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National City Nets $2.8 Billion for 2004
"CLEVELAND -- 2004 net income at National City Corp. was $2.8 billion, or $4.31 per diluted share, compared to $2.1 billion or $3.43 per diluted share for 2003, officials reported earlier today. For the 2004 fourth quarter, net income was $960 million, or $1.46 per diluted share, compared to net income of $544 million or 88 cents per diluted share in 2003. On Oct. 15, 2004, National City closed its previously announced sale of National Processing Inc., the corporation's 83%-owned subsidiary, for a cash price of $1.2 billion and realized a $714 million pretax gain, or $477 million after tax, inclusive of associated sale expenses."We achieved record levels of assets, equity, and net income in 2004," commented David A. Daberko, chairman and chief executive officer. "Particularly gratifying was the performance of our core banking and consumer finance businesses, which we refer to as 'Rest of National City,' or 'RONC.' Excluding gains from divestitures, RONC's earnings were up approximately 50% in 2004 over 2003. Wholesale banking enjoyed a substantial increase in earnings derived largely from reduced credit costs as well as new customer acquisition. Home equity and nonconforming mortgage volumes set records for originations and outstandings in 2004. Consumer and small business banking turned in strong growth in both balances and revenue. Performance in these businesses is critical for our success in 2005 and beyond. At the same time, National City Mortgage earnings fell sharply from the extraordinary levels of 2003 as expected."Our acquisition and divestiture activity in the past year is consistent with our strategic focus on our core banking business," Daberko continued. "As a result, we are well positioned to expand our market share in St. Louis, Cincinnati and elsewhere in our footprint. The divestiture of National Processing frees up significant capital for reinvestment in our core business, future acquisitions and share repurchases."Tax-equivalent net interest income was $1.2 billion for the fourth quarter, up 19% from the fourth quarter of 2003. Net interest margin was 4.09% for the fourth quarter of 2004 versus 4.03% for the same period last year reflecting the impact of rising interest rates in 2004. For the year, net interest income was $4.5 billion, up 3% from the prior year, and net interest margin was 4.09% vs. 4.11%.For the year, fees and other income were $4.4 billion, up 25% from 2003 led by strong growth in deposit fees. Mortgage banking revenue for 2004 was $1.3 billion compared to $1.5 billion in 2003, inclusive of net MSR hedging gains of $388 million and $370 million, respectively. In comparison to 2003, mortgage banking revenue also reflected lower origination income consistent with lower levels of activity in this business. National City originated $94.8 billion of mortgages in 2004 compared to $125.7 billion in 2003.The provision for credit losses for 2004 was $323 million and net charge-offs were $346 million, down significantly from $638 million and $609 million, respectively, a year ago. The lower credit loss provision reflects continued substantial improvement in credit quality, particularly in commercial loans. Consumer loan quality remains sound. At Dec. 31, 2004, total assets were $139.3 billion, and stockholders' equity was $12.8 billion, or 9.19% of assets. Tangible common equity as a percentage of tangible assets was 6.84%, compared to 6.72% for the preceding quarter and 7.23% a year ago. National City Corp. operates through an extensive banking network primarily in Ohio, Indiana, Illinois, Kentucky, Michigan, Missouri, and Pennsylvania, and also serves customers in selected markets nationally. Its core businesses include commercial and retail banking, consumer finance, asset management, and mortgage financing and servicing. Visit National City Corp.: www.NationalCity.com"