In addition to growth, our new banking centers are providing us with geographic balance. By 2010, we expect more than half of our banking centers to be located in growth markets outside of Michigan, up from 38 percent today. As we build momentum, we believe we can increase the rate of expansion.
Our national platform has been built on our ability to export relationship banking to new markets. Our size allows us to provide customers with a broad range of services while retaining the look, feel and flexibility of a smaller community-banking organization. We are steadily making progress toward our goal of achieving more geographic balance, with the Texas, Western and Florida markets generating 50 percent of average total loans compared to 46 percent a year ago.
To achieve balance, we are leveraging our strength as a business bank by expanding our retail, and wealth and institutional management businesses. You can learn more about our three strategic lines of business in the “At a Glance” section that precedes this letter.
Our strength as a business bank of choice for owner-managed and other companies is well known. We are among the top commercial lending institutions in the country. We provide our business customers with a level of service and experience they can’t always find elsewhere. We understand their business models and our commercial lenders use that knowledge to tailor our products and services to fit their needs.
The retail bank is a key part of our deposit-gathering strategy,
and accounts for 45 percent of our 2006 average deposits, excluding the deposits
in our Finance/Other division. Re-invigorating the retail bank is key to maintaining
strong profitability
and growth.
Our wealth and institutional management business has been producing increasingly better results for us. We re-engineered that business, and in doing so re-energized it and made it more efficient. Leveraging our existing customer base – both in the retail and the business bank – provides tremendous cross-sell and growth potential.
Regarding the sale of Munder Capital Management: We announced the sale in August and completed it by year-end. We realized an initial after-tax gain of $108 million. The transaction was the right move for our clients and shareholders. We now have a highly effective open architecture wealth management platform, which makes available to clients a wide array of investment alternatives for individual and institutional investors, including Munder’s products.