-----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, VQxqWWGu/1uoZejfP8ocbhcWb0tz9QabIZLhbUbXG0TzOmdcwRExu0nbJ8Mc+xw2 sluVd9v3SuFcL1KA98X+ww== 0000950152-05-000265.txt : 20050118 0000950152-05-000265.hdr.sgml : 20050117 20050118075741 ACCESSION NUMBER: 0000950152-05-000265 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050118 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050118 DATE AS OF CHANGE: 20050118 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: 1934 Act SEC FILE NUMBER: 000-07229 FILM NUMBER: 05532044 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 l11468ae8vk.txt NATIONAL CITY CORPORATION 8-K UNITED STATES 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 January 18, 2005 ------------------------------------------------ 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 44114-3484 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code)
(216) 222-2000 -------------------------------------------------------------- (Registrant's telephone number, including area code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On January 18, 2005, National City Corporation issued a news release announcing its financial results for the fourth quarter and fiscal year ended December 31, 2004 and included on its Web site at www.NationalCity.com its Financial Supplement, which contains additional financial information. The news release and the Financial Supplement are attached hereto as Exhibits 99.1 and 99.2, respectively, and are being furnished under Item 2.02 of this Form 8-K. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. (c) The following exhibits are being furnished herewith: Exhibit No. Exhibit Description ----------- ------------------- 99.1 News release issued by National City Corporation dated January 18, 2005 99.2 Financial Supplement of National City Corporation 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. National City Corporation ------------------------------------ (Registrant) Date: January 18, 2005 By: /s/ David L. Zoeller ---------------------------------- David L. Zoeller Executive Vice President and General Counsel EX-99.1 2 l11468aexv99w1.txt EXHIBIT 99.1 EXHIBIT 99.1 [NATIONAL CITY LOGO] NATIONAL CITY CORPORATION 1900 E. 9th St. Cleveland, OH 44114-3484 NEWS RELEASE For Immediate Release Investor Contact: Media Contact: Jennifer Hammarlund Amber Garwood 216-222-9849 216-222-8202 Jennifer.Hammarlund@NationalCity.com Amber.Garwood@NationalCity.com NATIONAL CITY REPORTS 2004 RESULTS CLEVELAND -- January 18, 2005 -- National City Corporation (NYSE: NCC) today reported 2004 net income of $2.8 billion, or $4.31 per diluted share, compared to $2.1 billion or $3.43 per diluted share for 2003. For the 2004 fourth quarter, net income was $960 million, or $1.46 per diluted share, compared to net income of $544 million or $.88 per diluted share in 2003. Both fourth quarter and full year net income included non-recurring and unusual items described below and elsewhere in this release. On October 15, 2004, National City closed its previously announced sale of National Processing, Inc., the Corporation's 83%-owned subsidiary, for a cash price of $1.2 billion and realized a $714 million pretax gain, or $477 million ($.74 per share) after tax, inclusive of associated sale expenses. CHAIRMAN'S COMMENTS Chairman and CEO David A. Daberko commented, "By any standard, 2004 was another highly successful year for National City. We achieved record levels of assets, equity, and net income in 2004. Particularly gratifying was the performance of our core banking and consumer finance businesses, which we refer to as Rest of National City, or "RONC." Excluding gains from divestitures, RONC's earnings were up approximately 50% in 2004 over 2003. Wholesale banking enjoyed a substantial increase in earnings derived largely from reduced credit costs as well as new customer acquisition. Home equity and nonconforming (more) -2- mortgage volumes set records for originations and outstandings in 2004. Consumer and small business banking turned in strong growth in both balances and revenue. Performance in these businesses is critical for our success in 2005 and beyond. At the same time, National City Mortgage earnings fell sharply from the extraordinary levels of 2003 as expected." Mr. Daberko concluded, "Our acquisition and divestiture activity in the past year is consistent with our strategic focus on our core banking business. As a result, we are well positioned to expand our market share in St. Louis, Cincinnati and elsewhere in our footprint. The divestiture of National Processing frees up significant capital for reinvestment in our core business, future acquisitions and share repurchases." NET INTEREST INCOME AND MARGIN Tax-equivalent net interest income was $1.2 billion for the fourth quarter, up 19% from the fourth quarter of 2003. Net interest margin was 4.09% for the fourth quarter of 2004 versus 4.03% for the same period last year reflecting the impact of rising interest rates in 2004. For the year, net interest income was $4.5 billion, up 3% from the prior year, and net interest margin was 4.09% vs. 4.11%. LOANS AND DEPOSITS Average portfolio loans for the fourth quarter increased 27% from the fourth quarter a year ago and 4% from the immediately preceding quarter. Acquisitions accounted for approximately half of year-over-year growth. The linked-quarter increase also reflects continued strong volume in home equity and other consumer lending. Average core deposits, excluding mortgage-banking escrow balances, were up 16% over the fourth quarter of 2003 and were also up slightly from the third quarter. The year-over-year and linked-quarter growth in average core deposits was largely the result of acquisitions. FEES AND OTHER INCOME Fees and other income for the fourth quarter were $1.4 billion, compared to $981 million in the fourth quarter of 2003 and $1.0 billion in the third quarter of 2004. Deposit fees were particularly strong. Fourth quarter results also included the previously noted gain (more) -3- on the sale of National Processing of $714 million and also a gain on the sale of seven branches located in the Upper Peninsula of Michigan of $14 million, both included in other income. Fourth quarter mortgage banking revenue included $10 million of net hedging pretax losses on mortgage servicing rights (MSRs) in comparison to gains of $160 million and $4 million in the third quarter of 2004 and the fourth quarter of 2003, respectively. For the year, fees and other income were $4.4 billion, up 25% from 2003 led by strong growth in deposit fees. Fees and other income for 2004 also included a $62 million gain on the second quarter sale of the Bond Trust Administration business in addition to the divestiture gains described in the preceding paragraph. Leasing income increased $143 million as a result of the Provident acquisition. Mortgage banking revenue for 2004 was $1.3 billion compared to $1.5 billion in 2003, inclusive of net MSR hedging gains of $388 million and $370 million, respectively. In comparison to 2003, mortgage banking revenue also reflected lower origination income consistent with lower levels of activity in this business. National City originated $94.8 billion of mortgages in 2004 compared to $125.7 billion in 2003. NONINTEREST EXPENSE Noninterest expense was $1.3 billion for the fourth quarter of 2004, up 3% from the immediately preceding quarter and 22% from the same quarter a year ago. The fourth quarter of 2004 includes $19 million of expenses related to the sale of National Processing. For the year, noninterest expense was $4.6 billion, compared to $4.1 billion in 2003. On a year-over-year basis, the higher expense levels also largely reflect the impact of acquisitions including amortization of intangibles, compensation and benefits, as well as acquisition integration costs of approximately $39 million in the fourth quarter and $74 million for the full year. INCOME TAX EXPENSE The effective tax rate for 2004 was 32% in comparison to 35% for 2003. The after-tax gain on the sale of National Processing reflects a 32% effective rate resulting from permanent differences between the tax and book bases of this subsidiary. The lower effective tax rate in 2004 also reflects tax benefits totaling $67 million ($23 million in the first quarter and $44 million in the fourth quarter) from the reduction of deferred tax liabilities due to the favorable conclusion of tax examinations and the reassessment of certain tax exposures. (more) -4- CREDIT QUALITY Credit quality continues to be sound. The provision for credit losses for the fourth quarter was $81 million compared to $148 million in the prior year fourth quarter. Net charge-offs were $104 million, down $46 million from the fourth quarter of the prior year. For the full year, the provision for credit losses was $323 million and net charge-offs were $346 million, down significantly from $638 million and $609 million, respectively, a year ago. The lower credit loss provision reflects continued substantial improvement in credit quality, particularly in commercial loans. Consumer loan quality remains sound. Nonperforming assets were $563 million at December 31, 2004, down from $657 million at December 31, 2003. The allowance for loan losses at December 31, 2004 was $1.2 billion, or 1.2% of portfolio loans compared to $1.0 billion or 1.3% of portfolio loans as of December 31, 2003. BALANCE SHEET At December 31, 2004, total assets were $139.3 billion, and stockholders' equity was $12.8 billion or 9.19% of assets. Tangible common equity as a percentage of tangible assets was 6.84%, compared to 6.72% for the preceding quarter and 7.23% a year ago. The decrease in the tangible common equity ratio in 2004 was attributable to share repurchases and intangible assets recognized in connection with recent acquisitions. At December 31, 2004, total deposits were $86.0 billion, including core deposits of $67.3 billion. On October 5, 2004, National City closed its previously announced acquisition of Wayne Bancorp for a cash price of $182 million, adding 23 branches to National City's northern Ohio presence. The Corporation repurchased 12.9 million shares of its common stock during the fourth quarter, bringing the repurchases for the full year to 40.1 million shares. In December 2004, the Corporation's Board of Directors authorized the repurchase of an additional 25 million shares of common stock. Combined with the February 2004 remaining authorization, the Corporation currently has authorization to repurchase approximately 37 million shares. The Corporation intends to continue repurchases in 2005, subject to applicable regulatory constraints. (more) -5- This document contains forward-looking statements. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance, nor should they be relied upon as representing management's views as of any subsequent date. The forward-looking statements are based on management's expectations and are subject to a number of risks and uncertainties. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include, without limitation, the Corporation's ability to effectively execute its business plans; changes in general economic and financial market conditions; changes in interest rates; changes in the competitive environment; continuing consolidation in the financial services industry; new litigation or changes in existing litigation; losses, customer bankruptcy, claims and assessments; changes in banking regulations or other regulatory or legislative requirements affecting the Corporation's business; and changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies. Additional information concerning factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements is available in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2003, and subsequent filings with the United States Securities and Exchange Commission (SEC). Copies of these filings are available at no cost on the SEC's Web site at WWW.SEC.GOV or on the Corporation's Web site at WWW.NATIONALCITY.COM. Management may elect to update forward-looking statements at some future point; however, it specifically disclaims any obligation to do so. Mr. Daberko, along with Jeffrey D. Kelly, chief financial officer, will host a conference call January 18th at 11:00 a.m. (ET) to discuss the fourth quarter earnings and 2004 results. Interested parties may access the conference call by dialing 1-800-288-9626. The conference call and supplemental materials will also be accessible via the Corporation's Web site, WWW.NATIONALCITY.COM. The call will be open to the public in a listen-only mode, with participants encouraged to call in approximately 15 minutes prior to the event. Questions may be submitted by e-mail to investor.relations@nationalcity.com prior to or during the conference. (more) -6- A replay of the conference call will be available at 2:30 p.m. (ET) on January 18, 2005, until midnight on January 24, 2005, accessible at WWW.NATIONALCITY.COM and by telephone at 1-800-475-6701 (international 1-320-365-3844), passcode 748933 or via the Company's website. ABOUT NATIONAL CITY National City Corporation (NYSE: NCC), headquartered in Cleveland, Ohio, is one of the nation's largest financial holding companies. The company operates through an extensive banking network primarily in Ohio, Indiana, Illinois, Kentucky, Michigan, Missouri, and Pennsylvania, and also serves customers in selected markets nationally. Its core businesses include commercial and retail banking, consumer finance, asset management, and mortgage financing and servicing. For more information about National City, visit the company's Web site at NationalCity.com. (more) UNAUDITED NATIONAL CITY CORPORATION CONSOLIDATED FINANCIAL HIGHLIGHTS (IN MILLIONS, EXCEPT PER SHARE DATA)
2004 2003 ------------------------------------ ------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------- ------- ------- ------- ------- ------- ------- ------- EARNINGS Tax-equivalent interest income $ 1,752 $ 1,620 $ 1,402 $ 1,350 $ 1,416 $ 1,554 $ 1,528 $ 1,527 Interest expense 509 424 335 325 375 403 426 426 ------- ------- ------- ------- ------- ------- -------- -------- Tax-equivalent net interest income 1,243 1,196 1,067 1,025 1,041 1,151 1,102 1,101 Provision for credit losses 81 98 61 83 148 107 183 200 ------- ------- ------- ------- ------- ------- -------- -------- Tax-equivalent NII after provision for credit losses 1,162 1,098 1,006 942 893 1,044 919 901 Fees and other income 1,442 1,023 861 1,118 981 484 981 1,103 Securities gains (losses), net 11 3 5 -- 10 5 32 -- Noninterest expense 1,271 1,233 1,075 986 1,045 1,008 1,026 1,009 ------- ------- ------- ------- ------- ------- -------- -------- Income before taxes and tax-equivalent adjustment 1,344 891 797 1,074 839 525 906 995 Income taxes 376 292 273 357 288 175 313 344 Tax-equivalent adjustment 8 8 5 7 7 6 7 8 ------- ------- ------- ------- ------- ------- -------- -------- Net income $ 960 $ 591 $ 519 $ 710 $ 544 $ 344 $ 586 $ 643 ======= ======= ======= ======= ======= ======= ======== ======== Effective tax rate 28.1% 33.2% 34.4% 33.5% 34.6% 33.8% 34.8% 34.8% PER COMMON SHARE Net income: Basic $ 1.48 $ .88 $ .84 $ 1.17 $ .89 $ .56 $ .96 $ 1.05 Diluted 1.46 .86 .83 1.16 .88 .56 .94 1.05 Dividends paid .35 .35 .32 .32 .32 .32 .305 .305 Book value 19.80 18.98 16.86 16.25 15.39 14.89 14.72 14.05 Market value (close) 37.55 38.62 35.01 35.58 33.94 29.46 32.71 27.85 Average shares: Basic 652.9 663.3 619.1 605.9 607.6 613.6 612.1 611.5 Diluted 666.3 677.1 625.5 612.6 612.7 619.0 618.4 615.6 PERFORMANCE RATIOS Return on average common equity 29.70% 19.00% 20.13% 29.58% 22.99% 14.87% 26.74% 30.60% Return on average total equity 29.72 19.01 20.13 29.58 22.99 14.87 26.74 30.60 Return on average assets * 2.77 1.76 1.80 2.61 1.88 1.10 1.97 2.24 Net interest margin 4.09 4.04 4.09 4.16 4.03 4.10 4.11 4.21 Efficiency ratio 47.34 55.54 55.77 46.03 51.69 61.62 49.27 45.77 LINE OF BUSINESS (LOB) RESULTS NET INCOME: National City Mortgage Co. $ 13 $ 139 $ 16 $ 273 $ 264 $ (2) $ 264 $ 411 REST OF NATIONAL CITY (RONC): Consumer and Small Business Financial Services 184 178 168 154 145 167 168 141 Wholesale Banking 196 167 164 140 82 129 61 59 National Consumer Finance 132 172 177 164 91 126 111 91 Asset Management 19 26 64 25 23 24 27 19 National Processing (9) 17 14 12 15 14 11 9 Parent and Other 425 (108) (84) (58) (76) (114) (56) (87) ------- ------- ------- ------- ------- ------- -------- -------- TOTAL RONC 947 452 503 437 280 346 322 232 ------- ------- ------- ------- ------- ------- -------- -------- TOTAL CONSOLIDATED NATIONAL CITY CORPORATION $ 960 $ 591 $ 519 $ 710 $ 544 $ 344 $ 586 $ 643 ======= ======= ======= ======= ======= ======= ======== ======== LOB CONTRIBUTION TO DILUTED EARNINGS PER SHARE: National City Mortgage Co. $ .01 $ .20 $ .02 $ .45 $ .42 -- $ .43 $ .67 REST OF NATIONAL CITY (RONC): Consumer and Small Business Financial Services .28 .26 .27 .25 .24 $ .27 .27 .23 Wholesale Banking .29 .25 .26 .23 .13 .21 .10 .10 National Consumer Finance .20 .25 .28 .27 .15 .20 .18 .15 Asset Management .03 .04 .10 .04 .04 .04 .04 .03 National Processing (.01) .02 .02 .02 .03 .02 .02 .01 Parent and Other .66 (.16) (.12) (.10) (.13) (.18) (.10) (.14) ------- ------- ------- ------- ------- ------- -------- -------- TOTAL RONC 1.45 .66 .81 .71 .46 .56 .51 .38 ------- ------- ------- ------- ------- ------- -------- -------- TOTAL CONSOLIDATED NATIONAL CITY CORPORATION $ 1.46 $ .86 $ .83 $ 1.16 $ .88 $ .56 $ .94 $ 1.05 ======= ======= ======= ======= ======= ======= ======== ========
2002 FOR THE YEAR ------- ------------------------ 4TH QTR 2004 2003 2002 ------- ---- ---- ---- EARNINGS Tax-equivalent interest income $ 1,540 $ 6,124 $ 6,025 $ 5,946 Interest expense 459 1,593 1,630 1,910 -------- ------- ------- ------- Tax-equivalent net interest income 1,081 4,531 4,395 4,036 Provision for credit losses 159 323 638 682 -------- ------- ------- ------- Tax-equivalent NII after provision for credit losses 922 4,208 3,757 3,354 Fees and other income 528 4,444 3,549 2,494 Securities gains (losses), net (17) 19 47 81 Noninterest expense 1,011 4,565 4,088 3,730 -------- ------- ------- ------- Income before taxes and tax-equivalent adjustment 422 4,106 3,265 2,199 Income taxes 136 1,298 1,120 722 Tax-equivalent adjustment 6 28 28 30 -------- ------- ------- ------- Net income $ 280 $ 2,780 $ 2,117 $ 1,447 ======== ======= ======= ======= Effective tax rate 32.7% 31.8% 34.6% 33.3% PER COMMON SHARE Net income: Basic $ .46 $ 4.37 $ 3.46 $ 2.37 Diluted .46 4.31 3.43 2.35 Dividends paid .305 1.34 1.25 1.20 Book value 13.35 Market value (close) 27.32 Average shares: Basic 611.9 635.5 611.2 610.2 Diluted 616.0 645.5 616.4 616.2 PERFORMANCE RATIOS Return on average common equity 13.41% 24.56% 23.60% 18.14% Return on average total equity 13.41 24.57 23.60 18.14 Return on average assets * .99 2.24 1.79 1.40 Net interest margin 4.26 4.09 4.11 4.34 Efficiency ratio 62.80 50.87 51.46 57.12 LINE OF BUSINESS (LOB) RESULTS NET INCOME: National City Mortgage Co. $ 441 $ 937 $ 341 REST OF NATIONAL CITY (RONC): Consumer and Small Business Financial Services 684 621 609 Wholesale Banking 667 331 277 National Consumer Finance 645 419 212 Asset Management 134 93 97 National Processing 34 49 51 Parent and Other 175 (333) (140) ------- ------- ------- TOTAL RONC 2,339 1,180 1,106 ------- ------- ------- TOTAL CONSOLIDATED NATIONAL CITY CORPORATION $ 2,780 $ 2,117 $ 1,447 ======= ======= ======= LOB CONTRIBUTION TO DILUTED EARNINGS PER SHARE: National City Mortgage Co. $ .68 $ 1.52 $ .55 REST OF NATIONAL CITY (RONC): Consumer and Small Business Financial Services 1.06 1.01 .99 Wholesale Banking 1.03 .54 .45 National Consumer Finance 1.00 .68 .34 Asset Management .21 .15 .16 National Processing .05 .08 .08 Parent and Other .28 (.55) (.22) ------- ------- ------- TOTAL RONC 3.63 1.91 1.80 ------- ------- ------- TOTAL CONSOLIDATED NATIONAL CITY CORPORATION $ 4.31 $ 3.43 $ 2.35 ======= ======= =======
* During the fourth quarter of 2004, the allowance for lending-related commitments was reclassified from the allowance for loan losses to other liabilities. All prior periods have been updated to reflect this reclassification. 7 UNAUDITED NATIONAL CITY CORPORATION CONSOLIDATED FINANCIAL HIGHLIGHTS (CONTINUED) ($ IN MILLIONS)
2004 2003 ------------------------------------- ------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------- ------- ------- ------- ------- ------- ------- ------- CREDIT QUALITY STATISTICS Net charge-offs $ 104 $ 97 $ 63 $ 82 $ 150 $ 125 $ 164 $ 170 Provision for credit losses 81 98 61 83 148 107 183 200 Loan loss allowance 1,188 1,178 1,028 1,011 1,023 1,030 1,053 1,032 Lending-related commitment allowance 100 127 117 115 102 99 94 96 Nonperforming assets 563 628 544 606 657 756 818 822 Annualized net charge-offs to average portfolio loans .41% .41% .30% .42% .76% .64% .88% .95% Loan loss allowance to period-end portfolio loans* 1.19 1.21 1.22 1.26 1.29 1.32 1.39 1.38 Loan loss allowance to nonperforming portfolio loans* 253.42 234.48 234.09 200.41 186.09 163.80 148.73 148.15 Loan loss allowance (period-end) to annualized net charge-offs* 290.31 302.46 407.33 305.75 171.81 208.55 159.72 149.14 Nonperforming assets to period-end portfolio loans and other nonperforming assets .56 .64 .64 .76 .83 .97 1.08 1.10 CAPITAL AND LIQUIDITY RATIOS Tier 1 capital(1) 8.24% 8.20% 9.03% 9.36% 8.79% 8.11% 8.12% 7.82% Total risk-based capital(1) 11.72 11.81 13.08 13.67 13.12 12.29 12.39 11.65 Leverage(1) 7.31 7.38 7.90 8.19 7.43 6.58 6.78 6.55 Period-end equity to assets* 9.19 9.15 8.83 8.84 8.18 7.49 7.32 7.30 Period-end tangible common equity to assets(2) * 6.84 6.72 7.65 7.88 7.23 6.59 6.42 6.39 Average equity to assets* 9.32 9.25 8.94 8.82 8.20 7.41 7.38 7.33 Average equity to portfolio loans 12.98 12.97 12.51 12.21 12.05 11.90 11.70 11.65 Average portfolio loans to deposits 118.67 115.52 114.03 120.30 116.37 107.50 108.45 110.78 Average portfolio loans to core deposits 145.37 141.21 132.75 135.51 133.21 125.80 127.10 130.48 Average portfolio loans to earning assets 81.52 80.56 79.24 80.08 75.47 68.82 69.92 69.84 Average securities to earning assets 7.84 8.17 6.36 6.62 6.33 5.95 6.89 7.92 AVERAGE BALANCES Assets* $137,909 $133,602 $115,948 $109,530 $114,566 $123,747 $119,131 $116,412 Portfolio loans 99,006 95,324 82,863 79,085 77,901 77,064 75,065 73,183 Loans held for sale or securitization 11,503 11,861 13,910 12,323 17,680 27,036 24,118 22,524 Securities (at cost) 9,524 9,670 6,646 6,537 6,534 6,667 7,397 8,295 Earning assets 121,453 118,332 104,567 98,759 103,218 111,984 107,355 104,785 Core deposits 68,105 67,506 62,420 58,360 58,479 61,258 59,060 56,087 Purchased deposits and funding 53,030 49,907 40,080 38,253 43,267 49,743 47,551 47,740 Common equity 12,847 12,359 10,370 9,659 9,390 9,171 8,786 8,529 Total equity 12,847 12,359 10,370 9,659 9,390 9,171 8,786 8,529 PERIOD-END BALANCES Assets* $139,280 $136,499 $117,087 $111,470 $114,036 $121,057 $123,437 $117,591 Portfolio loans 100,138 97,439 84,537 79,927 79,279 77,756 75,839 74,933 Loans held for sale or securitization 12,430 10,745 12,467 12,478 15,368 23,615 26,796 21,740 Securities (at fair value) 9,281 9,759 6,517 6,881 6,866 6,755 7,377 8,464 Core deposits 67,297 67,003 61,851 60,030 58,922 58,680 60,727 57,858 Purchased deposits and funding 55,282 52,535 41,473 37,343 41,983 49,010 48,762 46,492 Common equity 12,804 12,492 10,335 9,854 9,329 9,068 9,030 8,587 Total equity 12,804 12,492 10,335 9,854 9,329 9,068 9,030 8,587
2002 FOR THE YEAR ------- -------------------------- 4TH QTR 2004 2003 2002 ------- ---- ---- ---- CREDIT QUALITY STATISTICS Net charge-offs $ 140 $ 346 $ 609 $ 576 Provision for credit losses 159 323 638 682 Loan loss allowance 1,006 Lending-related commitment allowance 92 Nonperforming assets 817 Annualized net charge-offs to average portfolio loans .78% .39% .80% .83% Loan loss allowance to period-end portfolio loans* 1.40 Loan loss allowance to nonperforming portfolio loans* 143.30 Loan loss allowance (period-end) to annualized net charge-offs* 181.43 343.81 167.82 174.68 Nonperforming assets to period-end portfolio loans and other nonperforming assets 1.13 CAPITAL AND LIQUIDITY RATIOS Tier 1 capital(1) 7.46% Total risk-based capital(1) 11.37 Leverage(1) 6.39 Period-end equity to assets* 6.91 Period-end tangible common equity to assets(2) * 5.99 Average equity to assets* 7.36 9.10% 7.57% 7.70% Average equity to portfolio loans 11.63 12.70 11.83 11.55 Average portfolio loans to deposits 107.90 117.06 110.71 111.40 Average portfolio loans to core deposits 128.70 138.98 129.09 132.63 Average portfolio loans to earning assets 70.37 80.41 70.96 74.28 Average securities to earning assets 9.36 7.31 6.75 9.50 AVERAGE BALANCES Assets* $112,614 $124,310 $118,473 $103,505 Portfolio loans 71,291 89,114 75,819 69,032 Loans held for sale or securitization 19,676 12,395 22,837 14,227 Securities (at cost) 9,484 8,102 7,217 8,828 Earning assets 101,315 110,828 106,846 92,941 Core deposits 55,394 64,118 58,733 52,050 Purchased deposits and funding 45,666 45,351 47,072 40,665 Common equity 8,289 11,316 8,972 7,973 Total equity 8,289 11,316 8,972 7,973 PERIOD-END BALANCES Assets* $118,114 Portfolio loans 72,134 Loans held for sale or securitization 24,501 Securities (at fair value) 9,211 Core deposits 56,342 Purchased deposits and funding 49,530 Common equity 8,161 Total equity 8,161
(1) Fourth quarter 2004 regulatory capital ratios are based upon preliminary data (2) Excludes goodwill and other intangible assets * During the fourth quarter of 2004, the allowance for lending-related commitments was reclassified from the allowance for loan losses to other liabilities. All prior periods have been updated to reflect this reclassification. 8 EX-99.2 3 l11468aexv99w2.txt EXHIBIT 99.2 EXHIBIT 99.2 [NATIONAL CITY LOGO] UNAUDITED FINANCIAL SUPPLEMENT DECEMBER 31, 2004 TABLE OF CONTENTS QUARTERLY AND YEAR-TO-DATE FINANCIAL TRENDS Consolidated Financial Highlights 3-4 Consolidated Statements of Income 5 Consolidated Period-End Balance Sheets 6 Consolidated Average Balance Sheets 7 Selected Average Balances 8 Selected Period-End Balances 9 Securitized Balances 10 Average Balances/Net Interest Income/Rates 11-13 Stockholder Data 14 Capitalization 15 Noninterest Income 16 Noninterest Expense 16 Salaries, Benefits, and Other Personnel Expense 17 Full-Time Equivalent Employees by Line of Business 17 Credit Quality Statistics 18-20 Ten Largest Nonperforming Loans 20 Commercial Loan Industry Concentration 20 Consumer and Small Business Financial Services Performance Measures 21 Asset Management Performance Measures 22 Mortgage Banking Statistics 23-25 First Franklin Loan Origination and Portfolio Statistics 26 Home Equity Portfolio Statistics 27 Line of Business Results 28-33 MONTHLY FINANCIAL TRENDS Consolidated Selected Average Balances 34 Capitalization 35 Full-Time Equivalent Employees By Line of Business 35 Consumer and Small Business Financial Services Performance Measures 36 Asset Management Performance Measures 37 Mortgage Banking Statistics 37 First Franklin Loan Origination and Portfolio Statistics 38
TABLE OF CONTENTS (CONTINUED) FINANCIAL SUPPLEMENT SUMMARY OF PRESENTATION CHANGES CHANGES TO THIS FINANCIAL SUPPLEMENT ARE AS FOLLOWS: Activity for Allegiant Bancorp, Inc. (acquired on April 9, 2004), Provident Financial Group, Inc. (acquired on July 1, 2004) and Wayne Bancorp (acquired on October 5, 2004) is included in National City Corporation's results from the respective dates of acquisition. ALLOWANCE FOR LOSSES ON LENDING-RELATED COMMITMENTS During the fourth quarter of 2004, the allowance for losses on lending-related commitments was reclassified from the allowance for loan losses to other liabilities. This reclassification had no effect on the provision for credit losses, which continues to be comprised of the sum of the provision for loan losses and the provision for losses on lending-related commitments. All prior periods have been updated for this reclass and specific line items affected are noted with an asterisk(*). FINANCIAL HIGHLIGHTS - PAGE 3 Line of business net income and each business unit's contribution to diluted earnings per share are now presented in this section. NONINTEREST EXPENSE - PAGE 16 Merger integration costs recognized in 2004 were added to this section. CREDIT QUALITY STATISTICS - PAGE 18 A rollforward of the allowance for lending-related commitments was added to this section. See note above for further information on the allowance for losses on lending-related commitments. MORTGAGE BANKING STATISTICS - PAGE 24 A rollforward of National City Home Loan Services (NCHLS) mortgage servicing assets and a total for consolidated mortgage servicing assets were added to this section. FIRST FRANKLIN PORTFOLIO STATISTICS - PAGE 26 The following statistics were added to this section: Interest-only as a percentage of total originations and percentage of First Franklin portfolio loans represented by interest-only loans. 2 UNAUDITED NATIONAL CITY CORPORATION CONSOLIDATED FINANCIAL HIGHLIGHTS (IN MILLIONS, EXCEPT PER SHARE DATA)
2004 2003 ---------------------------------------------- ----------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------- ------- ------- ------- ------- ------- ------- ------- EARNINGS Tax-equivalent interest income $ 1,752 $ 1,620 $ 1,402 $ 1,350 $ 1,416 $ 1,554 $1,528 $ 1,527 Interest expense 509 424 335 325 375 403 426 426 -------- -------- -------- -------- ------- ------- ------ -------- Tax-equivalent net interest income 1,243 1,196 1,067 1,025 1,041 1,151 1,102 1,101 Provision for credit losses 81 98 61 83 148 107 183 200 -------- -------- -------- -------- ------- ------- ------ -------- Tax-equivalent NII after provision for credit losses 1,162 1,098 1,006 942 893 1,044 919 901 Fees and other income 1,442 1,023 861 1,118 981 484 981 1,103 Securities gains (losses), net 11 3 5 - 10 5 32 - Noninterest expense 1,271 1,233 1,075 986 1,045 1,008 1,026 1,009 -------- -------- -------- -------- ------- ------- ------ -------- Income before taxes and tax-equivalent adjustment 1,344 891 797 1,074 839 525 906 995 Income taxes 376 292 273 357 288 175 313 344 Tax-equivalent adjustment 8 8 5 7 7 6 7 8 -------- -------- -------- -------- ------- ------- ------ -------- Net income $ 960 $ 591 $ 519 $ 710 $ 544 $ 344 $ 586 $ 643 ======== ======== ======== ======== ======= ======= ====== ======== Effective tax rate 28.1% 33.2% 34.4% 33.5% 34.6% 33.8% 34.8% 34.8% PER COMMON SHARE Net income: Basic $ 1.48 $ .88 $ .84 $ 1.17 $ .89 $ .56 $ .96 $ 1.05 Diluted 1.46 .86 .83 1.16 .88 .56 .94 1.05 Dividends paid .35 .35 .32 .32 .32 .32 .305 .305 Book value 19.80 18.98 16.86 16.25 15.39 14.89 14.72 14.05 Market value (close) 37.55 38.62 35.01 35.58 33.94 29.46 32.71 27.85 Average shares: Basic 652.9 663.3 619.1 605.9 607.6 613.6 612.1 611.5 Diluted 666.3 677.1 625.5 612.6 612.7 619.0 618.4 615.6 PERFORMANCE RATIOS Return on average common equity 29.70% 19.00% 20.13% 29.58% 22.99% 14.87% 26.74% 30.60% Return on average total equity 29.72 19.01 20.13 29.58 22.99 14.87 26.74 30.60 Return on average assets * 2.77 1.76 1.80 2.61 1.88 1.10 1.97 2.24 Net interest margin 4.09 4.04 4.09 4.16 4.03 4.10 4.11 4.21 Efficiency ratio 47.34 55.54 55.77 46.03 51.69 61.62 49.27 45.77 LINE OF BUSINESS (LOB) RESULTS(1) NET INCOME: National City Mortgage Co. $ 13 $ 139 $ 16 $ 273 $ 264 ($ 2) $ 264 $ 411 REST OF NATIONAL CITY (RONC): Consumer and Small Business Financial Services 184 178 168 154 145 167 168 141 Wholesale Banking 196 167 164 140 82 129 61 59 National Consumer Finance 132 172 177 164 91 126 111 91 Asset Management 19 26 64 25 23 24 27 19 National Processing (9) 17 14 12 15 14 11 9 Parent and Other 425 (108) (84) (58) (76) (114) (56) (87) -------- -------- -------- -------- ------- ------- ------ -------- TOTAL RONC 947 452 503 437 280 346 322 232 -------- -------- -------- -------- ------- ------- ------ -------- TOTAL CONSOLIDATED NATIONAL CITY CORPORATION $ 960 $ 591 $ 519 $ 710 $ 544 $ 344 $ 586 $ 643 ======== ======== ======== ======== ======= ======= ====== ======== LOB CONTRIBUTION TO DILUTED EARNINGS PER SHARE: National City Mortgage Co. $ .01 $ .20 $ .02 $ .45 $ .42 - $ .43 $ .67 REST OF NATIONAL CITY (RONC): Consumer and Small Business Financial Services .28 .26 .27 .25 .24 $ .27 .27 .23 Wholesale Banking .29 .25 .26 .23 .13 .21 .10 .10 National Consumer Finance .20 .25 .28 .27 .15 .20 .18 .15 Asset Management .03 .04 .10 .04 .04 .04 .04 .03 National Processing (.01) .02 .02 .02 .03 .02 .02 .01 Parent and Other .66 (.16) (.12) (.10) (.13) (.18) (.10) (.14) -------- -------- -------- -------- ------- ------- ------ -------- TOTAL RONC 1.45 .66 .81 .71 .46 .56 .51 .38 -------- -------- -------- -------- ------- ------- ------ -------- TOTAL CONSOLIDATED NATIONAL CITY CORPORATION $ 1.46 $ .86 $ .83 $ 1.16 $ .88 $ .56 $ .94 $ 1.05 ======== ======== ======== ======== ======= ======= ====== ======== 2002 FOR THE YEAR ------- ------------------------------- 4TH QTR 2004 2003 2002 ------- ---- ---- ---- EARNINGS Tax-equivalent interest income $ 1,540 $ 6,124 $ 6,025 $ 5,946 Interest expense 459 1,593 1,630 1,910 ---------- ------- ------- ------- Tax-equivalent net interest income 1,081 4,531 4,395 4,036 Provision for credit losses 159 323 638 682 ---------- ------- ------- ------- Tax-equivalent NII after provision for credit losses 922 4,208 3,757 3,354 Fees and other income 528 4,444 3,549 2,494 Securities gains (losses), net (17) 19 47 81 Noninterest expense 1,011 4,565 4,088 3,730 Income before taxes and tax-equivalent adjustment 422 4,106 3,265 2,199 Income taxes 136 1,298 1,120 722 Tax-equivalent adjustment 6 28 28 30 ---------- ------- ------- ------- Net income $ 280 $ 2,780 $ 2,117 $ 1,447 ========== ======= ======= ======= Effective tax rate 32.7% 31.8% 34.6% 33.3% PER COMMON SHARE Net income: Basic $ .46 $ 4.37 $ 3.46 $ 2.37 Diluted .46 4.31 3.43 2.35 Dividends paid .305 1.34 1.25 1.20 Book value 13.35 Market value (close) 27.32 Average shares: Basic 611.9 635.5 611.2 610.2 Diluted 616.0 645.5 616.4 616.2 PERFORMANCE RATIOS Return on average common equity 13.41% 24.56% 23.60% 18.14% Return on average total equity 13.41 24.57 23.60 18.14 Return on average assets * .99 2.24 1.79 1.40 Net interest margin 4.26 4.09 4.11 4.34 Efficiency ratio 62.80 50.87 51.46 57.12 LINE OF BUSINESS (LOB) RESULTS(1) NET INCOME: National City Mortgage Co. $ 441 $ 937 $ 341 REST OF NATIONAL CITY (RONC): Consumer and Small Business Financial Services 684 621 609 Wholesale Banking 667 331 277 National Consumer Finance 645 419 212 Asset Management 134 93 97 National Processing 34 49 51 Parent and Other 175 (333) (140) ------- ------- ------- TOTAL RONC 2,339 1,180 1,106 ------- ------- ------- TOTAL CONSOLIDATED NATIONAL CITY CORPORATION $ 2,780 $ 2,117 $ 1,447 ======= ======= ======= LOB CONTRIBUTION TO DILUTED EARNINGS PER SHARE: National City Mortgage Co. $ .68 $ 1.52 $ .55 REST OF NATIONAL CITY (RONC): Consumer and Small Business Financial Services 1.06 1.01 .99 Wholesale Banking 1.03 .54 .45 National Consumer Finance 1.00 .68 .34 Asset Management .21 .15 .16 National Processing .05 .08 .08 Parent and Other .28 (.55) (.22) ------- ------- ------- TOTAL RONC 3.63 1.91 1.80 ------- ------- ------- TOTAL CONSOLIDATED NATIONAL CITY CORPORATION $ 4.31 $ 3.43 $ 2.35 ======= ======= =======
(1) See pages 28-33 for more detail on Line of Business results * See note on Summary of Presentation Changes 3 UNAUDITED NATIONAL CITY CORPORATION CONSOLIDATED FINANCIAL HIGHLIGHTS (CONTINUED) ($ IN MILLIONS)
2004 2003 ---------------------------------------- ---------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------- ------- ------- ------- ------- ------- ------- ------- CREDIT QUALITY STATISTICS Net charge-offs $ 104 $ 97 $ 63 $ 82 $ 150 $ 125 $ 164 $ 170 Provision for credit losses 81 98 61 83 148 107 183 200 Loan loss allowance 1,188 1,178 1,028 1,011 1,023 1,030 1,053 1,032 Lending-related commitment allowance 100 127 117 115 102 99 94 96 Nonperforming assets 563 628 544 606 657 756 818 822 Annualized net charge-offs to average portfolio loans .41% .41% .30% .42% .76% .64% .88% .95% Loan loss allowance to period-end portfolio loans* 1.19 1.21 1.22 1.26 1.29 1.32 1.39 1.38 Loan loss allowance to nonperforming portfolio loans* 253.42 234.48 234.09 200.41 186.09 163.80 148.73 148.15 Loan loss allowance (period-end) to annualized net charge-offs* 290.31 302.46 407.33 305.75 171.81 208.55 159.72 149.14 Nonperforming assets to period-end portfolio loans and other nonperforming assets .56 .64 .64 .76 .83 .97 1.08 1.10 CAPITAL AND LIQUIDITY RATIOS Tier 1 capital(1) 8.24% 8.20% 9.03% 9.36% 8.79% 8.11% 8.12% 7.82% Total risk-based capital(1) 11.72 11.81 13.08 13.67 13.12 12.29 12.39 11.65 Leverage(1) 7.31 7.38 7.90 8.19 7.43 6.58 6.78 6.55 Period-end equity to assets* 9.19 9.15 8.83 8.84 8.18 7.49 7.32 7.30 Period-end tangible common equity to assets(2) * 6.84 6.72 7.65 7.88 7.23 6.59 6.42 6.39 Average equity to assets* 9.32 9.25 8.94 8.82 8.20 7.41 7.38 7.33 Average equity to portfolio loans 12.98 12.97 12.51 12.21 12.05 11.90 11.70 11.65 Average portfolio loans to deposits 118.67 115.52 114.03 120.30 116.37 107.50 108.45 110.78 Average portfolio loans to core deposits 145.37 141.21 132.75 135.51 133.21 125.80 127.10 130.48 Average portfolio loans to earning assets 81.52 80.56 79.24 80.08 75.47 68.82 69.92 69.84 Average securities to earning assets 7.84 8.17 6.36 6.62 6.33 5.95 6.89 7.92 AVERAGE BALANCES Assets* $137,909 $133,602 $115,948 $109,530 $114,566 $123,747 $119,131 $116,412 Portfolio loans 99,006 95,324 82,863 79,085 77,901 77,064 75,065 73,183 Loans held for sale or securitization 11,503 11,861 13,910 12,323 17,680 27,036 24,118 22,524 Securities (at cost) 9,524 9,670 6,646 6,537 6,534 6,667 7,397 8,295 Earning assets 121,453 118,332 104,567 98,759 103,218 111,984 107,355 104,785 Core deposits 68,105 67,506 62,420 58,360 58,479 61,258 59,060 56,087 Purchased deposits and funding 53,030 49,907 40,080 38,253 43,267 49,743 47,551 47,740 Common equity 12,847 12,359 10,370 9,659 9,390 9,171 8,786 8,529 Total equity 12,847 12,359 10,370 9,659 9,390 9,171 8,786 8,529 PERIOD-END BALANCES Assets* $139,280 $136,499 $117,087 $111,470 $114,036 $121,057 $123,437 $117,591 Portfolio loans 100,138 97,439 84,537 79,927 79,279 77,756 75,839 74,933 Loans held for sale or securitization 12,430 10,745 12,467 12,478 15,368 23,615 26,796 21,740 Securities (at fair value) 9,281 9,759 6,517 6,881 6,866 6,755 7,377 8,464 Core deposits 67,297 67,003 61,851 60,030 58,922 58,680 60,727 57,858 Purchased deposits and funding 55,282 52,535 41,473 37,343 41,983 49,010 48,762 46,492 Common equity 12,804 12,492 10,335 9,854 9,329 9,068 9,030 8,587 Total equity 12,804 12,492 10,335 9,854 9,329 9,068 9,030 8,587 2002 FOR THE YEAR ------- ---------------------------- 4TH QTR 2004 2003 2002 ------- ---- ---- ---- CREDIT QUALITY STATISTICS Net charge-offs $ 140 $ 346 $ 609 $ 576 Provision for credit losses 159 323 638 682 Loan loss allowance 1,006 Lending-related commitment allowance 92 Nonperforming assets 817 Annualized net charge-offs to average portfolio loans .78% .39% .80% .83% Loan loss allowance to period-end portfolio loans* 1.40 Loan loss allowance to nonperforming portfolio loans* 143.30 Loan loss allowance (period-end) to annualized net charge-offs* 181.43 343.81 167.82 174.68 Nonperforming assets to period-end portfolio loans and other nonperforming assets 1.13 CAPITAL AND LIQUIDITY RATIOS Tier 1 capital(1) 7.46% Total risk-based capital(1) 11.37 Leverage(1) 6.39 Period-end equity to assets* 6.91 Period-end tangible common equity to assets(2) * 5.99 Average equity to assets* 7.36 9.10% 7.57% 7.70% Average equity to portfolio loans 11.63 12.70 11.83 11.55 Average portfolio loans to deposits 107.90 117.06 110.71 111.40 Average portfolio loans to core deposits 128.70 138.98 129.09 132.63 Average portfolio loans to earning assets 70.37 80.41 70.96 74.28 Average securities to earning assets 9.36 7.31 6.75 9.50 AVERAGE BALANCES Assets* $112,614 $124,310 $118,473 $103,505 Portfolio loans 71,291 89,114 75,819 69,032 Loans held for sale or securitization 19,676 12,395 22,837 14,227 Securities (at cost) 9,484 8,102 7,217 8,828 Earning assets 101,315 110,828 106,846 92,941 Core deposits 55,394 64,118 58,733 52,050 Purchased deposits and funding 45,666 45,351 47,072 40,665 Common equity 8,289 11,316 8,972 7,973 Total equity 8,289 11,316 8,972 7,973 PERIOD-END BALANCES Assets* $118,114 Portfolio loans 72,134 Loans held for sale or securitization 24,501 Securities (at fair value) 9,211 Core deposits 56,342 Purchased deposits and funding 49,530 Common equity 8,161 Total equity 8,161
(1) Fourth quarter 2004 regulatory capital ratios are based upon preliminary data (2) Excludes goodwill and other intangible assets * See note on Summary of Presentation Changes 4 UNAUDITED NATIONAL CITY CORPORATION CONSOLIDATED STATEMENTS OF INCOME ($ IN THOUSANDS, EXCEPT PER SHARE DATA)
2004 ---------------------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------- ------- ------- ------- INTEREST INCOME: Loans $ 1,597,934 $ 1,478,859 $ 1,305,225 $ 1,249,107 Securities: Taxable 100,509 103,590 65,332 69,293 Exempt from Federal income taxes 8,106 7,820 8,544 8,199 Dividends 7,868 7,528 4,670 4,206 Federal funds sold and security resale agreements 2,283 1,668 1,505 729 Other investments 28,726 12,975 9,827 12,404 ------------- ------------- ------------- ------------- TOTAL INTEREST INCOME 1,745,426 1,612,440 1,395,103 1,343,938 INTEREST EXPENSE: Deposits 275,894 230,042 201,650 188,545 Federal funds borrowed and security repurchase agreements 30,651 25,778 19,664 18,004 Borrowed funds 5,384 3,794 3,101 2,958 Long-term debt 197,420 164,343 110,303 115,804 ------------- ------------- ------------- ------------- TOTAL INTEREST EXPENSE 509,349 423,957 334,718 325,311 NET INTEREST INCOME 1,236,077 1,188,483 1,060,385 1,018,627 Provision for credit losses 81,545 98,432 60,788 82,507 ------------- ------------- ------------- ------------- NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 1,154,532 1,090,051 999,597 936,120 NONINTEREST INCOME: Mortgage banking revenue 141,391 369,765 193,173 579,398 Deposit service charges 174,227 172,526 161,549 147,353 Payment processing revenue 22,123 132,931 131,944 121,619 Trust and investment management fees 72,406 73,146 79,803 75,576 Card-related fees 31,315 35,148 37,965 37,130 Brokerage revenue 38,778 33,476 34,167 32,252 Leasing revenue 81,281 87,522 5,828 5,776 Other 880,224 119,151 216,651 118,454 ------------- ------------- ------------- ------------- TOTAL FEES AND OTHER INCOME 1,441,745 1,023,665 861,080 1,117,558 Securities gains (losses), net 10,649 2,989 5,197 139 ------------- ------------- ------------- ------------- TOTAL NONINTEREST INCOME 1,452,394 1,026,654 866,277 1,117,697 NONINTEREST EXPENSE: Salaries, benefits, and other personnel 684,780 661,486 594,060 548,891 Equipment 91,746 72,955 68,843 66,323 Net occupancy 68,527 66,044 59,476 59,959 Third-party services 94,868 82,197 72,346 68,364 Card processing 13,488 58,969 60,396 57,543 Marketing and public relations 33,645 29,640 29,858 22,260 Leasing expense 57,068 63,097 1,883 3,637 Other 227,009 198,386 188,275 159,363 ------------- ------------- ------------- ------------- TOTAL NONINTEREST EXPENSE 1,271,131 1,232,774 1,075,137 986,340 INCOME BEFORE INCOME TAX EXPENSE 1,335,795 883,931 790,737 1,067,477 INCOME TAX EXPENSE 375,990 293,216 271,691 357,109 ------------- ------------- ------------- ------------- NET INCOME $ 959,805 $ 590,715 $ 519,046 $ 710,368 ============= ============= ============= ============= NET INCOME PER COMMON SHARE: Basic $ 1.48 $ .88 $ .84 $ 1.17 Diluted 1.46 .86 .83 1.16 AVERAGE COMMON SHARES: Basic 652,948,959 663,338,716 619,097,523 605,916,791 Diluted 666,250,318 677,143,218 625,476,357 612,596,633 MEMO: Tax-equivalent net interest income $ 1,243,470 $ 1,195,824 $ 1,066,780 $ 1,025,157 Net income available to common stockholders 959,412 590,322 519,046 710,368 2003 ----------------------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------- ------- ------- ------- INTEREST INCOME: Loans $ 1,319,958 $ 1,456,575 $ 1,409,904 $ 1,398,244 Securities: Taxable 67,721 67,650 85,957 96,976 Exempt from Federal income taxes 8,360 8,424 8,579 8,564 Dividends 4,504 4,425 6,283 5,192 Federal funds sold and security resale agreements 813 827 612 504 Other investments 8,264 9,272 9,698 10,516 ------------- ------------- ------------- ------------- TOTAL INTEREST INCOME 1,409,620 1,547,173 1,521,033 1,519,996 INTEREST EXPENSE: Deposits 199,900 213,127 234,353 244,351 Federal funds borrowed and security repurchase agreements 19,797 30,330 40,685 41,585 Borrowed funds 2,396 2,678 4,600 8,998 Long-term debt 152,365 157,067 145,813 131,771 ------------- ------------- ------------- ------------- TOTAL INTEREST EXPENSE 374,458 403,202 425,451 426,705 NET INTEREST INCOME 1,035,162 1,143,971 1,095,582 1,093,291 Provision for credit losses 147,991 107,047 183,147 200,233 ------------- ------------- ------------- ------------- NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 887,171 1,036,924 912,435 893,058 NONINTEREST INCOME: Mortgage banking revenue 451,252 (26,883) 426,924 630,733 Deposit service charges 146,265 144,940 142,126 134,736 Payment processing revenue 134,913 124,517 113,047 105,411 Trust and investment management fees 72,003 72,403 77,310 69,359 Card-related fees 42,003 41,827 44,036 41,081 Brokerage revenue 31,400 32,776 33,428 24,476 Leasing revenue 8,458 10,602 7,778 10,259 Other 94,213 84,339 135,856 87,261 ------------- ------------- ------------- ------------- TOTAL FEES AND OTHER INCOME 980,507 484,521 980,505 1,103,316 Securities gains (losses), net 10,177 5,398 31,407 170 ------------- ------------- ------------- ------------- TOTAL NONINTEREST INCOME 990,684 489,919 1,011,912 1,103,486 NONINTEREST EXPENSE: Salaries, benefits, and other personnel 541,174 571,059 542,291 561,162 Equipment 71,928 54,646 58,618 59,404 Net occupancy 61,229 57,323 56,081 58,356 Third-party services 88,227 70,739 70,838 65,544 Card processing 60,379 54,194 51,194 52,326 Marketing and public relations 29,726 22,259 66,272 17,312 Leasing expense 2,966 (4,861) 5,160 48,853 Other 189,775 182,257 175,783 145,909 ------------- ------------- ------------- ------------- TOTAL NONINTEREST EXPENSE 1,045,404 1,007,616 1,026,237 1,008,866 INCOME BEFORE INCOME TAX EXPENSE 832,451 519,227 898,110 987,678 INCOME TAX EXPENSE 288,335 175,590 312,302 344,175 ------------- ------------- ------------- ------------- NET INCOME $ 544,116 $ 343,637 $ 585,808 $ 643,503 ============= ============= ============= ============= NET INCOME PER COMMON SHARE: Basic $ .89 $ .56 $ .96 $ 1.05 Diluted .88 .56 .94 1.05 AVERAGE COMMON SHARES: Basic 607,623,840 613,574,321 612,119,565 611,521,806 Diluted 612,711,761 618,968,822 618,384,192 615,578,784 MEMO: Tax-equivalent net interest income $ 1,041,905 $ 1,150,765 $ 1,102,248 $ 1,100,728 Net income available to common stockholders 544,116 343,637 585,808 643,503 2002 FOR THE YEAR ------- ------------------------------------------- 4TH QTR 2004 2003 2002 ------- ---- ---- ---- INTEREST INCOME: Loans $ 1,391,127 $ 5,631,125 $ 5,584,681 $ 5,333,962 Securities: Taxable 115,690 338,724 318,304 474,096 Exempt from Federal income taxes 8,846 32,669 33,927 36,286 Dividends 9,346 24,272 20,404 35,191 Federal funds sold and security resale agreements 554 6,185 2,756 2,010 Other investments 7,891 63,932 37,750 34,375 ------------- ------------- ------------- ------------- TOTAL INTEREST INCOME 1,533,454 6,096,907 5,997,822 5,915,920 INTEREST EXPENSE: Deposits 275,853 896,131 891,731 1,148,378 Federal funds borrowed and security repurchase agreements 41,749 94,097 132,397 150,430 Borrowed funds 12,003 15,237 18,672 37,375 Long-term debt 129,768 587,870 587,016 574,358 ------------- ------------- ------------- ------------- TOTAL INTEREST EXPENSE 459,373 1,593,335 1,629,816 1,910,541 NET INTEREST INCOME 1,074,081 4,503,572 4,368,006 4,005,379 Provision for credit losses 158,638 323,272 638,418 681,918 ------------- ------------- ------------- ------------- NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 915,443 4,180,300 3,729,588 3,323,461 NONINTEREST INCOME: Mortgage banking revenue 44,739 1,283,727 1,482,026 590,341 Deposit service charges 136,740 655,655 568,067 513,560 Payment processing revenue 116,976 408,617 477,888 451,037 Trust and investment management fees 70,740 300,931 291,075 307,387 Card-related fees 45,744 141,558 168,947 156,965 Brokerage revenue 25,770 138,673 122,080 108,585 Leasing revenue 8,336 180,407 37,097 40,190 Other 79,103 1,334,480 401,669 325,817 ------------- ------------- ------------- ------------- TOTAL FEES AND OTHER INCOME 528,148 4,444,048 3,548,849 2,493,882 Securities gains (losses), net (16,630) 18,974 47,152 81,092 ------------- ------------- ------------- ------------- TOTAL NONINTEREST INCOME 511,518 4,463,022 3,596,001 2,574,974 NONINTEREST EXPENSE: Salaries, benefits, and other personnel 527,242 2,489,217 2,215,686 1,865,480 Equipment 59,708 299,867 244,596 221,401 Net occupancy 58,851 254,006 232,989 225,044 Third-party services 71,159 317,775 295,348 239,083 Card processing 54,000 190,396 218,093 210,891 Marketing and public relations 19,140 115,403 135,569 146,138 Leasing expense 13,818 125,685 52,118 93,675 Other 206,729 773,033 693,724 727,922 ------------- ------------- ------------- ------------- TOTAL NONINTEREST EXPENSE 1,010,647 4,565,382 4,088,123 3,729,634 INCOME BEFORE INCOME TAX EXPENSE 416,314 4,077,940 3,237,466 2,168,801 INCOME TAX EXPENSE 136,242 1,298,006 1,120,402 722,158 ------------- ------------- ------------- ------------- NET INCOME $ 280,072 $ 2,779,934 $ 2,117,064 $ 1,446,643 ============= ============= ============= ============= NET INCOME PER COMMON SHARE: Basic $ .46 $ 4.37 $ 3.46 $ 2.37 Diluted .46 4.31 3.43 2.35 AVERAGE COMMON SHARES: Basic 611,896,075 635,450,188 611,205,682 610,186,786 Diluted 615,971,640 645,510,514 616,410,043 616,174,238 MEMO: Tax-equivalent net interest income $ 1,081,175 $ 4,531,231 $ 4,395,646 $ 4,035,733 Net income available to common stockholders 280,072 2,779,934 2,117,064 1,446,622
5 UNAUDITED NATIONAL CITY CORPORATION CONSOLIDATED PERIOD-END BALANCE SHEETS ($ IN THOUSANDS)
2004 ---------------------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------------- ------------- ------------- ------------- ASSETS Cash and demand balances due from banks $ 3,832,040 $ 3,629,582 $ 3,171,945 $ 3,386,459 Federal funds sold and security resale agreements 302,534 292,554 1,087,481 355,240 Securities available for sale, at fair value 9,280,917 9,759,041 6,516,742 6,880,816 Other investments 934,236 1,415,418 568,230 505,183 LOANS HELD FOR SALE OR SECURITIZATION: Commercial 24,534 16,591 26,249 7,300 Commercial real estate 546,072 235,708 - - Mortgage 11,859,715 10,492,391 12,440,540 12,470,720 Automobile - - - - ------------- ------------- ------------- ------------- TOTAL LOANS HELD FOR SALE OR SECURITIZATION 12,430,321 10,744,690 12,466,789 12,478,020 PORTFOLIO LOANS: Commercial 25,160,464 25,075,730 19,738,970 19,017,015 Commercial construction 2,922,921 2,894,973 2,284,178 2,188,177 Real estate - commercial 12,193,394 12,024,140 11,014,482 9,893,169 Real estate - residential 30,398,068 30,117,952 28,731,664 27,199,655 Home equity lines of credit 18,884,890 17,267,143 13,781,781 12,008,704 Credit card and other unsecured lines of credit 2,413,465 2,295,173 2,198,703 2,234,590 Other consumer 8,164,633 7,763,934 6,787,488 7,385,938 ------------- ------------- ------------- ------------- TOTAL PORTFOLIO LOANS 100,137,835 97,439,045 84,537,266 79,927,248 Allowance for loan losses * (1,188,462) (1,177,680) (1,027,550) (1,010,549) ------------- ------------- ------------- ------------- NET PORTFOLIO LOANS 98,949,373 96,261,365 83,509,716 78,916,699 Properties and equipment 1,268,688 1,263,170 1,170,130 1,101,656 Equipment leased to others 1,050,787 1,165,681 34,508 39,178 Other real estate owned 89,362 107,296 95,470 92,331 Mortgage servicing assets 1,504,866 1,416,112 1,926,051 1,199,918 Goodwill 3,302,413 3,308,500 1,423,536 1,103,340 Other intangible assets 213,461 253,800 68,408 56,336 Derivative assets 885,541 1,210,692 876,243 1,550,552 Accrued income and other assets 5,235,838 5,671,388 4,171,623 3,804,443 ------------- ------------- ------------- ------------- TOTAL ASSETS* $ 139,280,377 $ 136,499,289 $ 117,086,872 $ 111,470,171 ============= ============= ============= ============= LIABILITIES DEPOSITS: Noninterest bearing $ 18,652,502 $ 18,339,275 $ 17,448,186 $ 16,988,347 NOW and money market accounts 29,263,454 29,678,397 28,153,616 27,767,329 Savings accounts 2,552,990 2,580,343 2,560,288 2,425,914 Consumer time 16,828,303 16,404,590 13,689,154 12,848,588 ------------- ------------- ------------- ------------- CORE DEPOSITS 67,297,249 67,002,605 61,851,244 60,030,178 Other 4,635,416 4,794,275 1,278,431 972,734 Foreign 14,021,942 5,078,531 9,906,414 6,210,322 ------------- ------------- ------------- ------------- TOTAL DEPOSITS 85,954,607 76,875,411 73,036,089 67,213,234 Federal funds borrowed and security repurchase agreements 5,892,428 6,542,450 5,892,472 9,220,268 Borrowed funds 2,035,900 7,627,340 3,903,212 1,381,465 Long-term debt 28,695,992 28,492,599 20,492,392 19,557,891 Derivative liabilities 596,822 633,828 707,349 844,178 Accrued expenses and other liabilities* 3,301,099 3,835,187 2,720,374 3,399,024 ------------- ------------- ------------- ------------- TOTAL LIABILITIES* 126,476,848 124,006,815 106,751,888 101,616,060 STOCKHOLDERS' EQUITY Preferred stock - - - - Common stock 2,586,999 2,633,092 2,451,521 2,426,239 Capital surplus 3,647,711 3,666,340 1,607,658 1,182,405 Retained earnings 6,468,231 6,105,769 6,234,266 6,176,988 Accumulated other comprehensive income 100,588 87,273 41,539 68,479 ------------- ------------- ------------- ------------- TOTAL STOCKHOLDERS' EQUITY 12,803,529 12,492,474 10,334,984 9,854,111 ------------- ------------- ------------- ------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY* $ 139,280,377 $ 136,499,289 $ 117,086,872 $ 111,470,171 ============= ============= ============= ============= COMMON SHARES OUTSTANDING 646,749,650 658,272,817 612,880,193 606,559,564 MEMO: Noninterest bearing mortgage escrow principal and interest (P&I) balances $ 2,912,598 $ 2,405,762 $ 2,325,648 $ 3,226,351 Noninterest bearing mortgage escrow taxes and insurance (T&I) balances 1,129,641 1,425,109 1,165,704 1,041,688 Noninterest bearing mortgage escrow replacement reserve (NRR) balances 103,267 101,183 - - Interest bearing mortgage escrow replacement reserve (IRR) balances 128,103 122,322 - - Noninterest bearing deposits excluding P&I, T&I, and NRR balances 14,506,996 14,407,221 13,956,834 12,720,308 Core deposits excluding P&I, T&I, NRR, and IRR balances 63,023,640 62,948,229 58,359,892 55,762,139 2003 2002 ---------------------------------------------------------- ------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR ------------- ------------- ------------- ------------- ------------- ASSETS Cash and demand balances due from banks $ 3,595,706 $ 3,602,298 $ 4,042,648 $ 3,767,425 $ 3,756,426 Federal funds sold and security resale agreements 162,347 131,062 81,574 68,616 136,343 Securities available for sale, at fair value 6,865,616 6,755,118 7,377,350 8,464,144 9,211,268 Other investments 830,887 769,141 842,893 498,148 869,147 LOANS HELD FOR SALE OR SECURITIZATION: Commercial 16,300 15,591 12,591 12,591 14,840 Commercial real estate - - - - - Mortgage 14,497,277 23,599,767 26,783,635 21,727,600 24,486,524 Automobile 853,982 - - - - ------------- ------------- ------------- ------------- ------------- TOTAL LOANS HELD FOR SALE OR SECURITIZATION 15,367,559 23,615,358 26,796,226 21,740,191 24,501,364 PORTFOLIO LOANS: Commercial 19,164,326 20,934,229 21,837,932 22,824,571 22,631,724 Commercial construction 2,289,429 2,524,598 2,341,879 2,304,061 2,090,336 Real estate - commercial 9,827,877 9,495,261 9,462,072 9,507,893 9,384,851 Real estate - residential 27,393,711 24,330,916 23,009,187 21,820,145 19,972,549 Home equity lines of credit 10,950,356 10,074,306 9,124,178 8,393,176 8,062,199 Credit card and other unsecured lines of credit 2,324,198 2,178,703 2,124,368 2,023,065 2,030,024 Other consumer 7,328,956 8,217,497 7,939,113 8,060,075 7,962,729 ------------- ------------- ------------- ------------- ------------- TOTAL PORTFOLIO LOANS 79,278,853 77,755,510 75,838,729 74,932,986 72,134,412 Allowance for loan losses * (1,022,720) (1,030,225) (1,052,542) (1,031,725) (1,006,451) ------------- ------------- ------------- ------------- ------------- NET PORTFOLIO LOANS 78,256,133 76,725,285 74,786,187 73,901,261 71,127,961 Properties and equipment 1,085,220 1,066,819 1,048,526 968,220 964,920 Equipment leased to others 48,992 59,345 69,067 73,126 89,886 Other real estate owned 99,418 110,380 103,685 115,739 114,931 Mortgage servicing assets 1,298,417 1,136,987 733,420 813,312 615,193 Goodwill 1,103,340 1,103,271 1,102,799 1,078,281 1,078,281 Other intangible assets 62,475 68,631 74,502 69,193 74,573 Derivative assets 1,349,259 1,785,967 1,819,917 1,469,869 1,468,381 Accrued income and other assets 3,910,700 4,127,733 4,558,351 4,563,255 4,104,853 ------------- ------------- ------------- ------------- ------------- TOTAL ASSETS* $ 114,036,069 $ 121,057,395 $ 123,437,145 $ 117,590,780 $ 118,113,527 ============= ============= ============= ============= ============= LIABILITIES DEPOSITS: Noninterest bearing $ 16,585,367 $ 16,828,794 $ 19,238,413 $ 16,878,935 $ 16,156,081 NOW and money market accounts 26,849,261 26,256,752 25,415,374 24,361,618 23,022,449 Savings accounts 2,353,721 2,373,289 2,426,424 2,437,801 2,477,067 Consumer time 13,133,909 13,221,476 13,646,875 14,179,957 14,686,005 ------------- ------------- ------------- ------------- ------------- CORE DEPOSITS 58,922,258 58,680,311 60,727,086 57,858,311 56,341,602 Other 924,969 2,731,341 2,440,785 2,945,649 3,403,827 Foreign 4,082,803 8,864,227 3,602,917 5,093,320 5,373,339 ------------- ------------- ------------- ------------- ------------- TOTAL DEPOSITS 63,930,030 70,275,879 66,770,788 65,897,280 65,118,768 Federal funds borrowed and security repurchase agreements 6,693,916 8,637,604 12,112,317 12,744,562 6,528,258 Borrowed funds 6,615,460 1,472,746 2,667,925 1,735,932 11,493,909 Long-term debt 23,666,292 27,304,153 27,938,252 23,972,172 22,730,295 Derivative liabilities 875,737 1,246,371 1,416,132 989,625 1,243,544 Accrued expenses and other liabilities* 2,925,963 3,052,798 3,501,822 3,664,046 2,837,696 ------------- ------------- ------------- ------------- ------------- TOTAL LIABILITIES* 104,707,398 111,989,551 114,407,236 109,003,617 109,952,470 STOCKHOLDERS' EQUITY Preferred stock - - - - - Common stock 2,423,985 2,436,547 2,453,705 2,443,888 2,445,966 Capital surplus 1,116,279 1,079,072 1,057,467 1,002,194 989,346 Retained earnings 5,723,720 5,502,147 5,484,430 5,085,060 4,658,565 Accumulated other comprehensive income 64,687 50,078 34,307 56,021 67,180 ------------- ------------- ------------- ------------- ------------- TOTAL STOCKHOLDERS' EQUITY 9,328,671 9,067,844 9,029,909 8,587,163 8,161,057 ------------- ------------- ------------- ------------- ------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY* $ 114,036,069 $ 121,057,395 $ 123,437,145 $ 117,590,780 $ 118,113,527 ============= ============= ============= ============= ============= COMMON SHARES OUTSTANDING 605,996,120 609,136,762 613,426,098 610,971,942 611,491,359 MEMO: Noninterest bearing mortgage escrow principal and interest (P&I) balances $ 2,394,020 $ 2,993,448 $ 4,759,275 $ 3,577,713 Noninterest bearing mortgage escrow taxes and insurance (T&I) balances 860,045 1,018,593 928,275 801,459 Noninterest bearing mortgage escrow replacement reserve (NRR) balances - - - - Interest bearing mortgage escrow replacement reserve (IRR) balances - - - - Noninterest bearing deposits excluding P&I, T&I, and NRR balances 13,331,302 12,816,753 13,550,863 12,499,763 Core deposits excluding P&I, T&I, NRR, and IRR balances 55,668,193 54,668,270 55,039,536 53,479,139
* See note on Summary of Presentation Changes 6 UNAUDITED NATIONAL CITY CORPORATION CONSOLIDATED AVERAGE BALANCE SHEETS ($ IN MILLIONS)
2004 2003 ------------------------------------------ ------------------------------------------ 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR --------- --------- --------- --------- --------- --------- --------- --------- ASSETS EARNING ASSETS: PORTFOLIO LOANS: Commercial $ 25,173 $ 24,784 $ 19,531 $ 18,860 $ 20,022 $ 21,152 $ 22,001 $ 22,415 Commercial construction 2,936 2,815 2,270 2,245 2,445 2,425 2,318 2,181 Real estate - commercial 11,998 11,993 10,821 9,819 9,587 9,450 9,475 9,420 Real estate - residential 30,548 29,639 27,981 27,076 25,564 24,088 22,469 21,025 Home equity lines of credit 18,082 16,247 12,819 11,396 10,410 9,612 8,761 8,152 Credit card and other unsecured lines of credit 2,350 2,281 2,232 2,283 2,330 2,170 2,084 2,033 Other consumer 7,919 7,565 7,209 7,406 7,543 8,167 7,957 7,957 --------- --------- --------- --------- --------- --------- --------- --------- TOTAL PORTFOLIO LOANS 99,006 95,324 82,863 79,085 77,901 77,064 75,065 73,183 LOANS HELD FOR SALE OR SECURITIZATION: Commercial 16 61 21 13 13 13 13 14 Commercial real estate 326 328 - - - - - - Mortgage 11,161 11,472 13,889 11,780 17,060 27,023 24,105 22,510 Automobile - - - 530 607 - - - Credit card - - - - - - - - --------- --------- --------- --------- --------- --------- --------- --------- TOTAL LOANS HELD FOR SALE OR SECURITIZATION 11,503 11,861 13,910 12,323 17,680 27,036 24,118 22,524 Securities available for sale, at cost 9,524 9,670 6,646 6,537 6,534 6,667 7,397 8,295 Federal funds sold and security resale agreements 289 284 530 260 275 272 142 118 Other investments 1,131 1,193 618 554 828 945 633 665 --------- --------- --------- --------- --------- --------- --------- --------- TOTAL EARNING ASSETS 121,453 118,332 104,567 98,759 103,218 111,984 107,355 104,785 Allowance for loan losses* (1,176) (1,181) (1,027) (1,017) (1,025) (1,048) (1,031) (1,007) Fair value appreciation of securities available for sale 161 82 138 220 201 202 302 324 Cash and demand balances due from banks 3,829 3,354 3,088 3,015 3,173 3,554 3,465 3,376 Properties and equipment 1,263 1,259 1,158 1,090 1,083 1,059 987 969 Equipment leased to others 1,100 1,248 37 44 57 68 73 81 Other real estate owned 109 112 93 98 105 107 110 115 Mortgage servicing assets 1,448 1,842 1,593 1,341 1,271 1,225 801 762 Goodwill 3,319 3,315 1,403 1,103 1,103 1,103 1,084 1,078 Other intangible assets 197 225 72 59 65 71 69 72 Derivative assets 505 330 573 783 854 544 1,077 935 Accrued income and other assets 5,701 4,684 4,253 4,035 4,461 4,878 4,839 4,922 --------- --------- --------- --------- --------- --------- --------- --------- TOTAL ASSETS* $ 137,909 $ 133,602 $ 115,948 $ 109,530 $ 114,566 $ 123,747 $ 119,131 $ 116,412 ========= ========= ========= ========= ========= ========= ========= ========= LIABILITIES DEPOSITS: Noninterest bearing $ 18,883 $ 18,731 $ 17,756 $ 15,658 $ 16,089 $ 19,408 $ 17,596 $ 15,689 NOW and money market accounts 29,851 29,778 28,614 27,325 26,845 26,091 25,045 23,489 Savings accounts 2,706 2,679 2,576 2,369 2,367 2,422 2,447 2,458 Consumer time 16,665 16,318 13,474 13,008 13,178 13,337 13,972 14,451 --------- --------- --------- --------- --------- --------- --------- --------- CORE DEPOSITS 68,105 67,506 62,420 58,360 58,479 61,258 59,060 56,087 Brokered retail CDs 4,480 4,373 531 499 836 2,502 2,601 2,871 Other 566 828 567 359 369 739 606 499 Foreign 10,279 9,809 9,150 6,520 7,260 7,186 6,950 6,602 --------- --------- --------- --------- --------- --------- --------- --------- TOTAL DEPOSITS 83,430 82,516 72,668 65,738 66,944 71,685 69,217 66,059 Federal funds borrowed and security repurchase agreements 7,126 8,033 8,254 7,942 8,754 10,660 11,953 12,306 Borrowed funds 1,651 1,120 1,547 1,594 992 1,087 1,527 2,636 Long-term debt 28,928 25,744 20,031 21,339 25,056 27,569 23,914 22,826 Derivative liabilities 319 364 343 435 431 511 680 574 Accrued expenses and other liabilities* 3,608 3,466 2,735 2,823 2,999 3,064 3,054 3,482 --------- --------- --------- --------- --------- --------- --------- --------- TOTAL LIABILITIES* 125,062 121,243 105,578 99,871 105,176 114,576 110,345 107,883 STOCKHOLDERS' EQUITY Preferred - - - - - - - - Common 12,847 12,359 10,370 9,659 9,390 9,171 8,786 8,529 --------- --------- --------- --------- --------- --------- --------- --------- TOTAL STOCKHOLDERS' EQUITY 12,847 12,359 10,370 9,659 9,390 9,171 8,786 8,529 --------- --------- --------- --------- --------- --------- --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY* $ 137,909 $ 133,602 $ 115,948 $ 109,530 $ 114,566 $ 123,747 $ 119,131 $ 116,412 ========= ========= ========= ========= ========= ========= ========= ========= MEMO: Noninterest bearing mortgage escrow principal and interest (P&I) balances $ 3,027 $ 2,777 $ 3,596 $ 2,471 $ 2,646 $ 5,738 $ 4,692 $ 3,457 Noninterest bearing mortgage escrow taxes and insurance (T&I) balances 1,392 1,417 1,152 976 1,048 1,050 957 761 Noninterest bearing mortgage escrow replacement reserve (NRR) balances 110 94 - - - - - - Interest bearing mortgage escrow replacement reserve (IRR) balances 128 119 - - - - - - Noninterest bearing deposits excluding P&I, T&I, and NRR balances 14,354 14,443 13,008 12,211 12,395 12,620 11,947 11,471 Core deposits excluding P&I, T&I, NRR, and IRR balances 63,448 63,099 57,672 54,913 54,785 54,470 53,411 51,869 2002 For the Year --------- ------------------------------- 4TH QTR 2004 2003 2002 --------- --------- --------- --------- ASSETS EARNING ASSETS: PORTFOLIO LOANS: Commercial $ 23,696 $ 22,103 $ 21,390 $ 23,978 Commercial construction 1,628 2,568 2,343 1,380 Real estate - commercial 8,383 11,162 9,483 8,005 Real estate - residential 16,717 28,818 23,301 15,682 Home equity lines of credit 7,857 14,650 9,241 6,986 Credit card and other unsecured lines of credit 1,958 2,286 2,155 1,865 Other consumer 11,052 7,527 7,906 11,136 --------- --------- --------- --------- TOTAL PORTFOLIO LOANS 71,291 89,114 75,819 69,032 LOANS HELD FOR SALE OR SECURITIZATION: Commercial 21 28 13 11 Commercial real estate - 164 - - Mortgage 19,655 12,071 22,671 13,933 Automobile - 132 153 248 Credit card - - - 35 --------- --------- --------- --------- TOTAL LOANS HELD FOR SALE OR SECURITIZATION 19,676 12,395 22,837 14,227 Securities available for sale, at cost 9,484 8,102 7,217 8,828 Federal funds sold and security resale agreements 117 340 202 96 Other investments 747 877 771 758 --------- --------- --------- --------- TOTAL EARNING ASSETS 101,315 110,828 106,846 92,941 Allowance for loan losses* (998) (1,101) (1,028) (951) Fair value appreciation of securities available for sale 318 150 257 255 Cash and demand balances due from banks 3,458 3,323 3,392 3,096 Properties and equipment 960 1,192 1,023 951 Equipment leased to others 109 610 70 127 Other real estate owned 110 103 109 88 Mortgage servicing assets 774 1,556 1,017 1,067 Goodwill 1,078 2,291 1,092 1,078 Other intangible assets 77 138 69 81 Derivative assets 860 547 851 625 Accrued income and other assets 4,553 4,673 4,775 4,147 --------- --------- --------- --------- TOTAL ASSETS* $ 112,614 $ 124,310 $ 118,473 $ 103,505 ========= ========= ========= ========= LIABILITIES DEPOSITS: Noninterest bearing $ 15,710 $ 17,763 $ 17,203 $ 13,685 NOW and money market accounts 22,385 28,897 25,378 20,740 Savings accounts 2,488 2,583 2,423 2,561 Consumer time 14,811 14,875 13,729 15,064 --------- --------- --------- --------- CORE DEPOSITS 55,394 64,118 58,733 52,050 Brokered retail CDs 2,870 2,481 2,198 2,902 Other 545 581 554 711 Foreign 7,264 8,946 7,002 6,302 --------- --------- --------- --------- TOTAL DEPOSITS 66,073 76,126 68,487 61,965 Federal funds borrowed and security repurchase agreements 10,643 7,838 10,908 8,786 Borrowed funds 3,169 1,477 1,556 2,406 Long-term debt 21,175 24,028 24,854 19,558 Derivative liabilities 547 365 548 404 Accrued expenses and other liabilities* 2,718 3,160 3,148 2,413 --------- --------- --------- --------- TOTAL LIABILITIES* 104,325 112,994 109,501 95,532 STOCKHOLDERS' EQUITY Preferred - - - - Common 8,289 11,316 8,972 7,973 --------- --------- --------- --------- TOTAL STOCKHOLDERS' EQUITY 8,289 11,316 8,972 7,973 --------- --------- --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY* $ 112,614 $ 124,310 $ 118,473 $ 103,505 ========= ========= ========= ========= MEMO: Noninterest bearing mortgage escrow principal and interest (P&I) balances $ 3,444 $ 2,968 $ 4,136 $ 2,042 Noninterest bearing mortgage escrow taxes and insurance (T&I) balances 791 1,235 955 707 Noninterest bearing mortgage escrow replacement reserve (NRR) balances - 51 - - Interest bearing mortgage escrow replacement reserve (IRR) balances - 62 - - Noninterest bearing deposits excluding P&I, T&I, and NRR balances 11,475 13,509 12,112 10,936 Core deposits excluding P&I, T&I, NRR, and IRR balances 51,159 59,802 53,642 49,301
* See note on Summary of Presentation Changes 7 UNAUDITED NATIONAL CITY CORPORATION SELECTED AVERAGE BALANCES ($ IN MILLIONS)
2004 2003 ---------------------------------- ---------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------- ------- ------- ------- ------- ------- ------- ------- AVERAGE MORTGAGE LOANS HELD FOR SALE National City Mortgage Co. $ 9,123 $ 8,892 $11,304 $10,146 $15,355 $25,933 $23,079 $21,685 First Franklin 1,985 2,483 2,520 1,634 1,388 1,080 1,026 825 National City Home Loan Services (formerly Altegra) 48 4 65 - 317 10 - - Provident PCFS(3) 5 93 - - - - - - ------- ------- ------- ------- ------- ------- ------- ------- TOTAL MORTGAGE LOANS HELD FOR SALE $11,161 $11,472 $13,889 $11,780 $17,060 $27,023 $24,105 $22,510 ======= ======= ======= ======= ======= ======= ======= ======= SELECTED AVERAGE PORTFOLIO LOAN BALANCES ALTEGRA NONCONFORMING (1) Altegra/Loan Zone originated loans $ 39 $ 133 $ 236 $ 473 $ 845 $ 1,621 $ 1,799 $ 1,982 NATIONAL HOME EQUITY(1) Home equity lines of credit $ 9,562 $ 7,993 $ 6,207 $ 5,017 $ 4,250 $ 3,527 $ 2,949 $ 2,481 Installment loans (real estate-residential) 1,591 1,550 1,445 1,386 1,282 1,104 1,003 951 ------- ------- ------- ------- ------- ------- ------- ------- TOTAL NATIONAL HOME EQUITY $11,153 $ 9,543 $ 7,652 $ 6,403 $ 5,532 $ 4,631 $ 3,952 $ 3,432 ======= ======= ======= ======= ======= ======= ======= ======= CREDIT CARD AND OTHER UNSECURED LINES OF CREDIT(2) Credit card $ 1,002 $ 996 $ 997 $ 1,084 $ 1,071 $ 1,026 $ 958 $ 932 Personal lines of credit 600 545 513 502 586 481 477 478 Business lines of credit 748 740 722 697 673 663 649 623 ------- ------- ------- ------- ------- ------- ------- ------- TOTAL CREDIT CARD AND OTHER UNSECURED LINES OF CREDIT $ 2,350 $ 2,281 $ 2,232 $ 2,283 $ 2,330 $ 2,170 $ 2,084 $ 2,033 ======= ======= ======= ======= ======= ======= ======= ======= 2002 For the Year ------- ------------------------- 4TH QTR 2004 2003 2002 ------- ------- ------- ------- AVERAGE MORTGAGE LOANS HELD FOR SALE National City Mortgage Co. $18,896 $ 9,861 $21,507 $13,449 First Franklin 759 2,155 1,082 484 National City Home Loan Services (formerly Altegra) - 30 82 - Provident PCFS(3) - 25 - - ------- ------- ------- ------- TOTAL MORTGAGE LOANS HELD FOR SALE $19,655 $12,071 $22,671 $13,933 ======= ======= ======= ======= SELECTED AVERAGE PORTFOLIO LOAN BALANCES ALTEGRA NONCONFORMING (1) Altegra/Loan Zone originated loans $ 2,182 $ 178 $ 1,569 $ 2,513 NATIONAL HOME EQUITY(1) Home equity lines of credit $ 2,090 $ 7,204 $ 3,307 $ 1,530 Installment loans (real estate-residential) 942 1,493 1,085 943 ------- ------- ------- ------- TOTAL NATIONAL HOME EQUITY $ 3,032 $ 8,697 $ 4,392 $ 2,473 ======= ======= ======= ======= CREDIT CARD AND OTHER UNSECURED LINES OF CREDIT(2) Credit card $ 879 $ 1,020 $ 997 $ 814 Personal lines of credit 483 539 506 481 Business lines of credit 596 727 652 570 ------- ------- ------- ------- TOTAL CREDIT CARD AND OTHER UNSECURED LINES OF CREDIT $ 1,958 $ 2,286 $ 2,155 $ 1,865 ======= ======= ======= =======
(1) Represents a division under the National Consumer Finance line of business (2) Represents the consolidated credit card and other unsecured lines of credit portfolio (3) Provident PCFS was sold effective December 1, 2004 8 UNAUDITED NATIONAL CITY CORPORATION SELECTED PERIOD-END BALANCES ($ IN MILLIONS)
2004 2003 2002 ---------------------------------- ---------------------------------- ------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR ------- ------- ------- ------- ------- ------- ------- ------- ------- MORTGAGE LOANS HELD FOR SALE OR SECURITIZATION National City Mortgage Co. $ 9,552 $ 8,802 $ 9,751 $10,631 $12,755 $21,463 $25,810 $20,958 $23,559 First Franklin 1,898 1,521 2,687 1,840 1,742 1,187 974 770 928 National City Home Loan Services (formerly Altegra) 407 121 3 - - 950 - - - Provident PCFS(3) 3 48 - - - - - - - ------- ------- ------- ------- ------- ------- ------- ------- ------- TOTAL MORTGAGE LOANS HELD FOR SALE OR SECURITIZATION $11,860 $10,492 $12,441 $12,471 $14,497 $23,600 $26,784 $21,728 $24,487 ======= ======= ======= ======= ======= ======= ======= ======= ======= BANK STOCK FUND Cost basis of equity investments $ 208 $ 187 $ 157 $ 38 $ 7 $ 33 $ 36 $ 237 $ 75 Unrealized gains (losses), net 28 13 12 4 1 6 8 (11) (4) ------- ------- ------- ------- ------- ------- ------- ------- ------- FAIR VALUE OF INVESTMENTS $ 236 $ 200 $ 169 $ 42 $ 8 $ 39 $ 44 $ 226 $ 71 ======= ======= ======= ======= ======= ======= ======= ======= ======= INTANGIBLE ASSETS Goodwill $ 3,302 $ 3,309 $ 1,424 $ 1,103 $ 1,103 $ 1,103 $ 1,103 $ 1,078 $ 1,078 Core deposit intangibles 170 161 24 12 15 18 22 25 28 Credit card intangibles 2 2 2 3 3 3 3 4 4 Other intangibles 42 90 42 42 45 48 49 40 43 ------- ------- ------- ------- ------- ------- ------- ------- ------- TOTAL INTANGIBLE ASSETS $ 3,516 $ 3,562 $ 1,492 $ 1,160 $ 1,166 $ 1,172 $ 1,177 $ 1,147 $ 1,153 ======= ======= ======= ======= ======= ======= ======= ======= ======= MEMO: Holding company investment in subsidiaries $13,927 $13,900 $10,739 $10,958 $10,251 $10,016 $10,381 $10,432 $ 9,789 Holding company intangible assets 109 126 60 59 59 59 59 59 59 Double leverage ratio (1) 1.10x 1.12x 1.04x 1.12x 1.11x 1.11x 1.16x 1.22x 1.21x PRINCIPAL INVESTMENTS(2) TYPE OF INVESTMENT: Direct investments in public entities $ 4 - - $ 1 - - $ 1 $ 1 - Direct investments in nonpublic entities 319 $ 344 $ 323 288 $ 300 $ 308 324 328 $ 317 Indirect investments (fund) 342 351 314 296 295 286 284 264 255 ------- ------- ------- ------- ------- ------- ------- ------- ------- TOTAL INVESTMENTS $ 665 $ 695 $ 637 $ 585 $ 595 $ 594 $ 609 $ 593 $ 572 ======= ======= ======= ======= ======= ======= ======= ======= ======= TYPE OF SECURITY: Common stock $ 60 $ 61 $ 42 $ 25 $ 23 $ 25 $ 20 $ 15 $ 15 Convertible debt and preferred stock 52 67 69 67 59 61 62 57 58 Investments in partnerships, funds and other equity instruments 401 409 371 355 356 352 357 348 335 Mezzanine (subordinated) debt 152 158 155 138 157 156 170 173 164 ------- ------- ------- ------- ------- ------- ------- ------- ------- TOTAL INVESTMENTS $ 665 $ 695 $ 637 $ 585 $ 595 $ 594 $ 609 $ 593 $ 572 ======= ======= ======= ======= ======= ======= ======= ======= ======= MEMO: Commitments to fund principal investments $ 264 $ 238 $ 256 $ 241 $ 227 $ 253 $ 232 $ 240 $ 242
(1) Holding company investment in subsidiaries and intangible assets divided by consolidated equity (2) Includes equity and mezzanine capital investments in nonpublic and public entities made by National City Equity Partners and National City Capital Corp., which are within the Wholesale Banking line of business. Principal investments exclude investments held in the Bank Stock Fund. (3) Provident PCFS was sold effective December 1, 2004 9 UNAUDITED NATIONAL CITY CORPORATION SECURITIZED BALANCES ($ IN MILLIONS)
2004 2003 ---------------------------------- ---------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------- ------- ------- ------- ------- ------- ------- ------- CREDIT CARD LOANS MANAGED CREDIT CARD LOANS: Average balances: Loans held in portfolio $ 1,002 $ 996 $ 997 $ 1,084 $ 1,071 $ 1,026 $ 958 $ 932 Loans held for securitization - - - - - - - - Loans securitized 1,450 1,450 1,450 1,450 1,450 1,450 1,450 1,450 ------- ------- ------- ------- ------- ------- ------- ------- TOTAL AVERAGE MANAGED CREDIT CARD LOANS $ 2,452 $ 2,446 $ 2,447 $ 2,534 $ 2,521 $ 2,476 $ 2,408 $ 2,382 ======= ======= ======= ======= ======= ======= ======= ======= End of period balances: Loans held in portfolio $ 1,070 $ 971 $ 950 $ 1,024 $ 1,136 $ 1,030 $ 988 $ 916 Loans held for securitization - - - - - - - - Loans securitized 1,450 1,450 1,450 1,450 1,450 1,450 1,450 1,450 ------- ------- ------- ------- ------- ------- ------- ------- TOTAL MANAGED CREDIT CARD LOANS $ 2,520 $ 2,421 $ 2,400 $ 2,474 $ 2,586 $ 2,480 $ 2,438 $ 2,366 ======= ======= ======= ======= ======= ======= ======= ======= AUTOMOBILE LOANS(1) MANAGED AUTOMOBILE LOANS(2): Average balances: Loans held in portfolio $ 2,785 $ 2,830 $ 2,860 $ 2,657 $ 3,270 $ 3,896 $ 3,727 $ 3,578 Loans held for securitization - - - 530 607 - - - Loans securitized 944 1,051 1,196 1,012 530 610 698 791 ------- ------- ------- ------- ------- ------- ------- ------- TOTAL AVERAGE MANAGED AUTOMOBILE LOANS $ 3,729 $ 3,881 $ 4,056 $ 4,199 $ 4,407 $ 4,506 $ 4,425 $ 4,369 ======= ======= ======= ======= ======= ======= ======= ======= End of period balances: Loans held in portfolio $ 2,895 $ 2,910 $ 2,861 $ 2,834 $ 2,958 $ 3,900 $ 3,808 $ 3,581 Loans held for securitization - - - - 854 - - - Loans securitized 888 1,002 1,128 1,265 495 568 654 745 ------- ------- ------- ------- ------- ------- ------- ------- TOTAL MANAGED AUTOMOBILE LOANS $ 3,783 $ 3,912 $ 3,989 $ 4,099 $ 4,307 $ 4,468 $ 4,462 $ 4,326 ======= ======= ======= ======= ======= ======= ======= ======= HOME EQUITY LOANS(3) MANAGED HOME EQUITY LOANS: Average balances: Loans held in portfolio $23,770 $21,773 Loans held for securitization - - Loans securitized 71 80 ------- ------- TOTAL AVERAGE MANAGED HOME EQUITY LOANS $23,841 $21,853 ======= ======= End of period balances: Loans held in portfolio $24,579 $22,921 Loans held for securitization - - Loans securitized 61 76 ------- ------- TOTAL MANAGED HOME EQUITY LOANS $24,640 $22,997 ======= ======= 2002 FOR THE YEAR ------- ------------------------- 4TH QTR 2004 2003 2002 ------- ------- ------- ------- CREDIT CARD LOANS MANAGED CREDIT CARD LOANS: Average balances: Loans held in portfolio $ 879 $ 1,020 $ 997 $ 814 Loans held for securitization - - - 35 Loans securitized 1,450 1,450 1,450 1,415 ------- ------- ------- ------- TOTAL AVERAGE MANAGED CREDIT CARD LOANS $ 2,329 $ 2,470 $ 2,447 $ 2,264 ======= ======= ======= ======= End of period balances: Loans held in portfolio $ 950 Loans held for securitization - Loans securitized 1,450 ------- TOTAL MANAGED CREDIT CARD LOANS $ 2,400 ======= AUTOMOBILE LOANS(1) MANAGED AUTOMOBILE LOANS(2): Average balances: Loans held in portfolio $ 3,579 $ 2,779 $ 3,618 $ 3,407 Loans held for securitization - 132 153 248 Loans securitized 877 1,054 656 739 ------- ------- ------- ------- TOTAL AVERAGE MANAGED AUTOMOBILE LOANS $ 4,456 $ 3,965 $ 4,427 $ 4,394 ======= ======= ======= ======= End of period balances: Loans held in portfolio $ 3,566 Loans held for securitization - Loans securitized 834 ------- TOTAL MANAGED AUTOMOBILE LOANS $ 4,400 ======= HOME EQUITY LOANS(3) MANAGED HOME EQUITY LOANS: Average balances: Loans held in portfolio $20,013 Loans held for securitization - Loans securitized 38 ------- TOTAL AVERAGE MANAGED HOME EQUITY LOANS $20,051 ======= End of period balances: Loans held in portfolio Loans held for securitization Loans securitized TOTAL MANAGED HOME EQUITY LOANS
(1) In February 2004, the Corporation sold through securitization $890 million of indirect prime automobile loans (2) Represents managed portfolio of indirect prime automobile loans (3) Securitization acquired in the Provident acquisition. Represents managed portfolio of prime home equity lines of credit and prime home equity installment loans 10 UNAUDITED NATIONAL CITY CORPORATION AVERAGE BALANCES/NET INTEREST INCOME/RATES ($ IN MILLIONS)
2004 2003 ---------------------------------------- ------------------ 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR ------- ------- ------- ------- ------- ------- AVERAGE BALANCES ASSETS Earning Assets: Loans(1): Commercial $ 25,189 $ 24,845 $ 19,552 $ 18,873 $ 20,035 $ 21,165 Commercial construction 2,936 2,815 2,270 2,245 2,445 2,425 Real estate - commercial 12,324 12,321 10,821 9,819 9,587 9,450 Real estate - residential 41,709 41,111 41,870 38,856 42,624 51,111 Home equity lines of credit 18,082 16,247 12,819 11,396 10,410 9,612 Credit card and other unsecured lines of credit 2,350 2,281 2,232 2,283 2,330 2,170 Other consumer 7,919 7,565 7,209 7,936 8,150 8,167 --------- --------- --------- --------- -------- --------- Total loans 110,509 107,185 96,773 91,408 95,581 104,100 Securities available for sale, at cost: Taxable 8,834 9,023 5,979 5,879 5,860 5,988 Tax-exempt 690 647 667 658 674 679 --------- --------- --------- --------- -------- --------- Total securities available for sale 9,524 9,670 6,646 6,537 6,534 6,667 Federal funds sold, security resale agreements, and other investments 1,420 1,477 1,148 814 1,103 1,217 --------- --------- --------- --------- -------- --------- Total earning assets 121,453 118,332 104,567 98,759 103,218 111,984 Allowance for loan losses* (1,176) (1,181) (1,027) (1,017) (1,025) (1,048) Fair value appreciation of securities available for sale 161 82 138 220 201 202 Nonearning assets 17,471 16,369 12,270 11,568 12,172 12,609 --------- --------- --------- --------- -------- --------- TOTAL ASSETS* $ 137,909 $ 133,602 $ 115,948 $ 109,530 $114,566 $ 123,747 ========= ========= ========= ========= ======== ========= LIABILITIES AND STOCKHOLDERS' EQUITY Interest bearing liabilities: NOW and money market accounts $ 29,851 $ 29,778 $ 28,614 $ 27,325 $ 26,845 $ 26,091 Savings accounts 2,706 2,679 2,576 2,369 2,367 2,422 Consumer time deposits 16,665 16,318 13,474 13,008 13,178 13,337 Other deposits 5,046 5,201 1,098 858 1,205 3,241 Foreign deposits 10,279 9,809 9,150 6,520 7,260 7,186 Federal funds borrowed 3,987 5,156 5,548 4,996 5,765 7,632 Security repurchase agreements 3,139 2,877 2,706 2,946 2,989 3,028 Borrowed funds 1,651 1,120 1,547 1,594 992 1,087 Long-term debt 28,928 25,744 20,031 21,339 25,056 27,569 --------- --------- --------- --------- -------- --------- Total interest bearing liabilities 102,252 98,682 84,744 80,955 85,657 91,593 Noninterest bearing deposits 18,883 18,731 17,756 15,658 16,089 19,408 Accrued interest and other liabilities* 3,927 3,830 3,078 3,258 3,430 3,575 --------- --------- --------- --------- -------- --------- TOTAL LIABILITIES* 125,062 121,243 105,578 99,871 105,176 114,576 TOTAL STOCKHOLDERS' EQUITY 12,847 12,359 10,370 9,659 9,390 9,171 --------- --------- --------- --------- -------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY* $ 137,909 $ 133,602 $ 115,948 $ 109,530 $114,566 $ 123,747 ========= ========= ========= ========= ======== ========= MEMO: Interest bearing core deposits $ 49,222 $ 48,775 $ 44,664 $ 42,702 $ 42,390 $ 41,850 Interest bearing total deposits 64,547 63,785 54,912 50,080 50,855 52,277 Borrowed funding and long-term debt 37,705 34,897 29,832 30,875 34,802 39,316 2003 2002 FOR THE YEAR -------------------- --------- ------------------------------- 2ND QTR 1ST QTR 4TH QTR 2004 2003 2002 --------- --------- --------- --------- --------- --------- AVERAGE BALANCES ASSETS Earning Assets: Loans(1): Commercial $ 22,014 $ 22,429 $ 23,717 $ 22,131 $ 21,403 $ 23,989 Commercial construction 2,318 2,181 1,628 2,568 2,343 1,380 Real estate - commercial 9,475 9,420 8,383 11,326 9,483 8,005 Real estate - residential 46,574 43,535 36,372 40,889 45,972 29,615 Home equity lines of credit 8,761 8,152 7,857 14,650 9,241 6,986 Credit card and other unsecured lines of credit 2,084 2,033 1,958 2,286 2,155 1,900 Other consumer 7,957 7,957 11,052 7,659 8,059 11,384 --------- --------- --------- --------- --------- --------- Total loans 99,183 95,707 90,967 101,509 98,656 83,259 Securities available for sale, at cost: Taxable 6,721 7,650 8,825 7,437 6,548 8,154 Tax-exempt 676 645 659 665 669 674 --------- --------- --------- --------- --------- --------- Total securities available for sale 7,397 8,295 9,484 8,102 7,217 8,828 Federal funds sold, security resale agreements, and other investments 775 783 864 1,217 973 854 --------- --------- --------- --------- --------- --------- Total earning assets 107,355 104,785 101,315 110,828 106,846 92,941 Allowance for loan losses* (1,031) (1,007) (998) (1,101) (1,028) (951) Fair value appreciation of securities available for sale 302 324 318 150 257 255 Nonearning assets 12,505 12,310 11,979 14,433 12,398 11,260 --------- --------- --------- --------- --------- --------- TOTAL ASSETS* $ 119,131 $ 116,412 $ 112,614 $ 124,310 $ 118,473 $ 103,505 ========= ========= ========= ========= ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Interest bearing liabilities: NOW and money market accounts $ 25,045 $ 23,489 $ 22,385 $ 28,897 $ 25,378 $ 20,740 Savings accounts 2,447 2,458 2,488 2,583 2,423 2,561 Consumer time deposits 13,972 14,451 14,811 14,875 13,729 15,064 Other deposits 3,207 3,370 3,415 3,062 2,752 3,613 Foreign deposits 6,950 6,602 7,264 8,946 7,002 6,302 Federal funds borrowed 9,054 9,171 7,297 4,920 7,895 5,459 Security repurchase agreements 2,899 3,135 3,346 2,918 3,013 3,327 Borrowed funds 1,527 2,636 3,169 1,477 1,556 2,406 Long-term debt 23,914 22,826 21,175 24,028 24,854 19,558 --------- --------- --------- --------- --------- --------- Total interest bearing liabilities 89,015 88,138 85,350 91,706 88,602 79,030 Noninterest bearing deposits 17,596 15,689 15,710 17,763 17,203 13,685 Accrued interest and other liabilities* 3,734 4,056 3,265 3,525 3,696 2,817 --------- --------- --------- --------- --------- --------- TOTAL LIABILITIES* 110,345 107,883 104,325 112,994 109,501 95,532 TOTAL STOCKHOLDERS' EQUITY 8,786 8,529 8,289 11,316 8,972 7,973 --------- --------- --------- --------- --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY* $ 119,131 $ 116,412 $ 112,614 $ 124,310 $ 118,473 $ 103,505 ========= ========= ========= ========= ========= ========= MEMO: Interest bearing core deposits $ 41,464 $ 40,398 $ 39,684 $ 46,355 $ 41,530 $ 38,365 Interest bearing total deposits 51,621 50,370 50,363 58,363 51,284 48,280 Borrowed funding and long-term debt 37,394 37,768 34,987 33,343 37,318 30,750
(1) Includes loans held for sale or securitization * See note on Summary of Presentation Changes 11 UNAUDITED NATIONAL CITY CORPORATION AVERAGE BALANCES/NET INTEREST INCOME/RATES (CONTINUED) ($ IN MILLIONS)
2004 2003 ------------------------------------- --------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------- ------- ------- ------- ------- ------- -------- -------- INTEREST ASSETS Earning Assets: Loans(1): Commercial $ 309 $ 273 $ 179 $ 175 $ 183 $ 198 $ 217 $ 220 Commercial construction 38 33 24 24 25 27 26 25 Real estate - commercial 181 173 151 43 144 146 146 145 Real estate - residential 663 664 656 608 683 807 744 730 Home equity lines of credit 222 169 138 123 103 99 95 89 Credit card and other unsecured lines of credit 62 46 45 47 45 43 41 44 Other consumer 126 124 115 131 138 140 143 148 ------ ------- ------ ------ ------ ------- ------- -------- Total loans 1,601 1,482 1,308 1,251 1,321 1,460 1,412 1,401 Securities available for sale, at cost: Taxable 108 111 70 74 73 71 93 102 Tax-exempt 12 12 13 12 12 13 13 13 ------ ------- ------ ------ ------ ------- ------- -------- Total securities available for sale 120 123 83 86 85 84 106 115 Federal funds sold, security resale agreements, and other investments 31 15 11 13 10 10 10 11 ------ ------- ------ ------ ------ ------- ------- -------- TOTAL EARNING ASSETS $1,752 $ 1,620 $1,402 $1,350 $1,416 $ 1,554 $ 1,528 $ 1,527 ====== ======= ====== ====== ====== ======= ======= ======== LIABILITIES Interest bearing liabilities: NOW and money market accounts $ 77 $ 61 $ 57 $ 57 $ 59 $ 63 $ 67 $ 68 Savings accounts 2 3 2 2 2 3 3 3 Consumer time deposits 124 114 117 112 118 120 131 137 Other deposits 25 19 4 2 4 8 10 12 Foreign deposits 47 34 22 15 17 19 25 23 Federal funds borrowed 21 20 16 14 16 27 35 36 Security repurchase agreements 10 5 4 4 4 4 5 6 Borrowed funds 5 4 3 3 2 2 5 9 Long-term debt 198 164 110 116 153 157 145 132 ------ ------- ------ ------ ------ ------- ------- -------- TOTAL INTEREST BEARING LIABILITIES $ 509 $ 424 $ 335 $ 325 $ 375 $ 403 $ 426 $ 426 ====== ======= ====== ====== ====== ======= ======= ======== TAX-EQUIVALENT NET INTEREST INCOME $1,243 $ 1,196 $1,067 $1,025 $1,041 $ 1,151 $ 1,102 $ 1,101 ====== ======= ====== ====== ====== ======= ======= ======== MEMO: Interest bearing core deposits $ 203 $ 178 $ 176 $ 171 $ 179 $ 186 $ 201 $ 208 Interest bearing total deposits 275 231 202 188 200 213 236 243 Borrowed funding and long-term debt 234 193 133 137 175 190 190 183 Amortization of fair value adjustments included above(2): Loans ($ 9) ($ 13) - - - - - - Deposits (21) (34) - - - - - - Long-term debt (17) (20) - - - - - - 2002 FOR THE YEAR -------- ---------------------------- 4TH QTR 2004 2003 2002 -------- ------- ------- ------- INTEREST ASSETS Earning Assets: Loans(1): Commercial $ 262 $ 936 $ 818 $ 1,133 Commercial construction 22 119 103 79 Real estate - commercial 136 648 581 534 Real estate - residential 606 2,591 2,964 2,119 Home equity lines of credit 98 652 386 351 Credit card and other unsecured lines of credit 43 200 173 176 Other consumer 227 496 569 953 -------- ------- ------- ------- Total loans 1,394 5,642 5,594 5,345 Securities available for sale, at cost: Taxable 124 363 339 509 Tax-exempt 13 49 51 55 -------- ------- ------- ------- Total securities available for sale 137 412 390 564 Federal funds sold, security resale agreements, and other investments 9 70 41 37 -------- ------- ------- ------- TOTAL EARNING ASSETS $ 1,540 $ 6,124 $ 6,025 $ 5,946 ======== ======= ======= ======= LIABILITIES Interest bearing liabilities: NOW and money market accounts $ 77 $ 252 $ 257 $ 301 Savings accounts 5 9 11 21 Consumer time deposits 149 467 506 646 Other deposits 15 50 34 67 Foreign deposits 30 118 84 114 Federal funds borrowed 34 71 114 116 Security repurchase agreements 8 23 19 35 Borrowed funds 12 15 18 37 Long-term debt 129 588 587 573 -------- ------- ------- ------- TOTAL INTEREST BEARING LIABILITIES $ 459 $ 1,593 $ 1,630 $ 1,910 ======== ======= ======= ======= TAX-EQUIVALENT NET INTEREST INCOME $ 1,081 $ 4,531 $ 4,395 $ 4,036 ======== ======= ======= ======= MEMO: Interest bearing core deposits $ 231 $ 728 $ 774 $ 968 Interest bearing total deposits 276 896 892 1,149 Borrowed funding and long-term debt 183 697 738 761 Amortization of fair value adjustments included above(2): Loans - ($ 22) - - Deposits - (55) - - Long-term debt - (37) - -
(1) Includes loans held for sale or securitization (2) Fair value adjustments recognized under the purchase method of accounting in connection with acquisitions 12 UNAUDITED NATIONAL CITY CORPORATION AVERAGE BALANCES/NET INTEREST INCOME/RATES (CONTINUED) ($ IN MILLIONS)
2004 2003 ------------------------------------- ------------------------------------ 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------- ------- ------- ------- ------- ------- ------- ------- RATES ASSETS Earning Assets: Loans(1): Commercial 4.90% 4.36% 3.69% 3.72% 3.63% 3.73% 3.94% 3.97% Commercial construction 5.11 4.64 4.34 4.30 4.07 4.48 4.49 4.65 Real estate - commercial 5.84 5.58 5.61 5.87 5.99 6.10 6.18 6.25 Real estate - residential 6.36 6.47 6.26 6.26 6.41 6.31 6.39 6.71 Home equity lines of credit 4.92 4.16 4.29 4.33 3.97 4.11 4.36 4.36 Credit card and other unsecured lines of credit 10.37 8.16 8.02 8.30 7.57 7.81 8.06 8.68 Other consumer 6.35 6.51 6.43 6.62 6.76 6.79 7.19 7.55 ----- ---- ---- ---- ---- ---- ---- ---- Total loans 5.78 5.52 5.42 5.49 5.52 5.59 5.70 5.89 Securities available for sale, at cost: Taxable 4.90 4.92 4.69 5.01 4.92 4.81 5.47 5.37 Tax-exempt 7.02 7.28 7.62 7.53 7.50 7.50 7.68 8.06 ----- ---- ---- ---- ---- ---- ---- ---- Total securities available for sale 5.06 5.08 4.98 5.26 5.19 5.08 5.68 5.58 Federal funds sold, security resale agreements, and other investments 8.69 3.94 3.97 6.49 3.26 3.29 5.33 5.71 ----- ---- ---- ---- ---- ---- ---- ---- TOTAL EARNING ASSETS 5.76 5.46 5.37 5.48 5.47 5.53 5.70 5.86 ===== ==== ==== ==== ==== ==== ==== ==== LIABILITIES Interest bearing liabilities: NOW and money market accounts 1.03 .82 .80 .83 .88 .96 1.07 1.18 Savings accounts .37 .34 .35 .35 .36 .39 .46 .58 Consumer time deposits 2.94 2.78 3.50 3.47 3.55 3.58 3.74 3.86 Other deposits 2.03 1.46 1.13 1.13 1.07 1.05 1.26 1.42 Foreign deposits 1.83 1.35 .98 .94 .94 1.05 1.42 1.42 Federal funds borrowed 2.11 1.56 1.15 1.13 1.09 1.37 1.57 1.59 Security repurchase agreements 1.20 .77 .56 .55 .53 .53 .71 .73 Borrowed funds 1.30 1.35 .81 .75 .96 .98 1.21 1.38 Long-term debt 2.72 2.54 2.21 2.18 2.42 2.26 2.44 2.33 ----- ---- ---- ---- ---- ---- ---- ---- TOTAL INTEREST BEARING LIABILITIES 1.98 1.71 1.59 1.62 1.74 1.75 1.92 1.96 ===== ==== ==== ==== ==== ==== ==== ==== NET INTEREST SPREAD 3.78 3.75 3.78 3.86 3.73 3.78 3.78 3.90 Contribution of noninterest bearing sources of funds .31 .29 .31 .30 .30 .32 .33 .31 ----- ---- ---- ---- ---- ---- ---- ---- NET INTEREST MARGIN 4.09% 4.04% 4.09% 4.16% 4.03% 4.10% 4.11% 4.21% ===== ==== ==== ==== ==== ==== ==== ==== MEMO: Interest bearing core deposits 1.64% 1.45% 1.59% 1.61% 1.68% 1.76% 1.93% 2.10% Interest bearing total deposits 1.70 1.43 1.48 1.51 1.56 1.62 1.82 1.97 Borrowed funding and long-term debt 2.47 2.21 1.79 1.78 1.99 1.92 2.05 1.95 2002 FOR THE YEAR ------- ------------------ 4TH QTR 2004 2003 2002 ------- ---- ---- ---- RATES ASSETS Earning Assets: Loans(1): Commercial 4.39% 4.23% 3.82% 4.72% Commercial construction 5.29 4.63 4.41 5.72 Real estate - commercial 6.46 5.72 6.13 6.68 Real estate - residential 6.66 6.34 6.45 7.15 Home equity lines of credit 4.97 4.45 4.18 5.02 Credit card and other unsecured lines of credit 8.53 8.73 8.01 9.26 Other consumer 8.16 6.48 7.07 8.38 ---- ---- ---- ---- Total loans 6.10 5.56 5.69 6.42 Securities available for sale, at cost: Taxable 5.67 4.88 5.17 6.25 Tax-exempt 8.14 7.36 7.68 8.15 ---- ---- ---- ---- Total securities available for sale 5.84 5.08 5.41 6.39 Federal funds sold, security resale agreements, and other investments 3.88 5.77 4.17 4.26 ---- ---- ---- ---- TOTAL EARNING ASSETS 6.06 5.53 5.64 6.40 ==== ==== ==== ==== LIABILITIES Interest bearing liabilities: NOW and money market accounts 1.37 .87 1.01 1.45 Savings accounts .71 .35 .45 .82 Consumer time deposits 4.00 3.14 3.69 4.28 Other deposits 1.73 1.64 1.23 1.84 Foreign deposits 1.62 1.32 1.20 1.81 Federal funds borrowed 1.83 1.45 1.44 2.12 Security repurchase agreements .95 .78 .63 1.04 Borrowed funds 1.50 1.03 1.20 1.55 Long-term debt 2.44 2.45 2.36 2.94 ---- ---- ---- ---- TOTAL INTEREST BEARING LIABILITIES 2.14 1.74 1.84 2.42 ==== ==== ==== ==== NET INTEREST SPREAD 3.92 3.79 3.80 3.98 Contribution of noninterest bearing sources of funds .34 .30 .31 .36 ---- ---- ---- ---- NET INTEREST MARGIN 4.26% 4.09% 4.11% 4.34% ==== ==== ==== ==== MEMO: Interest bearing core deposits 2.31% 1.57% 1.86% 2.52% Interest bearing total deposits 2.17 1.54 1.74 2.38 Borrowed funding and long-term debt 2.08 2.09 1.98 2.48
(1) Includes loans held for sale or securitization 13 UNAUDITED NATIONAL CITY CORPORATION STOCKHOLDER DATA ($ IN MILLIONS, EXCEPT PER SHARE DATA)
2004 2003 ------------------------------------------- ------------------------------------------ 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------- ------- ------- --------- -------- -------- -------- -------- Per common share: Basic net income $ 1.48 $ .88 $ .84 $ 1.17 $ .89 $ .56 $ .96 $ 1.05 Diluted net income 1.46 .86 .83 1.16 .88 .56 .94 1.05 Trailing four quarters basic net income 4.37 3.78 3.46 3.58 3.46 3.03 3.03 2.69 Trailing four quarters diluted net income 4.31 3.73 3.43 3.54 3.43 3.01 3.01 2.67 Dividends declared .35 .35 .32 .32 .32 .32 .305 .305 Dividends paid .35 .35 .32 .32 .32 .32 .305 .305 Dividend payout ratio(1) 23.97% 40.70% 38.55% 27.59% 36.36% 57.14% 32.45% 29.05% Dividend yield (annualized)(2) 3.73 3.63 3.66 3.60 3.77 4.34 3.73 4.38 P/E ratio(3) 8.71 x 10.35 x 10.21 x 10.05 x 9.90 x 9.79 x 10.87 x 10.43 x Common dividends declared $ 231.9 $ 235.0 $ 199.4 $ 194.5 $ 195.3 $ 196.5 $ 186.4 $ 186.6 Preferred dividends declared .4 .4 - - - - - - Common dividends paid 231.9 235.0 199.4 194.5 195.3 196.5 186.4 186.6 Preferred dividends paid .4 .4 - - - - - - Shares outstanding(4): Average basic 652,949 663,339 619,098 605,917 607,624 613,574 612,120 611,522 Average diluted 666,250 677,143 625,476 612,597 612,712 618,969 618,384 615,579 Ending common 646,750 658,273 612,880 606,560 605,996 609,137 613,426 610,972 Common stock price: High $ 39.66 $ 39.35 $ 36.10 $ 37.10 $ 34.44 $ 34.56 $ 34.97 $ 29.45 Low 36.07 34.35 32.60 32.14 29.46 29.03 27.72 26.53 Close 37.55 38.62 35.01 35.58 33.94 29.46 32.71 27.85 Book value per common share $ 19.80 $ 18.98 $ 16.86 $ 16.25 $ 15.39 $ 14.89 $ 14.72 $ 14.05 Tangible book value per common share 14.36 13.57 14.43 14.33 13.47 12.96 12.80 12.18 Other comprehensive income per share .16 .13 .07 .11 .11 .08 .06 .09 Market to book value 189.6% 203.5% 207.7% 219.0% 220.5% 197.9% 222.2% 198.2% Market capitalization of common stock $ 24,285 $ 25,422 $ 21,457 $ 21,581 $ 20,568 $ 17,945 $ 20,065 $ 17,016 2002 FOR THE YEAR ------- ------------------------- 4TH QTR 2004 2003 2002 ------- ------- ------- ------- Per common share: Basic net income $ .46 $ 4.37 $ 3.46 $ 2.37 Diluted net income .46 4.31 3.43 2.35 Trailing four quarters basic net income 2.37 Trailing four quarters diluted net income 2.35 Dividends declared .305 1.34 1.25 1.20 Dividends paid .305 1.34 1.25 1.20 Dividend payout ratio(1) 66.30% 31.09% 36.44% 51.06% Dividend yield (annualized)(2) 4.47 P/E ratio(3) 11.63 x Common dividends declared $ 186.7 $ 860.8 $ 764.8 $ 732.2 Preferred dividends declared - .8 - - Common dividends paid 186.7 860.8 764.8 732.2 Preferred dividends paid - .8 - - Shares outstanding(4): Average basic 611,896 635,450 611,206 610,187 Average diluted 615,972 645,511 616,410 616,174 Ending common 611,491 Common stock price: High $ 29.82 $ 39.66 $ 34.97 $ 33.75 Low 24.60 32.14 26.53 24.60 Close 27.32 Book value per common share $ 13.35 Tangible book value per common share 11.46 Other comprehensive income per share .11 Market to book value 204.6% Market capitalization of common stock $16,706
(1) Dividend declared divided by diluted net income per common share (2) Dividend declared (annualized) divided by quarter-end stock price (3) Quarter-end stock price divided by trailing-four-quarters diluted net income per common share (4) In thousands 14 UNAUDITED NATIONAL CITY CORPORATION CAPITALIZATION (PERIOD END) (IN MILLIONS, EXCEPT PER SHARE DATA)
2004 2003 ----------------------------------- ---------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------- ------- ------- ------- ------- ------- ------- ------- LONG-TERM DEBT AND BORROWED FUNDS LONG-TERM DEBT: Holding company debt: Senior notes $ 559 $ 566 $ 476 $ 499 $ 295 $ 297 $ 304 $ 295 Subordinated debt 1,354 1,381 1,513 1,597 1,969 1,986 2,041 1,991 Junior subordinated debentures owed to unconsolidated subsidiary trusts 605 609 249 186 186 186 - - Other 1 1 1 2 2 2 2 3 -------- ------- ------- ------- ------- ------- ------- ------- Total holding company debt 2,519 2,557 2,239 2,284 2,452 2,471 2,347 2,289 Subsidiary debt: Subordinated debt 2,057 2,091 2,012 2,117 2,080 2,101 2,168 1,785 Senior bank notes 18,549 17,987 12,360 11,489 15,266 18,732 19,239 15,716 Capital securities - - - - - - 180 180 FHLB advances 4,904 4,965 3,881 3,668 3,868 4,000 4,004 4,002 Secured debt financings 667 893 - - - - - - -------- ------- ------- ------- ------- ------- ------- ------- Total subsidiary debt 26,177 25,936 18,253 17,274 21,214 24,833 25,591 21,683 -------- ------- ------- ------- ------- ------- ------- ------- TOTAL LONG-TERM DEBT $28,696 $28,493 $20,492 $19,558 $23,666 $27,304 $27,938 $23,972 ======== ======= ======= ======= ======= ======= ======= ======= BORROWED FUNDS: U.S. Treasury demand notes $ 1,024 $ 6,374 $ 2,986 $569 $ 5,655 $ 847 $ 1,550 $ 352 Short-term senior bank notes 195 100 100 - - - 290 555 Commercial paper and other 817 1,153 817 812 960 626 828 829 -------- ------- ------- ------- ------- ------- ------- ------- TOTAL BORROWED FUNDS $ 2,036 $ 7,627 $ 3,903 $ 1,381 $ 6,615 $ 1,473 $ 2,668 $ 1,736 ======== ======= ======= ======= ======= ======= ======= ======= STOCKHOLDERS' EQUITY Preferred - - - - - - - - Common $12,804 $12,492 $10,335 $ 9,854 $ 9,329 $ 9,068 $ 9,030 $ 8,587 -------- ------- ------- ------- ------- ------- ------- ------- TOTAL STOCKHOLDERS' EQUITY $12,804 $12,492 $10,335 $ 9,854 $ 9,329 $ 9,068 $ 9,030 $ 8,587 ======== ======= ======= ======= ======= ======= ======= ======= ACCUMULATED OTHER COMPREHENSIVE INCOME, NET OF TAX: SFAS 115 unrealized gain, net $ 107 $ 138 $ 45 $ 149 $ 132 $ 153 $ 183 $ 191 SFAS 133 unrealized loss, net ($ 6) (51) (3) (81) (67) (103) (149) (135) -------- ------- ------- ------- ------- ------- ------- ------- TOTAL ACCUMULATED OTHER COMPREHENSIVE INCOME, NET OF TAX $ 101 $ 87 $ 42 $ 68 $ 65 $ 50 $ 34 $ 56 ======== ======= ======= ======= ======= ======= ======= ======= RISK-BASED CAPITAL(1) Tier 1 capital $ 9,815 $ 9,578 $ 9,018 $ 8,864 $ 8,420 $ 8,052 $ 7,987 $ 7,536 Total risk-based capital 13,962 13,793 13,070 12,946 12,561 12,199 12,187 11,220 Risk-weighted assets 119,151 116,822 99,909 94,709 95,772 99,255 98,335 96,348 Tier 1 capital ratio 8.24% 8.20% 9.03% 9.36% 8.79% 8.11% 8.12% 7.82% Total risk-based capital ratio 11.72 11.81 13.08 13.67 13.12 12.29 12.39 11.65 Leverage ratio 7.31 7.38 7.90 8.19 7.43 6.58 6.78 6.55 COMMON STOCK REPURCHASE ACTIVITY Number of common shares repurchased 12.9 16.0 9.0 2.2 4.8 5.3 - 1.4 Average price per share of repurchased common shares $ 37.86 $ 36.83 $ 35.06 $ 34.53 $ 32.53 $ 30.10 - $ 27.24 Total cost $ 488.2 $ 589.2 $ 315.9 $ 75.4 $ 154.7 $ 160.3 - $ 37.6 Common shares remaining under authorization(2) 37.1 25.0 41.0 50.0 27.8 32.6 37.9 37.9 SELECTED RATIOS AND OTHER Long-term debt to equity 224.13% 228.08% 198.28% 198.47% 253.69% 301.11% 309.40% 279.16% Long-term debt to total capitalization 69.15 69.52 66.47 66.50 71.73 75.07 75.57 73.63 Equity to assets* 9.19 9.15 8.83 8.84 8.18 7.49 7.32 7.30 Common equity to assets* 9.19 9.15 8.83 8.84 8.18 7.49 7.32 7.30 Tangible equity to assets(3)* 6.84 6.72 7.65 7.88 7.23 6.59 6.42 6.39 Tangible common equity to assets(3)* 6.84 6.72 7.65 7.88 7.23 6.59 6.42 6.39 Minority interest(4) $ 240 $ 332 $ 164 $ 157 $ 156 $ 151 $ 73 $ 71 2002 FOR THE YEAR ------- -------------------------- 4TH QTR 2004 2003 2002 ------- ------- ------- ------- LONG-TERM DEBT AND BORROWED FUNDS LONG-TERM DEBT: Holding company debt: Senior notes - Subordinated debt $ 2,002 Junior subordinated debentures owed to unconsolidated subsidiary trusts - Other 3 ------- Total holding company debt 2,005 Subsidiary debt: Subordinated debt 1,796 Senior bank notes 14,998 Capital securities 180 FHLB advances 3,751 Secured debt financings - ------- Total subsidiary debt 20,725 ------- TOTAL LONG-TERM DEBT $22,730 ======= BORROWED FUNDS: U.S. Treasury demand notes $ 8,882 Short-term senior bank notes 1,560 Commercial paper and other 1,052 ------- TOTAL BORROWED FUNDS $11,494 ======= STOCKHOLDERS' EQUITY Preferred - Common $ 8,161 ------- TOTAL STOCKHOLDERS' EQUITY $ 8,161 ======= ACCUMULATED OTHER COMPREHENSIVE INCOME, NET OF TAX: SFAS 115 unrealized gain, net $ 223 SFAS 133 unrealized loss, net (156) ------- TOTAL ACCUMULATED OTHER COMPREHENSIVE INCOME, NET OF TAX $ 67 ======= RISK-BASED CAPITAL(1) Tier 1 capital $ 7,116 Total risk-based capital 10,850 Risk-weighted assets 95,416 Tier 1 capital ratio 7.46% Total risk-based capital ratio 11.37 Leverage ratio 6.39 COMMON STOCK REPURCHASE ACTIVITY Number of common shares repurchased 1.3 40.1 11.5 1.3 Average price per share of repurchased common shares $ 25.73 $ 36.64 $ 30.76 $ 25.73 Total cost $ 32.5 $1,468.7 $ 352.6 $ 32.5 Common shares remaining under authorization(2) 14.3 SELECTED RATIOS AND OTHER Long-term debt to equity 278.52% Long-term debt to total capitalization 73.58 Equity to assets* 6.91 Common equity to assets* 6.91 Tangible equity to assets(3)* 5.99 Tangible common equity to assets(3)* 5.99 Minority interest(4) $ 70
(1) Fourth quarter 2004 risk-based capital is based upon preliminary data (2) In December 2004, National City's Board of Directors authorized an additional 25 million shares of issued and outstanding common stock. This new authorization is incremental to the February 2004 share repurchase authorization, for 50 million shares, which replaced all previous share authorizations. (3) Excludes goodwill and other intangible assets (4) Included in other liabilities on the consolidated balance sheet * See note on Summary of Presentation Changes 15 UNAUDITED NATIONAL CITY CORPORATION NONINTEREST INCOME ($ IN MILLIONS)
2004 2003 2002 FOR THE YEAR ---------------------------------- ---------------------------------- ------- -------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 2004 2003 2002 ------- ------- ------- ------- ------- ------- -------- ------- ------- ------ ------ ------ Mortgage banking revenue $ 142 $ 370 $ 193 $ 579 $ 451 ($27) $ 427 $ 631 $ 45 $1,284 $1,482 $ 590 Deposit service charges 175 172 162 147 146 145 142 135 137 656 568 514 Payment processing revenue 23 132 132 122 135 125 113 105 116 409 478 451 Trust and investment management fees 72 74 79 76 72 72 78 69 70 301 291 307 Card-related fees 32 35 38 37 42 42 44 41 46 142 169 157 Other service fees 33 28 29 23 24 28 26 28 26 113 106 102 Brokerage revenue 39 34 34 32 31 33 34 24 26 139 122 109 Leasing revenue 81 87 6 6 8 11 8 10 8 180 37 40 Ineffective hedge and other derivative gains, net(1) 28 2 35 8 25 (11) 79 7 12 73 100 24 Principal investment gains (losses), net 10 19 17 23 - 17 (16) 6 (2) 69 7 (23) Student loan sale gains - 1 15 - - 1 6 - - 16 7 11 Gain on sale of National Processing, Inc. 714 - - - - - - - - 714 - - Gain on sale of Upper Peninsula branches 14 - - - - - - - - 14 - - Gain on sale of Corporate Trust Bond Administration business (3) - 65 - - - - - - 62 - - Initial gain from the securitization of automobile receivables - - - 9 - - - - - 9 - 25 Initial gain from the securitization of credit card receivables - - - - - - - - - - - 25 Consideration from the sale of NAMCO preferred shares - - - - - - - - - - - 5 All other 82 69 56 56 47 48 40 47 44 263 182 157 ------ ------ ------ ------ ------ ----- ------ ------ ------ ------ ------ ------ TOTAL FEES AND OTHER INCOME 1,442 1,023 861 1,118 981 484 981 1,103 528 4,444 3,549 2,494 Bank stock fund 3 - - - 7 1 32 - (16) 3 40 75 Other securities 8 3 5 - 3 4 - - (1) 16 7 6 ------ ------ ------ ------ ------ ----- ------ ------ ------ ------ ------ ------ TOTAL SECURITIES GAINS (LOSSES), NET 11 3 5 - 10 5 32 - (17) 19 47 81 ------ ------ ------ ------ ------ ----- ------ ------ ------ ------ ------ ------ TOTAL NONINTEREST INCOME $1,453 $1,026 $ 866 $1,118 $ 991 $ 489 $1,013 $1,103 $ 511 $4,463 $3,596 $2,575 ====== ====== ====== ====== ====== ===== ====== ====== ====== ====== ====== ====== MEMO: Operating lease intangible amortization(2) ($ 9) ($ 11)
(1) Ineffective hedge and other derivative gains and losses related to mortgage banking activities are included in mortgage banking revenue (2) Represents amortization of operating lease intangible asset recognized in connection with the acquisition of Provident, included in leasing revenue NONINTEREST EXPENSE ($ IN MILLIONS)
2004 2003 2002 FOR THE YEAR -------------------------------- ----------------------------------- -------- --------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 2004 2003 2002 ------- ------- ------- ------- ------- ------- ------- -------- -------- ------ ------ ------ Salaries, benefits, and other personnel $ 685 $ 661 $ 594 $ 549 $ 541 $ 571 $ 542 $ 561 $ 527 $2,489 $2,215 $1,865 Equipment 92 73 69 66 72 55 59 59 60 300 245 222 Net occupancy 69 66 59 60 61 58 56 58 59 254 233 225 Third-party services 95 82 73 68 88 71 71 65 71 318 295 239 Card processing 13 59 60 58 60 54 52 52 54 190 218 211 Telecommunications 22 21 23 19 22 22 19 21 22 85 84 86 Marketing and public relations 33 30 30 22 30 22 67 17 19 115 136 146 Leasing expense 57 63 2 4 3 (5) 5 49 14 126 52 94 Postage 21 22 20 20 19 22 18 20 19 83 79 74 Travel and entertainment 25 22 19 16 19 15 14 13 18 82 61 61 Supplies 19 17 15 14 16 15 15 13 15 65 59 54 State and local taxes 16 16 13 15 16 16 14 16 15 60 62 61 Intangible asset amortization 16 17 7 6 6 6 6 5 6 46 23 21 FDIC assessments 2 3 3 2 3 2 3 2 4 10 10 10 OREO expense, net 3 2 2 2 5 4 6 3 8 9 18 24 Building lease termination penalty - - - - - - 9 - - - 9 - Impairment, fraud, and other losses, net 15 20 26 10 24 14 16 9 34 71 63 136 Loss on commercial paper conduit consolidation - - - - - - - - - - - 16 All other 88 59 60 55 60 66 54 46 66 262 226 185 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ TOTAL NONINTEREST EXPENSE $1,271 $1,233 $1,075 $ 986 $1,045 $1,008 $1,026 $1,009 $1,011 $4,565 $4,088 $3,730 ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== MEMO: Merger integration costs $ 39 $ 28 $ 6 $ 1 $74
16 UNAUDITED NATIONAL CITY CORPORATION SALARIES, BENEFITS, AND OTHER PERSONNEL EXPENSE ($ IN MILLIONS)
2004 2003 --------------------------------------- ------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR -------- -------- ------- ------- ------- ------- ------- ------- Salaries and wages $ 353 $ 363 $ 318 $ 313 $ 313 $ 310 $ 303 $ 299 Incentive compensation 208 198 210 157 167 264 241 171 Deferred personnel costs (94) (99) (104) (81) (101) (145) (155) (110) Stock-based compensation 28 15 12 12 10 10 6 4 Payroll taxes 31 37 36 44 28 33 37 43 Contract labor 62 36 32 19 38 29 23 20 Medical and other benefits 37 54 48 46 45 42 49 44 Defined contribution plans 15 18 17 22 13 14 17 23 Defined benefit pension plan 2 2 3 2 (4) (4) (4) (4) Market valuation adjustments on deferred compensation liabilities 18 4 7 3 19 3 18 (1) Severance and other 25 33 15 12 13 15 7 72 ----- ----- ----- ----- ----- ----- ----- ----- TOTAL SALARIES, BENEFITS, AND OTHER PERSONNEL EXPENSE $ 685 $ 661 $ 594 $ 549 $ 541 $ 571 $ 542 $ 561 ===== ===== ===== ===== ===== ===== ===== ===== 2002 FOR THE YEAR ------- ---------------------------- 4TH QTR 2004 2003 2002 ------- ------- ------- ------- Salaries and wages $ 301 $ 1,347 $ 1,225 $ 1,174 Incentive compensation 230 773 843 639 Deferred personnel costs (125) (378) (511) (361) Stock-based compensation 4 67 30 11 Payroll taxes 29 148 141 125 Contract labor 26 149 110 72 Medical and other benefits 36 185 180 155 Defined contribution plans 15 72 67 62 Defined benefit pension plan (12) 9 (16) (57) Market valuation adjustments on deferred compensation liabilities 6 32 39 (11) Severance and other 17 85 107 56 ----- ------- ------- ------- TOTAL SALARIES, BENEFITS, AND OTHER PERSONNEL EXPENSE $ 527 $ 2,489 $ 2,215 $ 1,865 ===== ======= ======= =======
FULL-TIME EQUIVALENT EMPLOYEES BY LINE OF BUSINESS(1)
2004 2003 2002 ----------------------------------- ------------------------------------ ------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR ------- ------- ------- ------- ------- ------- -------- -------- ------- LINE OF BUSINESS STAFF: Consumer and Small Business Financial Services 12,944 12,678 12,334 11,996 12,093 11,794 11,450 11,472 11,665 Wholesale Banking 2,271 2,261 1,672 1,582 1,562 1,574 1,583 1,739 1,785 National City Mortgage Co.(2) 7,795 7,657 7,800 7,678 7,852 8,191 8,079 7,492 7,156 National Consumer Finance(2) First Franklin Financial Corporation 2,391 2,481 2,241 2,012 1,943 1,721 1,475 1,399 1,291 National City Home Loan Services 325 326 338 328 357 352 344 362 370 National Home Equity 415 415 391 312 311 283 253 230 225 National City Warehouse Resources 69 63 - - - - - - - Provident PCFS(3) 245 437 - - - - - - - ------ ------ ------ ------- ------ ------- ------ ------ ------ Total National Consumer Finance 3,445 3,722 2,970 2,652 2,611 2,356 2,072 1,991 1,886 Asset Management 1,516 1,533 1,511 1,483 1,510 1,505 1,522 1,642 1,733 National Processing(4) - 1,608 1,655 1,671 1,693 1,705 1,689 1,761 1,791 CORPORATE SUPPORT STAFF(5) 7,259 6,933 6,120 5,974 6,010 6,063 6,019 6,536 6,715 ------ ------ ------ ------ ------ ------ ------ ------ ------ TOTAL EMPLOYEES 35,230 36,392 34,062 33,036 33,331 33,188 32,414 32,633 32,731 ====== ====== ====== ====== ====== ====== ====== ====== ======
(1) Represents period-end, active, full-time equivalent employees (2) Effective January 1, 2004, National City Mortgage Co. was designated as a separate line of business. See page 29 of the Line of Business Results section for further details of this reporting change. (3) Provident PCFS was sold effective December 1, 2004 (4) In October 2004, the National Processing business was sold to Bank of America (5) Personnel expense associated with corporate staff are allocated to the lines of business either directly based on usage or indirectly as part of the general overhead allocation process 17 UNAUDITED NATIONAL CITY CORPORATION CREDIT QUALITY STATISTICS ($ IN MILLIONS)
2004 2003 ---------------------------------- ---------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------- ------- ------- ------- ------- ------- ------- ------- LOAN LOSS ALLOWANCE Beginning loan loss allowance* $ 1,178 $1,028 $1,011 $1,023 $ 1,030 $1,053 $1,032 $1,006 Provision for credit losses* 108 100 61 70 145 102 185 196 Allowance related to loans acquired, sold, or securitized 6 147 19 - (2) - - - Charge-offs: Commercial 60 63 17 30 81 43 100 104 Commercial construction 10 2 - - 1 1 1 - Real estate - commercial 8 6 7 2 13 10 5 3 Real estate - residential 34 30 34 28 32 48 31 41 Home equity lines of credit 8 6 7 6 6 6 6 6 Credit card and other unsecured lines of credit 25 26 27 31 27 24 25 22 Other consumer 28 24 25 27 29 27 30 35 ------- ------- ------- ------- ------- ------- ------- ------- Total charge-offs 173 157 117 124 189 159 198 211 ------- ------- ------- ------- ------- ------- ------- ------- Recoveries: Commercial 42 22 23 14 13 9 11 11 Commercial construction 1 - - - - - - - Real estate - commercial 3 4 3 3 3 1 - 1 Real estate - residential 10 18 14 10 10 11 6 10 Home equity lines of credit 2 3 3 2 2 2 1 2 Credit card and other unsecured lines of credit 2 2 2 2 2 2 2 2 Other consumer 9 11 9 11 9 9 14 15 ------- ------- ------- ------- ------- ------- ------- ------- Total recoveries 69 60 54 42 39 34 34 41 ------- ------- ------- ------- ------- ------- ------- ------- Net charge-offs 104 97 63 82 150 125 164 170 ------- ------- ------- ------- ------- ------- ------- ------- Ending loan loss allowance* $ 1,188 $1,178 $1,028 $1,011 $ 1,023 $1,030 $1,053 $1,032 ======= ======= ======= ======= ======= ======= ======= ======= MEMO: Net charge-offs on: Securitized credit cards $ 19 $ 19 $ 21 $ 17 $ 19 $ 20 $ 21 $ 15 Managed credit cards 35 35 39 38 37 35 36 28 Securitized automobile loans 4 3 3 2 2 2 2 3 Managed automobile loans(1) 14 10 10 12 12 11 10 13 Securitized home equity loans - - - - - - - - Managed home equity loans(2) 10 9 - - - - - - NET CHARGE-OFFS AS A % OF AVERAGE PORTFOLIO LOANS (annualized) Commercial .30% .64% (.11)% .34% 1.37% .63% 1.63% 1.67% Commercial construction 1.19 .32 (.07) (.01) .13 .12 .18 .02 Real estate - commercial .18 .09 .16 (.06) .41 .36 .22 .10 Real estate - residential .31 .16 .29 .28 .33 .61 .45 .59 Home equity lines of credit .10 .09 .13 .14 .15 .19 .19 .20 Credit card and other unsecured lines of credit 3.92 4.01 4.66 5.08 4.29 4.13 4.46 3.92 Other consumer .91 .77 .80 .91 1.04 .83 .80 1.09 ------- ------- ------- ------- ------- ------- ------- ------- TOTAL NET CHARGE-OFFS .41% .41% .30% .42% .76% .64% .88% .95% ======= ======= ======= ======= ======= ======= ======= ======= MEMO: Securitized credit cards 5.29% 5.33% 5.69% 4.77% 5.20% 5.35% 5.76% 4.29% Managed credit cards 5.69% 5.78% 6.38% 6.00% 5.82% 5.58% 6.11% 4.71% Securitized automobile loans 1.72% 1.18% .90% .83% 1.67% 1.41% 1.32% 1.39% Managed automobile loans(1) 1.44% 1.08% .96% 1.14% 1.09% .98% .89% 1.23% Securitized home equity loans 1.07% 1.84% - - - - - - Managed home equity loans(2) .16% .16% - - - - - - LENDING-RELATED COMMITMENTS ALLOWANCE* Beginning lending-related commitment allowance $ 127 $ 117 $ 115 $ 102 $ 99 $ 94 $ 96 $ 92 Allowance related to commitments acquired - 12 2 - - - - - Net provision for credit losses (27) (2) - 13 3 5 (2) 4 ------- ------- ------- ------- ------- ------- ------- ------- Ending lending-related commitment allowance $ 100 $ 127 $ 117 $ 115 $ 102 $ 99 $ 94 $ 96 ======= ======= ======= ======= ======= ======= ======= ======= MEMO: Total Provision for Credit Losses $ 81 $ 98 $ 61 $ 83 $ 148 $ 107 $ 183 $ 200 2002 FOR THE YEAR ------- ----------------------- 4TH QTR 2004 2003 2002 ------- ------- ------- ------ LOAN LOSS ALLOWANCE Beginning loan loss allowance* $ 1,009 $1,023 $1,006 $ 925 Provision for credit losses* 137 339 628 661 Allowance related to loans acquired, sold, or securitized - 172 (2) (4) Charge-offs: Commercial 74 170 328 317 Commercial construction - 12 3 2 Real estate - commercial 5 23 31 21 Real estate - residential 26 126 152 86 Home equity lines of credit 7 27 24 21 Credit card and other unsecured lines of credit 21 109 98 83 Other consumer 41 104 121 171 ------- ------ ------ ------ Total charge-offs 174 571 757 701 ------- ------ ------ ------ Recoveries: Commercial 12 101 44 32 Commercial construction - 1 - - Real estate - commercial 1 13 5 5 Real estate - residential 5 52 37 8 Home equity lines of credit 2 10 7 5 Credit card and other unsecured lines of credit 2 8 8 8 Other consumer 12 40 47 67 ------- ------ ------ ------ Total recoveries 34 225 148 125 ------- ------ ------ ------ Net charge-offs 140 346 609 576 ------- ------ ------ ------ Ending loan loss allowance* $ 1,006 $1,188 $1,023 $1,006 ======= ====== ====== ====== MEMO: Net charge-offs on: Securitized credit cards $ 19 $ 76 $ 75 $ 73 Managed credit cards 33 147 136 124 Securitized automobile loans 3 12 9 6 Managed automobile loans(1) 13 46 46 45 Securitized home equity loans - - - - Managed home equity loans(2) - 35 - - NET CHARGE-OFFS AS A % OF AVERAGE PORTFOLIO LOANS (annualized) Commercial 1.05% .31% 1.33% 1.19% Commercial construction (.11) .41 .12 .07 Real estate - commercial .16 .09 .27 .20 Real estate - residential .49 .26 .49 .50 Home equity lines of credit .27 .11 .18 .24 Credit card and other unsecured lines of credit 4.04 4.41 4.21 4.02 Other consumer 1.02 .85 .94 .93 ------- ------ ------ ------ TOTAL NET CHARGE-OFFS .78% .39% .80% .83% ======= ====== ====== ====== MEMO: Securitized credit cards 5.32% 5.27% 5.15% 5.21% Managed credit cards 5.69% 5.96% 5.56% 5.48% Securitized automobile loans 1.17% 1.13% 1.43% .67% Managed automobile loans(1) 1.18% 1.15% 1.04% 1.02% Securitized home equity loans - 1.47% - - Managed home equity loans(2) - .18% - - LENDING-RELATED COMMITMENTS ALLOWANCE* Beginning lending-related commitment allowance $ 70 $ 102 $ 92 $ 71 Allowance related to commitments acquired - 14 - - Net provision for credit losses 22 (16) 10 21 ------- ------ ------ ------ Ending lending-related commitment allowance $ 92 $ 100 $ 102 $ 92 ======= ====== ====== ====== MEMO: Total Provision for Credit Losses $ 159 $ 323 $ 638 $ 682
(1) Represents managed portfolio of indirect prime automobile loans (2) Represents managed portfolio of prime home equity line of credit and home equity installment loans * See note on Summary of Presentation Changes 18 UNAUDITED NATIONAL CITY CORPORATION CREDIT QUALITY STATISTICS (CONTINUED) ($ IN MILLIONS)
2004 2003 2002 ------------------------------------- ------------------------------------- ------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR ------- ------- ------- ------- ------- ------- ------- ------- ------- NONPERFORMING ASSETS Commercial $ 161 $ 212 $ 164 $ 200 $ 257 $ 341 $ 402 $ 379 $ 408 Commercial construction 12 13 2 4 7 9 8 6 6 Real estate - commercial 102 101 89 68 67 65 75 78 60 Real estate - residential: National City Mortgage 108 88 92 124 103 102 97 110 91 First Franklin 59 54 55 55 51 49 47 44 44 Altegra/Loan Zone 1 10 12 41 50 60 66 69 76 Other 26 24 25 13 15 3 12 10 17 ------- ------- ------- ------- ------- ------- ------- ------- ------ Total real estate - residential 194 176 184 233 219 214 222 233 228 ------- ------- ------- ------- ------- ------- ------- ------- ------ Total nonperforming portfolio loans 469 502 439 505 550 629 707 696 702 Other real estate owned (OREO): Commercial 5 18 4 2 2 4 5 3 3 Real estate - residential: National City Mortgage 32 31 35 31 43 44 38 43 40 First Franklin 42 42 38 39 33 34 31 34 34 Altegra/Loan Zone 5 9 15 20 21 28 30 36 38 Other 2 7 3 - - - - - - ------- ------- ------- ------- ------- ------- ------- ------- ------ Total real estate - residential 81 89 91 90 97 106 99 113 112 ------- ------- ------- ------- ------- ------- ------- ------- ------ Other 3 - - - - - - - - Total OREO 89 107 95 92 99 110 104 116 115 Mortgage loans held for sale and other 5 19 10 9 8 17 7 10 - ------- ------- ------- ------- ------- ------- ------- ------- ------ TOTAL NONPERFORMING ASSETS $ 563 $ 628 $ 544 $ 606 $ 657 $ 756 $ 818 $ 822 $ 817 ======= ======= ======= ======= ======= ======= ======= ======= ====== PERCENTAGE OF NONPERFORMING ASSETS BY CATEGORY Commercial 29 % 34 % 30 % 34 % 40 % 45 % 49 % 46 % 50 % Commercial construction 2 2 - 1 1 1 1 1 1 Real estate - commercial 18 16 16 11 10 9 9 9 7 Real estate - residential: National City Mortgage 19 15 17 20 15 14 13 14 12 First Franklin 10 8 10 9 8 6 5 5 5 Altegra/Loan Zone 0 2 2 7 8 8 8 8 9 Other 5 3 5 2 2 - 1 1 2 ------- ------- ------- ------- ------- ------- ------- ------- ------ Total real estate - residential 34 28 34 38 33 28 27 28 28 ------- ------- ------- ------- ------- ------- ------- ------- ------ Total nonperforming portfolio loans 83 80 80 84 84 83 86 84 86 Other real estate owned (OREO): Commercial 1 3 1 - - 1 1 - - Real estate - residential: National City Mortgage 6 5 6 5 7 6 4 6 5 First Franklin 7 7 7 7 5 4 4 4 4 Altegra/Loan Zone 1 1 3 3 3 4 4 4 5 Other 0 1 1 - - - - - - ------- ------- ------- ------- ------- ------- ------ ------- ------ Total real estate - residential 14 14 17 15 15 14 12 14 14 ------- ------- ------- ------- ------- ------- ------ ------- ------ Other 1 - - - - - - - - Total OREO 16 17 18 15 15 15 13 14 14 Mortgage loans held for sale and other 1 3 2 1 1 2 1 2 - ------- ------- ------- ------- ------- ------- ------ ------- ------ TOTAL NONPERFORMING ASSETS 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % ======= ======= ======= ======= ======= ======= ====== ======= ====== DISTRESSED LOAN SALES Distressed loans classified as nonperforming at the end of the previous quarter $ - - $ 1 $ 11 $ 27 $ 28 $ 40 $ 32 Other $ - $ 8 - 15 12 16 25 24 ------- ------- ------- ------- ------- ------- ------- ------- TOTAL DISTRESSED LOANS SOLD - $ 8 $ 1 $ 26 $ 39 $ 44 $ 65 $ 56 ======= ======= ======= ======= ======= ======= ======= ======= RATIOS Nonperforming assets to period-end portfolio loans and other nonperforming assets .56% .64% .64% .76% .83% .97% 1.08% 1.10% 1.13% Nonperforming assets to period-end total assets* .40 .46 .46 .54 .58 .62 .66 .70 .69 Loan loss allowance to nonperforming portfolio loans* 253.42 234.48 234.09 200.41 186.09 163.80 148.73 148.15 143.30 Loan loss allowance to period-end portfolio loans* 1.19 1.21 1.22 1.26 1.29 1.32 1.39 1.38 1.40 Loan loss allowance (period-end) to annualized net charge-offs* 290.31 302.46 407.33 305.75 171.81 208.55 159.72 149.14 181.43
* See note on Summary of Presentation Changes 19 UNAUDITED NATIONAL CITY CORPORATION CREDIT QUALITY STATISTICS (CONTINUED) ($ IN MILLIONS)
2004 2003 2002 ---------------------------------- ---------------------------------- ------- 4th Qtr 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR ------- ------- ------- ------- ------- ------- ------- ------- ------- LOANS 90+ DAYS PAST DUE ACCRUING INTEREST Commercial $ 44 $ 51 $ 39 $ 26 $ 20 $ 38 $ 35 $ 42 $ 41 Commercial construction 12 16 3 10 3 10 14 5 1 Real estate - commercial 29 46 51 35 32 22 26 18 26 Real estate - residential: National City Mortgage and other 168 150 121 131 140 121 125 136 135 First Franklin 295 265 252 235 225 210 190 189 184 Altegra/Loan Zone 3 8 10 50 63 84 115 121 131 National Home Equity 1 - - - - 1 1 1 - ----- ----- ----- ----- ----- ----- ----- ----- ------- Total real estate - residential 467 423 383 416 428 416 431 447 450 ----- ----- ----- ----- ----- ----- ----- ----- ------- Home equity lines of credit 10 9 7 9 15 15 15 14 16 Credit card and other unsecured lines of credit 21 22 22 22 18 15 14 16 8 Other consumer 13 13 10 10 12 11 19 12 19 Mortgage loans held for sale and other 25 48 35 36 37 71 39 57 14 ----- ----- ----- ----- ----- ----- ----- ----- ------- TOTAL LOANS 90+ DAYS PAST DUE $ 621 $ 628 $ 550 $ 564 $ 565 $ 598 $ 593 $ 611 $ 575 ===== ===== ===== ===== ===== ===== ===== ===== =======
TEN LARGEST NONPERFORMING LOANS AS OF DECEMBER 31, 2004 ($ IN MILLIONS)
Amount As a Percentage of Total Major Industry(1) Sub-Industry Portfolio Outstanding Nonperforming Assets - ------------------------------------------------------ ---------------------- ----------- ------------------------ Industrial Air Transportation Commercial Leases $31 5.5% Real estate Non-Residential Real Estate Commercial Real Estate 12 2.1% Real estate Non-Residential Real Estate Commercial Real Estate 9 1.7% Real estate Electrical Contracting Commercial 9 (2) 1.7% Consumer noncyclical Healthcare Commercial/Real Estate 7 1.2% Consumer cyclical Textiles and Leather Commercial 7 1.2% Industrial Transportation Commercial Leases 7 1.2% Real estate Non-Residential Real Estate Commercial Real Estate 7 1.2% Industrial Equipment Service Commercial 7 (2) 1.2% Industrial Glass Commercial 6 1.1% ---- ----- $102 18.1% Total nonperforming assets $563 100.0% Nonperforming assets as a percentage of period-end portfolio loans and other nonperforming assets .56%
(1) Based on Standard Industrial Classification System codes (2) Loan represents a participation in a shared national credit COMMERCIAL LOAN INDUSTRY CONCENTRATION AS OF DECEMBER 31, 2004 ($ IN MILLIONS)
Percent to Average Loan Largest Loan Major Industry(1) Balance Total Balance Per Obligor to a Single Obligor - ------------------------------------------ ------- ---------- ----------------------------------------- Real estate $12,221 30% $ .9 $58 Consumer cyclical 6,006 15% 1.0 87 Consumer noncyclical 4,347 11% .4 53 Industrial 4,004 10% 1.0 36 Basic materials 2,870 7% 1.4 33 Financial 2,201 5% 1.4 39 Services 1,434 3% .4 94 Energy and utilities 645 2% 1.1 20 Technology 276 1% 2.2 24 Miscellaneous 2,368 6% .2 23 Other(2) 1,069 3% ------- --- 37,441 93% Commercial leasing - all industries 2,836 7% ------- --- Total commercial, commercial real estate and commercial construction $40,277 100% ======= ===
(1) Based on Standard Industrial Classification System codes (2) Represents certain commercial and commercial real estate loans acquired in the Provident acquisition that do not have Standard Industrial Classification Codes assigned to them 20 UNAUDITED NATIONAL CITY CORPORATION CONSUMER AND SMALL BUSINESS FINANCIAL SERVICES PERFORMANCE MEASURES
2004 2003 ---------------------------------------- --------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ---------- -------- -------- -------- -------- -------- -------- -------- AVERAGE TOTAL DEPOSITS (1) $ 51,851 $ 52,400 $ 48,531 $ 46,419 $ 46,443 $ 46,003 $ 45,526 $ 44,472 PERIOD-END DEPOSIT ACCOUNT METRICS PERSONAL DEPOSITS: Number of accounts (in thousands): Noninterest bearing checking 1,727 1,750 1,661 1,651 1,645 1,641 1,604 1,574 Interest bearing checking(2) 839 830 750 720 713 709 696 682 Money market savings 565 542 496 457 456 457 449 438 Regular savings 757 795 806 824 824 841 854 871 ---------- -------- -------- -------- -------- -------- -------- -------- TOTAL PERSONAL DEPOSIT ACCOUNTS 3,888 3,917 3,713 3,652 3,638 3,648 3,603 3,565 ========== ======== ======== ======== ======== ======== ======== ======== Average account size: Noninterest bearing checking $ 2,185 $ 2,011 $ 2,001 $ 1,956 $ 1,916 $ 1,833 $ 1,938 $ 1,986 Interest bearing checking(2) 9,636 9,579 10,548 11,095 11,128 10,796 10,661 10,362 Money market savings 24,566 26,358 28,869 30,743 30,369 30,298 30,044 29,835 Regular savings 2,816 2,735 2,822 2,607 2,519 2,498 2,530 2,504 ---------- -------- -------- -------- -------- -------- -------- -------- TOTAL AVERAGE ACCOUNT SIZE $ 7,171 $ 7,128 $ 7,493 $ 7,505 $ 7,422 $ 7,292 $ 7,261 $ 7,133 ========== ======== ======== ======== ======== ======== ======== ======== BUSINESS DEPOSITS: Number of accounts (in thousands)(2) 374 372 336 320 315 308 297 286 Average account size(2) $ 19,766 $ 20,538 $ 19,775 $ 19,587 $ 19,006 $ 19,269 $ 19,211 $ 18,413 TIME DEPOSITS: Number of accounts (in thousands) 921 936 805 782 801 818 851 882 Average account size $ 17,386 $ 16,985 $ 16,451 $ 15,900 $ 15,816 $ 15,622 $ 15,521 $ 15,560 CONSUMER LOAN PRODUCTION METRICS (# OF LOANS)(3) Installment loan originations: Home equity(4)(6) 6,458 7,930 7,348 5,705 7,318 16,532 12,497 7,520 Other(5) 4,448 5,277 5,060 4,238 4,576 6,199 5,536 4,697 Home equity(6) and other lines of credit 18,608 24,775 22,598 15,289 17,340 23,946 26,974 19,406 ---------- -------- -------- -------- -------- -------- -------- -------- TOTAL CONSUMER LOAN ORIGINATIONS 29,514 37,982 35,006 25,232 29,234 46,677 45,007 31,623 ========== ======== ======== ======== ======== ======== ======== ======== BANK BRANCHES Traditional 1,179 1,161 1,100 1,065 1,067 1,071 1,070 1,076 In-store 43 45 42 42 47 51 53 63 ---------- -------- -------- -------- -------- -------- -------- -------- TOTAL BANK BRANCHES 1,222 1,206 1,142 1,107 1,114 1,122 1,123 1,139 ========== ======== ======== ======== ======== ======== ======== ======== ATMS 1,948 1,931 1,642 1,565 1,574 1,580 1,583 1,607 ONLINE BANKING CUSTOMERS 1,014,403 975,392 900,074 850,784 793,910 740,976 664,283 599,411 SELECTED AVERAGE PORTFOLIO LOAN BALANCES:(1) DEALER FINANCE Floorplan and other commercial (commercial) $ 1,143 $ 1,156 $ 1,136 $ 1,082 $ 987 $ 954 $ 1,042 $ 1,009 Automobile leases (other consumer) 561 618 83 127 177 270 379 518 Installment loans (other consumer): Installment loans 5,788 5,686 5,435 5,656 6,339 6,307 6,034 5,828 Securitized automobile loans(7) 944 1,051 1,196 1,012 530 610 698 791 ---------- -------- -------- -------- -------- -------- -------- -------- Total managed installment loans 6,732 6,737 6,631 6,668 6,869 6,917 6,732 6,619 ---------- -------- -------- -------- -------- -------- -------- -------- TOTAL DEALER FINANCE $ 8,436 $ 8,511 $ 7,850 $ 7,877 $ 8,033 $ 8,141 $ 8,153 $ 8,146 ========== ======== ======== ======== ======== ======== ======== ======== EDUCATION FINANCE Student loans (other consumer) $ 713 $ 454 $ 820 $ 1,092 $ 716 $ 471 $ 600 $750 Commercial loan (commercial) - - - - 417 298 352 749 ---------- -------- -------- -------- -------- -------- -------- -------- TOTAL EDUCATION FINANCE $ 713 $ 454 $ 820 $ 1,092 $ 1,133 $ 769 $ 952 $ 1,499 ========== ======== ======== ======== ======== ======== ======== ======== NATIONAL CITY CARD SERVICES (NCCS) Credit cards $ 994 $ 990 $ 986 $ 1,054 $ 1,044 $ 1,003 $ 939 $ 915 Securitized credit cards (7) 1,450 1,450 1,450 1,450 1,450 1,450 1,450 1,450 ---------- -------- -------- -------- -------- -------- -------- -------- TOTAL MANAGED NCCS CREDIT CARDS $ 2,444 $ 2,440 $ 2,436 $ 2,504 $ 2,494 $ 2,453 $ 2,389 $ 2,365 ========== ======== ======== ======== ======== ======== ======== ======== 2002 For the year -------- ---------------------------- 4TH QTR 2004 2003 2002 -------- -------- -------- -------- AVERAGE TOTAL DEPOSITS (1) $ 44,007 PERIOD-END DEPOSIT ACCOUNT METRICS PERSONAL DEPOSITS: Number of accounts (in thousands): Noninterest bearing checking 1,562 Interest bearing checking(2) 665 Money market savings 425 Regular savings 888 -------- TOTAL PERSONAL DEPOSIT ACCOUNTS 3,540 ======== Average account size: Noninterest bearing checking $ 1,869 Interest bearing checking(2) 9,904 Money market savings 29,385 Regular savings 2,416 -------- TOTAL AVERAGE ACCOUNT SIZE $ 6,816 ======== BUSINESS DEPOSITS: Number of accounts (in thousands)(2) 273 Average account size(2) $ 19,061 TIME DEPOSITS: Number of accounts (in thousands) 909 Average account size $ 15,656 CONSUMER LOAN PRODUCTION METRICS (# OF LOANS)(3) Installment loan originations: Home equity(4)(6) 10,664 Other(5) 5,446 Home equity(6) and other lines of credit 23,310 -------- TOTAL CONSUMER LOAN ORIGINATIONS 39,420 ======== BANK BRANCHES Traditional 1,075 In-store 68 -------- TOTAL BANK BRANCHES 1,143 ======== ATMS 1,610 ONLINE BANKING CUSTOMERS 533,780 SELECTED AVERAGE PORTFOLIO LOAN BALANCES:(1) DEALER FINANCE Floorplan and other commercial (commercial) $ 939 $1,129 $ 998 $ 871 Automobile leases (other consumer) 629 349 339 879 Installment loans (other consumer): Installment loans 5,844 5,650 6,139 5,614 Securitized automobile loans(7) 877 1,054 656 739 -------- ------ ------ ------ Total managed installment loans 6,721 6,704 6,795 6,353 -------- ------ ------ ------ TOTAL DEALER FINANCE $ 8,289 $8,182 $8,132 $8,103 ======== ====== ====== ====== EDUCATION FINANCE Student loans (other consumer) $ 474 $ 769 $ 634 $ 590 Commercial loan (commercial) 416 - 453 233 -------- ------ ------ ------ TOTAL EDUCATION FINANCE $ 890 $ 769 $1,087 $ 823 ======== ====== ====== ====== NATIONAL CITY CARD SERVICES (NCCS) Credit cards $ 863 $1,006 $ 976 $ 835 Securitized credit cards (7) 1,450 1,450 1,450 1,415 -------- ------ ------ ------ TOTAL MANAGED NCCS CREDIT CARDS $ 2,313 $2,456 $2,426 $2,250 ======== ====== ====== ======
(1) In millions. (2) Restated to reflect the transfer of deposits to the Wholesale Banking line of business in January 2004. (3) Excludes Dealer Finance, Education Finance, and National City Card Services. Additionally, home equity loans generated by the National Home Equity division of the National Consumer Finance line of business are excluded from these metrics. (4) Represents closed-end home equity installment loans included in real estate residential portfolio loans on the consolidated balance sheet. (5) Includes automobile, truck, boat, recreational vehicle, and other secured installment loans. (6) See additional home equity portfolio statistics on page 27. (7) Securitized credit cards and automobile loans are managed by these C&SBFS business units. See page 10 for further information on these securitized balances. 21 UNAUDITED NATIONAL CITY CORPORATION ASSET MANAGEMENT PERFORMANCE MEASURES ($ IN MILLIONS)
2004 2003 ------------------------------------------ --------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR -------- -------- --------- -------- -------- -------- -------- -------- ASSETS UNDER ADMINISTRATION Managed assets: Value at beginning of period $ 60,322 $ 59,757 $ 59,730 $ 59,708 $ 58,609 $ 58,690 $ 55,179 $ 57,571 Acquisitions 257 3,218 645 - - - - - Estimated change due to market impact 113 (702) 258 1,034 2,914 493 3,376 (188) Other activity, net 2,346 (1,951) (876) (1,012) (1,815) (574) 135 (2,204) -------- -------- --------- -------- -------- -------- -------- -------- Value at end of period 63,038 60,322 59,757 59,730 59,708 58,609 58,690 55,179 -------- -------- --------- -------- -------- -------- -------- -------- Non-managed assets: Value at beginning of period 47,327 41,096 52,219 52,139 48,317 48,987 45,929 73,752 Acquisitions 137 6,710 54 - - - - - Divestiture(1) - - (10,805) - - - - - Estimated change due to market impact 2,917 (450) 82 531 3,326 (246) 3,776 (1,814) Other activity, net (4,642) (29) (454) (451) 496 (424) (718) (26,009) -------- -------- --------- -------- -------- -------- -------- -------- Value at end of period 45,739 47,327 41,096 52,219 52,139 48,317 48,987 45,929 -------- -------- --------- -------- -------- -------- -------- -------- TOTAL ASSETS AT END OF PERIOD $108,777 $107,649 $100,853 $111,949 $111,847 $106,926 $107,677 $101,108 ======== ======== ======== ======== ======== ======== ======== ======== PROPRIETARY MUTUAL FUND ASSETS (included above) $ 13,483 $ 13,446 $ 14,131 $ 14,361 $ 15,335 $ 14,850 $ 15,831 $ 15,186 ASSETS UNDER ADMINISTRATION REPRESENTED BY: Type of investment: Money market and other $ 11,992 $ 16,834 $ 12,958 $ 14,598 $ 15,729 $ 15,871 $ 15,760 $ 15,144 Equity 59,057 57,004 56,098 56,166 55,319 49,966 50,647 45,364 Fixed income 37,728 33,811 31,797 41,185 40,799 41,089 41,270 40,600 -------- -------- --------- -------- -------- -------- -------- -------- TOTAL $108,777 $107,649 $100,853 $111,949 $111,847 $106,926 $107,677 $101,108 ======== ======== ======== ======== ======== ======== ======== ======== Type of business: Investment management and personal trust $ 54,074 $ 52,070 $ 53,175 $ 53,385 $ 50,475 $ 47,991 $ 48,866 $ 46,246 Corporate trust 13,380 7,076 6,833 17,316 18,788 19,333 18,006 17,312 Retirement plan services 18,459 18,172 18,243 18,215 18,418 16,703 17,514 15,826 Charitable and endowment 11,318 10,882 11,068 11,203 12,244 11,710 11,864 11,030 Other 11,546 19,449 11,534 11,830 11,922 11,189 11,427 10,694 -------- -------- --------- -------- -------- -------- -------- -------- TOTAL $108,777 $107,649 $100,853 $111,949 $111,847 $106,926 $107,677 $101,108 ======== ======== ======== ======== ======== ======== ======== ======== PERCENTAGE OF ASSETS UNDER ADMINISTRATION REPRESENTED BY: Type of investment: Money market and other 11% 16% 13% 13% 14% 15% 15% 15% Equity 54% 53% 56% 50% 50% 47% 47% 45% Fixed income 35% 31% 31% 37% 36% 38% 38% 40% Type of business: Investment management and personal trust 50% 48% 53% 48% 45% 45% 45% 45% Corporate trust 12% 7% 7% 15% 17% 18% 17% 17% Retirement plan services 17% 17% 18% 16% 16% 16% 16% 16% Charitable and endowment 10% 10% 11% 10% 11% 11% 11% 11% Other 11% 18% 11% 11% 11% 10% 11% 11% 2002 FOR THE YEAR --------- ------------------------------- 4TH QTR 2004 2003 2002 --------- -------- -------- -------- ASSETS UNDER ADMINISTRATION Managed assets: Value at beginning of period $ 56,975 $ 59,708 $ 57,571 $ 65,000 Acquisitions - 4,120 - - Estimated change due to market impact 682 703 6,595 (5,768) Other activity, net (86) (1,493) (4,458) (1,661) -------- -------- -------- -------- Value at end of period 57,571 63,038 59,708 57,571 -------- -------- -------- -------- Non-managed assets: Value at beginning of period 72,210 $ 52,139 $ 73,752 $ 82,160 Acquisitions - 6,901 - - Divestiture(1) - (10,805) - - Estimated change due to market impact 3,894 3,080 5,042 (6,067) Other activity, net (2,352) (5,576) (26,655) (2,341) -------- -------- -------- -------- Value at end of period 73,752 45,739 52,139 73,752 -------- -------- -------- -------- TOTAL ASSETS AT END OF PERIOD $131,323 $108,777 $111,847 $131,323 ======== ======== ======== ======== PROPRIETARY MUTUAL FUND ASSETS (included above) $ 16,014 ASSETS UNDER ADMINISTRATION REPRESENTED BY: Type of investment: Money market and other $ 16,359 Equity 53,968 Fixed income 60,996 -------- TOTAL $131,323 ======== Type of business: Investment management and personal trust $ 46,994 Corporate trust 45,500 Retirement plan services 16,487 Charitable and endowment 11,741 Other 10,601 -------- TOTAL $131,323 ======== PERCENTAGE OF ASSETS UNDER ADMINISTRATION REPRESENTED BY: Type of investment: Money market and other 13% Equity 41% Fixed income 46% Type of business: Investment management and personal trust 35% Corporate trust 35% Retirement plan services 13% Charitable and endowment 9% Other 8%
(1) Relates to the sale of the Corporate Trust Bond Administration business on June 30, 2004 22 UNAUDITED NATIONAL CITY CORPORATION MORTGAGE BANKING STATISTICS ($ IN MILLIONS)
2004 2003 ---------------------------------- ---------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------- ------- ------- ------- ------- ------- ------- ------- REVENUE SUMMARY Production revenue: National City Mortgage Co. (NCMC) $ 79 $ 80 $ 110 $ 122 $ 334 ($ 152) $ 273 $ 426 First Franklin 77 128 165 141 65 95 88 69 ------- ------- ------- ------- ------- ------- ------- ------- Total production revenue 156 208 275 263 399 (57) 361 495 Net servicing revenue (NCMC) (17) 157 (82) 316 52 30 66 136 Provident PCFS mortgage banking revenue 3 5 - - - - - - ------- ------- ------- ------- ------- ------- ------- ------- TOTAL MORTGAGE BANKING REVENUE $ 142 $ 370 $ 193 $ 579 $ 451 ($ 27) $ 427 $ 631 ======= ======= ======= ======= ======= ======= ======= ======= NCMC PRODUCTION REVENUE COMPONENTS: Gain on sale (1) $ 128 $ 120 $ 201 $ 198 Estimated effect of delayed delivery(2) (42) (51) (61) (76) Hedge results(3) 3 10 (57) 26 Disallowed valuation adjustments(4) (15) - 16 (35) Other (5) 5 1 11 9 ------- ------- ------- ------- TOTAL NCMC PRODUCTION REVENUE $ 79 $ 80 $ 110 $ 122 ======= ======= ======= ======= Gain on sale percentage(6) .98% .83% 1.18% 1.26% PRODUCTION DATA APPLICATIONS(7): NCMC $24,311 $26,411 $25,306 $30,493 $20,548 $31,104 $57,849 $45,073 First Franklin 11,311 12,975 15,703 9,998 10,380 10,935 8,262 6,763 ------- ------- ------- ------- ------- ------- ------- ------- TOTAL APPLICATIONS $35,622 $39,386 $41,009 $40,491 $30,928 $42,039 $66,111 $51,836 ======= ======= ======= ======= ======= ======= ======= ======= ORIGINATIONS: NCMC Retail 8,057 $ 7,735 $ 9,838 $ 7,393 $ 7,193 $15,475 $15,312 $11,325 NCMC Wholesale 8,355 7,765 8,890 7,631 7,921 16,283 18,358 13,694 Less: portfolio loan originations(8) (1,343) (1,381) (1,452) (945) (910) (1,159) (1,226) (1,250) ------- ------- ------- ------- ------- ------- ------- ------- Total NCMC originations for sale 15,069 14,119 17,276 14,079 14,204 30,599 32,444 23,769 Total First Franklin loan originations 6,953 7,743 8,782 5,673 6,203 6,051 4,396 3,488 Less: portfolio loan originations (2,594) (2,835) (3,056) (1,113) (3,227) (3,250) (2,000) (1,756) ------- ------- ------- ------- ------- ------- ------- ------- Total First Franklin originations for sale 4,359 4,908 5,726 4,560 2,976 2,801 2,396 1,732 ------- ------- ------- ------- ------- ------- ------- ------- TOTAL LOANS ORIGINATED FOR SALE $19,428 $19,027 $23,002 $18,639 $17,180 $33,400 $34,840 $25,501 ======= ======= ======= ======= ======= ======= ======= ======= PERCENTAGE OF NCMC ORIGINATIONS REPRESENTED BY: Refinances 55% 43% 55% 61% 52% 71% 75% 76% Government loans 10% 15% 15% 17% 18% 15% 15% 16% Adjustable-rate loans 33% 38% 32% 25% 20% 10% 6% 7% PERCENTAGE OF FIRST FRANKLIN ORIGINATIONS REPRESENTED BY: Refinances 35% 32% 34% 34% 28% 28% 29% 34% Adjustable-rate loans 78% 80% 76% 80% 83% 79% 74% 71% GEOGRAPHIC MIX OF ORIGINATIONS(9): Top five states and their percentage to total NCMC originations: California 18% 18% 18% 21% 23% 19% 21% 19% Maryland 9% 8% 8% 7% 6% 8% 8% 8% Virginia 8% 9% 9% 8% 7% 8% 8% 7% Illinois 6% 6% 6% 6% 6% 6% 6% 6% Texas 6% 6% 6% 5% 5% 6% 6% 6% LOAN SALES NCMC loans sold servicing retained $12,604 $14,042 $16,735 $15,412 $21,824 $33,140 $26,954 $25,400 NCMC loans sold servicing released(10) 500 417 312 285 340 322 323 211 ------- ------- ------- ------- ------- ------- ------- ------- Total NCMC loan sales 13,104 14,459 17,047 15,697 22,164 33,462 27,277 25,611 First Franklin loans sold servicing retained 1,919 - - - - - - - First Franklin loans sold servicing released(10) 2,277 5,566 4,887 4,433 2,379 2,543 2,164 1,851 ------- ------- ------- ------- ------- ------- ------- ------- Total First Franklin loan sales 4,196 5,566 4,887 4,433 2,379 2,543 2,164 1,851 ------- ------- ------- ------- ------- ------- ------- ------- TOTAL MORTGAGE LOAN SALES $17,300 $20,025 $21,934 $20,130 $24,543 $36,005 $29,441 $27,462 ======= ======= ======= ======= ======= ======= ======= ======= 2002 FOR THE YEAR ------- ----------------------------- 4TH QTR 2004 2003 2002 ------- -------- -------- -------- REVENUE SUMMARY Production revenue: National City Mortgage Co. (NCMC) ($ 45) $ 391 $ 881 $ 230 First Franklin 69 511 317 153 ------- -------- -------- -------- Total production revenue 24 902 1,198 383 Net servicing revenue (NCMC) 21 374 284 207 Provident PCFS mortgage banking revenue - 8 - - ------- -------- -------- -------- TOTAL MORTGAGE BANKING REVENUE $ 45 $ 1,284 $ 1,482 $ 590 ======= ======== ======== ======== NCMC PRODUCTION REVENUE COMPONENTS: Gain on sale (1) Estimated effect of delayed delivery(2) Hedge results(3) Disallowed valuation adjustments(4) Other (5) TOTAL NCMC PRODUCTION REVENUE Gain on sale percentage(6) PRODUCTION DATA APPLICATIONS(7): NCMC $38,985 106,521 $154,574 $126,205 First Franklin 6,862 49,987 36,340 24,399 ------- -------- -------- -------- TOTAL APPLICATIONS $45,847 $156,508 $190,914 $150,604 ======= ======== ======== ======== ORIGINATIONS: NCMC Retail $13,816 33,023 $ 49,305 $ 36,334 NCMC Wholesale 15,673 32,641 56,256 43,144 Less: portfolio loan originations(8) (571) (5,121) (4,545) (1,789) ------- -------- -------- -------- Total NCMC originations for sale 28,918 60,543 101,016 77,689 Total First Franklin loan originations 3,606 29,151 20,138 10,717 Less: portfolio loan originations (1,643) (9,598) (10,233) (5,547) ------- -------- -------- -------- Total First Franklin originations for sale 1,963 19,553 9,905 5,170 ------- -------- -------- -------- TOTAL LOANS ORIGINATED FOR SALE $30,881 $ 80,096 $110,921 $ 82,859 ======= ======== ======== ======== PERCENTAGE OF NCMC ORIGINATIONS REPRESENTED BY: Refinances 77% 54% 71% 65% Government loans 14% 14% 16% 17% Adjustable-rate loans 7% 32% 10% 9% PERCENTAGE OF FIRST FRANKLIN ORIGINATIONS REPRESENTED BY: Refinances 33% 34% 30% 29% Adjustable-rate loans 71% 78% 78% 74% GEOGRAPHIC MIX OF ORIGINATIONS(9): Top five states and their percentage to total NCMC originations: California 19% 19% 20% 20% Maryland 8% 8% 8% 7% Virginia 7% 9% 7% 7% Illinois 6% 6% 6% 6% Texas 6% 6% 6% 5% LOAN SALES NCMC loans sold servicing retained $20,012 58,793 $107,318 $66,291 NCMC loans sold servicing released(10) 241 1,514 1,196 1,262 ------- -------- -------- ------- Total NCMC loan sales 20,253 60,307 108,514 67,553 First Franklin loans sold servicing retained - 1,919 - - First Franklin loans sold servicing released(10) 1,810 17,163 8,937 4,559 ------- -------- -------- ------- Total First Franklin loan sales 1,810 19,082 8,937 4,559 ------- -------- -------- ------- TOTAL MORTGAGE LOAN SALES $22,063 $ 79,389 $117,451 $72,112 ======= ======== ======== =======
(1) Represents fee income, sales gains, and servicing value of loans originated and sold, net of direct origination costs. (2) Represents the estimated effect on mortgage banking revenue of delayed delivery of mortgage loans to the secondary market (i.e., roll charges), which is offset for the most part by a related increase in interest income due to the loans being held for sale for a longer period of time. (3) Represents the results of hedging pipeline, warehouse, and the anticipated mortgage servicing rights (MSR) for the period beginning with lock commitment and ending with sale settlement. (4) Represents timing differences for disallowed warehouse and MSR valuation changes related to failed SFAS 133 effectiveness tests and anticipated MSR valuation changes related to interest rate lock commitments not recorded pursuant to SAB 105. In addition, the first quarter of 2004 reflects the one-time revenue recognition impact of adopting SAB 105. (5) Represents primarily GNMA early buyout program revenue. (6) Calculated as gain on sale divided by the dollar volume of loans sold for the period. (7) Represents applications for both loans originated for sale and to be held in portfolio. (8) Primarily represents second mortgages originated for National Home Equity. (9) Based on the dollar volume of loans originated for sale. Percentages not shown for states that are not one of the top five. (10) Represents loan sales of new originations whereby the commitment to sell both the loan and related servicing was made simultaneously. 23 UNAUDITED NATIONAL CITY CORPORATION MORTGAGE BANKING STATISTICS (CONTINUED) ($ IN MILLIONS)
2004 2003 ----------------------------------- ------------------------------------ 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------- ------- ------- ------- ------- ------- ------- ------- NCMC NET SERVICING REVENUE COMPONENTS Net servicing fees $ 121 $ 122 $ 115 $ 120 $ 116 $ 94 $ 92 $ 120 Amortization of mortgage servicing assets (MSRs) (128) (125) (140) (100) (73) (190) (125) (126) MSR SFAS 140 impairment (charge) recovery (24) (5) 42 (118) 13 207 (125) 100 MSR SFAS 133 hedge and other derivative gains(losses): Gains (losses) on MSRs hedged under SFAS 133 143 (543) 607 (18) (22) (50) (83) (41) Gains (losses) on derivatives in SFAS 133 relationships (211) 537 (665) 24 16 16 139 67 Gains (losses) on other derivatives used to economically hedge MSRs 82 171 (41) 407 (3) (47) 168 16 Other - - - 1 5 - - - ------ ------ ------ ------ ------ ------- ------- ------- NET SERVICING REVENUE ($ 17) $ 157 ($ 82) $ 316 $ 52 $ 30 $ 66 $ 136 ====== ====== ====== ====== ====== ======= ======= ======= NCMC MORTGAGE SERVICING ASSETS Carrying value at beginning of period $1,465 $2,004 $1,320 $1,301 $1,152 $ 955 $1,047 $ 950 Additions 119 130 219 140 253 440 258 266 Amortization (128) (125) (140) (100) (73) (190) (125) (126) SFAS 133 hedge basis adjustments 143 (543) 607 (18) (22) (50) (83) (41) Application of valuation allowance to directly write- down Servicing assets - - - - - - (137) - Sales (2) (1) (2) (3) (9) (3) (5) (2) ------ ------ ------ ------ ------ ------- ------ ------ CARRYING VALUE BEFORE VALUATION ALLOWANCE AT END OF PERIOD $1,597 $1,465 $2,004 $1,320 $1,301 $ 1,152 $ 955 $1,047 ====== ====== ====== ====== ====== ======= ====== ====== VALUATION ALLOWANCE Balance at beginning of period ($ 83) ($ 78) ($ 120) ($ 2) ($ 15) ($ 222) ($ 234) ($ 334) Impairment recoveries (charges) (24) (5) 42 (118) 13 207 (125) 100 Application of valuation allowance to directly write -down servicing assets - - - - - - 137 - ------ ------ ------ ------ ------ ------- ------ ------ BALANCE AT END OF PERIOD ($ 107) ($ 83) ($ 78) ($ 120) ($ 2) ($ 15) ($ 222) ($ 234) ====== ====== ====== ====== ====== ======= ====== ====== NET CARRYING VALUE OF MORTGAGE SERVICING ASSETS AT END OF PERIOD $1,490 $1,382 $1,926 $1,200 $1,299 $ 1,137 $ 733 $ 813 ====== ====== ====== ====== ====== ======= ====== ======= FAIR VALUE AT END OF PERIOD $1,502 $1,394 $1,955 $1,240 $1,444 $ 1,140 $ 733 $ 813 ====== ====== ====== ====== ====== ======= ====== ====== RATIO OF CARRYING VALUE OF MSRS TO TOTAL MORTGAGE LOANS SERVICED FOR THIRD PARTIES .98% .92% 1.31% .83% .92% .88% .61% .72% RATIO OF FAIR VALUE OF MSRS TO TOTAL MORTGAGE LOANS SERVICED FOR THIRD PARTIES .99% .93% 1.33% .86% 1.02% .88% .61% .72% NCMC SERVICING ASSET CAPITALIZATION RATE .94% .93% 1.31% .91% 1.16% 1.33% .96% 1.05% SERVICING PREPAYMENT RATE (ANNUALIZED) 25% 22% 35% 26% 24% 65% 66% 50% NCMC ECONOMIC MSR PERFORMANCE(1) Net servicing fees and other $ 121 $ 122 $ 115 $ 121 $ 121 $ 94 $ 92 $ 120 Amortization of MSRs (128) (125) (140) (100) (73) (190) (125) (126) Recognized change in fair value of MSRs: SFAS 133 gains (losses) 143 (543) 607 (18) (22) (50) (83) (41) SFAS 140 impairment (charge) recovery (24) (5) 42 (118) 13 207 (125) 100 Change in MSR fair value not recognized(2) - (17) (10) (106) 145 - - - ------ ------ ------ ------ ------ ------- ------ ------ Total change in fair value of MSRs 119 (565) 639 (242) 136 157 (208) 59 ------ ------ ------ ------ ------ ------- ------ ------ Recognized change in fair value of derivatives: Derivatives included in SFAS 133 relationship (211) 537 (665) 24 16 16 139 67 Other derivatives used to economically hedge MSRs 82 171 (41) 407 (3) (47) 168 16 ------ ------ ------ ------ ------ ------- ------ ------ Total change in fair value of derivatives (129) 708 (706) 431 13 (31) 307 83 ------ ------ ------ ------ ------ ------- ------ ------ NET ECONOMIC MSR PERFORMANCE ($ 17) $ 140 ($ 92) $ 210 $ 197 $ 30 $ 66 $ 136 ====== ====== ====== ====== ====== ======= ====== ====== NCHLS MORTGAGE SERVICING ASSETS(3) Carrying value at beginning of period - Additions $ 15 Amortization - Sales - ------ BALANCE AT END OF PERIOD $ 15 ====== MEMO: Total Mortgage Servicing Assets $1,505
2002 FOR THE YEAR ------- ---------------------------- 4TH QTR 2004 2003 2002 ------- -------- -------- ----- NCMC NET SERVICING REVENUE COMPONENTS Net servicing fees $ 89 $ 478 $ 422 $ 368 Amortization of mortgage servicing assets (MSRs) (127) (493) (514) (358) MSR SFAS 140 impairment (charge) recovery (36) (105) 195 (246) MSR SFAS 133 hedge and other derivative gains(losses): Gains (losses) on MSRs hedged under SFAS 133 (93) 189 (196) (716) Gains (losses) on derivatives in SFAS 133 relationships 142 (315) 238 981 Gains (losses) on other derivatives used to economically hedge MSRs 46 619 134 178 Other - 1 5 - ------ -------- -------- ------ NET SERVICING REVENUE $ 21 $ 374 $ 284 $ 207 ====== ======== ======== ====== NCMC MORTGAGE SERVICING ASSETS Carrying value at beginning of period $ 989 $ 1,301 $ 950 $1,224 Additions 184 608 1,217 827 Amortization (127) (493) (514) (358) SFAS 133 hedge basis adjustments (93) 189 (196) (716) Application of valuation allowance to directly write- down servicing assets - - (137) - Sales (3) (8) (19) (27) ------ -------- -------- ------ CARRYING VALUE BEFORE VALUATION ALLOWANCE AT END OF PERIOD $ 950 $ 1,597 $ 1,301 $ 950 ====== ======== ======== ====== VALUATION ALLOWANCE Balance at beginning of period $ (298) ($ 2) ($ 334) ($ 88) Impairment recoveries (charges) (36) (105) 195 (246) Application of valuation allowance to directly write -down Servicing assets - - 137 - ------ -------- -------- ------ BALANCE AT END OF PERIOD $ (334) ($ 107) ($ 2) ($ 334) ====== ======== ======== ====== NET CARRYING VALUE OF MORTGAGE SERVICING ASSETS AT END OF PERIOD $ 661 $ 1,490 $ 1,299 $ 616 ====== ======== ======== ====== FAIR VALUE AT END OF PERIOD $ 616 $ 1,502 $ 1,444 $ 616 ====== ======== ======== ====== RATIO OF CARRYING VALUE OF MSRS TO TOTAL MORTGAGE LOANS SERVICED FOR THIRD PARTIES .60% RATIO OF FAIR VALUE OF MSRS TO TOTAL MORTGAGE LOANS SERVICED FOR THIRD PARTIES .60% NCMC SERVICING ASSET CAPITALIZATION RATE .92% 1.03% 1.13% 1.25% SERVICING PREPAYMENT RATE (ANNUALIZED) 61% NCMC ECONOMIC MSR PERFORMANCE(1) Net servicing fees and other $ 89 $ 479 $ 427 $ 368 Amortization of MSRs (127) (493) (514) (358) Recognized change in fair value of MSRs: SFAS 133 gains (losses) (93) 189 (196) (716) SFAS 140 impairment (charge) recovery (36) (105) 195 (246) Change in MSR fair value not recognized(2) - (133) 145 - ------ -------- -------- ------ Total change in fair value of MSRs (129) (49) 144 (962) ------ -------- -------- ------ Recognized change in fair value of derivatives: Derivatives included in SFAS 133 relationship 142 (315) 238 981 Other derivatives used to economically hedge MSRs 46 619 134 178 ------ -------- -------- ------ Total change in fair value of derivatives 188 304 372 1,159 ------ -------- -------- ------ NET ECONOMIC MSR PERFORMANCE $ 21 $ 241 $ 429 $ 207 ====== ======== ======== ======
(1) The purpose of this disclosure is to present the economic results for the MSR and related hedges as certain changes in the fair value of the servicing assets cannot be recognized in the period in which the change occurs (2) Represents increase in the fair value of certain MSRs accounted for under SFAS 140 that could not be written up above their cost basis (original cost basis less accumulated amortization and SFAS 133 hedge basis adjustments) (3) Represents mortgage servicing assets associated with First Franklin loans sold servicing retained. 24 UNAUDITED NATIONAL CITY CORPORATION MORTGAGE BANKING STATISTICS (CONTINUED) ($ IN MILLIONS)
2004 -------------------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ----------- ----------- ----------- ----------- NCMC SERVICING DATA Rollforward of servicing portfolio (UPB): Beginning balance $ 150,329 $ 146,958 $ 144,598 $ 141,146 Additions 12,604 14,042 16,735 15,412 Repayments (9,680) (8,200) (13,174) (9,753) Other reductions(1) (886) (2,471) (1,201) (2,207) ----------- ----------- ----------- ----------- Ending balance $ 152,367 $ 150,329 $ 146,958 $ 144,598 =========== =========== =========== =========== Servicing portfolio composition (UPB): Conventional $ 93,044 $ 92,134 $ 92,398 $ 91,527 Government 26,158 26,804 26,260 26,248 Jumbo and other 33,165 31,391 28,300 26,823 ----------- ----------- ----------- ----------- TOTAL MORTGAGE LOANS SERVICED FOR THIRD PARTIES $ 152,367 $ 150,329 $ 146,958 $ 144,598 =========== =========== =========== =========== NATIONAL SERVICER RANKING(2) 9 9 9 SERVICING PORTFOLIO METRICS: Number of loans 1,065,670 1,058,130 1,044,181 1,036,235 Average loan size $ 142,978 $ 142,070 $ 140,740 $ 139,542 Weighted-average note rate 5.80% 5.82% 5.84% 5.93% Weighted-average servicing fee 30 bps 31 bps 31 bps 32 bps Weighted-average age in months 19 18 17 16 Default rate(3) 3.94% 3.96% 3.60% 3.15% MORTGAGE BANKING PERSONNEL (FTES) NCMC: Loan origination - commission 2,674 2,640 2,649 2,650 Loan origination - non-commission 2,999 2,917 3,035 2,937 ----------- ----------- ----------- ----------- Total loan origination 5,673 5,557 5,684 5,587 Loan servicing 800 786 793 791 Indirect production 974 977 1,016 976 Corporate overhead and other 348 337 307 324 ----------- ----------- ----------- ----------- TOTAL NCMC FTES 7,795 7,657 7,800 7,678 =========== =========== =========== =========== FIRST FRANKLIN: Loan origination - commission 661 662 616 544 Loan origination - non-commission 1,341 1,461 1,296 1,148 ----------- ----------- ----------- ----------- Total loan origination 2,002 2,123 1,912 1,692 Indirect production 213 196 182 177 Corporate overhead and other 176 162 147 143 ----------- ----------- ----------- ----------- TOTAL FIRST FRANKLIN FTES 2,391 2,481 2,241 2,012 =========== =========== =========== ===========
2003 2002 ----------------------------------------------------------- ----------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR ----------- ----------- ----------- ----------- ----------- NCMC SERVICING DATA Rollforward of servicing portfolio (UPB): Beginning balance $ 129,127 $ 119,894 $ 112,358 $ 101,858 $ 98,439 Additions 21,824 33,140 26,954 25,400 20,012 Repayments (8,634) (22,067) (20,673) (14,696) (16,380) Other reductions(1) (1,171) (1,840) 1,255 (204) (213) ----------- ----------- ----------- ----------- ----------- Ending balance $ 141,146 $ 129,127 $ 119,894 $ 112,358 $ 101,858 =========== =========== =========== =========== =========== Servicing portfolio composition (UPB): Conventional $ 89,766 $ 80,160 $ 74,842 $ 67,549 $ 61,044 Government 25,439 24,323 23,760 23,405 22,060 Jumbo and other 25,941 24,644 21,292 21,404 18,754 ----------- ----------- ----------- ----------- ----------- TOTAL MORTGAGE LOANS SERVICED FOR THIRD PARTIES $ 141,146 $ 129,127 $ 119,894 $ 112,358 $ 101,858 =========== =========== =========== =========== =========== NATIONAL SERVICER RANKING(2) 9 9 9 9 8 SERVICING PORTFOLIO METRICS: Number of loans 1,010,980 948,789 907,969 871,150 818,412 Average loan size $ 139,613 $ 136,097 $ 132,046 $ 128,977 $ 124,458 Weighted-average note rate 5.98% 6.09% 6.36% 6.58% 6.78% Weighted-average servicing fee 33 bps 33 bps 34 bps 34 bps 35 bps Weighted-average age in months 15 15 16 18 19 Default rate(3) 4.00% 4.13% 4.29% 4.64% 5.29% MORTGAGE BANKING PERSONNEL (FTES) NCMC: Loan origination - commission 2,631 2,608 2,550 2,421 1,915 Loan origination - non-commission 3,145 3,523 3,510 3,121 3,373 ----------- ----------- ----------- ----------- ----------- Total loan origination 5,776 6,131 6,060 5,542 5,288 Loan servicing 745 713 706 675 645 Indirect production 999 1,030 997 957 898 Corporate overhead and other 332 317 316 318 325 ----------- ----------- ----------- ----------- ----------- TOTAL NCMC FTES 7,852 8,191 8,079 7,492 7,156 =========== =========== =========== =========== =========== FIRST FRANKLIN: Loan origination - commission 506 474 405 369 366 Loan origination - non-commission 1,140 961 808 771 682 ----------- ----------- ----------- ----------- ----------- Total loan origination 1,646 1,435 1,213 1,140 1,048 Indirect production 173 160 152 149 130 Corporate overhead and other 124 126 110 110 113 ----------- ----------- ----------- ----------- ----------- TOTAL FIRST FRANKLIN FTES 1,943 1,721 1,475 1,399 1,291 =========== =========== =========== =========== ===========
FOR THE YEAR --------------------------------------- 2004 2003 2002 ----------- ----------- ----------- NCMC SERVICING DATA Rollforward of servicing portfolio (UPB): Beginning balance $ 141,146 $ 101,858 $ 73,930 Additions 58,793 107,318 66,291 Repayments (40,807) (66,070) (36,142) Other reductions(1) (6,765) (1,960) (2,221) ----------- ----------- ----------- Ending balance $ 152,367 $ 141,146 $ 101,858 =========== =========== =========== Servicing portfolio composition (UPB): Conventional Government Jumbo and other TOTAL MORTGAGE LOANS SERVICED FOR THIRD PARTIES NATIONAL SERVICER RANKING(2) SERVICING PORTFOLIO METRICS: Number of loans Average loan size Weighted-average note rate Weighted-average servicing fee Weighted-average age in months Default rate(3) MORTGAGE BANKING PERSONNEL (FTES) NCMC: Loan origination - commission Loan origination - non-commission Total loan origination Loan servicing Indirect production Corporate overhead and other TOTAL NCMC FTES FIRST FRANKLIN: Loan origination - commission Loan origination - non-commission Total loan origination Indirect production Corporate overhead and other TOTAL FIRST FRANKLIN FTES
(1) Primarily represents foreclosure liquidations, GNMA early buyout sales, bulk servicing sales and loan repurchases. (2) Source: Inside Mortgage Finance. Represents rank of the Corporation's mortgage banking subsidiary, National City Mortgage Co. The current quarter ranking is not yet available. (3) Mortgage loans greater than 30 days past due 25 UNAUDITED NATIONAL CITY CORPORATION FIRST FRANKLIN LOAN ORIGINATION AND PORTFOLIO STATISTICS(1) ($ IN MILLIONS)
2004 2003 ----------------------------------------- ---------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR -------- -------- -------- -------- -------- -------- -------- -------- PRODUCTION DATA ORIGINATIONS: Total First Franklin originations $ 6,953 $ 7,743 $ 8,782 $ 5,673 $ 6,203 $ 6,051 $ 4,396 $ 3,488 Weighted-average note rate 6.91% 7.05% 6.66% 6.72% 6.99% 6.86% 7.14% 7.36% Weighted-average credit score(2) 653 653 658 651 653 660 657 657 Interest-only as a percent of total originations 50% 46% 43% 41% 39% 33% 27% 22% SALES: Total sales of First Franklin loans to third parties $ 4,196 $ 5,566 $ 4,887 $ 4,433 $ 2,379 $ 2,543 $ 2,164 $ 1,851 Total production revenue 77 128 165 141 65 95 88 69 Gain on sale(3) 3.00% 3.39% 4.42 % 4.10% 4.03% 4.50% 4.77% 4.52% PORTFOLIO STATISTICS(4) Period-end portfolio balance $ 18,260 $ 18,116 $ 16,714 $ 15,627 $ 15,137 $ 13,183 $ 11,496 $ 10,434 Average portfolio balance 18,393 17,497 16,236 15,376 14,219 12,290 11,000 10,004 Weighted-average note rate 6.76% 6.84% 6.84% 7.06% 7.19% 7.43% 7.70% 7.81% Weighted-average loan size $126,680 $124,399 $131,240 $126,960 $127,556 $124,772 $126,390 $136,113 Weighted-average credit score(2)(5) 648 650 649 648 649 648 645 645 First-lien weighted-average loan-to-value ratio(6) 77.78% 77.80% 77.85% 77.84% 77.89% 77.82% 78.56% 79.83% BY LOAN PURPOSE: Purchase 69% 69% 69% 69% 69% 69% 69% 69% Cash out refinancing 24% 24% 24% 24% 24% 24% 24% 24% Rate and term refinancing 7% 7% 7% 7% 7% 7% 7% 7% PERCENTAGE OF FIRST FRANKLIN PORTFOLIO LOANS REPRESENTED BY: Owner occupied 96% 96% 96% 96% 96% 97% 97% 97% Adjustable-rate loans 70% 69% 70% 68% 68% 65% 67% 72% Interest-only loans 24% 21% 17% 13% 10% 4% - - Second lien(7) 9% 10% 7% 8% 8% 8% 6% 2% GEOGRAPHIC MIX - TOP FIVE STATES California 37% 40% 42% 44% 45% 46% 46% 47% Florida 7% 7% 7% 6% 6% 6% 6% 6% Texas 5% 4% 4% 4% 4% - - - Oregon 4% 4% 4% 4% 4% 4% 4% 4% Washington 4% 4% 4% 4% 4% 4% 4% 3% Ohio - - - - - 3% 4% 4% NET CHARGE-OFFS $ 4 $ 6 $ 6 $ 6 $ 5 $ 5 $ 5 $ 6 NET CHARGE-OFFS AS A PERCENTAGE OF AVERAGE PORTFOLIO LOANS .10% .14% .14% .16% .13% .17% .18% .23% NONPERFORMING ASSETS: Nonperforming loans $ 53 $ 54 $ 55 $ 55 $ 51 $ 49 $ 47 $ 44 Other real estate owned 41 42 38 39 33 34 30 34 -------- -------- -------- -------- -------- -------- -------- -------- Total $ 94 $ 96 $ 93 $ 94 $ 84 $ 83 $ 77 $ 78 ======== ======== ======== ======== ======== ======== ======== ======== NONPERFORMING ASSETS TO TOTAL FIRST FRANKLIN PORTFOLIO LOANS AND OTHER REAL ESTATE OWNED .51% .53% .55% .60% .55% .63% .67% .75% Loans 90+ days past due $ 295 $ 265 $ 252 $ 235 $ 225 $ 210 $ 196 $ 189 DELINQUENCY RATE 6.39% 6.53% 6.42% 5.97% 6.64% 6.44% 7.04% 6.89%
2002 FOR THE YEAR -------- --------------------------- 4TH QTR 2004 2003 2002 -------- ------- ------- ------- PRODUCTION DATA ORIGINATIONS: Total First Franklin originations $ 3,606 $29,151 $20,138 $10,717 Weighted-average note rate 7.42% 6.83 7.05 7.96 Weighted-average credit score(2) 658 653 655 660 Interest-only as a percent of total originations 20% 45% 31% 8% SALES: Total sales of First Franklin loans to third parties $ 1,810 $19,082 $ 8,937 $ 4,559 Total production revenue 69 511 317 153 Gain on sale(3) 5.58% 3.73% 4.45% 4.87% PORTFOLIO STATISTICS(4) Period-end portfolio balance $ 9,370 Average portfolio balance 8,959 $16,944 $11,873 $ 7,598 Weighted-average note rate 8.03% Weighted-average loan size $138,902 Weighted-average credit score(2)(5) 646 First-lien weighted-average loan-to-value ratio(6) 78.83% BY LOAN PURPOSE: Purchase 71% Cash out refinancing 23% Rate and term refinancing 6% PERCENTAGE OF FIRST FRANKLIN PORTFOLIO LOANS REPRESENTED BY Owner occupied 97% Adjustable-rate loans 74% Interest-only loans - Second lien(7) 1% GEOGRAPHIC MIX - TOP FIVE STATES California 48% Florida 6% Texas - Oregon 4% Washington 3% Ohio 4% NET CHARGE-OFFS $ 5 $ 22 $ 21 $ 19 NET CHARGE-OFFS AS A PERCENTAGE OF AVERAGE PORTFOLIO LOANS .22% .13% .17% .23% NONPERFORMING ASSETS: Nonperforming loans $ 44 Other real estate owned 34 -------- Total $ 78 ======== NONPERFORMING ASSETS TO TOTAL FIRST FRANKLIN PORTFOLIO LOANS AND OTHER REAL ESTATE OWNED .83% Loans 90+ days past due $ 184 DELINQUENCY RATE 7.76%
(1) First Franklin loans represent nonconforming residential real estate loans originated by First Franklin Financial Corp., a wholly-owned subsidiary of National City Corporation and a division of the National Consumer Finance line of business. (2) Represents the Fair Isaac Corporation FICO(R) score, a benchmark credit rating system used by most financial companies and National City Corporation. National City is not affiliated with Fair Isaac Corporation and obtains FICO(R) scores from third-party credit bureaus. (3) Represents gross gain on external sales as a percentage of dollar value of loans sold including servicing value, if applicable. These gains are included in total production revenue. (4) Represents statistics on First Franklin loans retained in the residential real estate portfolio. (5) Based upon most recent available FICO(R) score for borrowers. FICO(R) scores are updated quarterly. (6) Based upon period-end first-lien mortgage loan balance divided by the most recent obtained value of the underlying mortgaged property. (7) Second lien positions are insured by third-party mortgage insurance providers between 3 and 10 percent of the insured loan pool balance. Second lien positions are not included in the loan-to-value calculations. 26 UNAUDITED NATIONAL CITY CORPORATION HOME EQUITY PORTFOLIO STATISTICS ($ IN MILLIONS)
2004 2003 2002 ----------------------------------- --------------------------------- ------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR ------- ------- ------- ------- ------- ------- ------- ------- ------- HOME EQUITY LINES OF CREDIT (HELOC) PERIOD-END BALANCES BY LINE OF BUSINESS: Wholesale Banking $ - $ 2 $ 8 $ 5 $ 6 $ 1 $ 1 $ 1 $ 1 Consumer and Small Business Financial Services 7,921 7,706 6,056 5,770 5,662 5,514 5,339 5,166 5,259 National Consumer Finance - National Home Equity 10,299 8,896 7,079 5,618 4,676 3,951 3,209 2,678 2,268 Asset Management 633 631 610 600 597 605 575 548 534 ------- ------- ------- ------- ------- ------- ------ ------ ------ TOTAL PERIOD-END BALANCES HELOCS(1) $18,853 $17,235 $13,753 $11,993 $10,941 $10,071 $9,124 $8,393 $8,062 ======= ======= ======= ======= ======= ======= ====== ====== ====== STATISTICS BY LINE OF BUSINESS FOR SIGNIFICANT PORTFOLIOS: Consumer and Small Business Financial Services Weighted-average note rate 5.14% 4.69% 4.34% 4.34% 4.33% 4.20% 4.39% 4.53% 4.96% Weighted-average credit score(2)(3) 727 719 723 721 722 723 722 722 720 Weighted-average cumulative loan-to-value ratio(4) 70.97% 72.69% 71.36% 71.22% 71.21% 71.15% 71.47% 71.81% 72.07% Utilization rate 48% 43% 42% 42% 41% 41% 40% 40% 40% Net charge-offs $ 2 $ 3 $ 3 $ 3 $ 4 $ 3 $ 3 $ 4 $ 4 Loans 90 days past due 7 8 6 7 7 7 6 6 7 National Consumer Finance - National Home Equity Weighted-average note rate 5.25% 4.74% 4.31% 4.35% 4.33% 4.32% 4.56 % 4.55% 4.86% Weighted-average credit score(2)(3) 722 723 722 717 721 721 721 723 720 Weighted-average cumulative loan-to-value ratio(4) 80.93% 80.92% 81.03% 81.18% 82.23% 81.24% 81.00% 80.74% 80.55% Utilization rate 57% 56% 53% 53% 51% 49% 49% 51% 52% Net charge-offs $ 1 $ 1 $ 1 $ 1 - $ 1 $ 1 - - Loans 90 days past due 2 1 1 1 $ 1 - 1 $ 1 - HOME EQUITY INSTALLMENT LOANS (HELOAN)(5)(6) PERIOD-END BALANCES BY LINE OF BUSINESS: Wholesale Banking $ 47 $ 56 $ 32 $ 5 $ 5 $ 5 $ 6 $ 7 $ 8 Consumer and Small Business Financial Services 4,054 3,969 3,726 3,622 3,564 3,452 2,768 2,382 2,303 National Consumer Finance - National Home Equity 1,528 1,564 1,500 1,414 1,339 1,160 1,055 975 935 Asset Management 97 97 93 91 90 92 96 104 105 ------- ------- ------- ------- ------- ------- ------ ------ ------ TOTAL PERIOD-END BALANCES HELOANS(1) $ 5,726 $ 5,686 $ 5,351 $ 5,132 $ 4,998 $ 4,709 $3,925 $3,468 $3,351 ======= ======= ======= ======= ======= ======= ====== ====== ====== STATISTICS BY LINE OF BUSINESS FOR SIGNIFICANT PORTFOLIOS: Consumer and Small Business Financial Services Weighted-average note rate 6.59% 6.63% 6.72% 6.82% 6.89% 6.99% 7.56% 8.13% 8.41% Weighted-average credit score(2)(3) 716 716 714 713 714 714 714 708 706 Weighted-average cumulative loan-to-value ratio(4) 69.55% 69.78% 69.96% 69.72% 69.67% 69.38% 68.83% 68.06% 68.23% Net charge-offs $ 4 $ 4 $ 5 $ 4 $ 5 $ 4 $ 5 $ 4 $ 4 Loans 90 days past due 5 5 4 5 5 4 5 4 3 National Consumer Finance - National Home Equity Weighted-average note rate 7.04% 7.02% 6.99% 7.07% 7.13% 7.33% 7.69% 7.94% 8.25% Weighted-average credit score(2)(3) 725 723 722 721 721 719 720 721 721 Weighted-average cumulative loan-to-value ratio(4) 89.65% 89.54% 89.61% 89.55% 90.19% 89.44% 89.27% 89.05% 88.96% Net charge-offs $ 1 - - - - $ 1 $ 1 $ 1 - Loans 90 days past due 1 - - - - 1 1 1 -
(1) Excludes balances from First Franklin and any remaining loans originated by the former Altegra unit. First Franklin portfolio balances and statistics are included in the First Franklin Loan Origination and Portfolio Statistics section on page 26. (2) Represents the Fair Isaac Corporation FICO(R) score, a benchmark credit rating system used by most financial companies and National City Corporation. National City is not affiliated with Fair Isaac Corporation and obtains FICO(R) scores from third-party credit bureaus. (3) Based upon most recent available FICO(R) score for borrowers. FICO(R) scores are updated quarterly. (4) Based upon period-end first-lien and second-lien mortgage loan balances divided by the obtained value of the underlying mortgaged property at the time of origination. (5) Represents installment loans collateralized by real estate whereby National City has a first or second lien position. (6) HELOANs are included in the real estate residential portfolio on the consolidated balance sheet. Prior to December 31, 2002, HELOANs were included in the other consumer portfolio on the consolidated balance sheet. 27 UNAUDITED NATIONAL CITY CORPORATION LINE OF BUSINESS RESULTS ($ IN THOUSANDS)
2004 2003 -------------------------------------- -------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR --------- --------- --------- -------- --------- --------- --------- --------- CONSUMER AND SMALL BUSINESS FINANCIAL SERVICES Net interest income (TE) $540,932 $532,086 $501,733 $495,625 $499,002 $497,354 $492,039 $488,725 Provision for credit losses 77,517 71,517 75,017 75,323 89,694 73,408 73,761 70,465 -------- -------- -------- -------- -------- -------- --------- --------- Net interest income after provision 463,415 460,569 426,716 420,302 409,308 423,946 418,278 418,260 Noninterest income 289,658 285,166 214,920 180,303 178,973 180,240 180,339 161,689 Noninterest expense 454,856 455,513 370,590 352,801 355,441 335,946 328,321 352,511 -------- -------- -------- -------- -------- -------- --------- --------- Income before taxes 298,217 290,222 271,046 247,804 232,840 268,240 270,296 227,438 Income tax expense and TE adjustment 114,713 111,869 102,755 93,670 88,014 101,395 102,172 85,972 -------- -------- -------- -------- -------- -------- --------- --------- Net income $183,504 $178,353 $168,291 $154,134 $144,826 $166,845 $168,124 $141,466 ======== ======== ======== ======== ======== ======== ========= ========= UNUSUAL ITEMS (PRETAX) Gain on sale of Upper Peninsula branches $ 13,983 - - - - - - - Auto lease residual recovery (charge) 1,781 $ 3,103 $ 1,332 - $ 1,579 $ 9,574 - ($ 25,255) -------- -------- -------- -------- -------- -------- --------- --------- Total $ 15,764 $ 3,103 $ 1,332 - $ 1,579 $ 9,574 - ($ 25,255) ======== ======== ======== ======== ======== ======== ========= ========= UNUSUAL ITEMS (AFTER TAX) Gain on sale of Upper Peninsula branches $ 9,089 - - - - - - - Auto lease residual recovery (charge) 1,158 $ 2,017 $ 866 - $ 1,026 $ 6,223 - ($ 16,416) -------- -------- -------- -------- -------- -------- --------- --------- Total $ 10,247 $ 2,017 $ 866 - $ 1,026 $ 6,223 - ($ 16,416) ======== ======== ======== ======== ======== ======== ========== ======== Average assets (in millions) $ 31,541 $ 31,180 $ 27,181 $ 27,033 $ 27,083 $ 26,420 $ 25,700 $ 25,785 Average equity (in millions) 3,358 3,332 2,666 2,551 2,562 2,523 2,470 2,424 Return on average assets 2.31% 2.28% 2.49% 2.29% 2.12% 2.51% 2.62% 2.23% Return on average equity 21.74 21.30 25.39 24.31 22.43 26.23 27.31 23.67 Efficiency ratio 54.76 55.74 51.71 52.20 52.43 49.58 48.83 54.20 WHOLESALE BANKING Net interest income (TE) $369,009 $347,211 $277,126 $257,050 $258,782 $266,758 $264,730 $259,494 Provision (benefit) for credit losses 15,636 31,244 (6,445) 10,598 80,787 39,820 104,349 115,761 -------- -------- -------- -------- -------- -------- --------- --------- Net interest income after provision 353,373 315,967 283,571 246,452 177,995 226,938 160,381 143,733 Noninterest income 157,891 139,061 103,656 99,435 78,419 100,833 60,132 86,637 Noninterest expense 197,857 187,783 126,959 124,621 126,863 121,604 120,826 136,966 -------- -------- -------- -------- -------- -------- --------- --------- Income before taxes 313,407 267,245 260,268 221,266 129,551 206,167 99,687 93,404 Income tax expense and TE adjustment 117,101 100,317 96,704 81,400 48,663 76,703 38,244 34,554 -------- -------- -------- -------- -------- -------- --------- --------- Net income $196,306 $166,928 $163,564 $139,866 $ 80,888 $129,464 $ 61,443 $58,850 ======== ======== ======== ======== ======== ======== ========= ========= UNUSUAL ITEMS (PRETAX) Commercial lease residual charge - - - - - - ($121) ($ 15,877) Principal investment gains (losses) $ 9,605 $ 19,070 $ 17,496 $ 22,906 $ 89 $ 16,860 (16,388) 6,464 -------- -------- -------- -------- -------- -------- --------- --------- Total $ 9,605 $ 19,070 $ 17,496 $ 22,906 $ 89 $ 16,860 ($ 16,509) ($ 9,413) ======== ======== ======== ======== ======== ======== ========= ========= UNUSUAL ITEMS (AFTER TAX) Commercial lease residual charge - - - - - - ($79) ($ 10,320) Principal investment gains (losses) $ 6,243 $ 12,396 $ 11,372 $ 14,889 $ 58 $ 10,959 (10,652) 4,202 -------- -------- -------- -------- -------- -------- --------- --------- Total $ 6,243 $ 12,396 $ 11,372 $ 14,889 $ 58 $ 10,959 ($ 10,731) ($ 6,118) ======== ======== ======== ======== ======== ======== ========= ========= Average assets (in millions) $ 40,982 $ 40,327 $ 31,428 $ 29,169 $ 29,720 $ 30,742 $ 31,321 $ 31,294 Average equity (in millions) 4,690 4,619 2,904 2,618 2,648 2,697 2,721 2,727 Return on average assets 1.91% 1.65% 2.09% 1.93% 1.08% 1.67% .79% .76% Return on average equity 16.65 14.38 22.66 21.49 12.12 19.04 9.06 8.75 Efficiency ratio 37.55 38.62 33.34 34.96 37.62 33.08 37.19 39.57 FOR THE YEAR ------------------------------------- 2004 2003 2002 ----------- ------------ ----------- CONSUMER AND SMALL BUSINESS FINANCIAL SERVICES Net interest income (TE) $2,070,376 $1,977,120 $1,984,835 Provision for credit losses 299,374 307,328 297,271 ---------- ----------- ----------- Net interest income after provision 1,771,002 1,669,792 1,687,564 Noninterest income 970,047 701,241 634,479 Noninterest expense 1,633,760 1,372,219 1,342,875 ---------- ----------- ----------- Income before taxes 1,107,289 998,814 979,168 Income tax expense and TE adjustment 423,007 377,553 370,126 ---------- ----------- ----------- Net income $ 684,282 $ 621,261 $ 609,042 ========== =========== =========== UNUSUAL ITEMS (PRETAX) Gain on sale of Upper Peninsula branches $ 13,983 - - Auto lease residual recovery (charge) 6,216 ($ 14,102) ($50,851) ---------- ----------- ----------- Total $ 20,199 ($ 14,102) ($ 50,851) ========== =========== =========== UNUSUAL ITEMS (AFTER TAX) Gain on sale of Upper Peninsula branches $ 9,089 Auto lease residual recovery (charge) 4,041 ($ 9,167) ($ 33,053) ---------- ----------- ----------- Total $ 13,130 ($9,167) ($33,053) ========== =========== =========== Average assets (in millions) $ 29,245 $ 26,251 $ 24,738 Average equity (in millions) 2,978 2,495 2,307 Return on average assets 2.34% 2.37% 2.46% Return on average equity 22.97 24.90 26.40 Efficiency ratio 53.73 51.23 51.27 WHOLESALE BANKING Net interest income (TE) $1,250,396 $1,049,764 $1,047,091 Provision (benefit) for credit losses 51,033 340,717 376,470 ---------- ----------- ----------- Net interest income after provision 1,199,363 709,047 670,621 Noninterest income 500,043 326,021 282,933 Noninterest expense 637,220 506,259 507,839 ---------- ---------- ----------- Income before taxes 1,062,186 528,809 445,715 Income tax expense and TE adjustment 395,522 198,164 168,611 ---------- ----------- ----------- Net income $ 666,664 $ 330,645 $ 277,104 ========== =========== =========== UNUSUAL ITEMS (PRETAX) Commercial lease residual charge - ($ 15,998) ($ 8,580) Principal investment gains (losses) $ 69,077 7,025 (22,903) ---------- ----------- ----------- Total $ 69,077 ($ 8,973) ($ 31,483) ========== =========== =========== UNUSUAL ITEMS (AFTER TAX) Commercial lease residual charge - (10,399) ($ 5,577) Principal investment gains (losses) $ 44,900 $ 4,567 (14,886) ---------- ----------- ----------- Total $ 44,900 ($ 5,832) ($ 20,463) ========== =========== =========== Average assets (in millions) $ 35,505 $ 30,765 $ 31,258 Average equity (in millions) 3,713 2,698 2,834 Return on average assets 1.88% 1.07% .89% Return on average equity 17.96 12.25 9.78 Efficiency ratio 36.40 36.80 38.18
UNAUDITED NATIONAL CITY CORPORATION LINE OF BUSINESS RESULTS $ IN THOUSANDS
2004 2003 ------------------------------------------- ----------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR --------- --------- --------- --------- --------- --------- --------- --------- NATIONAL CITY MORTGAGE CO.(1) Net interest income (TE) $ 121,530 $ 124,538 $ 160,732 $ 141,638 $ 203,097 $ 327,452 $ 281,174 $ 284,376 Provision (benefit) for credit losses 6,109 (1,324) 2,753 4,498 212 (2,520) (3,075) 11,148 --------- --------- --------- --------- --------- --------- --------- --------- Net interest income after provision 115,421 125,862 157,979 137,140 202,885 329,972 284,249 273,228 Noninterest income 85,163 258,053 50,107 458,985 405,084 (101,885) 357,429 577,602 Noninterest expense 179,983 160,256 181,975 155,317 171,130 229,127 199,880 173,158 --------- --------- --------- --------- --------- --------- --------- --------- Income (loss) before taxes 20,601 223,659 26,111 440,808 436,839 (1,040) 441,798 677,672 Income tax expense and TE adjustment 7,816 84,978 9,910 167,494 173,832 722 177,698 266,316 --------- --------- --------- --------- --------- --------- --------- --------- Net income (loss) $ 12,785 $ 138,681 $ 16,201 $ 273,314 $ 263,007 ($ 1,762) $ 264,100 $ 411,356 ========= ========= ========= ========= ========= ========= ========= ========= Average assets (in millions) $ 15,269 $ 14,822 $ 17,494 $ 16,386 $ 21,539 $ 32,778 $ 30,297 $ 28,868 Average equity (in millions) 781 782 784 783 779 784 788 794 Return on average assets .33% 3.72% .37% 6.71% 4.84% (.02)% 3.50% 5.78% Return on average equity 6.52 70.54 8.31 140.44 134.00 (.89) 134.38 210.05 Efficiency ratio 87.08 41.89 86.31 25.86 28.14 101.58 31.30 20.09 NATIONAL CONSUMER FINANCE(1) Net interest income (TE) $ 306,974 $ 321,646 $ 278,732 $ 258,261 $ 186,396 $ 220,393 $ 193,306 $ 171,174 Provision (benefit) for credit losses 2,971 20,098 10,406 11,061 (3,728) 16,753 28,504 19,338 --------- --------- --------- --------- --------- --------- --------- --------- Net interest income after provision 304,003 301,548 268,326 247,200 190,124 203,640 164,802 151,836 Noninterest income 62,918 125,293 157,226 135,551 57,504 91,938 87,594 68,160 Noninterest expense 154,997 149,858 140,179 119,427 101,243 93,156 74,190 73,113 --------- --------- --------- --------- --------- --------- --------- --------- Income before taxes 211,924 276,983 285,373 263,324 146,385 202,422 178,206 146,883 Income tax expense and TE adjustment 80,107 104,699 107,871 99,536 55,334 76,515 67,362 55,522 --------- --------- --------- --------- --------- --------- --------- --------- Net income $ 131,817 $ 172,284 $ 177,502 $ 163,788 $ 91,051 $ 125,907 $ 110,844 $ 91,361 ========= ========= ========= ========= ========= ========= ========= ========= Average assets (in millions) $ 33,064 $ 31,392 $ 27,162 $ 24,344 $ 22,921 $ 20,216 $ 18,008 $ 16,361 Average equity (in millions) 1,739 1,638 1,368 1,283 1,324 1,110 1,022 952 Return on average assets 1.59% 2.18% 2.63% 2.71% 1.58% 2.47% 2.47% 2.26% Return on average equity 30.15 41.84 52.20 51.33 27.29 44.99 43.49 38.90 Efficiency ratio 41.90 33.53 32.15 30.33 41.51 29.83 26.41 30.55 FOR THE YEAR ---------------------------------- 2004 2003 2002 ---------- ---------- ---------- NATIONAL CITY MORTGAGE CO.(1) Net interest income (TE) $ 548,438 $1,096,099 $ 709,352 Provision (benefit) for credit losses 12,036 5,765 19,734 ---------- ---------- ---------- Net interest income after provision 536,402 1,090,334 689,618 Noninterest income 852,308 1,238,230 490,502 Noninterest expense 677,531 773,295 638,601 ---------- ---------- ---------- Income (loss) before taxes 711,179 1,555,269 541,519 Income tax expense and TE adjustment 270,198 618,568 200,825 ---------- ---------- ---------- Net income (loss) $ 440,981 $ 936,701 $ 340,694 ========== ========== ========== Average assets (in millions) $ 15,988 $ 28,363 $ 20,217 Average equity (in millions) 782 786 801 Return on average assets 2.76% 3.30% 1.69% Return on average equity 56.36 119.13 42.53 Efficiency ratio 48.37 33.13 53.22 NATIONAL CONSUMER FINANCE(1) Net interest income (TE) $1,165,613 $ 771,269 $ 498,346 Provision (benefit) for credit losses 44,536 60,867 45,836 ---------- ---------- ---------- Net interest income after provision 1,121,077 710,402 452,510 Noninterest income 480,988 305,196 151,115 Noninterest expense 564,461 341,702 263,054 ---------- ---------- ---------- Income before taxes 1,037,604 673,896 340,571 Income tax expense and TE adjustment 392,213 254,733 128,735 ---------- ---------- ---------- Net income $ 645,391 $ 419,163 $ 211,836 ========== ========== ========== Average assets (in millions) $ 29,008 $ 19,396 $ 13,227 Average equity (in millions) 1,508 1,103 817 Return on average assets 2.22% 2.16% 1.60% Return on average equity 42.80 37.99 25.92 Efficiency ratio 34.28 31.74 40.50
(1) Effective January 1, 2004, National City Mortgage Co., formerly a business unit within National Consumer Finance, was designated as a separate line of business. National Consumer Finance now includes only National Home Equity, First Franklin, National City Warehouse Resources, and Provident PCFS. Prior periods have been restated to reflect this change. 29 UNAUDITED NATIONAL CITY CORPORATION LINE OF BUSINESS RESULTS ($ IN THOUSANDS)
2004 2003 --------------------------------------------- -------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR --------- --------- --------- --------- --------- --------- --------- --------- NATIONAL CONSUMER FINANCE DIVISIONAL RESULTS: FIRST FRANKLIN ORIGINATION, SALES, AND PORTFOLIO(1) Net interest income (TE) $ 214,196 $ 233,000 $ 223,280 $ 210,517 $ 160,411 $ 188,834 $ 165,776 $ 147,555 Provision (benefit) for credit losses 1,687 19,046 9,353 10,464 (7,260) 14,964 26,913 18,396 --------- --------- --------- --------- --------- --------- --------- --------- Net interest income after provision 212,509 213,954 213,927 200,053 167,671 173,870 138,863 129,159 Noninterest income 79,931 131,309 168,128 143,813 62,264 96,584 90,576 70,142 Noninterest expense 130,948 118,571 125,857 107,029 91,996 84,509 66,550 66,206 --------- --------- --------- --------- --------- --------- --------- --------- Income before taxes 161,492 226,692 256,198 236,837 137,939 185,945 162,889 133,095 Income tax expense and TE adjustment 61,044 85,688 96,843 89,524 52,141 70,287 61,572 50,310 --------- --------- --------- --------- --------- --------- --------- --------- Net income $ 100,448 $ 141,004 $ 159,355 $ 147,313 $ 85,798 $ 115,658 $ 101,317 $ 82,785 ========= ========= ========= ========= ========= ========= ========= ========= Average assets (in millions) $ 21,099 $ 20,927 $ 19,513 $ 17,958 $ 17,395 $ 15,588 $ 14,050 $ 12,924 Average equity (in millions) 1,212 1,180 1,115 1,069 1,138 954 888 834 Return on average assets 1.89% 2.68% 3.28% 3.30% 1.96% 2.94% 2.89% 2.60% Return on average equity 32.97 47.53 57.49 55.43 29.93 48.10 45.76 40.22 Efficiency ratio 44.52 32.55 32.15 30.21 41.31 29.61 25.96 30.41 NATIONAL HOME EQUITY Net interest income (TE) $ 78,068 $ 67,817 $ 55,452 $ 47,744 $ 25,985 $ 31,559 $ 27,530 $ 23,619 Provision for credit losses 1,187 927 1,053 597 3,532 1,789 1,591 942 --------- --------- --------- --------- --------- --------- --------- --------- Net interest income after provision 76,881 66,890 54,399 47,147 22,453 29,770 25,939 22,677 Noninterest income (21,071) (15,642) (10,902) (8,262) (4,760) (4,646) (2,982) (1,982) Noninterest expense 15,535 15,039 14,322 12,398 9,247 8,647 7,640 6,907 --------- --------- --------- --------- --------- --------- --------- --------- Income before taxes 40,275 36,209 29,175 26,487 8,446 16,477 15,317 13,788 Income tax expense and TE adjustment 15,224 13,687 11,028 10,012 3,193 6,228 5,790 5,212 --------- --------- --------- --------- --------- --------- --------- --------- Net income $ 25,051 $ 22,522 $ 18,147 $ 16,475 $ 5,253 $ 10,249 $ 9,527 $ 8,576 ========= ========= ========= ========= ========= ========= ========= ========= Average assets (in millions) $ 11,165 $ 9,529 $ 7,649 $ 6,386 $ 5,526 $ 4,628 $ 3,958 $ 3,437 Average equity (in millions) 360 311 253 214 186 156 134 118 Return on average assets .89% .94% .95% 1.04% .38% .88% .97% 1.01% Return on average equity 27.67 28.79 28.87 30.89 11.18 25.99 28.44 29.54 Efficiency ratio 27.26 28.82 32.15 31.40 43.57 32.13 31.12 31.92 OTHER(2) Net interest income (TE) $ 14,710 $ 20,829 - - - - - - Provision for credit losses 97 125 - - - - - - --------- --------- --------- --------- --------- --------- --------- --------- Net interest income after provision 14,613 20,704 - - - - - - Noninterest income 4,058 9,626 - - - - - - Noninterest expense 8,514 16,248 - - - - - - --------- --------- --------- --------- --------- --------- --------- --------- Income before taxes 10,157 14,082 - - - - - - Income tax expense and TE adjustment 3,839 5,324 - - - - - - --------- --------- --------- --------- --------- --------- --------- --------- Net income $ 6,318 $ 8,758 - - - - - - ========= ========= ========= ========= ========= ========= ========= ========= Average assets (in millions) $ 800 $ 936 - - - - - - Average equity (in millions) 167 147 - - - - - - Return on average assets 3.14% 3.72% -% -% -% -% -% -% Return on average equity 15.05 23.76 - - - - - - Efficiency ratio 45.37 53.35 - - - - - - FOR THE YEAR --------- --------- --------- 2004 2003 2002 --------- --------- --------- NATIONAL CONSUMER FINANCE DIVISIONAL RESULTS: FIRST FRANKLIN ORIGINATION, SALES, AND PORTFOLIO(1) Net interest income (TE) $ 880,993 $ 662,576 $ 432,460 Provision (benefit) for credit losses 40,550 53,013 43,770 --------- --------- --------- Net interest income after provision 840,443 609,563 388,690 Noninterest income 523,181 319,566 154,965 Noninterest expense 482,405 309,261 235,594 --------- --------- --------- Income before taxes 881,219 619,868 308,061 Income tax expense and TE adjustment 333,099 234,310 116,447 --------- --------- --------- Net income $ 548,120 $ 385,558 $ 191,614 ========= ========= ========= Average assets (in millions) $ 19,881 $ 15,003 $ 10,758 Average equity (in millions) 1,144 954 731 Return on average assets 2.76% 2.57% 1.78% Return on average equity 47.90 40.40 26.21 Efficiency ratio 34.36 31.49 40.11 NATIONAL HOME EQUITY Net interest income (TE) $ 249,081 $ 108,693 $ 65,886 Provision for credit losses 3,764 7,854 2,066 --------- --------- --------- Net interest income after provision 245,317 100,839 63,820 Noninterest income (55,877) (14,370) (3,850) Noninterest expense 57,294 32,441 27,460 --------- --------- --------- Income before taxes 132,146 54,028 32,510 Income tax expense and TE adjustment 49,951 20,423 12,288 --------- --------- --------- Net income $ 82,195 $ 33,605 $ 20,222 ========= ========= ========= Average assets (in millions) $ 8,691 $ 4,393 $ 2,469 Average equity (in millions) 285 149 86 Return on average assets .95% .76% .82% Return on average equity 28.85 22.56 23.50 Efficiency ratio 29.65 34.39 44.27 OTHER(2) Net interest income (TE) $ 35,539 - - Provision for credit losses 222 - - --------- --------- --------- Net interest income after provision 35,317 - - Noninterest income 13,684 - - Noninterest expense 24,762 - - --------- --------- --------- Income before taxes 24,239 - - Income tax expense and TE adjustment 9,163 - - --------- --------- --------- Net income $ 15,076 - - ========= ========= ========= Average assets (in millions) 436 - - Average equity (in millions) 79 - - Return on average assets 3.46% -% -% Return on average equity 19.13 - - Efficiency ratio 50.31 - -
(1) Includes the Altegra and Loan Zone portfolios (2) Includes results of National City Warehouse Resources and Provident PCFS 30 UNAUDITED National City Corporation LINE OF BUSINESS RESULTS ($ IN THOUSANDS)
2004 -------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR -------------------------------------------- ASSET MANAGEMENT Net interest income (TE) $ 30,256 $ 29,575 $ 26,405 $ 26,151 Provision (benefit) for credit losses 2,651 (135) 1,421 228 ---------- --------- --------- --------- Net interest income after provision 27,605 29,710 24,984 25,923 Noninterest income 87,214 83,156 160,199 92,652 Noninterest expense 85,753 71,299 82,274 77,470 ---------- --------- --------- --------- Income before taxes 29,066 41,567 102,909 41,105 Income tax expense and TE adjustment 10,987 15,712 38,900 15,537 ---------- --------- --------- --------- Net income $ 18,079 $ 25,855 $ 64,009 $ 25,568 ========== ========= ========= ========= UNUSUAL ITEMS (PRETAX) Gain on sale of Corporate Trust Bond Administration business ($ 2,918) - $ 65,246 - ---------- --------- --------- --------- Total ($ 2,918) - $ 65,246 - ========== ========= ========= ========= UNUSUAL ITEMS (AFTER TAX) Gain on sale of Corporate Trust Bond Administration business ($ 1,897) - $ 42,410 - ---------- --------- --------- --------- Total ($ 1,897) - $ 42,410 - ========== ========= ========= ========= Average assets (in millions) $ 3,319 $ 3,299 $ 3,019 $ 2,975 Average equity (in millions) 493 487 398 391 Return on average assets 2.17% 3.12% 8.53% 3.46% Return on average equity 14.60 21.12 64.63 26.27 Efficiency ratio 73.00 63.25 44.09 65.21 NATIONAL PROCESSING(1) Net interest income (TE) $ 279 $ 1,340 $ 986 $ 895 Provision for credit losses - - - - ---------- --------- --------- --------- Net interest income after provision 279 1,340 986 895 Noninterest income 21,949 133,481 132,334 121,991 Noninterest expense 37,005 107,079 109,620 103,314 ---------- --------- --------- --------- Income before taxes (14,777) 27,742 23,700 19,572 Income tax expense and TE adjustment (5,657) 10,979 9,314 7,608 ---------- --------- --------- --------- Net income (loss) ($ 9,120) $ 16,763 $ 14,386 $ 11,964 ========== ========= ========= ========= UNUSUAL ITEMS (PRETAX) Severance and related charges ($ 100) - - ($ 54) Sale-related costs (19,117) - - - Charge related to closing operations in Mexico - - - - ---------- --------- --------- --------- Total ($ 19,217) - - ($ 54) ========== ========= ========= ========= UNUSUAL ITEMS (AFTER TAX) Severance and related charges ($ 65) - - ($ 35) Sale-related costs (11,470) - - - Charge related to closing operations in Mexico - - - - ---------- --------- --------- --------- Total ($ 11,535) - - ($ 35) ========== ========= ========= ========= Average assets (in millions) $ 131 $ 744 $ 705 $ 699 Average equity (in millions) 92 554 538 523 Return on average assets (27.76)% 8.96% 8.21% 6.89% Return on average equity (39.47) 12.04 10.76 9.20 Efficiency ratio 166.48 79.42 82.22 84.07 2003 ------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------------------------------------------- ASSET MANAGEMENT Net interest income (TE) $ 26,425 $ 26,144 $ 25,930 $ 25,051 Provision (benefit) for credit losses 2,032 1,286 2,733 1,584 ---------- --------- --------- --------- Net interest income after provision 24,393 24,858 23,197 23,467 Noninterest income 85,027 86,870 91,588 82,706 Noninterest expense 72,350 72,406 70,952 75,809 ---------- --------- --------- --------- Income before taxes 37,070 39,322 43,833 30,364 Income tax expense and TE adjustment 14,012 14,864 16,569 11,477 ---------- --------- --------- --------- Net income $ 23,058 $ 24,458 $ 27,264 $ 18,887 ========== ========= ========= ========= UNUSUAL ITEMS (PRETAX) Gain on sale of Corporate Trust Bond Administration business - - - - ---------- --------- --------- --------- Total - - - - ========== ========= ========= ========= UNUSUAL ITEMS (AFTER TAX) Gain on sale of Corporate Trust Bond Administration business - - - - ---------- --------- --------- --------- Total - - - - ========== ========= ========= ========= Average assets (in millions) $ 2,988 $ 2,873 $ 2,884 $ 2,913 Average equity (in millions) 381 379 374 372 Return on average assets 3.06% 3.38% 3.79% 2.63% Return on average equity 24.00 25.62 29.24 20.60 Efficiency ratio 64.92 64.07 60.38 70.35 NATIONAL PROCESSING(1) Net interest income (TE) $ 916 $ 787 $ 865 $ 683 Provision for credit losses - - - - ---------- --------- --------- --------- Net interest income after provision 916 787 865 683 Noninterest income 135,281 124,881 113,590 106,123 Noninterest expense 111,987 101,548 95,945 92,564 ---------- --------- --------- --------- Income before taxes 24,210 24,120 18,510 14,242 Income tax expense and TE adjustment 9,371 9,811 7,444 5,695 ---------- --------- --------- --------- Net income (loss) $ 14,839 $ 14,309 $ 11,066 $ 8,547 ========== ========= ========= ========= UNUSUAL ITEMS (PRETAX) Severance and related charges ($ 228) $ 65 ($ 674) ($ 30) Sale-related costs - - - - Charge related to closing operations in Mexico - - - - ---------- --------- --------- --------- Total ($ 228) $ 65 ($ 674) ($ 30) ========== ========= ========= ========= UNUSUAL ITEMS (AFTER TAX) Severance and related charges ($ 137) $ 39 ($ 404) ($ 18) Sale-related costs - - - - Charge related to closing operations in Mexico - - - - ---------- --------- --------- --------- Total ($ 137) $ 39 ($ 404) ($ 18) ========== ========= ========= ========= Average assets (in millions) $ 718 $ 691 $ 542 $ 533 Average equity (in millions) 503 481 466 455 Return on average assets 8.20% 8.21% 8.19% 6.50% Return on average equity 11.70 11.80 9.52 7.62 Efficiency ratio 82.22 80.81 83.83 86.67 FOR THE YEAR ------------------------------- 2004 2003 2002 -------------------------------- ASSET MANAGEMENT Net interest income (TE) $ 112,387 $103,550 $101,494 Provision (benefit) for credit losses 4,165 7,635 14,051 ---------- --------- --------- Net interest income after provision 108,222 95,915 87,443 Noninterest income 423,221 346,191 369,369 Noninterest expense 316,796 291,517 300,610 ---------- --------- --------- Income before taxes 214,647 150,589 156,202 Income tax expense and TE adjustment 81,136 56,922 59,044 ---------- --------- --------- Net income $ 133,511 $ 93,667 $ 97,158 ========== ========= ========= UNUSUAL ITEMS (PRETAX) Gain on sale of Corporate Trust Bond Administration business $ 62,328 - - ---------- --------- --------- Total $ 62,328 - - ========== ========= ========= UNUSUAL ITEMS (AFTER TAX) Gain on sale of Corporate Trust Bond Administration business $ 40,513 - - ---------- --------- --------- Total $ 40,513 - - ========== ========= ========= Average assets (in millions) $ 3,154 $ 2,914 $ 2,966 Average equity (in millions) 443 376 383 Return on average assets 4.23% 3.21% 3.28% Return on average equity 30.16 24.88 25.35 Efficiency ratio 59.15 64.82 63.84 NATIONAL PROCESSING(1) Net interest income (TE) $ 3,500 $ 3,251 $ 5,347 Provision for credit losses - - - ---------- --------- --------- Net interest income after provision 3,500 3,251 5,347 Noninterest income 409,755 479,875 454,463 Noninterest expense 357,018 402,044 376,338 ---------- --------- --------- Income before taxes 56,237 81,082 83,472 Income tax expense and TE adjustment 22,244 32,321 32,396 ---------- --------- --------- Net income (loss) $ 33,993 $ 48,761 $ 51,076 ========== ========= ========= UNUSUAL ITEMS (PRETAX) Severance and related charges ($ 154) ($ 867) - Sale-related costs (19,117) - - Charge related to closing operations in Mexico - - ($ 1,650) --------- --------- --------- Total ($ 19,271) ($ 867) ($ 1,650) ========== ========= ========= UNUSUAL ITEMS (AFTER TAX) Severance and related charges ($ 100) ($ 520) - Sale-related costs (11,470) - - Charge related to closing operations in Mexico - - ($ 2,350) ---------- --------- --------- Total ($ 11,570) ($ 520) ($ 2,350) ========== ========= ========= Average assets (in millions) $ 569 $ 622 $ 481 Average equity (in millions) 426 477 399 Return on average assets 5.98% 7.84% 10.63% Return on average equity 7.98 10.23 12.80 Efficiency ratio 86.39 83.22 81.85
- -------------- (1) In October 2004, the National Processing Business was sold to Bank of America UNAUDITED NATIONAL CITY CORPORATION LINE OF BUSINESS RESULTS ($ IN THOUSANDS)
2004 ------------------------------------------- ---------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR ---------- ---------- ---------- ---------- ---------- PARENT AND OTHER Net interest expense (TE) ($125,510) ($160,572) ($178,934) ($154,463) ($132,713) Benefit related to credit losses (23,339) (22,968) (22,364) (19,201) (21,006) --------- --------- --------- --------- --------- Net interest expense after provision (102,171) (137,604) (156,570) (135,262) (111,707) Noninterest income 747,601 2,444 47,835 28,780 50,396 Noninterest expense 160,680 100,986 63,540 53,390 106,390 --------- --------- --------- --------- --------- Income (loss) before taxes 484,750 (236,146) (172,275) (159,872) (167,701) Income tax expense (benefit) and TE adjustment 58,316 (127,997) (87,368) (101,606) (94,148) --------- --------- --------- --------- --------- Net income (loss) ($426,434 ($108,149) ($ 84,907) ($ 58,266) ($ 73,553) ========= ========= ========= ========= ========= UNUSUAL ITEMS (PRETAX) Building lease termination penalty - - - - - Severance and related charges ($ 11,723) ($ 17,369) ($ 6,464) ($ 3,334) ($ 3,687) Consideration from sale of NAMCO preferred shares - - - - - Loss on commercial paper conduit consolidation - - - - - Charitable foundation contribution - - - - - Minority interest related to NPI charges 1,950 - - 5 34 Gain from sale of National Processing 714,195 - - - - Deferred tax adjustments 44,187 - - 23,000 - Bank stock fund gains 3,176 - - - 7,512 --------- --------- --------- --------- --------- Total $ 751,785 ($ 17,369) ($ 6,464) $ 19,671 $ 3,859 ========= ========= ========= ========= ========= UNUSUAL ITEMS (AFTER TAX) Building lease termination penalty - - - - - Severance and related charges ($ 7,685) ($ 11,290) ($ 4,202) ($ 2,167) ($ 2,396) Consideration from sale of NAMCO preferred shares - - - - - Loss on commercial paper conduit consolidation - - - - - Charitable foundation contribution - - - - - Minority interest related to NPI charges 1,950 - - 5 34 Gain from sale of National Processing 486,822 - - - - Deferred tax adjustments 44,187 - - 23,000 - Bank stock fund gains 2,064 - - - 4,883 --------- --------- --------- --------- --------- Total $ 527,338 ($ 11,290) ($ 4,202) $ 20,838 $ 2,521 ========= ========= ========= ========= ========= Average assets (in millions) $ 13,603 $ 11,838 $ 8,959 $ 8,924 $ 9,597 2003 FOR THE YEAR -------------------------------- -------------------------------- 3RD QTR 2ND QTR 1ST QTR 2004 2003 2002 ---------- ---------- ---------- ---------- ---------- ---------- PARENT AND OTHER Net interest expense (TE) ($188,123) ($155,796) ($128,775) ($619,479) ($605,407) ($310,732) Benefit related to credit losses (21,700) (23,125) (18,063) (87,872) (83,894) (71,444) --------- --------- --------- --------- --------- --------- Net interest expense after provision (166,423) (132,671) (110,712) (531,607) (521,513) (239,288) Noninterest income 7,042 121,240 20,569 826,660 199,247 192,113 Noninterest expense 53,829 136,123 104,745 378,596 401,087 300,317 --------- --------- --------- --------- --------- --------- Income (loss) before taxes (213,210) (147,554) (194,888) (83,543) (723,353) (347,492) Income tax expense (benefit) and TE adjustment (97,626) (90,521) (107,924) (258,655) (390,219) (207,225) --------- --------- --------- --------- --------- --------- Net income (loss) ($115,584) ($ 57,033) ($ 86,964) ($175,112 ($333,134) ($140,267) ========= ========= ========= ========= ========= ========= UNUSUAL ITEMS (PRETAX) Building lease termination penalty - ($ 8,738) - - ($ 8,738) - Severance and related charges ($ 5,504) 166 ($ 71,737) ($ 38,890) (80,762) ($ 32,803) Consideration from sale of NAMCO preferred shares - - - - - 5,136 Loss on commercial paper conduit consolidation - - - - - (15,891) Charitable foundation contribution - (40,089) - - (40,089) (52,825) Minority interest related to NPI charges (10) 101 5 1,955 130 346 Gain from sale of National Processing - - - 714,195 - - Deferred tax adjustments - - - 67,187 - - Bank stock fund gains 1,045 31,874 - 3,176 40,431 74,452 --------- --------- --------- --------- --------- --------- Total ($ 4,469) ($ 16,686) ($ 71,732) ($747,623 ($ 89,028) ($ 21,585) ========= ========= ========= ========= ========= ========= UNUSUAL ITEMS (AFTER TAX) Building lease termination penalty - ($ 5,680) - - ($ 5,680) - Severance and related charges ($ 3,578) 108 ($ 46,629) ($ 25,344) (52,495) ($ 21,322) Consideration from sale of NAMCO preferred shares - - - - 3,338 Loss on commercial paper conduit consolidation - - - - - (10,329) Charitable foundation contribution - (26,058) - - (26,058) (34,336) Minority interest related to NPI charges (10) 101 5 1,955 130 346 Gain from sale of National Processing - - - 486,822 - - Deferred tax adjustments - - - 67,187 - - Bank stock fund gains 679 25,997 - 2,064 31,559 53,343 --------- --------- --------- --------- --------- --------- Total ($ 2,909) ($ 5,532) ($ 46,624) ($532,684 ($ 52,544) ($ 8,960) ========= ========= ========= ========= ========= ========= Average assets (in millions) $ 10,027 $ 10,379 $ 10,658 $ 10,841 $ 10,162 $ 23,845
32 UNAUDITED NATIONAL CITY CORPORATION LINE OF BUSINESS RESULTS ($ IN THOUSANDS)
2004 --------------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ----------- ------------ ------------ ------------ CONSOLIDATED Net interest income (TE) $ 1,243,470 $ 1,195,824 $ 1,066,780 $ 1,025,157 Provision for credit losses 81,545 98,432 60,788 82,507 ----------- ----------- ----------- ----------- Net interest income after provision 1,161,925 1,097,392 1,005,992 942,650 Noninterest income 1,452,394 1,026,654 866,277 1,117,697 Noninterest expense 1,271,131 1,232,774 1,075,137 986,340 ----------- ----------- ----------- ----------- Income before taxes 1,343,188 891,272 797,132 1,074,007 Income tax expense and TE adjustment 383,383 300,557 278,086 363,639 ----------- ----------- ----------- ----------- Net income $ 959,805 $ 590,715 $ 519,046 $ 710,368 =========== =========== =========== =========== UNUSUAL ITEMS (PRETAX) Auto lease residual recovery (charge) $ 1,781 $ 3,103 $ 1,332 - Commercial lease residual charge - - - - Principal investment gains (losses) 9,605 19,070 17,496 $ 22,906 Gain on sale of Corporate Trust Bond Administration business (2,918) - 65,246 - Building lease termination penalty - - - - Severance and related charges, net (11,823) (17,369) (6,464) (3,383) Consideration from sale of NAMCO preferred shares - - - - Loss on commercial paper conduit consolidation - - - - Charitable foundation contribution - - - - NPI Sale-related costs (17,167) - - - NPI charge related to closing operations in Mexico, net - - - - Gain on sale of Upper Peninsula branches 13,983 - - - Gain from sale of National Processing 714,195 - - - Deferred tax adjustments 44,187 - - 23,000 Bank stock fund gains 3,176 - - - ----------- ----------- ----------- ----------- Total $ 755,019 $ 4,804 $ 77,610 $ 42,523 =========== =========== =========== =========== UNUSUAL ITEMS (AFTER TAX) Auto lease residual recovery (charge) $ 1,158 $ 2,017 $ 866 - Commercial lease residual charge - - - - Principal investment gains (losses) 6,243 12,396 11,372 $ 14,889 Gain on sale of Corporate Trust Bond Administration business (1,897) - 42,410 - Building lease termination penalty - - - - Severance and related charges, net (7,685) (11,290) (4,202) (2,197) Consideration from sale of NAMCO preferred shares - - - - Loss on commercial paper conduit consolidation - - - - Charitable foundation contribution - - - - NPI Sale-related costs (9,520) - - - NPI charge related to closing operations in Mexico, net - - - - Gain on sale of Upper Peninsula branches 9,089 - - - Gain from sale of National Processing 486,822 - - - Deferred tax adjustments 44,187 - - 23,000 Bank stock fund gains 2,064 - - - ----------- ----------- ----------- ----------- Total $ 530,461 $ 3,123 $ 50,446 $ 35,692 =========== =========== =========== =========== Average assets (in millions) $ 137,909 $ 133,602 $ 115,948 $ 109,530 Average total equity (in millions) 12,847 12,359 10,370 9,659 Return on average assets 2.77% 1.76% 1.80% 2.61% Return on average total equity 29.72 19.01 20.13 29.58 Efficiency ratio 47.34 55.54 55.77 46.03 2003 --------------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------------ ------------ ------------ ------------ CONSOLIDATED Net interest income (TE) $ 1,041,905 $ 1,150,765 $ 1,102,248 $ 1,100,728 Provision for credit losses 147,991 107,047 183,147 200,233 ----------- ----------- ----------- ----------- Net interest income after provision 893,914 1,043,718 919,101 900,495 Noninterest income 990,684 489,919 1,011,912 1,103,486 Noninterest expense 1,045,404 1,007,616 1,026,237 1,008,866 ----------- ----------- ----------- ----------- Income before taxes 839,194 526,021 904,776 995,115 Income tax expense and TE adjustment 295,078 182,384 318,968 351,612 ----------- ----------- ----------- ----------- Net income $ 544,116 $ 343,637 $ 585,808 $ 643,503 =========== =========== =========== =========== UNUSUAL ITEMS (PRETAX) Auto lease residual recovery (charge) $ 1,579 $ 9,574 - ($ 25,255) Commercial lease residual charge - - ($ 121) (15,877) Principal investment gains (losses) 89 16,860 (16,388) 6,464 Gain on sale of Corporate Trust Bond Administration business - - - - Building lease termination penalty - - (8,738) - Severance and related charges, net (3,881) (5,449) (407) (71,762) Consideration from sale of NAMCO preferred shares - - - - Loss on commercial paper conduit consolidation - - - - Charitable foundation contribution - - (40,089) - NPI Sale-related costs - - - - NPI charge related to closing operations in Mexico, net - - - - Gain on sale of Upper Peninsula branches - - - - Gain from sale of National Processing - - - - Deferred tax adjustments - - - - Bank stock fund gains 7,512 1,045 31,874 - ----------- ----------- ----------- ----------- Total $ 5,299 $ 22,030 ($ 33,869)($ 106,430) =========== =========== =========== =========== UNUSUAL ITEMS (AFTER TAX) Auto lease residual recovery (charge) $ 1,026 $ 6,223 - ($ 16,416) Commercial lease residual charge - - ($ 79) (10,320) Principal investment gains (losses) 58 10,959 (10,652) 4,202 Gain on sale of Corporate Trust Bond Administration business - - - - Building lease termination penalty - - (5,680) - Severance and related charges, net (2,499) (3,549) (195) (46,642) Consideration from sale of NAMCO preferred shares - - - - Loss on commercial paper conduit consolidation - - - - Charitable foundation contribution - - (26,058) - NPI Sale-related costs - - - - NPI charge related to closing operations in Mexico, net - - - - Gain on sale of Upper Peninsula branches - - - - Gain from sale of National Processing - - - - Deferred tax adjustments - - - - Bank stock fund gains 4,883 679 25,997 - ----------- ----------- ----------- ----------- Total $ 3,468 $ 14,312 ($ 16,667)($ 69,176) =========== =========== =========== =========== Average assets (in millions) $ 114,566 $ 123,747 $ 119,131 $ 116,412 Average total equity (in millions) 9,390 9,171 8,786 8,529 Return on average assets 1.88% 1.10% 1.97% 2.24% Return on average total equity 22.99 14.87 26.74 30.60 Efficiency ratio 51.69 61.62 49.27 45.77 FOR THE YEAR ------------------------------------- 2004 2003 2002 ------------ ------------ ----------- CONSOLIDATED Net interest income (TE) $ 4,531,231 $ 4,395,646 $ 4,035,733 Provision for credit losses 323,272 638,418 681,918 ----------- ----------- ----------- Net interest income after provision 4,207,959 3,757,228 3,353,815 Noninterest income 4,463,022 3,596,001 2,574,974 Noninterest expense 4,565,382 4,088,123 3,729,634 ----------- ----------- ----------- Income before taxes 4,105,599 3,265,106 2,199,155 Income tax expense and TE adjustment 1,325,665 1,148,042 752,512 ----------- ----------- ----------- Net income $ 2,779,934 $ 2,117,064 $ 1,446,643 =========== =========== =========== UNUSUAL ITEMS (PRETAX) Auto lease residual recovery (charge) $ 6,216 ($ 14,102)($ 50,851) Commercial lease residual charge - (15,998) (8,580) Principal investment gains (losses) 69,077 7,025 (22,903) Gain on sale of Corporate Trust Bond Administration business 62,328 - - Building lease termination penalty - (8,738) - Severance and related charges, net (39,039) (81,499) (32,803) Consideration from sale of NAMCO preferred shares - - 5,136 Loss on commercial paper conduit consolidation - - (15,891) Charitable foundation contribution - (40,089) (52,825) NPI Sale-related costs (17,167) NPI charge related to closing operations in Mexico, net - - (1,304) Gain on sale of Upper Peninsula branches 13,983 - - Gain from sale of National Processing 714,195 - - Deferred tax adjustments 67,187 - - Bank stock fund gains 3,176 40,431 74,452 ----------- ----------- ----------- Total $ 879,956 ($ 112,970)($ 105,569) =========== =========== =========== UNUSUAL ITEMS (AFTER TAX) Auto lease residual recovery (charge) $ 4,041 $ (9,167)($ 33,053) Commercial lease residual charge - (10,399) (5,577) Principal investment gains (losses) 44,900 4,567 (14,886) Gain on sale of Corporate Trust Bond Administration business 40,513 - - Building lease termination penalty - (5,680) - Severance and related charges, net (25,374) (52,885) (21,322) Consideration from sale of NAMCO preferred shares - - 3,338 Loss on commercial paper conduit consolidation - - (10,329) Charitable foundation contribution - (26,058) (34,336) NPI Sale-related costs (9,520) - - NPI charge related to closing operations in Mexico, net - - (2,004) Gain on sale of Upper Peninsula branches 9,089 - - Gain from sale of National Processing 486,822 - - Deferred tax adjustments 67,187 - - Bank stock fund gains 2,064 31,559 53,343 ----------- ----------- ----------- Total $ 619,722 ($ 68,063)($ 64,826) =========== =========== =========== Average assets (in millions) $ 124,310 $ 118,473 $ 103,505 Average total equity (in millions) 11,316 8,972 7,973 Return on average assets 2.24% 1.79% 1.40% Return on average total equity 24.57 23.60 18.14 Efficiency ratio 50.87 51.46 57.12
33 UNAUDITED NATIONAL CITY CORPORATION MONTHLY FINANCIAL TRENDS CONSOLIDATED SELECTED AVERAGE BALANCES ($ IN MILLIONS)
DECEMBER NOVEMBER OCTOBER SEPTEMBER AUGUST JULY JUNE 2004 2004 2004 2004 2004 2004 2004 -------- -------- ------- --------- ------- ------- ------- ASSETS AVAILABLE FOR SALE SECURITIES, AT COST $ 9,348 $ 9,573 $ 9,653 $ 9,460 $ 9,618 $ 9,923 $ 6,541 PORTFOLIO LOANS: Commercial $ 25,147 $ 25,171 $25,199 $24,852 $24,523 $24,980 $19,596 Commercial construction 2,926 2,957 2,925 2,855 2,820 2,771 2,279 Real estate - commercial 12,063 11,976 11,956 12,005 12,026 11,947 10,967 Real estate - residential 30,743 30,551 30,348 30,063 29,592 29,277 28,352 Home equity lines of credit 18,581 18,080 17,584 16,839 16,294 15,626 13,342 Credit card and other unsecured lines of credit 2,393 2,327 2,329 2,309 2,282 2,252 2,189 Other consumer 7,966 7,911 7,884 7,719 7,545 7,435 7,040 -------- -------- ------- ------- ------- ------- ------- TOTAL PORTFOLIO LOANS $ 99,819 $ 98,973 $98,225 $96,642 $95,082 $94,288 $83,765 ======== ======== ======= ======= ======= ======= ======= LOANS HELD FOR SALE OR SECURITIZATION: Commercial $ 22 $ 13 $ 13 $ 17 $ 17 $ 148 $ 24 Commercial real estate 384 371 223 278 348 357 - Mortgage: National City Mortgage Co. 9,259 9,289 8,827 8,748 8,498 9,424 10,861 First Franklin 2,123 1,958 1,874 2,162 2,402 2,875 2,962 National City Home Loan Services (formerly Altegra) 144 - - 7 3 3 5 Provident PCFS 3 - 10 47 86 145 - -------- -------- ------- ------- ------- ------- ------- Total mortgage loans held for sale 11,529 11,247 10,711 10,964 10,989 12,447 13,828 Automobile loans held for securitization - - - - - - - -------- -------- ------- ------- ------- ------- ------- TOTAL LOANS HELD FOR SALE OR SECURITIZATION $ 11,935 $ 11,631 $10,947 $11,259 $11,354 $12,952 $13,852 ======== ======== ======= ======= ======= ======= ======= LIABILITIES DEPOSITS: Noninterest bearing 18,726 $ 19,309 $18,628 $18,729 $18,722 $18,741 $17,279 NOW and money market accounts 29,730 29,893 29,928 29,449 29,715 30,159 28,626 Savings accounts 2,634 2,744 2,742 2,613 2,648 2,774 2,584 Consumer time 16,739 16,669 16,585 16,401 16,337 16,217 13,618 -------- -------- ------- ------- ------- ------- ------- CORE DEPOSITS 67,829 68,615 67,883 67,192 67,422 67,891 62,107 Other 4,822 5,183 5,140 5,065 5,373 5,161 1,180 Foreign 11,882 9,983 8,962 9,725 9,447 10,253 9,701 -------- -------- ------- ------- ------- ------- ------- TOTAL DEPOSITS $ 84,533 $ 83,781 $81,985 $81,982 $82,242 $83,305 $72,988 ======== ======== ======= ======= ======= ======= ======= Federal funds borrowed and security repurchase agreements $ 7,623 $ 6,846 $ 6,900 $ 7,400 $ 8,012 $ 8,667 $ 8,236 Borrowed funds 1,270 1,507 2,175 1,616 800 958 1,803 Long-term debt 28,527 29,284 28,983 27,254 25,688 24,438 20,533 MEMO: Noninterest bearing mortgage escrow principal and interest (P&I) balances $ 3,017 $ 3,168 $ 2,902 $ 2,815 $ 2,720 $ 2,771 $ 2,911 Noninterest bearing mortgage escrow taxes and insurance (T&I) balances 1,202 1,436 1,540 1,421 1,381 1,340 1,185 Noninterest bearing mortgage escrow replacement reserve (NRR) balances 107 118 104 99 92 93 - Interest bearing mortgage escrow replacement reserve (IRR) balances 132 126 127 122 119 116 - Noninterest bearing deposits excluding P&I, T&I, and NRR balances 14,400 14,587 14,082 14,394 14,529 14,537 13,183 Core deposits excluding P&I, T&I, NRR, and IRR balances 63,371 63,767 63,210 62,735 63,110 63,571 58,011 MAY APRIL MARCH FEBRUARY JANUARY DECEMBER 2004 2004 2004 2004 2004 2003 ------- ------- ------- -------- ------- -------- ASSETS AVAILABLE FOR SALE SECURITIES, AT COST $ 6,656 $ 6,740 $ 6,423 $ 6,565 $ 6,624 $ 6,678 PORTFOLIO LOANS: Commercial $19,657 $19,337 $18,927 $ 18,843 $18,811 $19,383 Commercial construction 2,259 2,274 2,228 2,249 2,257 2,235 Real estate - commercial 10,940 10,550 9,820 9,817 9,819 9,668 Real estate - residential 27,945 27,649 27,105 26,950 27,167 26,672 Home equity lines of credit 12,845 12,270 11,732 11,373 11,081 10,509 Credit card and other unsecured lines of credit 2,257 2,248 2,251 2,281 2,316 2,591 Other consumer 7,130 7,458 7,391 7,412 7,415 7,349 ------- ------- ------- -------- ------- ------- TOTAL PORTFOLIO LOANS $83,033 $81,786 $79,454 $ 78,925 $78,866 $78,407 ======= ======= ======= ======== ======= ======= LOANS HELD FOR SALE OR SECURITIZATION: Commercial $ 15 $ 25 $ 7 $ 7 $ 25 $ 17 Commercial real estate - - - - - - Mortgage: National City Mortgage Co. 11,832 11,202 9,816 9,063 11,489 12,288 First Franklin 2,580 2,015 1,490 1,945 1,488 1,263 National City Home Loan Services (formerly Altegra) 68 122 - - - 1 Provident PCFS - - - - - - ------- ------- ------- -------- ------- ------- Total mortgage loans held for sale 14,480 13,339 11,306 11,008 12,977 13,552 Automobile loans held for securitization - - - 732 871 741 ------- ------- ------- -------- ------- ------- TOTAL LOANS HELD FOR SALE OR SECURITIZATION $14,495 $13,364 $11,313 $ 11,747 $13,873 $14,310 ======= ======= ======= ======== ======= ======= LIABILITIES DEPOSITS: Noninterest bearing $18,127 $17,850 $16,505 $ 15,383 $15,068 $15,825 NOW and money market accounts 28,696 28,518 27,758 27,252 26,960 27,018 Savings accounts 2,594 2,550 2,400 2,350 2,354 2,354 Consumer time 13,471 13,332 12,910 13,021 13,099 13,140 ------- ------- ------- -------- ------- ------- CORE DEPOSITS 62,888 62,250 59,573 58,006 57,481 58,337 Other 1,107 1,005 838 837 896 891 Foreign 10,100 7,617 6,135 6,633 6,799 7,069 ------- ------- ------- -------- ------- ------- TOTAL DEPOSITS $74,095 $70,872 $66,546 $ 65,476 $65,176 $66,297 ======= ======= ======= ======== ======= ======= Federal funds borrowed and security repurchase agreements $ 7,719 $ 8,825 $ 8,422 $ 7,976 $ 7,431 $ 7,525 Borrowed funds 1,297 1,550 907 1,042 2,794 1,278 Long-term debt 20,295 19,257 19,829 21,405 22,790 23,770 MEMO: Noninterest bearing mortgage escrow principal and interest (P&I) balances $ 3,916 $ 3,951 $ 3,046 $ 2,323 $ 2,035 $ 2,336 Noninterest bearing mortgage escrow taxes and insurance (T&I) balances 1,132 1,139 1,057 967 902 904 Noninterest bearing mortgage escrow replacement reserve (NRR) balances - - - - - - Interest bearing mortgage escrow replacement reserve (IRR) balances - - - - - - Noninterest bearing deposits excluding P&I, T&I, and NRR balances 13,079 12,760 12,402 12,093 12,131 12,585 Core deposits excluding P&I, T&I, NRR, and IRR balances 57,840 57,160 55,470 54,716 54,544 55,097
34 UNAUDITED NATIONAL CITY CORPORATION MONTHLY FINANCIAL TRENDS CAPITALIZATION (PERIOD END) (IN MILLIONS, EXCEPT PER SHARE AND EMPLOYEE DATA)
DECEMBER NOVEMBER OCTOBER SEPTEMBER AUGUST JULY JUNE MAY APRIL MARCH 2004 2004 2004 2004 2004 2004 2004 2004 2004 2004 -------- -------- ------- --------- ------ ------ ------ ----- ----- ----- COMMON STOCK REPURCHASE ACTIVITY Number of common shares repurchased 5.1 4.4 3.4 5.6 2.4 8.0 9.0 - - - Average price per share of repurchased common shares $37.10 $38.33 $38.40 $38.31 $37.09 $35.72 $35.06 - - - Total cost $189.3 $168.2 $130.7 $214.8 $ 87.5 $286.9 $315.9 - - - Common shares remaining under authorization(1) 37.1 17.2 21.6 25.0 30.6 33.0 41.0 50.0 50.0 50.0 Shares outstanding: Average basic 648.4 653.4 657.0 660.7 662.9 666.4 618.4 621.5 617.3 606.4 Average diluted 660.8 667.2 670.8 675.4 677.3 678.6 625.0 627.8 623.6 613.8 Ending common 646.7 651.5 655.4 658.3 662.6 662.7 612.9 621.6 621.3 606.6 FEBRUARY JANUARY DECEMBER 2004 2004 2003 -------- ------- -------- COMMON STOCK REPURCHASE ACTIVITY Number of common shares repurchased .8 1.4 2.3 Average price per share of repurchased common shares $34.86 $34.32 $33.62 Total cost $ 29.0 $ 46.4 $ 77.0 Common shares remaining under authorization(1) 50.0 26.4 27.8 Shares outstanding: Average basic 605.4 605.9 606.9 Average diluted 612.2 611.8 612.6 Ending common 605.5 605.7 606.0
(1) In December 2004, National City's Board of Directors authorized an additional 25 million shares of issued and outstanding common stock. This new authorization is incremental to the February 2004 share repurchase authorization, for 50 million shares, which replaced all previous share authorizations. FULL-TIME EQUIVALENT EMPLOYEES BY LINE OF BUSINESS(1)
DECEMBER NOVEMBER OCTOBER SEPTEMBER AUGUST JULY JUNE MAY APRIL MARCH 2004 2004 2004 2004 2004 2004 2004 2004 2004 2004 -------- -------- ------- --------- ------ ------ ------ ------ ------ ------ LINE OF BUSINESS STAFF: Consumer and Small Business Financial Services 12,944 12,800 12,651 12,678 12,733 12,881 12,334 12,229 12,232 11,996 Wholesale Banking 2,271 2,269 2,248 2,261 2,246 2,277 1,672 1,680 1,665 1,582 National City Mortgage Co.(2) 7,795 7,743 7,708 7,657 7,709 7,719 7,800 7,776 7,798 7,678 National Consumer Finance(2) First Franklin Financial Corporation 2,391 2,492 2,488 2,481 2,450 2,369 2,241 2,157 2,072 2,012 National City Home Loan Services 325 326 333 326 326 332 338 338 331 328 National Home Equity 415 412 411 415 429 437 391 365 331 312 National City Warehouse Resources 69 70 68 63 64 66 - - - - Provident PCFS(3) 245 262 369 437 448 455 - - - - ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Total National Consumer Finance 3,445 3,562 3,669 3,722 3,717 3,659 2,970 2,860 2,734 2,652 Asset Management 1,516 1,525 1,538 1,533 1,533 1,567 1,511 1,494 1,497 1,483 National Processing(4) - - - 1,608 1,621 1,673 1,655 1,639 1,660 1,671 CORPORATE SUPPORT STAFF(5) 7,259 7,247 7,256 6,933 7,018 7,199 6,120 5,988 6,026 5,974 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ TOTAL EMPLOYEES 35,230 35,146 35,070 36,392 36,577 36,975 34,062 33,666 33,612 33,036 ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== FEBRUARY JANUARY DECEMBER 2004 2004 2003 -------- ------- -------- LINE OF BUSINESS STAFF: Consumer and Small Business Financial Services 11,966 12,049 12,093 Wholesale Banking 1,565 1,560 1,562 National City Mortgage Co.(2) 7,691 7,789 7,852 National Consumer Finance(2) First Franklin Financial Corporation 1,970 1,960 1,943 National City Home Loan Services 337 346 357 National Home Equity 305 308 311 National City Warehouse Resources - - - Provident PCFS(3) - - - ------ ------ ------ Total National Consumer Finance 2,612 2,614 2,611 Asset Management 1,489 1,491 1,510 National Processing(4) 1,683 1,693 1,693 CORPORATE SUPPORT STAFF(5) 6,007 6,032 6,010 ------ ------ ------ TOTAL EMPLOYEES 33,013 33,228 33,331 ====== ====== ======
(1) Represents period-end, active, full-time equivalent employees (2) Effective January 1, 2004, National City Mortgage Co. was designated as a separate line of business. (3) Provident PCFS was sold effective December 1, 2004 (4) In October 2004, the National Processing business was sold to Bank of America (5) Personnel expense associated with corporate staff are allocated to the lines of business either directly based on usage or indirectly as part of the general overhead allocation process 35 UNAUDITED NATIONAL CITY CORPORATION MONTHLY FINANCIAL TRENDS CONSUMER AND SMALL BUSINESS FINANCIAL SERVICES PERFORMANCE MEASURES
DECEMBER NOVEMBER OCTOBER SEPTEMBER AUGUST JULY JUNE 2004 2004 2004 2004 2004 2004 2004 ---------- ---------- ---------- ---------- ---------- ---------- ---------- AVERAGE TOTAL DEPOSITS (IN MILLIONS) $ 51,853 $ 51,864 $ 51,836 $ 52,133 $ 52,355 $ 52,703 $ 48,655 PERIOD-END DEPOSIT ACCOUNT METRICS PERSONAL DEPOSITS: Number of accounts (in thousands): Noninterest bearing checking 1,727 1,734 1,741 1,750 1,758 1,757 1,661 Interest bearing checking(1) 839 836 831 830 825 820 750 Money market savings 565 557 549 542 531 511 496 Regular savings 757 766 779 795 808 833 806 ---------- ---------- ---------- ---------- ---------- ---------- ---------- TOTAL PERSONAL DEPOSIT ACCOUNTS 3,888 3,893 3,900 3,917 3,922 3,921 3,713 ========== ========== ========== ========== ========== ========== ========== Average account size: Noninterest bearing checking $ 2,185 $ 2,043 $ 2,150 $ 2,011 $ 2,037 $ 2,036 $ 2,001 Interest bearing checking(1) 9,636 9,439 9,558 9,579 9,898 10,333 10,548 Money market savings 24,566 25,199 25,805 26,358 27,113 28,697 28,869 Regular savings 2,816 2,786 2,771 2,735 2,727 2,712 2,822 ---------- ---------- ---------- ---------- ---------- ---------- ---------- TOTAL AVERAGE ACCOUNT SIZE $ 7,171 $ 7,092 $ 7,183 $ 7,128 $ 7,228 $ 7,389 $ 7,493 ========== ========== ========== ========== ========== ========== ========== BUSINESS DEPOSITS: Number of accounts (in thousands)(1) 374 373 372 372 367 365 336 Average account size(1) $ 19,766 $ 20,811 $ 20,555 $ 20,538 $ 20,636 $ 21,147 $ 19,775 TIME DEPOSITS: Number of accounts (in thousands) 921 922 932 936 936 936 805 Average account size $ 17,386 $ 17,295 $ 17,036 $ 16,985 $ 16,927 $ 16,832 $ 16,451 CONSUMER LOAN PRODUCTION METRICS (# OF LOANS)(2) Installment loan originations: Home equity(3) 2,483 2,055 1,920 2,201 3,354 2,375 2,414 Other(4) 1,264 1,584 1,600 1,886 1,817 1,574 1,762 Home equity and other lines of credit 5,289 6,057 7,262 7,445 7,465 9,865 7,314 ---------- ---------- ---------- ---------- ---------- ---------- ---------- TOTAL CONSUMER LOAN ORIGINATIONS 9,036 9,696 10,782 11,532 12,636 13,814 11,490 ========== ========== ========== ========== ========== ========== ========== BANK BRANCHES AND OTHER Total bank branches 1,222 1,222 1,224 1,206 1,207 1,207 1,142 ATMs 1,948 1,948 1,945 1,931 2,106 2,101 1,642 Online banking customers 1,014,403 1,005,659 997,355 975,392 968,093 944,853 900,074 MAY APRIL MARCH FEBRUARY JANUARY DECEMBER 2004 2004 2004 2004 2004 2003 ---------- ---------- ---------- ---------- ---------- -------- AVERAGE TOTAL DEPOSITS (IN MILLIONS) $ 48,648 $ 48,285 $ 46,724 $ 46,341 $ 46,187 $ 46,509 PERIOD-END DEPOSIT ACCOUNT METRICS PERSONAL DEPOSITS: Number of accounts (in thousands): Noninterest bearing checking 1,659 1,664 1,651 1,648 1,646 1,645 Interest bearing checking(1) 744 739 720 717 715 713 Money market savings 483 471 457 455 455 456 Regular savings 823 836 824 825 823 824 ---------- ---------- ---------- ---------- ---------- ---------- TOTAL PERSONAL DEPOSIT ACCOUNTS 3,709 3,710 3,652 3,645 3,639 3,638 ========== ========== ========== ========== ========== ========== Average account size: Noninterest bearing checking $ 2,128 $ 2,170 $ 1,956 $ 2,055 $ 1,981 $ 1,916 Interest bearing checking(1) 10,985 11,096 11,095 11,103 11,034 11,128 Money market savings 30,100 30,802 30,743 30,649 30,501 30,369 Regular savings 2,812 2,776 2,607 2,543 2,521 2,519 ---------- ---------- ---------- ---------- ---------- ---------- TOTAL AVERAGE ACCOUNT SIZE $ 7,696 $ 7,716 $ 7,505 $ 7,518 $ 7,450 $ 7,422 ========== ========== ========== ========== ========== ========== BUSINESS DEPOSITS: Number of accounts (in thousands)(1) 334 332 320 317 315 315 Average account size(1) $ 19,761 $ 19,356 $ 19,587 $ 18,942 $ 18,518 $ 19,006 TIME DEPOSITS: Number of accounts (in thousands) 803 809 782 789 796 801 Average account size $ 16,290 $ 16,160 $ 15,900 $ 15,917 $ 15,856 $ 15,816 CONSUMER LOAN PRODUCTION METRICS (# OF LOANS)(2) Installment loan originations: Home equity(3) 2,565 2,369 2,568 1,661 1,476 2,225 Other(4) 1,571 1,727 1,739 1,213 1,286 1,391 Home equity and other lines of credit 8,121 7,163 6,402 4,519 4,368 5,039 ---------- ---------- ---------- ---------- ---------- ---------- TOTAL CONSUMER LOAN ORIGINATIONS 12,257 11,259 10,709 7,393 7,130 8,655 ========== ========== ========== ========== ========== ========== BANK BRANCHES AND OTHER Total bank branches 1,146 1,143 1,107 1,107 1,111 1,114 ATMs 1,631 1,624 1,565 1,567 1,568 1,574 Online banking customers 880,017 869,162 850,784 831,194 812,401 793,910
(1) Restated to reflect the transfer of deposits to the Wholesale Banking line of business in January 2004 (2) Excludes Dealer Finance, Education Finance, and National City Card Services. Additionally, home equity loans generated by the National Home Equity division of the National Consumer Finance line of business are excluded from these metrics. (3) Represents closed-end home equity installment loans included in real estate residential portfolio loans on the consolidated balance sheet (4) Includes automobile, truck, boat, recreational vehicle, and other secured installment loans 36 UNAUDITED NATIONAL CITY CORPORATION MONTHLY FINANCIAL TRENDS ASSET MANAGEMENT PERFORMANCE MEASURES ($ IN MILLIONS)
DECEMBER NOVEMBER OCTOBER SEPTEMBER AUGUST JULY JUNE 2004 2004 2004 2004 2004 2004 2004 -------- -------- -------- --------- -------- -------- -------- ASSETS UNDER ADMINISTRATION Managed assets: Value at beginning of period $ 61,262 $ 60,332 $ 60,322 $ 60,743 $ 60,984 $ 59,757 $ 59,741 Acquisition - - 257 - - 3,218 - Estimated change due to market impact 944 994 (1,825) 265 360 (1,327) 919 Other activity, net 832 (64) 1,578 (686) (601) (664) (903) -------- -------- -------- --------- -------- -------- -------- Value at end of period 63,038 61,262 60,332 60,322 60,743 60,984 59,757 -------- -------- -------- --------- -------- -------- -------- Non-managed assets: Value at beginning of period 46,508 48,005 47,327 47,191 46,635 41,096 51,689 Acquisition - - 137 - - 6,710 - Divestiture(1) - - - - - - (10,805) Estimated change due to market impact 866 820 1,231 176 121 (747) 358 Other activity, net (1,635) (2,317) (690) (40) 435 (424) (146) -------- -------- -------- --------- -------- -------- -------- Value at end of period 45,739 46,508 48,005 47,327 47,191 46,635 41,096 -------- -------- -------- --------- -------- -------- -------- TOTAL ASSETS AT END OF PERIOD $108,777 $107,770 $108,337 $ 107,649 $107,934 $107,619 $100,853 ======== ======== ======== ========= ======== ======== ======== PROPRIETARY MUTUAL FUND ASSETS (included above) $ 13,483 $ 13,450 $ 13,621 $ 13,446 $ 13,308 $ 13,611 $ 14,131 MAY APRIL MARCH FEBRUARY JANUARY DECEMBER 2004 2004 2004 2004 2004 2003 -------- -------- -------- -------- -------- -------- ASSETS UNDER ADMINISTRATION Managed assets: Value at beginning of period $ 58,892 $ 59,730 $ 61,037 $60,353 $ 59,708 $ 58,286 Acquisition - 645 - - - - Estimated change due to market impact 124 (785) (370) 597 807 1,344 Other activity, net 725 (698) (937) 87 (162) 78 -------- -------- -------- -------- -------- -------- Value at end of period 59,741 58,892 59,730 61,037 60,353 59,708 -------- -------- -------- -------- -------- -------- Non-managed assets: Value at beginning of period 52,320 52,219 52,564 51,815 52,139 50,565 Acquisition - 54 - - - - Divestiture(1) - - - - - - Estimated change due to market impact 237 (513) (450) 660 321 1,281 Other activity, net (868) 560 105 89 (645) 293 -------- -------- -------- -------- -------- -------- Value at end of period 51,689 52,320 52,219 52,564 51,815 52,139 -------- -------- -------- -------- -------- -------- TOTAL ASSETS AT END OF PERIOD $111,430 $111,212 $111,949 $113,601 $112,168 $111,847 ======== ======== ======== ======== ======== ======== PROPRIETARY MUTUAL FUND ASSETS (included above) $ 14,042 $ 14,031 $ 14,361 $ 14,892 $ 14,988 $ 15,335
(1) Relates to the sale of the Corporate Trust Bond Administration business on June 30, 2004 MORTGAGE BANKING STATISTICS ($ IN MILLIONS)
DECEMBER NOVEMBER OCTOBER SEPTEMBER AUGUST JULY JUNE 2004 2004 2004 2004 2004 2004 2004 -------- -------- -------- --------- -------- -------- -------- PRODUCTION DATA APPLICATIONS:(1) National City Mortgage Co. (NCMC) $ 7,694 $ 7,984 $ 8,633 $ 9,094 $ 9,096 $ 8,221 $ 8,429 First Franklin 3,607 3,748 3,956 4,098 4,492 4,385 5,920 -------- -------- -------- --------- -------- -------- -------- TOTAL APPLICATIONS $ 11,301 $ 11,732 $ 12,589 $ 13,192 $ 13,588 $ 12,606 $ 14,349 ======== ======== ======== ========= ======== ======== ======== Percentage of NCMC applications represented by refinances 57% 55% 54% 52% 48% 42% 39% ORIGINATIONS: NCMC Retail $ 2,684 $ 2,729 $ 2,644 $ 2,577 $ 2,648 $ 2,510 $ 2,871 NCMC Wholesale 2,980 2,892 2,483 2,710 2,659 2,396 2,551 Less: portfolio loan originations (437) (457) (449) (448) (466) (467) (521) -------- -------- -------- --------- -------- -------- -------- Total NCMC originations for sale 5,227 5,164 4,678 4,839 4,841 4,439 4,901 Total First Franklin loan originations 2,234 2,347 2,372 2,335 2,666 2,742 3,556 Less: portfolio loan originations (772) (813) (1,009) (773) (1,013) (1,049) (1,285) -------- -------- -------- --------- -------- -------- -------- Total First Franklin originations for sale 1,462 1,534 1,363 1,562 1,653 1,693 2,271 -------- -------- -------- --------- -------- -------- -------- TOTAL LOANS ORIGINATED FOR SALE $ 6,689 $ 6,698 $ 6,041 $ 6,401 $ 6,494 $ 6,132 $ 7,172 ======== ======== ======== ========= ======== ======== ======== Percentage of NCMC originations represented by refinances 55% 57% 52% 47% 43% 39% 42% Percentage of First Franklin originations represented by refinances 34% 37% 35% 31% 33% 33% 34% LOAN SALES NCMC loans sold servicing retained $ 4,341 $ 4,451 $ 3,812 $ 4,381 $ 4,161 $ 5,500 $ 5,483 NCMC loans sold servicing released(2) 136 154 210 237 92 88 119 -------- -------- -------- --------- -------- -------- -------- Total NCMC loan sales 4,477 4,605 $ 4,022 $ 4,618 $ 4,253 $ 5,588 $ 5,602 First Franklin loans sold servicing retained 970 949 - - - - - First Franklin loans sold servicing released(2) 330 382 1,565 1,678 2,625 1,263 2,317 -------- -------- -------- --------- -------- -------- -------- Total First Franklin loan sales 1,300 1,331 1,565 1,678 2,625 1,263 2,317 -------- -------- -------- --------- -------- -------- -------- TOTAL MORTGAGE LOAN SALES $ 5,777 $ 5,936 $ 5,587 $ 6,296 $ 6,878 $ 6,851 $ 7,919 ======== ======== ======== ========= ======== ======== ======== SERVICING DATA NCMC mortgage loans serviced for third parties $152,367 $152,365 $151,280 $ 150,329 $150,290 $149,293 $146,958 First Franklin mortgage loans serviced for third parties 1,913 949 - - - - - -------- -------- -------- --------- -------- -------- -------- TOTAL MORTGAGE LOANS SERVICED FOR THIRD PARTIES $154,280 $153,314 $151,280 $ 150,329 $150,290 $149,293 $146,958 ======== ======== ======== ========= ======== ======== ======== MAY APRIL MARCH FEBRUARY JANUARY DECEMBER 2004 2004 2004 2004 2004 2003 -------- -------- -------- -------- ------- -------- PRODUCTION DATA APPLICATIONS:(1) National City Mortgage Co. (NCMC) $ 7,845 $ 9,032 $ 13,982 $ 8,315 $ 8,196 $ 6,167 First Franklin 5,127 4,656 3,809 3,450 2,739 2,795 -------- -------- -------- -------- -------- -------- TOTAL APPLICATIONS $ 12,972 $ 13,688 $ 17,791 $ 11,765 $ 10,935 $ 8,962 ======== ======== ======== ======== ======== ======== Percentage of NCMC applications represented by refinances 41% 49% 66% 59% 60% 54% ORIGINATIONS: NCMC Retail $ 3,026 $ 3,941 $ 3,254 $ 2,367 $ 1,772 $ 2,383 NCMC Wholesale 2,616 3,723 3,341 2,391 1,899 2,519 Less: portfolio loan originations (456) (475) (414) (298) (233) (302) -------- -------- -------- -------- -------- -------- Total NCMC originations for sale 5,186 7,189 6,181 4,460 3,438 4,600 Total First Franklin loan originations 2,786 2,440 2,463 1,716 1,494 2,070 Less: portfolio loan originations (880) (891) (684) (429) - (1,112) -------- -------- -------- -------- -------- -------- Total First Franklin originations for sale 1,906 1,549 1,779 1,287 1,494 958 -------- -------- -------- -------- -------- -------- TOTAL LOANS ORIGINATED FOR SALE $ 7,092 $ 8,738 $ 7,960 $ 5,747 $ 4,932 $ 5,558 ======== ======== ======== ======== ======== ======== Percentage of NCMC originations represented by refinances 53% 67% 64% 63% 54% 51% Percentage of First Franklin originations represented by refinances 33% 34% 35% 34% 32% 32% LOAN SALES NCMC loans sold servicing retained $ 5,820 $ 5,432 $ 4,529 $ 4,656 $ 6,227 $ 3,957 NCMC loans sold servicing released(2) 79 114 102 84 99 104 -------- -------- -------- -------- -------- -------- Total NCMC loan sales $ 5,899 $ 5,546 $ 4,631 $ 4,740 $ 6,326 $ 4,061 First Franklin loans sold servicing retained - - - - - - First Franklin loans sold servicing released(2) 1,358 1,212 2,505 129 1,799 265 -------- -------- -------- -------- -------- -------- Total First Franklin loan sales 1,358 1,212 2,505 129 1,799 265 -------- -------- -------- -------- -------- -------- TOTAL MORTGAGE LOAN SALES $ 7,257 $ 6,758 $ 7,136 $ 4,869 $ 8,125 $ 4,326 ======== ======== ======== ======== ======== ======== SERVICING DATA NCMC mortgage loans serviced for third parties $144,859 $143,750 $144,598 $145,888 $144,679 $141,146 First Franklin mortgage loans serviced for third parties - - - - - - -------- -------- -------- -------- -------- -------- TOTAL MORTGAGE LOANS SERVICED FOR THIRD PARTIES $144,859 $143,750 $144,598 $145,888 $144,679 $141,146 ======== ======== ======== ======== ======== ========
(1) Represents applications for both loans originated for sale and to be held in portfolio (2) Represents loan sales of new originations whereby the commitment to sell both the loan and related servicing was made simultaneously 37 UNAUDITED NATIONAL CITY CORPORATION MONTHLY FINANCIAL TRENDS FIRST FRANKLIN ORIGINATION AND PORTFOLIO STATISTICS(1) ($ IN MILLIONS)
DECEMBER NOVEMBER OCTOBER SEPTEMBER AUGUST JULY JUNE 2004 2004 2004 2004 2004 2004 2004 -------- -------- -------- --------- -------- -------- -------- PRODUCTION DATA ORIGINATIONS: Total First Franklin originations $ 2,234 $ 2,347 $ 2,372 $ 2,335 $ 2,666 $ 2,742 $ 3,556 Weighted-average note rate 6.95% 6.88% 6.91% 7.02% 7.08% 7.04% 6.74% Weighted-average credit score(2) 653 652 654 653 653 654 660 SALES: Total sales of First Franklin loans to third parties $ 1,300 $ 1,331 $ 1,565 $ 1,678 $ 2,625 $ 1,263 $ 2,317 Total production revenue 24 24 29 37 66 25 81 PORTFOLIO STATISTICS(3) Period-end portfolio balance $ 18,260 $ 18,597 $ 18,273 $ 18,116 $ 17,729 $ 17,369 $ 16,714 Weighted-average note rate 6.76% 6.85% 6.85% 6.84% 6.83% 6.83% 6.84% Weighted-average loan size $126,680 $121,520 $122,564 $ 124,399 $126,552 $128,843 $131,240 Weighted-average credit score(2)(4) 648 649 648 650 650 650 649 First-lien weighted-average loan-to-value ratio(5) 77.78% 77.79% 77.78% 77.80% 77.82% 77.83% 77.85% MAY APRIL MARCH FEBRUARY JANUARY DECEMBER 2004 2004 2004 2004 2004 2003 -------- -------- -------- -------- -------- -------- PRODUCTION DATA ORIGINATIONS: Total First Franklin originations $ 2,786 $ 2,440 $ 2,463 $ 1,716 $ 1,494 $ 2,070 Weighted-average note rate 6.61% 6.61% 6.64% 6.71% 6.85% 6.99% Weighted-average credit score(2) 660 654 651 651 652 651 SALES: Total sales of First Franklin loans to third parties $ 1,358 $ 1,212 $ 2,505 $ 129 $ 1,799 $ 265 Total production revenue 44 40 85 12 44 4 PORTFOLIO STATISTICS(3) Period-end portfolio balance $ 16,436 $ 16,062 $ 15,627 $ 15,557 $ 15,930 $ 15,137 Weighted-average note rate 6.91% 6.98% 7.06% 7.13% 7.15% 7.19% Weighted-average loan size $129,969 $128,621 $126,960 $126,186 $126,637 $127,556 Weighted-average credit score(2)(4) 648 647 648 648 647 649 First-lien weighted-average loan-to-value ratio(5) 77.94% 77.86% 77.84% 77.85% 77.91% 77.89%
(1) First Franklin loans represent nonconforming residential real estate loans originated by First Franklin Financial Corp., a wholly-owned subsidiary of National City Corporation and a division of the National Consumer Finance line of business. (2) Represents the Fair Isaac Corporation FICO(R) score, a benchmark credit rating system used by most financial companies and National City Corporation. National City is not affiliated with Fair Isaac Corporation and obtains FICO(R) scores from third-party credit bureaus. (3) Represents statistics on First Franklin loans retained in the residential real estate portfolio. (4) Based upon most recent available FICO(R) score for borrowers. FICO(R) scores are updated quarterly. (5) Based upon period-end first-lien mortgage loan balance divided by the most recent obtained value of the underlying mortgaged property. 38 -----END PRIVACY-ENHANCED MESSAGE-----