<PAGE> 1
FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
October 14, 1998
------------------------
(Date of Report)
NATIONAL CITY CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-10074 34-1111088
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission IRS Employer
of incorporation) File Number) Identification No.)
1900 East Ninth Street, Cleveland, Ohio 44114
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(216) 575-2000
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE> 2
Item 5. Other Events
------------
On October 14, 1998, the Registrant issued a News Release reporting
earnings for the third quarter and first nine months of Fiscal Year 1998.
Reference is made to the News Release, dated October 14, 1998, a copy
of which is filed as Exhibit 99.1 to this Current Report on Form 8-K and is
incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
------------------------------------------------------------------
a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED: None
b) PRO FORMA FINANCIAL INFORMATION: None.
c) EXHIBITS:
--------
99.1 News Release, dated October 14, 1998 incorporated HEREIN by
reference.
<PAGE> 3
Signatures
----------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: October 14, 1998 By /s/ David L. Zoeller
--------------------
David L. Zoeller
Senior Vice President
and General Counsel
<PAGE> 1
Exhibit 99.1
[National City Corporation Letterhear]
FOR MORE INFORMATION CONTACT: News Release
Thomas A. Richlovsky
Senior Vice President & Treasurer
(216) 575-2126
Julie I. Sabroff
Vice President, Investor Relations
(216) 575-2467
For Immediate Release
NATIONAL CITY CORPORATION REPORTS RECORD
----------------------------------------
EARNINGS FOR THIRD QUARTER AND FIRST NINE MONTHS
------------------------------------------------
CLEVELAND, Ohio--October 14, 1998--National City Corporation (NYSE:NCC)
today reported third quarter earnings per diluted share increased 18.4% to
$1.03, compared to $.87 in the third quarter of 1997. Net income increased 21.7%
to $344.5 million, versus $283.1 million a year ago. Returns on average common
equity and average assets were 19.00% and 1.69%, respectively, compared to
18.12% and 1.55%, respectively, for the same period last year.
For the first nine months of 1998, excluding merger and restructuring
expenses, diluted earnings per share increased 13.1% to $2.94, compared to $2.60
in 1997. On the same basis, net income increased 13.8% to $973.3 million, versus
$855.6 million for the same period last year. Excluding merger and restructuring
expenses, returns on average common equity and average assets were 19.08% and
1.65%, respectively, compared to 18.58% and 1.60%, respectively, for the same
period last year. After-tax merger and restructuring expenses were $193.9
million or $.59 per diluted share for the first nine months of 1998, and $25.5
million or $.08 per diluted share for the same period in 1997.
Financial data for all prior periods have been restated to reflect the
merger with First of America Bank Corporation, which was completed on March 31,
1998 and accounted for as a pooling-of-interests. The financial results of Fort
Wayne National Corporation, accounted for
<PAGE> 2
-2-
as a purchase, are included in the results of operations subsequent to the date
of acquisition, March 30, 1998.
The results for the third quarter and first nine months reflect a
continuation of solid loan growth, increased revenue and excellent credit
quality. Average loans were up 10.7% to $57.6 billion in the third quarter of
1998 from $52.0 billion for the same period last year. This growth was led by a
13.5% increase in domestic commercial loans and a 14.5% increase in consumer
installment loans.
Commenting on the quarter, Chairman and CEO, David A. Daberko, stated,
"Third quarter results were in line with expectations and reflect successful
execution in the core banking and fee-based businesses. Credit quality is solid
and we have virtually no foreign loan or hedge fund exposure. National City will
remain unrelentingly focused on customer service and the integration of First of
America and Fort Wayne National, regardless of the direction of the economy."
Revenue growth was particularly strong in the fee-based segments.
Excluding securities gains, fees and other noninterest income increased 27.5% in
the third quarter of 1998 to $555.5 million, from $435.6 million a year ago. For
the first nine months of 1998, fees and other noninterest income grew 26.8% to
$1,603.4 million versus $1,264.5 million for the same period last year. The
strong performance reflected growth in virtually all major categories of fee
income with a notable increase in mortgage banking revenue.
For the first nine months of 1998, pre-tax securities gains totaled
$85.2 million or $.17 per diluted share, after-tax, compared to $47.2 million or
$.09 per diluted share, after-tax, for the same period in 1997. Securities gains
were generated mainly from National City's Bank Stock Fund.
Noninterest expenses, excluding merger and restructuring expenses, for
the third quarter and first nine months of 1998 rose 16.4% and 12.2%,
respectively, over the same periods last year. Increased expenses reflect
continued growth in the fee-based businesses, technology initiatives and Year
2000 readiness costs, as well as the acquisition of Fort Wayne National
Corporation, whose costs were not in the previous year's base.
<PAGE> 3
-3-
Credit quality continued to be excellent. At September 30, 1998,
nonperforming assets totaled $252.6 million, down $6.2 million from the prior
year. Net charge-offs for the first nine months of 1998 were $140.6 million or
.34% of loans, compared to $155.3 million or .40% of loans for the same period
in 1997. Net charge-offs were fully covered by the provision for loan losses.
The allowance for loan losses was $975.1 million or 1.66% of loans at September
30, 1998.
Total assets at September 30, 1998 were $83.1 billion, up 11.8% from
last year, and stockholders' equity was $7.3 billion. Equity as a percentage of
assets was 8.75% at September 30, 1998, compared to 8.27% a year ago. Loans at
September 30, 1998 were $58.7 billion, up 10.8% from $53.0 billion at September
30, 1997. Total deposits were $54.2 billion compared to $51.8 billion a year
ago.
National City Corporation is an $83 billion diversified financial
services company headquartered in Cleveland, Ohio. National City operates banks
and other financial services subsidiaries principally in Ohio, Kentucky,
Indiana, Pennsylvania, Michigan and Illinois. National City can be found on the
World Wide Web at www.national-city.com.
<PAGE> 4
UNAUDITED
National City Corporation
Financial Highlights
(Dollars in Millions Except Per Share Amounts)
<TABLE>
<CAPTION>
1998 1997 3Q98/ Nine Months Ended
------------------------------- --------------------
Third Second First Fourth Third 3Q97 September 30,
------------------------------
Quarter Quarter Quarter Quarter Quarter % Change 1998 1997 % Change
------- ------- ------- ------- ------- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Tax-equivalent net
interest income ........ $ 745.8 $ 739.9 $ 708.3 $ 711.8 $ 721.5 3.4% $2,194.0 $2,141.6 2.4%
Provision for loan
losses ................. 45.2 43.0 56.3 52.9 59.2 (23.6) 144.5 172.5 (16.2)
Noninterest income
(excluding securities
gains) ................. 555.5 554.1 493.8 501.9 435.6 27.5 1,603.4 1,264.5 26.8
Securities gains ......... 64.4 19.7 1.1 34.1 0.1 -- 85.2 47.2 80.5
Noninterest expense -
recurring .............. 782.4 749.2 699.3 738.9 672.0 16.4 2,230.9 1,987.7 12.2
Merger and restructuring
expense ................ -- -- 274.7 26.3 -- -- 274.7 39.6 593.7
Net income ............... 344.5 331.2 103.7 292.1 283.1 21.7 779.4 830.1 (6.1)
Net income before merger
and restructuring
expense ................ 344.5 331.2 297.6 301.5 283.1 21.7 973.3 855.6 13.8
Net income per common
share:
basic ................ 1.05 1.01 .33 .92 .88 19.3 2.39 2.56 (6.6)
Diluted .............. 1.03 .99 .32 .90 .87 18.4 2.35 2.52 (6.7)
Diluted - adjusted (1) 1.03 .99 .92 .93 .87 18.4 2.94 2.60 13.1
Dividends paid per
common share ........... .48 .46 .46 .425 .425 12.9 1.40 1.245 12.4
Cash earnings per
common share (1)(2) .... 1.09 1.04 .95 .97 .90 21.1 3.08 2.72 13.2
Performance Ratios (1)
- ----------------------
Return on average
common equity .......... 19.00% 19.47% 19.23% 18.67% 18.12% 19.08% 18.58%
Return on average
assets ................. 1.69 1.66 1.61 1.59 1.55 1.65 1.60
Net interest margin ...... 4.10 4.15 4.19 4.32 4.38 4.15 4.38
Overhead ratio ........... 30.42 26.36 29.02 31.42 32.77 28.60 33.77
Efficiency ratio ......... 60.12 57.90 58.17 59.78 58.09 58.75 58.57
Assets ................... $ 83,135 $ 74,348 11.8
Loans, net of allowance .. 57,709 52,068 10.8
Deposits ................. 54,228 51,798 4.7
Stockholders' equity ..... 7,273 6,145 18.4
Book value per common
share .................. 21.91 19.30 13.5
Market value per common
share .................. 65.94 61.56 7.1
</TABLE>
- --------------------------------
(1) Excluding after-tax merger and restructuring expenses of $193.9 million and
$9.4 million for the first quarter of 1998 and the fourth quarter of 1997, and
$193.9 million and $25.5 million for the nine months ended September 30, 1998
and 1997, respectively.
(2) Excludes amortization of goodwill and other intangible assets.
4
<PAGE> 5
UNAUDITED
National City Corporation
Consolidated Statements Of Income
(Dollars In Thousands Except Per Share Amounts)
<TABLE>
<CAPTION>
Nine Months Ended
1998 1997 September 30,
-------------------------------------- ------------------------ ------------------------
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter 1998 1997
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Interest Income:
Loans .......................... $1,229,009 $1,210,235 $1,140,421 $1,144,323 $1,142,610 $3,579,665 $3,342,206
Securities:
Taxable ....................... 207,384 207,228 206,412 197,058 199,062 621,024 598,171
Exempt from Federal income
taxes ....................... 13,145 14,562 11,600 11,484 11,575 39,307 33,559
Federal funds sold and security
resale agreements ............ 16,642 8,293 6,006 4,522 5,490 30,941 15,703
Other short-term investments ... 4,302 4,973 4,206 3,320 3,822 13,481 12,166
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total interest income ........ 1,470,482 1,445,291 1,368,645 1,360,707 1,362,559 4,284,418 4,001,805
Interest Expense:
Deposits ....................... 475,951 472,064 446,461 455,322 461,822 1,394,476 1,357,929
Federal funds borrowed and
security repurchase agreements 96,416 81,101 73,763 58,860 50,751 251,280 177,022
Borrowed funds ................. 38,078 48,564 51,276 47,784 47,860 137,918 132,298
Long-term debt ................. 123,672 113,439 99,170 99,803 90,945 336,281 223,156
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total interest expense ....... 734,117 715,168 670,670 661,769 651,378 2,119,955 1,890,405
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net interest income .......... 736,365 730,123 697,975 698,938 711,181 2,164,463 2,111,400
Provision for loan losses ...... 45,212 43,033 56,267 52,904 59,186 144,512 172,463
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net interest income after
provision for loan losses ... 691,153 687,090 641,708 646,034 651,995 2,019,951 1,938,937
Noninterest Income:
Item processing revenue ........ 124,268 117,686 112,540 118,826 97,396 354,494 274,289
Service charges on deposit
accounts ..................... 100,316 97,739 93,460 96,548 93,585 291,515 268,907
Trust and investment management
fees ......................... 74,565 79,729 76,954 72,978 68,611 231,248 205,815
Card-related fees .............. 56,415 49,383 46,891 53,755 53,598 152,689 151,876
Mortgage banking revenue ....... 79,362 97,223 61,250 48,307 42,734 237,835 110,237
Other .......................... 120,591 112,369 102,676 111,463 79,665 335,636 253,392
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total fees and other income .. 555,517 554,129 493,771 501,877 435,589 1,603,417 1,264,516
Securities gains ............... 64,451 19,714 1,052 34,058 53 85,217 47,181
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total noninterest income ..... 619,968 573,843 494,823 535,935 435,642 1,688,634 1,311,697
Noninterest Expense:
Salaries and other personnel ... 409,279 396,574 383,854 379,088 363,028 1,189,707 1,070,357
Equipment ...................... 51,054 51,471 51,728 54,361 48,427 154,253 150,501
Net occupancy .................. 51,737 49,671 48,737 47,677 48,141 150,145 145,878
Assessments and taxes .......... 15,395 12,097 11,689 12,242 13,631 39,181 45,027
Merger and restructuring ....... -- -- 274,698 26,262 -- 274,698 39,640
Other .......................... 254,935 239,365 203,295 245,579 198,843 697,595 575,958
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total noninterest expense .... 782,400 749,178 974,001 765,209 672,070 2,505,579 2,027,361
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before income taxes ...... 528,721 511,755 162,530 416,760 415,567 1,203,006 1,223,273
Income tax expense .............. 184,265 180,511 58,808 124,616 132,514 423,584 393,223
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income ................... $ 344,456 $ 331,244 $ 103,722 $ 292,144 $ 283,053 $ 779,422 $ 830,050
---------- ---------- ---------- ---------- ---------- ---------- ----------
Preferred dividends .......... 546 1,099 -- -- -- 1,645 --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income applicable to
common stock ............... $ 343,910 $ 330,145 $ 103,722 $ 292,144 $ 283,053 $ 777,777 $ 830,050
========== ========== ========== ========== ========== ========== ==========
Net income Per Common Share:
Basic ........................ $ 1.05 $ 1.01 $ .33 $ .92 $ .88 $ 2.39 $ 2.56
Diluted ...................... $ 1.03 $ .99 $ .32 $ .90 $ .87 $ 2.35 $ 2.52
</TABLE>
5
<PAGE> 6
UNAUDITED
NATIONAL CITY CORPORATION
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1998 1997
------------------------------------------- ----------------------------
Third Second First Fourth Third
Assets Quarter Quarter Quarter Quarter Quarter
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Loans:
Commercial ............................. $18,592,686 $18,153,768 $17,939,443 $16,280,575 $15,674,008
Real estate construction ............... 1,420,306 1,390,322 1,378,200 1,302,305 1,260,493
Lease financing ........................ 809,301 739,563 678,421 635,957 568,016
Commercial real estate ................. 6,475,950 6,518,933 6,523,261 6,410,531 6,589,262
Residential real estate ................ 12,107,421 12,258,365 12,212,294 11,236,774 11,783,559
Consumer ............................... 14,291,552 13,473,157 12,834,912 12,357,229 12,354,750
Credit card ............................ 1,797,840 1,830,355 1,855,401 2,047,769 1,949,374
Home equity ............................ 3,188,590 3,113,685 3,030,871 2,972,987 2,856,747
----------- ----------- ----------- ----------- -----------
Total loans .......................... 58,683,646 57,478,148 56,452,803 53,244,127 53,036,209
Allowance for loan losses ............ 975,100 976,469 976,464 941,874 967,797
----------- ----------- ----------- ----------- -----------
Net loans ............................ 57,708,546 56,501,679 55,476,339 52,302,253 52,068,412
Securities available for sale, at market .. 15,424,507 13,898,032 15,635,191 13,797,566 13,945,643
Federal funds sold and security resale
agreements .............................. 1,146,383 1,333,374 475,890 542,156 426,560
Other short-term investments .............. 100,292 80,220 111,687 84,204 140,347
Cash and demand balances due from banks ... 3,406,647 4,111,415 3,745,235 4,319,309 3,580,501
Properties and equipment .................. 1,134,480 1,081,876 1,037,159 1,031,912 1,038,721
Customers' acceptance liability ........... 29,531 31,785 37,235 45,823 68,741
Accrued income and other assets ........... 4,184,293 4,219,487 4,197,452 3,655,858 3,079,461
----------- ----------- ----------- ----------- -----------
Total Assets ........................ $83,134,679 $81,257,868 $80,716,188 $75,779,081 $74,348,386
=========== =========== =========== =========== ===========
Liabilities and Stockholders' Equity
Liabilities:
Demand deposits (noninterest bearing) ..... $10,158,773 $10,750,524 $10,449,115 $10,287,007 $9,461,158
NOW and money market accounts ............. 17,187,380 17,150,088 16,728,998 15,547,560 15,316,369
Savings accounts .......................... 4,599,228 4,855,384 4,943,381 4,781,806 4,966,820
Time deposits of individuals .............. 18,013,811 18,417,699 18,980,294 18,631,280 19,485,848
Other time deposits ....................... 2,475,572 2,484,797 2,482,568 1,633,282 1,558,133
Deposits in overseas offices .............. 1,793,442 1,173,497 1,802,535 1,736,419 1,009,934
----------- ----------- ----------- ----------- -----------
Total deposits ........................ 54,228,206 54,831,989 55,386,891 52,617,354 51,798,262
Federal funds borrowed and security
repurchase agreements ................. 8,662,013 6,069,853 7,967,150 4,810,953 3,864,531
Borrowed funds ............................ 3,122,562 4,330,313 2,762,173 4,264,556 5,112,241
Long-term debt ............................ 8,468,648 7,596,702 6,213,508 6,297,194 5,782,380
Acceptances outstanding ................... 29,531 31,785 37,235 45,823 68,741
Accrued expenses and other liabilities .... 1,350,324 1,378,230 1,523,429 1,584,941 1,576,822
----------- ----------- ----------- ----------- -----------
Total Liabilities ..................... 75,861,284 74,238,872 73,890,386 69,620,821 68,202,977
Stockholders' Equity:
Preferred ............................... 36,556 36,592 36,999 - -
Common .................................. 7,236,839 6,982,404 6,788,803 6,158,260 6,145,409
----------- ----------- ----------- ----------- -----------
Total Stockholders' Equity ............ 7,273,395 7,018,996 6,825,802 6,158,260 6,145,409
Total Liabilities and
Stockholders' Equity ................ $83,134,679 $81,257,868 $80,716,188 $75,779,081 $74,348,386
=========== =========== =========== =========== ===========
</TABLE>
6
<PAGE> 7
UNAUDITED
National City Corporation
Consolidated Average Balance Sheets
(Dollars in Millions)
<TABLE>
<CAPTION>
1998 1997
---------------------------------- ---------------------
Third Second First Fourth Third
Assets Quarter Quarter Quarter Quarter Quarter
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Earning Assets:
Loans:
Commercial ................................................... $ 26,672 $ 26,735 $ 24,777 $ 24,116 $ 23,503
Residential real estate ...................................... 12,030 11,932 11,215 11,160 11,529
Consumer ..................................................... 13,964 13,107 12,546 12,254 12,197
Credit card .................................................. 1,818 1,861 1,944 1,991 2,031
Home equity .................................................. 3,144 3,074 3,006 2,907 2,775
-------- -------- -------- -------- --------
Total loans ............................................... 57,628 56,709 53,488 52,428 52,035
Securities ..................................................... 13,614 13,874 13,728 12,969 13,166
Federal funds sold and security
resale agreements ............................................ 1,177 713 448 322 374
Other short-term investments ................................... 110 118 125 113 199
-------- -------- -------- -------- --------
Total earning assets ........................................ 72,529 71,414 67,789 65,832 65,774
Allowance for loan losses ....................................... (994) (995) (958) (961) (976)
Market value appreciation of
securities available for sale ................................. 511 564 537 490 377
Cash and demand balances due
from banks ................................................... 3,685 3,616 3,359 3,416 3,213
Properties and equipment ........................................ 1,124 1,055 1,042 1,023 1,038
Customers' acceptance liability ................................. 31 33 41 69 66
Accrued income and other assets ................................. 4,176 4,240 2,959 2,909 2,812
-------- -------- -------- -------- --------
Total Assets .............................................. $ 81,062 $ 79,927 $ 74,769 $ 72,778 $ 72,304
======== ======== ======== ======== ========
Liabilities and Stockholders' Equity
Liabilities:
NOW and money market accounts .................................. $ 17,326 $ 17,040 $ 15,691 $ 15,329 $ 15,450
Savings accounts ............................................... 4,721 4,870 4,756 4,842 5,085
Time deposits of individuals ................................... 18,222 18,640 18,566 18,896 19,561
Other time deposits ............................................ 2,505 2,536 1,940 1,538 1,579
Deposits in overseas offices ................................... 1,785 1,420 1,598 1,149 1,030
-------- -------- -------- -------- --------
Total interest bearing deposits ............................. 44,559 44,506 42,551 41,754 42,705
-------- -------- -------- -------- --------
Federal funds borrowed and security
repurchase agreements ....................................... 7,431 6,433 5,881 4,587 3,973
Borrowed funds ................................................. 2,644 3,395 3,499 3,291 3,328
Long-term debt ................................................. 7,962 7,235 6,264 6,118 5,605
-------- -------- -------- -------- --------
Total interest bearing liabilities .......................... 62,596 61,569 58,195 55,750 55,611
Noninterest bearing deposits ................................... 10,051 10,053 9,411 9,406 9,228
Acceptances outstanding ........................................ 31 33 41 69 66
Accrued expenses and other
liabilities .................................................. 1,164 1,433 846 1,360 1,202
-------- -------- -------- -------- --------
Total Liabilities ......................................... 73,842 73,088 68,493 66,585 66,107
Stockholders' Equity:
Preferred ..................................................... 37 37 - - -
Common ........................................................ 7,183 6,802 6,276 6,193 6,197
-------- -------- -------- -------- --------
Total Stockholders' Equity ................................ 7,220 6,839 6,276 6,193 6,197
-------- -------- -------- -------- --------
Total Liabilities and Stockholders'
Equity ................................................. $ 81,062 $ 79,927 $ 74,769 $ 72,778 $ 72,304
======== ======== ======== ======== ========
<CAPTION>
Nine Months Ended
September 30,
---------------------
Assets 1998 1997
-------- --------
<S> <C> <C>
Earning Assets:
Loans:
Commercial ................................................... $ 26,080 $ 23,156
Residential real estate ...................................... 11,683 11,400
Consumer ..................................................... 13,164 12,064
Credit card .................................................. 1,873 2,097
Home equity .................................................. 3,071 2,633
-------- --------
Total loans ............................................... 55,871 51,350
Securities ..................................................... 13,710 13,116
Federal funds sold and security
resale agreements ............................................ 793 377
Other short-term investments ................................... 114 218
-------- --------
Total earning assets ........................................ 70,488 65,061
Allowance for loan losses ....................................... (981) (972)
Market value appreciation of
securities available for sale ................................. 537 256
Cash and demand balances due
from banks ................................................... 3,592 3,324
Properties and equipment ........................................ 1,077 1,051
Customers' acceptance liability ................................. 35 74
Accrued income and other assets ................................. 3,935 2,862
-------- --------
Total Assets .............................................. $ 78,683 $ 71,656
======== ========
Liabilities and Stockholders' Equity
Liabilities:
NOW and money market accounts .................................. $ 16,657 $ 15,389
Savings accounts ............................................... 4,776 5,226
Time deposits of individuals ................................... 18,422 19,565
Other time deposits ............................................ 2,329 1,575
Deposits in overseas offices ................................... 1,602 1,009
-------- --------
Total interest bearing deposits ............................. 43,786 42,764
-------- --------
Federal funds borrowed and security
repurchase agreements ....................................... 6,577 4,627
Borrowed funds ................................................. 3,181 3,142
Long-term debt ................................................. 7,158 4,585
-------- --------
Total interest bearing liabilities .......................... 60,702 55,118
Noninterest bearing deposits ................................... 9,872 9,172
Acceptances outstanding ........................................ 35 74
Accrued expenses and other
liabilities .................................................. 1,241 1,135
-------- --------
Total Liabilities ......................................... 71,850 65,499
Stockholders' Equity:
Preferred ..................................................... 24 -
Common ........................................................ 6,809 6,157
-------- --------
Total Stockholders' Equity ................................ 6,833 6,157
-------- --------
Total Liabilities and Stockholders'
Equity ................................................. $ 78,683 $ 71,656
======== ========
</TABLE>
7
<PAGE> 8
UNAUDITED
NATIONAL CITY CORPORATION
AVERAGE BALANCES AND RATES ON A TAX EQUIVALENT BASIS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
1998 1997
------------------------------------------ ----------------------------------------
Tax Tax
Average Equivalent Average Average Equivalent Average
Balance Interest Rate Balance Interest Rate
Assets ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Earning Assets:
Loans:
Commercial ........................... $ 26,672 $ 567.5 8.44% $ 23,503 $ 516.6 8.75%
Residential real estate .............. 12,030 226.1 7.52 11,529 223.9 7.77
Consumer ............................. 13,964 305.6 8.68 12,197 272.3 8.86
Credit card .......................... 1,818 62.9 13.72 2,031 69.9 13.77
Home equity .......................... 3,144 72.4 9.14 2,775 63.7 9.11
---------- ---------- ---------- ---------- ---------- ----------
Total loans ....................... 57,628 1,234.5 8.51 52,035 1,146.4 8.77
Securities:
Taxable .............................. 12,647 205.8 6.50 12,354 199.6 6.46
Tax-exempt ........................... 967 18.7 7.76 812 17.4 8.59
---------- ---------- ---------- ---------- ---------- ----------
Total securities ................... 13,614 224.5 6.59 13,166 217.0 6.59
Federal funds sold ..................... 175 3.0 6.71 85 1.3 5.86
Security resale agreements ............. 1,002 13.7 5.42 289 4.2 5.82
Other short-term investments ........... 110 4.3 15.49 199 3.9 7.69
---------- ---------- ---------- ---------- ---------- ----------
Total earning assets ................ 72,529 1,480.0 8.11% 65,774 1,372.8 8.31%
---------- ----------
Allowance for loan losses ............... (994) (976)
Market value appreciation of
securities available for sale ......... 511 377
Noninterest earning assets .............. 9,016 7,129
---------- ----------
Total Assets ...................... $ 81,062 $ 72,304
========== ==========
Liabilities and Stockholders' Equity
Liabilities:
NOW and money market accounts .......... $ 17,326 $ 139.5 3.19% $ 15,450 $ 124.1 3.19%
Savings accounts ....................... 4,721 25.2 2.11 5,085 29.7 2.32
Time deposits of individuals ........... 18,222 253.1 5.51 19,561 273.8 5.55
Other time deposits .................... 2,505 33.9 5.38 1,579 20.4 5.18
Deposits in overseas offices ........... 1,785 24.2 5.39 1,030 13.7 5.28
Federal funds borrowed ................. 3,397 48.2 5.63 1,358 19.3 5.64
Security repurchase agreements ......... 4,034 48.2 4.74 2,615 31.4 4.77
Borrowed funds ......................... 2,644 38.1 5.71 3,328 47.9 5.71
Long-term debt ......................... 7,962 123.8 6.16 5,605 91.0 6.44
---------- ---------- ---------- ---------- ---------- ----------
Total interest bearing liabilities ... 62,596 734.2 4.65 55,611 651.3 4.65
---------- ---------- ---------- ---------- ----------
Noninterest bearing liabilities ......... 11,246 10,496
---------- ----------
Total Liabilities ................. 73,842 66,107
Stockholders' Equity .................... 7,220 6,197
Total Liabilities and Stockholders' ---------- ----------
Equity ......................... $ 81,062 $ 72,304
========== ==========
Net interest income and interest
spread ................................ $ 745.8 3.46% $ 721.5 3.66%
========== ========== ========== ==========
Net interest margin ..................... 4.10% 4.38%
========== ==========
</TABLE>
8
<PAGE> 9
UNAUDITED
National City Corporation
Average Balances and Rates on a Tax Equivalent Basis
For the Nine Months Ended September 30, 1998 and 1997
(Dollars in Millions)
<TABLE>
<CAPTION>
1998 1997
---------------------------------------- -------------------------------------
Tax Tax
Average Equivalent Average Average Equivalent Average
Assets Balance Interest Rate Balance Interest Rate
---------- ---------- ------- ---------- ---------- -------
<S> <C> <C> <C> <C> <C> <C>
Earning Assets:
Loans:
Commercial ........................... $ 26,080 $ 1,657.5 8.50% $ 23,156 $ 1,502.7 8.67%
Residential real estate .............. 11,683 664.6 7.43 11,400 663.8 7.76
Consumer ............................. 13,164 866.6 8.80 12,064 792.7 8.79
Credit card .......................... 1,873 194.9 13.91 2,097 213.3 13.60
Home equity .......................... 3,071 209.0 9.10 2,633 180.6 9.17
---------- ---------- ------- ---------- ---------- -------
Total loans ....................... 55,871 3,592.6 8.59 51,350 3,353.1 8.71
Securities:
Taxable .............................. 12,768 621.0 6.49 12,345 599.8 6.49
Tax-exempt ........................... 942 56.0 7.93 771 50.3 8.71
---------- ---------- ------- ---------- ---------- -------
Total securities ................... 13,710 677.0 6.59 13,116 650.1 6.61
Federal funds sold ..................... 127 5.5 5.79 89 3.7 5.64
Security resale agreements ............. 666 25.4 5.11 288 12.0 5.53
Other short-term investments ........... 114 13.5 15.79 218 13.1 8.09
---------- ---------- ------- ---------- ---------- -------
Total earning assets ................ 70,488 4,314.0 8.17% 65,061 4,032.0 8.27%
---------- ----------
Allowance for loan losses ............... (981) (972)
Market value appreciation of
securities available for sale ......... 537 256
Noninterest-earning assets .............. 8,639 7,311
---------- ----------
Total Assets ...................... $ 78,683 $ 71,656
========== ==========
Liabilities and Stockholders' Equity
Liabilities:
NOW and money market accounts .......... $ 16,657 $ 395.7 3.18% $ 15,389 $ 355.4 3.09%
Savings accounts ....................... 4,776 77.2 2.11 5,226 92.4 2.37
Time deposits of individuals ........... 18,422 763.3 5.54 19,565 810.6 5.52
Other time deposits .................... 2,329 94.0 5.27 1,575 59.9 5.09
Deposits in overseas offices ........... 1,602 64.2 5.40 1,009 39.7 5.26
Federal funds borrowed ................. 2,893 121.4 5.61 1,545 64.7 5.61
Security repurchase agreements ......... 3,684 130.0 4.71 3,082 112.2 4.80
Borrowed funds ......................... 3,181 137.9 5.80 3,142 132.3 5.63
Long-term debt ......................... 7,158 336.3 6.28 4,585 223.2 6.51
---------- ---------- ------- ---------- ---------- -------
Total interest bearing liabilities ... 60,702 2,120.0 4.67 55,118 1,890.4 4.58
---------- ------- ---------- -------
Noninterest bearing liabilities ......... 11,148 10,381
---------- ----------
Total Liabilities ................. 71,850 65,499
Stockholders' Equity .................... 6,833 6,157
Total Liabilities and Stockholders' ---------- ----------
Equity ......................... $ 78,683 $ 71,656
========== ==========
Net interest income and interest
spread ............................... $ 2,194.0 3.50% $ 2,141.6 3.69%
========== ====== ========== =======
Net interest margin ..................... 4.15% 4.38%
====== =======
</TABLE>
9
<PAGE> 10
UNAUDITED
National City Corporation
Selected Financial Information
<TABLE>
<CAPTION>
Nine Months Ended
1998 1997 September 30,
--------------------------------------- -------------------------- -------------------------
Third Second First Fourth Third
(Dollars in Thousands) Quarter Quarter Quarter Quarter Quarter 1998 1997
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Allowance for Loan Losses:
Balance at beginning
of period .............. $976,469 $976,464 $941,874 $967,797 $965,429 $941,874 $958,739
Provision ................ 45,212 43,033 56,267 52,904 59,186 144,512 172,463
Reserves acquired (sold) . (1,388) - 30,679 (11,389) (3,227) 29,291 (8,133)
Charge-offs:
Commercial ............. 19,927 10,504 12,077 20,739 19,963 42,508 51,037
Residential real estate 2,058 1,504 1,923 2,242 1,506 5,485 4,954
Consumer ............... 30,964 34,324 42,435 41,123 37,409 107,723 124,181
Credit card ............ 21,434 24,694 25,710 28,505 27,243 71,838 83,266
Home equity ............ 2,563 2,233 2,283 1,840 1,276 7,079 2,905
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total charge-offs .... 76,946 73,259 84,428 94,449 87,397 234,633 266,343
----------- ----------- ----------- ----------- ----------- ----------- -----------
Recoveries:
Commercial ............. 13,536 7,074 8,378 5,326 9,927 28,988 29,992
Residential real estate 114 240 9 148 371 363 1,127
Consumer ............... 12,111 17,187 17,392 15,956 17,682 46,690 62,640
Credit card ............ 4,765 5,066 5,588 5,058 5,363 15,419 16,171
Home equity ............ 1,227 664 705 523 463 2,596 1,141
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total recoveries ..... 31,753 30,231 32,072 27,011 33,806 94,056 111,071
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net charge-offs .......... 45,193 43,028 52,356 67,438 53,591 140,577 155,272
----------- ----------- ----------- ----------- ----------- ----------- -----------
Balance at end of period . $975,100 $976,469 $976,464 $941,874 $967,797 $975,100 $967,797
=========== =========== =========== =========== =========== =========== ===========
(Dollars in Millions)
Nonperforming Assets:
Nonaccrual and
restructured loans ..... $222.1 $225.0 $244.0 $237.8 $220.4
Other real estate owned .. 30.5 32.0 37.1 35.5 38.4
----------- ----------- ----------- ----------- -----------
Total nonperforming
assets ................. $252.6 $257.0 $281.1 $273.3 $258.8
=========== =========== =========== =========== ===========
Credit Quality Ratios:
Net charge-offs to
average loans .......... .31% .31% .40% .51% .41% .34% .40%
Loan loss reserve to
loans (period-end) ..... 1.66 1.70 1.73 1.77 1.82
Nonperforming assets to
loans and OREO
(period-end) ........... .43 .45 .50 .51 .49
Capital Ratios*:
Tier 1 Capital ........... 8.81% 8.41 8.67% 8.91% 9.27%
Total risk-based capital . 12.69 12.36 12.75 13.12 13.67
Leverage ................. 7.42 7.09 7.64 7.49 7.63
Tangible common equity
to tangible assets ..... 6.98 6.82 6.72 7.11 7.31
Share Information:
Average basic shares ..... 329,692,338 328,186,746 316,227,200 316,918,402 321,096,859 324,751,420 324,017,435
Average diluted shares ... 336,348,661 336,382,782 323,006,334 322,539,515 326,344,073 331,617,449 329,250,450
Common shares
outstanding at end of
period ................. 330,336,278 328,627,647 327,513,959 315,697,488 318,411,870
<FN>
* September 30, 1998 calculations are based on preliminary data
</TABLE>
10
