,518  
 
                                                                                                        
DEPOSIT ACCOUNT METRICS(1) (2)
                                                                                                        
Personal Deposits:
                                                                                                        
Noninterest Bearing Checking
                                                                                                        
Average total balance
   $ 3,077     $ 2,972     $ 2,995     $ 2,914     $ 2,934     $ 3,002     $ 2,987     $ 3,059     $ 3,095     $ 3,123     $ 3,306     $ 3,252     $ 3,210  
Number of accounts(3)
     1,696       1,701       1,703       1,707       1,714       1,723       1,729       1,720       1,717       1,711       1,715       1,726       1,733  
 
                                                                                                        
Interest Bearing Checking
                                                                                                        
Average total balance
   $ 8,179     $ 8,207     $ 8,256     $ 8,077     $ 7,993     $ 8,029     $ 8,036     $ 8,072     $ 8,132     $ 8,108     $ 8,325     $ 8,096     $ 7,927  
Number of accounts(3)
     1,154       1,144       1,134       1,129       1,120       1,108       1,095       1,075       1,061       1,044       1,025       1,008       991  
 
                                                                                                        
Money Market Savings
                                                                                                        
Average total balance
   $ 14,641     $ 14,348     $ 14,045     $ 13,860     $ 13,741     $ 13,709     $ 13,752     $ 13,761     $ 13,821     $ 13,772     $ 13,696     $ 13,682     $ 13,555  
Number of accounts(3)
     1,029       1,005       985       971       960       948       933       905       888       869       851       836       815  
 
                                                                                                        
Regular savings
                                                                                                        
Average total balance
   $ 1,505     $ 1,517     $ 1,532     $ 1,555     $ 1,580     $ 1,605     $ 1,652     $ 1,717     $ 1,764     $ 1,793     $ 1,819     $ 1,833     $ 1,815  
Number of accounts(3)
     519       526       534       540       547       556       563       574       583       591       599       607       616  
 
                                                                                                        
Business Deposits:
                                                                                                        
Average total balance
   $ 8,227     $ 8,200     $ 8,501     $ 8,495     $ 8,378     $ 8,343     $ 8,260     $ 8,331     $ 8,364     $ 8,069     $ 8,045     $ 8,031     $ 7,954  
Number of accounts(3)
     406       405       404       404       403       402       400       396       395       394       392       390       388  
 
                                                                                                        
Time Deposits:
                                                                                                        
Average total balance
   $ 21,485     $ 21,459     $ 21,485     $ 21,470     $ 21,373     $ 21,305     $ 21,290     $ 21,103     $ 20,953     $ 20,763     $ 20,502     $ 20,256     $ 19,977  
Number of accounts(3)
     1,051       1,048       1,050       1,054       1,051       1,053       1,054       1,048       1,039       1,038       1,032       1,022       1,013  
 
                                                                                                        
CONSUMER LOAN PRODUCTION METRICS (# of loans)(2)
                                                                                                        
Installment loan originations:
                                                                                                        
Home equity(4)
     1,992       1,608       1,718       2,124       2,337       2,110       3,074       2,531       2,491       2,421       1,966       2,702       3,853  
Other(5)
     1,591       1,943       1,814       2,126       2,137       1,912       2,331       2,098       2,057       2,264       1,689       1,570       1,022  
Home equity and other lines of credit
     5,387       4,911       5,355       5,833       6,547       6,550       6,720       5,087       6,541       6,577       6,912       6,193       4,581  
         
Total consumer loan originations
     8,970       8,462       8,887       10,083       11,021       10,572       12,125       9,716       11,089       11,262       10,567       10,465       9,456  
         
 
                                                                                                        
BANK BRANCHES AND OTHER
                                                                                                        
Total bank branches
     1,361       1,357       1,303       1,254       1,254       1,253       1,254       1,248       1,245       1,243       1,231       1,230       1,230  
ATMs
     2,092       2,088       2,013       1,965       1,964       1,960       1,957       1,960       1,968       1,967       1,954       1,949       1,945  
Online banking customers
     1,720,157       1,692,859       1,680,939       1,621,800       1,604,609       1,572,084       1,539,606       1,492,613       1,462,992       1,421,577       1,390,907       1,359,249       1,328,120  
 
(1)   Restated to reflect the reassignment of certain deposits with the Commercial Banking-Regional line of business.
 
(2)   Excludes Education Finance and National City Card Services. Additionally, home equity loans generated by the National Home Equity division of the Mortgage Banking line of business are excluded from the consumer loan production metrics.
 
(3)   Represents period-end number of accounts in thousands.
 
(4)   Represents closed-end home equity installment loans included in real estate residential portfolio loans on the consolidated balance sheet.
 
(5)   Represents other secured installment loans.

8

 

Unaudited
National City Corporation
Mid-Quarter Update to Financial Supplement
WEALTH MANAGEMENT PERFORMANCE MEASURES
($ in millions)
                                                                                                         
    February   January   December   November   October   September   August   July   June   May   April   March   February
    2007   2007   2006   2006   2006   2006   2006   2006   2006   2006   2006   2006   2006
         
ASSETS UNDER ADMINISTRATION
                                                                                                        
 
                                                                                                        
Managed assets:
                                                                                                        
Value at beginning of period
   $ 62,323     $ 61,369     $ 61,805     $ 60,546     $ 60,468     $ 59,744     $ 58,736     $ 59,217     $ 61,230     $ 62,131     $ 62,669     $ 66,748     $ 66,047  
Acquisition
     —       101       —       —       —       —       —       —       —       —       —       —       —  
Estimated change due to market impact
     (206 )     71       28       651       698       731       963       446       (551 )     (594 )     452       939       6  
Other activity, net
     (186 )     782       (464 )     608       (620 )     (7 )     45       (927 )     (1,462 )     (307 )     (990 )     (5,018 )     695  
         
Value at end of period
     61,931       62,323       61,369       61,805       60,546       60,468       59,744       58,736       59,217       61,230       62,131       62,669       66,748  
         
 
                                                                                                        
Non-managed assets:
                                                                                                        
Value at beginning of period
     51,308       50,823       51,831       51,725       50,910       49,784       49,798       48,261       48,633       48,404       48,018       43,340       43,487  
Estimated change due to market impact
     (30 )     242       744       595       423       875       8       839       (168 )     (192 )     456       306       (14 )
Other activity, net
     247       243       (1,752 )     (489 )     392       251       (22 )     698       (204 )     421       (70 )     4,372       (133 )
         
Value at end of period
     51,525       51,308       50,823       51,831       51,725       50,910       49,784       49,798       48,261       48,633       48,404       48,018       43,340  
         
Total assets at end of period
   $ 113,456     $ 113,631     $ 112,192     $ 113,636     $ 112,271     $ 111,378     $ 109,528     $ 108,534     $ 107,478     $ 109,863     $ 110,535     $ 110,687     $ 110,088  
         
Proprietary mutual fund assets (included above)
   $ 13,089     $ 12,999     $ 12,672     $ 12,545     $ 12,036     $ 11,946     $ 11,879     $ 11,672     $ 11,848     $ 11,833     $ 11,828     $ 12,198     $ 12,078  
NATIONAL CITY MORTGAGE STATISTICS
($ in millions)
                                                                                                         
    February   January   December   November   October   September   August   July   June   May   April   March   February
    2007   2007   2006   2006   2006   2006   2006   2006   2006   2006   2006   2006   2006
         
ORIGINATION AND SALES DATA
                                                                                                        
Applications(1)
   $ 6,725     $ 6,700     $ 6,214     $ 6,323     $ 6,514     $ 5,871     $ 6,462     $ 5,361     $ 5,979     $ 6,508     $ 6,017     $ 7,137     $ 5,517  
 
                                                                                                        
Percentage of applications represented by refinances
     55 %     59 %     63 %     59 %     58 %     56 %     52 %     48 %     46 %     46 %     45 %     47 %     49 %
 
                                                                                                        
Originations:
                                                                                                        
Retail
   $ 2,014     $ 2,158     $ 2,302     $ 2,162     $ 2,276     $ 2,196     $ 2,439     $ 2,225     $ 2,625     $ 2,571     $ 2,294     $ 2,398     $ 1,994  
Wholesale
     1,432       1,834       1,669       1,429       1,539       1,225       1,318       1,030       1,343       1,336       1,260       1,438       1,138  
Less: loan originations for other units (NHE) and portfolio
     (333 )     (363 )     (377 )     (409 )     (431 )     (398 )     (402 )     (366 )     (404 )     (408 )     (427 )     (430 )     (373 )
         
Total originations for sale
   $ 3,113     $ 3,629     $ 3,594     $ 3,182     $ 3,384     $ 3,023     $ 3,355     $ 2,889     $ 3,564     $ 3,499     $ 3,127     $ 3,406     $ 2,759  
         
 
                                                                                                        
Percentage of originations represented by refinances
     59 %     63 %     59 %     56 %     56 %     52 %     48 %     47 %     43 %     46 %     48 %     50 %     55 %
 
                                                                                                        
Loan Sales:
                                                                                                        
Loans sold servicing retained
   $ 2,386     $ 2,486     $ 2,377     $ 2,564     $ 2,070     $ 2,581     $ 2,325     $ 2,504     $ 2,868     $ 2,549     $ 2,167     $ 2,198     $ 3,028  
Loans sold servicing released
     505       500       328       358       467       231       463       316       235       237       266       258       161  
         
Total loan sales
   $ 2,891     $ 2,986     $ 2,705     $ 2,922     $ 2,537     $ 2,812     $ 2,788     $ 2,820     $ 3,103     $ 2,786     $ 2,433     $ 2,456     $ 3,189  
         
 
                                                                                                        
SERVICING DATA
                                                                                                        
Mortgage loans serviced for third parties
   $ 164,051     $ 163,377     $ 162,264     $ 161,984     $ 161,740     $ 162,202     $ 161,653     $ 160,895     $ 161,096     $ 160,652     $ 160,777     $ 160,983     $ 161,380  
 
(1)   Includes loans originated for sale and held in portfolio
NATIONAL HOME EQUITY STATISTICS
($ in millions)
                                                                                                         
    February   January   December   November   October   September   August   July   June   May   April   March   February
    2007   2007   2006   2006   2006   2006   2006   2006   2006   2006   2006   2006   2006
         
NATIONAL HOME EQUITY ORIGINATION DATA
                                                                                                        
Home equity line of Credits (HELOCs)(1)
   $ 763     $ 781     $ 817     $ 862     $ 932     $ 847     $ 936     $ 797     $ 874     $ 981     $ 899     $ 1,019     $ 832  
Home equity loans (HELOANs)(2)
     318       374       393       403       401       333       384       333       313       283       233       159       90  
 
                                                                                                        
NATIONAL HOME EQUITY SALE DATA
                                                                                                        
Home equity line of credits (HELOCs) sold servicing retained
   $ 803     $ 346       —     $ 843     $ 1,132       —     $ 133     $ 1,162     $ 1,099       —       —     $ 1,097       —  
Home equity line of credits (HELOCs) sold servicing released
     —       —       —       —       —       —       —       —       —       —       —       —       —  
 
                                                                                                        
Home equity loans (HELOANs) sold servicing retained
     726       —       —       227       353       —       —       516       190       —     $ 230       —       —  
Home equity loans (HELOANs) sold servicing released
     —       —       —       230       247     $ 241       —       49       —       —       —       —       —  
         
Total sales
   $ 1,529     $ 346       —     $ 1,300     $ 1,732     $ 241     $ 133     $ 1,727     $ 1,289       —     $ 230     $ 1,097       —  
         
 
(1)   Represents the total line of credit commitment amount.
 
(2)   Represents installment loans collateralized by real estate whereby National City has a first or second lien position. HELOANs are included in the residential real estate loan portfolio on the consolidated balance sheet.

9

 

Unaudited
National City Corporation
Mid-Quarter Update to Financial Supplement
RUN-OFF LOAN PORTFOLIO STATISTICS
($ in millions)
                                                                                                         
    February   January   December   November   October   September   August   July   June   May   April   March   February
    2007   2007   2006   2006   2006   2006   2006   2006   2006   2006   2006   2006   2006
         
FIRST FRANKLIN(1)
                                                                                                        
 
                                                                                                        
Period-end portfolio balance
   $ 6,478     $ 7,195     $ 7,480     $ 7,903     $ 8,257     $ 8,302     $ 15,326     $ 16,000     $ 16,583     $ 17,281     $ 17,918     $ 18,254     $ 18,693  
Weighted-average note rate
     7.58 %     7.53 %     7.98 %     7.92 %     7.87 %     7.83 %     7.53 %     7.51 %     7.48 %     7.45 %     7.41 %     7.34 %     7.29 %
Weighted-average loan size
   $ 91,019     $ 91,761     $ 92,690     $ 93,614     $ 94,528     $ 95,025     $ 101,908     $ 102,390     $ 102,939     $ 103,645     $ 104,339     $ 106,513     $ 108,389  
Weighted-average credit score(2)(3)
     628       629       629       629       635       635       644       644       645       645       647       647       647  
First-lien weighted-average loan-to-value ratio(4)
     77.61 %     77.63 %     77.70 %     77.75 %     77.84 %     77.92 %     77.19 %     77.25 %     77.31 %     77.37 %     77.44 %     77.48 %     77.55 %
Net charge-offs
   $ 6     $ 7     $ 8     $ 6     $ 3     $ 24     $ 11     $ 5     $ 5     $ 6     $ 5     $ 7     $ 7  
Loans 90 days past due
     580       564       566       580       506       500       459       452       405       387       380       364       401  
 
                                                                                                        
NATIONAL HOME EQUITY(5)
                                                                                                        
 
                                                                                                        
Home Equity Lines of Credit(HELOC) Portfolio:
                                                                                                        
Period-end portfolio balance
   $ 5,541     $ 5,748     $ 5,928     $ 6,156     $ 6,393     $ 6,671     $ 6,979     $ 7,270     $ 7,933     $ 8,201     $ 8,600     $ 8,906     $ 11,546  
Weighted-average credit score(2)(3)
     729       729       731       731       731       731       731       731       732       732       732       731       732  
Weighted-average cumulative loan-to-value ratio(6)
     79.55 %     79.51 %     79.54 %     79.64 %     79.48 %     79.71 %     79.62 %     79.65 %     79.69 %     79.76 %     79.79 %     79.97 %     80.16 %
Utilization rate
     48 %     49 %     49 %     49 %     50 %     50 %     50 %     51 %     51 %     51 %     52 %     52 %     54 %
Net charge-offs
   $ 4     $ 8     $ 7     $ 4     $ 1     $ 4     $ 3     $ 2     $ 1     $ 2     $ 1     $ 2     $ 4  
Loans 90 days past due
     22       21       19       22       20       12       13       14       10       7       8       8       10  
 
                                                                                                        
Home Equity Loans(HELOAN) Portfolio:
                                                                                                        
Period-end portfolio balance
   $ 1,350     $ 1,387     $ 1,412     $ 1,403     $ 1,430     $ 1,461     $ 1,503     $ 1,543     $ 1,578     $ 1,632     $ 1,618     $ 1,690     $ 1,879  
Weighted-average credit score(2)(3)
     738       738       738       738       738       737       737       736       736       735       735       735       735  
Weighted-average cumulative loan-to-value ratio(6)
     89.34 %     89.37 %     89.38 %     89.41 %     89.41 %     89.43 %     89.42 %     89.45 %     89.46 %     89.45 %     89.44 %     89.46 %     89.47 %
Net charge-offs
     —       —       —     $ 1       —     $ 1       —       —       —     $ 1       —       —       —  
Loans 90 days past due
   $ 1     $ 1     $ 1     $ 1     $ 1       1     $ 1     $ 1       —     $ 1     $ 1       —     $ 1  
 
(1)   Represents nonconforming residential real estate loans originated by the former First Franklin business unit. As First Franklin was sold in December 2006, this portfolio is in run-off.
 
(2)   Represents the Fair Isaac Corporation FICO® score, a benchmark credit rating system used by most financial companies and National City Corporation. National City is not affiliated with Fair Isaac Corporation and obtains FICO® scores from third-party credit bureaus.
 
(3)   Based upon most recent available FICO® score for borrowers. FICO® scores are updated quarterly.
 
(4)   Based upon period-end first-lien mortgage loan balance divided by the most recent obtained value of the underlying mortgaged property.
 
(5)   National Home Equity represents a division under the Mortgage Banking line of business. As a result of the originate-and-sell strategy for nonfootprint broker-sourced home equity loans and lines of credit, these portfolios are in run-off.
 
(6)   Based upon period-end first-lien and second-lien mortgage loan balances divided by the obtained value of the underlying mortgaged property at the time of origination.

10