National City Corporation
National City — Harbor Florida Bancshares — Merger or Acquisition (July 2006)
20 slides from National City's merger presentation, Jul 11, 2006
Slide 1: Acquisition of Harbor Florida Bancshares, Inc.
Acquisition of Harbor Florida Bancshares, Inc. Investor Presentation July 11, 2006
Slide 2: Regulation MA Disclosure
Regulation MA Disclosure This investor presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the benefits of the merger between National City Corporation and Harbo
Slide 3: Harbor Florida Bancshares, Inc. (Nasdaq: HARB)
Harbor Florida Bancshares, Inc. (Nasdaq: HARB) Based in Fort Pierce, Florida $3.2 billion asset thrift 40 branches Primary focus on retail banking and real estate lending Successful record of growth and profitability
Slide 4: Strategic Rationale
Strategic Rationale Expansion into higher growth market Well-run franchise with solid market position to build on Ability to leverage National City's capital base, technology and products Significantly augments National City's existing Florida presence
Slide 5: Expanding into High-Growth Markets
Expanding into High-Growth Markets Total Households Projected HH Growth (1) Projected HH Growth (HH > $50K) (1) United States 112,448,901 6.5% 22.2% National City Footprint (2) 15,872,715 2.2% 18.0% Growth Initiatives Cincinnati 820,568 4.6% 21.1% St. Louis 1,101,292 5.5% 21.7% Chicago 3,427,888 4.9
Slide 6: Harbor Florida is a Well-Run Franchise
Harbor Florida is a Well-Run Franchise Net Loans Assets Deposits Net Income East 0.128 0.137 0.134 0.163 Twelve months ended 3/31/06 Harbor Florida Peer Median (1) Return on Ave. Assets 1.6% 0.7% Return on Ave. Equity 15.2% 10.3% Net Interest Margin 3.9% 3.6% Efficiency Ratio 41.8% 65.1% Peers inclu
Slide 7: Strong Market Position
Strong Market Position Well-positioned branch network provides a meaningful base for growth National City to support growth with: Higher marketing spend De novo branches Broader product set Lower cost of capital Harbor Florida Footprint Harbor Florida Footprint Harbor Florida Footprint Harbor Florid
Slide 8: National City Offices
National City Offices As of July 2006; States with National City presence highlighted in green
Slide 9: Summary Terms
Summary Terms Pricing $45 for each Harbor Florida share Structure Exchange ratio based on average 10 days prior to Fed approval, equating to $45 per Harbor share Tax free exchange Aggregate Value $1.1 billion Termination Fee $40 million Expected Closing Fourth quarter 2006 Approvals Normal regulator
Slide 10: Transaction Multiples
Transaction Multiples Harbor Florida Transaction Comparable Transactions (1) Comparable Transactions (1) Harbor Florida Transaction Median Average Price/LTM EPS 21.8x 26.8x 30.4x Price/2006 Estimated EPS (2) 20.9x 25.4x 24.7x Price/Tangible Book Value 324% 307% 355% Price/Book Value 321% 273% 306% I
Slide 11: Expected Timeline
Expected Timeline Announcement July 11, 2006 Shareholder approval 4Q-06 Regulatory approval 4Q-06 Closing 4Q-06
Slide 12: Internal Rate of Return Assumptions
Internal Rate of Return Assumptions IRR of ~14% Assumptions 15% expense savings phased in over 18 months 5% - 10% revenue synergies Terminal multiple of 15x $125 million in excess capital released $37 million in pre-tax one-time merger- related costs
Slide 13: Accretion Assumptions
Accretion Assumptions Accretion of $0.03 per share in 2007 and $0.04 per share in 2008 Assumptions 100% stock transaction Repurchase equivalent number of shares in year 1 15% cost savings phased in over 18 months No revenue synergies
Slide 14: Management Structure
Management Structure Existing management remains in place National City additions: Credit officer Retail banking specialist Integration manager
Slide 15: Establishing the National City Brand
Establishing the National City Brand Establish the National City presence in a meaningful and memorable way Integrated approach Media and advertising Direct mail Branch merchandising Demonstrate commitment to Harbor Florida's marketplace, including local events and sponsorships
Slide 16: Revenue Growth Opportunities
Revenue Growth Opportunities Retail household acquisition Direct marketing Bank at work De novo branching Retail household expansion Enhanced product set Points from National City
Slide 17: Revenue Growth Opportunities
Revenue Growth Opportunities Wealth management New offering for Harbor Florida customers Retail branch presence and National City's existing wealth management operations are complementary Corporate banking Commercial real estate Treasury management Additional product offerings (e.g. derivatives, lea
Slide 18: Summary of Transaction Rationale
Summary of Transaction Rationale Well-run franchise with proven track record of solid organic growth Attractive branch network with opportunity to expand Favorable market demographics Ability to leverage National City's capital base, technology and products
Slide 19: Appendix
Appendix
Slide 20: Summary Statistics
Summary Statistics ($ in millions) National City Harbor Florida Portfolio Loans $102,269 $2,518 Assets $140,231 $3,214 Deposits $81,416 $2,211 Equity $12,622 $338.1 Earnings (qtr ended 3/31/06) $458.8 $12.4 NPAs/Assets 0.46% 0.09% Reserves/Loans 0.98% 0.82% Employees 33,848 694 Branches 1,230 40 ATM
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