National City Reports Second Quarter 2007 Earnings

CLEVELAND, July 26 /PRNewswire-FirstCall/ -- National City Corporation today reported second quarter 2007 net income of $347 million, or $.60 per diluted share, compared to $319 million or $.50 per diluted share for the first quarter of 2007, and $473 million, or $.77 per diluted share for the second quarter of 2006. For the first half of 2007, net income was $666 million, or $1.09 per diluted share, compared to $932 million, or $1.51 per diluted share, for the first half of 2006. Comparisons of results to the prior year are affected by acquisition and divestiture activities and other unusual or nonrecurring transactions as described further throughout this release.

(Logo: http://www.newscom.com/cgi-bin/prnh/20030428/NATIONALCITYLOGO ) CEO's Comments

President and CEO Peter E. Raskind commented, "Second quarter earnings were up from the first quarter due to better mortgage results, both operating and hedging, and strong performance in retail banking. While loan and deposit volumes have been good, we continue to experience pressure on commercial loan spreads, which has hurt net interest margin. Credit trends remain stable, both in the core and run-off portfolios."

Net Interest Income and Margin

Tax-equivalent net interest income was $1.1 billion for the second quarter of 2007, about equal to the preceding quarter, but down 6% from the second quarter a year ago. Average earning assets were $122.3 billion in the second quarter of 2007, about equal to the preceding quarter, and down slightly from the second quarter a year ago. Net interest margin for the second quarter of 2007 was 3.59%, down 10 basis points from the preceding quarter, and down 14 basis points from the second quarter of last year. Compared to the preceding quarter, the lower margin reflects lower levels of noninterest bearing funds resulting from share repurchases and, to a lesser extent, contraction of loan spreads. Compared to a year ago, narrower loan spreads, particularly on commercial loans, were the major reason for the margin decline.

Tax-equivalent net interest income was $2.2 billion for the first half of 2007, down about 6% compared to the first half of 2006. Average earning assets were $121.9 billion in the first half of 2007, down about 2% versus the comparable period in 2006. The implementation of an originate-and-sell strategy for certain indirect consumer loans has resulted in lower average balances as the associated portfolios run off. Net interest margin for the first six months of the year was 3.64% in 2007 versus 3.77% in the comparable period in 2006, mainly due to narrower loan spreads.

Loans and Deposits

Average portfolio loans were $99.7 billion for the second quarter of 2007, compared to $98.2 billion in the first quarter of 2007, and $101.8 billion in the second quarter of 2006. Commercial loans drove the linked-quarter increase in average portfolio loans. Compared to the second quarter a year ago, average portfolio loans decreased due to the originate-and-sale strategy discussed above, as well as the sale of $3.9 billion of nonconforming mortgage portfolio loans in late 2006. Average loans held for sale were $12.6 billion for the second quarter of 2007, $11.8 billion in the first quarter of 2007, and $12.8 billion in the second quarter a year ago.

Average total deposits were $90.0 billion in the second quarter of 2007, up $2.2 billion from the preceding quarter, and up $7.2 billion from the second quarter a year ago. The growth in deposits reflects growth in households, as well as deposits obtained from recent acquisitions. Average core deposits, excluding mortgage banking escrow balances, were $74.0 billion, up $1.3 billion compared to the preceding quarter and $8.8 billion compared to the second quarter last year.

Credit Quality

The provision for credit losses was $143 million in the second quarter of 2007, compared to $107 million in the first quarter of 2007, and $60 million in the second quarter a year ago. On a year-to-date basis, the provision for credit losses for the first six months of 2007 was $250 million, up from $87 million in the year earlier period. The higher provision for credit losses in the first half of 2007 was mainly concentrated among mortgage and home equity loans, reflecting weakness in the housing market, with the First Franklin run- off portfolio accounting for approximately $70 million of the increase. At the same time, the prior year provision benefited from improving commercial credit quality and low consumer losses following the 2005 bankruptcy law change.

Second quarter 2007 net charge-offs were $98 million, compared to $147 million in the preceding quarter, and $76 million in the second quarter a year ago. The first quarter of 2007 included some relatively large charge-offs for passenger airline leases and nonconforming mortgage loans. Net charge-offs for the first half of 2007 were $245 million compared to $197 million in the prior year. Net charge-offs have increased in the first half of 2007 due to weakness in the housing market which has affected residential real estate developers and nonconforming mortgage borrowers.

Nonperforming assets were $848 million at June 30, 2007 compared to $732 million at December 31, 2006. Loans in foreclosure have increased $46 million since year end. Recent acquisitions have also added to nonperforming assets since year end. The allowance for loan losses was $1.1 billion at both June 30, 2007 and December 31, 2006, representing 1.14% and 1.18% of portfolio loans, respectively.

Noninterest Income

Noninterest income was $764 million in the second quarter of 2007, compared to $621 million in the preceding quarter, and $784 million in the second quarter a year ago. Deposit service fees grew to $223 million for the second quarter of 2007, an increase of nearly 10% on both a linked-quarter and year-over-year basis. Growth in households and transaction volume contributed to this increase. Brokerage revenue grew to $54 million in the second quarter of 2007, up from $40 million in the first quarter of 2007, and $30 million in the second quarter a year ago, which reflects higher volumes of fee-based advisory services.

Loan sale revenue was $110 million for the second quarter of 2007, $75 million for the first quarter of 2007, and $285 million in the second quarter a year ago. Mortgage loan origination volume increased on both a linked- quarter and year-over-year basis, but margins continue to be under pressure. Student loan sales, which tend to be concentrated in the second quarter, accounted for $14 million of the linked-quarter increase. Writedowns on the nonconforming mortgage portfolio held for sale of $23 million were recorded in the first quarter of 2007 as these loans were returned to portfolio, with no similar charges in the second quarter of 2007. The second quarter of 2006 included $113 million of loan sale revenue from the Corporation's former First Franklin nonconforming mortgage platform. As this unit was sold in late 2006, there are no such revenues in 2007.

Loan servicing revenue was $96 million in the second quarter of 2007, up from $32 million in the preceding quarter, and a loss of $21 million in the second quarter a year ago. Net pretax mortgage servicing right (MSR) hedging gains were $10 million in the second quarter of 2007, versus net MSR hedging losses of $49 million in the first quarter of 2007, and $115 million in the second quarter of 2006. The second quarter of 2006 included $15 million of loan servicing revenue associated with the former First Franklin servicing platform.

Noninterest income was approximately $1.4 billion for both the first half of 2007 and 2006. Deposit service fees and brokerage revenue grew by $35 million and $30 million, respectively, for the same reasons described above. Loan sale revenue was $185 million for the first half of 2007, down from $429 million for the first half of 2006. Loan sale revenue for the first half of 2007 was affected by a weaker housing market, lower gain on sale margins, and the $23 million writedown of nonconforming mortgage loans held for sale. In contrast, loan sale revenue for first half of 2006 benefited from $171 million of First Franklin loan sale revenue. Loan servicing revenue was $128 million in the first half of 2007, up from a loss of $65 million in the prior year. Net pretax MSR hedging losses were $39 million in the first half of 2007 versus $243 million in the comparable period last year. Growth in the portfolio serviced for others in the first half of 2007 partially offset the loss of $29 million of revenue from the First Franklin servicing platform in 2006. Other noninterest income for the first half of 2006 included $35 million of nonrecurring income related to the partial release of a chargeback guarantee liability associated with a terminated credit card processing agreement for a major airline.

Noninterest Expense

Noninterest expense was $1.2 billion for the second quarter of 2007, about equal to both the first quarter of 2007 and the second quarter of 2006. Incremental costs from recently completed acquisitions were largely offset by cost savings from the sale of First Franklin and management's continued focus on cost containment. Personnel costs were relatively flat on both a linked- quarter and year-over-year basis.

Noninterest expense was approximately $2.4 billion for the first six months of 2007, up $36 million compared to the same period last year. Personnel costs were flat compared to the first half of 2006. Acquisition integration costs were $36 million for the first half of 2007, versus only $2 million in the first half of last year. Foreclosure costs for the first half of 2007 increased by $24 million compared to the prior year due to more loans in foreclosure and lower market values for real estate in 2007. The cost saving measures described above, as well as lower depreciation on leased equipment, largely offset these higher costs, resulting in essentially flat expenses on an overall basis.

Income Taxes

The effective tax rate for the second quarter of 2007 was 34%, compared to 30% in the first quarter of 2007 and 34% in the second quarter of 2006. The second quarter of 2007 included a higher provision for estimated interest and penalties on uncertain tax positions while the first quarter of 2007 had a one-time tax benefit from certain internal reorganizations and mergers. The effective tax rate for the first half of 2007 was 32%, the same as the first half of 2006. The full year effective tax rate is currently estimated at 32% for 2007.

Balance Sheet

At June 30, 2007, total assets were $140.6 billion, and stockholders' equity was $12.1 billion, or 8.6% of total assets. At June 30, 2007, total deposits were $92.6 billion, including core deposits of $79.0 billion. Total purchased funds were $31.5 billion at June 30, 2007, compared to $33.3 billion at December 31, 2006, and $40.6 billion at June 30, 2006. Continued growth in the deposit base, as well as planned run off in certain portfolio loan categories, has reduced the need for borrowing.

The Corporation repurchased 29.9 million shares of its common stock in the second quarter of 2007 and 85.1 million shares on a year-to-date basis. At June 30, 2007, the Corporation had remaining authorization to repurchase 38.7 million shares. No shares have been repurchased in July. Management expects to recommence share repurchases prior to year end, subject to restrictions imposed by a pending acquisition transaction, as well as maintenance of capital targets, market conditions, and applicable regulatory constraints.

Pending Acquisitions

On May 1, 2007, the Corporation announced a definitive agreement to acquire MAF Bancorp, headquartered in Clarendon Hills, Illinois. MAF Bancorp is the holding company of MidAmerica Bank, which operates 82 branches in the Chicago and Milwaukee metropolitan areas. Under the terms of the agreement, MAF Bancorp shareholders will receive National City common stock worth $56 for each share of MAF Bancorp common stock. The exchange ratio will be based on the average closing price of National City common stock for the 20 trading days immediately preceding the Federal Reserve Board approval. The total indicated value of the transaction is approximately $1.9 billion. This transaction is expected to be completed in either late third quarter or early fourth quarter, subject to shareholder and regulatory approvals.

Forward-Looking Statements

This document contains forward-looking statements. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance, nor should they be relied upon as representing management's views as of any subsequent date. The forward- looking statements are based on management's expectations and are subject to a number of risks and uncertainties. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include, without limitation, the Corporation's ability to effectively execute its business plans; changes in general economic and financial market conditions; changes in interest rates; changes in the competitive environment; continuing consolidation in the financial services industry; new litigation or changes in existing litigation; losses, customer bankruptcy, claims and assessments; changes in banking regulations or other regulatory or legislative requirements affecting the Corporation's business; and changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies. Additional information concerning factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements is available in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2006, and subsequent filings with the United States Securities and Exchange Commission (SEC). Copies of these filings are available at no cost on the SEC's Web site at http://www.sec.gov/ or on the Corporation's Web site at nationalcity.com. Management may elect to update forward-looking statements at some future point; however, it specifically disclaims any obligation to do so.

Conference Call

National City Corporation's executive management will host a conference call at 11:00 a.m. (ET) on Thursday, July 26, 2007 to discuss the second quarter 2007 financial results. Interested parties may access the conference call by dialing 1-800-230-1085. Participants are encouraged to call in 15 minutes prior to the call in order to register for the event. The conference call will also be accessible via the Company's Web site, http://www.nationalcity.com/investorrelations. Questions for discussion at the conference call may be submitted any time prior to or during the call by sending an email to investor.relations@nationalcity.com.

A replay of the conference call will be available from 1:30 p.m. (ET) on July 26, 2007, until midnight (ET) on August 2, 2007. The replay will be accessible by calling 1-800-475-6701 (domestic) or 320-365-3844 (international) using the pass code of 866914 or via the Company's Web site.

About National City

National City Corporation , headquartered in Cleveland, Ohio, is one of the nation's largest financial holding companies. The company operates through an extensive banking network primarily in Ohio, Florida, Illinois, Indiana, Kentucky, Michigan, Missouri and Pennsylvania, and also serves customers in selected markets nationally. Its core businesses include commercial and retail banking, mortgage financing and servicing, consumer finance and asset management. For more information about National City, visit the company's Web site at nationalcity.com.

Unaudited National City Corporation CONSOLIDATED FINANCIAL HIGHLIGHTS (In millions, except per share data) 2007 2nd Qtr 1st Qtr EARNINGS Tax-equivalent interest income $ 2,255 $ 2,218 Interest expense 1,159 1,100 Tax-equivalent net interest income 1,096 1,118 Provision for credit losses 143 107 Tax-equivalent NII after provision for credit losses 953 1,011 Noninterest income 764 621 Noninterest expense 1,188 1,171 Income before taxes and tax-equivalent adjustment 529 461 Income taxes 175 134 Tax-equivalent adjustment 7 8 Net income $ 347 $ 319 Effective tax rate 33.6% 29.5% PER COMMON SHARE Net income: Basic $ .60 $ .50 Diluted (1) .60 .50 Dividends paid .39 .39 Book value 21.45 22.12 Market value (close) 33.32 37.25 Average shares: Basic 572.7 631.7 Diluted 580.4 640.5 PERFORMANCE RATIOS Return on average common equity 11.35% 8.98% Return on average total equity 11.37 8.99 Return on average assets 1.00 .94 Net interest margin 3.59 3.69 Efficiency ratio 63.83 67.37 LINE OF BUSINESS (LOB) RESULTS Net Income: Retail Banking $ 197 $ 174 Commercial Banking - Regional 123 167 Commercial Banking - National 49 57 Mortgage Banking 62 7 Asset Management 29 27 Parent and Other (113) (113) Total Consolidated National City Corporation $ 347 $ 319 LOB Contribution to Diluted Earnings Per Share: Retail Banking $ .34 $ .27 Commercial Banking - Regional .22 .26 Commercial Banking - National .08 .09 Mortgage Banking .10 .01 Asset Management .05 .04 Parent and Other (.19) (.17) Total Consolidated National City Corporation (1) $ .60 $ .50 2006 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr EARNINGS Tax-equivalent interest income $ 2,270 $ 2,298 $ 2,243 $ 2,153 Interest expense 1,137 1,148 1,076 969 Tax-equivalent net interest income 1,133 1,150 1,167 1,184 Provision for credit losses 323 73 60 27 Tax-equivalent NII after provision for credit losses 810 1,077 1,107 1,157 Noninterest income 1,702 877 784 656 Noninterest expense 1,210 1,184 1,174 1,149 Income before taxes and tax-equivalent adjustment 1,302 770 717 664 Income taxes 452 236 238 197 Tax-equivalent adjustment 8 8 6 8 Net income $ 842 $ 526 $ 473 $ 459 Effective tax rate 34.9% 30.9% 33.5% 30.1% PER COMMON SHARE Net income: Basic $ 1.37 $ .87 $ .77 $ .75 Diluted (1) 1.36 .86 .77 .74 Dividends paid .39 .39 .37 .37 Book value 23.06 21.44 20.84 20.69 Market value (close) 36.56 36.60 36.19 34.90 Average shares: Basic 611.9 603.8 609.7 611.9 Diluted 620.7 612.1 618.2 619.7 PERFORMANCE RATIOS Return on average common equity 24.93% 16.45% 15.08% 14.91% Return on average total equity 24.94 16.46 15.10 14.92 Return on average assets 2.44 1.51 1.35 1.33 Net interest margin 3.73 3.73 3.73 3.81 Efficiency ratio 42.71 58.43 60.14 62.45 LINE OF BUSINESS (LOB) RESULTS Net Income: Retail Banking $ 129 $ 192 $ 207 $ 173 Commercial Banking - Regional 128 157 141 143 Commercial Banking - National 62 55 63 65 Mortgage Banking 38 70 (17) (33) Asset Management 21 24 30 22 Parent and Other 464 28 49 89 Total Consolidated National City Corporation $ 842 $ 526 $ 473 $ 459 LOB Contribution to Diluted Earnings Per Share: Retail Banking $ .21 $ .31 $ .33 $ .28 Commercial Banking - Regional .21 .26 .23 .23 Commercial Banking - National .10 .09 .11 .10 Mortgage Banking .06 .11 (.03) (.05) Asset Management .03 .04 .05 .04 Parent and Other .75 .05 .08 .14 Total Consolidated National City Corporation (1) $ 1.36 $ .86 $ .77 $ .74 2005 4th Qtr 3rd Qtr 2nd Qtr EARNINGS Tax-equivalent interest income $ 2,113 $ 2,034 $ 1,865 Interest expense 921 827 694 Tax-equivalent net interest income 1,192 1,207 1,171 Provision for credit losses 132 56 26 Tax-equivalent NII after provision for credit losses 1,060 1,151 1,145 Noninterest income 777 747 981 Noninterest expense 1,267 1,156 1,180 Income before taxes and tax-equivalent adjustment 570 742 946 Income taxes 164 256 313 Tax-equivalent adjustment 8 8 8 Net income $ 398 $ 478 $ 625 Effective tax rate 29.1% 34.9% 33.4% PER COMMON SHARE Net income: Basic $ .65 $ .75 $ .98 Diluted (1) .64 .74 .97 Dividends paid .37 .37 .35 Book value 20.51 20.54 20.42 Market value (close) 33.57 33.44 34.12 Average shares: Basic 618.2 635.9 636.9 Diluted 625.4 644.7 644.1 PERFORMANCE RATIOS Return on average common equity 12.57% 14.59% 19.65% Return on average total equity 12.59 14.61 19.66 Return on average assets 1.10 1.31 1.80 Net interest margin 3.74 3.72 3.76 Efficiency ratio 64.35 59.19 54.83 LINE OF BUSINESS (LOB) RESULTS Net Income: Retail Banking $ 158 $ 168 $ 151 Commercial Banking - Regional 128 146 147 Commercial Banking - National 72 67 54 Mortgage Banking 60 60 181 Asset Management 14 19 26 Parent and Other (34) 18 66 Total Consolidated National City Corporation $ 398 $ 478 $ 625 LOB Contribution to Diluted Earnings Per Share: Retail Banking $ .25 $ .26 $ .23 Commercial Banking - Regional .20 .23 .23 Commercial Banking - National .12 .10 .08 Mortgage Banking .10 .09 .28 Asset Management .02 .03 .04 Parent and Other (.05) .03 .11 Total Consolidated National City Corporation (1) $ .64 $ .74 $ .97 Six Months Ended June 30, 2007 2006 EARNINGS Tax-equivalent interest income $ 4,473 $ 4,396 Interest expense 2,259 2,045 Tax-equivalent net interest income 2,214 2,351 Provision for credit losses 250 87 Tax-equivalent NII after provision for credit losses 1,964 2,264 Noninterest income 1,385 1,440 Noninterest expense 2,359 2,323 Income before taxes and tax-equivalent adjustment 990 1,381 Income taxes 309 435 Tax-equivalent adjustment 15 14 Net income $ 666 $ 932 Effective tax rate 31.7% 31.8% PER COMMON SHARE Net income: Basic $ 1.10 $ 1.52 Diluted (1) 1.09 1.51 Dividends paid .78 .74 Book value Market value (close) Average shares: Basic 602.1 610.8 Diluted 610.3 619.0 PERFORMANCE RATIOS Return on average common equity 10.08% 15.00% Return on average total equity 10.09 15.01 Return on average assets .97 1.34 Net interest margin 3.64 3.77 Efficiency ratio 65.54 61.26 LINE OF BUSINESS (LOB) RESULTS Net Income: Retail Banking $ 371 $ 380 Commercial Banking - Regional 290 284 Commercial Banking - National 106 128 Mortgage Banking 69 (50) Asset Management 56 52 Parent and Other (226) 138 Total Consolidated National City Corporation $ 666 $ 932 LOB Contribution to Diluted Earnings Per Share: Retail Banking $ .61 $ .61 Commercial Banking - Regional .48 .46 Commercial Banking - National .17 .21 Mortgage Banking .11 (.08) Asset Management .09 .09 Parent and Other (.37) .22 Total Consolidated National City Corporation (1) $ 1.09 $ 1.51 (1) The sum of the quarterly earnings per share may not equal the year-to-date earnings per share due to rounding Unaudited National City Corporation CONSOLIDATED FINANCIAL HIGHLIGHTS (continued) ($ in millions) 2007 2nd Qtr 1st Qtr CREDIT QUALITY STATISTICS Net charge-offs $ 98 $ 147 Provision for credit losses 143 107 Loan loss allowance 1,136 1,104 Lending-related commitment allowance 61 63 Nonperforming assets 848 801 Annualized net charge-offs to average portfolio loans .39% .61% Loan loss allowance to period-end portfolio loans 1.14 1.11 Loan loss allowance to nonperforming portfolio loans 202.16 206.08 Loan loss allowance (period-end) to annualized net charge-offs 291.06 184.68 Nonperforming assets to period-end portfolio loans and other nonperforming assets .85 .80 CAPITAL AND LIQUIDITY RATIOS Tier 1 capital(1) 6.56% 7.08% Total risk-based capital(1) 10.27 10.13 Leverage(1) 6.53 6.92 Period-end equity to assets 8.64 9.51 Period-end tangible common equity to assets (2) 5.43 6.26 Average equity to assets 8.83 10.45 Average equity to portfolio loans 12.27 14.66 Average portfolio loans to deposits 110.74 111.78 Average portfolio loans to core deposits 127.87 128.66 Average portfolio loans to earning assets 81.48 80.79 Average securities to earning assets 5.84 6.34 AVERAGE BALANCES Assets $ 138,587 $ 137,810 Portfolio loans 99,689 98,198 Loans held for sale or securitization 12,615 11,769 Securities (at cost) 7,143 7,704 Earning assets 122,344 121,543 Core deposits 77,964 76,322 Purchased deposits and funding 44,604 43,001 Total equity 12,231 14,398 PERIOD-END BALANCES Assets $ 140,636 $ 138,559 Portfolio loans 99,683 99,566 Loans held for sale or securitization 14,421 10,693 Securities (at fair value) 7,024 7,208 Core deposits 79,043 77,884 Purchased deposits and funding 45,036 42,897 Total equity 12,147 13,170 2006 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr CREDIT QUALITY STATISTICS Net charge-offs $ 128 $ 117 $ 76 $ 121 Provision for credit losses 323 73 60 27 Loan loss allowance 1,131 932 989 1,001 Lending-related commitment allowance 78 80 77 79 Nonperforming assets 732 689 667 647 Annualized net charge-offs to average portfolio loans .54% .48% .30% .46% Loan loss allowance to period-end portfolio loans 1.18 1.00 .98 .98 Loan loss allowance to nonperforming portfolio loans 226.13 198.25 202.14 207.14 Loan loss allowance (period-end) to annualized net charge-offs 223.38 200.10 326.17 204.29 Nonperforming assets to period-end portfolio loans and other nonperforming assets .76 .74 .66 .63 CAPITAL AND LIQUIDITY RATIOS Tier 1 capital(1) 8.93% 7.48% 7.31% 7.38% Total risk-based capital(1) 12.16 10.30 10.20 10.31 Leverage(1) 8.56 7.13 6.89 6.92 Period-end equity to assets 10.40 9.34 8.91 9.00 Period-end tangible common equity to assets (2) 7.77 6.99 6.60 6.70 Average equity to assets 9.78 9.16 8.97 8.94 Average equity to portfolio loans 14.38 13.03 12.35 11.83 Average portfolio loans to deposits 110.18 116.64 122.88 127.05 Average portfolio loans to core deposits 131.69 140.31 146.55 155.09 Average portfolio loans to earning assets 76.65 79.11 81.32 84.71 Average securities to earning assets 6.43 6.40 6.24 6.20 AVERAGE BALANCES Assets $ 136,893 $138,434 $140,019 $139,396 Portfolio loans 93,124 97,404 101,757 105,431 Loans held for sale or securitization 17,425 15,065 12,760 8,826 Securities (at cost) 7,806 7,874 7,802 7,719 Earning assets 121,488 123,126 125,127 124,459 Core deposits 70,717 69,419 69,434 67,979 Purchased deposits and funding 48,917 52,321 54,338 55,105 Total equity 13,388 12,687 12,565 12,468 PERIOD-END BALANCES Assets $ 140,191 $138,123 $141,486 $140,231 Portfolio loans 95,492 92,963 100,973 102,269 Loans held for sale or securitization 12,853 19,505 12,964 11,779 Securities (at fair value) 7,509 7,906 7,726 7,609 Core deposits 73,375 68,788 69,744 69,884 Purchased deposits and funding 47,147 51,987 54,069 52,879 Total equity 14,581 12,902 12,610 12,623 2005 4th Qtr 3rd Qtr 2nd Qtr CREDIT QUALITY STATISTICS Net charge-offs $ 138 $ 83 $ 72 Provision for credit losses 132 56 26 Loan loss allowance 1,094 1,108 1,125 Lending-related commitment allowance 84 88 100 Nonperforming assets 596 585 572 Annualized net charge-offs to average portfolio loans .52% .30% .27% Loan loss allowance to period-end portfolio loans 1.03 1.02 1.05 Loan loss allowance to nonperforming portfolio loans 223.11 230.08 238.64 Loan loss allowance (period-end) to annualized net charge-offs 199.42 336.67 391.50 Nonperforming assets to period-end portfolio loans and other nonperforming assets .56 .54 .53 CAPITAL AND LIQUIDITY RATIOS Tier 1 capital(1) 7.43% 7.68% 7.96% Total risk-based capital(1) 10.54 10.78 11.20 Leverage(1) 6.83 7.03 7.36 Period-end equity to assets 8.86 8.80 9.02 Period-end tangible common equity to assets (2) 6.57 6.57 6.75 Average equity to assets 8.78 8.95 9.13 Average equity to portfolio loans 11.79 11.98 12.16 Average portfolio loans to deposits 126.68 127.88 130.12 Average portfolio loans to core deposits 156.15 158.32 154.90 Average portfolio loans to earning assets 83.41 83.59 84.13 Average securities to earning assets 6.00 5.75 6.21 AVERAGE BALANCES Assets $142,983 $144,967 $139,673 Portfolio loans 106,433 108,386 104,908 Loans held for sale or securitization 11,172 11,570 10,109 Securities (at cost) 7,657 7,450 7,746 Earning assets 127,608 129,659 124,691 Core deposits 68,160 68,462 67,728 Purchased deposits and funding 58,661 59,567 55,859 Total equity 12,549 12,980 12,752 PERIOD-END BALANCES Assets $142,397 $146,750 $144,143 Portfolio loans 106,039 108,910 106,808 Loans held for sale or securitization 9,667 11,942 11,539 Securities (at fair value) 7,875 7,568 7,694 Core deposits 68,408 67,738 67,922 Purchased deposits and funding 56,564 61,839 58,639 Total equity 12,613 12,920 13,002 Six Months Ended June 30, 2007 2006 CREDIT QUALITY STATISTICS Net charge-offs $ 245 $ 197 Provision for credit losses 250 87 Loan loss allowance Lending-related commitment allowance Nonperforming assets Annualized net charge-offs to average portfolio loans .50% .38% Loan loss allowance to period-end portfolio loans Loan loss allowance to nonperforming portfolio loans Loan loss allowance (period-end) to annualized net charge-offs 230.17 249.71 Nonperforming assets to period-end portfolio loans and other nonperforming assets CAPITAL AND LIQUIDITY RATIOS Tier 1 capital(1) Total risk-based capital(1) Leverage(1) Period-end equity to assets Period-end tangible common equity to assets (2) Average equity to assets 9.63% 8.96% Average equity to portfolio loans 13.45 12.08 Average portfolio loans to deposits 111.25 124.96 Average portfolio loans to core deposits 128.26 150.75 Average portfolio loans to earning assets 81.14 83.00 Average securities to earning assets 6.09 6.22 AVERAGE BALANCES Assets $138,201 $139,710 Portfolio loans 98,947 103,584 Loans held for sale or securitization 12,194 10,804 Securities (at cost) 7,422 7,761 Earning assets 121,946 124,794 Core deposits 77,147 68,711 Purchased deposits and funding 43,808 54,719 Total equity 13,308 12,517 PERIOD-END BALANCES Assets Portfolio loans Loans held for sale or securitization Securities (at fair value) Core deposits Purchased deposits and funding Total equity (1) Second quarter 2007 regulatory capital ratios are based upon preliminary data (2) Excludes goodwill and other intangible assets Supplemental financial information available at: http://media.corporate-ir.net/media_files/irol/64/64242/sup/2Q07.pdf