-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NLVfPJXZJckbLuBIL/PIq14cWAJcw0PWFsqfFUsMHmyqCJt/LLXVDu35k9+NHOxF LBIHDqz5kNYPcJ2iDEndMg== 0000950152-01-503291.txt : 20010723 0000950152-01-503291.hdr.sgml : 20010723 ACCESSION NUMBER: 0000950152-01-503291 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010720 ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010720 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL CITY CORP CENTRAL INDEX KEY: 0000069970 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 341111088 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-07229 FILM NUMBER: 1685469 BUSINESS ADDRESS: STREET 1: 1900 E NINTH ST CITY: CLEVELAND STATE: OH ZIP: 44114 BUSINESS PHONE: 2165752000 MAIL ADDRESS: STREET 1: 1900 EAST NINTH STREET CITY: CLEVELAND STATE: OH ZIP: 44114 8-K 1 l89498ae8-k.txt NATIONAL CITY CORPORATION FORM 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 July 20, 2001 ------------------------------------------------ Date of Report (Date of earliest event reported) NATIONAL CITY CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 1-10074 34-1111088 - ---------------------------- ------------------------ ------------- (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) 1900 East Ninth Street, Cleveland, Ohio 44114 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) (216) 575-2000 -------------------------------------------------------------- (Registrant's telephone number, including area code) 2 ITEM 5. OTHER EVENTS On July 20, 2001, the Registrant issued a news release announcing its financial results for the second quarter and six months ended June 30, 2001. This news release, dated July 20, 2001, is attached as Exhibit 99.1 to this report and incorporated herein by reference. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits 99.1 The Registrant's July 20, 2001 news release announcing its financial results for the second quarter and six months ended June 30, 2001. ITEM 9. REGULATION FD DISCLOSURE On July 20, 2001, the Registrant distributed to analysts and included on its Web site at www.nationalcity.com the Quarterly Financial Supplement, which is attached as Annex A to this Item 9. Also on July 20, 2001, the Registrant hosted a conference call to review results for the second quarter and six months ended June 30, 2001 and National City's business outlook for the remainder of the year. The slide presentation used by the Registrant in the conference call is attached as Annex B to this Item 9. Annexes A and B were prepared to assist investors, financial analysts and other interested parties in their analysis of National City Corporation. These annexes are incorporated herein by reference and have been furnished, not filed. 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: July 20, 2001 By /s/ David L. Zoeller ---------------------------------- David L. Zoeller Executive Vice President and General Counsel 4 Annex A [NATIONAL CITY CORPORATION LOGO] QUARTER ENDED JUNE 30, 2001 UNAUDITED QUARTERLY FINANCIAL SUPPLEMENT Derek Green Holly Schreiber (216) 222-9849 (216) 222-3035 5 UNAUDITED NATIONAL CITY CORPORATION CONSOLIDATED FINANCIAL HIGHLIGHTS ($ IN MILLIONS, EXCEPT PER SHARE DATA) - --------------------------------------------------------------------------------
2001 2000 ---------------------- --------------------------------------------------- 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ---------------------- --------------------------------------------------- EARNINGS - -------------------------------------------- Interest income(TE) $1,634.0 $1,667.7 $1,696.6 $1,660.4 $1,654.8 $1,588.5 Interest expense 799.0 888.5 940.4 914.4 905.8 847.6 ---------------------- --------------------------------------------------- Net interest income(TE) 835.0 779.2 756.2 746.0 749.0 740.9 Provision for loan losses 152.9 83.4 81.4 70.4 68.7 66.3 ---------------------- --------------------------------------------------- NII after provision for loan losses(TE) 682.1 695.8 674.8 675.6 680.3 674.6 Fees and other income 682.0 598.5 604.8 590.9 674.3 557.4 Securities gains (losses) 17.0 88.1 50.7 27.5 (42.8) 21.5 Noninterest expense 840.1 805.0 854.4 785.3 785.1 759.1 ---------------------- --------------------------------------------------- Income before taxes and TE adjustment 541.0 577.4 475.9 508.7 526.7 494.4 Income taxes 183.0 234.2 159.4 169.6 175.9 164.7 TE adjustment 8.5 7.8 8.5 8.4 8.4 8.4 ---------------------- --------------------------------------------------- Net income $349.5 $335.4 $308.0 $330.7 $342.4 $321.3 ====================== =================================================== Net income per common share: Basic $.58 $.56 $.50 $.55 $.56 $.53 Diluted .57 .55 .50 .54 .56 .53 PERFORMANCE RATIOS - -------------------------------------------- Return on average common equity 20.47% 20.52% 18.76% 21.13% 23.13% 22.45% Return on average total equity 20.41 20.45 18.70 21.06 23.04 22.37 Return on average assets 1.52 1.55 1.44 1.56 1.59 1.50 Net interest margin 3.98 3.92 3.90 3.90 3.80 3.79 Efficiency ratio 55.38 58.43 62.78 58.74 55.16 58.47 ASSET QUALITY - -------------------------------------------- Net charge-offs $92.7 $83.2 $81.2 $70.2 $68.7 $66.2 Loan loss allowance 989.9 929.7 928.6 945.5 970.4 970.6 Nonperforming assets 508.7 447.1 402.3 365.3 339.3 314.1 Net charge-offs to average loans .55% .51% .50% .45% .44% .44% Loan loss allowance to loans 1.46 1.39 1.42 1.49 1.58 1.57 Nonperforming assets to loans + OREO .75 .67 .61 .57 .55 .51 CAPITAL & LIQUIDITY - -------------------------------------------- Average equity to assets 7.47% 7.59% 7.68% 7.42% 6.89% 6.72% Average equity to loans* 10.23 10.04 10.14 10.03 9.56 9.47 Average loans to deposits* 115.64 122.69 122.71 119.91 120.59 117.81 Common equity to assets (tangible)** 6.16 6.19 6.34 6.20 5.81 5.38 AVERAGE BALANCES - -------------------------------------------- Assets $91,936 $87,611 $85,300 $84,201 $86,771 $85,951 Loans 67,158 66,225 64,645 62,248 62,537 61,043 Loans held for sale or securitization 7,453 3,604 2,855 3,001 2,848 2,101 Securities (at cost) 8,768 9,491 9,543 10,786 13,064 14,600 Earning assets 84,021 79,762 77,363 76,378 79,027 78,379 Deposits 58,073 53,977 52,683 51,913 51,860 51,816 Common equity 6,838 6,620 6,524 6,216 5,946 5,748 Total equity 6,868 6,650 6,554 6,246 5,976 5,778 MEMO: Mortgage loans held for sale $7,453 $3,473 $2,851 $3,001 $2,848 $2,101 Credit card loans held for securitization - 131 4 - - - ---------------------- --------------------------------------------------- Loans held for sale or securitization $7,453 $3,604 $2,855 $3,001 $2,848 $2,101 ENDING BALANCES - -------------------------------------------- Assets $94,440 $90,818 $88,535 $85,046 $84,601 $86,895 Loans 68,004 66,673 65,604 63,660 61,570 61,857 Loans held for sale or securitization 8,413 5,883 3,439 2,946 3,198 2,330 Securities (at fair value) 8,758 9,468 9,904 9,656 10,719 13,783 Deposits 58,018 55,854 55,256 52,726 49,988 50,613 Common equity 6,950 6,724 6,740 6,437 6,103 5,888 Total equity 6,980 6,754 6,770 6,467 6,133 5,918 MEMO: Mortgage loans held for sale $8,413 $5,883 $3,031 $2,946 $3,198 $2,330 Credit card loans held for securitization - - 408 - - - ---------------------- --------------------------------------------------- Loans held for sale or securitization $8,413 $5,883 $3,439 $2,946 $3,198 $2,330 1999 -------------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR -------------------------------------------------- EARNINGS - -------------------------------------------- Interest income(TE) $1,556.1 $1,474.9 $1,449.5 $1,469.1 Interest expense 799.7 717.2 691.3 704.4 -------------------------------------------------- Net interest income(TE) 756.4 757.7 758.2 764.7 Provision for loan losses 66.6 55.5 59.6 68.0 -------------------------------------------------- NII after provision for loan losses(TE) 689.8 702.2 698.6 696.7 Fees and other income 579.3 528.6 543.6 590.9 Securities gains (losses) 37.1 20.3 57.3 23.7 Noninterest expense 780.1 705.9 757.3 739.2 -------------------------------------------------- Income before taxes and TE adjustment 526.1 545.2 542.2 572.1 Income taxes 173.7 178.5 178.5 212.5 TE adjustment 8.9 10.2 9.2 8.6 -------------------------------------------------- Net income $343.5 $356.5 $354.5 $351.0 ================================================== Net income per common share: Basic $.56 $.58 $.56 $.55 Diluted .55 .57 .56 .54 PERFORMANCE RATIOS - -------------------------------------------- Return on average common equity 22.84% 23.79% 22.96% 21.12% Return on average total equity 22.76 23.70 22.87 21.05 Return on average assets 1.59 1.71 1.71 1.66 Net interest margin 3.87 4.03 4.04 4.02 Efficiency ratio 58.41 54.88 58.16 54.53 ASSET QUALITY - -------------------------------------------- Net charge-offs $66.6 $54.9 $60.0 $68.0 Loan loss allowance 970.5 970.7 970.2 970.3 Nonperforming assets 289.1 260.0 249.5 271.9 Net charge-offs to average loans .45% .38% .42% .48% Loan loss allowance to loans 1.61 1.67 1.69 1.69 Nonperforming assets to loans + OREO .48 .45 .44 .47 CAPITAL & LIQUIDITY - -------------------------------------------- Average equity to assets 7.00% 7.22% 7.46% 7.91% Average equity to loans* 10.15 10.45 10.86 11.80 Average loans to deposits* 112.85 110.67 108.97 105.26 Common equity to assets (tangible)** 5.12 5.52 5.78 6.17 AVERAGE BALANCES - -------------------------------------------- Assets $85,600 $82,691 $83,369 $85,520 Loans 59,006 57,142 57,257 57,319 Loans held for sale or securitization 2,555 2,172 2,344 2,976 Securities (at cost) 15,403 14,851 14,638 15,126 Earning assets 77,762 74,971 75,238 76,514 Deposits 52,287 51,633 52,543 54,457 Common equity 5,960 5,938 6,185 6,728 Total equity 5,990 5,969 6,216 6,761 MEMO: Mortgage loans held for sale $2,555 $2,172 $2,344 $2,976 Credit card loans held for securitization - - - - -------------------------------------------------- Loans held for sale or securitization $2,555 $2,172 $2,344 $2,976 ENDING BALANCES - -------------------------------------------- Assets $87,121 $85,058 $84,022 $84,094 Loans 60,204 58,001 57,317 57,312 Loans held for sale or securitization 2,731 2,439 2,339 2,519 Securities (at fair value) 14,904 15,811 14,994 15,264 Deposits 50,066 50,395 52,091 52,051 Common equity 5,698 5,884 5,837 6,226 Total equity 5,728 5,914 5,867 6,257 MEMO: Mortgage loans held for sale $2,731 $2,439 $2,339 $2,519 Credit card loans held for securitization - - - - -------------------------------------------------- Loans held for sale or securitization $2,731 $2,439 $2,339 $2,519
* Excludes loans held for sale or securitization. ** Period-end, less intangible assets. 2 6 UNAUDITED NATIONAL CITY CORPORATION BALANCE SHEET AVERAGES ($ IN MILLIONS) - --------------------------------------------------------------------------------
2001 2000 ------------------ ---------------------------------------- 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------------------ ---------------------------------------- AVERAGE LOANS - ----------------------------------------- Commercial $27,532 $27,010 $26,132 $25,294 $24,379 $23,496 Real estate - commercial 6,692 6,550 6,435 6,273 6,157 6,020 Real estate - residential 13,484 13,533 12,876 11,627 11,470 10,901 Consumer 12,286 12,174 12,165 12,224 13,973 14,520 Credit card 2,139 2,113 2,383 2,487 2,514 2,336 Home equity 5,025 4,845 4,654 4,343 4,044 3,770 ------------------ ---------------------------------------- TOTAL LOANS $67,158 $66,225 $64,645 $62,248 $62,537 $61,043 ================== ======================================== MEMO: Securitized credit card balances (avg) $997 $874 $685 $452 $321 $438 Securitized credit card balances (eop) 997 997 630 748 265 383 Total managed credit card balances (avg)* $2,202 $2,226 $2,228 $2,144 $2,086 $2,073 Total managed credit card balances (eop)* 2,237 2,183 2,323 2,188 2,097 2,072 AVERAGE SECURITIES (AT COST) - ----------------------------------------- Mortgage-backed securities $5,180 $5,397 $5,611 $6,078 $7,992 $9,196 Other investment securities 2,844 3,333 3,154 3,921 4,275 4,593 ------------------ ---------------------------------------- Total taxable securities 8,024 8,730 8,765 9,999 12,267 13,789 Tax-exempt securities 744 761 778 787 797 811 ------------------ ---------------------------------------- TOTAL SECURITIES $8,768 $9,491 $9,543 $10,786 $13,064 $14,600 ================== ======================================== AVERAGE DEPOSITS - ----------------------------------------- Noninterest bearing deposits $11,550 $10,781 $10,682 $10,837 $10,934 $10,716 NOW and money market accounts 17,963 17,276 16,803 16,473 16,477 16,443 Savings accounts 2,753 2,835 2,958 3,139 3,321 3,413 Consumer time deposits 15,459 15,725 15,764 15,652 15,385 15,019 ------------------ ---------------------------------------- Core deposits 47,725 46,617 46,207 46,101 46,117 45,591 Brokered retail CDs 4,920 3,666 1,984 1,733 1,757 1,699 Other deposits 1,187 1,304 1,217 1,105 1,124 1,126 Foreign deposits 4,241 2,390 3,275 2,974 2,862 3,400 ------------------ ---------------------------------------- TOTAL DEPOSITS $58,073 $53,977 $52,683 $51,913 $51,860 $51,816 ================== ======================================== SELECTED RATIOS - ----------------------------------------- Average loans to deposits 115.64% 122.69% 122.71% 119.91% 120.59% 117.81% Average loans to core deposits 140.72 142.06 139.90 135.03 135.61 133.89 Average loans to earning assets 79.93 83.03 83.56 81.50 79.13 77.88 Average securities to earning assets 10.44 11.90 12.34 14.12 16.53 18.63 1999 ---------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ---------------------------------------- AVERAGE LOANS - ----------------------------------------- Commercial $22,988 $22,066 $22,228 $22,154 Real estate - commercial 6,141 6,238 6,275 6,305 Real estate - residential 10,047 9,750 9,779 10,097 Consumer 14,045 13,664 13,834 13,785 Credit card 2,224 2,088 1,953 1,829 Home equity 3,561 3,336 3,188 3,149 ---------------------------------------- TOTAL LOANS $59,006 $57,142 $57,257 $57,319 ======================================== MEMO: Securitized credit card balances (avg) $500 $548 $637 $725 Securitized credit card balances (eop) 500 500 590 680 Total managed credit card balances (avg)* $2,060 $2,006 $1,997 $1,990 Total managed credit card balances (eop)* 2,155 2,050 2,026 1,958 AVERAGE SECURITIES (at cost) - ----------------------------------------- Mortgage-backed securities $9,752 $9,105 $8,800 $9,320 Other investment securities 4,813 4,895 4,961 4,907 ---------------------------------------- Total taxable securities 14,565 14,000 13,761 14,227 Tax-exempt securities 838 851 877 899 ---------------------------------------- TOTAL SECURITIES $15,403 $14,851 $14,638 $15,126 ======================================== AVERAGE DEPOSITS - ----------------------------------------- Noninterest bearing deposits $11,278 $11,338 $11,542 $11,681 NOW and money market accounts 16,580 16,742 16,997 16,899 Savings accounts 3,605 3,795 3,922 3,955 Consumer time deposits 14,578 14,461 14,883 15,581 ---------------------------------------- Core deposits 46,041 46,336 47,344 48,116 Brokered retail CDs 1,792 1,741 1,658 1,554 Other deposits 1,349 1,167 1,199 1,757 Foreign deposits 3,105 2,389 2,342 3,030 ---------------------------------------- TOTAL DEPOSITS $52,287 $51,633 $52,543 $54,457 ======================================== SELECTED RATIOS - ----------------------------------------- Average loans to deposits 112.85% 110.67% 108.97% 105.26% Average loans to core deposits 128.16 123.32 120.94 119.13 Average loans to earning assets 75.88 76.22 76.10 74.91 Average securities to earning assets 19.81 19.81 19.46 19.77
* Excludes certain unsecured personal and business lines of credit included in the credit card totals presented elsewhere in this document. STOCKHOLDER DATA ($ IN MILLIONS, EXCEPT PER SHARE DATA) - --------------------------------------------------------------------------------
2001 2000 -------------------- ------------------------------------------------ 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR -------------------- ------------------------------------------------ Per common share: Basic net income $.58 $.56 $.50 $.55 $.56 $.53 Diluted net income .57 .55 .50 .54 .56 .53 Trailing 4 qtrs basic net income 2.19 2.17 2.14 2.20 2.23 2.23 Trailing 4 qtrs diluted net income 2.16 2.15 2.13 2.18 2.21 2.21 Dividend declared .285 .285 .285 .285 .285 - Dividend paid .285 .285 .285 .285 .285 .285 Dividend payout ratio 50.00% 51.82% 57.00% 52.78% 50.89% n/a Dividend yield (annualized)*** 3.70 4.26 3.97 5.18 6.68 5.53 P/E ratio 14.25 12.44 13.50 10.09 7.72 9.33 Average basic shares o/s** 601,529 600,889 608,523 608,277 606,928 605,766 Average diluted shares o/s** 610,782 610,100 615,467 613,232 611,070 610,694 Ending common shares o/s** 603,093 600,750 609,189 608,398 607,434 606,228 Common stock price: High $30.86 $30.31 $29.75 $23.13 $22.75 $23.56 Low 25.56 23.69 18.50 17.19 16.00 17.19 Close 30.78 26.75 28.75 22.00 17.06 20.63 Book value/common share $11.52 $11.19 $11.06 $10.58 $10.05 $9.71 Tangible book value/common share 9.52 9.23 9.09 8.54 7.97 7.59 Unrealized gains (losses) related to SFAS 115 securities and SFAS 133 cash flow hedges included in equity/share (OCI per share) $.08 $.05 $.10 ($.16) ($.42) ($.47) Market to book value 267.2% 239.1% 259.9% 207.9% 169.8% 212.5% Market capitalization of common stock $18,563 $16,070 $17,514 $13,385 $10,363 $12,506 Common dividends declared $171.3 $171.1 $173.4 $173.2 $173.0 - Preferred dividends declared .4 .5 .4 .4 .5 - 1999 ------------------------------------------------ 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------------------------------------------------ Per common share: Basic net income $.56 $.58 $.56 $.55 Diluted net income .55 .57 .56 .54 Trailing 4 qtrs basic net income 2.25 2.13 2.08 2.03 Trailing 4 qtrs diluted net income 2.22 2.10 2.05 1.99 Dividend declared .285 .27 .27 .26 Dividend paid .27 .27 .26 .26 Dividend payout ratio 51.82% 47.37% 48.21% 48.15% Dividend yield (annualized)*** 4.81 4.05 3.30 3.13 P/E ratio 10.67 12.71 15.98 16.68 Average basic shares o/s** 613,878 616,884 623,117 640,989 Average diluted shares o/s** 620,784 624,581 633,280 652,221 Ending common shares o/s** 607,058 616,565 618,131 628,842 Common stock price: High $31.44 $33.38 $36.75 $37.81 Low 22.13 26.13 31.44 33.09 Close 23.69 26.69 32.75 33.19 Book value/common share $9.39 $9.54 $9.44 $9.90 Tangible book value/common share 7.23 7.51 7.76 8.15 Unrealized gains (losses) related to SFAS 115 securities and SFAS 133 cash flow hedges included in equity/share (OCI per share) ($.29) ($.10) $.03 $.31 Market to book value 252.3% 279.8% 346.9% 335.3% Market capitalization of common stock $14,381 $16,456 $20,244 $20,871 Common dividends declared $172.7 $166.5 $166.7 $163.8 Preferred dividends declared .4 .5 .4 .4
** In thousands. *** Based on quarter-end stock price. n/a Not applicable 3 7 UNAUDITED NATIONAL CITY CORPORATION CAPITALIZATION (PERIOD END) ($ IN MILLIONS, EXCEPT PER SHARE DATA) - --------------------------------------------------------------------------------
2001 2000 ----------------------- -------------------------------------------------- 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ----------------------- -------------------------------------------------- FUNDING - -------------------------------------- LONG-TERM DEBT (NET OF DISCOUNT): Total parent company debt $1,948.3 $1,962.7 $1,960.5 $1,960.9 $1,960.5 $2,060.3 Subsidiary debt: Subordinated debt 1,141.8 1,148.9 1,118.8 1,118.6 1,118.4 1,119.2 Senior bank notes 9,480.8 8,981.2 11,654.3 9,495.0 10,140.8 10,790.6 Capital securities 180.0 180.0 180.0 180.0 180.0 180.0 FHLB advances and other 3,742.8 3,236.7 3,231.2 2,881.1 2,757.2 2,833.0 ----------------------- -------------------------------------------------- Total subsidiary debt 14,545.4 13,546.8 16,184.3 13,674.7 14,196.4 14,922.8 ----------------------- -------------------------------------------------- TOTAL LONG-TERM DEBT $16,493.7 $15,509.5 $18,144.8 $15,635.6 $16,156.9 $16,983.1 ======================= ================================================== BORROWED FUNDS: U.S. Treasury demand notes $2,872.1 $792.8 $413.9 $1,583.2 $6,168.4 $4,304.1 Commercial paper 507.2 768.3 368.6 505.2 784.7 1,219.9 Other 106.6 83.2 121.2 194.9 21.7 16.8 ----------------------- -------------------------------------------------- TOTAL BORROWED FUNDS $3,485.9 $1,644.3 $903.7 $2,283.3 $6,974.8 $5,540.8 ======================= ================================================== STOCKHOLDERS' EQUITY - -------------------------------------- Preferred stock $30.0 $30.0 $30.0 $30.0 $30.0 $30.0 Common stock 6,950.0 6,724.0 6,740.0 6,437.4 6,103.5 5,887.6 ----------------------- -------------------------------------------------- TOTAL STOCKHOLDERS' EQUITY $6,980.0 $6,754.0 $6,770.0 $6,467.4 $6,133.5 $5,917.6 ======================= ================================================== OCI ADJUSTMENTS, NET OF TAX: SFAS 115 unrealized gain (loss), net $100.7 $84.6 $60.6 ($96.9) ($258.3) ($286.6) SFAS 133 unrealized loss, net (52.2) (52.1) - - - - BANK STOCK FUND - -------------------------------------- Cost basis of investments $381.4 $337.3 $569.7 $650.5 $745.1 $721.0 Unrealized gains (losses), net 64.3 33.9 99.1 41.6 (65.9) 0.3 ----------------------- -------------------------------------------------- FAIR MARKET VALUE OF INVESTMENTS $445.7 $371.2 $668.8 $692.1 $679.2 $721.3 ======================= ================================================== INTANGIBLE ASSETS - -------------------------------------- Goodwill $1,116.6 $1,106.4 $1,124.0 $1,157.0 $1,175.9 $1,193.1 Core deposit intangible 38.5 41.1 43.7 46.2 48.8 51.4 Purchased credit card relationships 3.5 3.5 3.8 4.6 5.5 6.4 Other intangibles 48.5 28.6 29.8 31.1 32.3 33.4 ----------------------- -------------------------------------------------- TOTAL INTANGIBLE ASSETS $1,207.1 $1,179.6 $1,201.3 $1,238.9 $1,262.5 $1,284.3 ======================= ================================================== MEMO: Parent Company investment in subsidiaries $8,655.6 $8,408.9 $7,887.3 $7,626.1 $7,477.2 $7,200.6 Parent Company intangible assets 76.4 78.1 79.9 81.6 83.3 85.0 RISK-BASED CAPITAL - -------------------------------------- Tier 1 capital $5,855.1 $5,686.2 $5,636.5 $5,554.7 $5,357.6 $5,147.4 Total risk-based capital 9,266.2 9,160.7 9,191.1 9,157.7 8,977.0 8,645.5 Risk-weighted assets 82,905.7 80,087.0 80,274.9 76,208.6 75,250.1 73,892.2 Tier 1 capital ratio 7.06% 7.10% 7.02% 7.29% 7.12% 6.97% Total risk-based capital ratio 11.18 11.44 11.45 12.03 11.93 11.70 Leverage ratio 6.46 6.59 6.70 6.67 6.23 6.05 STOCK REPURCHASE ACTIVITY - -------------------------------------- Number of shares repurchased - 9.3 .1 .2 - 2.2 Average price of repurchased shares - $17.84 $21.02 $20.60 - $21.93 Total cost - $166.2 $2.2 $5.1 - $47.1 Shares remaining under authorization 15.6 15.6 24.9 25.0 25.2 25.2 SELECTED RATIOS AND OTHER - -------------------------------------- Debt to equity 236.30% 229.63% 268.02% 241.76% 263.42% 286.99% Debt to total capitalization 70.26 69.66 72.83 70.74 72.48 74.16 Equity to assets 7.39 7.44 7.65 7.60 7.25 6.81 Common equity to assets 7.36 7.40 7.61 7.57 7.21 6.78 Equity to assets (tangible)* 6.19 6.22 6.38 6.24 5.84 5.41 Common equity to assets (tangible)* 6.16 6.19 6.34 6.20 5.81 5.38 Minority interest $48.4 $50.7 $46.6 $44.6 $42.8 $41.2 1999 ---------------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ---------------------------------------------------- FUNDING - -------------------------------------- LONG-TERM DEBT (NET OF DISCOUNT): Total parent company debt $2,060.1 $2,124.9 $2,126.2 $1,428.1 Subsidiary debt: Subordinated debt 1,119.2 1,119.1 1,118.9 1,118.8 Senior bank notes 8,918.6 8,718.4 7,527.3 6,987.1 Capital securities 180.0 180.0 180.0 679.9 FHLB advances and other 2,760.1 2,662.6 2,364.9 2,465.1 ---------------------------------------------------- TOTAL SUBSIDIARY DEBT 12,977.9 12,680.1 11,191.1 11,250.9 ---------------------------------------------------- TOTAL LONG-TERM DEBT $15,038.0 $14,805.0 $13,317.3 $12,679.0 ==================================================== BORROWED FUNDS: U.S. Treasury demand notes $9,228.2 $4,562.6 $2,912.0 $895.6 Commercial paper 313.4 450.0 918.0 950.7 Other 231.0 694.8 665.8 994.7 ---------------------------------------------------- TOTAL BORROWED FUNDS $9,772.6 $5,707.4 $4,495.8 $2,841.0 ==================================================== STOCKHOLDERS' EQUITY - -------------------------------------- Preferred stock $30.2 $30.5 $30.5 $30.5 Common stock 5,697.5 5,883.8 5,836.7 6,226.4 ---------------------------------------------------- TOTAL STOCKHOLDERS' EQUITY $5,727.7 $5,914.3 $5,867.2 $6,256.9 ==================================================== OCI ADJUSTMENTS, NET OF TAX: SFAS 115 unrealized gain (loss), net ($179.4) ($62.1) $20.3 $200.5 SFAS 133 unrealized loss, net - - - - BANK STOCK FUND - -------------------------------------- Cost basis of investments $486.5 $478.1 $452.8 $488.3 Unrealized gains (losses), net 64.4 128.4 184.0 223.6 ---------------------------------------------------- FAIR MARKET VALUE OF INVESTMENTS $550.9 $606.5 $636.8 $711.9 ==================================================== INTANGIBLE ASSETS - -------------------------------------- Goodwill $1,210.4 $1,174.4 $962.4 $1,025.3 Core deposit intangible 54.0 56.5 59.1 61.7 Purchased credit card relationships 7.2 8.1 11.1 12.1 Other intangibles 34.8 15.6 4.6 4.8 ---------------------------------------------------- TOTAL INTANGIBLE ASSETS $1,306.4 $1,254.6 $1,037.2 $1,103.9 ==================================================== MEMO: Parent Company investment in subsidiaries $7,013.3 $7,199.4 $7,784.0 $7,777.3 Parent Company intangible assets 86.7 88.5 93.6 95.3 RISK-BASED CAPITAL - -------------------------------------- Tier 1 capital $4,828.0 $4,948.6 $5,037.6 $5,152.9 Total risk-based capital 8,190.2 8,379.6 8,544.2 8,388.6 Risk-weighted assets 73,027.4 71,837.8 70,518.1 70,157.2 Tier 1 capital ratio 6.61% 6.89% 7.14% 7.34% Total risk-based capital ratio 11.22 11.66 12.12 11.96 Leverage ratio 5.72 6.07 6.06 6.13 STOCK REPURCHASE ACTIVITY - -------------------------------------- Number of shares repurchased 10.8 2.7 12.7 26.4 Average price of repurchased shares $24.56 $30.88 $34.24 $35.07 Total cost $261.8 $84.8 $435.9 $927.6 Shares remaining under authorization 27.4 8.2 10.9 23.6 SELECTED RATIOS AND OTHER - -------------------------------------- Debt to equity 262.55% 250.33% 226.98% 202.64% Debt to total capitalization 72.42 71.46 69.42 66.96 Equity to assets 6.57 6.95 6.98 7.44 Common equity to assets 6.54 6.92 6.95 7.40 Equity to assets (tangible)* 5.15 5.56 5.82 6.21 Common equity to assets (tangible)* 5.12 5.52 5.78 6.17 Minority interest $40.0 $38.7 $36.8 $35.3
* Period-end, less intangible assets. 4 8 UNAUDITED NATIONAL CITY CORPORATION NET INTEREST MARGIN - --------------------------------------------------------------------------------
2001 2000 1999 --------------- --------------------------------- -------------------------------- 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR --------------- --------------------------------- -------------------------------- EARNING ASSETS Loans * 7.98% 8.72% 9.08% 9.05% 8.82% 8.56% 8.38% 8.23% 8.13% 8.14% Securities 6.39 6.29 6.35 6.33 6.35 6.38 6.33 6.32 6.22 6.38 Other investments 5.24 9.04 9.44 8.73 7.51 6.88 6.58 5.83 5.15 5.22 RATE ON EARNING ASSETS 7.79 8.44 8.74 8.67 8.41 8.14 7.96 7.83 7.72 7.75 INTEREST BEARING LIABILITIES Core deposits 4.08 4.55 4.71 4.58 4.32 4.10 3.89 3.75 3.71 3.87 Purchased deposits 4.49 5.72 6.52 6.48 6.18 5.73 5.41 5.00 4.79 4.77 Other purchased funding 4.92 6.03 6.69 6.67 6.37 5.98 5.69 5.28 5.06 4.96 RATE ON INTEREST BEARING LIABILITIES 4.44 5.23 5.62 5.53 5.30 5.00 4.72 4.42 4.29 4.33 NET INTEREST SPREAD 3.35 3.21 3.12 3.14 3.11 3.14 3.24 3.41 3.43 3.42 Contribution of noninterest bearing sources of funds .63 .71 .78 .76 .69 .65 .63 .62 .61 .60 --------------- --------------------------------- -------------------------------- NET INTEREST MARGIN 3.98% 3.92% 3.90% 3.90% 3.80% 3.79% 3.87% 4.03% 4.04% 4.02% =============== ================================= ================================
* Includes loans held for sale or securitization. NONINTEREST INCOME ($ IN MILLIONS) - --------------------------------------------------------------------------------
2001 2000 1999 ----------------- ----------------------------------- ---------------------------------- 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ----------------- ----------------------------------- ---------------------------------- Deposit service charges $117.5 $111.8 $113.0 $115.4 $108.1 $106.3 $108.3 $107.4 $104.8 $99.9 Item processing revenue 115.7 106.4 118.8 112.1 107.3 101.2 104.5 97.4 111.5 128.3 Trust and investment mgmt. fees 86.0 81.9 81.1 79.8 90.1 83.6 82.3 81.1 80.7 81.8 Card-related fees 38.5 44.7 44.5 41.1 38.6 36.8 42.7 42.5 42.9 38.7 Mortgage banking: Core revenue (see detail on p. 7) 145.0 100.5 109.6 110.5 147.6 111.3 126.0 81.1 89.2 93.0 Mortgage servicing asset impairment (24.4) (198.3) - - - - - - - - Trading gains (losses), net (3.5) 235.7 6.1 2.8 4.2 5.2 5.2 5.6 3.5 3.5 Other service fees 25.8 26.2 24.3 24.0 30.9 24.3 21.4 22.7 21.4 24.9 Brokerage revenue 23.7 23.4 23.4 23.2 24.6 27.0 26.0 24.5 29.1 24.4 All other 157.7 66.2 84.0 82.0 122.9 61.7 62.9 66.3 60.5 96.4 ----------------- ----------------------------------- ---------------------------------- FEES AND OTHER INCOME 682.0 598.5 604.8 590.9 674.3 557.4 579.3 528.6 543.6 590.9 Net securities gains (losses) 17.0 88.1 50.7 27.5 (42.8) 21.5 37.1 20.3 57.3 23.7 ----------------- ----------------------------------- ---------------------------------- TOTAL NONINTEREST INCOME $699.0 $686.6 $655.5 $618.4 $631.5 $578.9 $616.4 $548.9 $600.9 $614.6 ================= =================================== ==================================
NONINTEREST EXPENSE ($ IN MILLIONS) - --------------------------------------------------------------------------------
2001 2000 1999 ----------------- ----------------------------------- ---------------------------------- 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ----------------- ----------------------------------- ---------------------------------- Salaries, benefits and other personnel $432.8 $410.4 $413.1 $406.0 $401.3 $406.9 $400.3 $367.7 $389.6 $400.8 Equipment 60.7 60.0 58.0 56.0 57.8 57.7 56.5 47.6 52.9 52.8 Net occupancy 53.5 53.5 52.0 52.7 51.8 52.7 49.8 48.9 49.3 54.1 Third-party services 50.0 43.6 52.6 51.2 48.5 45.1 49.7 49.3 48.5 45.6 Card-related fees 47.6 43.5 48.6 40.4 40.5 38.2 40.4 37.3 38.0 33.6 Intangibles amortization 21.0 21.1 21.9 22.0 22.0 22.1 21.1 19.2 17.6 17.5 Marketing and public relations 24.1 16.5 18.8 18.8 23.4 22.7 23.3 15.6 14.8 10.8 Telephone 20.9 21.3 22.1 20.5 18.4 20.3 20.3 15.1 19.6 19.0 Postage 18.9 18.5 17.1 18.2 18.7 17.6 17.8 16.2 18.1 18.5 Supplies 13.8 12.7 12.3 11.5 13.0 13.0 13.6 13.4 11.8 16.5 Travel and entertainment 14.0 13.6 16.0 14.8 15.1 13.6 14.6 12.6 12.7 11.9 State and local taxes 13.6 13.4 10.4 12.9 8.1 7.7 14.5 13.0 12.4 12.8 FDIC assessments 2.4 2.4 2.5 2.5 2.5 2.2 2.6 1.4 1.7 2.4 OREO expense, net 3.8 1.8 .8 .5 .5 .5 1.3 2.0 1.2 (.9) All other 63.0 72.7 108.2 57.3 63.5 38.8 54.3 46.6 69.1 43.8 ----------------- ----------------------------------- ---------------------------------- TOTAL NONINTEREST EXPENSE $840.1 $805.0 $854.4 $785.3 $785.1 $759.1 $780.1 $705.9 $757.3 $739.2 ================= =================================== ================================== MEMO: FTE employees 36,153 35,999 36,097 36,766 37,704 37,458 38,054 37,267 37,804 39,742
5 9 UNAUDITED NATIONAL CITY CORPORATION LOAN LOSS ALLOWANCE AND NET CHARGE-OFFS ($ IN MILLIONS) - --------------------------------------------------------------------------------
2001 2000 ------------------ ------------------------------------------- 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------------------ ------------------------------------------- LOAN LOSS ALLOWANCE - ------------------------------------------- Beginning loan loss allowance $929.7 $928.6 $945.5 $970.3 $970.6 $970.5 Provision 152.9 83.4 81.4 70.4 68.7 66.3 Reserves acquired (sold or securitized) - .9 (17.1) (25.0) (.3) - Net charge-offs: Commercial 33.2 24.4 23.6 15.0 21.4 18.5 Real estate - commercial 1.6 1.7 1.2 .7 2.4 (1.4) Real estate - residential 11.2 9.8 6.4 6.0 5.9 5.2 Consumer 24.6 27.5 26.8 26.3 17.9 23.4 Credit card 19.6 18.5 21.7 21.9 19.8 20.0 Home equity 2.5 1.3 1.5 .3 1.3 .4 ------------------ ------------------------------------------- Total net charge-offs 92.7 83.2 81.2 70.2 68.7 66.2 ------------------ ------------------------------------------- Ending loan loss allowance $989.9 $929.7 $928.6 $945.5 $970.3 $970.6 ================== =========================================== MEMO: Net charge-offs on securitized credit card balances $14.3 $9.7 $6.7 $2.5 $3.2 $4.4 Net charge-offs on managed credit card balances* $30.3 $24.3 $24.9 $20.3 $19.8 $21.2 NET CHARGE-OFFS AS A % OF AVERAGE LOANS (ANNUALIZED) - ------------------------------------------- Commercial .48% .37% .36% .24% .35% .32% Real estate - commercial .10 .10 .07 .04 .16 (.09) Real estate - residential .33 .29 .20 .21 .21 .18 Consumer .80 .93 .88 .86 .52 .65 Credit card 3.67 3.55 3.62 3.51 3.16 3.45 Home equity .20 .11 .13 .03 .13 .04 ------------------ ------------------------------------------- TOTAL NET CHARGE-OFFS .55% .51% .50% .45% .44% .44% ================== =========================================== MEMO: Securitized credit card 5.75% 4.50% 3.89% 2.20% 4.00% 4.04% Managed credit card* 5.52% 4.43% 4.45% 3.77% 3.82% 4.11% 1999 -------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR -------------------------------------------- LOAN LOSS ALLOWANCE - ------------------------------------------- Beginning loan loss allowance $970.7 $970.2 $970.3 $970.2 Provision 66.6 55.5 59.6 68.0 Reserves acquired (sold or securitized) (.2) (.1) .3 .1 Net charge-offs: Commercial 15.2 11.9 25.1 9.5 Real estate - commercial .4 .5 (2.7) - Real estate - residential 5.4 3.7 2.2 3.7 Consumer 25.3 20.1 14.6 32.1 Credit card 19.6 18.5 19.7 21.8 Home equity .7 .2 1.0 1.0 -------------------------------------------- Total net charge-offs 66.6 54.9 60.0 68.0 -------------------------------------------- Ending loan loss allowance $970.5 $970.7 $970.2 $970.3 ============================================ MEMO: Net charge-offs on securitized credit card balances $5.4 $5.8 $8.1 $8.6 Net charge-offs on managed credit card balances* $22.3 $22.2 $25.7 $27.6 NET CHARGE-OFFS AS A % OF AVERAGE LOANS (ANNUALIZED) - ------------------------------------------- Commercial .26% .21% .45% .17% Real estate - commercial .03 .03 (.17) .00 Real estate - residential .21 .15 .09 .15 Consumer .71 .58 .41 .95 Credit card 3.50 3.52 4.05 4.83 Home equity .08 .03 .12 .13 -------------------------------------------- TOTAL NET CHARGE-OFFS .45% .38% .42% .48% ============================================ MEMO: Securitized credit card 4.28% 4.20% 5.10% 4.81% Managed credit card* 4.30% 4.39% 5.16% 5.62%
* Excludes certain unsecured personal and business lines of credit included in the credit card totals presented elsewhere in this document. NONPERFORMING ASSETS ($ IN MILLIONS) - --------------------------------------------------------------------------------
2001 2000 ------------------ ---------------------------------------- 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------------------ ---------------------------------------- NONPERFORMING ASSETS Commercial $258.4 $216.5 $183.2 $170.8 $155.5 $138.6 Real estate - commercial 56.1 57.1 67.0 69.3 75.5 76.2 Real estate - residential 142.2 130.4 118.8 97.5 82.7 76.0 ------------------ ---------------------------------------- Total nonperforming loans 456.7 404.0 369.0 337.6 313.7 290.8 Other real estate owned 52.0 43.1 33.3 27.7 25.6 23.3 ------------------ ---------------------------------------- TOTAL NONPERFORMING ASSETS $508.7 $447.1 $402.3 $365.3 $339.3 $314.1 ================== ======================================== Loans 90 days past due $468.0 $423.1 $341.8 $310.3 $249.4 $250.0 ================== ======================================== NPAs to loans + OREO .75% .67% .61% .57% .55% .51% NPAs to total assets .54 .49 .45 .43 .40 .36 LLA to nonperforming loans 216.75 230.16 251.65 280.07 309.32 333.80 Loan loss allowance to loans 1.46 1.39 1.42 1.49 1.58 1.57 1999 --------------------------------------- TH QTR 3RD QTR 2ND QTR 1ST QTR --------------------------------------- NONPERFORMING ASSETS Commercial $130.4 $106.9 $100.1 $122.6 Real estate - commercial 68.5 60.4 63.9 63.2 Real estate - residential 70.3 68.8 58.8 56.7 --------------------------------------- Total nonperforming loans 269.2 236.1 222.8 242.5 Other real estate owned 19.9 23.9 26.7 29.4 --------------------------------------- TOTAL NONPERFORMING ASSETS $289.1 $260.0 $249.5 $271.9 ======================================= Loans 90 days past due $230.0 $244.0 $199.6 $223.2 ======================================= NPAs to loans + OREO .48% .45% .44% .47% NPAs to total assets .33 .31 .30 .32 LLA to nonperforming loans 360.51 411.14 435.46 400.14 Loan loss allowance to loans 1.61 1.67 1.69 1.69
6 10 UNAUDITED NATIONAL CITY CORPORATION DELIVERY CHANNELS - --------------------------------------------------------------------------------
2001 2000 1999 ----------------- ------------------------------------- ------------------------------------- 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ----------------- ------------------------------------- ------------------------------------- BANK BRANCHES - ----------------------------- Traditional 648 652 654 693 763 833 861 887 945 995 Limited service 74 74 75 74 76 77 77 83 92 88 In-store 83 83 83 85 92 92 97 97 98 111 Bank express 396 395 395 355 290 233 206 183 131 94 ----------------- ------------------------------------- ------------------------------------- TOTAL BANK BRANCHES 1,201 1,204 1,207 1,207 1,221 1,235 1,241 1,250 1,266 1,288 ================= ===================================== ===================================== ATMS 1,653 1,661 1,670 1,692 1,729 1,743 1,845 1,905 1,952 1,974 ONLINE BANKING CUSTOMERS 174,369 138,033 108,142 85,344 56,195 28,499 23,175 20,881 18,218 16,344
UNAUDITED MORTGAGE BANKING ($ IN MILLIONS) - --------------------------------------------------------------------------------
2001 2000 --------------------- --------------------------------------------- 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR --------------------- --------------------------------------------- REVENUE COMPONENTS - ----------------------------------------------- Servicing: Servicing fees $65.0 $60.8 $54.6 $52.7 $49.2 $47.7 Amortization of mortgage servicing assets (45.2) (40.2) (35.2) (32.4) (29.0) (26.7) Mortgage servicing asset impairment (24.4) (198.3) - - - - Gains on sales of servicing rights 4.6 3.0 - .2 13.6 - Other (3.7) - - - - - Conforming origination and sales revenue 94.7 77.3 89.0 83.5 79.4 68.4 Gain on sale of ARM loans - - - - 10.6 - Other - - (6.6) .1 2.1 5.2 --------------------- --------------------------------------------- Total conforming revenue 91.0 (97.4) 101.8 104.1 125.9 94.6 Nonconforming origination and sales revenue 29.6 (.4) 7.8 6.4 21.7 16.7 --------------------- --------------------------------------------- TOTAL MORTGAGE BANKING REVENUE $120.6 ($97.8) $109.6 $110.5 $147.6 $111.3 ===================== ============================================= PRODUCTION DATA - ----------------------------------------------- Conforming originations $13,922 $8,937 $5,801 $5,647 $5,422 $3,810 Nonconforming originations (First Franklin) 632 541 212 321 629 481 --------------------- --------------------------------------------- TOTAL LOANS ORIGINATED FOR SALE $14,554 $9,478 $6,013 $5,968 $6,051 $4,291 ===================== ============================================= Conforming sales to secondary market $10,378 $6,105 $5,137 $5,721 $3,741 $3,691 Nonconforming whole loan sales 852 103 356 299 670 672 --------------------- --------------------------------------------- TOTAL MORTGAGE SALES $11,230 $6,208 $5,493 $6,020 $4,411 $4,363 ===================== ============================================= MEMO: Total First Franklin nonconforming loan originations $1,538 $1,015 $1,025 $1,187 $1,204 $1,063 SERVICING DATA - ----------------------------------------------- Mortgage loans serviced for third parties $66,730 $60,618 $57,366 $53,452 $52,505 $48,574 Mortgage servicing assets: Carrying value at beginning of period $863.9 $999.7 $976.4 $948.7 $876.6 $785.0 Additions 178.6 102.7 89.6 93.2 86.7 60.4 Amortization (45.2) (40.2) (35.2) (32.4) (29.0) (26.7) SFAS 133 basis adjustment 36.1 - - - - - SFAS 140 impairment charge (24.4) (198.3) - - - - Sales (1.6) - - (29.0) (.1) - Other - - (31.1) (4.1) 14.5 57.9 --------------------- --------------------------------------------- Carrying value at end of period $1,007.4 $863.9 $999.7 $976.4 $948.7 $876.6 ===================== ============================================= 1999 --------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR --------------------------------------------- REVENUE COMPONENTS - ----------------------------------------------- Servicing: Servicing fees $45.4 $42.2 $39.5 $37.4 Amortization of mortgage servicing assets (28.9) (26.2) (26.0) (23.1) Mortgage servicing asset impairment - - - - Gains on sales of servicing rights - - - - Other - - - - Conforming origination and sales revenue 68.8 62.6 75.1 77.0 Gain on sale of ARM loans - - - - Other .1 .4 .6 1.7 --------------------------------------------- Total conforming revenue 85.4 79.0 89.2 93.0 Nonconforming origination and sales revenue 40.6 2.1 - - --------------------------------------------- TOTAL MORTGAGE BANKING REVENUE $126.0 $81.1 $89.2 $93.0 ============================================= PRODUCTION DATA - ----------------------------------------------- Conforming originations $3,795 $3,448 $4,414 $4,444 Nonconforming originations (First Franklin) 1,241 467 - - --------------------------------------------- TOTAL LOANS ORIGINATED FOR SALE $5,036 $3,915 $4,414 $4,444 ============================================= Conforming sales to secondary market $2,880 $3,858 $4,529 $5,796 Nonconforming whole loan sales 1,506 50 - - --------------------------------------------- TOTAL MORTGAGE SALES $4,386 $3,908 $4,529 $5,796 ============================================= MEMO: Total First Franklin nonconforming loan originations $1,343 $467 - - SERVICING DATA - ----------------------------------------------- Mortgage loans serviced for third parties $46,704 $44,376 $41,339 $38,840 Mortgage servicing assets: Carrying value at beginning of period $753.7 $683.2 $632.4 $564.0 Additions 56.4 78.1 78.7 89.1 Amortization (28.9) (26.2) (26.0) (23.1) SFAS 133 basis adjustment - - - - SFAS 140 impairment charge - - - - Sales - - - - Other 3.8 18.6 (1.9) 2.4 --------------------------------------------- Carrying value at end of period $785.0 $753.7 $683.2 $632.4 =============================================
UNAUDITED TRUST ASSETS ($ IN MILLIONS) - --------------------------------------------------------------------------------
2001 2000 ------------------- ----------------------------------------- 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------------------- ----------------------------------------- TRUST ASSETS - ------------------------------------ Managed assets * $66,429 $64,040 $68,040 $66,473 $66,951 $63,239 Non-managed assets 75,227 72,621 77,833 79,960 79,445 79,002 ------------------- ----------------------------------------- TOTAL ASSETS UNDER ADMINISTRATION $141,656 $136,661 $145,873 $146,433 $146,396 $142,241 =================== ========================================= PROPRIETARY MUTUAL FUND ASSETS $16,868 $16,443 $16,852 $16,204 $16,212 $16,600 =================== ========================================= 1999 ----------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ----------------------------------------- TRUST ASSETS - ------------------------------------ Managed assets * $63,645 $60,283 $62,641 $61,857 Non-managed assets 78,501 76,110 76,824 71,631 ----------------------------------------- TOTAL ASSETS UNDER ADMINISTRATION $142,146 $136,393 $139,465 $133,488 ========================================= PROPRIETARY MUTUAL FUND ASSETS $16,700 $15,800 $16,300 $15,600 =========================================
* Includes proprietary mutual fund assets. 7 11 UNAUDITED NATIONAL CITY CORPORATION LINE OF BUSINESS RESULTS ($ IN THOUSANDS) - --------------------------------------------------------------------------------
2001 2000 YTD -------------------- ------------------------------------------- -------------------- 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR 2001 2000 -------------------- ------------------------------------------- -------------------- RETAIL SALES AND DISTRIBUTION - ----------------------------- Net interest income (TE) $370,054 $367,333 $367,260 $371,293 $370,403 $367,183 $737,387 $737,586 Provision for loan losses 12,065 11,466 10,570 14,220 9,640 9,153 23,531 18,793 -------------------- ------------------------------------------- -------------------- Net interest income after provision 357,989 355,867 356,690 357,073 360,763 358,030 713,856 718,793 Noninterest income 147,442 136,469 141,063 141,878 134,892 128,325 283,911 263,217 Noninterest expense 286,185 279,114 288,622 292,939 282,694 284,900 565,299 567,594 -------------------- ------------------------------------------- -------------------- Income before taxes 219,246 213,222 209,131 206,012 212,961 201,455 432,468 414,416 Income tax expense and TE adjustment 83,845 81,585 80,186 79,046 81,594 77,308 165,430 158,902 -------------------- ------------------------------------------- -------------------- Net income $135,401 $131,637 $128,945 $126,966 $131,367 $124,147 $267,038 $255,514 ==================== =========================================== ==================== Average assets (in millions) $16,171 $15,775 $15,744 $15,617 $16,389 $16,496 $15,974 $16,443 WHOLESALE BANKING - ----------------- Net interest income (TE) $265,268 $255,281 $249,215 $243,982 $232,881 $222,988 $520,549 $455,869 Provision for loan losses 38,761 25,169 21,119 10,543 22,352 15,443 63,930 37,795 -------------------- ------------------------------------------- -------------------- Net interest income after provision 226,507 230,112 228,096 233,439 210,529 207,545 456,619 418,074 Noninterest income 78,645 71,027 92,970 64,084 71,369 70,101 149,672 141,470 Noninterest expense 124,651 118,374 110,570 111,369 105,410 109,694 243,025 215,104 -------------------- ------------------------------------------- -------------------- Income before taxes 180,501 182,765 210,496 186,154 176,488 167,952 363,266 344,440 Income tax expense and TE adjustment 67,939 68,822 78,506 70,213 66,468 63,150 136,761 129,618 -------------------- ------------------------------------------- -------------------- Net income $112,562 $113,943 $131,990 $115,941 $110,020 $104,802 $226,505 $214,822 ==================== =========================================== ==================== NON-CORE ITEMS (PRETAX) Venture capital gains (losses) $7,340 $401 $26,719 $(553) $2,676 $8,224 $7,741 $10,900 -------------------- ------------------------------------------- -------------------- Total $7,340 $401 $26,719 $(553) $2,676 $8,224 $7,741 $10,900 ==================== =========================================== ==================== NON-CORE ITEMS (AFTER TAX) Venture capital gains (losses) $4,771 $261 $17,368 $(359) $1,739 $5,346 $5,032 $7,085 -------------------- ------------------------------------------- -------------------- Total $4,771 $261 $17,368 $(359) $1,739 $5,346 $5,032 $7,085 ==================== =========================================== ==================== Average assets (in millions) $31,692 $31,131 $30,247 $29,182 $28,070 $27,094 $31,413 $27,582 CONSUMER FINANCE - ---------------- Net interest income (TE) $189,641 $184,730 $165,686 $157,458 $158,900 $157,951 $374,371 $316,851 Provision for loan losses 113,927 55,664 52,418 44,985 37,531 44,999 169,591 82,530 -------------------- ------------------------------------------- -------------------- Net interest income after provision 75,714 129,066 113,268 112,473 121,369 112,952 204,780 234,321 Noninterest income 51,837 21,106 32,551 30,124 119,457 39,739 72,943 159,196 Noninterest expense 111,792 120,164 135,313 91,928 115,453 95,971 231,956 211,424 -------------------- ------------------------------------------- -------------------- Income before taxes 15,759 30,008 10,506 50,669 125,373 56,720 45,767 182,093 Income tax expense and TE adjustment 5,986 11,329 4,040 19,101 47,116 21,371 17,315 68,487 -------------------- ------------------------------------------- -------------------- Net income $9,773 $18,679 $6,466 $31,568 $78,257 $35,349 $28,452 $113,606 ==================== =========================================== ==================== NON-CORE ITEMS (PRETAX) Gain on sale of student loans - - - - $74,216 - - $74,216 Loan Zone and other - - $(17,960) - - - - - Auto lease residual charge $(18,132) $(33,500) (26,000) - - - $(51,632) - Altegra loan loss provision (55,000) - - - - - (55,000) - -------------------- ------------------------------------------- -------------------- Total $(73,132) $(33,500) $(43,960) - $74,216 - $(106,632) $74,216 ==================== =========================================== ==================== NON-CORE ITEMS (AFTER TAX) Gain on sale of student loans - - - - $48,240 - - $48,240 Loan Zone and other - - $(11,674) - - - - - Auto lease residual charge $(11,786) $(21,775) (16,900) - - - $(33,561) - Altegra loan loss provision (35,750) - - - - - (35,750) - -------------------- ------------------------------------------- -------------------- Total $(47,536) $(21,775) $(28,574) - $48,240 - $(69,311) $48,240 ==================== =========================================== ==================== Average assets (in millions) $20,654 $20,175 $19,055 $17,659 $18,433 $18,098 $20,416 $18,266
8 12 UNAUDITED NATIONAL CITY CORPORATION LINE OF BUSINESS RESULTS ($ IN THOUSANDS) - --------------------------------------------------------------------------------
2001 2000 YTD ------------------- ---------------------------------------- ------------------ 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR 2001 2000 ------------------- ---------------------------------------- ------------------ ASSET MANAGEMENT - ---------------- Net interest income (TE) $26,918 $28,454 $26,264 $25,863 $25,114 $23,704 $55,372 $48,818 Provision for loan losses 2,188 524 3,476 2,950 2,317 890 2,712 3,207 ------------------- ---------------------------------------- ----------------- Net interest income after provision 24,730 27,930 22,788 22,913 22,797 22,814 52,660 45,611 Noninterest income 202,847 108,951 106,508 107,574 118,196 114,774 311,798 232,970 Noninterest expense 83,701 85,153 78,171 80,136 79,814 85,400 168,854 165,214 ------------------- ---------------------------------------- ----------------- Income before taxes 143,876 51,728 51,125 50,351 61,179 52,188 195,604 113,367 Income tax expense and TE adjustment 51,396 19,065 18,916 18,647 22,746 19,466 70,461 42,212 ------------------- ---------------------------------------- ----------------- Net income $92,480 $32,663 $32,209 $31,704 $38,433 $32,722 $125,143 $71,155 =================== ======================================== ================= NON-CORE ITEMS (PRETAX) Gain on sale of NAMCO preferred shares $88,775 - - - - - $88,775 - ------------------- ---------------------------------------- ----------------- Total $88,775 - - - - - $88,775 - =================== ======================================== ================= NON-CORE ITEMS (AFTER TAX) Gain on sale of NAMCO preferred shares $57,704 - - - - - $57,704 - ------------------- ---------------------------------------- ----------------- Total $57,704 - - - - - $57,704 - =================== ======================================== ================= Average assets (in millions) $2,722 $2,696 $2,729 $2,571 $2,394 $2,322 $2,709 $2,358 NATIONAL CITY MORTGAGE - ---------------------- Net interest income (TE) $40,554 $12,959 $7,772 $12,843 $11,016 $8,056 $53,513 $19,072 Provision for loan losses - - - - - - - - ------------------- ---------------------------------------- ----------------- Net interest income after provision 40,554 12,959 7,772 12,843 11,016 8,056 53,513 19,072 Noninterest income 83,103 120,568 95,380 99,989 111,983 95,553 203,671 207,536 Noninterest expense 78,621 86,113 91,019 87,318 86,341 78,639 164,734 164,980 ------------------- ---------------------------------------- ----------------- Income before taxes 45,036 47,414 12,133 25,514 36,658 24,970 92,450 61,628 Income tax expense and TE adjustment 16,733 17,601 4,697 9,725 13,935 9,521 34,334 23,456 ------------------- ---------------------------------------- ----------------- Net income $28,303 $29,813 $7,436 $15,789 $22,723 $15,449 $58,116 $38,172 =================== ======================================== ================= NON-CORE ITEMS (PRETAX) Mortgage servicing impairment charge $(24,405) $(198,338) - - - - $(222,743) - Mortgage servicing derivative (losses) gains (9,421) 221,363 - - - - 211,942 - SFAS 133 ineffective hedge gains related to mortgage servicing assets 4,470 - - - - - 4,470 - ------------------- ---------------------------------------- ----------------- Total $(29,356) $23,025 - - - - $(6,331) - =================== ======================================== ================= NON-CORE ITEMS (AFTER TAX) Mortgage servicing impairment charge $(15,863) $(128,920) - - - - $(144,783) - Mortgage servicing derivative (losses) gains (6,124) 143,886 - - - - 137,762 - SFAS 133 ineffective hedge gains related to mortgage servicing assets 2,905 - - - - - 2,905 - ------------------- ---------------------------------------- ----------------- Total $(19,082) $14,966 - - - - $(4,116) - =================== ======================================== ================= Average assets (in millions) $8,132 $4,522 $3,826 $3,980 $3,643 $2,779 $6,337 $3,211 NATIONAL PROCESSING - ------------------- Net interest income (TE) $1,948 $2,360 $2,566 $2,535 $2,228 $1,858 $4,308 $4,086 Provision for loan losses - - - - - - - - ------------------- ---------------------------------------- ----------------- Net interest income after provision 1,948 2,360 2,566 2,535 2,228 1,858 4,308 4,086 Noninterest income 115,821 106,916 113,772 106,599 102,794 96,281 222,737 199,075 Noninterest expense 101,123 90,624 99,724 87,975 87,788 82,693 191,747 170,481 ------------------- ---------------------------------------- ----------------- Income before taxes 16,646 18,652 16,614 21,159 17,234 15,446 35,298 32,680 Income tax expense and TE adjustment 8,728 7,113 6,235 8,175 6,758 5,899 15,841 12,657 ------------------- ---------------------------------------- ----------------- Net income $7,918 $11,539 $10,379 $12,984 $10,476 $9,547 $19,457 $20,023 =================== ======================================== ================= NON-CORE ITEMS (PRETAX) Goodwill and fixed asset impairment - - $(7,072) - - - - - Loss on divestiture $(6,250) - - - - - $(6,250) - ------------------- ---------------------------------------- ----------------- Total $(6,250) - $(7,072) - - - $(6,250) - =================== ======================================== ================= NON-CORE ITEMS (AFTER TAX) Goodwill and fixed asset impairment - - $(4,597) - - - - - Loss on divestiture $(6,150) - - - - - $(6,150) - ------------------- ---------------------------------------- ----------------- Total $(6,150) - $(4,597) - - - $(6,150) - =================== ======================================== ================= Average assets (in millions) $407 $412 $414 $385 $375 $365 $409 $370
13 UNAUDITED NATIONAL CITY CORPORATION LINE OF BUSINESS RESULTS ($ IN THOUSANDS) - --------------------------------------------------------------------------------
2001 2000 YTD ------------------- ---------------------------------------- ------------------ 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR 2001 2000 ------------------- ---------------------------------------- ------------------ PARENT AND OTHER - ---------------- Net interest income (expense) (TE) $(59,427) $ (71,889) $(62,559) $(67,954) $ (51,570) $ (40,845) $ (131,316) $ (92,415) Provision (benefit) for loan losses (14,018) (9,451) (6,168) (2,335) (3,149) (4,159) (23,469) (7,308) --------- ---------- ---------------------------------------- ---------- ---------- Net interest income (expense) after provision (45,409) (62,438) (56,391) (65,619) (48,421) (36,686) (107,847) (85,107) Noninterest income (expense) 19,156 121,633 73,230 68,065 (27,143) 34,126 140,789 6,983 Noninterest expense 54,029 25,455 51,018 33,644 27,570 21,796 79,484 49,366 --------- ---------- ---------------------------------------- ---------- ---------- Income (loss) before taxes (80,282) 33,740 (34,179) (31,198) (103,134) (24,356) (46,542) (127,490) Income tax expense (benefit) and TE adj. (43,347) 36,611 (24,765) (26,882) (54,245) (23,683) (6,736) (77,928) --------- ---------- ---------------------------------------- ---------- ---------- Net income (loss) $(36,935) $ (2,871) $ (9,414) $ (4,316) $ (48,889) $ (673) $ (39,806) $ (49,562) ========= ========== ======================================== ========== ========== NON-CORE ITEMS (PRETAX) Minority interest related to goodwill and fixed asset impairment - - $ 593 - - - - - Gain (loss) on sale and impairment of securities - - - $ 2,058 $ (58,379) - - $ (58,379) COLI tax charge - $ (40,000) - - - - $ (40,000) - Minority interest related to NPI loss on divestiture $ 831 - - - - - 831 - Bank stock fund gains 17,397 84,861 50,302 25,812 15,599 $ 21,097 102,258 36,696 --------- ---------- ---------------------------------------- ---------- ---------- Total $ 18,228 $ 44,861 $ 50,895 $ 27,870 $ (42,780) $ 21,097 $ 63,089 $ (21,683) ========= ========== ======================================== ========== ========== NON-CORE ITEMS (AFTER TAX) Minority interest related to goodwill and fixed asset impairment - - $ 593 - - - - - Gain (loss) on sale and impairment of securities - - - $ 1,337 $ (37,946) - - $ (37,946) COLI tax charge - $ (40,000) - - - - $ (40,000) - Minority interest related to NPI loss on divestiture $ 831 - - - - - 831 - Bank stock fund gains 11,309 55,159 32,697 16,778 10,139 $ 13,713 66,468 23,852 --------- ---------- ---------------------------------------- ---------- ---------- Total $ 12,140 $ 15,159 $ 33,290 $ 18,115 $ (27,807) $ 13,713 $ 27,299 $ (14,094) ========= ========== ======================================== ========== ========== Average assets (in millions) $ 12,158 $ 12,900 $ 13,285 $ 14,807 $ 17,467 $ 18,797 $ 12,528 $ 18,131 CONSOLIDATED - ------------ Net interest income (TE) $834,956 $ 779,228 $756,204 $746,020 $ 748,972 $ 740,895 $1,614,184 $1,489,867 Provision for loan losses 152,923 83,372 81,415 70,363 68,691 66,326 236,295 135,017 --------- ---------- ---------------------------------------- ---------- ---------- Net interest income after provision 682,033 695,856 674,789 675,657 680,281 674,569 1,377,889 1,354,850 Noninterest income 698,851 686,670 655,474 618,313 631,548 578,899 1,385,521 1,210,447 Noninterest expense 840,102 804,997 854,437 785,309 785,070 759,093 1,645,099 1,544,163 --------- ---------- ---------------------------------------- ---------- ---------- Income before taxes 540,782 577,529 475,826 508,661 526,759 494,375 1,118,311 1,021,134 Income tax expense and TE adjustment 191,280 242,126 167,815 178,025 184,372 173,032 433,406 357,404 --------- ---------- ---------------------------------------- ---------- ---------- Net income $349,502 $ 335,403 $308,011 $330,636 $ 342,387 $ 321,343 $ 684,905 $ 663,730 ========= ========== ======================================== ========== ========== NON-CORE ITEMS (PRETAX) Gain on sale of student loans - - - - $ 74,216 - - $ 74,216 Loan Zone and other - - $(17,960) - - - - - NPI goodwill and fixed asset impairment, net - - (6,479) - - - - - Gain (loss) on sale and impairment of - - securities - - - $ 2,058 (58,379) - - (58,379) Auto lease residual charge $(18,132) $ (33,500) (26,000) - - - $ (51,632) - Mortgage servicing impairment charge (24,405) (198,338) - - - - (222,743) - Mortgage servicing derivative (losses) gains (9,421) 221,363 - - - - 211,942 - SFAS 133 ineffective hedge gains related - - to mortgage servicing assets 4,470 - - - - - 4,470 - COLI tax charge - (40,000) - - - - (40,000) - Venture capital gains (losses) 7,340 401 26,719 (553) 2,676 $ 8,224 7,741 10,900 Altegra loan loss provision (55,000) - - - - - (55,000) - Gain on sale of NAMCO preferred shares 88,775 - - - - - 88,775 - NPI loss on divestiture, net (5,419) - - - - - (5,419) - Bank stock fund gains 17,397 84,861 50,302 25,812 15,599 21,097 102,258 36,696 --------- ---------- ---------------------------------------- ---------- ---------- Total $ 5,605 $ 34,787 $ 26,582 $ 27,317 $ 34,112 $ 29,321 $ 40,392 $ 63,433 ========= ========== ======================================== ========== ========== NON-CORE ITEMS (AFTER TAX) Gain on sale of student loans - - - - $ 48,240 - - $ 48,240 Loan Zone and other - - $(11,674) - - - - - NPI goodwill and fixed asset impairment, net - - (4,004) - - - - - Gain (loss) on sale and impairment of - - securities - - - $ 1,337 (37,946) - - (37,946) Auto lease residual charge $(11,786) $ (21,775) (16,900) - - - $ (33,561) - Mortgage servicing impairment charge (15,863) (128,920) - - - - (144,783) - Mortgage servicing derivative (losses) gains (6,124) 143,886 - - - - 137,762 - SFAS 133 ineffective hedge gains related - - to mortgage servicing assets 2,905 - - - - - 2,905 - COLI tax charge - (40,000) - - - - (40,000) - Venture capital gains (losses) 4,771 261 17,368 (359) 1,739 $ 5,346 5,032 7,085 Altegra loan loss provision (35,750) - - - - - (35,750) - Gain on sale of NAMCO preferred shares 57,704 - - - - - 57,704 - NPI loss on divestiture, net (5,319) - - - - - (5,319) - Bank stock fund gains 11,309 55,159 32,697 16,778 10,139 13,713 66,468 23,852 --------- ---------- ---------------------------------------- ---------- ---------- Total $ 1,847 $ 8,611 $ 17,487 $ 17,756 $ 22,172 $ 19,059 $ 10,458 $ 41,231 ========= ========== ======================================== ========== ========== Net income - excluding non-core items $347,655 $ 326,792 $290,524 $312,880 $ 320,215 $ 302,284 $ 674,447 $ 622,499 ========= ========== ======================================== ========== ========== Average assets (in millions) $ 91,936 $ 87,611 $ 85,300 $ 84,201 $ 86,771 $ 85,951 $ 89,786 $ 86,361
10 14 Annex B NATIONAL CITY SECOND QUARTER 2001 EARNINGS CONFERENCE CALL JULY 20, 2001 NATIONAL CITY(R) ---------------- nationalcity.com 15 FORWARD-LOOKING STATEMENTS The presentation and the oral statements relating to the following presentation contain certain forward-looking statements (as defined in the Private Securities Litigation Reform Act of 1995) including those referencing any future financial performance that are based on the beliefs of National City's management as well as assumptions made by and information currently available to National City's management. Such forward-looking statements involve significant risks and uncertainties, including changes in general economic and financial market conditions, deterioration in credit quality, the Corporation's ability to execute its business plans, and other factors as described in National City's 2000 Annual Report on Form 10-K and subsequent filings with the Securities and Exchange Commission. Although National City believes the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially. -2- NATIONAL CITY(R) ---------------- nationalcity.com 16 SECOND QUARTER 2001 CORE OPERATING EARNINGS ================================================================================ $ MM P/S ----- ---- Net Income $349.5 $.57 Mortgage Impairment, Net of Derivatives 19.1 .03 Auto Lease Residual 11.8 .02 NAMCO Sale Gain (57.7) (.09) NPI Divestiture 5.4 .01 Altegra Loan Loss Provision 35.7 .06 Bank Stock and Venture Capital Gains (16.1) (.03) ----- ---- Core Earnings $347.7 $.57 -3- NATIONAL CITY(R) ---------------- nationalcity.com 17 EPS Trend ================================================================================
1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 ---- ---- ---- ---- ---- ---- Reported EPS $.53 $.56 $.54 $.50 $.55 $.57 Bond Losses .06 Asset Sale Gains (.08) (.09) Auto Lease Residual .03 .04 .02 Closings and Divestitures .02 .01 Altegra Loan Loss Provision .06 Mortgage Impairment, Net of Derivatives (.03) .03 COLI Tax Charge .07 Bank Stock and Venture Capital Gains (.03) (.02) (.03) (.08) (.09) (.03) ---- ---- ---- ---- ---- ---- Core EPS $.50 $.52 $.51 $.47 $.54 $.57
-4- NATIONAL CITY(R) ---------------- nationalcity.com 18 EPS TREND ================================================================================
Full Year 1H00/1H01 1H00 2H00 2000 1H01 Change ---- ---- ---- ---- ------ Reported EPS $1.09 $1.04 $2.13 $1.12 2.8% Bond Losses .06 .06 Asset Sale Gains (.08) (.08) (.09) Auto Lease Residual .03 .03 .06 Closing and Divestitures .02 .02 .01 Altegra Loan Loss Provision .06 Mortgage Impairment, Net of Derivatives -- COLI Tax Charge .07 Bank Stock and Venture Capital Gains (.05) (.11) (.16) (.12) ---- ---- ---- ---- Core EPS $1.02 $.98 $2.00 $1.11 8.8%
-5- NATIONAL CITY(R) ---------------- nationalcity.com 19 TEN LARGEST NPAS AS OF JUNE 30, 2001 ================================================================================ $000s AMOUNT % INDUSTRY CLASSIFICATION OUTSTANDING TOTAL NPS AS - -------- -------------- ----------- ------------ Lodging Non Residential Real Estate $16,704 3.3% Contract Services Commercial 12,896 2.5% Textiles Commercial 11,115 2.2% Home Builder Commercial 10,294 2.0% Injection Molder Commercial 9,003 1.8% Leasing Company Commercial 7,707 1.5% Food Services Commercial 7,014 1.4% Individual Commercial 6,720 1.3% Manufacturing Leasing 6,590 1.3% Manufacturing Commercial 5,865 1.2% ------- $93,908 18.5% Total Nonperforming Assets $508,710 100% 75bps -6- NATIONAL CITY(R) ---------------- nationalcity.com 20 NPAS BY CATEGORY AS OF JUNE 30, 2001 ================================================================================ [PIE CHART INSERTED HERE] OREO 10.2% Residential Real Estate 26.4% Commercial 50.8% Non Residential Real Estate 11.0% Real Estate Construction 1.6% Total: $508.7 Million -7- NATIONAL CITY(R) ---------------- nationalcity.com 21 2001 EPS FORECAST AS OF JULY 20, 2001 ================================================================================ Reported and Core EPS $2.24 to $2.28 - - Assumes minimal Bank Stock and Venture Capital gains in second half - - Assumes no other non-core charges or gains in second half -8- NATIONAL CITY(R) ---------------- nationalcity.com EX-99.1 2 l89498aex99-1.txt EXHIBIT 99.1 1 Exhibit 99.1 [NATIONAL CITY LETTERHEAD] NEWS RELEASE FOR MORE INFORMATION CONTACT: Thomas A. Richlovsky Derek Green Senior Vice President & Treasurer Vice President, Investor Relations (216) 575-2126 (216) 222-9849 www.nationalcity.com FOR IMMEDIATE RELEASE -------------------- NATIONAL CITY REPORTS QUARTERLY EARNINGS ---------------------------------------- SECOND QUARTER HIGHLIGHTS - Earnings per share of $.57, up from $.56 in prior year - Record revenue of $1.5 billion, up 11% over prior year - Solid growth in loans, deposits, and net interest income with strong margin improvement - Record fee income driven by processing, mortgage, and banking businesses - Sound credit quality; nonperforming assets within expectations - Core earnings per share of $.57, up 10% over second quarter 2000 CLEVELAND, July 20, 2001--National City Corporation (NYSE: NCC) today reported second quarter 2001 net income of $349.5 million, or $.57 per diluted share. Returns on average common equity and assets were 20.5% and 1.52%, respectively. For the 2001 first half, net income was $684.9 million, or $1.12 per diluted share, and returns on average common equity and assets were 20.5% and 1.54%, respectively. CHAIRMAN'S REMARKS Chairman and CEO David A. Daberko remarked, "We are pleased to report strong second quarter earnings. In spite of a slowing economy and volatile financial markets, National (more) 2 -2- City delivered outstanding fundamental results. We are encouraged by measurable progress made on various strategic directives, including a focus on service quality, product enhancement, and building long-term, mutually profitable relationships. In our retail and wholesale banking businesses, loan and core deposit growth continues to trend positively, and margins have improved. Our fee businesses are performing well, especially our National Processing and National City Mortgage subsidiaries. National Processing continues to win new customers at impressive rates and is growing transaction volumes well in excess of the industry average, while National City Mortgage is enjoying its best year ever on the strength of record origination volumes." Daberko further added, "We have decided to take a more aggressive posture this quarter toward the management of certain problem loans. The increased loan loss provision this quarter reflects the priority we place on maintaining strong credit quality and is consistent with weaker economic conditions and the effects of closing the wholesale origination unit of our Altegra subsidiary last December, coupled with the decision to address related problem credits in that unit more aggressively. While nonperforming assets have increased for the industry overall and to a lesser extent for National City, we have historically experienced very low losses relative to nonperforming assets. We expect this trend to continue and view the overall credit picture for the second half of the year as manageable." Daberko concluded, "As we evaluate the first half results, the Corporation appears to be well positioned to improve its fundamental performance in the second half. Our estimate at this time for full-year 2001 earnings per share is between $2.24 and $2.28, on both a reported and a core basis. The primary risks to the forecast are economic weakness and unforeseen credit deterioration." (more) 3 -3- ROBUST NET INTEREST INCOME GROWTH AND STRONG MARGIN IMPROVEMENT Tax-equivalent net interest income was up 7.2% over the first quarter and 11.5% over the prior year's second quarter. The growth in net interest income reflected higher volumes of loans and was accompanied by a significant boost in net interest margin to 3.98%, up from 3.92% in the first quarter of this year and represented the fifth consecutive quarter of improvement. A richer asset mix, wider spreads across the loan portfolio, and core deposit growth all contributed to the margin strength. STRONG LOAN GROWTH Average second quarter loans were up 13.6% over the prior year, adjusted for sales and securitizations. Commercial loans and leases showed especially strong growth, with continued focus on risk-adjusted returns contributing to wider spreads. Mindful of the effects a slowing economy can have on credit quality, the Corporation maintained its sound underwriting standards and continues to seek well-priced and well-structured corporate loans. Propelled by lower interest rates and a strong housing market, home equity and real estate loan production also contributed to the increase in loans outstanding. Record origination volume drove average mortgage loans held for sale to $7.5 billion in the second quarter of 2001, up from $3.5 billion last quarter and $2.8 billion in the second quarter a year ago. Conforming residential mortgage loan originations were $13.9 billion for the 2001 second quarter, up from $8.9 billion last quarter and $5.4 billion in the second quarter a year ago. Nonconforming mortgage loans generated by the First Franklin subsidiary were $1.5 billion this quarter, up from $1.0 billion last quarter and $1.2 billion in the second quarter of 2000. (more) 4 -4- PROCESSING, MORTGAGE, AND BANKING BUSINESSES BOOST FEE REVENUE Fees and other income for the second quarter of 2001 were $682.0 million, up 13.9% from $598.5 million in the 2001 first quarter and also up from $674.3 million in the second quarter of 2000. On a year-over-year basis, increased customer debit card usage, higher cash management fees, fewer waived fees, and other volume-driven increases led to higher deposit service charges. Item processing revenue exhibited strong growth over the past year due to increased debit and credit card transaction volume and new customer acquisition. Higher servicing fees on National City's residential loan servicing portfolio ($66.7 billion, up 27% from a year ago) combined with the strength of new mortgage loan production supported solid core mortgage banking revenue, offset by accelerated amortization and impairment of servicing assets resulting from higher prepayment rates. Also affecting the year-over-year comparison of mortgage banking revenue were $24.2 million of gains recognized on the sales of adjustable-rate mortgage loans and servicing assets during the 2000 second quarter, versus gains of only $4.6 million on servicing asset sales in the same quarter this year. The robust level of originations in 2001 has boosted the Corporation's warehouse of mortgage loans held for sale to over $8.4 billion at quarter-end June 2001. As these loans are sold into the secondary market, additional production revenue will be recognized. Fees and other income for the second quarter of 2001 also included an $88.8 million gain on the previously-disclosed sale of the Corporation's preferred share interest in National Asset Management Corporation; a Louisville, Kentucky-based investment advisor, whereas in comparison, the second quarter of 2000 included a $74.2 million gain on the sale of student loans. (more) 5 -5- On a linked-quarter basis, National City's retail and commercial banking, asset management, and item processing businesses each contributed to the overall increase in fees and other income. Although the lower interest rate environment fueled record mortgage production in 2001, the higher level of refinancing also increased prepayment rates and lowered the estimated value of existing mortgage servicing assets, which led to a decrease in mortgage banking revenue in the first quarter of 2001. In the second quarter, mortgage-banking revenue included a $24.4 million impairment charge and trading revenue included a $9.4 million net trading loss associated with mortgage servicing hedging activities. During the first quarter, the $198.3 million decline in estimated value of mortgage servicing assets was recorded as an impairment charge, a component of mortgage banking revenue. This charge was more than offset by $221.4 million of net trading gains recognized on the derivatives used to hedge the decline in estimated value of mortgage servicing assets. New accounting rules adopted in 2001 caused and may continue to cause significant, but generally counterbalancing entries related to mortgage servicing hedging and valuation. The Corporation hedges the economic risk associated with changes in the fair value of mortgage servicing assets using both derivative instruments and on-balance-sheet securities. The primary hedging strategies use derivative financial instruments, which beginning January 1, 2001, are carried at fair value on the balance sheet. Changes in the fair value of these derivatives are recorded in the income statement, and if the relationship of the derivatives to the mortgage servicing assets meet certain criteria, then the derivative fair value changes are recorded as direct offsets to the related changes in the estimated value of the mortgage servicing rights. (more) 6 -6- BANK STOCK FUND AND VENTURE CAPITAL INVESTMENTS The Corporation continued to realize gains from its bank stock and venture capital investments. Bank stock gains, included in securities gains, were $17.4 million for the 2001 second quarter, versus $84.9 million last quarter, and $15.6 million for the second quarter a year ago. The bank stock fund is managed opportunistically, with the degree of market strength and industry consolidation affecting the comparability of achieved results between periods. Unrealized gains on the bank stock fund portfolio were $64.3 million at June 30, 2001. Venture capital gains, included in other noninterest income, were $7.3 million in the 2001 second quarter, compared to $.4 million last quarter and $2.7 million for the second quarter of 2000. TARGETED PROCESS IMPROVEMENTS AND COST CONTROL A PRIORITY Higher volume-driven personnel and card processing expenses in 2001 combined with annual compensation increases, partially offset by state and local tax refunds in 2000, led to the year-over-year quarterly increase in noninterest expense. While continuing to invest in technology, expanded product offerings, and enhanced service quality, the Corporation's continued cost control and targeted process improvement efforts have led to disciplined noninterest expense growth. The efficiency ratio, which expresses noninterest expense as a percentage of tax-equivalent net interest income and total fees and other income, improved to 55.4% in the second quarter from 58.4% in the previous quarter. Noninterest expense reported in the second quarter of 2001 included an $18.1 million charge to reflect further deterioration in estimated automobile lease residual values, versus a $33.5 million charge last quarter and a $15.0 million charge in the second quarter of 2000. The Corporation ceased origination of new automobile leases in December 2000 and announced its intention to liquidate the existing portfolio over time. In the second quarter of 2001, the (more) 7 -7- Corporation's National Processing subsidiary elected to divest the data capture services line within its Corporate Outsourcing division, resulting in a $5.4 million charge on a consolidated basis. SOUND CREDIT QUALITY As anticipated, net charge-offs and nonperforming assets increased over prior periods due mainly to portfolio growth and continued deterioration in leveraged commercial credits and certain nonconforming residential mortgage loans generated by the former wholesale loan origination unit of the Corporation's consumer finance subsidiary Altegra Credit Company. National City closed the wholesale and retail loan origination units of Altegra in December 2000. As part of the decision to exit this activity, the Corporation assumed a more aggressive stance on the management of this portfolio, which has contributed in 2001 to the increase in net charge-offs, nonperforming assets, and delinquencies. To focus Altegra's resources on its growing servicing business, the Corporation committed in the second quarter to accelerate the disposition of a portfolio of nonperforming and delinquent loans, totaling approximately $250 million. In so doing, the allowance for loan losses provided for this segregated portfolio was increased by $55.0 million through a second quarter charge to the provision for loan losses. As the Corporation exits or otherwise resolves the problem credits, this associated allowance will be used to absorb the losses. The amount of the allowance allocated was determined based on estimated secondary market prices or liquidation values that could be realized upon disposition or internal workout of these loans in a relatively short period of time. Net charge-offs in the second quarter of 2001 were .55% of average loans, compared to .51% last quarter and .44% in the second quarter a year ago. At June 30, 2001, the allowance for (more) 8 -8- loan losses, inclusive of the allowance provided through the Altegra charge, was $989.9 million, or 1.46% of loans, compared to $929.7 million, or 1.39% of loans at March 31, 2001, and $970.4 million, or 1.58% of loans a year earlier. At June 30, 2001, nonperforming assets were $508.7 million, compared to $447.1 million at March 31, 2001 and $339.3 million at June 30, 2000. As a percentage of loans and other real estate, nonperforming assets were .75% at June 30, 2001, compared to .67% at March 31, 2001 and .55% a year ago. At June 30, 2001, real estate mortgage loans, which have historically had low loss ratios, comprised approximately 50% of nonperforming assets. As a result of the slowing economy and the aforementioned workout of loans in the former Altegra wholesale origination unit, nonperforming assets are expected to continue to rise, while net charge-offs, exclusive of the Altegra loans designated for accelerated disposition, are anticipated to be relatively stable in the second half of 2001. CORE EARNINGS In evaluating the fundamental operating results of its businesses, management excludes certain gains and charges related to non-core activities from net income. Net income for the 2001 second quarter, excluding these non-core charges and gains as shown below, was $347.7 million, or $.57 per diluted share, representing respective increases of 8.6% and 9.6% over last year's second quarter and 6.4% and 5.6% over the first quarter of 2001. Net income for the first half of 2001, excluding the non-core charges and gains, was $674.5 million, or $1.11 per diluted share, reflecting respective increases of 8.4% and 8.8% over $622.5 million, or $1.02 per diluted share, in the comparable 2000 period. The combined non-core charges and gains listed below increased second quarter net income by $1.8 million, with no effect on earnings per share. On a year-to-date basis, these combined non-core charges and gains increased net income by $10.4 million, or $.01 per share. (more) 9 The following table reconciles net income to core earnings (in millions, except per share amounts).
2Q 2001 1Q 2001 2Q 2000 ------- ------- ------- Net income $ 349.5 $ 335.4 $ 342.4 Net income per diluted share $ .57 $ .55 $ .56 Non-core items, net of tax: Mortgage servicing impairment 15.9 128.9 - Mortgage servicing derivative (gains) losses 6.1 (143.9) - SFAS 133 ineffective hedge gains related to mortgage servicing assets (2.9) - - Altegra loan loss provision 35.7 - - National Processing divestiture loss, net 5.4 - - Automobile lease residual valuation 11.8 21.8 - NAMCO sale gain (57.7) - - Corporate-owned life insurance tax charge - 40.0 - Student loan sale gain - - (48.2) Balance sheet restructuring bond sale loss - - 37.9 Bank stock fund gains (11.3) (55.2) (10.2) Venture capital gains (4.8) (.2) (1.7) --------- -------- -------------- Total non-core items, net of tax (1.8) (8.6) (22.2) Core earnings $ 347.7 $ 326.8 $ 320.2 --------- -------- -------------- Core earnings per diluted share $ .57 $ .54 $ .52 --------- -------- --------------
Total assets were $94.4 billion at June 30, 2001, and total stockholders' equity was $7.0 billion. Deposits climbed to $58.0 billion at June 30, 2001, up 16.1% from a year ago. As of June 30, 2001, equity as a percentage of assets stood strong at 7.39% and tangible common equity as a percentage of tangible assets was 6.16%. Mr. Daberko's remarks and the section entitled "Sound Credit Quality" contain forward-looking statements that involve significant risks and uncertainties, including changes in general economic and financial market conditions and the Corporation's ability to execute its business (more) 10 -10- plans. Although management believes the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially. Mr. Daberko, Jeffrey D. Kelly, chief financial officer, and Robert J. Ondercik, chief credit officer, will host a conference call today at 9:00 a.m. Eastern Time to review the second quarter results and National City's business outlook for the remainder of the year. Individual investors and the media are welcome to join the call in a listen-only mode by calling (800) 260-0702 beginning at 8:45 a.m. Eastern Time. Associated materials are accessible through National City's website, www.nationalcity.com. A replay of the conference call will also be available through Wednesday, July 25, 2001, by calling (800) 475-6701 using the confirmation code 545484. National City Corporation is a $94 billion financial holding company headquartered in Cleveland, Ohio. The company operates banks and other financial services subsidiaries principally in Ohio, Michigan, Pennsylvania, Indiana, Kentucky, and Illinois. Principal activities include commercial and retail banking, consumer finance, asset management, mortgage financing and servicing, and item processing. National City can be found on the World Wide Web at http://www.nationalcity.com. (more) 11 -11- UNAUDITED National City Corporation Financial Highlights (Dollars in Millions, Except Per Share Amounts)
2001 2000 ------------------------ ----------------------------------- 2Q01/ Second First Fourth Third Second 2Q00 Quarter Quarter Quarter Quarter Quarter % Change --------- --------- --------- --------- --------- --------- EARNINGS: Tax-equivalent net interest income ...................... $835.0 $779.2 $756.2 $746.0 $749.0 11.5 % Provision for loan losses ..... 152.9 83.4 81.4 70.4 68.7 122.6 Fees and other income ......... 682.0 598.5 604.8 590.9 674.3 1.1 Securities gains (losses), net 17.0 88.1 50.7 27.5 (42.8) 139.6 Noninterest expense ........... 840.1 805.0 854.4 785.3 785.1 7.0 Income tax expense and tax- equivalent adjustment ....... 191.5 242.0 167.9 178.0 184.3 3.7 Net income .................... $349.5 $335.4 $308.0 $330.7 $342.4 2.1 PER COMMON SHARE: Net income Basic ................... $.58 $.56 $.50 $.55 $.56 3.6 % Diluted ................. .57 .55 .50 .54 .56 1.8 Diluted - cash basis (a) .60 .58 .53 .57 .59 1.7 Dividends paid .............. .285 .285 .285 .285 .285 -- Book value .................. 11.52 11.19 11.06 10.58 10.05 14.6 Market value (close) ........ 30.78 26.75 28.75 22.00 17.06 80.4 Average shares Basic ................... 601.53 600.89 608.52 608.28 606.93 (0.9) Diluted ................. 610.78 610.10 615.47 613.23 611.07 -- PERFORMANCE RATIOS: Return on average common equity ............... 20.47 % 20.52 % 18.75 % 21.13 % 23.13 % Return on average assets ...... 1.52 1.55 1.44 1.56 1.59 Net interest margin ........... 3.98 3.92 3.90 3.90 3.80 Efficiency ratio .............. 55.38 58.43 62.78 58.74 55.16 AT PERIOD END: Assets ........................ $94,440 $90,818 $88,535 $85,046 $84,601 11.6 % Loans ......................... 68,004 66,673 65,604 63,660 61,570 10.4 Securities (at fair value) .... 8,758 9,468 9,904 9,656 10,719 (18.3) Deposits ...................... 58,018 55,854 55,256 52,726 49,988 16.1 Stockholders' equity .......... 6,980 6,754 6,770 6,467 6,133 13.8 Equity to assets .............. 7.39 % 7.44 % 7.65 % 7.60 % 7.25 % 1.9 Tangible common equity to tangible assets ............. 6.16 6.19 6.34 6.20 5.81 6.0 Common shares outstanding ..... 603.09 600.75 609.19 608.40 607.43 (0.7) ASSET QUALITY: Net charge-offs to average loans (annualized) .......... .55 % .51 % .50 % .45 % .44 % Allowance for loan losses as a percentage of period-end loans ....................... 1.46 1.39 1.42 1.49 1.58 Nonperforming assets to period- end loans and OREO .......... .75 .67 .61 .57 .55 ===================================================================================================================== Six Months Ended June 30, ----------------------------------- 2001 2000 % Change --------- --------- ----------- EARNINGS: Tax-equivalent net interest income ...................... $1,614.2 $1,489.9 8.3 % Provision for loan losses ..... 236.3 135.0 75.0 Fees and other income ......... 1,280.5 1,231.7 4.0 Securities gains (losses), net 105.1 (21.3) 594.5 Noninterest expense ........... 1,645.1 1,544.2 6.5 Income tax expense and tax- equivalent adjustment ....... 433.5 357.4 21.3 Net income .................... $684.9 $663.7 3.2 PER COMMON SHARE: Net income Basic ................... $1.14 $1.09 4.6 % Diluted ................. 1.12 1.09 2.8 Diluted - cash basis (a) 1.18 1.15 2.6 Dividends paid .............. .57 .57 -- Book value .................. Market value (close) ........ Average shares Basic ................... 601.21 606.35 (.8) Diluted ................. 610.44 610.88 (.1) PERFORMANCE RATIOS: Return on average common equity ............... 20.50 % 22.80 % Return on average assets ...... 1.54 1.55 Net interest margin ........... 3.95 3.79 Efficiency ratio .............. 56.83 56.74 AT PERIOD END: Assets ........................ Loans ......................... Securities (at fair value) .... Deposits ...................... Stockholders' equity .......... Equity to assets .............. Tangible common equity to tangible assets ............. Common shares outstanding ..... ASSET QUALITY: Net charge-offs to average loans (annualized) .......... .53 % .44 % Allowance for loan losses as a percentage of period-end loans ....................... Nonperforming assets to period- end loans and OREO .......... =====================================================================================================
(a) Excludes amortization of goodwill and other intangible assets. 12 -12- UNAUDITED NATIONAL CITY CORPORATION CONSOLIDATED STATEMENTS OF INCOME (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
SIX MONTHS ENDED 2001 2000 JUNE 30, -------------------------- --------------------------------------- -------------------------- SECOND FIRST FOURTH THIRD SECOND QUARTER QUARTER QUARTER QUARTER QUARTER 2001 2000 ----------- ----------- ----------- ----------- ----------- ----------- ----------- INTEREST INCOME: Loans ........................... $1,482,738 $1,506,488 $1,534,503 $1,479,328 $1,433,996 $2,989,226 $2,776,262 Securities: Taxable ........................ 111,731 122,017 122,083 140,303 176,765 233,748 379,020 Exempt from Federal income taxes 10,115 10,319 10,615 10,750 10,914 20,434 22,085 Dividends ...................... 12,730 11,146 13,346 14,054 13,989 23,876 27,452 Federal funds sold and security resale agreements ............. 848 1,616 2,036 3,058 6,802 2,464 13,760 Other investments ............... 7,536 8,225 5,550 4,464 4,008 15,761 7,914 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total interest income ......... 1,625,698 1,659,811 1,688,133 1,651,957 1,646,474 3,285,509 3,226,493 INTEREST EXPENSE: Deposits ........................ 483,760 506,058 526,377 500,477 466,241 989,818 910,180 Federal funds borrowed and security repurchase agreements 86,538 89,946 103,745 103,895 85,727 176,484 188,295 Borrowed funds .................. 14,133 27,267 15,044 28,609 77,782 41,400 121,063 Long-term debt and capital securities ..................... 214,597 265,248 295,249 281,443 276,069 479,845 533,844 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total interest expense ........ 799,028 888,519 940,415 914,424 905,819 1,687,547 1,753,382 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Net interest income ........... 826,670 771,292 747,718 737,533 740,655 1,597,962 1,473,111 Provision for loan losses ....... 152,923 83,372 81,415 70,363 68,691 236,295 135,017 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Net interest income after provision for loan losses .... 673,747 687,920 666,303 667,170 671,964 1,361,667 1,338,094 NONINTEREST INCOME: Deposit service charges ......... 117,466 111,806 112,975 115,392 108,073 229,272 214,386 Item processing revenue ......... 115,724 106,441 118,845 112,051 107,326 222,165 208,544 Trust and investment management fees .......................... 86,023 81,850 81,144 79,805 90,054 167,873 173,678 Card-related fees ............... 38,569 44,671 44,522 41,148 38,561 83,240 75,358 Mortgage banking ................ 120,644 (97,761) 109,596 110,454 147,610 22,883 258,904 Trading gains (losses), net ..... (3,495) 235,745 6,098 2,773 4,164 232,250 9,319 Other ........................... 206,984 115,788 131,630 129,255 178,540 322,772 291,505 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total fees and other income ... 681,915 598,540 604,810 590,878 674,328 1,280,455 1,231,694 Securities gains (losses), net .. 16,936 88,130 50,664 27,435 (42,780) 105,066 (21,247) ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total noninterest income ...... 698,851 686,670 655,474 618,313 631,548 1,385,521 1,210,447 NONINTEREST EXPENSE: Salaries, benefits and other personnel ..................... 432,833 410,393 413,096 405,984 401,309 843,226 808,180 Equipment ....................... 60,747 60,002 57,997 56,038 57,759 120,749 115,441 Net occupancy ................... 53,544 53,479 52,015 52,730 51,816 107,023 104,484 Third-party services ............ 49,963 43,601 52,590 51,201 48,546 93,564 93,694 Other ........................... 243,015 237,522 278,739 219,356 225,640 480,537 422,364 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total noninterest expense ..... 840,102 804,997 854,437 785,309 785,070 1,645,099 1,544,163 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Income before income tax expense . 532,496 569,593 467,340 500,174 518,442 1,102,089 1,004,378 Income tax expense ............... 182,994 234,190 159,329 169,538 176,055 417,184 340,648 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Net income .................... $349,502 $335,403 $308,011 $330,636 $342,387 $684,905 $663,730 =========== =========== =========== =========== =========== =========== =========== NET INCOME PER COMMON SHARE: Basic ......................... $.58 $.56 $.50 $.55 $.56 $1.14 $1.09 Diluted ....................... .57 .55 .50 .54 .56 1.12 1.09
13 -13- UNAUDITED NATIONAL CITY CORPORATION CONSOLIDATED PERIOD-END BALANCE SHEETS (DOLLARS IN THOUSANDS)
2001 2000 ---------------------------- -------------------------------------------- SECOND FIRST FOURTH THIRD SECOND ASSETS QUARTER QUARTER QUARTER QUARTER QUARTER ------------ ------------ ------------ ------------ ------------ LOANS: Commercial ..................................... $27,693,335 $27,397,956 $26,703,622 $25,873,664 $24,935,236 Real estate - commercial ....................... 6,734,448 6,625,035 6,511,018 6,372,924 6,265,055 Real estate - residential ...................... 13,818,303 13,502,846 13,357,438 12,303,054 11,179,970 Consumer ....................................... 12,417,440 12,140,385 12,100,567 12,317,934 12,386,130 Credit card .................................... 2,195,596 2,092,678 2,152,445 2,260,766 2,601,931 Home equity .................................... 5,144,385 4,913,701 4,779,359 4,531,993 4,201,854 ------------ ------------ ------------ ------------ ------------ Total loans .................................. 68,003,507 66,672,601 65,604,449 63,660,335 61,570,176 Allowance for loan losses ...................... (989,936) (929,679) (928,592) (945,492) (970,362) ------------ ------------ ------------ ------------ ------------ Net loans .................................... 67,013,571 65,742,922 64,675,857 62,714,843 60,599,814 LOANS HELD FOR SALE OR SECURITIZATION: Mortgage loans held for sale ................... 8,412,730 5,882,521 3,030,672 2,945,975 3,198,328 Credit card loans held for securitization ...... -- -- 407,900 -- -- ------------ ------------ ------------ ------------ ------------ Total loans held for sale or securitization .. 8,412,730 5,882,521 3,438,572 2,945,975 3,198,328 Securities available for sale, at fair value ..... 8,758,250 9,468,365 9,904,533 9,655,612 10,719,285 Federal funds sold and security resale agreements ..................................... 103,320 4,460 81,040 111,222 493,130 Other investments ................................ 541,043 529,766 687,732 173,483 145,623 Cash and demand balances due from banks .......... 3,468,695 3,314,336 3,535,186 3,230,100 3,262,268 Properties and equipment ......................... 1,070,186 1,066,295 1,071,637 1,090,185 1,098,053 Accrued income and other assets .................. 5,071,958 4,809,268 5,140,052 5,124,455 5,084,132 ------------ ------------ ------------ ------------ ------------ Total Assets ................................. $94,439,753 $90,817,933 $88,534,609 $85,045,875 $84,600,633 ============ ============ ============ ============ ============ LIABILITIES DEPOSITS: Noninterest bearing deposits ................... $11,988,114 $11,563,466 $11,500,026 $10,646,830 $11,384,267 NOW and money market accounts .................. 18,101,899 17,703,959 17,262,587 16,496,536 16,291,791 Savings accounts ............................... 2,703,807 2,799,732 2,883,763 3,036,999 3,230,386 Consumer time deposits ......................... 15,312,780 15,670,865 15,816,422 15,763,352 15,583,974 Other deposits ................................. 6,021,327 5,971,041 4,072,308 2,780,526 2,874,460 Foreign deposits ............................... 3,890,538 2,145,016 3,721,316 4,001,338 623,331 ------------ ------------ ------------ ------------ ------------ Total deposits ............................... 58,018,465 55,854,079 55,256,422 52,725,581 49,988,209 Federal funds borrowed and security repurchase agreements ........................ 7,751,145 9,410,866 5,677,643 6,097,889 4,012,113 Borrowed funds ................................... 3,485,872 1,644,320 903,725 2,283,295 6,974,817 Long-term debt ................................... 16,313,685 15,329,472 17,964,800 15,455,589 15,976,934 Corporation-obligated mandatorily redeemable capital securities of subsidiary trusts holding solely debentures of the Corporation .......... 180,000 180,000 180,000 180,000 180,000 Accrued expenses and other liabilities ........... 1,710,683 1,645,209 1,782,198 1,836,114 1,335,080 ------------ ------------ ------------ ------------ ------------ Total Liabilities ............................ 87,459,850 84,063,946 81,764,788 78,578,468 78,467,153 STOCKHOLDERS' EQUITY Preferred stock .................................. 29,502 29,968 29,968 29,982 29,982 Common stock ..................................... 2,412,374 2,403,000 2,436,755 2,433,591 2,429,736 Capital surplus .................................. 865,022 841,808 837,444 828,220 812,671 Retained earnings ................................ 3,624,463 3,446,673 3,405,077 3,272,496 3,119,402 Accumulated other comprehensive income (loss) ................................. 48,542 32,538 60,577 (96,882) (258,311) ------------ ------------ ------------ ------------ ------------ Total Stockholders' Equity ..................... 6,979,903 6,753,987 6,769,821 6,467,407 6,133,480 ------------ ------------ ------------ ------------ ------------ Total Liabilities and Stockholders' Equity ......................... $94,439,753 $90,817,933 $88,534,609 $85,045,875 $84,600,633 ============ ============ ============ ============ ============
14 -14- UNAUDITED NATIONAL CITY CORPORATION CONSOLIDATED AVERAGE BALANCE SHEETS (DOLLARS IN MILLIONS)
SIX MONTHS ENDED 2001 2000 JUNE 30, -------------------- --------------------------------- -------------------- SECOND FIRST FOURTH THIRD SECOND ASSETS QUARTER QUARTER QUARTER QUARTER QUARTER 2001 2000 -------- -------- -------- -------- -------- -------- -------- EARNING ASSETS: LOANS: Commercial .................................. $27,532 $27,010 $26,132 $25,294 $24,379 $27,272 $23,937 Real estate - commercial .................... 6,692 6,550 6,435 6,273 6,157 6,621 6,088 Real estate - residential ................... 13,484 13,533 12,876 11,627 11,470 13,509 11,185 Consumer .................................... 12,286 12,174 12,165 12,224 13,973 12,231 14,248 Credit card ................................. 2,139 2,113 2,383 2,487 2,514 2,126 2,425 Home equity ................................. 5,025 4,845 4,654 4,343 4,044 4,936 3,907 -------- -------- -------- -------- -------- -------- -------- Total loans ............................... 67,158 66,225 64,645 62,248 62,537 66,695 61,790 LOANS HELD FOR SALE OR SECURITIZATION: Mortgage loans held for sale ................ 7,453 3,473 2,851 3,001 2,848 5,474 2,475 Credit card loans held for securitization ... -- 131 4 -- -- 65 -- -------- -------- -------- -------- -------- -------- -------- Total loans held for sale or securitization 7,453 3,604 2,855 3,001 2,848 5,539 2,475 Securities available for sale, at cost ........ 8,768 9,491 9,543 10,786 13,064 9,127 13,833 Federal funds sold and security resale agreements ......................... 81 112 120 178 432 96 456 Other investments ............................. 561 330 200 165 146 446 150 -------- -------- -------- -------- -------- -------- -------- Total earning assets ...................... 84,021 79,762 77,363 76,378 79,027 81,903 78,704 Allowance for loan losses ....................... (942) (950) (967) (991) (995) (946) (995) Fair value appreciation (depreciation) of securities available for sale .............. 111 123 (101) (304) (430) 117 (419) Cash and demand balances due from banks ................................... 3,086 3,000 3,005 3,091 3,116 3,043 3,128 Properties and equipment ........................ 1,071 1,078 1,086 1,099 1,114 1,075 1,121 Accrued income and other assets ................. 4,589 4,598 4,914 4,928 4,939 4,594 4,822 -------- -------- -------- -------- -------- -------- -------- Total Assets ................................ $91,936 $87,611 $85,300 $84,201 $86,771 $89,786 $86,361 ======== ======== ======== ======== ======== ======== ======== LIABILITIES DEPOSITS: Noninterest bearing deposits .................. $11,550 $10,781 $10,682 $10,837 $10,934 $11,167 $10,825 NOW and money market accounts ................. 17,963 17,276 16,803 16,473 16,477 17,621 16,460 Savings accounts .............................. 2,753 2,835 2,958 3,139 3,321 2,794 3,367 Consumer time deposits ........................ 15,459 15,725 15,764 15,652 15,385 15,591 15,202 Other deposits ................................ 6,107 4,970 3,201 2,838 2,881 5,543 2,853 Foreign deposits .............................. 4,241 2,390 3,275 2,974 2,862 3,320 3,131 -------- -------- -------- -------- -------- -------- -------- Total deposits .............................. 58,073 53,977 52,683 51,913 51,860 56,036 51,838 -------- -------- -------- -------- -------- -------- -------- Federal funds borrowed and security repurchase agreements ........................ 8,801 7,008 6,837 6,941 6,053 7,909 6,889 Borrowed funds .................................. 1,282 1,809 872 1,726 5,056 1,543 4,090 Long-term debt and capital securities ........... 15,612 16,853 16,910 16,014 16,636 16,229 16,448 Accrued expenses and other liabilities ................................... 1,300 1,314 1,444 1,361 1,190 1,309 1,219 -------- -------- -------- -------- -------- -------- -------- Total Liabilities ........................... 85,068 80,961 78,746 77,955 80,795 83,026 80,484 STOCKHOLDERS' EQUITY: Preferred ..................................... 30 30 30 30 30 30 30 Common ........................................ 6,838 6,620 6,524 6,216 5,946 6,730 5,847 -------- -------- -------- -------- -------- -------- -------- Total Stockholders' Equity .................. 6,868 6,650 6,554 6,246 5,976 6,760 5,877 -------- -------- -------- -------- -------- -------- -------- Total Liabilities and Stockholders' Equity .................................... $91,936 $87,611 $85,300 $84,201 $86,771 $89,786 $86,361 ======== ======== ======== ======== ======== ======== ========
15 -15- UNAUDITED NATIONAL CITY CORPORATION AVERAGE BALANCES AND RATES ON A TAX EQUIVALENT BASIS FOR THE THREE MONTHS ENDED JUNE 30, 2001 AND 2000 (DOLLARS IN MILLIONS)
2001 2000 ------------------------------------- ------------------------------------- TAX TAX AVERAGE EQUIVALENT AVERAGE AVERAGE EQUIVALENT AVERAGE ASSETS BALANCE INTEREST RATE BALANCE INTEREST RATE ---------- ---------- ---------- ---------- ---------- ---------- EARNING ASSETS: LOANS: Commercial .............................. $27,532 $502.9 7.32 % $24,379 $533.8 8.80 % Real estate - commercial ............... 6,692 136.4 8.18 6,157 134.9 8.82 Real estate - residential (a) .......... 20,937 411.2 7.86 14,318 296.3 8.28 Consumer ................................ 12,286 269.0 8.78 13,973 292.2 8.42 Credit card ............................. 2,139 65.1 12.21 2,514 86.3 13.81 Home equity ............................. 5,025 101.0 8.04 4,044 93.0 9.19 ---------- ---------- ---------- ---------- ---------- ---------- Total loans ........................... 74,611 1,485.6 7.98 65,385 1,436.5 8.82 Securities: Taxable ................................. 8,024 124.9 6.23 12,267 191.2 6.24 Tax-exempt .............................. 744 15.1 8.13 797 16.2 8.13 ---------- ---------- ---------- ---------- ---------- ---------- Total securities ...................... 8,768 140.0 6.39 13,064 207.4 6.35 Federal funds sold, security resale agreements and other investments ........ 642 8.4 5.24 578 10.9 7.51 ---------- ---------- ---------- ---------- ---------- ---------- Total earning assets .................. 84,021 1,634.0 7.79 79,027 1,654.8 8.41 Allowance for loan losses ................... (942) (995) Fair value appreciation (depreciation) of securities available for sale ............. 111 (430) Noninterest earning assets .................. 8,746 9,169 ---------- ---------- Total Assets ............................ $91,936 $86,771 ========== ========== Liabilities and Stockholders' Equity Interest bearing liabilities: NOW and money market accounts ............. $17,963 $137.3 3.06 % $16,477 $149.3 3.64 % Savings accounts .......................... 2,753 9.6 1.41 3,321 13.7 1.66 Consumer time deposits .................... 15,459 221.0 5.74 15,385 215.1 5.62 Other deposits ............................ 6,107 71.3 4.68 2,881 43.9 6.13 Foreign deposits .......................... 4,241 44.5 4.21 2,862 44.3 6.22 Federal funds borrowed .................... 5,012 56.3 4.50 2,277 37.1 6.56 Security repurchase agreements ............ 3,789 30.3 3.21 3,776 48.6 5.18 Borrowed funds ............................ 1,282 14.1 4.43 5,056 77.8 6.19 Long-term debt and capital securities ..... 15,612 214.6 5.51 16,636 276.0 6.67 ---------- ---------- ---------- ---------- ---------- ---------- Total interest bearing liabilities ...... 72,218 799.0 4.44 68,671 905.8 5.30 ---------- ---------- ---------- ---------- Noninterest bearing deposits ................ 11,550 10,934 Accrued expenses and other liabilities ...... 1,300 1,190 ---------- ---------- Total Liabilities ....................... 85,068 80,795 Total Stockholders' Equity .................. 6,868 5,976 Total Liabilities and Stockholders' ---------- ---------- Equity ............................... $91,936 $86,771 ========== ========== Net interest income and intere spread .................................... $835.0 3.35 % $749.0 3.11 % ========== ========== ========== ========== Net interest margin ......................... 3.98 % 3.80 % ========== ==========
(a) INCLUDES LOANS HELD FOR SALE. 16 -16- UNAUDITED NATIONAL CITY CORPORATION AVERAGE BALANCES AND RATES ON A TAX EQUIVALENT BASIS FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000 (DOLLARS IN MILLIONS)
2001 2000 ------------------------------------- ------------------------------------- TAX TAX AVERAGE EQUIVALENT AVERAGE AVERAGE EQUIVALENT AVERAGE ASSETS BALANCE INTEREST RATE BALANCE INTEREST RATE ---------- ---------- ---------- ---------- ---------- ---------- EARNING ASSETS: LOANS: Commercial .......................... $27,272 $1,065.4 7.87 % $23,937 $1,023.9 8.60 % Real estate - commercial ........... 6,621 274.9 8.37 6,088 265.6 8.77 Real estate - residential (a) ...... 18,983 764.9 8.06 13,660 556.5 8.15 Consumer ............................ 12,231 533.9 8.80 14,248 595.1 8.40 Credit card (a) ..................... 2,191 140.5 12.93 2,425 164.0 13.60 Home equity ......................... 4,936 214.9 8.71 3,907 176.4 9.03 ---------- ---------- ---------- ---------- ---------- ---------- Total loans ....................... 72,234 2,994.5 8.34 64,265 2,781.5 8.69 Securities: Taxable ............................. 8,375 258.5 6.18 13,029 407.2 6.25 Tax-exempt .......................... 752 30.5 8.10 804 32.8 8.16 ---------- ---------- ---------- ---------- ---------- ---------- Total securities .................. 9,127 289.0 6.34 13,833 440.0 6.36 Federal funds sold, security resale agreements and other investments .... 542 18.2 6.78 606 21.8 7.18 ---------- ---------- ---------- ---------- ---------- ---------- Total earning assets .............. 81,903 3,301.7 8.10 78,704 3,243.3 8.27 Allowance for loan losses ............... (946) (995) Fair value appreciation (depreciation) of securities available for sale ......... 117 (419) Noninterest earning assets .............. 8,712 9,071 ---------- ---------- Total Assets ........................ $89,786 $86,361 ========== ========== Liabilities and Stockholders' Equity Interest bearing liabilities: NOW and money market accounts ......... $17,621 $298.2 3.41 % $16,460 $289.3 3.53 % Savings accounts ...................... 2,794 20.3 1.47 3,367 27.9 1.67 Consumer time deposits ................ 15,591 451.8 5.84 15,202 416.1 5.50 Other deposits ........................ 5,543 143.0 5.20 2,853 84.9 5.99 Foreign deposits ...................... 3,320 76.5 4.65 3,131 92.0 5.91 Federal funds borrowed ................ 4,101 103.5 5.09 2,960 91.0 6.18 Security repurchase agreements ........ 3,808 73.0 3.87 3,929 97.3 4.98 Borrowed funds ........................ 1,543 41.4 5.41 4,090 121.1 5.95 Long-term debt and capital securities . 16,229 479.8 5.95 16,448 533.8 6.52 ---------- ---------- ---------- ---------- ---------- ---------- Total interest bearing liabilities .. 70,550 1,687.5 4.82 68,440 1,753.4 5.15 ---------- ---------- ---------- ---------- Noninterest bearing deposits ............ 11,167 10,825 Accrued expenses and other liabilities .. 1,309 1,219 ---------- ---------- Total Liabilities ................... 83,026 80,484 Total Stockholders' Equity .............. 6,760 5,877 Total Liabilities and Stockholders' ---------- ---------- Equity ........................... $89,786 $86,361 ========== ========== Net interest income and interest spread ................................ $1,614.2 3.28 % $1,489.9 3.12 % ========== ========== ========== ========== Net interest margin ..................... 3.95 % 3.79 % ========== ==========
(a) INCLUDES LOANS HELD FOR SALE OR SECURITIZATION. 17 -17- UNAUDITED National City Corporation Selected Financial Information
2001 2000 ----------------------------- ----------------------------------------------- Second First Fourth Third Second (Dollars in Thousands) Quarter Quarter Quarter Quarter Quarter ------------- ------------- ------------- ------------- ------------- Allowance for Loan Losses: Balance at beginning of period ...................... $929,679 $928,592 $945,492 $970,362 $970,642 Provision ........................ 152,923 83,372 81,415 70,363 68,691 Allowance related to loans acquired (sold or securitized) . -- 887 (17,100) (25,016) (305) Charge-offs: Commercial ..................... 38,226 28,714 27,568 19,577 25,085 Real estate - commercial ....... 2,983 2,960 1,734 1,635 3,282 Real estate - residential ...... 11,265 9,993 6,533 6,169 6,270 Consumer ....................... 42,962 45,438 45,731 43,248 36,772 Credit card .................... 24,350 23,468 26,463 27,103 26,083 Home equity .................... 3,170 2,115 2,367 1,644 2,036 ------------- ------------- ------------- ------------- ------------- Total charge-offs ............ 122,956 112,688 110,396 99,376 99,528 ------------- ------------- ------------- ------------- ------------- Recoveries: Commercial ..................... 4,999 4,403 3,962 4,546 3,714 Real estate - commercial ....... 1,309 1,296 556 945 848 Real estate - residential ...... 121 168 131 172 327 Consumer ....................... 18,318 17,948 18,905 16,949 18,900 Credit card .................... 4,799 4,932 4,790 5,176 6,313 Home equity .................... 744 769 837 1,371 760 ------------- ------------- ------------- ------------- ------------- Total recoveries ............. 30,290 29,516 29,181 29,159 30,862 ------------- ------------- ------------- ------------- ------------- Net charge-offs .................. 92,666 83,172 81,215 70,217 68,666 ------------- ------------- ------------- ------------- ------------- Balance at end of period ......... $989,936 $929,679 $928,592 $945,492 $970,362 ============= ============= ============= ============= ============= (Dollars in Millions) Nonperforming Assets: Nonaccrual and restructured loans ............. $456.7 $404.0 $369.0 $337.6 $313.7 Other real estate owned .......... 52.0 43.1 33.3 27.7 25.6 ------------- ------------- ------------- ------------- ------------- Total nonperforming assets ......................... $508.7 $447.1 $402.3 $365.3 $339.3 ============= ============= ============= ============= ============= Loans 90 days past-due accruing interest .............. $468.0 $423.1 $341.8 $310.3 $249.4 Asset Quality Ratios: Net charge-offs to average loans (annualized) ............. .55 % .51 % .50 % .45 % .44 % Allowance for loan losses as a percentage of period-end loans . 1.46 1.39 1.42 1.49 1.58 Nonperforming assets to period-end loans and OREO ...... .75 .67 .61 .57 .55 Capital Ratios (a): Tier 1 capital ................... 7.06 % 7.10 % 7.02 % 7.29 % 7.12 % Total risk-based capital ......... 11.18 11.44 11.45 12.03 11.93 Leverage ......................... 6.46 6.59 6.70 6.67 6.23 Tangible common equity to tangible assets ............. 6.16 6.19 6.34 6.20 5.81 Share Information: Average basic shares ............. 601,528,522 600,888,928 608,522,539 608,276,536 606,927,559 Average diluted shares ........... 610,782,001 610,099,764 615,466,562 613,232,391 611,070,243 Common shares outstanding at end of period ......................... 603,093,286 600,749,772 609,188,668 608,397,735 607,433,924 Six Months Ended June 30, ----------------------------- (Dollars in Thousands) 2001 2000 ------------- ------------- Allowance for Loan Losses: Balance at beginning of period ...................... $928,592 $970,463 Provision ........................ 236,295 135,017 Allowance related to loans acquired (sold or securitized) . 887 (305) Charge-offs: Commercial ..................... 66,940 49,226 Real estate - commercial ....... 5,943 3,537 Real estate - residential ...... 21,258 11,821 Consumer ....................... 88,400 78,489 Credit card .................... 47,818 51,993 Home equity .................... 5,285 3,160 ------------- ------------- Total charge-offs ............ 235,644 198,226 ------------- ------------- Recoveries: Commercial ..................... 9,402 9,405 Real estate - commercial ....... 2,605 2,474 Real estate - residential ...... 289 638 Consumer ....................... 36,266 37,189 Credit card .................... 9,731 12,207 Home equity .................... 1,513 1,500 ------------- ------------- Total recoveries ............. 59,806 63,413 ------------- ------------- Net charge-offs .................. 175,838 134,813 ------------- ------------- Balance at end of period ......... $989,936 $970,362 ============= ============= (Dollars in Millions) Nonperforming Assets: Nonaccrual and restructured loans ............. Other real estate owned .......... Total nonperforming assets ......................... Loans 90 days past-due accruing interest .............. Asset Quality Ratios: Net charge-offs to average loans (annualized) ............. .53 % .44 % Allowance for loan losses as a percentage of period-end loans . Nonperforming assets to period-end loans and OREO ...... Capital Ratios (a): Tier 1 capital ................... Total risk-based capital ......... Leverage ......................... Tangible common equity to tangible assets ............. Share Information: Average basic shares ............. 601,210,492 606,346,848 Average diluted shares ........... 610,442,768 610,882,275 Common shares outstanding at end of period .........................
(a) Second quarter 2001 ratios are based on preliminary data. -----END PRIVACY-ENHANCED MESSAGE-----