Slide 1: Fourth Quarter 2007 Review
Fourth Quarter 2007 Review January 22, 2008 Speakers: Henry Meyer Jeff Weeden
Slide 2: Forward-Looking Statement Disclosure
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 FORWARD-LOOKING STATEMENT DISCLOSURE This presentation contains forward-looking statements, including statements about our financial condition, results of operations, earnings outlook, asset quality trends and profitability. Forward- looking statement
Slide 3: Strategic Actions
Strategic Actions Strengthened loan loss reserve Transferred $1.1B homebuilder loans and $.8B condo exposure to special asset management group Curtailed out-of-footprint homebuilder loans Announced decision to exit dealer-originated home improvement lending and Payroll Online services Initiated proa
Slide 4: Strong Dividend Record
Strong Dividend Record 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008T Outstanding 0.64 0.72 0.76 0.84 0.94 1.04 1.12 1.18 1.2 1.22 1.24 1.3 1.38 1.46 1.5 S&P 500 Dividend Aristocrat Dividend increased 43 consecutive years T = Target
Slide 5: Financial Summary-4Q07 vs. 4Q06
Financial Summary-4Q07 vs. 4Q06 (1) Continuing Operations exclude the results of the Champion Mortgage finance business, which has been accounted for as a discontinued operation. Results from Continuing Operations (1) EPS ROE NIM Average Earning Assets Asset Quality - Net Charge-offs - NPLs $0.06 vs
Slide 6: Net Interest Margin (TE)-Continuing Ops.
Net Interest Margin (TE)-Continuing Ops. 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 Net Interest Income 689 692 716 722 726 726 744 700 706 712 750 Net Interest Spread 0.0319 0.0309 0.0306 0.0305 0.0296 0.0285 0.0285 0.027 0.0262 0.0252 0.0275 Net Interest Margin 0.0367 0.0363 0.0368 0.0
Slide 7: Noninterest Income-Continuing Ops.
Noninterest Income-Continuing Ops. $ in millions
Slide 8: Noninterest Expense-Continuing Ops.
Noninterest Expense-Continuing Ops. $ in millions
Slide 9: Average Loans-Continuing Ops.
2003 2004 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 Average Loan Growth from Prior Year -0.0156 -0.0349 0.0815 0.0613 0.0483 0.054 0.0539 0.0516 0.034 0.0234 0.02157 0.03834 0.063 Champion Loans 2.9 2.9 2.8 2.8 2.7 2.5 2.4 0.8 0 0 Consumer Loans 21.2 20.9 17.7 17.7 17.7 17.5 17.6 17.6 1
Slide 10: Average Core Deposits-Continuing Ops.
$ in billions 2003 2004 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 CD's 11.3 10.564 10.8 10.8 10.8 11.3 11.5 11.7 11.9 12.063 12.047 11.5 11.455 Average Core Deposit Growth Adjusted for McDonald Divestiture 0.0571 0.013 0.01 0.034 0.0222 Average Core Deposit Growth from Prior Year 0.1005
Slide 11: Asset Quality
Asset Quality $in millions Net C/O to Average Loans from Continuing Operations Nonperforming Loans to EOP Loans Nonperforming Assets to EOP Loans + OREO Allowance to Total Loans to Nonperforming Loans Change 4007 vs. 4Q07 3007 4006 3a07_ _ 406 $ 119 $ 59 S$ 54 $ 60 $ 65 0.67 % 0.35 % 0.33 % $ 687 $
Slide 12: Capital Ratios
Capital Ratios Tangible Equity to Tangible Assets Tier 1 Risk-based Capital* Peer Median-Tier 1 Risk-based Capital 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 Tangible Equity to Tangible Assets 0.0643 0.066 0.0668 0.0668 0.0671 0.0668 0.0681 0.0701 0.0697 0.0689 0.0678 0.0646 Peer-Ta
Slide 13: 2008 Outlook and Long-Term Goals
2008 Outlook and Long-Term Goals Net Interest Margin 3.30% range Loan Growth Low single digit range Core Deposit Growth Low single digit range Net Charge-Offs Expenses Effective Tax Rate 60 - 70 basis point range Low single digit range Approximately 32% - 33%
Slide 14: Appendix
Appendix
Slide 15: Summary of Operations-Continuing Ops.
Summary of Operations-Continuing Ops. $ in millions, except EPS TE = Taxable Equivalent
Slide 16: Community Banking
Community Banking Great Lakes Core Deposits: 36% Comm'l Loans: 39% Northwest Core Deposits: 24% Comm'l Loans: 25% Rocky Mountains Core Deposits: 9% Comm'l Loans: 12% Northeast Core Deposits: 31% Comm'l Loans: 24% Quarterly Average Balances-December 31, 2007
Slide 17: National Banking-Continuing Ops. Financial Summary
National Banking-Continuing Ops. Financial Summary TE = Taxable Equivalent N/M = Not Meaningful N/A = Not Applicable $ in millions
Slide 18: National Banking Line of Business Summary
National Banking Line of Business Summary $ in millions TE = Taxable Equivalent N/M = Not Meaningful N/A = Not Applicable
Slide 19: National Banking Line of Business Summary
National Banking Line of Business Summary $ in millions TE = Taxable Equivalent N/M = Not Meaningful N/A = Not Applicable
Slide 20: Community Banking Financial Summary
Financial Summary $ in millions TE = Taxable Equivalent N/M = Not Meaningful N/A = Not Applicable Community Banking
Slide 21: Community Banking Line of Business Summary
Community Banking Line of Business Summary $ in millions TE = Taxable Equivalent N/A = Not Applicable
Slide 22: Average Loan Breakdown Continuing Operations
Average Loan Breakdown $ in millions Continuing Operations
Slide 23: Commercial Portfolio-Credit Size
Commercial Portfolio*-Credit Size <$5 $5 to $15 $15 to $25 > $25 Outstanding 0.445 0.2736 0.1225 0.1584 Commitments 0.35 0.23 0.1347 0.2852 # of Obligations 0.9847 0.0102 0.0027 0.0024 ($ in millions) Outstanding Commitments # of Obligations as of 12/31/07 *Excludes commercial lease financing balanc
Slide 24: Net Charge-Offs to Average Loans
Net Charge-Offs to Average Loans (1) Excludes Passenger Airline Lease Portfolio 2004 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 KEY 0.0074 0.0032 0.0032 0.0102 0.0024 0.0022 0.0026 0.0033 0.0027 0.0032 0.0035 0.0067 0.0057 0.0026 0.0022 Peer Median S&P Regional & Diversified Bank Indices
Slide 25: Net Charge-Offs to Average Loans Consumer and Commercial
Net Charge-Offs to Average Loans Consumer (1) Commercial 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 Consumer/Comml Loans 0.0023 0.0016 0.0019 0.0015 0.0012 0.0023 0.0028 0.002 0.0029 0.003 0.0066 '0 0.0054 0.0056 0.0036 0.0051 0.0043
Slide 26: Nonperforming Assets to Loans + OREO
$ in millions 2003 2004 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 NPAs to Loans + OREO 0.0126 0.006 0.0052 0.006 0.0046 0.0048 0.0046 0.005 0.0041 0.0054 0.0057 0.0083 0.0108 Peer Median S&P Regional & Diversified Bank Indices 0.0043 0.0044 0.0044 0.0046 0.005 0.0049 0.0054 0.0066 0.008
Slide 27: Allowance to NPLs
Allowance to NPLs 2003 2004 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 KEY 2.03 3.69 3.7671 3.04 3.49 3.27 3.43 4.23 4.39 3.72 3.42 1.92 1.75 Peer Median S&P Regional & Diversified Bank Indices 2.38 3.14 3.37 3.38 3.56 3.76 3.26 3.24 2.9 2.41 2.1 1.83
Slide 28: Allowance to Period-End Loans
Allowance to Period-End Loans 2003 2004 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 KEY 0.0235 0.018 0.017 0.0167 0.0145 0.0144 0.0142 0.0144 0.0143 0.0144 0.0142 0.0138 0.0169 Peer Median S&P Regional & Diversified Bank Indices 0.0141 0.0121 0.0118 0.0121 0.0113 0.0109 0.0107 0.0107 0.01
Slide 29: Commercial Real Estate Loans
Commercial Real Estate Loans December 31, 2007 $ in millions N/M = Not Meaningful
Slide 30: Commercial Real Estate Residential Properties
Commercial Real Estate Residential Properties: $3.5 Billion $1.4 B $0.3 B $0.4 B $0.2 B $1.0 B $0.2 B $0.8 B $0.6 B
Slide 31: Commercial Real Estate Servicing
2000 2001 2002 2003 2004 2005 1Q06 2Q06 3Q06 4Q06 2006 1Q07 2Q07 3Q07 4Q07 Servicing Portfolio 8.3 11 19.8 22.4 34.1 73.7 76.1 78.4 81.8 93.6 93.6 108.3 121.4 136.2 134.9 Average Escrow Deposits 0.125 0.303 0.411 0.558 0.832 1.23 2.135 2.386 2.494 3.053 2.52 3.279 3.924 4.57 4.3 Commercial Real Esta
Slide 32: Home Equity Loans
Home Equity Loans Period End Balance-December 31, 2007 N/M = Not Meaningful $ in millions