[LOGO] NATIONAL CITY
BANCORPORATION
2000
THIRD QUARTER
REPORT
NINE MONTHS
ENDED
SEPTEMBER 30, 2000
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TO OUR STOCKHOLDERS:
Net earnings were $4,552,000 for the third quarter of 2000, compared with
$5,023,000 in the third quarter of 1999. Earnings per share were 53 cents,
compared with 57 cents for the same quarter of 1999. Net earnings for the nine
months ended September 30, 2000 were $13,545,000 or $1.58 per share, compared
with $12,542,000 or $1.34 per share last year. Net earnings for the third
quarter and nine months of 1999 were impacted by a state income tax refund of
$1,233,000 which had an after tax effect of approximately $769,000. Without the
effect of the tax refund, net income from continuing operations increased
$298,000 or 4 cents per share in the third quarter and $1,772,000 or 24 cents
for the nine months, an improvement of 7 percent and 15 percent, respectively.
Nonperforming assets were $12.9 million or 1.43 percent of total loans at
September 30, 2000 compared with $16.3 million or 1.94 percent of total loans at
December 31, 1999. The Company's reserve for loan losses at quarter-end was
$12.6 million or 1.39 percent of loans outstanding.There were net chargeoffs
during the quarter of $2.3 million compared with net recoveries of $63 thousand
in the third quarter of 1999.
Net interest income which represents 85 percent of total revenues, was $13.3
million in the quarter, up 5 percent from the year-earlier period. The increase
was largely a result of higher loan volume, with average loans increasing by 9
percent. Noninterest income for the third quarter was down from the year-earlier
period. The relative decline relates primarily to the income tax refund received
in the prior year. Noninterest expense increased 3.8 percent compared with last
year.
At its October 18, 2000 meeting the Board of Directors declared a regular
quarterly cash dividend on common stock of 14 cents per share, payable December
1, 2000, to stockholders of record November 2, 2000.
/s/ David C. Malmberg /s/ David L. Andreas
David C. Malmberg David L. Andreas
Chairman of the Board President and
Chief Executive Officer
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NATIONAL CITY BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash & due from banks ............................................ $ 45,103 $ 36,997
Federal funds sold and resale agreements ......................... 3,725 55,655
Available-for-sale securities:
U.S. Treasury ............................................... 4,981 4,958
U.S. Government agencies .................................... 43,970 21,637
Mortgage-backed ............................................. 85,666 95,921
Municipal ................................................... 19,845 9,189
Other securities ............................................ 4,607 3,635
------------ ------------
Total available-for-sale securities .................... 159,069 135,340
Held-to-maturity securities:
Mortgage-backed ............................................. 40,925 46,572
------------ ------------
Total held-to-maturity securities ...................... 40,925 46,572
(approximate market value: 2000-$40,012; 1999-$45,297)
Loans ............................................................ 904,901 838,585
Less allowance for loan losses .............................. (12,591) (13,883)
------------ ------------
Net loans .............................................. 892,310 824,702
Premises and equipment ........................................... 7,799 8,921
Accrued interest receivable ...................................... 9,305 7,600
Customer acceptance liability .................................... 2,132 1,424
Other assets ..................................................... 23,664 22,969
------------ ------------
Total assets ................................................ $ 1,184,032 $ 1,140,180
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest bearing ......................................... $ 142,308 $ 166,039
Interest bearing ............................................ 501,453 448,269
------------ ------------
Total deposits ......................................... 643,761 614,308
Federal funds purchased and repurchase agreements ................ 88,180 89,950
Commercial paper ................................................. 36,844 38,777
Other short-term borrowed funds .................................. 56,465 45,053
Acceptances outstanding .......................................... 2,132 1,424
Other liabilities ................................................ 11,302 22,719
Long-term debt ................................................... 186,000 176,000
------------ ------------
Total liabilities ........................................... 1,024,684 988,231
Stockholders' equity:
Common stock, par value $1.25
Authorized shares: 40,000,000
Issued shares: 2000-8,866,143; 1999-8,861,944 .......... 11,083 11,077
Additional paid-in capital .................................. 122,042 121,982
Unrealized gains (losses) net of tax effect ................. (736) (1,883)
Retained earnings ........................................... 34,026 23,735
------------ ------------
Subtotal ............................................... 166,415 154,911
Less common stock in treasury at cost:
2000-394,232 shares; 1999-125,222 shares ....................... (7,067) (2,962)
------------ ------------
Total stockholders' equity ............................. 159,348 151,949
------------ ------------
Total liabilities and stockholders' equity ............. $ 1,184,032 $ 1,140,180
============ ============
</TABLE>
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NATIONAL CITY BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands except per share)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans .................................... $ 23,657 $ 20,071 $ 67,480 $ 56,385
Interest on federal funds sold and resale agreements .......... 253 214 663 408
Interest and dividends on securities .......................... 3,260 2,675 9,519 8,157
---------- ---------- ---------- ----------
Total interest income .................................... 27,170 22,960 77,662 64,950
INTEREST EXPENSE
Interest on deposits .......................................... 7,323 4.500 19,189 11,910
Interest on short-term borrowed funds ......................... 2,585 3,408 7,964 9,750
Interest on long-term debt .................................... 3,937 2,323 10,859 6,537
---------- ---------- ---------- ----------
Total interest expense ................................... 13,845 10,231 38,012 28,197
---------- ---------- ---------- ----------
Net interest income ...................................... 13,325 12,729 39,650 36,753
Provision for loan losses ..................................... 845 1,111 1,995 2,970
---------- ---------- ---------- ----------
Net interest income after provision for loan losses ...... 12,480 11,618 37,655 33,783
NONINTEREST INCOME
Service charges on deposit accounts ........................... 578 614 1,825 1,851
Fees for other customer services .............................. 421 486 1,337 1,371
Trust fees .................................................... 1,134 1,189 3,366 3,614
State income tax refund ....................................... 1,233 1,233
Other ......................................................... 201 125 609 414
---------- ---------- ---------- ----------
Total noninterest income ................................. 2,334 3,647 7,137 8,483
NONINTEREST EXPENSES
Salaries and employee benefits ................................ 4,040 3,980 12,754 12,242
Net occupancy expense ......................................... 945 815 2,603 2,494
Equipment rentals, depreciation and maintenance ............... 795 900 2,590 2,645
Other ......................................................... 1,533 1,350 4,611 4,231
---------- ---------- ---------- ----------
Total noninterest expense ................................ 7,313 7,045 22,558 21,612
---------- ---------- ---------- ----------
Earnings before taxes ......................................... 7,501 8,220 22,234 20,654
Applicable income taxes ....................................... 2,949 3,197 8,689 8,112
---------- ---------- ---------- ----------
Net earnings ............................................. $ 4,552 $ 5,023 $ 13,545 $ 12,542
========== ========== ========== ==========
Basic earnings per common share .................................... $ 0.53 $ 0.57 $ 1.58 $ 1.43
Average common shares outstanding .................................. 8,471,039 8,756,876 8,550,335 8,771,368
</TABLE>
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FINANCIAL HIGHLIGHTS
(in thousands except per share)
THIRD QUARTER ENDED
SEPTEMBER 30,
------------------------- PERCENT
2000 1999 CHANGE
--------- --------- -------
EARNINGS:
Net interest income ....... $ 13,325 $ 12,729 5%
Net earnings .............. 4,552 5,023 (9)%
BASIC EARNINGS PER SHARE:
Net earnings .............. $ 0.53 $ 0.57 (7)%
NINE MONTHS ENDED
SEPTEMBER 30,
-------------------------
2000 1999
--------- ---------
EARNINGS:
Net interest income ....... $ 39,650 $ 36,753 8%
Net earnings .............. 13,545 12,542 8%
BASIC EARNINGS PER SHARE:
Net earnings .............. $ 1.58 $ 1.43 10%
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- ------------
BALANCE SHEET ITEMS:
Total assets .............. $ 1,184,032 $ 1,140,180 4%
Loans ..................... 904,901 838,585 8%
Deposits .................. 643,761 614,308 5%
Stockholders' equity ...... 159,348 151,949 5%
Book value per share ...... 18.81 17.39
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DIRECTORS OF NATIONAL CITY OFFICERS OF NATIONAL CITY
BANCORPORATION BANCORPORATION
David C. Malmberg David L. Andreas
CHAIRMAN OF THE BOARD PRESIDENT AND
National City Bancorporation CHIEF EXECUTIVE OFFICER
Wendell R. Anderson* Thomas J. Freed
OF COUNSEL SECRETARY AND
Larkin, Hoffman, Daly and CHIEF FINANCIAL OFFICER
Lindgren Ltd.
PRINCIPAL OFFICERS OF
David L. Andreas SUBSIDIARIES
PRESIDENT AND
CHIEF EXECUTIVE OFFICER DIVERSIFIED BUSINESS
National City Bancorporation CREDIT, INC.
PRESIDENT AND
CHIEF EXECUTIVE OFFICER Robert L. Olson
National City Bank of PRESIDENT AND
Minneapolis CHIEF EXECUTIVE OFFICER
Terry L. Andreas Janet L. Pomeroy
CHAIRMAN OF THE BOARD SENIOR VICE PRESIDENT
School for Field Studies
Beverly, Massachusetts NATIONAL CITY BANK
OF MINNEAPOLIS
Michael J. Boris*
PRIVATE INVESTOR AND David L. Andreas
CONSULTANT PRESIDENT AND
CHIEF EXECUTIVE OFFICER
Sharon Bredeson
PRESIDENT AND William J. Klein
CHIEF EXECUTIVE OFFICER EXECUTIVE VICE PRESIDENT
Staff-Plus, Inc. CLIENT SERVICES
John H. Daniels, Jr.* Thomas J. Freed
PARTNER SENIOR VICE PRESIDENT AND
Willeke and Daniels CHIEF FINANCIAL OFFICER
James B. Goetz, Sr. Donald W. Kjonaas
PRESIDENT AND SENIOR VICE PRESIDENT
CHIEF EXECUTIVE OFFICER OPERATIONS
Goetz Companies
Esperanza Guerrero-Anderson*
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
Milestone Growth Fund, Inc.
C. Bernard Jacobs
RETIRED PRESIDENT AND
CHIEF EXECUTIVE OFFICER
National City Bancorporation
RETIRED CHAIRMAN OF THE BOARD
National City Bank
Walter E. Meadley, Jr.
RETIRED VICE CHAIRMAN
OF THE BOARD
National City Bank
Robert L. Olson
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
Diversified Business Credit, Inc.
Roger H. Scherer*
CHAIRMAN OF THE BOARD
Scherer Bros. Lumber Company
*Members of the Audit Committee
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NATIONAL CITY BANCORPORATION
CHANGE OF ADDRESS FOR SHAREHOLDER
National City Bank of Minneapolis
Stock Transfer Department
P.O. Box 1919
Minneapolis, Minnesota 55480-1919
PLEASE CHANGE MY ADDRESS TO:
Name____________________________________________________
(PRINT NAME EXACTLY AS IT APPEARS ON STOCK CERTIFICATE)
Street__________________________________________________
City____________________________________________________
State_________________________Zip Code__________________
Date____________________________________________________
OLD ADDRESS
Street__________________________________________________
City____________________________________________________
State_________________________Zip Code__________________
Signature_______________________________________________
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NATIONAL CITY BANCORPORATION BULK RATE
651 Nicollet Mall U.S. POSTAGE
Minneapolis, Minnesota 55402-1611 PAID
Telephone 612-904-8503 MINNEAPOLIS, MN
PERMIT NO. 2816
