EX-99.1 3 l05091aexv99w1.txt EX-99.1 FINANCIAL SUPPLEMENT EXHIBIT 99.1 [NATIONAL CITY(R) LOGO] UNAUDITED FINANCIAL SUPPLEMENT DECEMBER 31, 2003 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 Securitized Balances 9 Selected Period-End 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 Origination and Portfolio Statistics 38 2001 QUARTERS Consolidated Financial Highlights 39 Consolidated Statements of Income 40 Consolidated Period-End Balance Sheets 41 Consolidated Average Balance Sheets 42 Noninterest Income 43 Noninterest Expense 43 Mortgage Banking Statistics 44-46
TABLE OF CONTENTS (CONTINUED) FINANCIAL SUPPLEMENT SUMMARY OF PRESENTATION CHANGES -------------------------------------------------------------------------------- PRESENTATION CHANGES TO THIS QUARTER'S FINANCIAL SUPPLEMENT ARE AS FOLLOWS: RESTATEMENT This financial supplement reflects restated financial information for 2001, 2002, and the first three quarters of 2003 related to the application of Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities. Further discussion of this restatement is included in the Corporation's news release dated January 15, 2004 announcing financial results for the fourth quarter and full year of 2003. The specific line items affected by the restatement are noted with an asterisk (*). CONSOLIDATED PERIOD-END BALANCE SHEETS - PAGE 6, CONSOLIDATED AVERAGE BALANCE SHEETS - PAGE 7, AVERAGE BALANCES/NET INTEREST INCOME/RATES - PAGES 11-13, CREDIT QUALITY - PAGES 18-20. The commercial construction portfolio is now presented separately from the commercial portfolio in these sections. CONSOLIDATED PERIOD-END BALANCE SHEETS - PAGE 6, SELECTED PERIOD-END BALANCES - PAGE 10 The breakdown of period-end mortgage loans held for sale was removed from the Consolidated Period-End Balance Sheet page and was moved to the Selected Period-End Balances page. Period-end disclosures of noninterest bearing mortgage banking escrow balances were added to the Consolidated Period-End Balance Sheet. MORTGAGE BANKING STATISTICS - PAGES 23-25 The statistics now include the servicing asset capitalization rate and servicing asset amortization rate as well as a roll forward of the unpaid principal balance (UPB) of loans serviced for third parties. HOME EQUITY PORTFOLIO STATISTICS - PAGE 27 Weighted-average note rates were added to the portfolio statistics for Consumer and Small Business Financial Services' and National Home Equity's HELOC and HELOAN portfolios. LINE OF BUSINESS RESULTS - PAGES 29-30 Complete financial information for each division of National Consumer Finance is now presented. 2001 QUARTERS - PAGES 39-46 These financial supplement pages were added to present the restated quarterly 2001 financial information. UNAUDITED NATIONAL CITY CORPORATION CONSOLIDATED FINANCIAL HIGHLIGHTS (IN MILLIONS, EXCEPT PER SHARE DATA)
2003 ---------------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ---------------------------------------------------- EARNINGS Tax-equivalent interest income $ 1,416 $ 1,554 $ 1,528 $ 1,527 Interest expense 375 403 426 426 ---------------------------------------------------- Tax-equivalent net interest income 1,041 1,151 1,102 1,101 Provision for loan losses 148 107 183 200 ---------------------------------------------------- Tax-equivalent NII after provision for loan losses 893 1,044 919 901 Fees and other income - as restated* 981 484 981 1,103 Securities gains (losses), net 10 5 32 - Noninterest expense 1,045 1,008 1,026 1,009 ---------------------------------------------------- Income before taxes and tax-equivalent adjustment - as restated* 839 525 906 995 Income taxes - as restated* 288 175 313 344 Tax-equivalent adjustment 7 6 7 8 ---------------------------------------------------- Net income - as restated* $ 544 $ 344 $ 586 $ 643 ==================================================== Effective tax rate - as restated* 34.6% 33.8% 34.8% 34.8% PER COMMON SHARE Net income: Basic - as restated* $ .89 $ .56 $ .96 $ 1.05 Diluted - as restated* .88 .56 .94 1.05 Dividends paid .32 .32 .305 .305 Book value - as restated* 15.39 14.89 14.72 14.05 Market value (close) 33.94 29.46 32.71 27.85 Average shares: Basic 607.6 613.6 612.1 611.5 Diluted 612.7 619.0 618.4 615.6 EFFECT OF RESTATEMENT OF NET INCOME AND EPS* Mortgage loans held for sale hedge program $ 190 ($153) ($49) $237 Mortgage servicing rights hedge program (145) 95 -- -- ---------------------------------------------------- Net pretax effect of restatement on mortgage banking revenue (1) $ 45 ($58) ($49) $ 237 ==================================================== Net after-tax effect of restatement (1) $ 28 ($35) ($31) $ 147 ==================================================== Cumulative effect on net income (2001 through 2003) ($38) =========== Net income - as originally reported $ 379 $ 617 $ 496 Adjustment for restatement (35) (31) 147 -------------------------------------- Net income - as restated $ 344 $ 586 $ 643 ====================================== Diluted net income per share - as originally reported $ .62 $ .99 $ .81 Adjustment for restatement (.06) (.05) .24 -------------------------------------- Diluted net income per share - as restated $ .56 $ .94 $ 1.05 ======================================= PERFORMANCE RATIOS Return on average common equity - as restated* 22.99% 14.87% 26.74% 30.60% Return on average total equity - as restated* 22.99 14.87 26.74 30.60 Return on average assets - as restated* 1.89 1.10 1.97 2.24 Net interest margin 4.03 4.10 4.11 4.21 Efficiency ratio - as restated* 51.69 61.62 49.27 45.77 CREDIT QUALITY STATISTICS Net charge-offs $ 151 $ 124 $ 164 $ 171 Provision for loan losses 148 107 183 200 Loan loss allowance 1,125 1,130 1,147 1,128 Nonperforming assets 657 756 818 822 Annualized net charge-offs to average portfolio loans .76% .64% .88% .95% Loan loss allowance to period-end portfolio loans 1.42 1.45 1.51 1.51 Loan loss allowance to nonperforming portfolio loans 204.76 179.61 162.09 162.01 Loan loss allowance (period-end) to annualized net charge-offs 189.04 228.68 174.07 163.10 Nonperforming assets to period-end portfolio loans and other nonperforming assets .83 .97 1.08 1.10 2002 ----------------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ----------------------------------------------------- EARNINGS Tax-equivalent interest income $ 1,540 $ 1,451 $ 1,444 $ 1,511 Interest expense 459 472 473 506 ----------------------------------------------------- Tax-equivalent net interest income 1,081 979 971 1,005 Provision for loan losses 159 169 165 189 ----------------------------------------------------- Tax-equivalent NII after provision for loan losses 922 810 806 816 Fees and other income - as restated* 528 576 699 691 Securities gains (losses), net (17) - 44 54 Noninterest expense 1,011 870 974 875 ----------------------------------------------------- Income before taxes and tax-equivalent adjustment - as restated* 422 516 575 686 Income taxes - as restated* 136 161 193 232 Tax-equivalent adjustment 6 8 8 8 ----------------------------------------------------- Net income - as restated* $ 280 $ 347 $ 374 $ 446 ===================================================== Effective tax rate - as restated* 32.7% 31.8% 34.0% 34.2% PER COMMON SHARE Net income: Basic - as restated* $ .46 $ .56 $ .62 $ .73 Diluted - as restated* .46 .56 .60 .73 Dividends paid .305 .305 .295 .295 Book value - as restated* 13.35 13.25 12.99 12.61 Market value (close) 27.32 28.53 33.25 30.76 Average shares: Basic 611.9 611.6 609.3 607.8 Diluted 616.0 617.9 616.8 614.0 EFFECT OF RESTATEMENT OF NET INCOME AND EPS* Mortgage loans held for sale hedge program ($162) ($45) ($30) -- Mortgage servicing rights hedge program -- -- -- -- ----------------------------------------------------- Net pretax effect of restatement on mortgage banking revenue (1) ($162) ($45) ($30) -- ===================================================== Net after-tax effect of restatement (1) ($101) ($27) ($19) -- ===================================================== Cumulative effect on net income (2001 through 2003) Net income - as originally reported $ 381 $ 374 $ 393 $ 446 Adjustment for restatement (101) (27) (19) -- ----------------------------------------------------- Net income - as restated $ 280 $ 347 $ 374 $ 446 ===================================================== Diluted net income per share - as originally reported $ .62 $ .61 $ .63 $ .73 Adjustment for restatement (.16) (.05) (.03) -- ----------------------------------------------------- Diluted net income per share - as restated $ .46 $ .56 $ .60 $ .73 ===================================================== PERFORMANCE RATIOS Return on average common equity - as restated* 13.41% 16.79% 19.05% 24.03% Return on average total equity - as restated* 13.41 16.79 19.05 24.03 Return on average assets - as restated* .99 1.36 1.53 1.77 Net interest margin 4.26 4.34 4.42 4.36 Efficiency ratio - as restated* 62.80 55.98 58.33 51.58 CREDIT QUALITY STATISTICS Net charge-offs $ 140 $ 120 $ 135 $ 181 Provision for loan losses 159 169 165 189 Loan loss allowance 1,099 1,080 1,030 1,000 Nonperforming assets 817 852 793 716 Annualized net charge-offs to average portfolio loans .78% .69% .80% 1.08% Loan loss allowance to period-end portfolio loans 1.52 1.52 1.50 1.47 Loan loss allowance to nonperforming portfolio loans 156.42 144.44 146.42 153.84 Loan loss allowance (period-end) to annualized net charge-offs 198.04 227.03 190.26 135.90 Nonperforming assets to period-end portfolio loans and other nonperforming assets 1.13 1.20 1.15 1.05 FOR THE YEAR -------------------------------------- 2003 2002 2001 -------------------------------------- EARNINGS Tax-equivalent interest income $ 6,025 $ 5,946 $ 6,448 Interest expense 1,630 1,910 2,976 -------------------------------------- Tax-equivalent net interest income 4,395 4,036 3,472 Provision for loan losses 638 682 605 -------------------------------------- Tax-equivalent NII after provision for loan losses 3,757 3,354 2,867 Fees and other income - as restated* 3,549 2,494 2,533 Securities gains (losses), net 47 81 145 Noninterest expense 4,088 3,730 3,345 -------------------------------------- Income before taxes and tax-equivalent adjustment - as restated* 3,265 2,199 2,200 Income taxes - as restated* 1,120 722 778 Tax-equivalent adjustment 28 30 34 -------------------------------------- Net income - as restated* $ 2,117 $ 1,447 $ 1,388 ====================================== Effective tax rate - as restated* 34.6% 33.3% 35.9% PER COMMON SHARE Net income: Basic - as restated* $ 3.46 $ 2.37 $ 2.30 Diluted - as restated* 3.43 2.35 2.27 Dividends paid 1.25 1.20 1.16 Book value - as restated* Market value (close) Average shares: Basic 611.2 610.2 603.6 Diluted 616.4 616.2 611.9 EFFECT OF RESTATEMENT OF NET INCOME AND EPS* Mortgage loans held for sale hedge program $ 225 ($237) -- Mortgage servicing rights hedge program (50) -- -- -------------------------------------- Net pretax effect of restatement on mortgage banking revenue (1) $ 175 ($237) -- ====================================== Net after-tax effect of restatement (1) $ 109 ($147) -- ====================================== Cumulative effect on net income (2001 through 2003) Net income - as originally reported $ 1,594 $ 1,388 Adjustment for restatement (147) -- ----------------------- Net income - as restated $ 1,447 $ 1,388 ======================= Diluted net income per share - as originally reported $ 2.59 $ 2.27 Adjustment for restatement (.24) -- ----------------------- Diluted net income per share - as restated $ 2.35 $ 2.27 ======================= PERFORMANCE RATIOS Return on average common equity - as restated* 23.60% 18.14% 19.94% Return on average total equity - as restated* 23.60 18.14 19.90 Return on average assets - as restated* 1.79 1.40 1.49 Net interest margin 4.11 4.34 4.09 Efficiency ratio - as restated* 51.46 57.12 55.70 CREDIT QUALITY STATISTICS Net charge-offs $ 610 $ 576 $ 463 Provision for loan losses 638 682 605 Loan loss allowance Nonperforming assets Annualized net charge-offs to average portfolio loans .80% .83% .68% Loan loss allowance to period-end portfolio loans Loan loss allowance to nonperforming portfolio loans Loan loss allowance (period-end) to annualized net charge-offs 184.65 190.67 215.61 Nonperforming assets to period-end portfolio loans and other nonperforming assets
* See note on Summary of Presentation Changes (1) The fourth quarter of 2003 includes the effects of not applying SFAS 133 hedge accounting to mortgage loans held for sale (pretax income reduction of $12.9 million) and modifying the testing methodology related to the mortgage servicing rights hedging program. 3 UNAUDITED NATIONAL CITY CORPORATION CONSOLIDATED FINANCIAL HIGHLIGHTS (CONTINUED) ($ IN MILLIONS)
2003 2002 ----------------------------------------- ----------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ----------------------------------------- ----------------------------------------- CAPITAL AND LIQUIDITY RATIOS Tier 1 capital(1) - as restated* 8.80% 8.12% 8.12% 7.82% 7.46% 7.74% 7.90% 7.66% Total risk-based capital(1) - as restated* 13.12 12.30 12.39 11.65 11.37 11.82 12.22 12.09 Leverage(1) - as restated* 7.43 6.58 6.78 6.55 6.39 7.05 7.03 6.49 Period-end equity to assets - as restated* 8.19 7.50 7.32 7.31 6.91 7.42 8.00 7.67 Period-end tangible common equity to assets(2) - as restated* 7.24 6.59 6.43 6.39 6.00 6.43 6.91 6.58 Average equity to assets - as restated* 8.20 7.42 7.38 7.33 7.37 8.10 8.05 7.37 Average equity to portfolio loans - as restated* 12.05 11.90 11.70 11.65 11.63 11.87 11.60 11.08 Average portfolio loans to deposits 116.37 107.50 108.45 110.78 107.90 112.32 114.08 111.71 Average portfolio loans to core deposits 133.21 125.80 127.10 130.48 128.70 131.24 133.96 137.26 Average portfolio loans to earning assets 75.47 68.82 69.92 69.84 70.37 76.59 77.37 73.37 Average securities to earning assets 6.33 5.95 6.89 7.92 9.36 9.26 9.86 9.54 AVERAGE BALANCES Assets - as restated* $114,466 $123,651 $119,035 $116,318 $112,533 $101,054 $ 97,906 $102,108 Portfolio loans 77,901 77,064 75,065 73,183 71,291 68,945 67,930 67,929 Loans held for sale or securitization 17,680 27,036 24,118 22,524 19,676 11,851 10,343 15,015 Securities (at cost) 6,534 6,667 7,397 8,295 9,484 8,336 8,660 8,834 Earning assets 103,218 111,984 107,355 104,785 101,315 90,014 87,797 92,578 Core deposits 58,479 61,258 59,060 56,087 55,394 52,535 50,710 49,490 Purchased deposits and funding 43,267 49,743 47,551 47,740 45,666 37,413 36,765 42,818 Common equity - as restated* 9,390 9,171 8,786 8,529 8,289 8,185 7,876 7,528 Total equity - as restated* 9,390 9,171 8,786 8,529 8,289 8,185 7,877 7,529 PERIOD-END BALANCES Assets - as restated* $113,933 $120,958 $123,343 $117,494 $118,021 $109,271 $ 99,101 $100,078 Portfolio loans 79,279 77,756 75,839 74,933 72,134 71,032 68,674 68,089 Loans held for sale or securitization - as restated* 15,368 23,615 26,796 21,740 24,501 15,811 9,796 12,296 Securities (at fair value) 6,866 6,755 7,377 8,464 9,211 10,487 8,800 9,036 Core deposits 58,922 58,680 60,727 57,858 56,342 54,428 51,763 50,196 Purchased deposits and funding 41,983 49,010 48,762 46,492 49,530 43,276 36,528 39,492 Common equity - as restated* 9,329 9,068 9,030 8,587 8,161 8,110 7,928 7,672 Total equity - as restated* 9,329 9,068 9,030 8,587 8,161 8,110 7,929 7,672 FOR THE YEAR ------------------------------ 2003 2002 2001 ------------------------------ CAPITAL AND LIQUIDITY RATIOS Tier 1 capital(1) - as restated* Total risk-based capital(1) - as restated* Leverage(1) - as restated* Period-end equity to assets - as restated* Period-end tangible common equity to assets(2) - as restated* Average equity to assets - as restated* 7.58% 7.71% 7.49% Average equity to portfolio loans - as restated* 11.83 11.55 10.31 Average portfolio loans to deposits 110.71 111.40 116.81 Average portfolio loans to core deposits 129.09 132.63 141.55 Average portfolio loans to earning assets 70.96 74.28 79.73 Average securities to earning assets 6.75 9.50 10.27 AVERAGE BALANCES Assets - as restated* $118,377 $103,423 $ 93,084 Portfolio loans 75,819 69,032 67,644 Loans held for sale or securitization 22,837 14,227 7,961 Securities (at cost) 7,217 8,828 8,710 Earning assets 106,846 92,941 84,837 Core deposits 58,733 52,050 47,787 Purchased deposits and funding 47,072 40,665 36,808 Common equity - as restated* 8,972 7,973 6,955 Total equity - as restated* 8,972 7,973 6,974 PERIOD-END BALANCES Assets - as restated* Portfolio loans Loans held for sale or securitization - as restated* Securities (at fair value) Core deposits Purchased deposits and funding Common equity - as restated* Total equity - as restated*
(1) Fourth quarter 2003 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)
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 loan losses 147,991 107,047 183,147 200,233 ----------------------------------------------------------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 887,171 1,036,924 912,435 893,058 NONINTEREST INCOME: Mortgage banking revenue - as restated* 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 Other 102,671 94,941 143,634 97,520 ----------------------------------------------------------- TOTAL FEES AND OTHER INCOME - AS RESTATED* 980,507 484,521 980,505 1,103,316 Securities gains (losses), net 10,177 5,398 31,407 170 ----------------------------------------------------------- TOTAL NONINTEREST INCOME - AS RESTATED* 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 75,508 58,458 62,763 64,692 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 Other 189,161 173,584 176,798 189,474 ----------------------------------------------------------- TOTAL NONINTEREST EXPENSE 1,045,404 1,007,616 1,026,237 1,008,866 INCOME BEFORE INCOME TAX EXPENSE - AS RESTATED* 832,451 519,227 898,110 987,678 INCOME TAX EXPENSE - AS RESTATED* 288,335 175,590 312,302 344,175 ----------------------------------------------------------- NET INCOME - AS RESTATED* $ 544,116 $ 343,637 $ 585,808 $ 643,503 =========================================================== NET INCOME PER COMMON SHARE: Basic - as restated* $ .89 $ .56 $ .96 $ 1.05 Diluted - as restated* .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 - as restated* 544,116 343,637 585,808 643,503 2002 ----------------------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ----------------------------------------------------------- INTEREST INCOME: Loans $ 1,391,127 $ 1,306,486 $ 1,284,830 $ 1,351,519 Securities: Taxable 115,690 109,454 123,968 124,984 Exempt from Federal income taxes 8,846 9,006 9,143 9,291 Dividends 9,346 9,008 8,330 8,507 Federal funds sold and security resale agreements 554 464 474 518 Other investments 7,891 8,506 9,171 8,807 ----------------------------------------------------------- TOTAL INTEREST INCOME 1,533,454 1,442,924 1,435,916 1,503,626 INTEREST EXPENSE: Deposits 275,853 283,800 287,481 301,244 Federal funds borrowed and security repurchase agreements 41,749 34,511 32,241 41,929 Borrowed funds 12,003 7,147 4,969 13,256 Long-term debt 129,768 146,322 148,588 149,680 ----------------------------------------------------------- TOTAL INTEREST EXPENSE 459,373 471,780 473,279 506,109 NET INTEREST INCOME 1,074,081 971,144 962,637 997,517 Provision for loan losses 158,638 169,164 165,476 188,640 ----------------------------------------------------------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 915,443 801,980 797,161 808,877 NONINTEREST INCOME: Mortgage banking revenue - as restated* 44,739 132,983 217,402 195,217 Deposit service charges 136,740 132,270 125,763 118,787 Payment processing revenue 116,976 113,513 111,707 108,841 Trust and investment management fees 70,740 73,936 85,136 77,575 Card-related fees 45,744 47,212 31,873 32,136 Brokerage revenue 25,770 24,986 30,762 27,067 Other 87,439 50,755 96,575 131,238 ----------------------------------------------------------- TOTAL FEES AND OTHER INCOME - AS RESTATED* 528,148 575,655 699,218 690,861 Securities gains (losses), net (16,630) 157 44,033 53,532 ----------------------------------------------------------- TOTAL NONINTEREST INCOME - AS RESTATED* 511,518 575,812 743,251 744,393 NONINTEREST EXPENSE: Salaries, benefits, and other personnel 527,242 448,517 445,393 444,328 Equipment 65,140 56,667 61,325 62,299 Net occupancy 58,851 56,035 55,334 54,824 Third-party services 71,159 54,671 59,668 53,585 Card processing 54,000 50,963 52,112 53,816 Marketing and public relations 19,140 25,402 75,447 26,149 Other 215,115 177,921 224,643 179,888 ----------------------------------------------------------- TOTAL NONINTEREST EXPENSE 1,010,647 870,176 973,922 874,889 INCOME BEFORE INCOME TAX EXPENSE - AS RESTATED* 416,314 507,616 566,490 678,381 INCOME TAX EXPENSE - AS RESTATED* 136,242 161,313 192,353 232,250 ----------------------------------------------------------- NET INCOME - AS RESTATED* $ 280,072 $ 346,303 $ 374,137 $ 446,131 =========================================================== NET INCOME PER COMMON SHARE: Basic - as restated* $ .46 $ .56 $ .62 $ .73 Diluted - as restated* .46 .56 .60 .73 AVERAGE COMMON SHARES: Basic 611,896,075 611,638,832 609,336,050 607,815,387 Diluted 615,971,640 617,850,460 616,793,457 614,041,768 MEMO: Tax-equivalent net interest income $ 1,081,175 $ 978,851 $ 970,357 $ 1,005,350 Net income available to common stockholders - as restated* 280,072 346,302 374,127 446,121 FOR THE YEAR ------------------------------------------- 2003 2002 2001 ------------------------------------------- INTEREST INCOME: Loans $ 5,584,681 $ 5,333,962 $ 5,863,785 Securities: Taxable 318,304 474,096 433,115 Exempt from Federal income taxes 33,927 36,286 39,800 Dividends 20,404 35,191 45,201 Federal funds sold and security resale agreements 2,756 2,010 4,317 Other investments 37,750 34,375 28,534 ------------------------------------------- TOTAL INTEREST INCOME 5,997,822 5,915,920 6,414,752 INTEREST EXPENSE: Deposits 891,731 1,148,378 1,777,731 Federal funds borrowed and security repurchase agreements 132,397 150,430 297,374 Borrowed funds 18,672 37,375 63,987 Long-term debt 587,016 574,358 836,811 ------------------------------------------- TOTAL INTEREST EXPENSE 1,629,816 1,910,541 2,975,903 NET INTEREST INCOME 4,368,006 4,005,379 3,438,849 Provision for loan losses 638,418 681,918 605,295 ------------------------------------------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 3,729,588 3,323,461 2,833,554 NONINTEREST INCOME: Mortgage banking revenue - as restated* 1,482,026 590,341 525,312 Deposit service charges 568,067 513,560 469,326 Payment processing revenue 477,888 451,037 464,627 Trust and investment management fees 291,075 307,387 319,825 Card-related fees 168,947 156,965 169,453 Brokerage revenue 122,080 108,585 97,505 Other 438,766 366,007 486,973 ------------------------------------------- TOTAL FEES AND OTHER INCOME - AS RESTATED* 3,548,849 2,493,882 2,533,021 Securities gains (losses), net 47,152 81,092 144,802 ------------------------------------------- TOTAL NONINTEREST INCOME - AS RESTATED* 3,596,001 2,574,974 2,677,823 NONINTEREST EXPENSE: Salaries, benefits, and other personnel 2,215,686 1,865,480 1,710,309 Equipment 261,421 245,431 238,956 Net occupancy 232,989 225,044 212,780 Third-party services 295,348 239,083 203,762 Card processing 218,093 210,891 198,928 Marketing and public relations 135,569 146,138 71,348 Other 729,017 797,567 708,793 ------------------------------------------- TOTAL NONINTEREST EXPENSE 4,088,123 3,729,634 3,344,876 INCOME BEFORE INCOME TAX EXPENSE - AS RESTATED* 3,237,466 2,168,801 2,166,501 INCOME TAX EXPENSE - AS RESTATED* 1,120,402 722,158 778,393 ------------------------------------------- NET INCOME - AS RESTATED* $ 2,117,064 $ 1,446,643 $ 1,388,108 =========================================== NET INCOME PER COMMON SHARE: Basic - as restated* $ 3.46 $ 2.37 $ 2.30 Diluted - as restated* 3.43 2.35 2.27 AVERAGE COMMON SHARES: Basic 611,205,682 610,186,786 603,611,073 Diluted 616,410,043 616,174,238 611,936,906 MEMO: Tax-equivalent net interest income $ 4,395,646 $ 4,035,733 $ 3,472,195 Net income available to common stockholders - as restated* 2,117,064 1,446,622 1,387,092
* See note on Summary of Presentation Changes 5 UNAUDITED NATIONAL CITY CORPORATION CONSOLIDATED PERIOD-END BALANCE SHEETS ($ IN THOUSANDS)
2003 ------------------------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------------------------------------------------------------- ASSETS Cash and demand balances due from banks $ 3,595,706 $ 3,602,298 $ 4,042,648 $ 3,767,425 Federal funds sold and security resale agreements 162,347 131,062 81,574 68,616 Securities available for sale, at fair value 6,865,616 6,755,118 7,377,350 8,464,144 Other investments 830,887 769,141 842,893 498,148 LOANS HELD FOR SALE OR SECURITIZATION: Commercial 16,300 15,591 12,591 12,591 Mortgage - as restated* 14,497,277 23,599,767 26,783,635 21,727,600 Automobile 853,982 - - - Credit card - - - - ------------------------------------------------------------- TOTAL LOANS HELD FOR SALE OR SECURITIZATION - AS RESTATED* 15,367,559 23,615,358 26,796,226 21,740,191 PORTFOLIO LOANS: Commercial 19,164,326 20,934,229 21,837,932 22,824,571 Commercial construction 2,289,429 2,524,598 2,341,879 2,304,061 Real estate - commercial 9,827,877 9,495,261 9,462,072 9,507,893 Real estate - residential 27,393,711 24,330,916 23,009,187 21,820,145 Home equity lines of credit 10,950,356 10,074,306 9,124,178 8,393,176 Credit card and other unsecured lines of credit 2,324,198 2,178,703 2,124,368 2,023,065 Other consumer 7,328,956 8,217,497 7,939,113 8,060,075 ------------------------------------------------------------- TOTAL PORTFOLIO LOANS 79,278,853 77,755,510 75,838,729 74,932,986 Allowance for loan losses (1,125,329) (1,129,633) (1,147,098) (1,128,249) ------------------------------------------------------------- NET PORTFOLIO LOANS 78,153,524 76,625,877 74,691,631 73,804,737 Properties and equipment 1,125,526 1,113,714 1,106,705 1,032,617 Other real estate owned 99,418 110,380 103,685 115,739 Mortgage servicing assets - as restated * 1,298,417 1,136,987 733,420 813,312 Goodwill 1,103,340 1,103,271 1,102,799 1,078,281 Other intangible assets 62,475 68,631 74,502 69,193 Derivative assets 1,349,259 1,785,967 1,819,917 1,469,869 Accrued income and other assets 3,919,386 4,140,183 4,569,239 4,571,984 ------------------------------------------------------------- TOTAL ASSETS - AS RESTATED* $ 113,933,460 $ 120,957,987 $ 123,342,589 $ 117,494,256 ============================================================= LIABILITIES DEPOSITS: Noninterest bearing $ 16,585,367 $ 16,828,794 $ 19,238,413 $ 16,878,935 NOW and money market accounts 26,849,261 26,256,752 25,415,374 24,361,618 Savings accounts 2,353,721 2,373,289 2,426,424 2,437,801 Consumer time 13,133,909 13,221,476 13,646,875 14,179,957 ------------------------------------------------------------- CORE DEPOSITS 58,922,258 58,680,311 60,727,086 57,858,311 Other 924,969 2,731,341 2,440,785 2,945,649 Foreign 4,082,803 8,864,227 3,602,917 5,093,320 ------------------------------------------------------------- TOTAL DEPOSITS 63,930,030 70,275,879 66,770,788 65,897,280 Federal funds borrowed and security repurchase agreements 6,693,916 8,637,604 12,112,317 12,744,562 Borrowed funds 6,615,460 1,472,746 2,667,925 1,735,932 Long-term debt 23,666,292 27,304,153 27,938,252 23,972,172 Derivative liabilities 875,737 1,246,371 1,416,132 989,625 Accrued expenses and other liabilities - as restated* 2,823,354 2,953,390 3,407,266 3,567,522 ------------------------------------------------------------- TOTAL LIABILITIES - AS RESTATED* 104,604,789 111,890,143 114,312,680 108,907,093 STOCKHOLDERS' EQUITY Preferred stock - - - - Common stock 2,423,985 2,436,547 2,453,705 2,443,888 Capital surplus 1,116,279 1,079,072 1,057,467 1,002,194 Retained earnings - as restated* 5,723,720 5,502,147 5,484,430 5,085,060 Accumulated other comprehensive income 64,687 50,078 34,307 56,021 ------------------------------------------------------------- TOTAL STOCKHOLDERS' EQUITY - AS RESTATED* 9,328,671 9,067,844 9,029,909 8,587,163 ------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY - AS RESTATED* $ 113,933,460 $ 120,957,987 $ 123,342,589 $ 117,494,256 ============================================================= COMMON SHARES OUTSTANDING 605,996,120 609,136,762 613,426,098 610,971,942 MEMO: Noninterest bearing mortgage banking principal and interest (P&I) balances $ 2,394,020 $ 2,993,448 $ 4,759,275 $ 3,577,713 Noninterest bearing mortgage banking taxes and insurance (T&I) balances 860,045 1,018,593 928,275 801,459 Noninterest bearing deposits excluding P&I and T&I balances 13,331,302 12,816,753 13,550,863 12,499,763 Core deposits excluding P&I and T&I balances 55,668,193 54,668,270 55,039,536 53,479,139 2002 ------------------------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------------------------------------------------------------- ASSETS Cash and demand balances due from banks $ 3,756,426 $ 4,106,687 $ 3,367,210 $ 2,859,394 Federal funds sold and security resale agreements 136,343 95,895 86,285 67,994 Securities available for sale, at fair value 9,211,268 10,487,124 8,800,004 9,036,019 Other investments 869,147 761,248 728,936 744,981 LOANS HELD FOR SALE OR SECURITIZATION: Commercial 14,840 27,973 - - Mortgage - as restated* 24,486,524 15,783,350 9,796,496 12,296,059 Automobile - - - - Credit card - - - - ------------------------------------------------------------- TOTAL LOANS HELD FOR SALE OR SECURITIZATION - AS RESTATED* 24,501,364 15,811,323 9,796,496 12,296,059 PORTFOLIO LOANS: Commercial 22,631,724 24,571,513 24,143,487 24,525,742 Commercial construction 2,090,336 1,452,849 1,305,491 1,207,856 Real estate - commercial 9,384,851 8,076,473 7,978,960 7,868,692 Real estate - residential 19,972,549 16,404,069 15,454,101 15,215,099 Home equity lines of credit 8,062,199 7,617,672 7,009,400 6,320,135 Credit card and other unsecured lines of credit 2,030,024 1,915,547 1,870,138 1,731,075 Other consumer 7,962,729 10,993,697 10,912,771 11,220,717 ------------------------------------------------------------- TOTAL PORTFOLIO LOANS 72,134,412 71,031,820 68,674,348 68,089,316 Allowance for loan losses (1,098,588) (1,079,773) (1,030,487) (1,000,043) ------------------------------------------------------------- NET PORTFOLIO LOANS 71,035,824 69,952,047 67,643,861 67,089,273 Properties and equipment 1,036,937 1,031,098 1,042,933 1,059,445 Other real estate owned 114,931 104,587 89,365 65,562 Mortgage servicing assets - as restated * 615,193 690,615 1,068,400 1,363,860 Goodwill 1,078,281 1,078,281 1,078,281 1,078,281 Other intangible assets 74,573 79,438 80,500 83,919 Derivative assets 1,468,381 1,048,665 765,193 493,847 Accrued income and other assets 4,122,722 4,024,139 4,553,245 3,839,050 ------------------------------------------------------------- TOTAL ASSETS - AS RESTATED* $ 118,021,390 $ 109,271,147 $ 99,100,709 $ 100,077,684 ============================================================= LIABILITIES DEPOSITS: Noninterest bearing $ 16,156,081 $ 15,616,730 $ 13,674,346 $ 12,600,160 NOW and money market accounts 23,022,449 21,325,533 20,239,550 19,786,170 Savings accounts 2,477,067 2,499,922 2,596,261 2,629,316 Consumer time 14,686,005 14,985,661 15,253,091 15,180,008 ------------------------------------------------------------- CORE DEPOSITS 56,341,602 54,427,846 51,763,248 50,195,654 Other 3,403,827 3,128,856 3,239,652 3,837,062 Foreign 5,373,339 3,077,867 2,311,938 4,268,676 ------------------------------------------------------------- TOTAL DEPOSITS 65,118,768 60,634,569 57,314,838 58,301,392 Federal funds borrowed and security repurchase agreements 6,528,258 6,068,559 5,212,463 10,586,323 Borrowed funds 11,493,909 9,802,372 6,659,291 1,109,360 Long-term debt 22,730,295 21,198,090 19,104,451 19,690,454 Derivative liabilities 1,243,544 730,231 495,966 315,077 Accrued expenses and other liabilities - as restated* 2,745,559 2,726,994 2,384,560 2,402,867 ------------------------------------------------------------- TOTAL LIABILITIES - AS RESTATED* 109,860,333 101,160,815 91,171,569 92,405,473 STOCKHOLDERS' EQUITY Preferred stock - - 698 698 Common stock 2,445,966 2,448,721 2,441,917 2,433,582 Capital surplus 989,346 982,552 964,599 930,865 Retained earnings - as restated* 4,658,565 4,591,280 4,431,500 4,236,947 Accumulated other comprehensive income 67,180 87,779 90,426 70,119 ------------------------------------------------------------- TOTAL STOCKHOLDERS' EQUITY - AS RESTATED* 8,161,057 8,110,332 7,929,140 7,672,211 ------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY - AS RESTATED* $ 118,021,390 $ 109,271,147 $ 99,100,709 $ 100,077,684 ============================================================= COMMON SHARES OUTSTANDING 611,491,359 612,180,011 610,479,248 608,395,463 MEMO: Noninterest bearing mortgage banking principal and interest (P&I) balances Noninterest bearing mortgage banking taxes and insurance (T&I) balances Noninterest bearing deposits excluding P&I and T&I balances Core deposits excluding P&I and T&I balances
* See note on Summary of Presentation Changes 6 UNAUDITED NATIONAL CITY CORPORATION CONSOLIDATED AVERAGE BALANCE SHEETS ($ IN MILLIONS)
2003 ------------------------------------------------------ 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------------------------------------------------------ ASSETS EARNING ASSETS: PORTFOLIO LOANS: Commercial $ 20,022 $ 21,152 $ 22,001 $ 22,415 Commercial construction 2,445 2,425 2,318 2,181 Real estate - commercial 9,587 9,450 9,475 9,420 Real estate - residential 25,564 24,088 22,469 21,025 Home equity lines of credit 10,410 9,612 8,761 8,152 Credit card and other unsecured lines of credit 2,330 2,170 2,084 2,033 Other consumer 7,543 8,167 7,957 7,957 ------------------------------------------------------ TOTAL PORTFOLIO LOANS 77,901 77,064 75,065 73,183 LOANS HELD FOR SALE OR SECURITIZATION: Commercial 13 13 13 14 Mortgage 17,060 27,023 24,105 22,510 Automobile 607 - - - Credit card - - - - ------------------------------------------------------ TOTAL LOANS HELD FOR SALE OR SECURITIZATION 17,680 27,036 24,118 22,524 Securities available for sale, at cost 6,534 6,667 7,397 8,295 Federal funds sold and security resale agreements 275 272 142 118 Other investments 828 945 633 665 ------------------------------------------------------ TOTAL EARNING ASSETS 103,218 111,984 107,355 104,785 Allowance for loan losses (1,125) (1,144) (1,127) (1,101) Fair value appreciation of securities available for sale 201 202 302 324 Cash and demand balances due from banks 3,173 3,554 3,465 3,376 Properties and equipment 1,128 1,115 1,049 1,038 Other real estate owned 105 107 110 115 Mortgage servicing assets - as restated* 1,271 1,225 801 762 Goodwill 1,103 1,103 1,084 1,078 Other intangible assets 65 71 69 72 Derivative assets 854 544 1,077 935 Accrued income and other assets - as restated* 4,473 4,890 4,850 4,934 ------------------------------------------------------ TOTAL ASSETS - AS RESTATED* $ 114,466 $ 123,651 $ 119,035 $ 116,318 ====================================================== LIABILITIES DEPOSITS: Noninterest bearing $ 16,089 $ 19,408 $ 17,596 $ 15,689 NOW and money market accounts 26,845 26,091 25,045 23,489 Savings accounts 2,367 2,422 2,447 2,458 Consumer time 13,178 13,337 13,972 14,451 ------------------------------------------------------ CORE DEPOSITS 58,479 61,258 59,060 56,087 Brokered retail CDs 836 2,502 2,601 2,871 Other 369 739 606 499 Foreign 7,260 7,186 6,950 6,602 ------------------------------------------------------ TOTAL DEPOSITS 66,944 71,685 69,217 66,059 Federal funds borrowed and security repurchase agreements 8,754 10,660 11,953 12,306 Borrowed funds 992 1,087 1,527 2,636 Long-term debt 25,056 27,569 23,914 22,826 Derivative liabilities 431 511 680 574 Accrued expenses and other liabilities - as restated* 2,899 2,968 2,958 3,388 ------------------------------------------------------ TOTAL LIABILITIES - AS RESTATED* 105,076 114,480 110,249 107,789 STOCKHOLDERS' EQUITY Preferred - - - - Common - as restated* 9,390 9,171 8,786 8,529 ------------------------------------------------------ TOTAL STOCKHOLDERS' EQUITY - AS RESTATED* 9,390 9,171 8,786 8,529 ------------------------------------------------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY - AS RESTATED* $ 114,466 $ 123,651 $ 119,035 $ 116,318 ====================================================== MEMO: Noninterest bearing mortgage banking principal and interest (P&I) balances $ 2,646 $ 5,738 $ 4,692 $ 3,457 Noninterest bearing mortgage banking taxes and insurance (T&I) balances 1,048 1,050 957 761 Noninterest bearing deposits excluding P&I and T&I balances 12,395 12,620 11,947 11,471 Core deposits excluding P&I and T&I balances 54,785 54,470 53,411 51,869 2002 ------------------------------------------------------ 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------------------------------------------------------ ASSETS EARNING ASSETS: PORTFOLIO LOANS: Commercial $ 23,696 $ 23,466 $ 23,888 $ 24,881 Commercial construction 1,628 1,397 1,239 1,252 Real estate - commercial 8,383 8,037 7,909 7,682 Real estate - residential 16,717 15,895 15,161 14,932 Home equity lines of credit 7,857 7,316 6,679 6,066 Credit card and other unsecured lines of credit 1,958 1,910 1,810 1,780 Other consumer 11,052 10,924 11,244 11,336 ------------------------------------------------------ TOTAL PORTFOLIO LOANS 71,291 68,945 67,930 67,929 LOANS HELD FOR SALE OR SECURITIZATION: Commercial 21 18 - 4 Mortgage 19,655 11,833 10,343 13,862 Automobile - - - 1,007 Credit card - - - 142 ------------------------------------------------------ TOTAL LOANS HELD FOR SALE OR SECURITIZATION 19,676 11,851 10,343 15,015 Securities available for sale, at cost 9,484 8,336 8,660 8,834 Federal funds sold and security resale agreements 117 87 93 95 Other investments 747 795 771 705 ------------------------------------------------------ TOTAL EARNING ASSETS 101,315 90,014 87,797 92,578 Allowance for loan losses (1,079) (1,031) (1,000) (1,021) Fair value appreciation of securities available for sale 318 299 208 188 Cash and demand balances due from banks 3,458 3,126 2,855 2,937 Properties and equipment 1,040 1,048 1,061 1,085 Other real estate owned 110 97 77 65 Mortgage servicing assets - as restated* 774 1,052 1,224 1,225 Goodwill 1,078 1,078 1,078 1,078 Other intangible assets 77 81 79 86 Derivative assets 860 739 520 380 Accrued income and other assets - as restated* 4,582 4,551 4,007 3,507 ------------------------------------------------------ TOTAL ASSETS - AS RESTATED* $ 112,533 $ 101,054 $ 97,906 $ 102,108 ====================================================== LIABILITIES DEPOSITS: Noninterest bearing $ 15,710 $ 13,864 $ 12,760 $ 12,366 NOW and money market accounts 22,385 21,006 20,119 19,411 Savings accounts 2,488 2,543 2,622 2,594 Consumer time 14,811 15,122 15,209 15,119 ------------------------------------------------------ CORE DEPOSITS 55,394 52,535 50,710 49,490 Brokered retail CDs 2,870 2,500 2,644 3,609 Other 545 565 818 920 Foreign 7,264 5,781 5,372 6,792 ------------------------------------------------------ TOTAL DEPOSITS 66,073 61,381 59,544 60,811 Federal funds borrowed and security repurchase agreements 10,643 7,798 7,298 9,402 Borrowed funds 3,169 1,784 1,201 3,480 Long-term debt 21,175 18,985 19,432 18,615 Derivative liabilities 547 459 293 313 Accrued expenses and other liabilities - as restated* 2,637 2,462 2,261 1,958 ------------------------------------------------------ TOTAL LIABILITIES - AS RESTATED* 104,244 92,869 90,029 94,579 STOCKHOLDERS' EQUITY Preferred - - 1 1 Common - as restated* 8,289 8,185 7,876 7,528 ------------------------------------------------------ TOTAL STOCKHOLDERS' EQUITY - AS RESTATED* 8,289 8,185 7,877 7,529 ------------------------------------------------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY - AS RESTATED* $ 112,533 $ 101,054 $ 97,906 $ 102,108 ====================================================== MEMO: Noninterest bearing mortgage banking principal and interest (P&I) balances $ 3,444 $ 2,090 $ 1,291 $ 1,320 Noninterest bearing mortgage banking taxes and insurance (T&I) balances 791 824 680 530 Noninterest bearing deposits excluding P&I and T&I balances 11,475 10,950 10,789 10,516 Core deposits excluding P&I and T&I balances 51,159 49,621 48,739 47,640 FOR THE YEAR --------------------------------------- 2003 2002 2001 --------------------------------------- ASSETS EARNING ASSETS: PORTFOLIO LOANS: Commercial $ 21,390 $ 23,978 $ 26,010 Commercial construction 2,343 1,380 1,262 Real estate - commercial 9,483 8,005 6,788 Real estate - residential 23,301 15,682 14,007 Home equity lines of credit 9,241 6,986 5,215 Credit card and other unsecured lines of credit 2,155 1,865 2,164 Other consumer 7,906 11,136 12,198 --------------------------------------- TOTAL PORTFOLIO LOANS 75,819 69,032 67,644 LOANS HELD FOR SALE OR SECURITIZATION: Commercial 13 11 19 Mortgage 22,671 13,933 7,789 Automobile 153 248 120 Credit card 0 35 33 --------------------------------------- TOTAL LOANS HELD FOR SALE OR SECURITIZATION 22,837 14,227 7,961 Securities available for sale, at cost 7,217 8,828 8,710 Federal funds sold and security resale agreements 202 96 111 Other investments 771 758 411 --------------------------------------- TOTAL EARNING ASSETS 106,846 92,941 84,837 Allowance for loan losses (1,124) (1,033) (975) Fair value appreciation of securities available for sale 257 255 167 Cash and demand balances due from banks 3,392 3,096 3,082 Properties and equipment 1,083 1,058 1,077 Other real estate owned 109 88 51 Mortgage servicing assets - as restated* 1,017 1,067 908 Goodwill 1,092 1,078 1,101 Other intangible assets 69 81 82 Derivative assets 851 625 286 Accrued income and other assets - as restated* 4,785 4,167 2,468 --------------------------------------- TOTAL ASSETS - AS RESTATED* $ 118,377 $ 103,423 $ 93,084 ======================================= LIABILITIES DEPOSITS: Noninterest bearing $ 17,203 $ 13,685 $ 11,622 NOW and money market accounts 25,378 20,740 18,120 Savings accounts 2,423 2,561 2,713 Consumer time 13,729 15,064 15,332 --------------------------------------- CORE DEPOSITS 58,733 52,050 47,787 Brokered retail CDs 2,198 2,902 4,629 Other 554 711 1,173 Foreign 7,002 6,302 4,319 --------------------------------------- TOTAL DEPOSITS 68,487 61,965 57,908 Federal funds borrowed and security repurchase agreements 10,908 8,786 8,524 Borrowed funds 1,556 2,406 1,748 Long-term debt 24,854 19,558 16,415 Derivative liabilities 548 404 219 Accrued expenses and other liabilities - as restated* 3,052 2,331 1,296 --------------------------------------- TOTAL LIABILITIES - AS RESTATED* 109,405 95,450 86,110 STOCKHOLDERS' EQUITY Preferred - - 19 Common - as restated* 8,972 7,973 6,955 --------------------------------------- TOTAL STOCKHOLDERS' EQUITY - AS RESTATED* 8,972 7,973 6,974 --------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY - AS RESTATED* $ 118,377 $ 103,423 $ 93,084 ======================================= MEMO: Noninterest bearing mortgage banking principal and interest (P&I) balances $ 4,136 $ 2,042 $ 1,050 Noninterest bearing mortgage banking taxes and insurance (T&I) balances 955 707 455 Noninterest bearing deposits excluding P&I and T&I balances 12,112 10,936 10,117 Core deposits excluding P&I and T&I balances 53,642 49,301 46,282
* See note on Summary of Presentation Changes 7 UNAUDITED NATIONAL CITY CORPORATION SELECTED AVERAGE BALANCES ($ IN MILLIONS)
2003 ------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------------------------------------------- AVERAGE MORTGAGE LOANS HELD FOR SALE National City Mortgage Co. $15,355 $25,933 $23,079 $21,685 First Franklin 1,388 1,080 1,026 825 National City Home Loan Services (formerly Altegra) 317 10 - - ------------------------------------------- TOTAL MORTGAGE LOANS HELD FOR SALE $17,060 $27,023 $24,105 $22,510 =========================================== SELECTED AVERAGE PORTFOLIO LOAN BALANCES DEALER(1) Floorplan loans (commercial) $ 727 $ 722 $ 812 $ 781 Automobile leases (other consumer) 188 270 379 518 Installment loans (other consumer) 6,368 6,307 6,034 5,828 ------------------------------------------- TOTAL DEALER $ 7,283 $ 7,299 $ 7,225 $ 7,127 =========================================== FIRST FRANKLIN/ALTEGRA NONCONFORMING (real estate-residential)(2) Altegra/Loan Zone originated loans $ 845 $ 1,621 $ 1,799 $ 1,982 First Franklin originated loans 14,219 12,290 11,000 10,004 ------------------------------------------- TOTAL FIRST FRANKLIN/ALTEGRA NONCONFORMING $15,064 $13,911 $12,799 $11,986 =========================================== EDUCATION FINANCE(1) Student loans (other consumer) $ 716 $ 471 $ 600 $ 750 Commercial loan (commercial) 417 298 352 749 ------------------------------------------- TOTAL EDUCATION FINANCE $ 1,133 $ 769 $ 952 $ 1,499 =========================================== NATIONAL HOME EQUITY(2) Home equity lines of credit $ 4,250 $ 3,527 $ 2,949 $ 2,481 Installment loans (real estate-residential) 1,282 1,104 1,003 951 ------------------------------------------- TOTAL NATIONAL HOME EQUITY $ 5,532 $ 4,631 $ 3,952 $ 3,432 =========================================== CREDIT CARD AND OTHER UNSECURED LINES OF CREDIT(3) Credit card $ 1,071 $ 1,026 $ 958 $ 932 Personal lines of credit 586 481 477 478 Business lines of credit 673 663 649 623 ------------------------------------------- TOTAL CREDIT CARD AND OTHER UNSECURED LINES OF CREDIT $ 2,330 $ 2,170 $ 2,084 $ 2,033 =========================================== 2002 ------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------------------------------------------- AVERAGE MORTGAGE LOANS HELD FOR SALE National City Mortgage Co. $18,896 $11,483 $ 9,931 $13,451 First Franklin 759 350 412 411 National City Home Loan Services (formerly Altegra) - - - - ------------------------------------------- TOTAL MORTGAGE LOANS HELD FOR SALE $19,655 $11,833 $10,343 $13,862 =========================================== SELECTED AVERAGE PORTFOLIO LOAN BALANCES DEALER(1) Floorplan loans (commercial) $ 722 $ 639 $ 696 $ 631 Automobile leases (other consumer) 629 791 975 1,126 Installment loans (other consumer) 5,844 5,645 5,447 5,516 ------------------------------------------- TOTAL DEALER $ 7,195 $ 7,075 $ 7,118 $ 7,273 =========================================== FIRST FRANKLIN/ALTEGRA NONCONFORMING (real estate-residential)(2) Altegra/Loan Zone originated loans $ 2,182 $ 2,401 $ 2,617 $ 2,859 First Franklin originated loans 8,959 8,167 6,962 6,273 ------------------------------------------- TOTAL FIRST FRANKLIN/ALTEGRA NONCONFORMING $11,141 $10,568 $ 9,579 $ 9,132 =========================================== EDUCATION FINANCE(1) Student loans (other consumer) $ 474 $ 377 $ 746 $ 771 Commercial loan (commercial) 416 41 8 467 ------------------------------------------- TOTAL EDUCATION FINANCE $ 890 $ 418 $ 754 $ 1,238 =========================================== NATIONAL HOME EQUITY(2) Home equity lines of credit $ 2,090 $ 1,700 $ 1,335 $ 981 Installment loans (real estate-residential) 942 974 960 897 ------------------------------------------- TOTAL NATIONAL HOME EQUITY $ 3,032 $ 2,674 $ 2,295 $ 1,878 =========================================== CREDIT CARD AND OTHER UNSECURED LINES OF CREDIT(3) Credit card $ 879 $ 846 $ 767 $ 762 Personal lines of credit 483 483 478 483 Business lines of credit 596 581 565 535 ------------------------------------------- TOTAL CREDIT CARD AND OTHER UNSECURED LINES OF CREDIT $ 1,958 $ 1,910 $ 1,810 $ 1,780 =========================================== FOR THE YEAR ------------------------------- 2003 2002 2001 ------------------------------- AVERAGE MORTGAGE LOANS HELD FOR SALE National City Mortgage Co. $21,507 $13,449 $ 7,380 First Franklin 1,082 484 409 National City Home Loan Services (formerly Altegra) 82 - - ------------------------------- TOTAL MORTGAGE LOANS HELD FOR SALE $22,671 $13,933 $ 7,789 =============================== SELECTED AVERAGE PORTFOLIO LOAN BALANCES DEALER(1) Floorplan loans (commercial) $ 761 $ 672 $ 657 Automobile leases (other consumer) 339 879 1,500 Installment loans (other consumer) 6,139 5,614 6,544 ------------------------------- TOTAL DEALER $ 7,239 $ 7,165 $ 8,701 =============================== FIRST FRANKLIN/ALTEGRA NONCONFORMING (real estate-residential)(2) Altegra/Loan Zone originated loans $ 1,569 $ 2,513 $ 3,646 First Franklin originated loans 11,873 7,598 4,001 ------------------------------- TOTAL FIRST FRANKLIN/ALTEGRA NONCONFORMING $13,442 $10,111 $ 7,647 =============================== EDUCATION FINANCE(1) Student loans (other consumer) $ 634 $ 590 $ 600 Commercial loan (commercial) 453 233 361 ------------------------------- TOTAL EDUCATION FINANCE $ 1,087 $ 823 $ 961 =============================== NATIONAL HOME EQUITY(2) Home equity lines of credit $ 3,307 $ 1,530 $ 513 Installment loans (real estate-residential) 1,085 943 617 ------------------------------- TOTAL NATIONAL HOME EQUITY $ 4,392 $ 2,473 $ 1,130 =============================== CREDIT CARD AND OTHER UNSECURED LINES OF CREDIT(3) Credit card $ 997 $ 814 $ 1,190 Personal lines of credit 506 481 512 Business lines of credit 652 570 462 ------------------------------- TOTAL CREDIT CARD AND OTHER UNSECURED LINES OF CREDIT $ 2,155 $ 1,865 $ 2,164 ===============================
(1) Represents a division under the Consumer and Small Business Financial Services line of business (2) Represents a division under the National Consumer Finance line of business (3) Represents the consolidated credit card and other unsecured lines of credit portfolio 8 UNAUDITED NATIONAL CITY CORPORATION SECURITIZED BALANCES ($ IN MILLIONS)
2003 ---------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ---------------------------------------- CREDIT CARD LOANS MANAGED CREDIT CARD LOANS: Average balances: Loans held in portfolio $1,071 $1,026 $ 958 $ 932 Loans held for securitization - - - - Loans securitized 1,450 1,450 1,450 1,450 --------------------------------------- TOTAL AVERAGE MANAGED CREDIT CARD LOANS $2,521 $2,476 $2,408 $2,382 ======================================= End of period balances: Loans held in portfolio $1,136 $1,030 $ 988 $ 916 Loans held for securitization - - - - Loans securitized 1,450 1,450 1,450 1,450 --------------------------------------- TOTAL MANAGED CREDIT CARD LOANS $2,586 $2,480 $2,438 $2,366 ======================================= AUTOMOBILE LOANS MANAGED AUTOMOBILE LOANS(1): Average balances: Loans held in portfolio $3,270 $3,896 $3,727 $3,578 Loans held for securitization 607 - - - Loans securitized 530 610 698 791 --------------------------------------- TOTAL AVERAGE MANAGED AUTOMOBILE LOANS $4,407 $4,506 $4,425 $4,369 ======================================= End of period balances: Loans held in portfolio $2,958 $3,900 $3,808 $3,581 Loans held for securitization 854 - - - Loans securitized 495 568 654 745 --------------------------------------- TOTAL MANAGED AUTOMOBILE LOANS $4,307 $4,468 $4,462 $4,326 ======================================= 2002 ---------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ---------------------------------------- CREDIT CARD LOANS MANAGED CREDIT CARD LOANS: Average balances: Loans held in portfolio $ 879 $ 846 $ 767 $ 762 Loans held for securitization - - - 142 Loans securitized 1,450 1,450 1,450 1,308 --------------------------------------- TOTAL AVERAGE MANAGED CREDIT CARD LOANS $2,329 $2,296 $2,217 $2,212 ======================================= End of period balances: Loans held in portfolio $ 950 $ 839 $ 819 $ 712 Loans held for securitization - - - - Loans securitized 1,450 1,450 1,450 1,450 --------------------------------------- TOTAL MANAGED CREDIT CARD LOANS $2,400 $2,289 $2,269 $2,162 ======================================= AUTOMOBILE LOANS MANAGED AUTOMOBILE LOANS(1): Average balances: Loans held in portfolio $3,579 $3,446 $3,257 $3,343 Loans held for securitization - - - 1,007 Loans securitized 877 969 1,060 37 --------------------------------------- TOTAL AVERAGE MANAGED AUTOMOBILE LOANS $4,456 $4,415 $4,317 $4,387 ======================================= End of period balances: Loans held in portfolio $3,566 $3,525 $3,306 $3,220 Loans held for securitization - - - - Loans securitized 834 924 1,016 1,107 --------------------------------------- TOTAL MANAGED AUTOMOBILE LOANS $4,400 $4,449 $4,322 $4,327 ======================================= FOR THE YEAR ---------------------------- 2003 2002 2001 ---------------------------- CREDIT CARD LOANS MANAGED CREDIT CARD LOANS: Average balances: Loans held in portfolio $ 997 $ 814 $1,190 Loans held for securitization - 35 34 Loans securitized 1,450 1,415 992 ---------------------------- TOTAL AVERAGE MANAGED CREDIT CARD LOANS $2,447 $2,264 $2,216 ============================ End of period balances: Loans held in portfolio Loans held for securitization Loans securitized TOTAL MANAGED CREDIT CARD LOANS AUTOMOBILE LOANS MANAGED AUTOMOBILE LOANS(1): Average balances: Loans held in portfolio $3,618 $3,407 $4,257 Loans held for securitization 153 248 120 Loans securitized 656 739 - ---------------------------- TOTAL AVERAGE MANAGED AUTOMOBILE LOANS $4,427 $4,394 $4,377 ============================ End of period balances: Loans held in portfolio Loans held for securitization Loans securitized TOTAL MANAGED AUTOMOBILE LOANS
(1) Represents managed portfolio of indirect prime automobile loans 9 UNAUDITED NATIONAL CITY CORPORATION SELECTED PERIOD-END BALANCES ($ IN MILLIONS)
2003 ----------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ----------------------------------------------- MORTGAGE LOANS HELD FOR SALE OR SECURITIZATION National City Mortgage Co. - as restated* $ 12,755 $ 21,463 $ 25,810 $ 20,958 First Franklin 1,742 1,187 974 770 National City Home Loan Services (formerly Altegra) - 950 - - ----------------------------------------------- TOTAL MORTGAGE LOANS HELD FOR SALE OR SECURITIZATION - AS RESTATED* $ 14,497 $ 23,600 $ 26,784 $ 21,728 =============================================== BANK STOCK FUND Cost basis of equity investments $ 7 $ 33 $ 36 $ 237 Unrealized gains (losses), net 1 6 8 (11) ----------------------------------------------- FAIR VALUE OF INVESTMENTS $ 8 $ 39 $ 44 $ 226 =============================================== INTANGIBLE ASSETS Goodwill $ 1,103 $ 1,103 $ 1,103 $ 1,078 Core deposit intangibles 15 18 22 25 Credit card intangibles 3 3 3 4 Other intangibles 45 48 49 40 ----------------------------------------------- TOTAL INTANGIBLE ASSETS $ 1,166 $ 1,172 $ 1,177 $ 1,147 =============================================== MEMO: Holding company investment in subsidiaries - as restated* $ 10,251 $ 10,016 $ 10,381 $ 10,432 Holding company intangible assets 59 59 59 59 Double leverage ratio (1) - as restated* 1.11 x 1.11 x 1.16 x 1.22 x PRINCIPAL INVESTMENTS(2) TYPE OF INVESTMENT: Direct investments in public entities - - $ 1 $ 1 Direct investments in nonpublic entities $ 300 $ 308 324 328 Indirect investments (fund) 295 286 284 264 ----------------------------------------------- TOTAL INVESTMENTS $ 595 $ 594 $ 609 $ 593 =============================================== TYPE OF SECURITY: Common stock $ 23 $ 25 $ 20 $ 15 Convertible debt and preferred stock 59 61 62 57 Investments in partnerships, funds and other equity instruments 356 352 357 348 Mezzanine (subordinated) debt 157 156 170 173 ----------------------------------------------- TOTAL INVESTMENTS $ 595 $ 594 $ 609 $ 593 =============================================== MEMO: Commitments to fund principal investments $ 227 $ 253 $ 232 $ 240 2002 -------------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR -------------------------------------------------- MORTGAGE LOANS HELD FOR SALE OR SECURITIZATION National City Mortgage Co. - as restated* $ 23,559 $ 14,988 $ 9,445 $ 11,926 First Franklin 928 795 351 370 National City Home Loan Services (formerly Altega) - - - - -------------------------------------------------- TOTAL MORTGAGE LOANS HELD FOR SALE OR SECURITIZATION - AS RESTATED* $ 24,487 $ 15,783 $ 9,796 $ 12,296 ================================================== BANK STOCK FUND Cost basis of equity investments $ 75 $ 257 $ 155 $ 272 Unrealized gains (losses), net (4) (40) (2) 24 -------------------------------------------------- FAIR VALUE OF INVESTMENTS $ 71 $ 217 $ 153 $ 296 ================================================== INTANGIBLE ASSETS Goodwill $ 1,078 $ 1,078 $ 1,078 $ 1,078 Core deposit intangibles 28 31 35 38 Credit card intangibles 4 5 4 3 Other intangibles 43 44 42 43 -------------------------------------------------- TOTAL INTANGIBLE ASSETS $ 1,153 $ 1,158 $ 1,159 $ 1,162 ================================================== MEMO: Holding company investment in subsidiaries - as restated* $ 9,789 $ 9,425 $ 9,063 $ 9,289 Holding company intangible assets 59 59 59 59 Double leverage ratio (1) - as restated* 1.21 x 1.17 x 1.15 x 1.22 x PRINCIPAL INVESTMENTS(2) TYPE OF INVESTMENT: Direct investments in public entities - - $ 1 $ 1 Direct investments in nonpublic entities $ 317 $ 318 318 289 Indirect investments (fund) 255 249 238 220 -------------------------------------------------- TOTAL INVESTMENTS $ 572 $ 567 $ 557 $ 510 ================================================== TYPE OF SECURITY: Common stock $ 15 $ 15 $ 13 $ 14 Convertible debt and preferred stock 58 63 64 55 Investments in partnerships, funds and other equity instruments 335 329 319 297 Mezzanine (subordinated) debt 164 160 161 144 -------------------------------------------------- TOTAL INVESTMENTS $ 572 $ 567 $ 557 $ 510 ================================================== MEMO: Commitments to fund principal investments $ 242 $ 252 $ 285 $ 318
(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. * See note on Summary of Presentation Changes 10 UNAUDITED NATIONAL CITY CORPORATION AVERAGE BALANCES/NET INTEREST INCOME/RATES ($ IN MILLIONS)
2003 ------------------------------------------------------ 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------------------------------------------------------ AVERAGE BALANCES ASSETS Earning Assets: Loans(1): Commercial $ 20,035 $ 21,165 $ 22,014 $ 22,429 Commercial construction 2,445 2,425 2,318 2,181 Real estate - commercial 9,587 9,450 9,475 9,420 Real estate - residential 42,624 51,111 46,574 43,535 Home equity lines of credit 10,410 9,612 8,761 8,152 Credit card and other unsecured lines of credit 2,330 2,170 2,084 2,033 Other consumer 8,150 8,167 7,957 7,957 ------------------------------------------------------ Total loans 95,581 104,100 99,183 95,707 Securities available for sale, at cost: Taxable 5,860 5,988 6,721 7,650 Tax-exempt 674 679 676 645 ------------------------------------------------------ Total securities available for sale 6,534 6,667 7,397 8,295 Federal funds sold, security resale agreements, and other investments 1,103 1,217 775 783 ------------------------------------------------------ Total earning assets 103,218 111,984 107,355 104,785 Allowance for loan losses (1,125) (1,144) (1,127) (1,101) Fair value appreciation of securities available for sale 201 202 302 324 Nonearning assets - as restated* 12,172 12,609 12,505 12,310 ------------------------------------------------------ TOTAL ASSETS - AS RESTATED* $ 114,466 $ 123,651 $ 119,035 $ 116,318 ====================================================== LIABILITIES AND STOCKHOLDERS' EQUITY Interest bearing liabilities: NOW and money market accounts $ 26,845 $ 26,091 $ 25,045 $ 23,489 Savings accounts 2,367 2,422 2,447 2,458 Consumer time deposits 13,178 13,337 13,972 14,451 Other deposits 1,205 3,241 3,207 3,370 Foreign deposits 7,260 7,186 6,950 6,602 Federal funds borrowed 5,765 7,632 9,054 9,171 Security repurchase agreements 2,989 3,028 2,899 3,135 Borrowed funds 992 1,087 1,527 2,636 Long-term debt 25,056 27,569 23,914 22,826 ------------------------------------------------------ Total interest bearing liabilities 85,657 91,593 89,015 88,138 Noninterest bearing deposits 16,089 19,408 17,596 15,689 Accrued interest and other liabilities - as restated* 3,330 3,479 3,638 3,962 ------------------------------------------------------ TOTAL LIABILITIES - AS RESTATED* 105,076 114,480 110,249 107,789 TOTAL STOCKHOLDERS' EQUITY - AS RESTATED* 9,390 9,171 8,786 8,529 ------------------------------------------------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY - AS RESTATED* $ 114,466 $ 123,651 $ 119,035 $ 116,318 ====================================================== MEMO: Interest bearing core deposits $ 42,390 $ 41,850 $ 41,464 $ 40,398 Interest bearing total deposits 50,855 52,277 51,621 50,370 Borrowed funding and long-term debt 34,802 39,316 37,394 37,768 2002 ------------------------------------------------------ 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------------------------------------------------------ AVERAGE BALANCES ASSETS Earning Assets: Loans(1): Commercial $ 23,717 $ 23,484 $ 23,888 $ 24,885 Commercial construction 1,628 1,397 1,239 1,252 Real estate - commercial 8,383 8,037 7,909 7,682 Real estate - residential 36,372 27,728 25,504 28,794 Home equity lines of credit 7,857 7,316 6,679 6,066 Credit card and other unsecured lines of credit 1,958 1,910 1,810 1,922 Other consumer 11,052 10,924 11,244 12,343 ------------------------------------------------------ Total loans 90,967 80,796 78,273 82,944 Securities available for sale, at cost: Taxable 8,825 7,668 7,981 8,145 Tax-exempt 659 668 679 689 ------------------------------------------------------ Total securities available for sale 9,484 8,336 8,660 8,834 Federal funds sold, security resale agreements, and other investments 864 882 864 800 ------------------------------------------------------ Total earning assets 101,315 90,014 87,797 92,578 Allowance for loan losses (1,079) (1,031) (1,000) (1,021) Fair value appreciation of securities available for sale 318 299 208 188 Nonearning assets - as restated* 11,979 11,772 10,901 10,363 ------------------------------------------------------ TOTAL ASSETS - AS RESTATED* $ 112,533 $ 101,054 $ 97,906 $ 102,108 ====================================================== LIABILITIES AND STOCKHOLDERS' EQUITY Interest bearing liabilities: NOW and money market accounts $ 22,385 $ 21,006 $ 20,119 $ 19,411 Savings accounts 2,488 2,543 2,622 2,594 Consumer time deposits 14,811 15,122 15,209 15,119 Other deposits 3,415 3,065 3,462 4,529 Foreign deposits 7,264 5,781 5,372 6,792 Federal funds borrowed 7,297 4,482 4,092 5,961 Security repurchase agreements 3,346 3,316 3,206 3,441 Borrowed funds 3,169 1,784 1,201 3,480 Long-term debt 21,175 18,985 19,432 18,615 ------------------------------------------------------ Total interest bearing liabilities 85,350 76,084 74,715 79,942 Noninterest bearing deposits 15,710 13,864 12,760 12,366 Accrued interest and other liabilities - as restated* 3,184 2,921 2,554 2,271 ------------------------------------------------------ TOTAL LIABILITIES - AS RESTATED* 104,244 92,869 90,029 94,579 TOTAL STOCKHOLDERS' EQUITY - AS RESTATED* 8,289 8,185 7,877 7,529 ------------------------------------------------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY - AS RESTATED* $ 112,533 $ 101,054 $ 97,906 $ 102,108 ====================================================== MEMO: Interest bearing core deposits $ 39,684 $ 38,671 $ 37,950 $ 37,124 Interest bearing total deposits 50,363 47,517 46,784 48,445 Borrowed funding and long-term debt 34,987 28,567 27,931 31,497 FOR THE YEAR --------------------------------------- 2003 2002 2001 --------------------------------------- AVERAGE BALANCES ASSETS Earning Assets: Loans(1): Commercial $ 21,403 $ 23,989 $ 26,029 Commercial construction 2,343 1,380 1,262 Real estate - commercial 9,483 8,005 6,788 Real estate - residential 45,972 29,615 21,796 Home equity lines of credit 9,241 6,986 5,215 Credit card and other unsecured lines of credit 2,155 1,900 2,197 Other consumer 8,059 11,384 12,318 --------------------------------------- Total loans 98,656 83,259 75,605 Securities available for sale, at cost: Taxable 6,548 8,154 7,977 Tax-exempt 669 674 733 --------------------------------------- Total securities available for sale 7,217 8,828 8,710 Federal funds sold, security resale agreements, and other investments 973 854 522 --------------------------------------- Total earning assets 106,846 92,941 84,837 Allowance for loan losses (1,124) (1,033) (975) Fair value appreciation of securities available for sale 257 255 167 Nonearning assets - as restated* 12,398 11,260 9,055 --------------------------------------- TOTAL ASSETS - AS RESTATED* $ 118,377 $ 103,423 $ 93,084 ======================================= LIABILITIES AND STOCKHOLDERS' EQUITY Interest bearing liabilities: NOW and money market accounts $ 25,378 $ 20,740 $ 18,120 Savings accounts 2,423 2,561 2,713 Consumer time deposits 13,729 15,064 15,332 Other deposits 2,752 3,613 5,802 Foreign deposits 7,002 6,302 4,319 Federal funds borrowed 7,895 5,459 4,637 Security repurchase agreements 3,013 3,327 3,887 Borrowed funds 1,556 2,406 1,748 Long-term debt 24,854 19,558 16,415 --------------------------------------- Total interest bearing liabilities 88,602 79,030 72,973 Noninterest bearing deposits 17,203 13,685 11,622 Accrued interest and other liabilities - as restated* 3,600 2,735 1,515 --------------------------------------- TOTAL LIABILITIES - AS RESTATED* 109,405 95,450 86,110 TOTAL STOCKHOLDERS' EQUITY - AS RESTATED* 8,972 7,973 6,974 --------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY - AS RESTATED* $ 118,377 $ 103,423 $ 93,084 ======================================= MEMO: Interest bearing core deposits $ 41,530 $ 38,365 $ 36,165 Interest bearing total deposits 51,284 48,280 46,286 Borrowed funding and long-term debt 37,318 30,750 26,687
(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)
2003 2002 -------------------------------------- --------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------- ------- ------- ------- ------- ------- ------- ------- INTEREST ASSETS Earning Assets: Loans(1): Commercial $ 183 $ 198 $ 217 $ 220 $ 262 $ 281 $ 291 $ 299 Commercial construction 25 27 26 25 22 20 19 18 Real estate - commercial 144 146 146 145 136 133 134 131 Real estate - residential 683 807 744 730 606 507 481 525 Home equity lines of credit 103 99 95 89 98 92 84 77 Credit card and other unsecured lines of credit 45 43 41 44 43 44 43 46 Other consumer 138 140 143 148 227 232 236 258 -------------------------------------- --------------------------------------- Total loans 1,321 1,460 1,412 1,401 1,394 1,309 1,288 1,354 Securities available for sale, at cost: Taxable 73 71 93 102 124 119 132 134 Tax-exempt 12 13 13 13 13 14 14 14 -------------------------------------- --------------------------------------- Total securities available for sale 85 84 106 115 137 133 146 148 Federal funds sold, security resale agreements, and other investments 10 10 10 11 9 9 10 9 -------------------------------------- --------------------------------------- TOTAL EARNING ASSETS $ 1,416 $ 1,554 $ 1,528 $ 1,527 $ 1,540 $ 1,451 $ 1,444 $ 1,511 ====================================== ======================================= LIABILITIES Interest bearing liabilities: NOW and money market accounts $ 59 $ 63 $ 67 $ 68 $ 77 $ 78 $ 74 $ 72 Savings accounts 2 3 3 3 5 5 5 6 Consumer time deposits 118 120 131 137 149 160 166 171 Other deposits 4 8 10 12 15 15 16 21 Foreign deposits 17 19 25 23 30 27 26 31 Federal funds borrowed 16 27 35 36 34 25 24 33 Security repurchase agreements 4 4 5 6 8 9 9 9 Borrowed funds 2 2 5 9 12 7 5 13 Long-term debt 153 157 145 132 129 146 148 150 -------------------------------------- --------------------------------------- TOTAL INTEREST BEARING LIABILITIES $ 375 $ 403 $ 426 $ 426 $ 459 $ 472 $ 473 $ 506 ====================================== ======================================= TAX-EQUIVALENT NET INTEREST INCOME $ 1,041 $ 1,151 $ 1,102 $ 1,101 $ 1,081 $ 979 $ 971 $ 1,005 ====================================== ======================================= MEMO: Interest bearing core deposits $ 179 $ 186 $ 201 $ 208 $ 231 $ 243 $ 245 $ 249 Interest bearing total deposits 200 213 236 243 276 285 287 301 Borrowed funding and long-term debt 175 190 190 183 183 187 186 205
FOR THE YEAR ------------------------ 2003 2002 2001 ---- ---- ---- INTEREST ASSETS Earning Assets: Loans(1): Commercial $ 818 $1,133 $1,791 Commercial construction 103 79 100 Real estate - commercial 581 534 540 Real estate - residential 2,964 2,119 1,712 Home equity lines of credit 386 351 397 Credit card and other unsecured lines of credit 173 176 264 Other consumer 569 953 1,072 ------------------------ Total loans 5,594 5,345 5,876 Securities available for sale, at cost: Taxable 339 509 480 Tax-exempt 51 55 59 ------------------------ Total securities available for sale 390 564 539 Federal funds sold, security resale agreements, and other investments 41 37 33 ------------------------ TOTAL EARNING ASSETS $6,025 $5,946 $6,448 ======================== LIABILITIES Interest bearing liabilities: NOW and money market accounts $ 257 $ 301 $ 503 Savings accounts 11 21 36 Consumer time deposits 506 646 843 Other deposits 34 67 244 Foreign deposits 84 114 152 Federal funds borrowed 114 116 186 Security repurchase agreements 19 35 111 Borrowed funds 18 37 64 Long-term debt 587 573 837 ------------------------ TOTAL INTEREST BEARING LIABILITIES $1,630 $1,910 $2,976 ======================== TAX-EQUIVALENT NET INTEREST INCOME $4,395 $4,036 $3,472 ======================== MEMO: Interest bearing core deposits $ 774 $ 968 $1,382 Interest bearing total deposits 892 1,149 1,778 Borrowed funding and long-term debt 738 761 1,198
(1) Includes loans held for sale or securitization 12 UNAUDITED NATIONAL CITY CORPORATION AVERAGE BALANCES/NET INTEREST INCOME/RATES (CONTINUED) ($ IN MILLIONS)
2003 2002 ------------------------------------ -------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------------------------------------ -------------------------------------------- RATES ASSETS Earning Assets: Loans(1): Commercial 3.63% 3.73% 3.94% 3.97% 4.39% 4.75% 4.88% 4.87% Commercial construction 4.07 4.48 4.49 4.65 5.29 5.77 6.03 5.90 Real estate - commercial 5.99 6.10 6.18 6.25 6.46 6.57 6.81 6.90 Real estate - residential 6.41 6.31 6.39 6.71 6.66 7.31 7.54 7.30 Home equity lines of credit 3.97 4.11 4.36 4.36 4.97 5.04 5.04 5.06 Credit card and other unsecured lines of credit 7.57 7.81 8.06 8.68 8.53 9.20 9.64 9.70 Other consumer 6.76 6.79 7.19 7.55 8.16 8.44 8.40 8.49 ----------------------------------- ------------------------------------------ Total loans 5.52 5.59 5.70 5.89 6.10 6.46 6.59 6.58 Securities available for sale, at cost: Taxable 4.92 4.81 5.47 5.37 5.67 6.18 6.63 6.56 Tax-exempt 7.50 7.50 7.68 8.06 8.14 8.15 8.15 8.16 ----------------------------------- ------------------------------------------ Total securities available for sale 5.19 5.08 5.68 5.58 5.84 6.33 6.75 6.69 Federal funds sold, security resale agreements, and other investments 3.26 3.29 5.33 5.71 3.88 4.03 4.48 4.73 ----------------------------------- ------------------------------------------ TOTAL EARNING ASSETS 5.47 5.53 5.70 5.86 6.06 6.42 6.59 6.58 =================================== ========================================== LIABILITIES Interest bearing liabilities: NOW and money market accounts .88 .96 1.07 1.18 1.37 1.47 1.48 1.50 Savings accounts .36 .39 .46 .58 .71 .80 .85 .90 Consumer time deposits 3.55 3.58 3.74 3.86 4.00 4.16 4.38 4.59 Other deposits 1.07 1.05 1.26 1.42 1.73 1.89 1.86 1.87 Foreign deposits .94 1.05 1.42 1.42 1.62 1.87 1.91 1.88 Federal funds borrowed 1.09 1.37 1.57 1.59 1.83 2.25 2.32 2.24 Security repurchase agreements .53 .53 .71 .73 .95 1.08 1.07 1.07 Borrowed funds .96 .98 1.21 1.38 1.50 1.59 1.66 1.55 Long-term debt 2.42 2.26 2.44 2.33 2.44 3.06 3.07 3.25 ----------------------------------- ------------------------------------------ TOTAL INTEREST BEARING LIABILITIES 1.74 1.75 1.92 1.96 2.14 2.46 2.54 2.57 =================================== ========================================== NET INTEREST SPREAD 3.73 3.78 3.78 3.90 3.92 3.96 4.05 4.01 Contribution of noninterest bearing sources of funds .30 .32 .33 .31 .34 .38 .37 .35 ----------------------------------- ------------------------------------------ NET INTEREST MARGIN 4.03% 4.10% 4.11% 4.21% 4.26% 4.34% 4.42% 4.36% =================================== ========================================== MEMO: Interest bearing core deposits 1.68% 1.76% 1.93% 2.10% 2.31% 2.48% 2.60% 2.72% Interest bearing total deposits 1.56 1.62 1.82 1.97 2.17 2.37 2.46 2.52 Borrowed funding and long-term debt 1.99 1.92 2.05 1.95 2.08 2.61 2.66 2.64
FOR THE YEAR ----------------------- 2003 2002 2001 ---- ---- ---- RATES ASSETS Earning Assets: Loans(1): Commercial 3.82% 4.72% 6.88% Commercial construction 4.41 5.72 7.92 Real estate - commercial 6.13 6.68 7.96 Real estate - residential 6.45 7.15 7.85 Home equity lines of credit 4.18 5.02 7.61 Credit card and other unsecured lines of credit 8.01 9.26 12.04 Other consumer 7.07 8.38 8.70 ---------------------- Total loans 5.69 6.42 7.77 Securities available for sale, at cost: Taxable 5.17 6.25 6.02 Tax-exempt 7.68 8.15 8.13 ---------------------- Total securities available for sale 5.41 6.39 6.20 Federal funds sold, security resale agreements, and other investments 4.17 4.26 6.29 ---------------------- TOTAL EARNING ASSETS 5.64 6.40 7.60 ====================== LIABILITIES Interest bearing liabilities: NOW and money market accounts 1.01 1.45 2.78 Savings accounts .45 .82 1.33 Consumer time deposits 3.69 4.28 5.50 Other deposits 1.23 1.84 4.20 Foreign deposits 1.20 1.81 3.53 Federal funds borrowed 1.44 2.12 4.02 Security repurchase agreements .63 1.04 2.86 Borrowed funds 1.20 1.55 3.66 Long-term debt 2.36 2.94 5.10 ---------------------- TOTAL INTEREST BEARING LIABILITIES 1.84 2.42 4.08 ====================== NET INTEREST SPREAD 3.80 3.98 3.52 Contribution of noninterest bearing sources of funds .31 .36 .57 ---------------------- NET INTEREST MARGIN 4.11% 4.34% 4.09% ====================== MEMO: Interest bearing core deposits 1.86% 2.52% 3.82% Interest bearing total deposits 1.74 2.38 3.84 Borrowed funding and long-term debt 1.98 2.48 4.49
(1) Includes loans held for sale or securitization 13 UNAUDITED NATIONAL CITY CORPORATION STOCKHOLDER DATA ($ IN MILLIONS, EXCEPT PER SHARE DATA)
2003 2002 ------------------------------------- ------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------------------------------------- ------------------------------------- Per common share: Basic net income - as restated* $ .89 $ .56 $ .96 $ 1.05 $ .46 $ .56 $ .62 $ .73 Diluted net income - as restated* .88 .56 .94 1.05 .46 .56 .60 .73 Trailing four quarters basic net income - as restated* 3.46 3.03 3.03 2.69 2.37 2.58 2.51 2.48 Trailing four quarters diluted net income - as restated* 3.43 3.01 3.01 2.67 2.35 2.55 2.39 2.46 Dividends declared .32 .32 .305 .305 .305 .305 .295 .295 Dividends paid .32 .32 .305 .305 .305 .305 .295 .295 Dividend payout ratio(1) - as restated* 36.36% 57.14% 32.45% 29.05% 66.30% 54.46% 49.17% 40.41% Dividend yield (annualized)(2) 3.77 4.34 3.73 4.38 4.47 4.28 3.55 3.84 P/E ratio(3) - as restated* 9.90x 9.79x 10.87x 10.43x 11.63x 5.36x 13.91x 12.50x Common dividends declared $ 195 $ 196 $ 186 $ 187 $ 187 $ 186 $ 180 $ 179 Preferred dividends declared - - - - - - - - Common dividends paid 195 196 186 187 187 186 180 179 Preferred dividends paid - - - - - - - - Shares outstanding(4): Average basic 607,624 613,574 612,120 611,522 611,896 611,639 609,336 607,815 Average diluted 612,712 618,969 618,384 615,579 615,972 617,850 616,793 614,042 Ending common 605,996 609,137 613,426 610,972 611,491 612,180 610,479 608,395 Common stock price: High $ 34.44 $ 34.56 $ 34.97 $ 29.45 $ 29.82 $ 33.49 $ 33.75 $ 31.16 Low 29.46 29.03 27.72 26.53 24.60 25.58 29.60 26.31 Close 33.94 29.46 32.71 27.85 27.32 28.53 33.25 30.76 Book value per common share - as restated* $ 15.39 $ 14.89 $ 14.72 $ 14.05 $ 13.35 $ 13.25 $ 12.99 $ 12.61 Tangible book value per common share - as restated* 13.47 12.96 12.80 12.18 11.46 11.36 11.09 10.70 Other comprehensive income per share .11 .08 .06 .09 .11 .14 .15 .12 Market to book value - as restated* 220.5% 197.9% 222.2% 198.2% 204.6% 215.3% 256.0% 243.9% Market capitalization of common stock $ 20,568 $ 17,945 $ 20,065 $ 17,016 $ 16,706 $ 17,465 $ 20,298 $ 18,714
FOR THE YEAR ---------------------------- 2003 2002 2001 ---------------------------- Per common share: Basic net income - as restated* $ 3.46 $ 2.37 $ 2.30 Diluted net income - as restated* 3.43 2.35 2.27 Trailing four quarters basic net income - as restated* Trailing four quarters diluted net income - as restated* Dividends declared 1.25 1.20 1.16 Dividends paid 1.25 1.20 1.16 Dividend payout ratio(1) - as restated* 36.44% 51.06% 51.10% Dividend yield (annualized)(2) P/E ratio(3) - as restated* Common dividends declared $ 764 $ 732 $ 700 Preferred dividends declared - - 1 Common dividends paid 764 732 700 Preferred dividends paid - - 2 Shares outstanding(4): Average basic 611,206 610,187 603,611 Average diluted 616,410 616,174 611,937 Ending common Common stock price: High $ 34.97 $ 33.75 $ 32.70 Low 26.53 24.60 23.69 Close Book value per common share - as restated* Tangible book value per common share - as restated* Other comprehensive income per share Market to book value - as restated* Market capitalization of common stock
(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 * See note on Summary of Presentation Changes 14 UNAUDITED NATIONAL CITY CORPORATION CAPITALIZATION (PERIOD END) (IN MILLIONS, EXCEPT PER SHARE DATA)
2003 2002 --------------------------------------- ----------------------------------------- 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 $ 295 $ 297 $ 304 $ 295 - - - - Subordinated debt 1,969 1,986 2,041 1,991 $ 2,002 $ 1,992 $ 1,910 1,946 Junior subordinated debentures owed to unconsolidated subsidiary trusts 186 186 - - - - - - Other 2 2 2 3 3 13 13 14 --------------------------------------- ----------------------------------------- Total holding company debt 2,452 2,471 2,347 2,289 2,005 2,005 1,923 1,960 Subsidiary debt: Subordinated debt 2,080 2,101 2,168 1,785 1,796 1,782 1,701 1,631 Senior bank notes 15,266 18,732 19,239 15,716 14,998 13,480 11,554 12,170 Capital securities - - 180 180 180 180 180 180 FHLB advances 3,868 4,000 4,004 4,002 3,751 3,751 3,747 3,750 --------------------------------------- ----------------------------------------- Total subsidiary debt 21,214 24,833 25,591 21,683 20,725 19,193 17,182 17,731 --------------------------------------- ----------------------------------------- TOTAL LONG-TERM DEBT $23,666 $ 27,304 $27,938 $ 23,972 $ 22,730 $ 21,198 $19,105 $19,691 ======================================= ========================================= BORROWED FUNDS: U.S. Treasury demand notes $ 5,655 $ 847 $ 1,550 $ 352 $ 8,882 $ 8,364 $ 6,285 $ 578 Short-term senior bank notes - - 290 555 1,560 - - - Commercial paper and other 960 626 828 829 1,052 1,438 374 531 --------------------------------------- ----------------------------------------- TOTAL BORROWED FUNDS $ 6,615 $ 1,473 $ 2,668 $ 1,736 $ 11,494 $ 9,802 $ 6,659 $ 1,109 ======================================= ========================================= STOCKHOLDERS' EQUITY Preferred - - - - - - $ 1 $ 1 Common $ 9,329 $ 9,068 $ 9,030 $ 8,587 $ 8,161 $ 8,110 7,928 7,671 --------------------------------------- ----------------------------------------- TOTAL STOCKHOLDERS' EQUITY - as restated $ 9,329 $ 9,068 $ 9,030 $ 8,587 $ 8,161 $ 8,110 $ 7,929 $ 7,672 ======================================= ========================================= ACCUMULATED OTHER COMPREHENSIVE INCOME, NET OF TAX: SFAS 115 unrealized gain, net $ 132 $ 153 $ 183 $ 191 $ 223 $ 221 $ 173 $ 83 SFAS 133 unrealized loss, net (67) (103) (149) (135) (156) (133) (83) (13) --------------------------------------- ----------------------------------------- TOTAL ACCUMULATED OTHER COMPREHENSIVE INCOME, NET OF TAX $ 65 $ 50 $ 34 $ 56 $ 67 $ 88 $ 90 $ 70 ======================================= ========================================= RISK-BASED CAPITAL(1) Tier 1 capital - as restated* $ 8,420 $ 8,052 $ 7,987 $ 7,536 $ 7,118 $ 7,035 $ 6,794 $ 6,546 Total risk-based capital - as restated* 12,561 12,199 12,187 11,220 10,852 10,749 10,500 10,324 Risk-weighted assets - as restated* 95,735 99,160 98,335 96,348 95,418 90,939 85,956 85,409 Tier 1 capital ratio 8.80% 8.12% 8.12% 7.82% 7.46% 7.74% 7.90% 7.66% Total risk-based capital ratio 13.12 12.30 12.39 11.65 11.37 11.82 12.22 12.09 Leverage ratio 7.43 6.58 6.78 6.55 6.39 7.05 7.03 6.49 COMMON STOCK REPURCHASE ACTIVITY Number of common shares repurchased 4.8 5.3 - 1.4 1.3 - - - Average price per share of repurchased common shares $ 32.53 $ 30.10 - $ 27.24 $ 25.73 - - - Total cost $ 154.7 $ 160.3 - $ 37.6 $ 32.5 - - - Common shares remaining under authorization(2) 27.8 32.6 37.9 37.9 14.3 15.6 15.6 15.6 SELECTED RATIOS AND OTHER Long-term debt to equity - as restated* 253.69% 301.11% 309.40% 279.16% 278.52% 261.37% 240.94% 256.65% Long-term debt to total capitalization - as restated* 71.73 75.07 75.57 73.63 73.58 72.33 70.67 71.96 Equity to assets - as restated* 8.19 7.50 7.32 7.31 6.91 7.42 8.00 7.67 Common equity to assets - as restated* 8.19 7.50 7.32 7.31 6.91 7.42 8.00 7.67 Tangible equity to assets(3) - as restated* 7.24 6.59 6.43 6.39 6.00 6.43 6.91 6.58 Tangible common equity to assets(3) - as restated* 7.24 6.59 6.43 6.39 6.00 6.43 6.91 6.58 Minority interest(4) $ 156 $ 151 $ 73 $ 71 $ 70 $ 68 $ 65 $ 62
FOR THE YEAR ---------------------------- 2003 2002 2001 ---------------------------- LONG-TERM DEBT AND BORROWED FUNDS LONG-TERM DEBT: Holding company debt: Senior notes Subordinated debt Junior subordinated debentures owed to unconsolidated subsidiary trusts Other Total holding company debt Subsidiary debt: Subordinated debt Senior bank notes Capital securities FHLB advances Total subsidiary debt TOTAL LONG-TERM DEBT BORROWED FUNDS: U.S. Treasury demand notes Short-term senior bank notes Commercial paper and other TOTAL BORROWED FUNDS STOCKHOLDERS' EQUITY Preferred Common TOTAL STOCKHOLDERS' EQUITY ACCUMULATED OTHER COMPREHENSIVE INCOME, NET OF TAX: SFAS 115 unrealized gain, net SFAS 133 unrealized loss, net TOTAL ACCUMULATED OTHER COMPREHENSIVE INCOME, NET OF TAX RISK-BASED CAPITAL(1) Tier 1 capital - as restated* Total risk-based capital - as restated* Risk-weighted assets - as restated* Tier 1 capital ratio Total risk-based capital ratio Leverage ratio COMMON STOCK REPURCHASE ACTIVITY Number of common shares repurchased 11.5 1.3 - Average price per share of repurchased common shares $ 30.76 $ 25.73 - Total cost $ 352.6 $ 32.5 - Common shares remaining under authorization(2) SELECTED RATIOS AND OTHER Long-term debt to equity - as restated* Long-term debt to total capitalization - as restated* Equity to assets - as restated* Common equity to assets - as restated* Tangible equity to assets(3) - as restated* Tangible common equity to assets(3) - as restated* Minority interest(4)
(1) Fourth quarter 2003 risk-based capital is based upon preliminary data (2) In February 2003, National City Corporation's Board of Directors authorized the repurchase of an additional 25 million shares of issued and outstanding common stock (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)
2003 2002 ------------------------------------- ------------------------------------ 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------------------------------------- ------------------------------------ Mortgage banking revenue - as restated* $ 451 ($ 27) $ 427 $ 631 $ 45 $ 133 $ 217 $ 195 Deposit service charges 146 145 142 135 137 132 126 119 Payment processing revenue 135 125 113 105 116 114 112 109 Trust and investment management fees 72 72 78 69 70 74 85 78 Card-related fees 42 42 44 41 46 47 32 32 Other service fees 24 28 26 28 26 24 30 22 Brokerage revenue 31 33 34 24 26 25 31 27 Ineffective hedge and other derivative gains, net(1) 25 (11) 79 7 12 (1) 2 11 Principal investment gains (losses), net - 17 (16) 6 (2) (17) (2) (2) Student loan sale gains - 1 6 - - 1 10 - Demutualization gains on insurance company holdings - - - - - - - - Initial gains from the securitization of credit card receivables - - - - - - - 25 Initial gain from the securitization of automobile receivables - - - - - - - 25 Consideration from the sale of NAMCO preferred shares - - - - - - 5 - All other 55 59 48 57 52 44 51 50 ------------------------------------- ------------------------------------ TOTAL FEES AND OTHER INCOME - AS RESTATED* 981 484 981 1,103 528 576 699 691 Bank stock fund 7 1 32 - (16) - 42 49 Other securities 3 4 - - (1) - 2 5 ------------------------------------- ------------------------------------ TOTAL SECURITIES GAINS (LOSSES), NET 10 5 32 - (17) - 44 54 ------------------------------------- ------------------------------------ TOTAL NONINTEREST INCOME - AS RESTATED* $ 991 $ 489 $ 1,013 $ 1,103 $ 511 $ 576 $ 743 $ 745 ===================================== ====================================
(1) Ineffective hedge and other derivative gains and losses related to mortgage banking activities are included in mortgage banking revenue * See note on Summary of Presentation Changes
FOR THE YEAR -------------------------- 2003 2002 2001 -------------------------- Mortgage banking revenue - as restated* $ 1,482 $ 590 $ 525 Deposit service charges 568 514 469 Payment processing revenue 478 451 465 Trust and investment management fees 291 307 320 Card-related fees 169 157 170 Other service fees 106 102 115 Brokerage revenue 122 109 98 Ineffective hedge and other derivative gains, net(1) 100 24 37 Principal investment gains (losses), net 7 (23) (2) Student loan sale gains 7 11 5 Demutualization gains on insurance company holdings - - 20 Initial gains from the securitization of credit card receivables - 25 21 Initial gain from the securitization of automobile receivables - 25 - Consideration from the sale of NAMCO preferred shares - 5 89 All other 219 197 201 -------------------------- TOTAL FEES AND OTHER INCOME - AS RESTATED* 3,549 2,494 2,533 Bank stock fund 40 75 123 Other securities 7 6 22 -------------------------- TOTAL SECURITIES GAINS (LOSSES), NET 47 81 145 -------------------------- TOTAL NONINTEREST INCOME - AS RESTATED* $ 3,596 $ 2,575 $2,678 ==========================
NONINTEREST EXPENSE ($ IN MILLIONS)
2003 2002 ------------------------------------- ------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------------------------------------- ------------------------------------- Salaries, benefits, and other personnel $ 541 $ 571 $ 542 $ 561 $ 527 $ 449 $ 445 $ 444 Equipment 75 59 62 65 65 57 61 62 Net occupancy 61 58 56 58 59 56 55 55 Third-party services 88 71 71 65 71 55 60 53 Card processing 60 54 52 52 54 51 52 54 Telecommunications 22 22 19 21 22 21 22 21 Marketing and public relations 30 22 67 17 19 26 75 26 Postage 19 22 18 20 19 19 17 19 Travel and entertainment 19 15 14 13 18 14 15 14 Supplies 16 15 15 13 15 13 13 13 State and local taxes 16 16 14 16 15 15 14 17 Goodwill and other intangible asset amortization 6 6 6 5 6 5 5 5 FDIC assessments 3 2 3 2 4 2 2 2 OREO expense, net 5 4 6 3 8 5 6 5 Automobile lease residual value write-downs (recovery) (2) (9) - 25 - - 38 13 Commercial lease residual value write-downs (recovery) - - - 17 5 (1) 5 - Building lease termination penalty - - 9 - - - - - Impairment, fraud, and other losses, net 24 14 16 9 40 23 53 20 Loss on commercial paper conduit consolidation - - - - - 16 - - All other 62 66 56 47 64 44 36 52 ------------------------------------- ------------------------------------- TOTAL NONINTEREST EXPENSE $ 1,045 $ 1,008 $ 1,026 $ 1,009 $ 1,011 $ 870 $ 974 $ 875 ===================================== =====================================
FOR THE YEAR ------------------------ 2003 2002 2001 ------------------------ Salaries, benefits, and other personnel $2,215 $1,865 $1,710 Equipment 261 245 239 Net occupancy 233 225 213 Third-party services 295 239 204 Card processing 218 211 199 Telecommunications 84 86 85 Marketing and public relations 136 146 71 Postage 79 74 73 Travel and entertainment 61 61 58 Supplies 59 54 56 State and local taxes 62 61 52 Goodwill and other intangible asset amortization 23 21 86 FDIC assessments 10 10 10 OREO expense, net 18 24 8 Automobile lease residual value write-downs (recovery) 14 51 67 Commercial lease residual value write-downs (recovery) 17 9 5 Building lease termination penalty 9 - - Impairment, fraud, and other losses, net 63 136 75 Loss on commercial paper conduit consolidation - 16 - All other 231 196 134 ------------------------ TOTAL NONINTEREST EXPENSE $4,088 $3,730 $3,345 ========================
16 UNAUDITED NATIONAL CITY CORPORATION SALARIES, BENEFITS, AND OTHER PERSONNEL EXPENSE ($ IN MILLIONS)
2003 2002 ---------------------------------------- ----------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ---------------------------------------- ----------------------------------------- Salaries and wages $ 313 $ 310 $ 303 $ 299 $ 301 $ 294 $ 290 $ 289 Incentive compensation 167 264 241 171 230 164 130 115 Deferred personnel costs (101) (145) (155) (110) (125) (98) (66) (72) Stock-based compensation 10 10 6 4 4 3 2 2 Payroll taxes 28 33 37 43 29 28 30 38 Contract labor 38 29 23 20 26 16 14 16 Medical and other benefits 45 42 49 44 36 40 40 39 Defined contribution plans 13 14 17 23 15 14 13 20 Defined benefit pension plan (4) (4) (4) (4) (12) (15) (15) (15) Market valuation adjustments on deferred compensation liabilities 19 3 18 (1) 6 (15) (5) 3 Severance and other 13 15 7 72 17 18 12 9 -------------------------------------- --------------------------------------- TOTAL SALARIES, BENEFITS, AND OTHER PERSONNEL EXPENSE $ 541 $ 571 $ 542 $ 561 $ 527 $ 449 $ 445 $ 444 ====================================== ======================================= FOR THE YEAR ----------------------------- 2003 2002 2001 ----------------------------- Salaries and wages $1,225 $1,174 $1,134 Incentive compensation 843 639 504 Deferred personnel costs (511) (361) (286) Stock-based compensation 30 11 8 Payroll taxes 141 125 122 Contract labor 110 72 60 Medical and other benefits 180 155 147 Defined contribution plans 67 62 56 Defined benefit pension plan (16) (57) (66) Market valuation adjustments on deferred compensation liabilities 39 (11) (2) Severance and other 107 56 33 ----------------------------- TOTAL SALARIES, BENEFITS, AND OTHER PERSONNEL EXPENSE $2,215 $1,865 $1,710 =============================
FULL-TIME EQUIVALENT EMPLOYEES BY LINE OF BUSINESS(1)
2003 2002 ------------------------------------ ------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------------------------------------ ------------------------------------- LINE OF BUSINESS STAFF: Consumer and Small Business Financial Services 12,093 11,794 11,450 11,472 11,665 11,626 11,790 11,866 Wholesale Banking 1,562 1,574 1,583 1,739 1,785 1,793 1,826 1,830 National Consumer Finance: National City Mortgage Co. 7,852 8,191 8,079 7,492 7,156 6,623 6,375 6,297 First Franklin Financial Corporation 1,943 1,721 1,475 1,399 1,291 1,166 1,085 989 National City Home Loan Services 361 356 347 365 372 366 376 363 National Home Equity 311 283 254 230 225 204 186 142 ----------------------------------- ------------------------------------ Total National Consumer Finance 10,467 10,551 10,155 9,486 9,044 8,359 8,022 7,791 Asset Management 1,510 1,505 1,522 1,642 1,733 1,728 1,771 1,788 National Processing 1,693 1,705 1,689 1,761 1,791 1,795 1,859 1,882 CORPORATE SUPPORT STAFF(2) 6,006 6,059 6,015 6,533 6,713 6,798 6,890 6,919 ----------------------------------- ------------------------------------ TOTAL EMPLOYEES 33,331 33,188 32,414 32,633 32,731 32,099 32,158 32,076 =================================== ====================================
(1) Represents period-end, active, full-time equivalent employees. (2) Personnel expense associated with corporate staff are allocated to the lines of business either directly based on usage or indirectly as part of the general overhead allocation process. 17 UNAUDITED NATIONAL CITY CORPORATION CREDIT QUALITY STATISTICS ($ IN MILLIONS)
2003 2002 ------------------------------------- -------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------------------------------------- -------------------------------------- LOAN LOSS ALLOWANCE Beginning loan loss allowance $1,130 $1,147 $1,128 $1,099 $1,080 $1,030 $1,000 $997 Provision 148 107 183 200 159 169 165 189 Allowance related to loans sold or securitized (2) - - - - 1 - (5) Charge-offs: Commercial 81 43 100 104 74 66 72 105 Commercial construction 1 1 1 - - 1 - 1 Real estate - commercial 13 10 5 3 5 6 8 2 Real estate - residential 32 48 31 41 26 16 20 24 Home equity lines of credit 6 6 6 6 7 4 5 5 Credit card and other unsecured lines of credit 27 24 25 22 21 21 19 22 Other consumer 29 27 30 35 41 37 38 55 ------------------------------------ ------------------------------------- Total charge-offs 189 159 198 211 174 151 162 214 ------------------------------------ ------------------------------------- Recoveries: Commercial 13 9 11 11 12 9 4 7 Commercial construction - - - - - - - - Real estate - commercial 3 1 - 1 1 2 1 1 Real estate - residential 10 11 6 10 5 1 1 1 Home equity lines of credit 2 2 1 2 2 1 1 1 Credit card and other unsecured lines of credit 2 2 2 2 2 1 2 3 Other consumer 8 10 14 14 12 17 18 20 ------------------------------------ ------------------------------------- Total recoveries 38 35 34 40 34 31 27 33 ------------------------------------ ------------------------------------- Net charge-offs 151 124 164 171 140 120 135 181 ------------------------------------ ------------------------------------- Ending loan loss allowance $1,125 $1,130 $1,147 $1,128 $1,099 $1,080 $1,030 $1,000 ==================================== ===================================== MEMO: Net charge-offs on: Securitized credit cards $ 19 $ 20 $ 21 $ 15 $ 19 $ 18 $ 18 $ 18 Managed credit cards 37 35 36 28 33 30 29 32 Securitized automobile loans 2 2 2 3 3 2 1 - Managed automobile loans(1) 12 11 10 13 13 9 8 15 NET CHARGE-OFFS AS A % OF AVERAGE PORTFOLIO LOANS (ANNUALIZED) Commercial 1.37% .63% 1.63% 1.67% 1.05% .98% 1.13% 1.59% Commercial construction .13 .12 .18 .02 (.11) .20 .06 .18 Real estate - commercial .41 .36 .22 .10 .16 .18 .37 .09 Real estate - residential .33 .61 .45 .59 .49 .40 .49 .62 Home equity lines of credit .15 .19 .19 .20 .27 .21 .21 .25 Credit card and other unused lines of credit 4.29 4.13 4.46 3.92 4.04 3.65 3.87 4.56 Other consumer 1.04 .83 .80 1.09 1.02 .72 .74 1.24 ------------------------------------ ------------------------------------- TOTAL NET CHARGE-OFFS .76% .64% .88% .95% .78% .69% .80% 1.08% ==================================== ===================================== MEMO: Securitized credit cards 5.20% 5.35% 5.76% 4.29% 5.32% 5.00% 5.07% 5.49% Managed credit cards 5.82% 5.58% 6.11% 4.71% 5.69% 5.12% 5.30% 5.81% Securitized automobile loans 1.67% 1.41% 1.32% 1.39% 1.17% .66% .27% - Managed automobile loans(1) 1.09% .98% .89% 1.23% 1.18% .81% .74% 1.34% FOR THE YEAR ----------------------------- 2003 2002 2001 ----------------------------- LOAN LOSS ALLOWANCE Beginning loan loss allowance $1,099 $ 997 $929 Provision 638 682 605 Allowance related to loans sold or securitized (2) (4) (74) Charge-offs: Commercial 328 317 199 Commercial construction 3 2 1 Real estate - commercial 31 21 16 Real estate - residential 152 86 60 Home equity lines of credit 24 21 14 Credit card and other unsecured lines of credit 98 83 98 Other consumer 121 171 199 ----------------------------- Total charge-offs 757 701 587 ----------------------------- Recoveries: Commercial 44 32 17 Commercial construction - - - Real estate - commercial 5 5 6 Real estate - residential 37 8 1 Home equity lines of credit 7 5 3 Credit card and other unsecured lines of credit 8 8 23 Other consumer 46 67 74 ----------------------------- Total recoveries 147 125 124 ----------------------------- Net charge-offs 610 576 463 ----------------------------- Ending loan loss allowance $1,125 $1,099 $997 ============================= MEMO: Net charge-offs on: Securitized credit cards $ 75 $ 73 $ 50 Managed credit cards 136 124 105 Securitized automobile loans 9 6 - Managed automobile loans(1) 46 45 50 NET CHARGE-OFFS AS A % OF AVERAGE PORTFOLIO LOANS (ANNUALIZED) Commercial 1.33% 1.19% .70% Commercial construction .12 .07 .10 Real estate - commercial .27 .20 .15 Real estate - residential .49 .50 .42 Home equity lines of credit .18 .24 .21 Credit card and other unused lines of credit 4.21 4.02 3.48 Other consumer .94 .93 1.02 ----------------------------- TOTAL NET CHARGE-OFFS .80% .83% .68% ============================= MEMO: Securitized credit cards 5.15% 5.21% 5.04% Managed credit cards 5.56% 5.48% 4.76% Securitized automobile loans 1.43% .67% - Managed automobile loans(1) 1.04% 1.02% 1.14%
(1) Represents managed portfolio of indirect prime automobile loans. 18 UNAUDITED NATIONAL CITY CORPORATION CREDIT QUALITY STATISTICS (CONTINUED) ($ IN MILLIONS)
2003 2002 -------------------------------------- ------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR -------------------------------------- ------------------------------------- NONPERFORMING ASSETS Commercial $ 257 $ 341 $ 402 $ 379 $ 408 $ 437 $ 415 $ 356 Commercial construction 7 9 8 6 6 6 6 12 Real estate - commercial 67 65 75 78 60 78 57 53 Real estate - residential: National City Mortgage 103 102 97 110 91 79 73 77 First Franklin 51 49 47 44 44 46 47 47 Altegra/Loan Zone 50 60 66 69 76 80 82 83 Other 15 3 12 10 17 21 24 22 -------------------------------------- ------------------------------------- Total real estate - residential 219 214 222 233 228 226 226 229 -------------------------------------- ------------------------------------- Total nonperforming portfolio loans 550 629 707 696 702 747 704 650 Other real estate owned (OREO): Commercial 2 4 5 3 3 4 4 4 Real estate - residential: National City Mortgage 43 44 38 43 40 36 34 23 First Franklin 33 34 31 34 34 30 24 17 Altegra/Loan Zone 21 28 30 36 38 35 27 22 -------------------------------------- ------------------------------------- Total real estate - residential 97 106 99 113 112 101 85 62 -------------------------------------- ------------------------------------- Total OREO 99 110 104 116 115 105 89 66 Mortgage loans held for sale and other 8 17 7 10 - - - - -------------------------------------- ------------------------------------- TOTAL NONPERFORMING ASSETS $ 657 $ 756 $ 818 $ 822 $ 817 $ 852 $ 793 $ 716 ====================================== ===================================== PERCENTAGE OF NONPERFORMING ASSETS BY CATEGORY Commercial 40% 45% 49% 46% 50% 51% 53% 50% Commercial construction 1 1 1 1 1 1 1 2 Real estate - commercial 10 9 9 9 7 9 7 7 Real estate - residential: National City Mortgage 15 14 13 14 12 11 10 10 First Franklin 8 6 5 5 5 5 6 7 Altegra/Loan Zone 8 8 8 8 9 9 10 12 Other 2 - 1 1 2 2 2 3 -------------------------------------- ------------------------------------- Total real estate - residential 33 28 27 28 28 27 28 32 -------------------------------------- ------------------------------------- Total nonperforming portfolio loans 84 83 86 84 86 88 89 91 Other real estate owned (OREO): Commercial - 1 1 - - - 1 1 Real estate - residential: National City Mortgage 7 6 4 6 5 4 4 3 First Franklin 5 4 4 4 4 4 3 2 Altegra/Loan Zone 3 4 4 4 5 4 3 3 -------------------------------------- ------------------------------------- Total real estate - residential 15 14 12 14 14 12 10 8 -------------------------------------- ------------------------------------- Total OREO 15 15 13 14 14 12 11 9 Mortgage loans held for sale and other 1 2 1 2 - - - - -------------------------------------- ------------------------------------- TOTAL NONPERFORMING ASSETS 100% 100% 100% 100% 100% 100% 100% 100% ====================================== ===================================== DISTRESSED LOAN SALES Distressed loans classified as nonperforming at the end of the previous quarter $ 27 $ 28 $ 40 $ 32 Other 12 16 25 24 -------------------------------------- TOTAL DISTRESSED LOANS SOLD $ 39 $ 44 $ 65 $ 56 ====================================== RATIOS Nonperforming assets to period-end portfolio loans and other nonperforming assets .83% .97% 1.08% 1.10% 1.13% 1.20% 1.15% 1.05% Nonperforming assets to period-end total assets - as restated* .58 .62 .66 .70 .69 .78 .80 .72 Loan loss allowance to nonperforming portfolio loans 204.76 179.61 162.09 162.01 156.42 144.44 146.42 153.84 Loan loss allowance to period-end portfolio loans 1.42 1.45 1.51 1.51 1.52 1.52 1.50 1.47 Loan loss allowance (period-end) to annualized net charge-offs 189.04 228.68 174.07 163.10 198.04 227.03 190.26 135.90
* See note on Summary of Presentation Changes 19 UNAUDITED NATIONAL CITY CORPORATION CREDIT QUALITY STATISTICS (CONTINUED) ($ IN MILLIONS)
2003 2002 -------------------------------------- ----------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR -------------------------------------- ----------------------------------------- LOANS 90+ DAYS PAST DUE ACCRUING INTEREST Commercial $ 20 $ 38 $ 35 $ 42 $ 41 $ 75 $ 57 $ 61 Commercial construction 3 10 14 5 1 2 7 7 Real estate - commercial 32 22 26 18 26 17 30 31 Real estate - residential: National City Mortgage and other 140 121 125 136 135 127 123 142 First Franklin 276 259 237 233 228 216 198 179 Altegra/Loan Zone 12 35 68 77 87 95 89 85 National Home Equity - 1 1 1 - - - - ----------------------------------- -------------------------------------- Total real estate - residential 428 416 431 447 450 438 410 406 ----------------------------------- -------------------------------------- Home equity lines of credit 15 15 15 14 16 15 15 17 Credit card and other unsecured lines of credit 18 15 14 16 8 7 7 8 Other consumer 12 11 19 12 19 18 18 21 Mortgage loans held for sale and other 37 71 39 57 14 5 5 21 ----------------------------------- -------------------------------------- TOTAL LOANS 90+ DAYS PAST DUE $565 $598 $593 $611 $575 $577 $549 $572 =================================== ======================================
TEN LARGEST NONPERFORMING LOANS AS OF DECEMBER 31, 2003 ($ IN MILLIONS)
Amount As a Percentage of Total Major Industry(1) Sub-Industry Portfolio Outstanding Nonperforming Assets ------------------------------------ ---------------------- ---------------- ----------- -------------------- Industrial Electrical Products Commercial $ 10 1.5% Real estate Electrical Contracting Commercial 9 (2) 1.4% Technology Telecomm Commercial 9 (2) 1.4% Basic materials Metal Treating Commercial 8 1.2% Consumer noncyclical Healthcare Commercial/Real Estate 8 1.2% Industrial Cargo Transportation Commercial 7 1.1% Consumer cyclical Household Furniture Commercial 6 .9% Financial Finance Commercial 6 .9% Consumer cyclical Textiles and Leather Commercial 6 (2) .9% Industrial Electronic Machinery Commercial 5 (2) .8% ---- ----- $ 74 11.3% Total nonperforming assets $657 100.0% Nonperforming assets as a percentage of period-end portfolio loans and other nonperforming assets .83%
(1) Based on Standard Industrial Classification System codes (2) Loan represents a participation in a shared national credit COMMERCIAL LOAN INDUSTRY CONCENTRATION AS OF DECEMBER 31, 2003 ($ IN MILLIONS)
Average Largest Loan Percent to Loan Balance to a Single Major Industry(1) Balance Total Per Obligor Obligor ---------------------------------------- ------- ----- ----------- ------- Real estate $ 9,362 30% $ .8 $38 Consumer cyclical 4,787 15% .8 78 Consumer noncyclical 3,959 13% .4 93 Industrial 3,264 10% .8 60 Basic materials 2,576 8% 1.2 28 Financial 1,761 6% 1.3 42 Services 1,335 4% .4 81 Energy and utilities 616 2% 1.0 24 Technology 287 1% 2.6 25 Miscellaneous 1,908 6% .2 18 ------- --- 29,855 95% Commercial leasing - all industries 1,427 5% ------- --- Total commercial, commercial real estate and commercial construction $31,282 100% ======= ===
(1) Based on Standard Industrial Classification System codes 20 UNAUDITED NATIONAL CITY CORPORATION CONSUMER AND SMALL BUSINESS FINANCIAL SERVICES PERFORMANCE MEASURES
2003 2002 ----------------------------------------- ------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ----------------------------------------- ------------------------------------------- DEPOSIT ACCOUNT METRICS PERSONAL DEPOSITS: Number of accounts (in thousands): Noninterest bearing checking 1,645 1,641 1,604 1,574 1,562 1,568 1,534 1,505 Interest bearing checking 713 709 696 682 665 658 639 623 Money market savings 456 457 448 438 425 418 410 401 Regular savings 824 841 855 871 888 930 947 963 ----------------------------------------- ------------------------------------------ TOTAL PERSONAL DEPOSIT ACCOUNTS 3,638 3,648 3,603 3,565 3,540 3,574 3,530 3,492 ========================================= ========================================== Average account size: Noninterest bearing checking $ 1,835 $ 1,834 $ 1,876 $ 1,910 $ 1,903 $ 1,904 $ 1,971 $ 1,951 Interest bearing checking 11,189 10,953 10,761 10,226 8,626 8,400 8,521 8,407 Money market savings 30,513 30,246 29,981 29,530 27,720 28,029 28,109 28,289 Regular savings 2,517 2,519 2,548 2,495 2,455 2,459 2,456 2,442 ----------------------------------------- ------------------------------------------ TOTAL AVERAGE ACCOUNT SIZE $ 7,415 $ 7,321 $ 7,249 $ 7,034 $ 6,265 $ 6,260 $ 6,305 $ 6,262 ========================================= ========================================== BUSINESS DEPOSITS: Number of accounts (in thousands) 315 308 297 286 270 266 264 261 Average account size $ 20,894 $ 20,551 $ 20,273 $ 19,875 $ 21,921 $ 22,667 $ 22,219 $ 21,572 TIME DEPOSITS: Number of accounts (in thousands) 801 819 851 882 909 936 965 976 Average account size $ 15,836 $ 15,649 $ 15,694 $ 15,652 $ 15,681 $ 15,341 $ 15,130 $ 14,776 CONSUMER LOAN PRODUCTION METRICS (# OF LOANS)(1) Installment loan originations: Home equity(2)(4) 7,318 16,532 12,497 7,520 10,664 5,577 6,259 7,116 Other(3) 4,576 6,199 5,536 4,697 5,446 6,723 6,631 5,779 Home equity(4) and other lines of credit 17,340 23,946 26,974 19,406 23,310 23,154 28,578 26,672 ----------------------------------------- ------------------------------------------ TOTAL CONSUMER LOAN ORIGINATIONS 29,234 46,677 45,007 31,623 39,420 35,454 41,468 39,567 ========================================= ========================================== BANK BRANCHES Traditional 690 673 660 659 653 652 654 653 Limited service 17 19 20 21 22 23 20 20 In-store 47 51 53 63 68 70 73 74 Bank express 360 379 390 396 400 400 401 402 ----------------------------------------- ------------------------------------------ TOTAL BANK BRANCHES 1,114 1,122 1,123 1,139 1,143 1,145 1,148 1,149 ========================================= ========================================== ATMs 1,574 1,580 1,583 1,607 1,610 1,615 1,633 1,637 ONLINE BANKING CUSTOMERS 793,910 740,976 664,283 599,411 533,780 477,176 401,414 343,234
(1) Excludes home equity loans generated by the National Home Equity division of the National Consumer Finance line of business. (2) Represents closed-end home equity installment loans included in real estate residential portfolio loans on the consolidated balance sheet. (3) Includes automobile, truck, boat, recreational vehicle, and other secured installment loans. (4) See additional home equity portfolio statistics on page 27. 21 UNAUDITED NATIONAL CITY CORPORATION ASSET MANAGEMENT PERFORMANCE MEASURES ($ IN MILLIONS)
2003 --------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR --------------------------------------------- ASSETS UNDER ADMINISTRATION Managed assets: Value at beginning of period $ 58,334 $ 58,690 $ 55,179 $ 57,571 Estimated change due to market impact 2,914 492 3,376 (188) Other activity, net (1,831) (848) 135 (2,204) --------- --------- --------- --------- Value at end of period 59,417 58,334 58,690 55,179 --------- --------- --------- --------- Non-managed assets: Value at beginning of period 48,317 48,987 45,929 73,752 Estimated change due to market impact 3,326 (246) 3,776 (1,814) Other activity, net 496 (424) (718) (26,009) --------- --------- --------- --------- Value at end of period 52,139 48,317 48,987 45,929 --------- --------- --------- --------- TOTAL ASSETS AT END OF PERIOD $ 111,556 $ 106,651 $ 107,677 $ 101,108 ========= ========= ========= ========= PROPRIETARY MUTUAL FUND ASSETS (included above) $ 15,335 $ 14,850 $ 15,831 $ 15,186 ASSETS UNDER ADMINISTRATION REPRESENTED BY: Type of investment: Money market and other $ 15,711 $ 15,826 $ 15,760 $ 15,144 Equity 55,167 49,851 50,647 45,364 Fixed income 40,678 40,974 41,270 40,600 --------- --------- --------- --------- TOTAL $ 111,556 $ 106,651 $ 107,677 $ 101,108 ========= ========= ========= ========= Type of business: Investment management and personal trust $ 50,185 $ 47,716 $ 48,866 $ 46,246 Corporate trust 18,788 19,333 18,006 17,312 Retirement plan services 18,418 16,703 17,514 15,826 Charitable and endowment 12,244 11,710 11,864 11,030 Other 11,921 11,189 11,427 10,694 --------- --------- --------- --------- TOTAL $ 111,556 $ 106,651 $ 107,677 $ 101,108 ========= ========= ========= ========= PERCENTAGE OF ASSETS UNDER ADMINISTRATION REPRESENTED BY: Type of investment: Money market and other 14% 15% 15% 15% Equity 50% 47% 47% 45% Fixed income 36% 38% 38% 40% Type of business: Investment management and personal trust 45% 45% 45% 45% Corporate trust 17% 18% 17% 17% Retirement plan services 16% 16% 16% 16% Charitable and endowment 11% 11% 11% 11% Other 11% 10% 11% 11% 2002 -------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR -------------------------------------------- ASSETS UNDER ADMINISTRATION Managed assets: Value at beginning of period $ 56,975 $ 61,064 $ 64,945 $ 65,000 Estimated change due to market impact 682 (3,340) (3,455) 345 Other activity, net (86) (749) (426) (400) --------- --------- --------- --------- Value at end of period 57,571 56,975 61,064 64,945 --------- --------- --------- --------- Non-managed assets: Value at beginning of period 72,210 79,515 82,936 82,160 Estimated change due to market impact 3,894 (7,070) (3,989) 1,098 Other activity, net (2,352) (235) 568 (322) --------- --------- --------- --------- Value at end of period 73,752 72,210 79,515 82,936 --------- --------- --------- --------- TOTAL ASSETS AT END OF PERIOD $ 131,323 $ 129,185 $ 140,579 $ 147,881 ========= ========= ========= ========= PROPRIETARY MUTUAL FUND ASSETS (included above) $ 16,014 $ 16,255 $ 17,318 $ 17,443 ASSETS UNDER ADMINISTRATION REPRESENTED BY: Type of investment: Money market and other $ 16,359 $ 18,829 $ 19,466 $ 19,809 Equity 53,968 50,138 58,674 65,796 Fixed income 60,996 60,218 62,439 62,276 --------- --------- --------- --------- TOTAL $ 131,323 $ 129,185 $ 140,579 $ 147,881 ========= ========= ========= ========= Type of business: Investment management and personal trust $ 46,994 $ 46,453 $ 50,169 $ 53,115 Corporate trust 45,500 44,403 48,551 49,320 Retirement plan services 16,487 15,640 17,248 18,936 Charitable and endowment 11,741 11,995 12,764 13,735 Other 10,601 10,694 11,847 12,775 --------- --------- --------- --------- TOTAL $ 131,323 $ 129,185 $ 140,579 $ 147,881 ========= ========= ========= ========= PERCENTAGE OF ASSETS UNDER ADMINISTRATION REPRESENTED BY: Type of investment: Money market and other 13% 14% 14% 14% Equity 41% 39% 42% 44% Fixed income 46% 47% 44% 42% Type of business: Investment management and personal trust 35% 36% 36% 36% Corporate trust 35% 35% 35% 33% Retirement plan services 13% 12% 12% 13% Charitable and endowment 9% 9% 9% 9% Other 8% 8% 8% 9% FOR THE YEAR ----------------------------------- 2003 2002 2001 ----------------------------------- ASSETS UNDER ADMINISTRATION Managed assets: Value at beginning of period $ 57,571 $ 65,000 $ 66,155 Estimated change due to market impact 6,594 (5,768) (590) Other activity, net (4,748) (1,661) (565) --------- --------- --------- Value at end of period 59,417 57,571 65,000 --------- --------- --------- Non-managed assets: Value at beginning of period $ 73,752 $ 82,160 83,879 Estimated change due to market impact 5,042 (6,067) 382 Other activity, net (26,655) (2,341) (2,101) --------- --------- --------- Value at end of period 52,139 73,752 82,160 --------- --------- --------- TOTAL ASSETS AT END OF PERIOD $ 111,556 $ 131,323 $ 147,160 ========= ========= ========= PROPRIETARY MUTUAL FUND ASSETS (included above) ASSETS UNDER ADMINISTRATION REPRESENTED BY: Type of investment: Money market and other Equity Fixed income TOTAL Type of business: Investment management and personal trust Corporate trust Retirement plan services Charitable and endowment Other TOTAL PERCENTAGE OF ASSETS UNDER ADMINISTRATION REPRESENTED BY: Type of investment: Money market and other Equity Fixed income Type of business: Investment management and personal trust Corporate trust Retirement plan services Charitable and endowment Other
22 UNAUDITED NATIONAL CITY CORPORATION MORTGAGE BANKING STATISTICS ($ IN MILLIONS) --------------------------------------------------------------------------------
2003 2002 -------------------------------------------- ---------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR -------------------------------------------- ---------------------------------------------- REVENUE SUMMARY ---------------------------------- Origination and sales revenue: National City Mortgage Co. (NCMC) $334 ($152) $273 $426 ($45) $18 $133 $124 First Franklin 65 95 88 69 69 27 43 14 -------------------------------------------- ---------------------------------------------- Total origination and sales revenue 399 (57) 361 495 24 45 176 138 Net servicing revenue (NCMC) 52 30 66 136 21 88 41 57 -------------------------------------------- ---------------------------------------------- TOTAL MORTGAGE BANKING REVENUE - AS RESTATED * $451 ($27) $427 $631 $45 $133 $217 $195 ============================================ ============================================== APPLICATION DATA(1) ---------------------------------- National City Mortgage Co. (NCMC) $20,548 $31,104 $57,849 $45,073 $38,985 $42,432 $23,387 $21,401 First Franklin 10,380 10,935 8,262 6,763 6,862 6,055 6,358 5,124 -------------------------------------------- ---------------------------------------------- TOTAL APPLICATIONS $30,928 $42,039 $66,111 $51,836 $45,847 $48,487 $29,745 $26,525 ============================================ ============================================== PERCENTAGE OF NCMC APPLICATIONS REPRESENTED BY: Refinances 52% 57% 75% 76% 75% 73% 48% 52% Government loans 16% 18% 15% 16% 16% 16% 20% 20% Adjustable-rate loans 14% 11% 9% 6% 6% 8% 10% 8% PRODUCTION DATA ---------------------------------- NCMC: Retail $6,389 $14,990 $14,495 $10,606 $13,657 $9,632 $6,257 $6,249 Wholesale 7,800 16,283 18,358 13,694 15,673 11,983 7,348 8,140 -------------------------------------------- ---------------------------------------------- Total NCMC 14,189 31,273 32,853 24,300 29,330 21,615 13,605 14,389 First Franklin 2,976 2,801 2,396 1,732 1,963 1,333 1,248 626 -------------------------------------------- ---------------------------------------------- TOTAL LOANS ORIGINATED FOR SALE $17,165 $34,074 $35,249 $26,032 $31,293 $22,948 $14,853 $15,015 ============================================ ============================================== MEMO: Total First Franklin loan originations $6,203 $6,051 $4,396 $3,488 $3,606 $2,706 $2,396 $2,009 PERCENTAGE OF NCMC ORIGINATIONS REPRESENTED BY: Refinances 52% 71% 75% 76% 77% 64% 46% 62% Government loans 18% 15% 15% 16% 14% 17% 22% 18% Adjustable-rate loans 17% 8% 6% 6% 6% 10% 11% 8% NATIONAL ORIGINATOR RANKING(2) 8 7 8 7 7 7 7 GEOGRAPHIC MIX OF ORIGINATIONS(3): Top five states and their percentage to total NCMC originations: California 23% 19% 21% 19% 19% 20% 22% 23% Virginia 7% 8% 8% 7% 7% 7% 7% 6% Maryland 6% 8% 8% 8% 8% 8% 6% 6% Illinois 6% 6% 6% 6% 6% 6% 6% 6% Texas 5% 6% 6% 6% 6% 5% 5% - Ohio - - - - - - - 5% Arizona - - - - - - - - LOAN SALES ---------------------------------- NCMC $22,164 $33,462 $27,277 $25,611 $20,253 $14,921 $15,390 $16,989 First Franklin 2,379 2,543 2,164 1,851 1,810 867 1,247 635 -------------------------------------------- ---------------------------------------------- TOTAL MORTGAGE LOAN SALES $24,543 $36,005 $29,441 $27,462 $22,063 $15,788 $16,637 $17,624 ============================================ ==============================================
FOR THE YEAR -------------------------------- 2003 2002 2001 -------------------------------- REVENUE SUMMARY ---------------------------------- Origination and sales revenue: National City Mortgage Co. (NCMC) $881 $230 $352 First Franklin 317 153 59 -------------------------------- Total origination and sales revenue 1,198 383 411 Net servicing revenue (NCMC) 284 207 114 -------------------------------- TOTAL MORTGAGE BANKING REVENUE - AS RESTATED * $1,482 $590 $525 ================================ APPLICATION DATA(1) ---------------------------------- National City Mortgage Co. (NCMC) $154,574 $126,205 $90,222 First Franklin 36,340 24,399 16,162 -------------------------------- TOTAL APPLICATIONS $190,914 $150,604 $106,384 ================================ PERCENTAGE OF NCMC APPLICATIONS REPRESENTED BY: Refinances 69% 65% 60% Government loans 16% 17% 14% Adjustable-rate loans 9% 8% 4% PRODUCTION DATA ---------------------------------- NCMC: Retail $46,480 $35,795 $27,743 Wholesale 56,135 43,144 28,300 -------------------------------- Total NCMC 102,615 78,939 56,043 First Franklin 9,905 5,170 2,465 -------------------------------- TOTAL LOANS ORIGINATED FOR SALE $112,520 $84,109 $58,508 ================================ MEMO: Total First Franklin loan originations $20,138 $10,717 $6,301 PERCENTAGE OF NCMC ORIGINATIONS REPRESENTED BY: Refinances 71% 65% 60% Government loans 16% 17% 20% Adjustable-rate loans 8% 8% 6% NATIONAL ORIGINATOR RANKING(2) GEOGRAPHIC MIX OF ORIGINATIONS(3): Top five states and their percentage to total NCMC originations: California 20% 20% 20% Virginia 7% 7% 6% Maryland 8% 7% 6% Illinois 6% 6% 6% Texas 6% 5% - Ohio - - 6% Arizona - - - LOAN SALES ---------------------------------- NCMC $108,514 $67,553 $41,009 First Franklin 8,937 4,559 2,070 -------------------------------- TOTAL MORTGAGE LOAN SALES $117,451 $72,112 $43,079 ================================
(1) Represents applications for both loans originated for sale and to be held in portfolio (2) Source: Inside Mortgage Finance. Represents rank of the Corporation's mortgage banking subsidiary, National City Mortgage Co. The current quarter ranking is not yet available. (3) Based on the dollar volume of loans originated for sale. Percentages not shown for states that are not one of the top five. * See note on Summary of Presentation Changes 23 UNAUDITED NATIONAL CITY CORPORATION MORTGAGE BANKING STATISTICS (CONTINUED) ($ IN MILLIONS) --------------------------------------------------------------------------------
2003 2002 ---------------------------------------- ----------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ---------------------------------------- ----------------------------------------- NCMC NET SERVICING REVENUE COMPONENTS ----------------------------------------- Net servicing fees $116 $94 $92 $120 $89 $97 $94 $88 Amortization of mortgage servicing assets (MSRs) (73) (190) (125) (126) (127) (100) (69) (62) MSR SFAS 140 impairment (charge) recovery 13 207 (125) 100 (36) (111) (112) 13 MSR SFAS 133 hedge and other derivative gains (losses): Gains (losses) on MSRs hedged under SFAS 133 (22) (50) (83) (41) (93) (295) (316) (12) Gains (losses) on derivatives in SFAS 133 relationships 16 16 139 67 142 373 435 31 Gains (losses) on other derivatives used to economically hedge MSRs (3) (47) 168 16 46 124 9 (1) Other 5 - - - - - - - ---------------------------------------- ----------------------------------------- NET SERVICING REVENUE - AS RESTATED * $52 $30 $66 $136 $21 $88 $41 $57 ======================================== ========================================= MORTGAGE SERVICING ASSETS ----------------------------------------- Carrying value at beginning of period $1,152 $955 $1,047 $950 $989 $1,255 $1,439 $1,224 Additions 253 440 258 266 184 143 206 294 Amortization (73) (190) (125) (126) (127) (100) (69) (62) SFAS 133 hedge basis adjustments (22) (50) (83) (41) (93) (295) (316) (12) Application of valuation allowance to directly write-down servicing assets - - (137) - - - - - Sales (9) (3) (5) (2) (3) (14) (5) (5) ---------------------------------------- ----------------------------------------- CARRYING VALUE BEFORE VALUATION ALLOWANCE AT END OF PERIOD $1,301 $1,152 $955 $1,047 $950 $989 $1,255 $1,439 ======================================== ========================================= VALUATION ALLOWANCE Balance at beginning of period ($15) ($222) ($234) ($334) ($298) ($187) ($75) ($88) Impairment recoveries (charges) 13 207 (125) 100 (36) (111) (112) 13 Application of valuation allowance to directly write-down servicing assets - - 137 - - - - - ---------------------------------------- ----------------------------------------- BALANCE AT END OF PERIOD ($2) ($15) ($222) ($234) ($334) ($298) ($187) ($75) ======================================== ========================================= NET CARRYING VALUE OF MORTGAGE SERVICING ASSETS AT END OF PERIOD - AS RESTATED * $1,299 $1,137 $733 $813 $616 $691 $1,068 $1,364 ======================================== ========================================= FAIR VALUE AT END OF PERIOD $1,444 $1,140 $733 $813 $616 $691 $1,068 $1,364 ======================================== ========================================= RATIO OF CARRYING VALUE OF MSRS TO TOTAL MORTGAGE LOANS SERVICED FOR THIRD PARTIES .92% .88% .61% .72% .60% .70% 1.13% 1.60% RATIO OF FAIR VALUE OF MSRS TO TOTAL MORTGAGE LOANS SERVICED FOR THIRD PARTIES 1.02% .88% .61% .72% .60% .70% 1.13% 1.60% NCMC SERVICING ASSET CAPITALIZATION RATE 1.14% 1.31% .95% 1.04% .91% .96% 1.34% 1.73% NCMC SERVICING ASSET AMORTIZATION RATE (ANNUALIZED) 25% 79% 48% 54% 51% 32% 19% 21% ECONOMIC MSR PERFORMANCE (1) ----------------------------------------- Net servicing fees and other $121 $94 $92 $120 $89 $97 $94 $88 Amortization of MSRs (73) (190) (125) (126) (127) (100) (69) (62) Recognized change in fair value of MSRs: SFAS 133 gains (losses) (22) (50) (83) (41) (93) (295) (316) (12) SFAS 140 impairment (charge) recovery 13 207 (125) 100 (36) (111) (112) 13 Change in MSR fair value not recognized(2) 145 - - - - - - - ---------------------------------------- ----------------------------------------- Total change in fair value of MSRs 136 157 (208) 59 (129) (406) (428) 1 ---------------------------------------- ----------------------------------------- Recognized change in fair value of derivatives: Derivatives included in SFAS 133 relationship 16 16 139 67 142 373 435 31 Other derivatives used to economically hedge MSRs (3) (47) 168 16 46 124 9 (1) ---------------------------------------- ----------------------------------------- Total change in fair value of derivatives 13 (31) 307 83 188 497 444 30 ---------------------------------------- ----------------------------------------- NET ECONOMIC MSR PERFORMANCE $197 $30 $66 $136 $21 $88 $41 $57 ======================================== =========================================
FOR THE YEAR -------------------------------- 2003 2002 2001 -------------------------------- NCMC NET SERVICING REVENUE COMPONENTS ----------------------------------------- Net servicing fees $422 $368 $270 Amortization of mortgage servicing assets (MSRs) (514) (358) (197) MSR SFAS 140 impairment (charge) recovery 195 (246) (88) MSR SFAS 133 hedge and other derivative gains (losses): Gains (losses) on MSRs hedged under SFAS 133 (196) (716) (185) Gains (losses) on derivatives in SFAS 133 relationships 238 981 264 Gains (losses) on other derivatives used to economically hedge MSRs 134 178 66 Other 5 - (16) -------------------------------- NET SERVICING REVENUE - AS RESTATED * $284 $207 $114 ================================ MORTGAGE SERVICING ASSETS ----------------------------------------- Carrying value at beginning of period $950 $1,224 $1,000 Additions 1,217 827 613 Amortization (514) (358) (197) SFAS 133 hedge basis adjustments (196) (716) (185) Application of valuation allowance to directly write-down servicing assets (137) - - Sales (19) (27) (7) -------------------------------- CARRYING VALUE BEFORE VALUATION ALLOWANCE AT END OF PERIOD $1,301 $950 $1,224 ================================ VALUATION ALLOWANCE Balance at beginning of period ($334) ($88) - Impairment recoveries (charges) 195 (246) (88) Application of valuation allowance to directly write-down servicing assets 137 - - -------------------------------- BALANCE AT END OF PERIOD ($2) ($334) ($88) ================================ NET CARRYING VALUE OF MORTGAGE SERVICING ASSETS AT END OF PERIOD - AS RESTATED * $1,299 $616 $1,136 ================================ FAIR VALUE AT END OF PERIOD $1,444 $616 $1,136 ================================ RATIO OF CARRYING VALUE OF MSRS TO TOTAL MORTGAGE LOANS SERVICED FOR THIRD PARTIES RATIO OF FAIR VALUE OF MSRS TO TOTAL MORTGAGE LOANS SERVICED FOR THIRD PARTIES NCMC SERVICING ASSET CAPITALIZATION RATE 1.12% 1.22% 1.49% NCMC SERVICING ASSET AMORTIZATION RATE (ANNUALIZED) 54% 29% 20% ECONOMIC MSR PERFORMANCE (1) ----------------------------------------- Net servicing fees and other $427 $368 $254 Amortization of MSRs (514) (358) (197) Recognized change in fair value of MSRs: SFAS 133 gains (losses) (196) (716) (185) SFAS 140 impairment (charge) recovery 195 (246) (88) Change in MSR fair value not recognized(2) 145 - - -------------------------------- Total change in fair value of MSRs 144 (962) (273) -------------------------------- Recognized change in fair value of derivatives Derivatives included in SFAS 133 relationship 238 981 264 Other derivatives used to economically hedge MSRs 134 178 66 -------------------------------- Total change in fair value of derivatives 372 1,159 330 -------------------------------- NET ECONOMIC MSR PERFORMANCE $429 $207 $114 ================================
(1) The purpose of this disclosure is to present the economic results for the MSR and related hedges as certain increases in the fair value of the servicing assets cannot be recognized in the period in which the increase occurs (2) Represents increase in the fair value of certain MSRs accounted for under SFAS 140 that could not be written up above their cost basis (original cost basis less accumulated amortization and SFAS 133 hedge basis adjustments) * See note on Summary of Presentation Changes 24 UNAUDITED NATIONAL CITY CORPORATION MORTGAGE BANKING STATISTICS (CONTINUED) ($ IN MILLIONS) --------------------------------------------------------------------------------
2003 2002 ------------------------------------------ -------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------------------------------------------ -------------------------------------------- SERVICING DATA ---------------------------------- Rollforward of servicing portfolio (UPB): Beginning balance $129,127 $119,894 $112,358 $101,858 $98,439 $94,550 $85,206 $73,930 Additions 28,000 39,004 34,964 32,224 26,876 18,764 18,615 21,022 Repayments (8,634) (22,067) (20,673) (14,696) (16,380) (9,944) (4,601) (5,217) Other reductions (7,347) (7,704) (6,755) (7,028) (7,077) (4,931) (4,670) (4,529) ------------------------------------------ -------------------------------------------- Ending balance $141,146 $129,127 $119,894 $112,358 $101,858 $98,439 $94,550 $85,206 ========================================== ============================================ Memo: Prepayment rate 24% 65% 66% 50% 61% 39% 20% 25% Servicing portfolio composition (UPB): Conventional $89,766 $80,160 $74,842 $67,549 $61,044 $60,013 $58,132 $52,403 Government 25,439 24,323 23,760 23,405 22,060 22,163 21,386 20,302 Jumbo and other 25,941 24,644 21,292 21,404 18,754 16,263 15,032 12,501 ------------------------------------------ -------------------------------------------- TOTAL MORTGAGE LOANS SERVICED FOR THIRD PARTIES $141,146 $129,127 $119,894 $112,358 $101,858 $98,439 $94,550 $85,206 ========================================== ============================================ NATIONAL SERVICER RANKING(1) 9 9 9 8 10 11 11 GEOGRAPHIC MIX OF MORTGAGE LOANS SERVICED FOR THIRD PARTIES(2): Top five states and their percentage to total mortgage loans serviced for third parties California 15% 15% 14% 14% 14% 14% 14% 13% Virginia 7% 7% 6% 6% 6% 6% 6% 6% Maryland 7% 7% 6% 6% 6% 6% 6% 6% Texas 7% 7% 6% 6% - - - - Ohio 6% 6% 6% 7% 7% 8% 8% 8% Illinois - - - - 6% 6% 6% 6% Pennsylvania - - - - - - - - SERVICING PORTFOLIO METRICS: Conventional: Number of loans 678,544 621,695 589,048 554,707 526,037 522,293 512,385 473,163 Average loan size $132,292 $128,938 $127,056 $121,774 $116,045 $114,903 $113,454 $110,750 Weighted-average note rate 5.93% 6.04% 6.31% 6.55% 6.76% 6.92% 6.98% 7.03% Weighted-average servicing fee 29 bps 30 bps 31 bps 32 bps 32 bps 32 bps 33 bps 33 bps Weighted-average age in months 15 15 17 18 21 22 22 23 Default rate(3) 2.60% 2.70% 2.81% 2.97% 3.26% 2.74% 2.49% 2.62% Government: Number of loans 227,726 220,860 219,551 219,824 210,550 213,870 209,824 203,677 Average loan size $111,711 $110,128 $108,221 $106,469 $104,771 $103,628 $101,923 $99,678 Weighted-average note rate 6.15% 6.29% 6.50% 6.70% 6.88% 7.06% 7.17% 7.27% Weighted-average servicing fee 47 bps 47 bps 48 bps 48 bps 49 bps 49 bps 49 bps 50 bps Weighted-average age in months 18 18 20 21 22 22 23 23 Default rate(3) 7.38% 7.46% 7.06% 6.91% 8.92% 8.04% 8.58% 9.78% Jumbo and other: Number of loans 104,710 106,234 99,370 96,619 81,825 73,970 68,626 58,028 Average loan size $247,741 $231,977 $214,270 $221,530 $229,194 $219,863 $219,038 $215,428 Weighted-average note rate 5.99% 6.09% 6.37% 6.55% 6.74% 7.03% 7.15% 7.24% Weighted-average servicing fee 29 bps 28 bps 27 bps 27 bps 27 bps 26 bps 28 bps 27 bps Weighted-average age in months 11 10 11 11 12 14 15 16 Default rate(3) 5.52% 5.49% 6.30% 7.38% 7.70% 7.31% 9.16% 8.42% Total portfolio: Number of loans 1,010,980 948,789 907,969 871,150 818,412 810,133 790,835 734,868 Average loan size $139,613 $136,097 $132,046 $128,977 $124,458 $121,510 $119,557 $115,947 Weighted-average note rate 5.98% 6.09% 6.36% 6.58% 6.78% 6.97% 7.05% 7.12% Weighted-average servicing fee 33 bps 33 bps 34 bps 34 bps 35 bps 35 bps 36 bps 36 bps Weighted-average age in months 15 15 16 18 19 21 21 22 Default rate(3) 4.00% 4.13% 4.29% 4.64% 5.29% 4.69% 4.91% 5.17%
FOR THE YEAR ---------------------------------------- 2003 2002 2001 ---------------------------------------- SERVICING DATA ---------------------------------- Rollforward of servicing portfolio:(UPB) Beginning balance $101,858 $73,930 Additions 134,192 85,277 Repayments (66,070) (36,142) Other reductions (28,834) (21,207) ---------------------------------------- Ending balance $141,146 $101,858 $73,930 ======================================== Memo: Prepayment rate Servicing portfolio composition (UPB): Conventional Government Jumbo and other TOTAL MORTGAGE LOANS SERVICED FOR THIRD PARTIES NATIONAL SERVICER RANKING(1) GEOGRAPHIC MIX OF MORTGAGE LOANS SERVICED FOR THIRD PARTIES(2): Top five states and their percentage to total mortgage loans serviced for third parties California Virginia Maryland Texas Ohio Illinois Pennsylvania SERVICING PORTFOLIO METRICS: Conventional: Number of loans Average loan size Weighted-average note rate Weighted-average servicing fee Weighted-average age in months Default rate(3) Government: Number of loans Average loan size Weighted-average note rate Weighted-average servicing fee Weighted-average age in months Default rate(3) Jumbo and other: Number of loans Average loan size Weighted-average note rate Weighted-average servicing fee Weighted-average age in months Default rate(3) Total portfolio: Number of loans Average loan size Weighted-average note rate Weighted-average servicing fee Weighted-average age in months Default rate(3)
(1) Source: Inside Mortgage Finance. Represents rank of the Corporation's mortgage banking subsidiary, National City Mortgage Co. The current quarter ranking is not yet available. (2) Based upon period-end UPB of mortgage loans serviced for third parties. Percentages not shown for states that are not one of the top five. (3) Mortgage loans greater than 30 days past due 25 UNAUDITED NATIONAL CITY CORPORATION FIRST FRANKLIN LOAN ORIGINATION AND PORTFOLIO STATISTICS(1) ($ IN MILLIONS)
2003 -------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR -------- -------- -------- -------- PRODUCTION DATA ORIGINATIONS: Total First Franklin originations $ 6,203 $ 6,051 $ 4,396 $ 3,488 Weighted-average note rate 6.99% 6.86% 7.14% 7.36% Weighted-average credit score(2) 653 660 657 657 SALES: Total sales of First Franklin loans to third parties $ 2,379 $ 2,543 $ 2,164 $ 1,851 Net gains on sales of First Franklin loans to third parties 65 95 88 69 PORTFOLIO STATISTICS(3) Period-end portfolio balance $ 15,137 $ 13,183 $ 11,496 $ 10,434 Weighted-average note rate 7.19% 7.43% 7.70% 7.81% Weighted-average loan size $127,556 $124,772 $126,390 $136,113 Weighted-average credit score(2)(4) 649 648 645 645 First-lien weighted-average loan-to-value ratio(5) 77.89% 77.82% 78.56% 79.83% BY LOAN PURPOSE: Purchase 69% 69% 69% 69% Cash out refinancing 24% 24% 24% 24% Rate and term refinancing 7% 7% 7% 7% PERCENTAGE OF FIRST FRANKLIN PORTFOLIO LOANS REPRESENTED BY: Owner occupied 96% 97% 97% 97% Adjustable-rate loans 68% 65% 67% 72% Second lien(6) 8% 8% 6% 2% GEOGRAPHIC MIX - TOP FIVE STATES California 45% 46% 46% 47% Florida 6% 6% 6% 6% Oregon 4% 4% 4% 4% Washington 4% 4% 4% 3% Texas 4% - - - Ohio - 3% 4% 4% Illinois - - - - NET CHARGE-OFFS $ 5 $ 5 $ 5 $ 6 NET CHARGE-OFFS AS A PERCENTAGE OF AVERAGE PORTFOLIO LOANS .13% .17% .18% .23% NONPERFORMING ASSETS: Nonperforming loans $ 51 $ 49 $ 47 $ 44 Other real estate owned 33 34 30 34 -------- -------- -------- -------- Total $ 84 $ 83 $ 77 $ 78 ======== ======== ======== ======== Loans 90+ days past due $ 276 $ 259 $ 237 $ 233 NONPERFORMING ASSETS TO TOTAL FIRST FRANKLIN PORTFOLIO LOANS AND OTHER REAL ESTATE OWNED .55% .63% .67% .75% 2002 -------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR -------- -------- -------- -------- PRODUCTION DATA ORIGINATIONS: Total First Franklin originations $ 3,606 $ 2,706 $ 2,396 $ 2,009 Weighted-average note rate 7.42% 8.00% 8.37% 8.40% Weighted-average credit score(2) 658 659 663 663 SALES: Total sales of First Franklin loans to third parties $ 1,810 $ 867 $ 1,247 $ 635 Net gains on sales of First Franklin loans to third parties 69 27 43 14 PORTFOLIO STATISTICS(3) Period-end portfolio balance $ 9,370 $ 8,733 $ 7,472 $ 6,773 Weighted-average note rate 8.03% 8.29% 8.58% 8.79% Weighted-average loan size $138,902 $137,913 $135,506 $133,414 Weighted-average credit score(2)(4) 646 644 642 637 First-lien weighted-average loan-to-value ratio(5) 78.83% 78.89% 77.73% 77.62% BY LOAN PURPOSE: Purchase 71% 72% 71% 71% Cash out refinancing 23% 22% 23% 23% Rate and term refinancing 6% 6% 6% 6% PERCENTAGE OF FIRST FRANKLIN PORTFOLIO LOANS REPRESENTED BY: Owner occupied 97% 97% 97% 97% Adjustable-rate loans 74% 77% 77% 80% Second lien(6) 1% 1% 2% 2% GEOGRAPHIC MIX - TOP FIVE STATES California 48% 49% 49% 49% Florida 6% 6% 6% 6% Oregon 4% 4% 4% 4% Washington 3% 3% - - Texas - - - - Ohio 4% 4% 4% 4% Illinois - - 3% 3% NET CHARGE-OFFS $ 5 $ 4 $ 4 $ 6 NET CHARGE-OFFS AS A PERCENTAGE OF AVERAGE PORTFOLIO LOANS .22% .19% .23% .39% NONPERFORMING ASSETS: Nonperforming loans $ 44 $ 46 $ 47 $ 47 Other real estate owned 34 30 24 17 -------- -------- -------- -------- Total $ 78 $ 76 $ 71 $ 64 ======== ======== ======== ======== Loans 90+ days past due $ 228 $ 216 $ 198 $ 179 NONPERFORMING ASSETS TO TOTAL FIRST FRANKLIN PORTFOLIO LOANS AND OTHER REAL ESTATE OWNED .83% .87% .95% .95% FOR THE YEAR -------------------------------- 2003 2002 2001 -------- -------- -------- PRODUCTION DATA ORIGINATIONS: Total First Franklin originations $ 20,138 $ 10,717 $ 6,301 Weighted-average note rate 7.05 7.96 8.95 Weighted-average credit score(2) 655 660 660 SALES: Total sales of First Franklin loans to third parties $ 8,937 $ 4,559 $ 2,070 Net gains on sales of First Franklin loans to third parties 317 153 59 PORTFOLIO STATISTICS(3) Period-end portfolio balance Weighted-average note rate Weighted-average loan size Weighted-average credit score(2)(4) First-lien weighted-average loan-to-value ratio(5) BY LOAN PURPOSE: Purchase Cash out refinancing Rate and term refinancing PERCENTAGE OF FIRST FRANKLIN PORTFOLIO LOANS REPRESENTED BY: Owner occupied Adjustable-rate loans Second lien(6) GEOGRAPHIC MIX - TOP FIVE STATES California Florida Oregon Washington Texas Ohio Illinois NET CHARGE-OFFS $ 21 $ 19 $ 10 NET CHARGE-OFFS AS A PERCENTAGE OF AVERAGE PORTFOLIO LOANS .17% .23% .25% NONPERFORMING ASSETS: Nonperforming loans Other real estate owned Total Loans 90+ days past due NONPERFORMING ASSETS TO TOTAL FIRST FRANKLIN PORTFOLIO LOANS AND OTHER REAL ESTATE OWNED
(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. (6) Second lien positions are fully insured by third-party mortgage insurance providers up to 10% 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)
2003 2002 ------------------------------------------ --------- 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 $ 6 $ 1 $ 1 $ 1 $ 1 Consumer and Small Business Financial Services 5,662 5,514 5,339 5,166 5,259 National Consumer Finance: National Home Equity 4,676 3,951 3,209 2,678 2,268 Asset Management 597 605 575 548 534 ----------------------------------------------------- TOTAL HELOCS(1) $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 4.33% 4.20% 4.39% 4.53% 4.96% Weighted-average credit score(2)(3) 722 723 722 722 720 Weighted-average cumulative loan-to-value ratio(4) 71.21% 71.15% 71.47% 71.81% 72.07% Utilization rate 32% 28% 29% 30% 31% Net charge-offs $ 4 $ 3 $ 3 $ 4 $ 4 Loans 90 days past due 7 7 6 6 7 National Consumer Finance - National Home Equity Weighted-average note rate 4.33% 4.32% 4.56% 4.55% 4.86% Weighted-average credit score(2)(3) 721 721 721 723 720 Weighted-average cumulative loan-to-value ratio(4) 82.23% 81.24% 81.00% 80.74% 80.55% Utilization rate 42% 40% 41% 43% 45% Net charge-offs - $ 1 $ 1 - - Loans 90 days past due 1 - 1 1 - HOME EQUITY INSTALLMENT LOANS (HELOAN)(5)(6) PERIOD-END BALANCES BY LINE OF BUSINESS: Wholesale Banking $ 5 $ 5 $ 6 $ 7 $ 8 Consumer and Small Business Financial Services 3,564 3,452 2,768 2,382 2,303 National Consumer Finance - National Home Equity 1,339 1,160 1,055 975 935 Asset Management 90 92 96 104 105 ----------------------------------------------------- TOTAL HELOANS(1) $ 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 6.89% 6.99% 7.56% 8.13% 8.41% Weighted-average credit score(2)(3) 714 714 714 708 706 Weighted-average cumulative loan-to-value ratio(4) 69.67% 69.38% 68.83% 68.06% 68.23% Net charge-offs $ 5 $ 4 $ 5 $ 4 $ 4 Loans 90 days past due 5 4 5 4 3 National Consumer Finance - National Home Equity Weighted-average note rate 7.13% 7.33% 7.69% 7.94% 8.25% Weighted-average credit score(2)(3) 721 719 720 721 721 Weighted-average cumulative loan-to-value ratio(4) 90.19% 89.44% 89.27% 89.05% 88.96% Net charge-offs - $ 1 $ 1 $ 1 - Loans 90 days past due - 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 most recent obtained value of the underlying mortgaged property. (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) -------------------------------------------------------------------------------
2003 ------------------------------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------------------------------------------------------------------- CONSUMER AND SMALL BUSINESS FINANCIAL SERVICES ---------------------------------------------- Net interest income (TE) $501,778 $500,491 $492,957 $488,031 Provision for loan losses 89,694 73,408 73,761 70,465 ------------------------------------------------------------------- Net interest income after provision 412,084 427,083 419,196 417,566 Noninterest income 180,128 181,702 181,581 163,127 Noninterest expense 356,114 336,662 329,024 353,150 ------------------------------------------------------------------- Income before taxes 236,098 272,123 271,753 227,543 Income tax expense and TE adjustment 89,245 102,863 102,723 86,011 ------------------------------------------------------------------- Net income $146,853 $169,260 $169,030 $141,532 =================================================================== UNUSUAL ITEMS (PRETAX) Auto lease residual recovery (charge) $1,579 $9,574 - ($25,255) ------------------------------------------------------------------- Total $1,579 $9,574 - ($25,255) =================================================================== UNUSUAL ITEMS (AFTER TAX) Auto lease residual recovery (charge) $1,026 $6,223 - ($16,416) ------------------------------------------------------------------- Total $1,026 $6,223 - ($16,416) =================================================================== Average assets (in millions) $27,117 $26,451 $25,737 $25,819 Average equity (in millions) 2,426 2,381 2,328 2,279 Return on average assets 2.15 % 2.54 % 2.63 % 2.22 % Return on average equity 24.01 28.20 29.12 25.19 Efficiency ratio 52.22 49.35 48.78 54.23 WHOLESALE BANKING ----------------- Net interest income (TE) $254,107 $261,416 $259,266 $253,542 Provision for loan losses 80,748 39,823 104,339 115,729 ------------------------------------------------------------------- Net interest income after provision 173,359 221,593 154,927 137,813 Noninterest income 77,821 99,998 59,405 85,700 Noninterest expense 127,223 121,831 120,851 136,938 ------------------------------------------------------------------- Income before taxes 123,957 199,760 93,481 86,575 Income tax expense and TE adjustment 46,624 74,583 35,760 32,157 ------------------------------------------------------------------- Net income $77,333 $125,177 $57,721 $54,418 =================================================================== UNUSUAL ITEMS (PRETAX) Commercial lease residual (charge) recovery - - ($121) ($17,032) Principal investment (losses) gains $89 $16,860 (16,388) 6,464 ------------------------------------------------------------------- Total $89 $16,860 ($16,509) ($10,568) =================================================================== UNUSUAL ITEMS (AFTER TAX) Commercial lease residual (charge) recovery - - ($79) ($11,071) Principal investment (losses) gains $58 $10,959 (10,652) 4,202 ------------------------------------------------------------------- Total $58 $10,959 ($10,731) ($6,869) =================================================================== Average assets (in millions) $29,631 $30,626 $31,194 $31,180 Average equity (in millions) 2,334 2,329 2,333 2,334 Return on average assets 1.04 % 1.62 % .74 % .71 % Return on average equity 13.15 21.32 9.92 9.46 Efficiency ratio 38.33 33.71 37.92 40.37
2002 ------------------------------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ------------------------------------------------------------------- CONSUMER AND SMALL BUSINESS FINANCIAL SERVICES ---------------------------------------------- Net interest income (TE) $499,702 $496,594 $496,033 $491,924 Provision for loan losses 79,937 63,656 74,303 79,375 ------------------------------------------------------------------- Net interest income after provision 419,765 432,938 421,730 412,549 Noninterest income 167,024 164,692 166,154 141,930 Noninterest expense 327,744 323,507 362,506 331,098 ------------------------------------------------------------------- Income before taxes 259,045 274,123 225,378 223,381 Income tax expense and TE adjustment 97,919 103,619 85,193 84,438 ------------------------------------------------------------------- Net income $161,126 $170,504 $140,185 $138,943 ==================================================================== UNUSUAL ITEMS (PRETAX) Auto lease residual recovery (charge) - - ($37,682) ($13,169) ------------------------------------------------------------------- Total - - ($37,682) ($13,169) =================================================================== UNUSUAL ITEMS (AFTER TAX) Auto lease residual recovery (charge) - - ($24,493) ($8,560) ------------------------------------------------------------------- Total - - ($24,493) ($8,560) =================================================================== Average assets (in millions) $25,189 $24,382 $24,449 $24,796 Average equity (in millions) 2,258 2,211 2,182 2,166 Return on average assets 2.54 % 2.77 % 2.30 % 2.27 % Return on average equity 28.32 30.59 25.77 26.02 Efficiency ratio 49.16 48.92 54.74 52.24 WHOLESALE BANKING ----------------- Net interest income (TE) $254,330 $252,684 $255,594 $246,624 Provision for loan losses 125,021 73,905 83,600 94,079 ------------------------------------------------------------------- Net interest income after provision 129,309 178,779 171,994 152,545 Noninterest income 76,592 50,712 79,778 71,612 Noninterest expense 134,372 122,006 127,258 124,127 ------------------------------------------------------------------- Income before taxes 71,529 107,485 124,514 100,030 Income tax expense and TE adjustment 27,070 40,390 47,107 37,841 ------------------------------------------------------------------- Net income $44,459 $67,095 $77,407 $62,189 =================================================================== UNUSUAL ITEMS (PRETAX) Commercial lease residual (charge) recovery ($5,206) $1,246 ($4,620) - Principal investment (losses) gains (1,912) (17,224) (1,860) ($1,907) ------------------------------------------------------------------- Total ($7,118) ($15,978) ($6,480) ($1,907) =================================================================== UNUSUAL ITEMS (AFTER TAX) Commercial lease residual (charge) recovery ($3,384) $810 ($3,003) - Principal investment (losses) gains (1,243) (11,195) (1,209) ($1,239) ------------------------------------------------------------------- Total ($4,627) ($10,385) ($4,212) ($1,239) =================================================================== Average assets (in millions) $31,461 $31,013 $31,041 $31,407 Average equity (in millions) 2,225 2,319 2,296 2,303 Return on average assets .56 % .86 % 1.00 % .80 % Return on average equity 7.93 11.48 13.52 10.95 Efficiency ratio 40.61 40.21 37.95 39.00
FOR THE YEAR ---------------------------------------------------- 2003 2002 2001 ---------------------------------------------------- CONSUMER AND SMALL BUSINESS FINANCIAL SERVICES ---------------------------------------------- Net interest income (TE) $1,983,257 $1,984,253 $1,994,482 Provision for loan losses 307,328 297,271 265,624 ---------------------------------------------------- Net interest income after provision 1,675,929 1,686,982 1,728,858 Noninterest income 706,538 639,800 598,659 ---------------------------------------------------- Noninterest expense 1,374,950 1,344,855 1,348,199 Income before taxes 1,007,517 981,927 979,318 Income tax expense and TE adjustment 380,842 371,169 373,551 ---------------------------------------------------- Net income $626,675 $610,758 $605,767 ==================================================== UNUSUAL ITEMS (PRETAX) Auto lease residual recovery (charge) ($14,102) ($50,851) ($67,383) ---------------------------------------------------- Total ($14,102) ($50,851) ($67,383) ==================================================== UNUSUAL ITEMS (AFTER TAX) Auto lease residual recovery (charge) ($9,167) ($33,053) ($43,799) ---------------------------------------------------- Total ($9,167) ($33,053) ($43,799) ==================================================== Average assets (in millions) $26,285 $24,704 $23,955 Average equity (in millions) 2,354 2,204 1,638 Return on average assets 2.38 % 2.47 % 2.53 % Return on average equity 26.62 27.71 36.98 Efficiency ratio 51.12 51.25 51.99 WHOLESALE BANKING ----------------- Net interest income (TE) $1,028,331 $1,009,232 $1,006,819 Provision for loan losses 340,639 376,605 218,256 ---------------------------------------------------- Net interest income after provision 687,692 632,627 788,563 Noninterest income 322,924 278,694 300,683 Noninterest expense 506,843 507,763 498,817 ---------------------------------------------------- Income before taxes 503,773 403,558 590,429 Income tax expense and TE adjustment 189,124 152,408 222,732 ---------------------------------------------------- Net income $314,649 $251,150 $367,697 ==================================================== UNUSUAL ITEMS (PRETAX) Commercial lease residual (charge) recovery ($17,153) ($8,580) - Principal investment (losses) gains 7,025 (22,903) ($1,856) ---------------------------------------------------- Total ($10,128) ($31,483) ($1,856) ==================================================== UNUSUAL ITEMS (AFTER TAX) Commercial lease residual (charge) recovery ($11,150) ($5,577) - Principal investment (losses) gains 4,567 (14,886) ($1,206) ---------------------------------------------------- Total ($6,583) ($20,463) ($1,206) ==================================================== Average assets (in millions) $30,654 $31,230 $31,758 Average equity (in millions) 2,332 2,286 2,133 Return on average assets 1.03 % .80 % 1.16 % Return on average equity 13.49 10.99 17.24 Efficiency ratio 37.51 39.42 38.15
28 UNAUDITED NATIONAL CITY CORPORATION LINE OF BUSINESS RESULTS ($ IN THOUSANDS)
---------------------------------------------------------------------------------------------------------------------------------- 2003 2002 -------------------------------------------- ------------------------------------------ 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR -------------------------------------------- ------------------------------------------ NATIONAL CONSUMER FINANCE ------------------------- Net interest income (TE) $396,107 $549,461 $475,532 $456,299 $380,802 $289,438 $259,376 $277,638 Provision for loan losses (3,517) 14,233 25,428 30,486 (26,530) 50,121 19,157 22,822 -------------------------------------------- ------------------------------------------ Net interest income after provision 399,624 535,228 450,104 425,813 407,332 239,317 240,219 254,816 Noninterest income - as restated* 451,375 (23,263) 433,003 637,309 60,010 135,713 219,040 202,237 Noninterest expense 270,902 320,948 272,919 245,321 293,144 188,503 211,396 206,264 -------------------------------------------- ------------------------------------------ Income before taxes - as restated* 580,097 191,017 610,188 817,801 174,198 186,527 247,863 250,789 Income tax expense and TE adjustment 228,003 73,144 241,186 319,187 64,581 69,712 92,806 93,928 -------------------------------------------- ------------------------------------------ Net income - as restated* $352,094 $117,873 $369,002 $498,614 $109,617 $116,815 $155,057 $156,861 ============================================ ========================================== Average assets (in millions) - as restated* $44,408 $52,949 $48,268 $45,202 $40,950 $32,031 $28,983 $31,628 Average equity (in millions) - as restated* 1,795 1,711 1,632 1,576 1,657 1,552 1,384 1,270 Return on average assets - as restated* 3.15 % .88 % 3.07 % 4.47 % 1.06 % 1.45 % 2.15 % 2.01 % Return on average equity - as restated* 77.83 27.34 90.71 128.33 26.25 29.86 44.94 50.11 Efficiency ratio - as restated* 31.97 60.99 30.04 22.43 66.50 44.34 44.19 42.98 NATIONAL CONSUMER FINANCE RESULTS BY DIVISION(1): NATIONAL CITY MORTGAGE CO. - AS RESTATED* ----------------------------------------- Net interest income (TE) $203,165 $327,544 $281,277 $284,486 $230,096 $158,611 $146,134 $174,688 Provision (benefit) for loan losses 212 (2,520) (3,075) 11,148 (1,480) 16,428 3,370 1,416 -------------------------------------------- ------------------------------------------ Net interest income after provision 202,953 330,064 284,352 273,338 231,576 142,183 142,764 173,272 Noninterest income 405,084 (101,885) 357,429 577,601 1,127 114,973 181,289 193,113 Noninterest expense 171,130 229,127 199,880 173,158 217,055 125,857 147,348 148,342 -------------------------------------------- ------------------------------------------ Income (loss) before taxes 436,907 (948) 441,901 677,781 15,648 131,299 176,705 218,043 Income tax expense and TE adjustment 173,859 759 177,739 266,360 4,626 48,826 65,897 81,540 -------------------------------------------- ------------------------------------------ Net income (loss) $263,048 ($1,707) $264,162 $411,421 $11,022 $82,473 $110,808 $136,503 ============================================ ========================================== Average assets (in millions) $21,540 $32,779 $30,298 $28,869 $25,861 $18,297 $16,518 $20,142 Average equity (in millions) 784 791 796 803 924 876 743 663 Return on average assets 4.85 % (.02)% 3.50 % 5.78 % .17 % 1.79 % 2.69 % 2.75 % Return on average equity 133.08 (.86) 133.16 207.85 4.73 37.35 59.79 83.49 Efficiency ratio 28.13 101.54 31.29 20.09 93.87 46.00 45.00 40.35 FOR THE YEAR -------------------------------- 2003 2002 2001 -------------------------------- NATIONAL CONSUMER FINANCE ------------------------- Net interest income (TE) $1,877,399 $1,207,254 $585,693 Provision for loan losses 66,630 65,570 165,487 -------------------------------- Net interest income after provision 1,810,769 1,141,684 420,206 Noninterest income - as restated* 1,498,424 617,000 535,223 Noninterest expense 1,110,090 899,307 680,457 -------------------------------- Income before taxes - as restated* 2,199,103 859,377 274,972 Income tax expense and TE adjustment 861,520 321,027 109,357 -------------------------------- Net income - as restated* $1,337,583 $ 538,350 $165,615 ================================ Average assets (in millions) - as restated* $47,719 $33,420 $23,352 Average equity (in millions) - as restated* 1,679 1,467 808 Return on average assets - as restated* 2.80% 1.61% .71% Return on average equity - as restated* 79.67 36.70 20.49 Efficiency ratio - as restated* 32.88 49.30 60.71 NATIONAL CONSUMER FINANCE RESULTS BY DIVISION(1): NATIONAL CITY MORTGAGE CO. - AS RESTATED* ----------------------------------------- Net interest income (TE) $1,096,472 $709,529 $305,258 Provision (benefit) for loan losses 5,765 19,734 5,106 -------------------------------- Net interest income after provision 1,090,707 689,795 300,152 Noninterest income 1,238,229 490,502 490,768 Noninterest expense 773,295 638,602 484,581 -------------------------------- Income (loss) before taxes 1,555,641 541,695 306,339 Income tax expense and TE adjustment 618,717 200,889 116,668 -------------------------------- Net income (loss) $ 936,924 $340,806 $189,671 ================================ Average assets (in millions) $28,364 $20,215 $14,399 Average equity (in millions) 793 802 418 Return on average assets 3.30% 1.69% 1.32% Return on average equity 118.11 42.47 45.40 Efficiency ratio 33.12 53.22 60.88
(1) The sum of the divisional results do not equal the total results for National Consumer Finance due to certain transactions between the divisions that are eliminated in consolidation. * See note on Summary of Presentation Changes. 29 UNAUDITED NATIONAL CITY CORPORATION LINE OF BUSINESS RESULTS ($ IN THOUSANDS) --------------------------------------------------------------------------------
2003 2002 -------------------------------------------- ------------------------------------------ 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR -------------------------------------------- ------------------------------------------ NATIONAL CONSUMER FINANCE RESULTS BY DIVISION (CONTINUED)(1): FIRST FRANKLIN ORIGINATION, SALES, ---------------------------------- AND PORTFOLIO(2) ---------------- Net interest income (TE) $156,695 $186,768 $163,686 $145,506 $126,481 $111,129 $97,303 $89,938 Provision (benefit) for loan losses (7,260) 14,964 26,913 18,396 (25,222) 33,337 14,829 20,826 -------------------------------------------- ------------------------------------------ Net interest income after provision 163,955 171,804 136,773 127,110 151,703 77,792 82,474 69,112 Noninterest income 61,359 95,678 89,769 69,386 68,757 26,597 43,408 13,784 Noninterest expense 90,602 83,224 65,437 65,288 67,804 55,981 57,537 51,923 -------------------------------------------- ------------------------------------------ Income (loss) before taxes 134,712 184,258 161,105 131,208 152,656 48,408 68,345 30,973 Income tax expense (benefit) and TE adjustment 50,921 69,649 60,897 49,596 57,704 18,298 25,834 11,708 -------------------------------------------- ------------------------------------------ Net income (loss) $83,791 $114,609 $100,208 $81,612 $94,952 $30,110 $42,511 $19,265 ============================================ ========================================== Average assets (in millions) $17,395 $15,588 $14,050 $12,924 $12,087 $11,089 $10,196 $9,629 Average equity (in millions) 884 813 744 692 661 611 584 559 Return on average assets 1.91 % 2.92 % 2.86 % 2.56 % 3.12 % 1.08 % 1.67 % .81 % Return on average equity 37.61 55.92 54.02 47.83 56.96 19.54 29.20 13.97 Efficiency ratio 41.55 29.47 25.82 30.38 34.73 40.65 40.89 50.06 NATIONAL HOME EQUITY -------------------- Net interest income (TE) $25,096 $30,801 $26,893 $23,130 $21,546 $17,431 $13,967 $11,308 Provision for loan losses 3,532 1,789 1,591 942 173 357 957 580 -------------------------------------------- ------------------------------------------ Net interest income after provision 21,564 29,012 25,302 22,188 21,373 17,074 13,010 10,728 Noninterest income (4,760) (4,646) (2,982) (1,982) (1,352) (1,180) (851) (467) Noninterest expense 9,171 8,597 7,601 6,875 8,285 6,664 6,512 5,999 -------------------------------------------- ------------------------------------------ Income before taxes 7,633 15,769 14,719 13,331 11,736 9,230 5,647 4,262 Income tax expense and TE adjustment 2,885 5,961 5,564 5,039 4,436 3,489 2,135 1,611 -------------------------------------------- ------------------------------------------ Net income $4,748 $9,808 $9,155 $8,292 $7,300 $5,741 $3,512 $2,651 ============================================ ========================================== Average assets (in millions) $5,527 $4,631 $3,960 $3,433 $3,031 $2,671 $2,291 $1,876 Average equity (in millions) 127 107 92 81 72 65 57 47 Return on average assets .34 % .84 % .93 % .98 % .96 % .85 % .61 % .57 % Return on average equity 14.84 36.45 39.92 41.52 40.28 35.20 24.87 22.68 Efficiency ratio 45.10 32.87 31.79 32.51 41.03 41.01 49.65 55.34 FOR THE YEAR -------------------------------- 2003 2002 2001 -------------------------------- NATIONAL CONSUMER FINANCE RESULTS BY DIVISION (CONTINUED)(1): FIRST FRANKLIN ORIGINATION, SALES, ---------------------------------- AND PORTFOLIO(2) ---------------- Net interest income (TE) $652,655 $424,851 $245,478 Provision (benefit) for loan losses 53,013 43,770 159,592 -------------------------------- Net interest income after provision 599,642 381,081 85,886 Noninterest income 316,192 152,546 58,814 Noninterest expense 304,551 233,245 176,739 -------------------------------- Income (loss) before taxes 611,283 300,382 (32,039) Income tax expense (benefit) and TE adjustment 231,063 113,544 (7,563) -------------------------------- Net income (loss) $380,220 $186,838 ($24,476) ================================ Average assets (in millions) $15,003 $10,758 $7,835 Average equity (in millions) 784 604 363 Return on average assets 2.53 % 1.74 % (.31) Return on average equity 48.51 30.92 (6.74) Efficiency ratio 31.43 40.40 58.08 NATIONAL HOME EQUITY -------------------- Net interest income (TE) $105,920 $64,252 $30,932 Provision for loan losses 7,854 2,067 789 -------------------------------- Net interest income after provision 98,066 62,185 30,143 Noninterest income (14,370) (3,850) 284 Noninterest expense 32,244 27,460 19,137 -------------------------------- Income before taxes 51,452 30,875 11,290 Income tax expense and TE adjustment 19,449 11,671 4,233 -------------------------------- Net income $32,003 $19,204 $7,057 ================================ Average assets (in millions) $4,394 $2,471 $1,130 Average equity (in millions) 102 60 27 Return on average assets .73% .78% .62% Return on average equity 31.43 31.88 25.99 Efficiency ratio 35.22 45.46 61.31
(1) The sum of the divisional results do not equal the total results for National Consumer Finance due to certain transactions between the divisions that are eliminated in consolidation. (2) Includes the Altegra and Loan Zone portfolios. 30 UNAUDITED NATIONAL CITY CORPORATION LINE OF BUSINESS RESULTS ($ IN THOUSANDS) --------------------------------------------------------------------------------
2003 2002 -------------------------------------------- ------------------------------------------ 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR -------------------------------------------- ------------------------------------------ ASSET MANAGEMENT ---------------- Net interest income (TE) $26,762 $26,434 $26,167 $25,279 $25,838 $25,341 $25,451 $25,146 Provision for loan losses 2,032 1,286 2,733 1,584 2,352 1,328 8,863 1,509 -------------------------------------------- ------------------------------------------ Net interest income after provision 24,730 25,148 23,434 23,695 23,486 24,013 16,588 23,637 Noninterest income 85,027 86,870 91,588 82,706 84,097 89,351 102,360 93,560 Noninterest expense 72,495 72,552 71,098 75,954 75,447 72,412 77,381 75,370 -------------------------------------------- ------------------------------------------ Income before taxes 37,262 39,466 43,924 30,447 32,136 40,952 41,567 41,827 Income tax expense and TE adjustment 14,085 14,918 16,603 11,509 12,148 15,480 15,712 15,811 -------------------------------------------- ------------------------------------------ Net income $23,177 $24,548 $27,321 $18,938 $19,988 $25,472 $25,855 $26,016 ============================================ ========================================== Average assets (in millions) $2,992 $2,880 $2,890 $2,916 $2,951 $2,934 $2,974 $3,012 Average equity (in millions) 382 380 375 373 385 383 388 392 Return on average assets 3.07 % 3.38 % 3.79 % 2.63 % 2.69 % 3.44 % 3.49 % 3.50 % Return on average equity 24.05 25.63 29.20 20.57 20.60 26.42 26.70 26.91 Efficiency ratio 64.85 64.03 60.38 70.34 68.63 63.14 60.54 63.49 NATIONAL PROCESSING ------------------- Net interest income (TE) $916 $787 $865 $683 $1,554 $1,346 $1,258 $1,190 Provision for loan losses - - - - - - - - -------------------------------------------- ------------------------------------------ Net interest income after provision 916 787 865 683 1,554 1,346 1,258 1,190 Noninterest income 135,281 124,881 113,590 106,123 117,847 114,345 112,493 109,778 Noninterest expense 111,987 101,548 95,945 92,564 96,087 97,056 91,691 91,504 -------------------------------------------- ------------------------------------------ Income before taxes 24,210 24,120 18,510 14,242 23,314 18,635 22,060 19,464 Income tax expense and TE adjustment 9,371 9,811 7,444 5,695 9,170 5,949 9,861 7,416 -------------------------------------------- ------------------------------------------ Net income $14,839 $14,309 $11,066 $8,547 $14,144 $12,686 $12,199 $12,048 ============================================ ========================================== UNUSUAL ITEMS (PRETAX) Severance and related charges ($254) $65 ($1,273) - - - - - Loss on divestiture - - - - - - - - Charge related to closing operations in Mexico - - - - - - ($1,650) - -------------------------------------------- ------------------------------------------ Total ($254) $65 ($1,273) - - - ($1,650) - ============================================ ========================================== UNUSUAL ITEMS (AFTER TAX) Severance and related charges ($153) $39 ($764) - - - - - Loss on divestiture - - - - - - - - Charge related to closing operations in Mexico - - - - - - ($2,350) - -------------------------------------------- ------------------------------------------ Total ($153) $39 ($764) - - - ($2,350) - ============================================ ========================================== Average assets (in millions) $718 $691 $542 $533 $520 $510 $453 $442 Average equity (in millions) 503 481 466 455 429 412 384 370 Return on average assets 8.20 % 8.21 % 8.19 % 6.50 % 10.80 % 9.87 % 10.80 % 11.05 % Return on average equity 11.70 11.80 9.52 7.62 13.08 12.22 12.75 13.20 Efficiency ratio 82.22 80.81 83.83 86.67 80.47 83.89 80.61 82.46 FOR THE YEAR -------------------------------- 2003 2002 2001 -------------------------------- ASSET MANAGEMENT ---------------- Net interest income (TE) $104,642 $101,776 $108,534 Provision for loan losses 7,635 14,052 5,229 -------------------------------- Net interest income after provision 97,007 87,724 103,305 Noninterest income 346,191 369,368 384,896 Noninterest expense 292,099 300,610 309,257 -------------------------------- Income before taxes 151,099 156,482 178,944 Income tax expense and TE adjustment 57,115 59,151 68,691 -------------------------------- Net income $93,984 $97,331 $110,253 ================================ Average assets (in millions) $2,920 $2,968 $2,729 Average equity (in millions) 378 387 317 Return on average assets 3.22% 3.28% 4.04% Return on average equity 24.88 25.15 34.73 Efficiency ratio 64.79 63.80 62.68 NATIONAL PROCESSING ------------------- Net interest income (TE) $3,251 $5,348 $7,250 Provision for loan losses - - - -------------------------------- Net interest income after provision 3,251 5,348 7,250 Noninterest income 479,875 454,463 465,366 Noninterest expense 402,044 376,338 384,181 -------------------------------- Income before taxes 81,082 83,473 88,435 Income tax expense and TE adjustment 32,321 32,396 35,774 -------------------------------- Net income $48,761 $51,077 $52,661 ================================ UNUSUAL ITEMS (PRETAX) Severance and related charges ($1,462) - - Loss on divestiture - - ($3,250) Charge related to closing operations in Mexico - ($1,650) - -------------------------------- Total ($1,462) ($1,650) ($3,250) ================================ UNUSUAL ITEMS (AFTER TAX) Severance and related charges ($878) - - Loss on divestiture - - ($4,250) Charge related to closing operations in Mexico - ($2,350) - -------------------------------- Total ($878) ($2,350) ($4,250) ================================ Average assets (in millions) $622 $481 $409 Average equity (in millions) 477 399 343 Return on average assets 7.84% 10.63% 12.88% Return on average equity 10.22 12.80 15.37 Efficiency ratio 83.23 81.85 81.29
31 UNAUDITED NATIONAL CITY CORPORATION LINE OF BUSINESS RESULTS ($ IN THOUSANDS) --------------------------------------------------------------------------------
2003 2002 ---------------------------------------------- -------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 1ST QTR ---------------------------------------------- -------------------------------------------- PARENT AND OTHER ---------------- Net interest expense (TE) ($137,765) ($187,824) ($152,539) ($123,106) ($81,051) ($86,552) ($67,355) ($37,172) Benefit related to loan losses (20,966) (21,703) (23,114) (18,031) (22,142) (19,846) (20,447) (9,145) ---------------------------------------------- -------------------------------------------- Net interest expense after provision (116,799) (166,121) (129,425) (105,075) (58,909) (66,706) (46,908) (28,027) Noninterest income 61,052 19,731 132,745 28,521 5,948 20,999 63,426 125,276 Noninterest expense 106,683 54,075 136,400 104,939 83,853 66,692 103,690 46,526 ---------------------------------------------- -------------------------------------------- (Loss) income before taxes (162,430) (200,465) (133,080) (181,493) (136,814) (112,399) (87,172) 50,723 Income tax (benefit) expense and TE adjustment (92,250) (92,935) (84,748) (102,947) (67,552) (66,130) (50,606) 649 ---------------------------------------------- -------------------------------------------- Net (loss) income ($70,180) ($107,530) ($48,332) ($78,546) ($69,262) ($46,269) ($36,566) $50,074 ============================================== ============================================ UNUSUAL ITEMS (PRETAX) Building lease termination penalty - - ($8,738) - - - - - Severance and related charges ($3,687) ($5,504) 1,376 ($71,137) ($9,755) ($11,485) ($5,717) ($5,846) Consideration from sale of NAMCO preferred shares - - - - - - 5,136 - Loss on commercial paper conduit consolidation - - - - - (15,891) - - Charitable foundation contribution - - (40,089) - - - (52,825) - COLI tax charge - - - - - - - - Minority interest related to NPI charges 23 (6) 115 - - - 346 - Bank stock fund gains (losses) 7,512 1,045 31,874 - (15,605) - 41,630 48,427 ---------------------------------------------- -------------------------------------------- Total $3,848 ($4,465) ($15,462) ($71,137) ($25,360) ($27,376) ($11,430) $42,581 ============================================== ============================================ UNUSUAL ITEMS (AFTER TAX) Building lease termination penalty - - ($5,680) - - - - - Severance and related charges ($2,396) ($3,578) 894 ($46,239) ($6,341) ($7,465) ($3,716) ($3,800) Consideration from sale of NAMCO preferred shares - - - - - - 3,338 - Loss on commercial paper conduit consolidation - - - - - (10,329) - - Charitable foundation contribution - - (26,058) - - - (34,336) - COLI tax charge - - - - - - - - Minority interest related to NPI charges 23 (6) 115 - - - 346 - Bank stock fund gains (losses) 4,883 679 25,997 - (10,143) - 32,008 31,478 ---------------------------------------------- -------------------------------------------- Total $2,510 ($2,905) ($4,732) ($46,239) ($16,484) ($17,794) ($2,360) $27,678 ============================================== ============================================ Average assets (in millions) $9,546 $10,053 $10,404 $10,668 $11,562 $10,181 $9,965 $10,767 FOR THE YEAR -------------------------------- 2003 2002 2001 -------------------------------- PARENT AND OTHER ---------------- Net interest expense (TE) ($601,234) ($272,130) ($230,583) Benefit related to loan losses (83,814) (71,580) (49,301) -------------------------------- Net interest expense after provision (517,420) (200,550) (181,282) Noninterest income 242,049 215,649 392,996 Noninterest expense 402,097 300,761 123,965 -------------------------------- (Loss) income before taxes (677,468) (285,662) 87,749 Income tax (benefit) expense and TE adjustment (372,880) (183,639) 1,634 -------------------------------- Net (loss) income ($304,588) ($102,023) $86,115 ================================ UNUSUAL ITEMS (PRETAX) Building lease termination penalty ($8,738) - - Severance and related charges (78,952) ($32,803) - Consideration from sale of NAMCO preferred shares - 5,136 $88,775 Loss on commercial paper conduit consolidation - (15,891) - Charitable foundation contribution (40,089) (52,825) - COLI tax charge - - (40,000) Minority interest related to NPI charges 132 346 558 Bank stock fund gains (losses) 40,431 74,452 123,357 -------------------------------- Total ($87,216) ($21,585) $172,690 ================================ UNUSUAL ITEMS (AFTER TAX) Building lease termination penalty ($5,680) - - Severance and related charges (51,319) ($21,322) - Consideration from sale of NAMCO preferred shares - 3,338 $57,704 Loss on commercial paper conduit consolidation - (10,329) - Charitable foundation contribution (26,058) (34,336) - COLI tax charge - - (40,000) Minority interest related to NPI charges 132 346 558 Bank stock fund gains (losses) 31,559 53,343 80,183 -------------------------------- Total ($51,366) ($8,960) $98,445 ================================ Average assets (in millions) $10,177 $10,620 $10,881
32 UNAUDITED NATIONAL CITY CORPORATION LINE OF BUSINESS RESULTS ($ IN THOUSANDS) --------------------------------------------------------------------------------
2003 2002 ---------------------------------------------- -------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR 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 $1,081,175 $978,851 $970,357 $1,005,350 Provision for loan losses 147,991 107,047 183,147 200,233 158,638 169,164 165,476 188,640 ---------------------------------------------- -------------------------------------------- Net interest income after provision 893,914 1,043,718 919,101 900,495 922,537 809,687 804,881 816,710 Noninterest income - as restated* 990,684 489,919 1,011,912 1,103,486 511,518 575,812 743,251 744,393 Noninterest expense 1,045,404 1,007,616 1,026,237 1,008,866 1,010,647 870,176 973,922 874,889 ---------------------------------------------- -------------------------------------------- Income before taxes - as restated* 839,194 526,021 904,776 995,115 423,408 515,323 574,210 686,214 Income tax expense and TE adjustment - as restated* 295,078 182,384 318,968 351,612 143,336 169,020 200,073 240,083 ---------------------------------------------- -------------------------------------------- Net income - as restated* $544,116 $343,637 $585,808 $643,503 $280,072 $346,303 $374,137 $446,131 ============================================== ============================================ UNUSUAL ITEMS (PRETAX) Auto lease residual recovery (charge) $1,579 $9,574 - ($25,255) - - ($37,682) ($13,169) Commercial lease residual (charge) recovery - - ($121) (17,032) ($5,206) $1,246 (4,620) - Principal investment gains (losses) 89 16,860 (16,388) 6,464 (1,912) (17,224) (1,860) (1,907) Building lease termination penalty - - (8,738) - - - - - Severance and related charges (3,918) (5,445) 218 (71,137) (9,755) (11,485) (5,717) (5,846) 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 charge related to closing operations in Mexico, net - - - - - - (1,304) - NPI loss on divestiture, net - - - - - - - - COLI tax charge - - - - - - - - Bank stock fund gains (losses) 7,512 1,045 31,874 - (15,605) - 41,630 48,427 ---------------------------------------------- -------------------------------------------- Total $5,262 $22,034 ($33,244) ($106,960) ($32,478) ($43,354) ($57,242) $27,505 ============================================== ============================================ UNUSUAL ITEMS (AFTER TAX) Auto lease residual recovery (charge) $1,026 $6,223 - ($16,416) - - ($24,493) ($8,560) Commercial lease residual (charge) recovery - - ($79) (11,071) ($3,384) $810 (3,003) - Principal investment gains (losses) 58 10,959 (10,652) 4,202 (1,243) (11,195) (1,209) (1,239) Building lease termination penalty - - (5,680) - - - - - Severance and related charges (2,526) (3,545) 245 (46,239) (6,341) (7,465) (3,716) (3,800) 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 charge related to closing operations in Mexico, net - - - - - - (2,004) - NPI loss on divestiture, net COLI tax charge Bank stock fund gains (losses) 4,883 679 25,997 - (10,143) - 32,008 31,478 ---------------------------------------------- -------------------------------------------- Total $3,441 $14,316 ($16,227) ($69,524) ($21,111) ($28,179) ($33,415) $17,879 ============================================== ============================================ Average assets (in millions) $114,466 $123,651 $119,035 $116,318 $112,533 $101,054 $97,906 $102,108 Average total equity (in millions) 9,390 9,171 8,786 8,529 8,289 8,185 7,877 7,529 Return on average assets 1.89 % 1.10 % 1.97 % 2.24 % .99 % 1.36 % 1.53 % 1.77% Return on average total equity 22.99 14.87 26.74 30.60 13.41 16.79 19.05 24.03 Efficiency ratio 51.69 61.62 49.27 45.77 62.80 55.98 58.33 51.58 FOR THE YEAR -------------------------------- 2003 2002 2001 -------------------------------- CONSOLIDATED ------------ Net interest income (TE) $4,395,646 $4,035,733 $3,472,195 Provision for loan losses 638,418 681,918 605,295 -------------------------------- Net interest income after provision 3,757,228 3,353,815 2,866,900 Noninterest income - as restated* 3,596,001 2,574,974 2,677,823 Noninterest expense 4,088,123 3,729,634 3,344,876 -------------------------------- Income before taxes - as restated* 3,265,106 2,199,155 2,199,847 Income tax expense and TE adjustment - as restated* 1,148,042 752,512 811,739 -------------------------------- Net income - as restated* $2,117,064 $1,446,643 $1,388,108 ================================ UNUSUAL ITEMS (PRETAX) Auto lease residual recovery (charge) ($14,102) ($50,851) ($67,383) Commercial lease residual (charge) recovery (17,153) (8,580) - Principal investment gains (losses) 7,025 (22,903) (1,856) Building lease termination penalty (8,738) - - Severance and related charges (80,282) (32,803) - Consideration from sale of NAMCO preferred shares - 5,136 88,775 Loss on commercial paper conduit consolidation - (15,891) - Charitable foundation contribution (40,089) (52,825) - NPI charge related to closing operations in Mexico, net - (1,304) - NPI loss on divestiture, net - - (2,692) COLI tax charge - - (40,000) Bank stock fund gains (losses) 40,431 74,452 123,357 -------------------------------- Total ($112,908) ($105,569) $100,201 ================================ UNUSUAL ITEMS (AFTER TAX) Auto lease residual recovery (charge) ($9,167) ($33,053) ($43,799) Commercial lease residual (charge) recovery (11,150) (5,577) - Principal investment gains (losses) 4,567 (14,886) (1,206) Building lease termination penalty (5,680) - - Severance and related charges (52,065) (21,322) - Consideration from sale of NAMCO preferred shares - 3,338 57,704 Loss on commercial paper conduit consolidation - (10,329) - Charitable foundation contribution (26,058) (34,336) - NPI charge related to closing operations in Mexico, net - (2,004) - NPI loss on divestiture, net (3,692) COLI tax charge (40,000) Bank stock fund gains (losses) 31,559 53,343 80,183 -------------------------------- Total ($67,994) ($64,826) $49,190 ================================ Average assets (in millions) $118,377 $103,423 $93,084 Average total equity (in millions) 8,972 7,973 6,974 Return on average assets 1.79 % 1.40 % 1.49% Return on average total equity 23.60 18.14 19.90 Efficiency ratio 51.46 57.12 55.70
*See note on Summary of Presentation Changes. 33 UNAUDITED NATIONAL CITY CORPORATION MONTHLY FINANCIAL TRENDS CONSOLIDATED SELECTED AVERAGE BALANCES ($ IN MILLIONS)
DECEMBER NOVEMBER OCTOBER SEPTEMBER AUGUST JULY 2003 2003 2003 2003 2003 2003 ------------------------------------------------------------------ ASSETS AVAILABLE FOR SALE SECURITIES, AT COST $ 6,678 $ 6,466 $ 6,455 $ 6,496 $ 6,703 $ 6,796 PORTFOLIO LOANS: Commercial $ 19,383 $ 20,228 $ 20,463 $ 20,987 $21,121 $21,344 Commercial construction 2,235 2,574 2,532 2,491 2,416 2,370 Real estate - commercial 9,668 9,563 9,529 9,466 9,435 9,448 Real estate - residential 26,672 25,387 24,627 24,828 24,041 23,418 Home equity lines of credit 10,509 10,511 10,212 9,926 9,634 9,287 Credit card and other unsecured lines of credit 2,591 2,202 2,192 2,183 2,181 2,147 Other consumer 7,349 7,588 7,691 8,276 8,264 7,964 ------------------------------------------------------------------ TOTAL PORTFOLIO LOANS $ 78,407 $ 78,053 $ 77,246 $ 78,157 $77,092 $75,978 ================================================================== LOANS HELD FOR SALE OR SECURITIZATION: Commercial $ 17 $ 7 $ 15 $ 14 $ 13 $ 13 Mortgage: National City Mortgage Co. 12,288 14,706 19,052 24,957 26,828 25,980 First Franklin 1,263 1,400 1,500 1,361 957 932 National City Home Loan Services (formerly Altegra) 1 2 937 32 - - ------------------------------------------------------------------ Total mortgage loans held for sale 13,552 16,108 21,489 26,350 27,785 26,912 Automobile loans held for securitization 741 563 516 - - - ------------------------------------------------------------------ TOTAL LOANS HELD FOR SALE OR SECURITIZATION $ 14,310 $ 16,678 $ 22,020 $ 26,364 $27,798 $26,925 ================================================================== LIABILITIES DEPOSITS: Noninterest bearing $ 15,825 $ 16,152 $ 16,292 $ 18,313 $20,012 $19,863 NOW and money market accounts 27,018 26,891 26,625 26,371 26,179 25,729 Savings accounts 2,354 2,368 2,380 2,394 2,427 2,444 Consumer time 13,140 13,180 13,213 13,245 13,290 13,474 ------------------------------------------------------------------ CORE DEPOSITS 58,337 58,591 58,510 60,323 61,908 61,510 Other 891 964 1,755 3,014 3,739 2,964 Foreign 7,069 7,126 7,581 8,835 7,015 5,762 ------------------------------------------------------------------ TOTAL DEPOSITS $ 66,297 $ 66,681 $ 67,846 $ 72,172 $72,662 $70,236 ================================================================== Federal funds borrowed and security repurchase agreements $ 7,525 $ 8,665 $ 10,070 $ 10,214 $10,577 $11,174 Borrowed funds 1,278 769 920 1,161 855 1,246 Long-term debt(1) 23,770 25,248 26,156 27,275 27,879 27,545 MEMO: Noninterest bearing mortgage banking principal and interest (P&I) balances $ 2,336 $ 2,686 $ 2,917 $ 4,653 $ 6,457 $ 6,069 Noninterest bearing mortgage banking taxes and insurance (T&I) balances 904 1,119 1,124 1,032 1,059 1,060 Noninterest bearing deposits excluding P&I and T&I balances 12,585 12,347 12,251 12,628 12,496 12,734 Core deposits excluding P&I and T&I balances 55,097 54,786 54,469 54,638 54,392 54,381 JUNE MAY APRIL MARCH FEBRUARY JANUARY 2003 2003 2003 2003 2003 2003 ---------------------------------------------------------------- ASSETS AVAILABLE FOR SALE SECURITIES, AT COST $ 6,920 $ 7,421 $ 7,850 $ 8,080 $ 8,345 $ 8,464 PORTFOLIO LOANS: Commercial $21,408 $21,952 $22,644 $22,506 $ 22,390 $ 22,347 Commercial construction 2,344 2,317 2,292 2,293 2,199 2,053 Real estate - commercial 9,465 9,453 9,508 9,496 9,397 9,366 Real estate - residential 22,833 22,525 22,048 21,787 20,931 20,348 Home equity lines of credit 8,996 8,771 8,514 8,306 8,156 7,995 Credit card and other unsecured lines of credit 2,115 2,083 2,055 2,039 2,025 2,033 Other consumer 8,001 7,828 8,047 7,812 8,034 8,031 ---------------------------------------------------------------- TOTAL PORTFOLIO LOANS $75,162 $74,929 $75,108 $74,239 $ 73,132 $ 72,173 ================================================================ LOANS HELD FOR SALE OR SECURITIZATION: Commercial $ 13 $ 13 $ 13 $ 13 $ 15 $ 15 Mortgage: National City Mortgage Co. 24,216 23,194 21,823 20,786 21,383 22,856 First Franklin 954 1,143 976 607 868 1,005 National City Home Loan Services (formerly Altegra) - - - - - - ---------------------------------------------------------------- Total mortgage loans held for sale 25,170 24,337 22,799 21,393 22,251 23,861 Automobile loans held for securitization - - - - - - ---------------------------------------------------------------- TOTAL LOANS HELD FOR SALE OR SECURITIZATION $25,183 $24,350 $22,812 $21,406 $ 22,266 $ 23,876 ================================================================ LIABILITIES DEPOSITS: Noninterest bearing $17,868 $17,537 $17,385 $16,061 $ 15,728 $ 15,283 NOW and money market accounts 25,404 25,003 24,730 24,060 23,375 23,021 Savings accounts 2,452 2,448 2,442 2,441 2,449 2,482 Consumer time 13,799 13,998 14,116 14,264 14,466 14,627 ---------------------------------------------------------------- CORE DEPOSITS 59,523 58,986 58,673 56,826 56,018 55,413 Other 3,038 3,402 3,176 3,307 3,569 3,250 Foreign 5,683 8,612 6,498 6,250 6,001 7,498 ---------------------------------------------------------------- TOTAL DEPOSITS $68,244 $71,000 $68,347 $66,383 $ 65,588 $ 66,161 ================================================================ Federal funds borrowed and security repurchase agreements $11,674 $11,420 $12,783 $12,169 $ 12,841 $ 11,960 Borrowed funds 1,617 1,304 1,670 1,731 2,249 3,893 Long-term debt(1) 25,753 22,995 23,021 23,063 22,976 22,452 MEMO: Noninterest bearing mortgage banking principal and interest (P&I) balances $ 4,735 $ 4,741 $ 4,599 $ 3,681 $ 3,510 $ 3,186 Noninterest bearing mortgage banking taxes and insurance (T&I) balances 1,007 954 909 816 750 717 Noninterest bearing deposits excluding P&I and T&I balances 12,126 11,842 11,877 11,564 11,468 11,380 Core deposits excluding P&I and T&I balances 53,781 53,291 53,165 52,329 51,758 51,510
(1) Includes debt obligations to the subsidiary trusts. 34 UNAUDITED NATIONAL CITY CORPORATION MONTHLY FINANCIAL TRENDS CAPITALIZATION (PERIOD END) (IN MILLIONS, EXCEPT PER SHARE DATA)
DECEMBER NOVEMBER OCTOBER SEPTEMBER AUGUST JULY JUNE 2003 2003 2003 2003 2003 2003 2003 --------------------------------------------------------------- COMMON STOCK REPURCHASE ACTIVITY Number of common shares repurchased 2.3 1.0 1.5 5.3 - - - Average price per share of repurchased common shares $ 33.62 $ 32.76 $ 30.67 $ 30.10 - - - Total cost $ 77.0 $ 32.7 $ 45.0 $ 160.3 - - - Common shares remaining under authorization(1) 27.8 30.1 31.1 32.6 37.9 37.9 37.9 MAY APRIL MARCH FEBRUARY JANUARY 2003 2003 2003 2003 2003 ---- ----- -------- -------- ------- COMMON STOCK REPURCHASE ACTIVITY Number of common shares repurchased - - 1.1 .2 .1 Average price per share of repurchased common shares - - $ 27.30 $ 26.93 $ 27.02 Total cost - - $ 31.1 $ 5.2 $ 1.3 Common shares remaining under authorization(1) 37.9 37.9 37.9 39.0 14.3
(1) In February 2003, National City Corporation's Board of Directors authorized the repurchase of an additional 25 million shares of issued and outstanding common stock. FULL-TIME EQUIVALENT EMPLOYEES BY LINE OF BUSINESS(1)
DECEMBER NOVEMBER OCTOBER SEPTEMBER AUGUST JULY 2003 2003 2003 2003 2003 2003 ----------------------------------------------------------- LINE OF BUSINESS STAFF: Consumer and Small Business Financial Services 12,093 11,945 11,876 11,794 11,853 11,696 Wholesale Banking 1,562 1,563 1,575 1,574 1,587 1,589 National Consumer Finance: National City Mortgage Co. 7,852 7,928 8,072 8,191 8,419 8,308 First Franklin Financial Corporation 1,943 1,902 1,853 1,721 1,648 1,552 National City Home Loan Services 361 357 351 356 357 350 National Home Equity 311 303 300 283 288 276 ----------------------------------------------------------- Total National Consumer Finance 10,467 10,490 10,576 10,551 10,712 10,486 Asset Management 1,510 1,516 1,508 1,505 1,499 1,509 National Processing 1,693 1,691 1,677 1,705 1,751 1,682 CORPORATE SUPPORT STAFF(2) 6,006 6,034 6,032 6,059 6,091 6,086 ----------------------------------------------------------- TOTAL EMPLOYEES 33,331 33,239 33,244 33,188 33,493 33,048 =========================================================== JUNE MAY APRIL MARCH FEBRUARY JANUARY 2003 2003 2003 2003 2003 2003 LINE OF BUSINESS STAFF: Consumer and Small Business Financial Services 11,450 11,222 11,521 11,472 11,499 11,541 Wholesale Banking 1,583 1,585 1,706 1,739 1,758 1,771 National Consumer Finance National City Mortgage Co. 8,079 7,783 7,704 7,492 7,392 7,198 First Franklin Financial Corporation 1,475 1,424 1,424 1,399 1,357 1,333 National City Home Loan Services 347 355 361 365 376 385 National Home Equity 254 246 232 230 232 228 ----------------------------------------------------- Total National Consumer Finance 10,155 9,808 9,721 9,486 9,357 9,144 Asset Management 1,522 1,546 1,613 1,642 1,653 1,660 National Processing 1,689 1,758 1,767 1,761 1,771 1,781 CORPORATE SUPPORT STAFF(2) 6,015 6,054 6,440 6,533 6,585 6,702 ----------------------------------------------------- TOTAL EMPLOYEES 32,414 31,973 32,768 32,633 32,623 32,599 =====================================================
(1) Represents period-end, active, full-time equivalent employees. (2) Personnel expense associated with corporate staff are allocated to the lines of business either directly based on usage or indirectly as part of the general overhead allocation process. 35 UNAUDITED NATIONAL CITY CORPORATION MONTHLY FINANCIAL TRENDS CONSUMER AND SMALL BUSINESS FINANCIAL SERVICES PERFORMANCE MEASURES
DECEMBER NOVEMBER OCTOBER SEPTEMBER AUGUST JULY JUNE MAY 2003 2003 2003 2003 2003 2003 2003 2003 -------- -------- ------- --------- ------- ------- ------- ------- DEPOSIT ACCOUNT METRICS (PERIOD-END) PERSONAL DEPOSITS: Number of accounts (in thousands): Noninterest bearing checking 1,645 1,643 1,643 1,641 1,632 1,617 1,604 1,589 Interest bearing checking 713 713 712 709 705 700 696 692 Money market savings 456 458 458 457 454 452 448 445 Regular savings 824 828 834 841 846 850 855 859 -------- -------- -------- --------- -------- -------- -------- -------- TOTAL PERSONAL DEPOSIT ACCOUNTS 3,638 3,642 3,647 3,648 3,637 3,619 3,603 3,585 ======== ======== ======== ========= ======== ======== ======== ======== Average account size: Noninterest bearing checking $ 1,835 $ 1,836 $ 1,815 $ 1,834 $ 1,866 $ 1,844 $ 1,876 $ 1,885 Interest bearing checking 11,189 11,097 11,002 10,953 10,984 10,803 10,761 10,652 Money market savings 30,513 30,463 30,339 30,246 30,233 30,092 29,981 29,849 Regular savings 2,517 2,526 2,524 2,519 2,535 2,540 2,548 2,540 -------- -------- -------- --------- -------- -------- -------- -------- TOTAL AVERAGE ACCOUNT SIZE $ 7,415 $ 7,405 $ 7,352 $ 7,321 $ 7,331 $ 7,268 $ 7,249 $ 7,206 ======== ======== ======== ========= ======== ======== ======== ======== BUSINESS DEPOSITS: Number of accounts (in thousands) 315 313 310 308 304 301 297 294 Average account size $ 20,894 $ 20,961 $ 20,769 $ 20,551 $ 20,704 $ 20,498 $ 20,273 $ 19,940 TIME DEPOSITS: Number of accounts (in thousands) 801 806 813 819 825 837 851 862 Average account size $ 15,836 $ 15,792 $ 15,703 $ 15,649 $ 15,591 $ 15,577 $ 15,694 $ 15,721 CONSUMER LOAN PRODUCTION METRICS (# OF LOANS)(1) Installment loan originations: Home equity(2) 2,225 2,178 2,915 6,967 4,644 4,921 5,781 4,006 Other(3) 1,391 1,453 1,732 2,681 1,442 2,076 1,811 1,926 Home equity and other lines of credit 5,039 5,580 6,721 6,749 8,616 8,581 7,822 9,857 -------- -------- -------- --------- -------- -------- -------- -------- TOTAL CONSUMER LOAN ORIGINATIONS 8,655 9,211 11,368 16,397 14,702 15,578 15,414 15,789 ======== ======== ======== ========= ======== ======== ======== ======== BANK BRANCHES AND OTHER Total bank branches 1,114 1,122 1,120 1,122 1,124 1,123 1,123 1,131 ATMs 1,574 1,579 1,572 1,580 1,582 1,580 1,583 1,597 Online banking customers 793,910 775,924 760,797 740,976 717,039 687,510 664,283 640,523 APRIL MARCH FEBRUARY JANUARY 2003 2003 2003 2003 ------- ------- -------- ------- DEPOSIT ACCOUNT METRICS (PERIOD-END) PERSONAL DEPOSITS: Number of accounts (in thousands): Noninterest bearing checking 1,581 1,574 1,568 1,563 Interest bearing checking 688 682 675 669 Money market savings 442 438 432 427 Regular savings 863 871 876 880 -------- -------- --------- -------- TOTAL PERSONAL DEPOSIT ACCOUNTS 3,574 3,565 3,551 3,539 ======== ======== ========= ======== Average account size: Noninterest bearing checking $ 1,925 $ 1,910 $ 1,860 $ 1,820 Interest bearing checking 10,619 10,226 9,879 9,906 Money market savings 29,676 29,530 29,344 29,369 Regular savings 2,527 2,495 2,446 2,437 -------- -------- --------- -------- TOTAL AVERAGE ACCOUNT SIZE $ 7,173 $ 7,034 $ 6,873 $ 6,824 ======== ======== ========= ======== BUSINESS DEPOSITS: Number of accounts (in thousands) 290 286 281 277 Average account size $ 19,855 $ 19,875 $ 20,091 $ 20,321 TIME DEPOSITS: Number of accounts (in thousands) 872 882 892 902 Average account size $ 15,667 $ 15,652 $ 15,703 $ 15,708 CONSUMER LOAN PRODUCTION METRICS (# OF LOANS)(1) Installment loan originations: Home equity(2) 2,710 3,266 2,300 1,954 Other(3) 1,799 1,653 1,551 1,493 Home equity and other lines of credit 9,295 7,036 6,263 6,107 -------- -------- --------- -------- TOTAL CONSUMER LOAN ORIGINATIONS 13,804 11,955 10,114 9,554 ======== ======== ========= ======== BANK BRANCHES AND OTHER Total bank branches 1,136 1,139 1,139 1,142 ATMs 1,597 1,607 1,607 1,608 Online banking customers 621,538 599,411 578,653 556,236
(1) Excludes home equity loans generated by the National Home Equity division of the National Consumer Finance line of business. (2) Represents closed-end home equity installment loans included in real estate residential portfolio loans on the consolidated balance sheet. (3) 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 2003 2003 2003 2003 2003 2003 2003 --------- --------- --------- --------- --------- --------- --------- ASSETS UNDER ADMINISTRATION Managed assets: Value at beginning of period $ 58,002 $ 58,626 $ 58,334 $ 58,540 $ 58,017 $ 58,690 $ 57,331 Estimated change due to market impact 1,343 427 1,144 305 144 43 323 Other activity, net 72 (1,051) (852) (511) 379 (716) 1,036 --------- --------- --------- --------- --------- --------- --------- Value at end of period $ 59,417 $ 58,002 $ 58,626 $ 58,334 $ 58,540 $ 58,017 $ 58,690 --------- --------- --------- --------- --------- --------- --------- Non-managed assets: Value at beginning of period 50,565 49,550 48,317 49,147 48,125 48,987 48,676 Estimated change due to market impact 1,281 417 1,628 (635) 702 (313) 621 Other activity, net 293 598 (395) (195) 320 (549) (310) --------- --------- --------- --------- --------- --------- --------- Value at end of period 52,139 50,565 49,550 48,317 49,147 48,125 48,987 --------- --------- --------- --------- --------- --------- --------- TOTAL ASSETS AT END OF PERIOD $ 111,556 $ 108,567 $ 108,176 $ 106,651 $ 107,687 $ 106,142 $ 107,677 ========= ========= ========= ========= ========= ========= ========= PROPRIETARY MUTUAL FUND ASSETS (included above) $ 15,335 $ 14,835 $ 15,024 $ 14,850 $ 15,358 $ 15,281 $ 15,831 MAY APRIL MARCH FEBRUARY JANUARY 2003 2003 2003 2003 2003 --------- --------- --------- --------- --------- ASSETS UNDER ADMINISTRATION Managed assets: Value at beginning of period $ 55,808 $ 55,179 $ 54,468 $ 55,855 $ 57,571 Estimated change due to market impact 1,392 1,661 594 (9) (773) Other activity, net 131 (1,032) 117 (1,378) (943) --------- --------- --------- --------- --------- Value at end of period $ 57,331 $ 55,808 $ 55,179 $ 54,468 $ 55,855 --------- --------- --------- --------- --------- Non-managed assets: Value at beginning of period 47,385 45,929 45,674 67,239 73,752 Estimated change due to market impact 1,593 1,562 277 (995) (1,096) Other activity, net (302) (106) (22) (20,570) (5,417) --------- --------- --------- --------- --------- Value at end of period 48,676 47,385 45,929 45,674 67,239 --------- --------- --------- --------- --------- TOTAL ASSETS AT END OF PERIOD $ 106,007 $ 103,193 $ 101,108 $ 100,142 $ 123,094 ========= ========= ========= ========= ========= PROPRIETARY MUTUAL FUND ASSETS (included above) $ 15,633 $ 15,116 $ 15,186 $ 15,476 $ 15,871
MORTGAGE BANKING STATISTICS ($ IN MILLIONS)
DECEMBER NOVEMBER OCTOBER SEPTEMBER AUGUST JULY 2003 2003 2003 2003 2003 2003 --------- --------- --------- --------- --------- --------- APPLICATION DATA National City Mortgage Co. (NCMC) $ 6,167 $ 6,272 $ 8,109 $ 8,705 $ 8,581 $ 13,818 First Franklin(1) 2,795 3,694 3,891 3,638 4,202 3,095 --------- --------- --------- --------- --------- --------- TOTAL APPLICATIONS $ 8,962 $ 9,966 $ 12,000 $ 12,343 $ 12,783 $ 16,913 ========= ========= ========= ========= ========= ========= Percentage of NCMC applications represented by refinances 54% 52% 51% 52% 51% 64% PRODUCTION DATA NCMC: Retail $ 2,116 $ 1,931 $ 2,342 $ 3,336 $ 5,240 $ 6,414 Wholesale 2,480 2,254 3,066 3,766 5,330 7,187 --------- --------- --------- --------- --------- --------- Total NCMC 4,596 4,185 5,408 7,102 10,570 13,601 First Franklin 958 577 1,441 977 1,117 707 --------- --------- --------- --------- --------- --------- TOTAL LOANS ORIGINATED FOR SALE $ 5,554 $ 4,762 $ 6,849 $ 8,079 $ 11,687 $ 14,308 ========= ========= ========= ========= ========= ========= Percentage of NCMC originations represented by refinances 51% 52% 54% 60% 72% 78% MEMO: Total First Franklin loan orginations $ 2,070 $ 1,845 $ 2,288 $ 2,147 $ 2,131 $ 1,773 LOAN SALES NCMC $ 4,061 $ 7,798 $ 10,305 $ 11,212 $ 10,023 $ 12,227 First Franklin 265 972 1,142 984 711 848 --------- --------- --------- --------- --------- --------- TOTAL MORTGAGE LOAN SALES $ 4,326 $ 8,770 $ 11,447 $ 12,196 $ 10,734 $ 13,075 ========= ========= ========= ========= ========= ========= SERVICING DATA Total mortgage loans serviced for third parties $ 141,146 $ 139,979 $ 135,678 $ 129,127 $ 123,630 $ 121,395 JUNE MAY APRIL MARCH FEBRUARY JANUARY 2003 2003 2003 2003 2003 2003 --------- --------- --------- --------- --------- --------- APPLICATION DATA National City Mortgage Co. (NCMC) $ 21,344 $ 21,374 $ 15,131 $ 18,361 $ 13,511 $ 13,201 First Franklin(1) 2,732 2,858 2,672 2,244 2,450 2,069 --------- --------- --------- --------- --------- --------- TOTAL APPLICATIONS $ 24,076 $ 24,232 $ 17,803 $ 20,605 $ 15,961 $ 15,270 ========= ========= ========= ========= ========= ========= Percentage of NCMC applications represented by refinances 79% 76% 69% 76% 76% 75% PRODUCTION DATA NCMC: Retail $ 5,498 $ 4,371 $ 4,626 $ 3,975 $ 3,279 $ 3,352 Wholesale 6,562 5,446 6,350 5,372 4,263 4,059 --------- --------- --------- --------- --------- --------- Total NCMC 12,060 9,817 10,976 9,347 7,542 7,411 First Franklin 868 746 782 680 350 702 --------- --------- --------- --------- --------- --------- TOTAL LOANS ORIGINATED FOR SALE $ 12,928 $ 10,563 $ 11,758 $ 10,027 $ 7,892 $ 8,113 ========= ========= ========= ========= ========= ========= Percentage of NCMC originations represented by refinances 75% 71% 78% 76% 77% 75% MEMO: Total First Franklin loan orginations $ 1,588 $ 1,449 $ 1,359 $ 1,280 $ 1,105 $ 1,103 LOAN SALES NCMC $ 9,445 $ 8,472 $ 9,360 $ 8,968 $ 7,751 $ 8,892 First Franklin 1,499 117 548 572 617 662 --------- --------- --------- --------- --------- --------- TOTAL MORTGAGE LOAN SALES $ 10,944 $ 8,589 $ 9,908 $ 9,540 $ 8,368 $ 9,554 ========= ========= ========= ========= ========= ========= SERVICING DATA Total mortgage loans serviced for third parties $ 119,894 $ 117,493 $ 114,204 $ 112,358 $ 108,638 $ 105,465
(1) Represents First Franklin applications for both loans originated for sale and to be held in portfolio. 37 UNAUDITED NATIONAL CITY CORPORATION MONTHLY FINANCIAL TRENDS FIRST FRANKLIN ORIGINATION AND PORTFOLIO STATISTICS(1) ($ IN MILLIONS)
DECEMBER NOVEMBER OCTOBER SEPTEMBER AUGUST JULY 2003 2003 2003 2003 2003 2003 --------- --------- --------- --------- --------- --------- PRODUCTION DATA ORIGINATIONS: Total First Franklin originations $ 2,070 $ 1,845 $ 2,288 $ 2,147 $ 2,131 $ 1,773 Weighted-average note rate 6.99% 7.05% 6.95% 6.94% 6.83% 6.80% Weighted-average credit score(2) 651 652 655 659 662 658 SALES: Total sales of First Franklin loans to third parties $ 265 $ 972 $ 1,142 $ 984 $ 711 $ 848 Net gains on sales of First Franklin loans to third parties 4 26 35 36 24 35 PORTFOLIO STATISTICS(3) Period-end portfolio balance $ 15,137 $ 14,529 $ 13,791 $ 13,183 $ 12,527 $ 11,871 Weighted-average note rate 7.19% 7.23% 7.32% 7.43% 7.55% 7.65% Weighted-average loan size $ 127,556 $ 128,813 $ 126,742 $ 124,772 $ 123,036 $ 123,905 Weighted-average credit score(2)(4) 649 648 647 648 647 646 First-lien weighted-average loan-to-value ratio(5) 77.89% 77.89% 77.86% 77.82% 77.80% 78.58% JUNE MAY APRIL MARCH FEBRUARY JANUARY 2003 2003 2003 2003 2003 2003 --------- --------- --------- --------- --------- --------- PRODUCTION DATA ORIGINATIONS: Total First Franklin originations $ 1,588 $ 1,449 $ 1,359 $ 1,280 $ 1,105 $ 1,103 Weighted-average note rate 7.04% 7.19% 7.21% 7.31% 7.34% 7.35% Weighted-average credit score(2) 657 657 656 656 657 657 SALES: Total sales of First Franklin loans to third parties $ 1,499 $ 117 $ 548 $ 572 $ 617 $ 662 Net gains on sales of First Franklin loans to third parties 62 8 18 24 26 19 PORTFOLIO STATISTICS(3) Period-end portfolio balance $ 11,496 $ 11,066 $ 10,891 $ 10,434 $ 10,005 $ 9,863 Weighted-average note rate 7.70% 7.75% 7.77% 7.81% 7.85% 7.92% Weighted-average loan size $ 126,390 $ 129,188 $ 132,673 $ 136,113 $ 139,914 $ 139,696 Weighted-average credit score(2)(4) 645 645 644 645 645 644 First-lien weighted-average loan-to-value ratio(5) 78.56% 78.57% 78.62% 79.83% 78.71% 78.81%
(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 UNAUDITED NATIONAL CITY CORPORATION CONSOLIDATED FINANCIAL HIGHLIGHTS (IN MILLIONS, EXCEPT PER SHARE DATA)
2001 -------------------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR -------------------------------------------------------- EARNINGS Tax-equivalent interest income $ 1,523 $ 1,623 $ 1,634 $ 1,668 Interest expense 570 718 799 889 -------------------------------------------------------- Tax-equivalent net interest income 953 905 835 779 Provision for loan losses 209 160 153 83 -------------------------------------------------------- Tax-equivalent NII after provision for loan losses 744 745 682 696 Fees and other income - as restated* 750 503 692 588 Securities gains (losses), net 19 21 17 88 Noninterest expense 885 815 840 805 -------------------------------------------------------- Income before taxes and tax-equivalent adjustment - as restated* 628 454 551 567 Income taxes - as restated* 213 149 186 230 Tax-equivalent adjustment 9 8 9 8 -------------------------------------------------------- Net income - as restated* $ 406 $ 297 $ 356 $ 329 ======================================================== Effective tax rate - as restated* 34.4% 33.3% 34.4% 41.2% PER COMMON SHARE Net income: Basic - as restated* $ .67 $ .49 $ .59 $ .55 Diluted - as restated* .66 .49 .58 .54 Dividends paid .295 .295 .285 .285 Book value - as restated* 12.15 11.77 11.52 11.18 Market value (close) 29.24 29.95 30.78 26.75 Average shares: Basic 606.9 605.0 601.5 600.9 Diluted 613.0 613.8 610.8 610.1 EFFECT OF RESTATEMENT ON NET INCOME AND EPS* Mortgage loans held for sale hedge program $ 94 ($ 94) $ 10 ($ 10) Mortgage servicing rights hedge program - - - - -------------------------------------------------------- Net pretax effect of restatement on mortgage banking revenue $ 94 ($ 94) $ 10 ($ 10) ======================================================== Net after-tax effect of restatement $ 59 ($ 59) $ 6 ($ 6) ======================================================== Net income - as originally reported $ 347 $ 356 $ 350 $ 335 Adjustment for restatement 59 (59) 6 (6) -------------------------------------------------------- Net income - as restated $ 406 $ 297 $ 356 $ 329 ======================================================== Diluted net income per share - as originally reported $ .57 $ .58 $ .57 $ .55 Adjustment for restatement .09 (.09) .01 (.01) -------------------------------------------------------- Diluted net income per share - as restated $ .66 $ .49 $ .58 $ .54 ======================================================== PERFORMANCE RATIOS Return on average common equity - as restated* 22.07% 16.69% 20.86% 20.13% Return on average total equity - as restated* 22.06 16.66 20.80 20.07 Return on average assets - as restated* 1.64 1.25 1.55 1.52 Net interest margin 4.25 4.20 3.98 3.92 Efficiency ratio - as restated* 51.95 57.91 55.01 58.86 CREDIT QUALITY STATISTICS Net charge-offs $ 147 $ 140 $ 93 $ 83 Provision for loan losses 209 160 153 83 Loan loss allowance 997 1,008 990 930 Nonperforming assets 658 649 509 447 Annualized net charge-offs to average portfolio loans .85% .81% .55% .51% Loan loss allowance to period-end portfolio loans 1.47 1.46 1.46 1.39 Loan loss allowance to nonperforming portfolio loans 167.90 171.85 216.75 230.12 Loan loss allowance (period-end) to annualized net charge-offs 170.37 182.63 266.34 275.62 Nonperforming assets to period-end portfolio loans and other nonperforming assets .97 .94 .75 .67
* See note on Summary of Presentation Changes 39 UNAUDITED NATIONAL CITY CORPORATION CONSOLIDATED STATEMENTS OF INCOME ($ IN THOUSANDS, EXCEPT PER SHARE DATA)
2001 ----------------------------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ----------------------------------------------------------------- INTEREST INCOME: Loans $ 1,393,435 $ 1,481,124 $ 1,482,738 $ 1,506,488 Securities: Taxable 96,563 102,804 111,731 122,017 Exempt from Federal income taxes 9,580 9,786 10,115 10,319 Dividends 9,674 11,651 12,730 11,146 Federal funds sold and security resale agreements 665 1,188 848 1,616 Other investments 5,096 7,677 7,536 8,225 ----------------------------------------------------------------- TOTAL INTEREST INCOME 1,515,013 1,614,230 1,625,698 1,659,811 INTEREST EXPENSE: Deposits 352,666 435,247 483,760 506,058 Federal funds borrowed and security repurchase agreements 47,180 73,710 86,538 89,946 Borrowed funds 10,753 11,834 14,133 27,267 Long-term debt 160,067 196,899 214,597 265,248 ----------------------------------------------------------------- TOTAL INTEREST EXPENSE 570,666 717,690 799,028 888,519 NET INTEREST INCOME 944,347 896,540 826,670 771,292 Provision for loan losses 209,000 160,000 152,923 83,372 ----------------------------------------------------------------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 735,347 736,540 673,747 687,920 NONINTEREST INCOME: Mortgage banking revenue - as restated* 254,512 31,450 125,161 114,189 Deposit service charges 122,718 117,336 117,466 111,806 Payment processing revenue 122,169 120,293 115,724 106,441 Trust and investment management fees 72,542 79,410 86,023 81,850 Card-related fees 43,603 42,610 38,569 44,671 Brokerage revenue 28,056 22,367 23,657 23,425 Other 106,010 89,490 185,552 105,921 ----------------------------------------------------------------- TOTAL FEES AND OTHER INCOME - AS RESTATED* 749,610 502,956 692,152 588,303 Securities gains (losses), net 18,543 21,193 16,936 88,130 ----------------------------------------------------------------- TOTAL NONINTEREST INCOME - AS RESTATED* 768,153 524,149 709,088 676,433 NONINTEREST EXPENSE: Salaries, benefits, and other personnel 448,945 418,138 432,833 410,393 Equipment 64,658 53,549 60,747 60,002 Net occupancy 53,567 52,190 53,544 53,479 Third-party services 60,327 49,871 49,963 43,601 Card processing 57,506 50,295 47,652 43,475 Marketing and public relations 7,170 23,620 24,013 16,545 Other 192,142 167,799 171,350 177,502 ----------------------------------------------------------------- TOTAL NONINTEREST EXPENSE 884,315 815,462 840,102 804,997 INCOME BEFORE INCOME TAX EXPENSE - AS RESTATED* 619,185 445,227 542,733 559,356 INCOME TAX EXPENSE - AS RESTATED* 213,168 148,041 186,782 230,402 ----------------------------------------------------------------- NET INCOME - AS RESTATED* $ 406,017 $ 297,186 $ 355,951 $ 328,954 ================================================================= NET INCOME PER COMMON SHARE: Basic - as restated* $ .67 $ .49 $ .59 $ .55 Diluted - as restated* .66 .49 .58 .54 AVERAGE COMMON SHARES: Basic 606,939,772 605,005,257 601,528,522 600,888,928 Diluted 612,984,102 613,829,266 610,782,001 610,099,764 MEMO: Tax-equivalent net interest income $ 952,701 $ 905,310 $ 834,956 $ 779,228 Net income available to common stockholders - as restated* 406,007 297,072 355,509 328,504
* See note on Summary of Presentation Changes 40 UNAUDITED NATIONAL CITY CORPORATION CONSOLIDATED PERIOD-END BALANCE SHEETS ($ IN THOUSANDS)
2001 --------------------------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR --------------------------------------------------------------- ASSETS Cash and demand balances due from banks $ 4,403,962 $ 3,701,290 $ 3,468,695 $ 3,314,336 Federal funds sold and security resale agreements 171,498 71,170 103,320 4,460 Securities available for sale, at fair value 9,858,868 8,538,644 8,758,250 9,468,365 Other investments 432,861 391,011 541,043 529,766 LOANS HELD FOR SALE OR SECURITIZATION: Commercial 50,959 165,909 - - Mortgage - as restated* 15,553,297 8,508,279 8,412,730 5,872,284 Automobile 824,434 - - - Credit card 402,305 - - - --------------------------------------------------------------- TOTAL LOANS HELD FOR SALE OR SECURITIZATION - AS RESTATED* 16,830,995 8,674,188 8,412,730 5,872,284 PORTFOLIO LOANS: Commercial 25,438,604 26,330,964 26,432,389 26,177,741 Commercial construction 1,313,511 1,283,056 1,260,946 1,220,215 Real estate - commercial 7,281,268 6,942,914 6,734,448 6,625,035 Real estate - residential 14,763,546 14,570,015 13,818,303 13,502,846 Home equity lines of credit 5,827,879 5,483,648 5,144,385 4,913,701 Credit card and other unsecured lines of credit 1,867,053 2,200,004 2,195,596 2,092,678 Other consumer 11,548,785 12,468,019 12,417,440 12,140,385 --------------------------------------------------------------- TOTAL PORTFOLIO LOANS 68,040,646 69,278,620 68,003,507 66,672,601 Allowance for loan losses (997,331) (1,008,390) (989,936) (929,679) --------------------------------------------------------------- NET PORTFOLIO LOANS 67,043,315 68,270,230 67,013,571 65,742,922 Properties and equipment 1,084,106 1,070,554 1,070,186 1,066,295 Other real estate owned 64,316 62,090 52,003 43,130 Mortgage servicing assets 1,135,704 817,592 1,007,365 863,901 Goodwill 1,086,041 1,103,229 1,116,573 1,106,402 Other intangible assets 81,356 83,302 90,525 73,167 Derivative assets 728,892 653,149 303,135 300,587 Accrued income and other assets 2,894,786 2,649,089 2,502,357 2,422,081 --------------------------------------------------------------- TOTAL ASSETS - AS RESTATED* $105,816,700 $ 96,085,538 $ 94,439,753 $ 90,807,696 =============================================================== LIABILITIES DEPOSITS: Noninterest bearing $ 14,823,277 $ 11,928,824 $ 11,988,114 $ 11,563,466 NOW and money market accounts 19,501,137 18,792,722 18,101,899 17,703,959 Savings accounts 2,608,565 2,624,591 2,703,807 2,799,732 Consumer time 14,962,150 15,101,268 15,312,780 15,670,865 --------------------------------------------------------------- CORE DEPOSITS 51,895,129 48,447,405 48,106,600 47,738,022 Other 5,332,874 6,111,936 6,021,327 5,971,041 Foreign 5,901,929 5,570,199 3,890,538 2,145,016 --------------------------------------------------------------- TOTAL DEPOSITS 63,129,932 60,129,540 58,018,465 55,854,079 Federal funds borrowed and security repurchase agreements 6,593,388 8,688,276 7,751,145 9,410,866 Borrowed funds 8,578,742 1,535,772 3,485,872 1,644,320 Long-term debt 17,316,232 16,682,817 16,493,685 15,509,472 Derivative liabilities 389,838 529,898 234,851 231,487 Accrued expenses and other liabilities - as restated* 2,427,345 1,376,578 1,475,832 1,409,934 --------------------------------------------------------------- TOTAL LIABILITIES - AS RESTATED* 98,435,477 88,942,881 87,459,850 84,060,158 STOCKHOLDERS' EQUITY Preferred stock 698 7,578 29,502 29,968 Common stock 2,429,419 2,424,022 2,412,374 2,403,000 Capital surplus 908,780 901,528 865,022 841,808 Retained earnings - as restated* 3,970,049 3,743,097 3,624,463 3,440,224 Accumulated other comprehensive income 72,277 66,432 48,542 32,538 --------------------------------------------------------------- TOTAL STOCKHOLDERS' EQUITY - AS RESTATED* 7,381,223 7,142,657 6,979,903 6,747,538 --------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY - AS RESTATED* $105,816,700 $ 96,085,538 $ 94,439,753 $ 90,807,696 =============================================================== COMMON SHARES OUTSTANDING 607,354,729 606,005,287 603,093,286 600,749,772
* See note on Summary of Presentation Changes 41 UNAUDITED NATIONAL CITY CORPORATION CONSOLIDATED AVERAGE BALANCE SHEETS ($ IN MILLIONS)
2001 ---------------------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ---------------------------------------------------------- ASSETS EARNING ASSETS: PORTFOLIO LOANS: Commercial $25,752 $26,210 $26,298 $25,782 Commercial construction 1,308 1,276 1,234 1,228 Real estate - commercial 7,077 6,826 6,692 6,550 Real estate - residential 14,722 14,274 13,484 13,533 Home equity lines of credit 5,675 5,302 5,025 4,845 Credit card and other unsecured lines of credit 2,202 2,198 2,139 2,113 Other consumer 11,958 12,375 12,286 12,174 --------------------------------------------------------- TOTAL PORTFOLIO LOANS 68,694 68,461 67,158 66,225 LOANS HELD FOR SALE OR SECURITIZATION: Commercial 75 2 - - Mortgage 11,353 8,778 7,453 3,473 Automobile 476 - - - Credit card 4 - - 131 --------------------------------------------------------- TOTAL LOANS HELD FOR SALE OR SECURITIZATION 11,908 8,780 7,453 3,604 Securities available for sale, at cost 8,322 8,276 8,768 9,491 Federal funds sold and security resale agreements 118 130 81 112 Other investments 306 450 561 330 --------------------------------------------------------- TOTAL EARNING ASSETS 89,348 86,097 84,021 79,762 Allowance for loan losses (1,001) (1,004) (942) (950) Fair value appreciation of securities available for sale 229 202 111 123 Cash and demand balances due from banks 3,200 3,041 3,086 3,000 Properties and equipment 1,083 1,074 1,071 1,078 Other real estate owned 63 57 48 38 Mortgage servicing assets 1,012 895 882 839 Goodwill 1,093 1,101 1,097 1,114 Other intangible assets 81 87 84 75 Derivative assets 470 363 232 71 Accrued income and other assets - as restated* 2,803 2,373 2,241 2,456 --------------------------------------------------------- TOTAL ASSETS - AS RESTATED* $98,381 $94,286 $91,931 $87,606 ========================================================= LIABILITIES DEPOSITS: Noninterest bearing $12,526 $11,611 $11,550 $10,781 NOW and money market accounts 18,840 18,378 17,963 17,276 Savings accounts 2,602 2,664 2,753 2,835 Consumer time 14,902 15,259 15,459 15,725 --------------------------------------------------------- CORE DEPOSITS 48,870 47,912 47,725 46,617 Brokered retail CDs 5,052 4,858 4,920 3,666 Other 1,057 1,146 1,187 1,304 Foreign 5,757 4,847 4,241 2,390 --------------------------------------------------------- TOTAL DEPOSITS 60,736 58,763 58,073 53,977 Federal funds borrowed and security repurchase agreements 9,039 9,218 8,801 7,008 Borrowed funds 2,581 1,315 1,282 1,809 Long-term debt 16,721 16,475 15,612 16,853 Derivative liabilities 394 239 172 68 Accrued expenses and other liabilities - as restated* 1,607 1,200 1,126 1,244 --------------------------------------------------------- TOTAL LIABILITIES - AS RESTATED* 91,078 87,210 85,066 80,959 STOCKHOLDERS' EQUITY Preferred 3 15 30 30 Common - as restated* 7,300 7,061 6,835 6,617 --------------------------------------------------------- TOTAL STOCKHOLDERS' EQUITY - AS RESTATED* 7,303 7,076 6,865 6,647 --------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY - AS RESTATED* $98,381 $94,286 $91,931 $87,606 ========================================================= MEMO: Noninterest bearing mortgage banking principal and interest (P&I) balances $ 1,450 $ 1,060 $ 1,066 $ 616 Noninterest bearing mortgage banking taxes and insurance (T&I) balances 487 471 438 422 Noninterest bearing deposits excluding P&I and T&I balances 10,589 10,080 10,046 9,743 Core deposits excluding P&I and T&I balances 46,933 46,381 46,221 45,579
* See note on Summary of Presentation Changes 42 UNAUDITED NATIONAL CITY CORPORATION NONINTEREST INCOME ($ IN MILLIONS)
2001 ---------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ---------------------------------------------- Mortgage banking revenue - as restated* $ 255 $ 31 $ 125 $ 114 Deposit service charges 122 117 118 112 Payment processing revenue 123 120 116 106 Trust and investment management fees 73 79 86 82 Card-related fees 43 43 39 45 Other service fees 26 37 26 26 Brokerage revenue 29 22 24 23 Ineffective hedge and other derivative gains, net(1) 14 5 9 9 Principal investment gains (losses), net (4) (6) 7 1 Student loan sale gains (losses), net (1) 5 - 1 Demutualization gains on insurance company holdings 20 - - - Initial gains from the securitization of credit card receivables - - - 21 Initial gain from the securitization of automobile receivables - - - - Consideration from the sale of NAMCO preferred shares - - 89 - All other 50 50 53 48 -------------------------------------------- TOTAL FEES AND OTHER INCOME - AS RESTATED* 750 503 692 588 Bank stock fund - 21 17 85 Other securities 19 - - 3 -------------------------------------------- TOTAL SECURITIES GAINS, NET 19 21 17 88 -------------------------------------------- TOTAL NONINTEREST INCOME - AS RESTATED* $ 769 $ 524 $ 709 $ 676 ============================================
(1) Ineffective hedge and other derivative gains and losses related to mortgage banking activities are included in mortgage banking revenue * See note on Summary of Presentation Changes NONINTEREST EXPENSE ($ IN MILLIONS)
2001 ----------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ----------------------------------------------- Salaries, benefits, and other personnel $449 $418 $433 $410 Equipment 64 54 61 60 Net occupancy 54 52 53 54 Third-party services 60 50 50 44 Card processing 58 50 48 43 Telecommunications 22 21 21 21 Marketing and public relations 6 24 24 17 Postage 19 17 19 18 Travel and entertainment 16 14 14 14 Supplies 16 13 14 13 State and local taxes 12 13 14 13 Goodwill and other intangible asset amortization 22 22 21 21 FDIC assessments 3 3 2 2 OREO expense, net 4 2 1 1 Automobile lease residual value write-downs 13 2 18 34 Commercial lease residual value write-downs 5 - - - Building lease termination penalty - - - - Impairment, fraud, and other losses, net 19 25 22 9 Loss on commercial paper conduit consolidation - - - - All other 43 35 25 31 ------------------------------------------- TOTAL NONINTEREST EXPENSE $885 $815 $840 $805 ===========================================
43 UNAUDITED NATIONAL CITY CORPORATION MORTGAGE BANKING STATISTICS ($ IN MILLIONS) --------------------------------------------------------------------------------
2001 ---------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ---------------------------------------------- REVENUE SUMMARY ---------------------------------------------------------------- Origination and sales revenue: National City Mortgage Co. (NCMC) $187 ($10) $108 $67 First Franklin 26 3 30 - ---------------------------------------------- Total origination and sales revenue 213 (7) 138 67 Net servicing revenue (NCMC) 42 38 (13) 47 ---------------------------------------------- TOTAL MORTGAGE BANKING REVENUE - AS RESTATED * $255 $31 $125 $114 ============================================== APPLICATION DATA(1) ---------------------------------------------------------------- National City Mortgage Co. (NCMC) $30,094 $20,454 $19,867 $19,807 First Franklin 4,553 4,541 4,149 2,919 ---------------------------------------------- TOTAL APPLICATIONS $34,647 $24,995 $24,016 $22,726 ============================================== PERCENTAGE OF NCMC APPLICATIONS REPRESENTED BY: Refinances 71% 54% 50% 58% Government loans 11% 14% 15% 15% Adjustable-rate loans 7% 5% 3% 1% PRODUCTION DATA ---------------------------------------------------------------- NCMC: Retail $9,736 $6,348 $6,970 $4,689 Wholesale 10,592 6,508 6,952 4,248 ---------------------------------------------- Total NCMC 20,328 12,856 13,922 8,937 First Franklin 466 803 655 541 ---------------------------------------------- TOTAL LOANS ORIGINATED FOR SALE $20,794 $13,659 $14,577 $9,478 ============================================== MEMO: Total First Franklin loan originations $1,848 $1,900 $1,538 $1,015 PERCENTAGE OF NCMC ORIGINATIONS REPRESENTED BY: Refinances 70% 49% 56% 58% Government loans 17% 23% 21% 25% Adjustable-rate loans 7% 8% 4% 3% NATIONAL ORIGINATOR RANKING(2) 7 8 8 11 GEOGRAPHIC MIX OF ORIGINATIONS(3): Top five states and their percentage to total NCMC originations: California 18% 22% 20% 20% Virginia 7% 6% 6% 6% Maryland 7% 6% - 6% Illinois 7% 6% 6% 7% Texas - - - - Ohio 6% 6% 6% - Arizona - - 6% 6% LOAN SALES ---------------------------------------------------------------- NCMC $12,152 $12,378 $10,374 $6,105 First Franklin 890 225 852 103 ---------------------------------------------- TOTAL MORTGAGE LOAN SALES $13,042 $12,603 $11,226 $6,208 ==============================================
(1) Represents applications for both loans originated for sale and to be held in portfolio (2) Source: Inside Mortgage Finance. Represents rank of the Corporation's mortgage banking subsidiary, National City Mortgage Co. (3) Based on the dollar volume of loans originated for sale. Percentages not shown for states that are not one of the top five. * See note on Summary of Presentation Changes 44 UNAUDITED NATIONAL CITY CORPORATION MORTGAGE BANKING STATISTICS (CONTINUED) ($ IN MILLIONS) --------------------------------------------------------------------------------
2001 ---------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ---------------------------------------------- NCMC NET SERVICING REVENUE COMPONENTS - as restated* ---------------------------------------------------------------- Net servicing fees $78 $69 $61 $62 Amortization of mortgage servicing assets (MSRs) (58) (53) (46) (40) MSR SFAS 140 impairment (charge) recovery 170 (30) (49) (179) MSR SFAS 133 hedge and other derivative gains (losses): Gains (losses) on MSRs hedged under SFAS 133 32 (279) 62 - Gains (losses) on derivatives in SFAS 133 relationships (18) 321 (39) - Gains (losses) on other derivatives used to economically hedge MSRs (162) 10 (2) 220 Other - - - (16) ---------------------------------------------- NET SERVICING REVENUE $42 $38 ($13) $47 ============================================== MORTGAGE SERVICING ASSETS - as restated* ---------------------------------------------------------------- Carrying value at beginning of period $1,076 $1,235 $1,043 $1,000 Additions 177 175 178 83 Amortization (58) (53) (46) (40) SFAS 133 hedge basis adjustments 32 (279) 62 - Application of valuation allowance to directly write-down servicing assets - - - - Sales (3) (2) (2) - ---------------------------------------------- CARRYING VALUE BEFORE VALUATION ALLOWANCE AT END OF PERIOD $1,224 $1,076 $1,235 $1,043 ============================================== VALUATION ALLOWANCE Balance at beginning of period ($258) ($228) ($179) - Impairment (charges) recoveries 170 (30) (49) (179) Application of valuation allowance to directly write-down servicing assets - - - - ---------------------------------------------- BALANCE AT END OF PERIOD ($88) ($258) ($228) ($179) ============================================== NET CARRYING VALUE OF MORTGAGE SERVICING ASSETS AT END OF PERIOD $1,136 $818 $1,007 $864 ============================================== FAIR VALUE AT END OF PERIOD $1,136 $818 $1,007 $864 ============================================== RATIO OF CARRYING VALUE OF MSRS TO TOTAL MORTGAGE LOANS SERVICED FOR THIRD PARTIES 1.54% 1.17% 1.62% 1.51% RATIO OF FAIR VALUE OF MSRS TO TOTAL MORTGAGE LOANS SERVICED FOR THIRD PARTIES 1.54% 1.17% 1.62% 1.51% NCMC SERVICING ASSET CAPITALIZATION RATE 1.46% 1.41% 1.72% 1.36% NCMC SERVICING ASSET AMORTIZATION RATE (ANNUALIZED) 21% 17% 18% 16% ECONOMIC MSR PERFORMANCE (1) ---------------------------------------------------------------- Net servicing fees and other $78 $69 $61 $46 Amortization of MSRs (58) (53) (46) (40) Recognized change in fair value of MSRs: SFAS 133 gains (losses) 32 (279) 62 - SFAS 140 impairment (charge) recovery 170 (30) (49) (179) Change in MSR fair value not recognized(2) - - - - ---------------------------------------------- Total change in fair value of MSRs 202 (309) 13 (179) ---------------------------------------------- Recognized change in fair value of derivatives: Derivatives included in SFAS 133 relationship (18) 321 (39) - Other derivatives used to economically hedge MSRs (162) 10 (2) 220 ---------------------------------------------- Total change in fair value of derivatives (180) 331 (41) 220 ---------------------------------------------- NET ECONOMIC MSR PERFORMANCE $42 $38 ($13) $47 ==============================================
(1) The purpose of this disclosure is to present the economic results for the MSR and related hedges as certain increases in the fair value of the servicing assets cannot be recognized in the period in which the increase occurs. (2) Represents increase in the fair value of certain MSRs accounted for under SFAS 140 that could not be written up above their cost basis (original cost basis less accumulated amortization and SFAS 133 hedge basis adjustments) * See note on Summary of Presentation Changes 45 UNAUDITED NATIONAL CITY CORPORATION MORTGAGE BANKING STATISTICS (CONTINUED) ($ IN MILLIONS) --------------------------------------------------------------------------------
2001 ---------------------------------------------- 4TH QTR 3RD QTR 2ND QTR 1ST QTR ---------------------------------------------- SERVICING DATA ---------------------------------------------------------------- Rollforward of servicing portfolio (UPB): Beginning balance $70,148 Originations 14,623 Repayments (7,630) Other reductions (3,211) ---------------------------------------------- Ending balance $73,930 $70,148 $62,246 $57,102 ============================================== Memo: Prepayment rate 40% 24% 31% 22% Servicing portfolio composition (UPB): Conventional $44,489 Government 19,057 Jumbo and other 10,384 ---------------------------------------------- TOTAL MORTGAGE LOANS SERVICED FOR THIRD PARTIES $73,930 $70,148 $62,246 $57,102 ============================================== NATIONAL SERVICER RANKING(1) 12 12 12 13 GEOGRAPHIC MIX OF MORTGAGE LOANS SERVICED FOR THIRD PARTIES(2): Top five states and their percentage to total mortgage loans serviced for third parties California 12% 11% 9% 7% Virginia 6% 6% 6% 6% Maryland - - - - Texas - - - - Ohio 9% 9% 10% 10% Illinois 6% 6% 6% 6% Pennsylvania 6% 7% 7% 8% SERVICING PORTFOLIO METRICS: Conventional: Number of loans 427,923 Average loan size $103,965 Weighted-average note rate 7.20% Weighted-average servicing fee 33 bps Weighted-average age in months 26 Default rate(3) 3.10% Government: Number of loans 195,888 Average loan size $97,283 Weighted-average note rate 7.42% Weighted-average servicing fee 51 bps Weighted-average age in months 24 Default rate(3) 12.06% Jumbo and other: Number of loans 51,859 Average loan size $200,228 Weighted-average note rate 7.46% Weighted-average servicing fee 27 bps Weighted-average age in months 18 Default rate(3) 8.85% Total portfolio: Number of loans 675,670 Average loan size $109,417 Weighted-average note rate 7.29% Weighted-average servicing fee 36 bps Weighted-average age in months 24 Default rate(3) 6.20%
(1) Source: Inside Mortgage Finance. Represents rank of the Corporation's mortgage banking subsidiary, National City Mortgage Co. (2) Based upon period-end UPB of mortgage loans serviced for third parties. Percentages not shown for states that are not one of the top five. (3) Mortgage loans greater than 30 days past due 46