National City Reports 2005 Fourth Quarter and Full Year Results18 January 2006
National City Corporation (NYSE: NCC) today reported fourth quarter 2005 net income of $398 million, or $.64 per diluted share, and full year 2005 net income of $2.0 billion, or $3.09 per diluted share. Fourth quarter net income included pretax charges aggregating $115 million, equal to $75 million after-tax or $.12 per diluted share, pertaining to the Corporation's Best In Class program and other initiatives.
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Fourth quarter 2004 net income was $960 million, or $1.46 per diluted share. Full year 2004 net income was $2.8 billion, or $4.31 per diluted share. These results include an after-tax gain of $477 million on the sale of a former subsidiary, National Processing, Inc., net of sale expenses. Exclusive of that gain, fourth quarter 2004 net income would have been $483 million, or $.72 per diluted share, and full year net income would have been $2.3 billion, or $3.57 per diluted share.
Results for both 2005 and 2004 include other unusual or infrequently occurring items as described later in this release.
Chairman's Comments
Chairman and CEO David A. Daberko commented, "Our 2005 results were positive despite a challenging environment in certain businesses. Loan growth was quite good in commercial, residential real estate and home equity. Net interest margin held up reasonably well, despite narrow loan spreads and a flat yield curve. Our retail bank delivered significant growth in deposit fee income and continued growth in households. As expected, mortgage banking earnings fell sharply in 2005 due to cyclically lower volumes and gains on sale of mortgages, as well as lower hedging gains. We believe that we are now at the low point of the mortgage cycle."
"Consumer charge-offs increased in the fourth quarter as a result of a spike in consumer bankruptcy filings associated with the change in bankruptcy laws in October. Beyond this one-time event, we do not see any adverse trends in consumer charge-offs going forward. Commercial credit quality remains sound."
Mr. Daberko concluded, "For 2006, we expect continued growth in revenue and lower expenses, aided by our Best In Class initiative which is now fully under way. We also will be open to targeted acquisitions to enhance our presence in certain markets, such as our recently announced plans to acquire Forbes First Financial Corporation, an eight branch bank in St. Louis."
Fourth Quarter Charges
As noted, fourth quarter 2005 results included pretax charges aggregating $115 million, or $75 million after-tax ($.12 per diluted share), as follows: $56 million ($.06 per share) of severance and other costs associated with Best In Class implementation, a $29 million loss ($.03 per share) on the securitization of indirect auto loans pursuant to the discontinuance of this business, and $30 million ($.03 per share) of contributions expense related to securities donated to the Corporation's charitable foundation.
In addition, the fourth quarter included other income and expense items as described later in this release.
Net Interest Income and Margin
Tax-equivalent net interest income was $1.2 billion for the fourth quarter of 2005, consistent with the preceding and year earlier periods. Net interest margin was 3.74% compared with 3.72% for the third quarter of 2005 and 4.01% for the fourth quarter of 2004. The lower margin reflects a flatter yield curve, a lower spread on mortgages held for sale, and the effects of narrower commercial and consumer loan spreads.
For the full year, tax-equivalent net interest income was $4.7 billion, up 6% from 2004. Net interest margin was 3.74% in 2005 versus 4.02% in 2004. Higher levels of earning assets more than offset the effects of a lower net interest margin in 2005.
During the fourth quarter of 2005, the Corporation reclassified the amortization of certain deferred loan origination costs from noninterest income to net interest income which had the effect of reducing reported net interest margin, with no effect on net income. Results for prior periods have been reclassified to conform with the current presentation.
Loans and Deposits
Average portfolio loans for the fourth quarter of 2005 increased 7% compared with the same period in 2004 due to strong commercial, residential real estate and home equity lending. Compared with the third quarter of 2005, average portfolio loans decreased, reflecting the sale or securitization of $3.6 billion of consumer home equity and auto loans during the fourth quarter. Management expects to sell or securitize more of its National Home Equity and First Franklin loan production in future periods.
Average core deposits, excluding mortgage-banking escrow balances, were $64 billion for the fourth quarter, up slightly from the preceding quarter and the fourth quarter of 2004. Retail deposits continued to grow, while corporate balances declined somewhat due to higher interest rates.
Noninterest Income
Fees and other income for the fourth quarter of 2005 were $768 million, compared with $748 million in the third quarter of 2005 and $727 million in the fourth quarter of 2004, excluding the gain on the sale of National Processing described earlier. Mortgage banking revenue increased on both a linked-quarter and year-over-year basis. Net hedging gains on mortgage servicing rights (MSRs) were $15 million and $43 million pretax in the fourth and third quarters of 2005, respectively, versus net hedging losses of $10 million pretax in the fourth quarter of last year.
Deposit service charges for the fourth quarter of 2005 grew 13% compared with the fourth quarter of last year and 2% compared with the preceding quarter, reflecting growth in both the number of accounts and fee-generating transactions. Comparisons of fees and other income on both a linked quarter and year-over-year basis are affected by several unusual or nonrecurring items. Fees and other income for the fourth quarter of 2005 included an $18 million gain on the sale of home equity lines and a $29 million loss on the securitization of indirect auto loans. For the fourth quarter of 2004, fees and other income included a $714 million of gain on the sale of National Processing and a $14 million gain on the sale of branches in Michigan's Upper Peninsula.
For the full year, fees and other income were $3.3 billion in 2005, down from $3.7 billion in 2004, exclusive of the gain on the sale of National Processing. Fees and other income for 2004 contained $409 million of payment processing revenue which was substantially eliminated with the sale of National Processing. Other divestiture activity affecting year-over-year comparisons include a $16 million gain on the sale of Madison Bank & Trust in 2005, versus a $62 million gain on the sale of the Bond Trust Administration business in 2004, and the gain on the sale of Michigan branches described above.
Mortgage banking revenue for 2005 was $1.1 billion compared with $1.2 billion in 2004, inclusive of net MSR pretax hedging gains of $286 million and $388 million, respectively. $88.6 billion of conforming and nonconforming mortgages were originated in 2005, compared to $94.8 billion in the prior year.
Noninterest Expense
Noninterest expense was $1.3 billion for the fourth quarter of 2005, up $113 million from the third quarter of 2005, and $25 million from the year earlier period. The fourth quarter of 2005 included $56 million of severance and other costs related to the Corporation's Best In Class initiative and a $30 million charitable contribution. The fourth quarter of 2004 contained $17 million of expenses associated with the sale of National Processing and $39 million of acquisition integration expenses.
For the year 2005, noninterest expense was $4.8 billion, compared with $4.5 billion in 2004, including the full year effect of acquisitions completed during 2004, as well as the items described above. In addition, noninterest expense for 2005 included $45 million of acquisition integration costs, a $29 million one-time adjustment for lease accounting, and $19 million of impairment charges on buildings to be sold, partially offset by a $22 million insurance settlement for previously incurred auto lease residual losses. Noninterest expense for 2004 included $74 million of acquisition integration costs, as well as expenses associated with National Processing, which was sold in October 2004.
Income Tax Expense
The effective tax rate for 2005 was 33% compared with 32% for 2004. The effective tax rate in 2004 reflects a lower rate applied to the gain on the sale of National Processing. In addition, $11 million of net tax benefits were recognized in 2005 ($25 million in the fourth quarter), versus $67 million in 2004 ($44 million in the fourth quarter), based on the regular reassessment of required tax accruals.
Credit Quality
The provision for credit losses for the fourth quarter of 2005 was $132 million compared with $56 million in the preceding quarter and $81 million in the fourth quarter of 2004. The linked quarter and year-over-year increase reflects higher commercial and consumer net charge-offs, as well as a $20 million one-time provision for estimated consumer bankruptcy losses that have not yet been realized. Net charge-offs were $138 million in the fourth quarter of 2005, compared with $83 million and $104 million in the preceding period and the year-earlier periods, respectively.
For the full year, the loan loss provision for 2005 was $284 million, down from $323 million last year, reflecting improvement in commercial credit quality, offset somewhat by a higher level of consumer losses. Net charge- offs were $380 million in 2005 compared with $346 million a year ago. The higher charge-offs in 2005 were due to losses resulting from higher consumer bankruptcies, as noted above.
Nonperforming assets were $596 million at December 31, 2005, up from $563 million at December 31, 2004. The increase in nonperforming loans reflects growth in the loan portfolio and the classification of certain airline related credits to nonperforming status. As a percentage of period-end portfolio loans, nonperforming assets were .56% at both December 31, 2005 and 2004. The allowance for loan losses at December 31, 2005 was $1.1 billion, or 1.03% of portfolio loans compared with $1.2 billion or 1.19% of portfolio loans as of December 31, 2004.
Balance Sheet
At December 31, 2005, total assets were $142.4 billion, and stockholders' equity was $12.6 billion or 8.86% of assets. Tangible common equity as a percentage of tangible assets was 6.57%, consistent with the preceding quarter and previously stated targets for this ratio, versus 6.83% a year ago. The decrease in the tangible common equity ratio in 2005 was mainly due to share repurchases.
The Corporation repurchased 14.7 million shares of its common stock during the fourth quarter of 2005, bringing the repurchases for the full year to 43.5 million shares. As of December 31, 2005, the Corporation had authorization to repurchase an additional 33.6 million shares. Management intends to continue repurchases in 2006, subject to market conditions and maintenance of targeted capital ratios.
At December 31, 2005, total deposits were $84.0 billion, including core deposits of $68.4 billion.
In December 2005, the Corporation signed a definitive agreement to purchase privately-held Forbes First Financial Corporation, a bank holding company with approximately $500 million of assets, operating eight branches and three limited service locations in the St. Louis, Missouri market. Completion of this transaction is expected to occur in the second quarter of 2006, subject to shareholder and regulatory approvals.
Forward-Looking Statements
This document contains forward-looking statements. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance, nor should they be relied upon as representing management's views as of any subsequent date. The forward- looking statements are based on management's expectations and are subject to a number of risks and uncertainties. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include, without limitation, the Corporation's ability to effectively execute its business plans; changes in general economic and financial market conditions; changes in interest rates; changes in the competitive environment; continuing consolidation in the financial services industry; new litigation or changes in existing litigation; losses, customer bankruptcy, claims and assessments; changes in banking regulations or other regulatory or legislative requirements affecting the Corporation's business; and changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies. Additional information concerning factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements is available in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2004, and subsequent filings with the United States Securities and Exchange Commission (SEC). Copies of these filings are available at no cost on the SEC's Web site at http://www.sec.gov or on the Corporation's Web site at NationalCity.com. Management may elect to update forward-looking statements at some future point; however, it specifically disclaims any obligation to do so.
Conference Call
Mr. Daberko, along with Jeffrey D. Kelly, vice chairman and chief financial officer, will host a conference call on January 17, 2006 at 11:00 a.m. (ET) to discuss the fourth quarter and full year 2005 results. Interested parties may access the conference call by dialing 800-230-1096. The conference call and supplemental materials will also be accessible via the Corporation's Web site, NationalCity.com. The call will be open to the public in a listen-only mode, with participants encouraged to call in approximately 15 minutes prior to the event. Questions may be submitted by e-mail to investor.relations@nationalcity.com prior to or during the conference.
A replay of the conference call will be available at 2:30 p.m. (ET) on January 17, 2006, until midnight (ET) on January 24, 2006, accessible by dialing 800-475-6701 (international 320-365-3844), passcode 801537 or via the Company's website.
About National City
National City Corporation (NYSE: NCC), headquartered in Cleveland, Ohio, is one of the nation's largest financial holding companies. The company operates through an extensive banking network primarily in Ohio, Illinois, Indiana, Kentucky, Michigan, Missouri and Pennsylvania, and also serves customers in selected markets nationally. Its core businesses include commercial and retail banking, mortgage financing and servicing, consumer finance and asset management. For more information about National City, visit the company's Web site at NationalCity.com.
Supplemental financial information available at: http://media.corporate-ir.net/media_files/irol/64/64242/sup/4q05.pdf
Unaudited
National City Corporation
CONSOLIDATED FINANCIAL HIGHLIGHTS
(In millions, except per share data)
2005
4th Qtr 3rd Qtr 2nd Qtr 1st Qtr
EARNINGS
Tax-equivalent interest income $2,113 $2,034 $1,865 $1,751
Interest expense 921 827 694 594
Tax-equivalent net interest income 1,192 1,207 1,171 1,157
Provision for credit losses 132 56 26 70
Tax-equivalent NII after provision for
credit losses 1,060 1,151 1,145 1,087
Fees and other income 768 748 976 785
Securities gains (losses), net 9 (1) 5 14
Noninterest expense 1,271 1,158 1,181 1,145
Income before taxes and tax-equivalent
adjustment 566 740 945 741
Income taxes 161 254 311 250
Tax-equivalent adjustment 7 8 9 7
Net income $398 $478 $625 $484
Effective tax rate 28.6% 34.8% 33.2% 34.1%
PER COMMON SHARE
Net income:
Basic $.65 $.75 $.98 $.75
Diluted .64 .74 .97 .74
Dividends paid .37 .37 .35 .35
Book value 20.51 20.54 20.42 19.82
Market value (close) 33.57 33.44 34.12 33.50
Average shares:
Basic 618.2 635.9 636.9 643.0
Diluted 625.4 644.7 644.1 652.5
PERFORMANCE RATIOS
Return on average common equity 12.57% 14.59% 19.65% 15.35%
Return on average total equity 12.59 14.61 19.66 15.37
Return on average assets 1.10 1.31 1.80 1.42
Net interest margin 3.74 3.72 3.76 3.78
Efficiency ratio 64.85 59.25 55.03 58.94
LINE OF BUSINESS (LOB) RESULTS
Net Income:
National City Mortgage $20 $26 $153 $85
Rest of National City (RONC):
Consumer and Small Business Financial
Services 157 201 182 159
Wholesale Banking 193 204 191 182
National Consumer Finance 129 126 146 158
Asset Management 14 19 26 21
National Processing - - - -
Parent and Other (115) (98) (73) (121)
Total RONC 378 452 472 399
Total Consolidated National City
Corporation $398 $478 $625 $484
LOB Contribution to Diluted Earnings
Per Share:
National City Mortgage $.03 $.04 $.24 $.13
Rest of National City (RONC):
Consumer and Small Business Financial
Services .26 .31 .28 .24
Wholesale Banking .30 .32 .30 .28
National Consumer Finance .20 .20 .23 .24
Asset Management .02 .03 .04 .03
National Processing - - - -
Parent and Other (.17) (.16) (.12) (.18)
Total RONC .61 .70 .73 .61
Total Consolidated National City
Corporation $.64 $.74 $.97 $.74
Unaudited
National City Corporation
CONSOLIDATED FINANCIAL HIGHLIGHTS
(In millions, except per share data)
2004
4th Qtr 3rd Qtr 2nd Qtr 1st Qtr
EARNINGS
Tax-equivalent interest income $1,727 $1,601 $1,387 $1,338
Interest expense 509 424 335 325
Tax-equivalent net interest income 1,218 1,177 1,052 1,013
Provision for credit losses 81 98 61 83
Tax-equivalent NII after provision for
credit losses 1,137 1,079 991 930
Fees and other income 1,442 1,021 849 1,109
Securities gains (losses), net 11 3 5 -
Noninterest expense 1,247 1,211 1,049 965
Income before taxes and tax-equivalent
adjustment 1,343 892 796 1,074
Income taxes 376 293 272 357
Tax-equivalent adjustment 7 8 5 7
Net income $960 $591 $519 $710
Effective tax rate 28.1% 33.2% 34.4% 33.5%
PER COMMON SHARE
Net income:
Basic $1.48 $.88 $.84 $1.17
Diluted 1.46 .86 .83 1.16
Dividends paid .35 .35 .32 .32
Book value 19.80 18.98 16.86 16.25
Market value (close) 37.55 38.62 35.01 35.58
Average shares:
Basic 652.9 663.3 619.1 605.9
Diluted 666.3 677.1 625.5 612.6
PERFORMANCE RATIOS
Return on average common equity 29.71% 19.00% 20.13% 29.58%
Return on average total equity 29.72 19.01 20.13 29.58
Return on average assets 2.77 1.76 1.80 2.61
Net interest margin 4.01 3.97 4.03 4.11
Efficiency ratio 46.85 55.11 55.15 45.50
LINE OF BUSINESS (LOB) RESULTS
Net Income:
National City Mortgage $13 $139 $17 $273
Rest of National City (RONC):
Consumer and Small Business
Financial Services 181 177 166 153
Wholesale Banking 192 166 164 140
National Consumer Finance 131 166 178 164
Asset Management 18 26 64 25
National Processing (9) 17 14 12
Parent and Other 434 (100) (84) (57)
Total RONC 947 452 502 437
Total Consolidated National City
Corporation $960 $591 $519 $710
LOB Contribution to Diluted Earnings
Per Share:
National City Mortgage $.01 $.20 $.02 $.45
Rest of National City (RONC):
Consumer and Small Business
Financial Services .27 .26 .27 .25
Wholesale Banking .29 .25 .26 .23
National Consumer Finance .20 .24 .28 .27
Asset Management .03 .04 .10 .04
National Processing (.01) .02 .02 .02
Parent and Other .67 (.15) (.12) (.10)
Total RONC 1.45 .66 .81 .71
Total Consolidated National City
Corporation $1.46 $.86 $.83 $1.16
Unaudited
National City Corporation
CONSOLIDATED FINANCIAL HIGHLIGHTS
(In millions, except per share data)
2003 For the Year
4th Qtr 2005 2004 2003
EARNINGS
Tax-equivalent interest income $1,407 $7,763 $6,053 $5,994
Interest expense 375 3,036 1,593 1,630
Tax-equivalent net interest income 1,032 4,727 4,460 4,364
Provision for credit losses 148 284 323 638
Tax-equivalent NII after provision for
credit losses 884 4,443 4,137 3,726
Fees and other income 979 3,277 4,421 3,546
Securities gains (losses), net 10 27 19 47
Noninterest expense 1,034 4,755 4,472 4,053
Income before taxes and tax-equivalent
adjustment 839 2,992 4,105 3,266
Income taxes 288 976 1,298 1,120
Tax-equivalent adjustment 7 31 27 29
Net income $544 $1,985 $2,780 $2,117
Effective tax rate 34.6% 33.0% 31.8% 34.6%
PER COMMON SHARE
Net income:
Basic $.89 $3.13 $4.37 $3.46
Diluted .88 3.09 4.31 3.43
Dividends paid .32 1.44 1.34 1.25
Book value 15.39
Market value (close) 33.94
Average shares:
Basic 607.6 633.4 635.5 611.2
Diluted 612.7 641.6 645.5 616.4
PERFORMANCE RATIOS
Return on average common equity 22.99% 15.54% 24.56% 23.60%
Return on average total equity 22.99 15.55 24.57 23.60
Return on average assets 1.88 1.40 2.23 1.79
Net interest margin 3.99 3.74 4.02 4.08
Efficiency ratio 51.42 59.41 50.35 51.24
LINE OF BUSINESS (LOB) RESULTS
Net Income:
National City Mortgage $263 $284 $442 $939
Rest of National City (RONC):
Consumer and Small Business
Financial Services 143 699 677 615
Wholesale Banking 81 770 662 329
National Consumer Finance 91 559 639 419
Asset Management 23 80 133 93
National Processing 15 - 34 49
Parent and Other (72) (407) 193 (327)
Total RONC 281 1,701 2,338 1,178
Total Consolidated National City
Corporation $544 $1,985 $2,780 $2,117
LOB Contribution to Diluted Earnings
Per Share:
National City Mortgage $.42 $.44 $.68 $1.52
Rest of National City (RONC):
Consumer and Small Business
Financial Services .23 1.09 1.05 1.00
Wholesale Banking .13 1.20 1.03 .53
National Consumer Finance .15 .87 .99 .68
Asset Management .04 .12 .21 .15
National Processing .03 - .05 .08
Parent and Other (.12) (.63) .30 (.53)
Total RONC .46 2.65 3.63 1.91
Total Consolidated National City
Corporation $.88 $3.09 $4.31 $3.43
Unaudited
National City Corporation
CONSOLIDATED FINANCIAL HIGHLIGHTS (continued)
($ in millions)
2005
4th Qtr 3rd Qtr 2nd Qtr 1st Qtr
CREDIT QUALITY STATISTICS
Net charge-offs $138 $83 $72 $87
Provision for credit losses 132 56 26 70
Loan loss allowance 1,094 1,108 1,125 1,179
Lending-related commitment allowance 84 88 100 93
Nonperforming assets 596 585 572 578
Annualized net charge-offs to average
portfolio loans .52% .30% .27% .35%
Loan loss allowance to period-end
portfolio loans 1.03 1.02 1.05 1.15
Loan loss allowance to
nonperforming portfolio loans 223.11 230.08 238.64 245.11
Loan loss allowance (period-end)
to annualized net charge-offs 199.42 336.67 391.50 330.46
Nonperforming assets to period-end
portfolio loans and other
nonperforming assets .56 .54 .53 .56
CAPITAL AND LIQUIDITY RATIOS
Tier 1 capital(1) 7.44% 7.68% 7.96% 7.91%
Total risk-based capital(1) 10.56 10.78 11.20 11.25
Leverage(1) 6.83 7.03 7.36 7.22
Period-end equity to assets 8.86 8.80 9.02 8.97
Period-end tangible common equity
to assets (2) 6.57 6.57 6.75 6.65
Average equity to assets 8.78 8.95 9.13 9.23
Average equity to portfolio loans 11.79 11.98 12.16 12.62
Average portfolio loans to deposits 126.68 127.88 130.12 124.24
Average portfolio loans to core
deposits 156.15 158.32 154.90 150.92
Average portfolio loans to earning
assets 83.41 83.59 84.13 82.45
Average securities to earning assets 6.00 5.75 6.21 6.67
AVERAGE BALANCES
Assets $142,983 $144,967 $139,673 $138,516
Portfolio loans 106,433 108,386 104,908 101,283
Loans held for sale or
securitization 11,172 11,570 10,109 11,502
Securities (at cost) 7,657 7,450 7,746 8,195
Earning assets 127,608 129,659 124,691 122,847
Core deposits 68,160 68,462 67,728 67,109
Purchased deposits and funding 58,661 59,567 55,859 54,713
Total equity 12,549 12,980 12,752 12,779
PERIOD-END BALANCES
Assets $142,397 $146,750 $144,143 $140,982
Portfolio loans 106,039 108,910 106,808 102,932
Loans held for sale or
securitization 9,667 11,942 11,539 11,639
Securities (at fair value) 7,875 7,568 7,694 8,085
Core deposits 68,408 67,738 67,922 68,336
Purchased deposits and funding 56,564 61,839 58,639 55,274
Total equity 12,613 12,920 13,002 12,643
(1) Fourth quarter 2005 regulatory capital ratios are based upon
preliminary data
(2) Excludes goodwill and other intangible assets
Unaudited
National City Corporation
CONSOLIDATED FINANCIAL HIGHLIGHTS (continued)
($ in millions)
2004
4th Qtr 3rd Qtr 2nd Qtr 1st Qtr
CREDIT QUALITY STATISTICS
Net charge-offs $104 $97 $63 $82
Provision for credit losses 81 98 61 83
Loan loss allowance 1,188 1,178 1,028 1,011
Lending-related commitment allowance 100 127 117 115
Nonperforming assets 563 628 544 606
Annualized net charge-offs to average
portfolio loans .41% .41% .30% .42%
Loan loss allowance to period-end
portfolio loans 1.19 1.21 1.21 1.26
Loan loss allowance to
nonperforming portfolio loans 256.92 234.48 234.09 200.41
Loan loss allowance (period-end)
to annualized net charge-offs 290.31 302.46 407.33 305.75
Nonperforming assets to period-end
portfolio loans and other
nonperforming assets .56 .64 .64 .76
CAPITAL AND LIQUIDITY RATIOS
Tier 1 capital(1) 8.25% 8.23% 9.02% 9.36%
Total risk-based capital(1) 11.79 11.86 13.07 13.67
Leverage(1) 7.31 7.35 7.90 8.19
Period-end equity to assets 9.18 9.14 8.82 8.83
Period-end tangible common equity
to assets (2) 6.83 6.71 7.64 7.88
Average equity to assets 9.31 9.24 8.94 8.81
Average equity to portfolio loans 12.96 12.95 12.50 12.20
Average portfolio loans to deposits 118.81 115.64 114.14 120.41
Average portfolio loans to core
deposits 145.55 141.36 132.88 135.63
Average portfolio loans to earning
assets 81.54 80.57 79.26 80.09
Average securities to earning assets 7.44 7.79 6.01 6.27
AVERAGE BALANCES
Assets $138,030 $133,703 $116,027 $109,599
Portfolio loans 99,127 95,425 82,942 79,154
Loans held for sale or
securitization 11,503 11,861 13,910 12,323
Securities (at cost) 9,044 9,230 6,290 6,197
Earning assets 121,574 118,433 104,646 98,828
Core deposits 68,105 67,506 62,420 58,360
Purchased deposits and funding 53,030 49,907 40,080 38,253
Total equity 12,847 12,359 10,370 9,659
PERIOD-END BALANCES
Assets $139,414 $136,615 $117,180 $111,544
Portfolio loans 100,271 97,554 84,630 80,001
Loans held for sale or
securitization 12,430 10,745 12,467 12,478
Securities (at fair value) 8,765 9,338 6,159 6,540
Core deposits 67,297 67,003 61,851 60,030
Purchased deposits and funding 55,282 52,535 41,473 37,343
Total equity 12,804 12,492 10,335 9,854
(1) Fourth quarter 2005 regulatory capital ratios are based upon
preliminary data
(2) Excludes goodwill and other intangible assets
Unaudited
National City Corporation
CONSOLIDATED FINANCIAL HIGHLIGHTS (continued)
($ in millions)
2003 For the Year
4th Qtr 2005 2004 2003
CREDIT QUALITY STATISTICS
Net charge-offs $150 $380 $346 $609
Provision for credit losses 148 284 323 638
Loan loss allowance 1,023
Lending-related commitment allowance 102
Nonperforming assets 657
Annualized net charge-offs to average
portfolio loans .76% .36% .39% .80%
Loan loss allowance to period-end
portfolio loans 1.29
Loan loss allowance to
nonperforming portfolio loans 186.09
Loan loss allowance (period-end)
to annualized net charge-offs 171.81 287.26 343.81 167.82
Nonperforming assets to period-end
portfolio loans and other
nonperforming assets .83
CAPITAL AND LIQUIDITY RATIOS
Tier 1 capital(1) 8.79%
Total risk-based capital(1) 13.12
Leverage(1) 7.43
Period-end equity to assets 8.18
Period-end tangible common equity
to assets (2) 7.23
Average equity to assets 8.19 9.02% 9.10% 7.57%
Average equity to portfolio loans 12.04 12.13 12.69 11.83
Average portfolio loans to deposits 116.46 127.23 117.18 110.78
Average portfolio loans to core
deposits 133.32 155.12 139.13 129.18
Average portfolio loans to earning
assets 75.49 83.40 80.42 70.98
Average securities to earning assets 5.99 6.15 6.94 6.42
AVERAGE BALANCES
Assets $114,628 $141,556 $124,403 $118,525
Portfolio loans 77,963 105,275 89,207 75,871
Loans held for sale or
securitization 17,680 11,090 12,395 22,837
Securities (at cost) 6,187 7,759 7,698 6,864
Earning assets 103,280 126,224 110,921 106,898
Core deposits 58,479 67,869 64,118 58,733
Purchased deposits and funding 43,267 57,217 45,351 47,072
Total equity 9,390 12,765 11,316 8,972
PERIOD-END BALANCES
Assets $114,102
Portfolio loans 79,344
Loans held for sale or
securitization 15,368
Securities (at fair value) 6,525
Core deposits 58,922
Purchased deposits and funding 41,983
Total equity 9,329
(1) Fourth quarter 2005 regulatory capital ratios are based upon
preliminary data
(2) Excludes goodwill and other intangible assets
Source: prnewswire
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