<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 15, 1999
------------------------
(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 15, 1999, the Registrant issued a News Release reporting
earnings for the third quarter and first nine months of Fiscal Year 1999.
Reference is made to the News Release, dated October 15, 1999, a copy
of which is filed as Exhibit 99.1 to this Current Report on Form 8-K and
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 15, 1999 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 15, 1999 By /s/ David L. Zoeller
--------------------
David L. Zoeller
Senior Vice President
and General Counsel
<PAGE> 1
Exhibit 99.1
[NATIONAL CITY LETTERHEAD]
FOR MORE INFORMATION CONTACT:
NEWS RELEASE
Thomas A. Richlovsky
Senior Vice President & Treasurer
(216) 575-2126
Jeffrey C. Douglas
Vice President, Assistant Treasurer
Investor Relations
(216) 222-9849
www.national-city.com
For Immediate Release
NATIONAL CITY REPORTS 10 PERCENT INCREASE IN
THIRD QUARTER EARNINGS PER SHARE
CLEVELAND, Ohio--October 15, 1999--National City Corporation (NYSE:
NCC) today reported record third quarter earnings per diluted share of $.57, an
increase of 9.6% compared to $.52 in the third quarter of 1998. Net income was
$356.5 million, versus $344.4 million a year ago. Returns on average common
equity and average assets were 23.8% and 1.71%, respectively, compared to 19.0%
and 1.69%, respectively, for the same period last year. The efficiency ratio
improved to 54.9% from 60.1% in last year's third quarter.
For the first nine months of 1999, excluding nonrecurring items,
diluted earnings per share increased 12.9% to $1.66, compared to $1.47 in 1998.
On the same basis, net income increased 8.8% to $1,059.3 million, versus $973.3
million for the same period last year. Excluding nonrecurring items, returns on
average common equity and average assets were 22.5% and 1.69%, respectively,
compared to 19.1% and 1.65%, respectively, for the same period last year.
<PAGE> 2
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On August 31, 1999, the Corporation acquired First Franklin Financial
Companies, an industry leader in nonagency residential mortgage loan
originations. The initial effect of First Franklin, accounted for as a purchase
and included in the results of operations beginning in September, reduced
reported earnings by $.01 per diluted share.
Commenting on the financial results for the third quarter and first
nine months of 1999, David A. Daberko, Chairman and CEO stated, "The
Corporation's financial performance was characterized by well-controlled
expenses, sound credit quality, continued strength in consumer lending, and a
stable net interest margin. While performance in most business lines is
generally on plan, several key initiatives have held down overall revenues. We
divested unprofitable business lines at National Processing, deliberately pared
back our real estate exposure, and managed our capital aggressively. Revenue
growth continues to be our #1 challenge and priority. We believe the strategies
and capabilities built upon this year, including initiatives such as the
purchase of First Franklin, position us to strengthen core revenues going
forward."
Included in the nine-month results were several non-recurring items
which, while having no impact on the third quarter and only a nominal per share
impact in the first nine months of 1999, did affect a number of reported income
and expense line items.
Reported securities gains in the first nine months of 1999 included a
pre-tax gain of $32.1 million from the sale of National City's holdings in
Concord EFS, Inc. (NASDAQ: CEFT). Noninterest expense included $37.8 million in
pre-tax charges pursuant to a plan to improve the cost-efficiency of branch
office facilities, along with certain unrelated executive contract obligations.
Other noninterest income included gains on the sales of National City's
interests in Electronic Payment Services, Inc. and Stored Value Systems, Inc.,
and losses on the disposition of certain business lines at National Processing,
Inc. (NYSE: NAP), National City's 88%-owned
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item processing subsidiary. The combination of these items produced a pre-tax
benefit of $37.1 million, and increased reported net income for the first nine
months of 1999 by $2.7 million, or $.01 per diluted share.
The results for the first nine months of 1998 included pre-tax charges
of $274.7 million incurred in connection with the acquisitions of First of
America Bank Corporation and Fort Wayne National Corporation. The effect of
these nonrecurring charges was to reduce net income by $193.9 million, or $.29
per diluted share.
Net interest income on a taxable-equivalent basis for the third quarter
of 1999 was $757.7 million, an $11.9 million increase from $745.8 million for
the same period in 1998. The year-over-year increase represents a higher level
of earning assets reduced somewhat by a lower net interest margin. The lower
margin primarily reflects the cost of funding the Corporation's share repurchase
program. Average loans, excluding real estate, were up 8.7% to $42.5 billion in
the third quarter of 1999 compared to $39.1 billion in last year's third
quarter. Growth was driven by a 9.2% increase in commercial loans and an 8.2%
increase in consumer installment and revolving loans. Commercial and consumer
loan growth was partially offset by a managed reduction in lower-yielding
assets, principally residential real estate loans.
On a linked-quarter basis, a richer earning-asset mix, offset by higher
interest costs associated with share repurchases and a shift in funding
composition, led to net interest income and margin remaining relatively
unchanged for the third quarter of 1999. Commercial leasing and home equity loan
originations for the third quarter were among the strongest ever and drove a
19.3% annualized increase in these outstandings. Residential loans of $356
million were also acquired as part of the First Franklin acquisition. The
positive effect of these items on the third
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quarter's net interest income was partially offset by the sale of $566 million
of student loans and a seasonal decline in commercial floorplan lending.
Fees and other income for the third quarter of 1999 were $528.6
million. Excluding the effect of the divested businesses, fees and other income
increased 2.1% from $517.8 million in the third quarter of 1998, and were up
1.7% from $520.0 million in the second quarter of this year, representing an
annualized growth rate of 6.6%. Solid contributions from trust and investment
management fees and service charges on deposit accounts benefited the
year-over-year quarterly comparison of noninterest income. Service charges on
deposit accounts for the third quarter of 1999 also increased over 1999's second
quarter due to improved deposit fee management. Mortgage banking revenues were
strong through most of 1999, although higher interest rates in the third quarter
slowed mortgage refinancing and originations. National City's residential loan
servicing portfolio grew 35.7% to $44.4 billion at the end of the 1999 third
quarter, up from $32.7 billion in 1998.
For the first nine months of 1999, excluding the effect of the divested
businesses and nonrecurring items, fees and other income grew 5.0% to $1,563.6
million, from $1,488.6 million for the same period last year with growth
experienced in item processing revenue, service charges on deposit accounts,
trust and investment management fees, and mortgage banking revenue.
In the third quarter of 1999, pre-tax securities gains totaled $20.3
million, or $.02 per share, after-tax, compared to $64.4 million, or $.06 per
share, after-tax, in the third quarter of 1998. For the first nine months of
1999, pre-tax securities gains, excluding nonrecurring items, totaled $69.2
million, or $.07 per share, after-tax, compared to $85.2 million, or $.08 per
share, after-tax, for the same period in 1998.
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Noninterest expense, excluding nonrecurring items, declined 9.8%, or
$76.5 million to $705.9 million in the 1999 third quarter from $782.4 million in
the third quarter of 1998. Compared to the second quarter of 1999, noninterest
expense, excluding the nonrecurring items, was down 7.5% on an annualized basis.
Noninterest expense, excluding nonrecurring items, for the first nine months of
1999 declined by $66.3 million, or 3.0% over the same period last year. Reduced
incentive compensation, merger integration savings, and lower expenses from the
disposition of the National Processing business lines in the second quarter of
1999 contributed to the declines. Partially offsetting these reductions were
increased expenses in 1999 resulting from growth in fee-based businesses,
information technology initiatives, and the purchase acquisition of First
Franklin Financial Companies, whose costs were not in the previous quarter's
base.
Credit quality continued to be excellent with low levels of
nonperforming loans, delinquencies and net charge-offs. Nonperforming assets at
September 30, 1999 were $260.0 million, or .45% of total loans and real estate
owned, up from $249.5 million at June 30, 1999 and down from $271.9 million at
March 31, 1999. Real estate mortgage loans, which historically have had annual
loss ratios of less than .06%, comprise nearly 60% of nonperforming assets at
September 30, 1999. For the third quarter of 1999, net charge-offs totaled $55.0
million, or .38% of average loans, versus $59.9 million, or .42% of average
loans in the second quarter of 1999, and $68.0 million, or .48% in the first
quarter of 1999. The allowance for loan losses was $970.7 million, or 1.67% of
loans at quarter-end 1999.
Total assets were $85.1 billion at September 30, 1999, and total
stockholders' equity was $5.9 billion. Equity as a percentage of assets was
6.95% at September 30, 1999, compared to 8.75% a year ago, reflecting the effect
of share repurchases. Since September 30, 1998, 51.9 million common shares were
repurchased at a total cost of $1.8 billion.
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Mr. Daberko's comments contain forward-looking statements that involve
significant risks and uncertainties including changes in general economic and
financial market conditions and the Corporation's ability to execute its
business plans. Although management believes the expectations reflected in such
forward-looking statements are reasonable, actual results may differ materially.
National City Corporation is an $85 billion diversified financial
services company headquartered in Cleveland, Ohio. National City operates banks
and other financial services subsidiaries principally in Ohio, Michigan,
Pennsylvania, Indiana, Kentucky and Illinois.
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<TABLE>
UNAUDITED
NATIONAL CITY CORPORATION
FINANCIAL HIGHLIGHTS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<CAPTION>
1999 1998 NINE MONTHS ENDED
------------------------------ ------------------- 3Q99/ SEPTEMBER 30,
THIRD SECOND FIRST FOURTH THIRD 3Q98 -------------------------------
QUARTER QUARTER QUARTER QUARTER QUARTER % CHANGE 1999 1998 % CHANGE
------- ------- ------- ------- ------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TAX-EQUIVALENT NET
INTEREST INCOME .......... $ 757.7 $ 758.2 $ 764.7 $ 757.9 $ 745.8 1.6% $2,280.6 $2,194.0 3.9%
PROVISION FOR LOAN
LOSSES ................... 55.5 59.6 68.0 56.9 45.2 22.7 183.1 144.5 26.7
FEE AND OTHER INCOME -
RECURRING ................ 528.6 537.6 554.1 576.3 555.5 (4.8) 1,620.3 1,603.4 1.1
SECURITIES GAINS BEFORE NON-
RECURRING ITEMS .......... 20.3 25.2 23.7 49.3 64.4 (68.4) 69.2 85.2 (18.8)
NONINTEREST EXPENSE -
RECURRING ................ 705.9 719.5 739.2 766.8 782.4 (9.8) 2,164.6 2,230.9 (3.0)
NET INCOME BEFORE NON -
RECURRING ITEMS .......... 356.5 354.9 347.9 359.3 344.4 3.5 1,059.3 973.3 8.8
NONRECURRING ITEMS:
PRE-TAX .................. -- 0.3 36.8 (104.7) -- -- 37.1 (274.7) --
AFTER-TAX ................ -- (0.4) 3.1 (68.0) -- -- 2.7 (193.9) --
NET INCOME ................. 356.5 354.5 351.0 291.3 344.4 3.5 1,062.0 779.4 36.3
NET INCOME PER COMMON SHARE:
BASIC .................. $ .58 $ .56 $ .55 $ .44 $ .53 9.4 $ 1.69 $ 1.20 40.8
DILUTED ................ .57 .56 .54 .43 .52 9.6 1.67 1.18 41.5
DILUTED - ADJUSTED (1) . .57 .56 .53 .53 .52 9.6 1.66 1.47 12.9
DILUTED - CASH
BASIS (1)(2) ......... .59 .59 .56 .56 .54 9.3 1.74 1.54 13.0
DIVIDENDS PAID PER
COMMON SHARE ............. .27 .26 .26 .24 .24 12.5 .79 .70 12.9
PERFORMANCE RATIOS (1):
RETURN ON AVERAGE
COMMON EQUITY ............ 23.79% 22.99% 20.94% 19.43% 19.00% 22.52% 19.08%
RETURN ON AVERAGE
ASSETS ................... 1.71 1.71 1.65 1.69 1.69 1.69 1.65
NET INTEREST MARGIN ........ 4.03 4.04 4.02 4.00 4.10 4.03 4.15
OVERHEAD RATIO ............. 23.40 23.99 24.21 25.15 30.42 23.87 28.60
EFFICIENCY RATIO ........... 54.88 55.52 56.05 57.48 60.12 55.49 58.75
ASSETS ..................... $85,058 $84,022 $84,094 $88,246 $83,135 2.3%
LOANS ...................... 58,001 57,317 57,312 58,011 55,935 3.7
SECURITIES ................. 15,811 14,994 15,264 16,119 15,425 2.5
DEPOSITS ................... 50,395 52,091 52,051 58,247 54,228 (7.1)
STOCKHOLDERS' EQUITY ....... 5,914 5,867 6,257 7,013 7,273 (18.7)
BOOK VALUE PER COMMON
SHARE .................... 9.54 9.44 9.90 10.69 10.95 (12.9)
MARKET VALUE PER COMMON
SHARE .................... 26.69 32.75 33.19 36.25 32.97 (19.0)
NONRECURRING ITEMS DETAIL:
GAIN ON SALE OF CEFT STOCK $ -- $ 32.1 $ -- $ -- $ -- $ 32.1 $ --
GAIN ON SALE OF EPS ........ -- -- 95.7 -- -- 95.7 --
GAIN ON SALE OF SVS ........ -- -- 6.1 -- -- 6.1 --
NPI BUSINESS LINE DIVEST-
ITURES, NET OF MINORITY
INTEREST ................. -- 6.0 (65.0) -- -- (59.0) --
FACILITIES CHARGE AND
EXECUTIVE CONTRACT
OBLIGATIONS .............. -- (37.8) -- -- -- (37.8) --
MERGER CHARGES ............. -- -- -- (104.7) -- -- (274.7)
------- ------- ------- ------- ------- -------- --------
NONRECURRING PRE-TAX ....... $ -- $ 0.3 $ 36.8 $(104.7) $ -- $ 37.1 $ (274.7)
======= ======= ======= ======= ======= ======== ========
</TABLE>
- ----------------------------------------------------
(1) Excludes effects of nonrecurring items.
(2) Excludes amortization of goodwill and other intangible assets.
<PAGE> 8
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<TABLE>
UNAUDITED
NATIONAL CITY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<CAPTION>
NINE MONTHS ENDED
1999 1998 SEPTEMBER 30,
-------------------------------------- ------------------------ ------------------------
THIRD SECOND FIRST FOURTH THIRD
QUARTER QUARTER QUARTER QUARTER QUARTER 1999 1998
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
INTEREST INCOME:
LOANS .......................... $1,224,469 $1,205,526 $1,212,303 $1,232,070 $1,229,009 $3,642,298 $3,579,665
SECURITIES:
TAXABLE ....................... 217,175 208,446 223,913 215,406 207,384 649,534 621,024
EXEMPT FROM FEDERAL INCOME
TAXES ....................... 11,245 13,465 10,199 9,524 13,145 34,909 39,307
FEDERAL FUNDS SOLD AND SECURITY
RESALE AGREEMENTS ............ 8,656 9,903 11,013 12,852 16,642 29,572 30,941
OTHER SHORT-TERM INVESTMENTS ... 3,189 2,925 3,062 2,407 4,302 9,176 13,481
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL INTEREST INCOME ........ 1,464,734 1,440,265 1,460,490 1,472,259 1,470,482 4,365,489 4,284,418
INTEREST EXPENSE:
DEPOSITS ....................... 397,516 393,145 419,023 451,800 475,951 1,209,684 1,394,476
FEDERAL FUNDS BORROWED AND
SECURITY REPURCHASE AGREEMENTS 87,901 79,352 99,694 102,602 96,416 266,947 251,280
BORROWED FUNDS ................. 37,632 36,957 28,484 30,589 38,078 103,073 137,918
LONG-TERM DEBT AND CAPITAL
SECURITIES .................... 194,206 181,867 157,154 140,083 123,672 533,227 336,281
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL INTEREST EXPENSE ....... 717,255 691,321 704,355 725,074 734,117 2,112,931 2,119,955
---------- ---------- ---------- ---------- ---------- ---------- ----------
NET INTEREST INCOME .......... 747,479 748,944 756,135 747,185 736,365 2,252,558 2,164,463
PROVISION FOR LOAN LOSSES ...... 55,476 59,542 68,034 56,888 45,212 183,052 144,512
---------- ---------- ---------- ---------- ---------- ---------- ----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES ... 692,003 689,402 688,101 690,297 691,153 2,069,506 2,019,951
NONINTEREST INCOME:
ITEM PROCESSING REVENUE ........ 91,519 105,089 121,703 130,009 124,268 318,311 354,494
SERVICE CHARGES ON DEPOSIT
ACCOUNTS ..................... 107,430 104,834 99,863 98,649 98,472 312,127 286,289
TRUST AND INVESTMENT MANAGEMENT
FEES ......................... 81,097 80,683 81,847 79,802 74,565 243,627 231,248
CARD-RELATED FEES .............. 48,383 49,259 45,310 48,479 56,415 142,952 152,689
MORTGAGE BANKING REVENUE ....... 81,105 89,181 92,995 89,412 79,362 263,281 237,835
OTHER .......................... 119,080 114,585 149,173 129,915 122,435 382,838 340,862
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FEES AND OTHER INCOME .. 528,614 543,631 590,891 576,266 555,517 1,663,136 1,603,417
SECURITIES GAINS ............... 20,353 57,224 23,688 49,242 64,451 101,265 85,217
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL NONINTEREST INCOME ..... 548,967 600,855 614,579 625,508 619,968 1,764,401 1,688,634
NONINTEREST EXPENSE:
SALARIES AND OTHER PERSONNEL ... 367,638 389,585 400,764 405,050 409,279 1,157,987 1,189,707
EQUIPMENT ...................... 47,590 52,955 52,761 58,618 51,054 153,306 154,253
NET OCCUPANCY .................. 48,944 49,234 54,127 52,519 51,737 152,305 150,145
THIRD PARTY SERVICES ........... 49,304 48,551 45,570 55,233 70,075 143,425 171,029
MERGER EXPENSES ................ -- -- -- 104,678 -- -- 274,698
OTHER .......................... 192,487 216,910 185,980 195,436 200,255 595,377 565,747
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL NONINTEREST EXPENSE .... 705,963 757,235 739,202 871,534 782,400 2,202,400 2,505,579
---------- ---------- ---------- ---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAXES ...... 535,007 533,022 563,478 444,271 528,721 1,631,507 1,203,006
INCOME TAX EXPENSE .............. 178,545 178,534 212,459 153,012 184,265 569,538 423,584
---------- ---------- ---------- ---------- ---------- ---------- ----------
NET INCOME ................... $ 356,462 $ 354,488 $ 351,019 $ 291,259 $ 344,456 $1,061,969 $ 779,422
========== ========== ========== ========== ========== ========== ==========
NET INCOME APPLICABLE TO
COMMON STOCK ............... $ 356,005 $ 354,078 $ 350,604 $ 290,722 $ 343,910 $1,060,687 $ 777,777
========== ========== ========== ========== ========== ========== ==========
NET INCOME PER COMMON SHARE:
BASIC ........................ $ .58 $ .56 $ .55 $ .44 $ .53 $ 1.69 $ 1.20
DILUTED ...................... $ .57 $ .56 $ .54 $ .43 $ .52 $ 1.67 $ 1.18
</TABLE>
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<TABLE>
UNAUDITED
NATIONAL CITY CORPORATION
CONSOLIDATED PERIOD-END BALANCE SHEETS
(DOLLARS IN THOUSANDS)
1999 1998
------------------------------------------- ---------------------------
THIRD SECOND FIRST FOURTH THIRD
ASSETS QUARTER QUARTER QUARTER QUARTER QUARTER
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
LOANS:
COMMERCIAL .................................... $22,426,781 $22,153,612 $22,306,928 $22,243,114 $20,745,705
REAL ESTATE - COMMERCIAL ...................... 6,207,547 6,277,934 6,309,277 6,251,879 6,475,950
REAL ESTATE - RESIDENTIAL ..................... 8,360,180 8,388,380 8,693,757 9,664,115 9,435,870
CONSUMER ...................................... 15,348,767 15,184,825 15,022,782 14,822,759 14,291,552
CREDIT CARD ................................... 2,199,984 2,050,842 1,846,719 1,852,635 1,797,840
HOME EQUITY ................................... 3,457,622 3,261,466 3,133,121 3,176,664 3,188,590
----------- ----------- ----------- ----------- -----------
TOTAL LOANS ................................. 58,000,881 57,317,059 57,312,584 58,011,166 55,935,507
ALLOWANCE FOR LOAN LOSSES ................... (970,736) (970,229) (970,336) (970,243) (975,100)
----------- ----------- ----------- ----------- -----------
NET LOANS ................................... 57,030,145 56,346,830 56,342,248 57,040,923 54,960,407
MORTGAGE LOANS HELD FOR SALE ..................... 2,439,039 2,338,641 2,519,462 3,507,487 2,748,139
SECURITIES AVAILABLE FOR SALE, AT MARKET ......... 15,811,453 14,993,616 15,263,581 16,119,370 15,424,507
FEDERAL FUNDS SOLD AND SECURITY RESALE
AGREEMENTS ..................................... 727,822 864,178 978,138 930,492 1,146,383
OTHER SHORT-TERM INVESTMENTS ..................... 122,272 196,974 101,696 218,149 100,292
CASH AND DEMAND BALANCES DUE FROM BANKS .......... 3,346,593 3,807,336 3,443,365 4,783,491 3,406,647
PROPERTIES AND EQUIPMENT ......................... 1,076,180 1,073,051 1,129,305 1,150,210 1,134,480
ACCRUED INCOME AND OTHER ASSETS .................. 4,504,049 4,401,847 4,316,701 4,495,510 4,213,824
----------- ----------- ----------- ----------- -----------
TOTAL ASSETS ............................... $85,057,553 $84,022,473 $84,094,496 $88,245,632 $83,134,679
=========== =========== =========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
NONINTEREST BEARING DEPOSITS ..................... $10,909,167 $11,624,345 $11,200,312 $10,911,926 $10,158,773
NOW AND MONEY MARKET ACCOUNTS .................... 16,677,065 16,845,872 16,800,510 18,610,832 17,735,380
SAVINGS ACCOUNTS ................................. 3,700,585 3,870,281 3,957,576 4,021,113 4,051,228
TIME DEPOSITS OF INDIVIDUALS ..................... 16,242,472 16,321,310 16,821,451 17,450,904 18,013,811
OTHER TIME DEPOSITS .............................. 1,246,972 1,109,959 1,340,458 2,280,973 2,475,572
DEPOSITS IN OVERSEAS OFFICES ..................... 1,619,190 2,319,594 1,930,292 4,971,161 1,793,442
----------- ----------- ----------- ----------- -----------
TOTAL DEPOSITS ............................... 50,395,451 52,091,361 52,050,599 58,246,909 54,228,206
FEDERAL FUNDS BORROWED AND SECURITY
REPURCHASE AGREEMENTS ........................ 6,625,101 6,979,837 8,753,759 9,427,309 8,662,013
BORROWED FUNDS ................................... 5,707,438 4,495,831 2,840,983 2,117,916 3,122,562
LONG-TERM DEBT ................................... 14,625,031 13,137,293 11,999,109 9,009,448 7,788,754
CORPORATION-OBLIGATED MANDATORILY REDEEMABLE
CAPITAL SECURITIES OF SUBSIDIARY TRUSTS HOLDING
SOLELY DEBENTURES OF THE CORPORATION .......... 180,000 180,000 679,896 679,895 679,894
ACCRUED EXPENSES AND OTHER LIABILITIES ........... 1,610,230 1,270,942 1,513,241 1,751,247 1,379,855
----------- ----------- ----------- ----------- -----------
TOTAL LIABILITIES ............................ 79,143,251 78,155,264 77,837,587 81,232,724 75,861,284
STOCKHOLDERS' EQUITY:
PREFERRED ...................................... 30,474 30,513 30,513 36,098 36,556
COMMON ......................................... 5,883,828 5,836,696 6,226,396 6,976,810 7,236,839
----------- ----------- ----------- ----------- -----------
TOTAL STOCKHOLDERS' EQUITY ................... 5,914,302 5,867,209 6,256,909 7,012,908 7,273,395
----------- ----------- ----------- ----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY ....................... $85,057,553 $84,022,473 $84,094,496 $88,245,632 $83,134,679
=========== =========== =========== =========== ===========
</TABLE>
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<TABLE>
UNAUDITED
NATIONAL CITY CORPORATION
CONSOLIDATED AVERAGE BALANCE SHEETS
(DOLLARS IN MILLIONS)
<CAPTION>
NINE MONTHS ENDED
1999 1998 SEPTEMBER 30,
----------------------------------- --------------------- ---------------------
THIRD SECOND FIRST FOURTH THIRD
ASSETS QUARTER QUARTER QUARTER QUARTER QUARTER 1999 1998
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNING ASSETS:
LOANS:
COMMERCIAL ............................. $22,066 $22,228 $22,154 $21,609 $20,206 $22,147 $19,611
REAL ESTATE - COMMERCIAL ............... 6,238 6,275 6,305 6,314 6,466 6,272 6,444
REAL ESTATE - RESIDENTIAL .............. 8,362 8,483 8,926 9,327 9,505 8,594 9,707
CONSUMER ............................... 15,052 15,130 14,956 14,491 13,964 15,044 13,188
CREDIT CARD ............................ 2,088 1,953 1,829 1,818 1,818 1,958 1,874
HOME EQUITY ............................ 3,336 3,188 3,149 3,193 3,144 3,228 3,071
------- ------- ------- ------- ------- ------- -------
TOTAL LOANS ......................... 57,142 57,257 57,319 56,752 55,103 57,243 53,895
MORTGAGE LOANS HELD FOR SALE ............. 2,172 2,344 2,976 2,991 2,525 2,489 1,978
SECURITIES AVAILABLE FOR SALE ............ 14,851 14,638 15,126 14,500 13,614 14,870 13,708
FEDERAL FUNDS SOLD AND SECURITY
RESALE AGREEMENTS ...................... 666 850 945 1,157 1,177 819 779
OTHER SHORT-TERM INVESTMENTS ............. 140 149 148 113 110 146 115
------- ------- ------- ------- ------- ------- -------
TOTAL EARNING ASSETS .................. 74,971 75,238 76,514 75,513 72,529 75,567 70,475
ALLOWANCE FOR LOAN LOSSES ................. (990) (989) (985) (988) (994) (988) (981)
MARKET VALUE (DEPRECIATION) APPRECIATION
OF SECURITIES AVAILABLE FOR SALE ........ (8) 268 377 509 511 211 537
CASH AND DEMAND BALANCES DUE
FROM BANKS ............................. 3,306 3,506 4,068 3,826 3,685 3,624 3,557
PROPERTIES AND EQUIPMENT .................. 1,077 1,124 1,145 1,148 1,124 1,115 1,072
ACCRUED INCOME AND OTHER ASSETS ........... 4,335 4,222 4,401 4,200 4,207 4,321 3,988
------- ------- ------- ------- ------- ------- -------
TOTAL ASSETS ........................ $82,691 $83,369 $85,520 $84,208 $81,062 $83,850 $78,648
======= ======= ======= ======= ======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
NOW AND MONEY MARKET ACCOUNTS ............ $16,742 $16,997 $16,899 $18,181 $17,890 $16,879 $17,232
SAVINGS ACCOUNTS ......................... 3,795 3,922 3,955 4,033 4,157 3,890 4,203
TIME DEPOSITS OF INDIVIDUALS ............. 16,202 16,541 17,135 17,795 18,222 16,622 18,422
OTHER TIME DEPOSITS ...................... 1,167 1,199 1,757 2,472 2,505 1,372 2,329
DEPOSITS IN OVERSEAS OFFICES ............. 2,389 2,342 3,030 2,050 1,785 2,585 1,593
------- ------- ------- ------- ------- ------- -------
TOTAL INTEREST BEARING DEPOSITS ....... 40,295 41,001 42,776 44,531 44,559 41,348 43,779
------- ------- ------- ------- ------- ------- -------
FEDERAL FUNDS BORROWED AND SECURITY
REPURCHASE AGREEMENTS ................. 7,703 7,377 9,004 9,195 7,431 8,024 6,590
BORROWED FUNDS ........................... 2,808 2,977 2,838 2,515 2,644 2,875 3,176
LONG-TERM DEBT AND CAPITAL
SECURITIES ............................. 13,532 13,305 11,301 9,292 7,962 12,721 7,161
------- ------- ------- ------- ------- ------- -------
TOTAL INTEREST BEARING LIABILITIES .... 64,338 64,660 65,919 65,533 62,596 64,968 60,706
NONINTEREST BEARING DEPOSITS ............. 11,338 11,542 11,681 10,168 10,051 11,519 9,834
ACCRUED EXPENSES AND OTHER
LIABILITIES ............................ 1,046 951 1,159 1,144 1,195 1,051 1,275
------- ------- ------- ------- ------- ------- -------
TOTAL LIABILITIES ................... 76,722 77,153 78,759 76,845 73,842 77,538 71,815
STOCKHOLDERS' EQUITY:
PREFERRED ............................... 31 31 33 36 37 32 24
COMMON .................................. 5,938 6,185 6,728 7,327 7,183 6,280 6,809
------- ------- ------- ------- ------- ------- -------
TOTAL STOCKHOLDERS' EQUITY .......... 5,969 6,216 6,761 7,363 7,220 6,312 6,833
------- ------- ------- ------- ------- ------- -------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY ........................... $82,691 $83,369 $85,520 $84,208 $81,062 $83,850 $78,648
======= ======= ======= ======= ======= ======= =======
</TABLE>
<PAGE> 11
-11-
<TABLE>
UNAUDITED
NATIONAL CITY CORPORATION
AVERAGE BALANCES AND RATES ON A TAX EQUIVALENT BASIS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(DOLLARS IN MILLIONS)
<CAPTION>
1999 1998
----------------------------------- ---------------------------------
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 ........................... $22,066 $ 434.9 7.82% $20,206 $ 419.2 8.23%
REAL ESTATE - COMMERCIAL ............ 6,238 135.8 8.63 6,466 148.3 9.10
REAL ESTATE - RESIDENTIAL * ......... 10,534 198.4 7.54 12,030 226.1 7.52
CONSUMER ............................. 15,052 318.5 8.40 13,964 305.6 8.68
CREDIT CARD .......................... 2,088 70.3 13.36 1,818 62.9 13.72
HOME EQUITY .......................... 3,336 70.6 8.40 3,144 72.4 9.14
------- -------- ----- ------- -------- -----
TOTAL LOANS ....................... 59,314 1,228.5 8.23 57,628 1,234.5 8.51
SECURITIES:
TAXABLE .............................. 14,000 217.2 6.20 12,647 205.8 6.50
TAX-EXEMPT ........................... 851 17.5 8.24 967 18.7 7.76
------- -------- ----- ------- -------- -----
TOTAL SECURITIES ................... 14,851 234.7 6.32 13,614 224.5 6.59
FEDERAL FUNDS SOLD ..................... 112 1.5 5.55 175 3.0 6.71
SECURITY RESALE AGREEMENTS ............. 554 7.1 5.08 1,002 13.7 5.42
OTHER SHORT-TERM INVESTMENTS ........... 140 3.1 9.15 110 4.3 15.49
------- -------- ----- ------- -------- -----
TOTAL EARNING ASSETS ................ 74,971 1,474.9 7.83 72,529 1,480.0 8.11
ALLOWANCE FOR LOAN LOSSES ............... (990) (994)
MARKET VALUE (DEPRECIATION) APPRECIATION
OF SECURITIES AVAILABLE FOR SALE ...... (8) 511
NONINTEREST EARNING ASSETS .............. 8,718 9,016
------- -------
TOTAL ASSETS ...................... $82,691 $81,062
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
NOW AND MONEY MARKET ACCOUNTS .......... $16,742 $ 131.2 3.11% $17,890 $ 143.9 3.19%
SAVINGS ACCOUNTS ....................... 3,795 16.0 1.67 4,157 20.8 1.99
TIME DEPOSITS OF INDIVIDUALS ........... 16,202 206.6 5.06 18,222 253.1 5.51
OTHER TIME DEPOSITS .................... 1,167 13.6 4.64 2,505 33.9 5.38
DEPOSITS IN OVERSEAS OFFICES ........... 2,389 30.1 5.00 1,785 24.2 5.39
FEDERAL FUNDS BORROWED ................. 2,889 37.5 5.16 3,397 48.2 5.63
SECURITY REPURCHASE AGREEMENTS ......... 4,814 50.3 4.15 4,034 48.2 4.74
BORROWED FUNDS ......................... 2,808 37.7 5.32 2,644 38.1 5.71
LONG-TERM DEBT AND CAPITAL SECURITIES .. 13,532 194.2 5.69 7,962 123.8 6.16
------- -------- ----- ------- -------- -----
TOTAL INTEREST BEARING LIABILITIES ... 64,338 717.2 4.42 62,596 734.2 4.65
-------- ----- -------- -----
NONINTEREST BEARING LIABILITIES ......... 12,384 11,246
------- -------
TOTAL LIABILITIES ................. 76,722 73,842
STOCKHOLDERS' EQUITY .................... 5,969 7,220
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY ......................... $82,691 $81,062
======= =======
NET INTEREST INCOME AND INTEREST
SPREAD ................................ $ 757.7 3.41% $ 745.8 3.46%
======== ===== ======== =====
NET INTEREST MARGIN ..................... 4.03% 4.10%
===== =====
</TABLE>
* INCLUDES MORTGAGE LOANS HELD FOR SALE.
<PAGE> 12
-12-
<TABLE>
UNAUDITED
NATIONAL CITY CORPORATION
AVERAGE BALANCES AND RATES ON A TAX EQUIVALENT BASIS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(DOLLARS IN MILLIONS)
<CAPTION>
1999 1998
----------------------------------- --------------------------------
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 ............................. $22,147 $1,278.2 7.72% $19,611 $1,220.3 8.32%
REAL ESTATE - COMMERCIAL .............. 6,272 403.2 8.60 6,444 437.1 9.07
REAL ESTATE - RESIDENTIAL * ........... 11,083 616.3 7.41 11,685 664.6 7.58
CONSUMER ............................... 15,044 949.4 8.44 13,188 866.6 8.80
CREDIT CARD ............................ 1,958 195.4 13.35 1,874 194.9 13.91
HOME EQUITY ............................ 3,228 208.7 8.64 3,071 209.0 9.10
------- -------- ----- ------- -------- -----
TOTAL LOANS ......................... 59,732 3,651.2 8.17 55,873 3,592.5 8.59
SECURITIES:
TAXABLE ................................ 13,994 649.5 6.19 12,766 621.0 6.49
TAX-EXEMPT ............................. 876 54.1 8.24 942 56.0 7.93
------- -------- ----- ------- -------- -----
TOTAL SECURITIES ..................... 14,870 703.6 6.31 13,708 677.0 6.59
FEDERAL FUNDS SOLD ....................... 78 3.0 5.16 135 5.5 5.45
SECURITY RESALE AGREEMENTS ............... 741 26.6 4.80 644 25.4 5.27
OTHER SHORT-TERM INVESTMENTS ............. 146 9.1 8.43 115 13.6 15.79
------- -------- ----- ------- -------- -----
TOTAL EARNING ASSETS .................. 75,567 4,393.5 7.77 70,475 4,314.0 8.17
ALLOWANCE FOR LOAN LOSSES ................. (988) (981)
MARKET VALUE APPRECIATION OF
SECURITIES AVAILABLE FOR SALE ........... 211 537
NONINTEREST EARNING ASSETS ................ 9,060 8,617
------- -------
TOTAL ASSETS ........................ $83,850 $78,648
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
NOW AND MONEY MARKET ACCOUNTS ............ $16,879 $ 384.4 3.05% $17,232 $ 408.7 3.18%
SAVINGS ACCOUNTS ......................... 3,890 49.5 1.70 4,203 64.3 2.05
TIME DEPOSITS OF INDIVIDUALS ............. 16,622 635.3 5.11 18,422 763.3 5.54
OTHER TIME DEPOSITS ...................... 1,372 47.8 4.66 2,329 94.0 5.40
DEPOSITS IN OVERSEAS OFFICES ............. 2,585 92.7 4.80 1,593 64.2 5.40
FEDERAL FUNDS BORROWED ................... 3,105 115.0 4.95 2,917 121.4 5.57
SECURITY REPURCHASE AGREEMENTS ........... 4,919 151.9 4.13 3,673 129.9 4.71
BORROWED FUNDS ........................... 2,875 103.1 4.79 3,176 137.9 5.80
LONG-TERM DEBT AND CAPITAL SECURITIES .... 12,721 533.2 5.60 7,161 336.3 6.28
------- -------- ----- ------- -------- -----
TOTAL INTEREST BEARING LIABILITIES ..... 64,968 2,112.9 4.35 60,706 2,120.0 4.67
-------- ----- -------- -----
NONINTEREST BEARING LIABILITIES ........... 12,570 11,109
------- -------
TOTAL LIABILITIES ................... 77,538 71,815
STOCKHOLDERS' EQUITY ...................... 6,312 6,833
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY ........................... $83,850 $78,648
======= =======
NET INTEREST INCOME AND INTEREST
SPREAD .................................. $2,280.6 3.42% $2,194.0 3.50%
======== ===== ======== =====
NET INTEREST MARGIN ....................... 4.03% 4.15%
===== =====
</TABLE>
* INCLUDES MORTGAGE LOANS HELD FOR SALE.
<PAGE> 13
-13-
<TABLE>
UNAUDITED
NATIONAL CITY CORPORATION
SELECTED FINANCIAL INFORMATION
<CAPTION>
NINE MONTHS ENDED
1999 1998 SEPTEMBER 30,
----------------------------------------- ---------------------------- --------------------------
THIRD SECOND FIRST FOURTH THIRD
(DOLLARS IN THOUSANDS) QUARTER QUARTER QUARTER QUARTER QUARTER 1999 1998
------------ ------------ ------------ ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
ALLOWANCE FOR LOAN LOSSES:
BALANCE AT BEGINNING
OF PERIOD .................. $ 970,229 $ 970,336 $ 970,243 $ 975,100 $ 976,469 $ 970,243 $ 941,874
PROVISION .................... 55,476 59,542 68,034 56,888 45,212 183,052 144,512
ALLOWANCES RELATED TO LOANS
ACQUIRED (SOLD) ............ (16) 268 93 (1,790) (1,388) 345 29,291
CHARGE-OFFS:
COMMERCIAL ................. 16,741 32,018 13,023 15,397 10,485 61,782 28,333
REAL ESTATE - COMMERCIAL ... 1,828 738 1,377 1,860 2,674 3,943 7,407
REAL ESTATE - RESIDENTIAL .. 1,454 444 1,702 3,501 2,058 3,600 5,485
CONSUMER ................... 42,381 40,019 55,671 40,435 37,732 138,071 114,491
CREDIT CARD ................ 23,831 25,185 27,106 23,843 21,434 76,122 71,838
HOME EQUITY ................ 1,339 2,032 2,009 1,716 2,563 5,380 7,079
------------ ------------ ------------ ------------ ------------- ------------ ------------
TOTAL CHARGE-OFFS ........ 87,574 100,436 100,888 86,752 76,946 288,898 234,633
------------ ------------ ------------ ------------ ------------- ------------ ------------
RECOVERIES:
COMMERCIAL ................. 4,834 6,937 3,519 4,492 9,369 15,290 20,812
REAL ESTATE - COMMERCIAL ... 1,401 3,343 1,423 1,842 1,415 6,167 5,424
REAL ESTATE - RESIDENTIAL .. 68 805 143 343 114 1,016 363
CONSUMER ................... 19,940 22,910 21,437 14,888 14,863 64,287 49,442
CREDIT CARD ................ 5,299 5,468 5,326 4,406 4,765 16,093 15,419
HOME EQUITY ................ 1,079 1,056 1,006 826 1,227 3,141 2,596
------------ ------------ ------------ ------------ ------------- ------------ ------------
TOTAL RECOVERIES ......... 32,621 40,519 32,854 26,797 31,753 105,994 94,056
------------ ------------ ------------ ------------ ------------- ------------ ------------
NET CHARGE-OFFS .............. 54,953 59,917 68,034 59,955 45,193 182,904 140,577
------------ ------------ ------------ ------------ ------------- ------------ ------------
BALANCE AT END OF PERIOD ..... $ 970,736 $ 970,229 $ 970,336 $ 970,243 $ 975,100 $ 970,736 $ 975,100
============ ============ ============ ============ ============= ============ ============
(DOLLARS IN MILLIONS)
NONPERFORMING ASSETS:
NONACCRUAL AND
RESTRUCTURED LOANS ......... $ 236.1 $ 222.8 $ 242.5 $ 218.6 $ 221.9
OTHER REAL ESTATE OWNED ...... 23.9 26.7 29.4 29.9 30.5
------------ ------------ ------------ ------------ ------------
TOTAL NONPERFORMING
ASSETS ..................... $ 260.0 $ 249.5 $ 271.9 $ 248.5 $ 252.4
============ ============ ============ ============ ============
CREDIT QUALITY RATIOS:
NET CHARGE-OFFS TO
AVERAGE LOANS (ANNUALIZED).. .38% .42% .48% .42% .33% .43% .35%
LOAN LOSS RESERVE TO
LOANS (PERIOD-END) ......... 1.67 1.69 1.69 1.67 1.74
NONPERFORMING ASSETS TO
LOANS AND OREO
(PERIOD-END) ............... .45 .44 .47 .43 .45
CAPITAL RATIOS*:
TIER 1 CAPITAL ............... 6.78% 7.14% 7.34% 7.95% 8.81%
TOTAL RISK-BASED CAPITAL ..... 11.48 12.12 11.96 11.79 12.70
LEVERAGE ..................... 6.07 6.06 6.13 6.94 7.49
TANGIBLE COMMON EQUITY
TO TANGIBLE ASSETS ......... 5.52 5.78 6.17 6.72 7.46
SHARE INFORMATION:
AVERAGE BASIC SHARES ......... 616,883,898 623,116,746 640,989,054 659,453,842 659,384,676 626,908,263 649,502,840
AVERAGE DILUTED SHARES ....... 624,581,200 633,280,420 652,220,500 671,262,008 672,697,322 636,413,367 663,234,898
COMMON SHARES
OUTSTANDING AT END OF
PERIOD ..................... 616,564,714 618,131,386 628,841,942 652,654,720 660,672,556
</TABLE>
* THIRD QUARTER 1999 CALCULATIONS ARE BASED ON PRELIMINARY DATA.
