second-quarter earnings jumped 20% from a year ago, as hedging gains, strong deposit growth and mortgage lending offset a narrowing of its loan spread.
The Cleveland bank earned $625 million, or 97 cents a share, in the quarter, compared with $519 million, or 83 cents a share, a year ago. The 2005 quarter's profit eclipsed the Thomson First Call consensus estimate by 22 cents a share.
The company had mortgage banking revenue of $400 million in the latest quarter, more than double the year-ago amount. The total included a pretax gain of $157 million from hedging gains on mortgage servicing rights. There were $57 million of such gains in the year-ago quarter.
Fees and other income were $951 million in the 2005 quarter compared with $861 million a year ago. Average core deposits rose 10% from a year ago, while the company's average portfolio of loans rose 26% from last year.
National City's net interest margin was 3.85% in the second quarter, compared with 4.09% a year ago. The metric measures the profitability of loans and has been shrinking for most banks because of the narrowing differential between short- and long-term interest rates.