SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549

FORM 10-K

Annual Report Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934

|                          |                
|------------------------- | ---------------
|For the Fiscal Year Ended | Commission File
|December 31, 2004         | 1-8019-01      

PFGI CAPITAL CORPORATION

|                     |                  
|-------------------- | -----------------
|Incorporated Under   | IRS Employer I.D.
|the Laws of Maryland | No. 04-3659419   

1900 East Ninth Street,
Cleveland, Ohio 44114

Phone: 1-800-622-4204

Securities Registered
Pursuant to Section 12(b) of the Act:
                                              Income PRIDES, $25 Stated Value

Securities Registered
Pursuant to Section 12(g) of the Act: None

Indicate
by check mark whether the Registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months,
and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is
not contained herein, and need not be contained, to the best of registrants
knowledge, in definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. [X]

Indicate
by check mark whether the registrant is an  accelerated  filer (as defined in Rule 12b-2
of the Act). Yes [ ] No [X]

All
Common Stock is held by an affiliate of the registrant as of December 31, 2004. As of
February 28, 2005, 5,940,000 shares of Common Stock at $.01 per share par value were
outstanding. The aggregate market value of the Common Stock held by non-affiliates of the
registrant as of the close of business on June 30, 2004 is $0.

Documents Incorporated
by Reference:

Information Statement
for the 2005 Annual Meeting of Stockholders (portions which are incorporated by reference
into Part III hereof).

Please
address all correspondence to:

David J. Lucido 
Chief Financial Officer and Treasurer
PFGI Capital Corporation
1900 East Ninth Street
Cleveland, Ohio 44114

---

PFGI CAPITAL CORPORATION

INDEX TO ANNUAL REPORT

ON FORM 10-K

|           |                                                            |   
|---------- | ---------------------------------------------------------- | --
|PART I     |                                                            |   
|ITEM 1     | BUSINESS                                                   | 1 
|ITEM 2     | PROPERTIES                                                 | 15
|ITEM 3     | LEGAL PROCEEDINGS                                          | 16
|ITEM 4     | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS        | 16
|          
|PART II   
|ITEM 5     | MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
|           | MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES          | 17
|ITEM 6     | SELECTED FINANCIAL DATA                                    | 18
|ITEM 7     | MANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIAL          
|           | CONDITION AND RESULTS OF OPERATIONS                        | 19
|ITEM 7A    | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 26
|ITEM 8     | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                | 27
|ITEM 9     | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS             
|           | ON ACCOUNTING AND FINANCIAL DISCLOSURE                     | 44
|ITEM 9A    | CONTROLS AND PROCEDURES                                    | 44
|          
|PART III  
|ITEM 10    | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT         | 44
|ITEM 11    | EXECUTIVE COMPENSATION                                     | 44
|ITEM 12    | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND       
|           | MANAGEMENT AND RELATED STOCKHOLDER MATTERS                 | 44
|ITEM 13    | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS             | 44
|ITEM 14    | PRINCIPAL ACCOUNTANT FEES AND SERVICES                     | 44
|          
|PART IV   
|ITEM 15.   | EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS       
|           | ON FORM 8-K                                                | 45
|          
|SIGNATURES |                                                            | 47

FORWARD-LOOKING
STATEMENTS

This Form
10-K contains certain forward-looking statements that are subject to numerous assumptions,
risks or uncertainties. The Private Securities Litigation Reform Act of 1995 provides a
safe harbor for forward-looking statements. Forward-looking statements may be identified
by words such as estimates, anticipates, projects, plans, expects, intends, believes,
should and similar expressions and by the context in which they are used. Such statements
are based upon current expectations of the company and speak only as of the date made.
Actual results could differ materially from those contained in or implied by such
forward-looking statements for a variety of factors including: sharp and/or rapid changes
in interest rates; prepayments of loans with fixed interest rates resulting in
reinvestment of the proceeds in loans with lower interest rates; significant changes in
the anticipated economic scenario which could materially change anticipated credit quality
trends; adverse economic and other developments in states where loans are concentrated;
the possible exchange of Series A Preferred Stock for preferred shares of National City
Bank at the direction of the Office of the Comptroller of the Currency if The Bank becomes
undercapitalized; the failure of PFGI Capital Corporation to maintain its status as a REIT
for federal income tax purposes; significant changes in accounting, tax, or regulatory
practices or requirements; and factors noted in connection with forward-looking
statements. Additionally, borrowers of loan participations could suffer unanticipated
losses without regard to general economic conditions. The result of these and other
factors could cause differences from expectations in the level of defaults, changes in
risk characteristics of the loan participation portfolio, and changes in the provision for
loan participation losses. PFGI Capital Corporation undertakes no obligation to update any
forward-looking statements to reflect events or circumstances arising after the date on
which they are made.

---

PFGI CAPITAL CORPORATION

PART I

ITEM 1. BUSINESS

PFGI CAPITAL CORPORATION

General

PFGI
Capital Corporation (PFGI Capital) is a Maryland corporation incorporated on May 9, 2002.
The principal business objective of PFGI Capital is to acquire, hold and manage commercial
mortgage loan assets and other authorized investments that will generate net income for
distribution to PFGI Capitals stockholders. As such, management views its financial
condition and results of operations as one business segment. PFGI Capital has elected to
be treated as a real estate investment trust (REIT) for federal income tax purposes. As a
REIT, PFGI Capital generally will not be liable for federal income tax to the extent that
it distributes its income to its stockholders and continues to meet a number of other
requirements.

All
of PFGI Capitals Common Stock is owned by National City Bank, a wholly owned
subsidiary of National City Corporation, a financial holding company headquartered in
Cleveland Ohio (National City). Prior to March 5, 2005, all of PFGI Capitals Common
Stock was owned by The Provident Bank, a wholly-owned subsidiary of Provident Financial
Group, Inc. (Provident) prior to July 1, 2004. Effective July 1, 2004, National City
Corporation acquired Provident pursuant to an Agreement and Plan of Merger under which The
Provident Bank became a wholly-owned subsidiary of National City Corporation. On March 5,
2005, The Provident Bank was merged into National City Bank.

Under
terms of the merger, Providents shareholders received 1.135 shares of National City
common stock for each share of Provident common stock. National City has assumed
Providents obligations under the PRIDES Forward Purchase Contracts. Holders of
PRIDES Forward Purchase Contracts will be required to purchase shares of National City
common stock and the settlement rate has been adjusted to reflect the exchange ratio.

Unless
specifically referenced, references in this document relative to the Bank refer to The
Provident Bank prior to March 5, 2005 and National City Bank thereafter.

Copies
of National Citys Form 10-K and all other SEC filings by National City may be
obtained, without charge, by contacting Investor Relations at (216) 222-9849 or (800)
622-4204. These reports may also be obtained via the Internet at the web sites of National
City at http://www.nationalcity.com, and the Securities and Exchange Commission (SEC) at
http://www.sec.gov.

PFGI
Capital and National Citys executive offices are located at 1900 East Ninth Street,
Cleveland, Ohio 44114. Directors and officers of PFGI Capital are:

| | T.
James Berry  Director (Member of Audit and Compensation Committees) Linda K.
Erkkila  Director and Secretary (Member of Executive Committee) Dett Hunter  Director
(Member of Audit and Compensation Committees) J. Richard Jordan  Director, Vice
President and Assistant Secretary Susan M. Kinsey  Director and President (Member
of Executive Committee) Darlene M. Lindsay  Director and Vice President David J.
Lucido  Director, Chief Financial Officer and Treasurer J. David Rosenberg  Director
(Member of Executive, Audit and Compensation Committees) John E. Rubenbauer  Director
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(1)

---

The
Registrar and Transfer Agent of PFGI Capital is:National City Bank1900 East Ninth
Street 
Cleveland, Ohio 44114 Phone: 1-800-622-6757

In
connection with the startup of business, PFGI Capital acquired mortgage assets from the
Bank in an aggregate amount of approximately $330 million pursuant to a participation
agreement. These assets were comprised of participation interests in commercial mortgage
loans, before the allowance for loan losses. Since acquiring these assets, PFGI Capital
has met all of the REIT qualification tests for federal income tax purposes.

Although
PFGI Capital has the authority to acquire interests in an unlimited number of mortgage
assets from unaffiliated third parties, all of PFGI Capitals interests in mortgage
and other assets were acquired from the Bank, pursuant to the participation agreement
between the Bank and PFGI Capital. The Bank either originated the mortgage assets or
acquired them as part of the acquisition of other financial institutions. PFGI Capital may
also acquire from time to time a limited amount of additional non-mortgage-related
securities. PFGI Capital has no present plans or expectations to purchase mortgage assets
or other assets from unaffiliated third parties.

PFGI
Capitals participation interests do not entitle PFGI Capital to retain any portion
of any late payment charges or penalties, assumption fees or conversion fees collected and
retained by the Bank in connection with the loans underlying PFGI Capitals
participation interests serviced by the Bank.

General  Description of
Mortgage Assets and Other  Authorized  Investments; Investment Policy

In
order to qualify as a REIT under the Internal Revenue Code, at least 75% of the total
value of PFGI Capitals assets must, broadly speaking, consist of real estate assets,
which includes: residential mortgage loans and commercial mortgage loans, including
participation interests in residential or commercial mortgage loans; mortgage-backed
securities eligible to be held by REITs; cash; cash equivalents which includes receivables
and government securities; and other real estate assets. PFGI Capital refers to these
types of assets as REIT qualifying assets. PFGI Capital may invest up to 25% of the value
of its total assets in other types of securities (within the meaning of the Investment
Company Act). Under the Investment Company Act, the term security is defined
broadly to include, among other things, any note, stock, treasury stock, debenture,
evidence of indebtedness, or certificate of interest or participation in any profit
sharing agreement or a group or index of securities. The Internal Revenue Code also
generally requires that the value of any one issuers securities, other than those
securities included in the 75% test, may not exceed 5% by value of the total assets of
PFGI Capital. In addition, under the Internal Revenue Code, PFGI Capital generally may not
own more than 10% of the voting securities nor more than 10% of the value of the
outstanding securities of any one issuer, other than those securities included in the 75%
test.

(2)

---

As
of December 31, 2004, nearly 100% of PFGI Capitals assets were invested in REIT
Qualifying Assets. PFGI Capital does not hold any securities nor does PFGI Capital intend
to hold securities in any one issuer that exceed 5% of PFGI Capitals total assets or
more than 10% of the voting securities of any one issuer. PFGI Capitals assets
consisted of the following at December 31, 2004:

|Type of Asset                              | Amount
(In Thousands) | Percentage
of Total
Assets
|------------------------------------------ | --------------------- | --------------------------
|Loan Participations                        |                       |                           
|Reserve for Participation Losses           |                       |                           
|Interest Bearing Deposit with Bank         |                       |                           
|Interest Receivable on Loan Participations |                       |                           
|Other Assets                               |                       |                           
|                                           |                       |                           
|Total Assets                               |                       |                           
|                                           |                       |                           

REITs
generally are subject to tax at the maximum corporate rate on any income from foreclosure
property, other than income that would be qualifying income for purposes of the 75% gross
income test, less deductible expenses directly connected with the production of such
income. Therefore, prior to foreclosure of any underlying loan acquired by PFGI Capital
from the Bank, PFGI Capital currently intends to try to sell the participation interest in
the underlying loan back to the Bank. The Bank will then bear all expenses related to the
foreclosure after that time.

Loan
Participations: PFGI Capital holds participation interests in commercial mortgage loans
that are secured by real property such as: office buildings; multi-family properties of
five units or more; industrial, warehouse and self-storage properties; office and
industrial condominiums; retail space; strip shopping centers; mixed use commercial
properties; mobile home parks; nursing homes; hotels and motels; churches and farms.
Commercial mortgage loans may not be fully amortizing. This means that the loans may have
a significant principal balance or balloon payment due on maturity.
Additionally, apart from the Banks commercial mortgage loan origination guidelines,
there is no requirement regarding the percentage of any commercial real estate property
that must be leased at the time PFGI Capital acquires a participation interest in a
commercial mortgage loan secured by such property nor are commercial mortgage loans
required to have third party guarantees. Commercial properties, particularly industrial
and warehouse properties, generally are subject to relatively greater environmental risks
than non-commercial properties. This gives rise to increased costs of compliance with
environmental laws and regulations. The Bank may be affected by environmental liabilities
related to the underlying real property, which could exceed the value of the real
property. Although the Bank has exercised, and will continue to exercise, due diligence to
discover potential environmental liabilities prior to PFGI Capitals acquisition of
any participation interests in loans secured by such property, hazardous substances or
wastes, contaminants, pollutants, or their sources may be discovered on properties during
PFGI Capitals ownership of the participation interests. There can be no assurance
that the Bank would not incur full recourse liability for the entire cost of any removal
and clean-up on a property it acquired in foreclosure, that the cost of removal and
clean-up would not exceed the value of the property, or that the Bank could recoup any of
the costs from any third party. Even though PFGI Capital intends to sell back to the Bank
the participation interest in any loan prior to foreclosure, the discovery of these
liabilities and any associated costs could have a material adverse effect on the fair
value of that loan, and therefore PFGI Capital may not recover any or all of its
investment in the underlying loan.

(3)

---

The
credit quality of a commercial mortgage loan may depend on, among other factors: o the
existence and structure of underlying leases; o the physical condition of the property,
including whether any maintenance has been deferred; o the creditworthiness of tenants; o
the historical and anticipated level of vacancies; o rents on the property and on other
comparable properties located in the same region; o potential or existing environmental
risks; o the availability of credit to refinance the loan at or prior to maturity; and o
the local and regional economic climate in general.

Foreclosures
of defaulted commercial mortgage loans generally are subject to a number of complicating
factors, including environmental considerations, which are not generally present in
foreclosures of residential mortgage loans.

Other
Assets: Cash and Due From Banks on the Balance Sheet represent cash received
by the Bank from borrowers for the payment of principal and interest on the underlying
loans deposited in a demand deposit account of the Bank for PFGI Capital. These funds are
available for the purchase of additional participation interests, payment of dividends and
other operating expenses of PFGI Capital.

Other
assets also include accrued interest on the loans underlying PFGI Capitals
participation interests, which is calculated by the Banks loan accounting systems.

Dividend Policy

PFGI
Capital expects to distribute annually an aggregate amount of dividends with respect to
its outstanding capital shares equal to approximately 100% of its REIT taxable income (as
determined before any deduction for dividends paid and excluding any net capital gain). In
order to remain qualified as a REIT, PFGI Capital is required to distribute annually at
least 90% of such REIT taxable income to its stockholders.

Dividends
will be authorized and declared at the discretion of PFGI Capitals board of
directors. Factors that would generally be considered by PFGI Capitals board of
directors in making this determination are PFGI Capitals distributable funds,
financial condition and capital needs, the impact of current and pending legislation and
regulations, economic conditions, tax considerations, and PFGI Capitals continued
qualification as a REIT. PFGI Capital currently expects that both PFGI Capitals cash
available for distribution and its REIT taxable income will be in excess of the amounts
needed to pay dividends on all outstanding shares of preferred stock, even in the event of
a significant drop in interest rate levels because:

(4)

---

o
substantially all of PFGI Capitals mortgage assets and other authorized investments
are interest-earning;

o
all outstanding shares of PFGI Capitals preferred stock represent in the aggregate
only approximately 50% of PFGI Capitals capitalization and, as a result, the
scheduled distributions to be paid to PFGI Capital with respect to its participation
interests will exceed the aggregate dividends to be paid on PFGI Capital Series A
preferred stock;

o
with the prior approval of PFGI Capitals independent directors, PFGI Capital may
incur indebtedness in an aggregate amount of no more than 20% of PFGI Capitals
stockholders equity as determined in accordance with generally accepted accounting
principles: provided that PFGI Capital may incur indebtedness in an aggregate amount not
to exceed $10.0 million without such prior approval so long as, at the time of incurrence
of such indebtedness, PFGI Capitals outstanding common stockholders equity as
determined in accordance with accounting principles generally accepted in the United
States is at least $150.0 million; and

o
PFGI Capital anticipates that it will have cash flows from principal payments on its
commercial mortgage loan portfolio.

Accordingly,
PFGI Capital expects that it will, after paying the dividends on all series and classes of
preferred stock, pay dividends to the holder of its Common Stock in an amount sufficient
to comply with applicable requirements regarding qualification as a REIT and to ensure
that there will be no federal taxable income at the PFGI Capital level.

As
an alternative to distributing a cash dividend, PFGI Capital has the option of
distributing to its common stockholder, a dividend using a procedure known as a
consent dividend, as authorized by Section 565 of the Internal Revenue Code. A
consent dividend procedure is where a stockholder, on the last day of a REITs tax
year, agrees to treat as a dividend the amount that the REIT so designates, without any
distribution of cash or property actually occurring. The effect of the consent dividend is
that the REIT is considered to have paid a dividend on the last day of its tax year, and
the stockholder is treated as having received that amount and contributed it back to the
REIT. The dollar amount of the consent dividend is included, as if it were distributed, in
the calculation to determine that at least 90% of a REITs taxable income has been
distributed to its stockholders. PFGI Capital, as a REIT, receives a deduction for
dividends paid, reducing its taxable income by the amount of the consent dividend, but
without the need to have cash available to distribute. For the years ended December 31,
2004, 2003, and for the period from June 12 to December 31, 2002, PFGI Capital and its
common stockholder have agreed to use the consent dividend procedure. As a result, PFGI
Capital will have additional funds available for investment purposes and/or for
distribution to its preferred stockholders than if PFGI Capital had paid a cash dividend
to the common stockholder.

Under
certain circumstances, including any determination that the Banks relationship with
PFGI Capital results in an unsafe and unsound banking practice, the Office of the
Comptroller of the Currency will have the authority to issue an order that restricts PFGI
Capitals ability to make dividend payments to PFGI Capitals stockholders,
including holders of PFGI Capital Series A preferred stock. The exercise of these powers
to restrict dividends on PFGI Capital Series A preferred stock would also have the effect
of restricting PFGI Capitals ability to pay dividends on its Common Stock and affect
its status as a REIT.

Conflict of Interests and
Related Policies

The
Bank controls 90% of the voting power of PFGI Capitals outstanding securities.
Accordingly, the Bank will continue to have the right to elect all of PFGI Capitals
directors, including PFGI Capitals independent directors, other than the two
additional independent directors to be elected by the holders of PFGI Capital Series A
preferred stock if PFGI Capital fails to pay quarterly dividends of $.484375 per share on
PFGI Capital Series A preferred stock for at least six consecutive dividend periods. In
addition, PFGI Capitals officers and six of its directors are also officers and/or
employees of National City, the Bank or its affiliates. Because of the nature of PFGI
Capitals relationship with National City and the Bank, it is likely that conflicts
of interest will arise with respect to certain transactions because National City, the
Bank and their affiliates have interests which are not identical to those of PFGI Capital.

(5)

---

The
Bank administers PFGI Capitals day-to-day activities under the terms of a management
agreement between PFGI Capital and the Bank. Since the parties to this agreement are
affiliated, this agreement was not the result of arms-length negotiations. Any future
modification of the management agreement will require the approval of a majority of PFGI
Capitals independent directors. However, since the Bank, through its ownership of
all of PFGI Capitals Common Stock, controls the election of all of PFGI
Capitals directors, including PFGI Capitals independent directors, any such
modification also would not be the result of arms-length negotiations. Thus, there can be
no guarantee that future modifications will be on terms as favorable to PFGI Capital as
those that could have been obtained from unaffiliated third parties.

Under
the terms of the management agreement between PFGI Capital and the Bank, PFGI Capital pays
the Bank a monthly management fee equal to (i) 1/12 multiplied by (ii) .10% multiplied by
the average daily outstanding principal balance of the loans of PFGI Capital during each
such calendar month. Similarly, PFGI Capital pays the Bank a monthly servicing fee under
the term of the participation agreement equal to (i) 1/12 multiplied by (ii) .125%
multiplied by the average daily outstanding principal balance of the loans of PFGI Capital
during each such calendar month. PFGI Capital and the Bank believe the combined 22.5
annual basis point charge is below current market rates that could be obtained for the
management services and the servicing of commercial mortgage loans from independent
parties.

National
City, the owner of all the Banks common shares, may have investment goals and
strategies that differ from those of the holders of shares of PFGI Capital Series A
preferred stock. Nevertheless, PFGI Capitals investment and operating strategies
will largely be directed by National City and the Bank. In addition, neither National City
nor the Bank has a policy addressing treatment of new business opportunities. Thus, new
business opportunities identified by National City or the Bank may be directed to
affiliates other than PFGI Capital.

PFGI
Capital is dependent on the diligence and skill of the officers and employees of the Bank
for the selection and structuring of the loans underlying PFGI Capitals
participation interests and PFGI Capitals other authorized investments. Management
will select the amount, type, and price of loan participation interests and other assets
which PFGI Capital will acquire from the Bank and its affiliates. PFGI Capital anticipates
that it will continue to acquire all or substantially all of its assets from National
City, the Bank or its affiliates. To date, all participation interests have been
transferred at the Banks carrying value, which the parties believe approximates fair
value. Carrying value is the principal amount outstanding plus accrued interest. At
December 31, 2004, approximately 85% of the loan participations are adjustable rate loans.
Substantially all of the loans underlying both the fixed rate and adjustable rate
participations are current on principal and interest payments. Neither PFGI Capital nor
the Bank has obtained any third-party valuations, nor does PFGI Capital intend to do so in
the future. Although PFGI Capital has adopted certain policies to guide the acquisition
and disposition of assets, these policies may be revised or exceptions may be approved
from time to time at the discretion of the board of directors without a vote of PFGI
Capitals stockholders. Changes in or exceptions made to these policies could permit
PFGI Capital to acquire lower quality assets.

(6)

---

PFGI
Capital is also dependent on the Bank and others for monitoring and servicing the loans
underlying PFGI Capitals participation interests under the terms of the
participation agreement between the Bank and PFGI Capital. Since the parties to this
agreement are affiliated, this agreement is not the result of arms-length negotiations.
Any future modification of the participation agreement will require the approval of a
majority of PFGI Capitals independent directors. However, since the Bank, through
its ownership of all of PFGI Capitals Common Stock, controls the election of all of
PFGI Capitals directors, including PFGI Capitals independent directors, any
such modification would not be the result of arms-length negotiation. Conflicts may arise
as part of such servicing, particularly with respect to loans that are placed on
nonaccrual status. While PFGI Capital believes that the Bank will diligently pursue
collection of any non-performing assets, there can be no guarantee that this will be the
case. Conflicts of interest between PFGI Capital and the Bank may also arise in connection
with making decisions that bear upon the credit arrangements that the Bank may have with a
borrower under a loan. The Bank could also seek to exercise its influence over PFGI
Capitals affairs so as to cause the sale of PFGI Capitals assets and their
replacement by lesser quality assets purchased from the Bank or elsewhere. Although these
potential conflicts exist, PFGI Capital believes that the Bank will service the assets
with a view toward PFGI Capitals interests.

The
requirement in PFGI Capitals charter that certain of PFGI Capitals actions be
approved by a majority of PFGI Capitals independent directors is intended to ensure
fair dealings between PFGI Capital and the Bank. There can be no assurance, however, that
such agreement or transaction will be on terms as favorable to PFGI Capital as could have
been obtained from unaffiliated third parties.

There
are no provisions in PFGI Capitals charter limiting any of PFGI Capitals
officers, directors, stockholders, or affiliates from having any direct or indirect
pecuniary interest in any asset to be acquired or disposed of by PFGI Capital or in any
transaction in which PFGI Capital has an interest or from engaging in acquiring, holding,
and managing PFGI Capitals assets. It is expected that the Bank and its affiliates
will have direct interests in transactions with PFGI Capital including, without
limitation, the sale of assets to PFGI Capital; however, it is not anticipated that any of
PFGI Capitals officers or directors will have any interests in such assets, other
than as borrowers or guarantors of loans underlying PFGI Capitals participation
interests, in which case such loans would be on substantially the same terms, including
interest rates and collateral on loans, as those prevailing at the time for comparable
transactions with others and would not involve more than the normal risk of collectibility
or present other unfavorable features.

(7)

---

Other Management Policies
and Programs

General:
In administering PFGI Capitals participation interests and other authorized
investments, the Bank has a high degree of autonomy. PFGI Capital, however, adopted
certain policies to guide PFGI Capitals administration with respect to the
acquisition and disposition of assets, use of capital and leverage, credit risk management
and certain other activities. These policies, which are discussed below, may be amended or
revised from time to time at the discretion of PFGI Capitals board of directors and,
in certain circumstances subject to the approval of a majority of PFGI Capitals
independent directors, but without a vote of PFGI Capitals stockholders, including
holders of shares of PFGI Capitals Series A preferred stock.

Underwriting
Standards: In connection with the acquisition of commercial mortgage loan participations
by PFGI Capital, the Bank represents to PFGI Capital that substantially all of the
commercial mortgage loans underlying the participation interests acquired by PFGI Capital
were originated generally in accordance with underwriting policies customarily employed by
the Bank during the period in which the commercial mortgage loans were originated. It is
the policy of the Bank to make commercial mortgage loans primarily in the geographic areas
in which the Bank is doing business, normally a l00-mile radius of Cincinnati, Dayton,
Columbus and Cleveland, Ohio. The Bank avoids transactions perceived to have unacceptably
high risk, as well as excessive industry, type of collateral and other concentrations. It
is the policy of the Bank that no more than two-thirds of the Banks commercial
mortgage loans cover properties that are not stabilized at any one time.

Some
of the loans, however, were acquired by the Bank in connection with the acquisition of
other financial institutions. Prior to acquiring any financial institution, the Bank
performed due diligence procedures to, among other things, assess the overall quality of
the target institutions loan portfolio. These procedures included the examination of
underwriting standards used in the origination of loan products by the target institution,
the review of loan documents and the contents of selected loan files, and the verification
of the past due status and payment histories of selected borrowers. Through its due
diligence procedures, the Bank obtained a sufficient level of comfort pertaining to the
underwriting standards used by the target institution and their influence on the quality
of the portfolio. Even though the Bank did not and does not warrant those standards, the
Bank found them acceptable in comparison to its own underwriting standards in cases where
the Bank had made a favorable decision to acquire the institution as a whole.

The
underwriting standards imposed by the Bank in connection with the origination of the
commercial mortgage loans underlying the participation interests acquired by PFGI Capital
include careful consideration of the borrowers overall creditworthiness and capacity
to service debt independent of the income generated from the underlying property. In most
instances, cash equity is required in each commercial mortgage loan transaction to reduce
debt to a level where the income of the property can comfortably service that debt. In
other instances where income from the underlying property does not provide adequate debt
service coverage margins, additional collateral is required to offset any perceived
deficiency. In the case of properties where the stability of the income stream may be in
question, such as construction and development situations, the Bank requires the borrower
to have met the pre-leasing and pre-sale standard designated by the Bank for the type of
property.

(8)

---

The
underwriting procedures and guidelines taken into account by the Bank include such factors
as:

o
demographic factors, including population and employment trends;

o current
and projected vacancy, construction and absorption rates;

o
current  and  projected  lease  terms,  rental  rates  and sales  prices, including
concessions;

o
economic indicators,  including trends and diversification of the lending

area;

o
valuation trends, including discount and direct capitalization rates;

o amount
and credit rating of additional collateral;

o
the net worth and credit rating of the borrower, as well as its operating and liquidity
ratios;

o
the existence of a guarantee;

o
the management ability of the borrower, including its business experience and financial
soundness;

o
the characteristics of the specific project financed; and

o such
other economic, demographic, or other factors as in the judgment of the Bank might affect
the value of the collateral and the ability of the borrower to service the loan.

Asset
Acquisition and Disposition Policies: PFGI Capital adopted the policy of purchasing from
the Bank or its affiliates participation interests generally in commercial mortgage loans
that:

o
are performing, meaning they have no more than two payments past due, if any,

o
are in accruing status,

o
are secured by real property such that they are REIT qualifying, and

o have
not been previously sold, securitized or charged-off either in whole or in part.

PFGI
Capitals policy also will allow for investment in assets which are not REIT
qualifying assets up to but not exceeding the statutory limitations imposed on
organizations that qualify as a REIT. PFGI Capital, under this policy, will have the
discretion to purchase other assets to maximize its return to stockholders.

From
time to time PFGI Capital acquires participation interests in additional commercial
mortgage loans from the Bank or its affiliates on a basis consistent with secondary market
standards pursuant to the participation agreement. These acquisitions are made out of
proceeds received by PFGI Capital in connection with the repayment or disposition of loan
participation interests in PFGI Capitals portfolio. Although PFGI Capital is
permitted to do so, PFGI Capital has no present plans or intentions to purchase loans or
loan participation interests from unaffiliated third parties. PFGI Capital currently
anticipates that additional participation interests in mortgage loans acquired by PFGI
Capital will be of the types described above under the heading Business: General
Description of Mortgage Assets and Other Authorized Investments; Investment Policy,
although PFGI Capital is not precluded from purchasing additional types of loans or loan
participation interests.

PFGI
Capital may acquire from time to time limited amounts of participation interests in loans
that are not commercial mortgage loans, such as residential mortgage loans and equipment
loans. PFGI Capital also may from time to time acquire a limited amount of other
authorized investments. Although PFGI Capital currently does not intend to acquire any
mortgage-backed securities representing interests in or obligations backed by pools of
mortgage loans that will be secured by single-family residential or multi-family real
estate properties located throughout the United States, PFGI Capital is not restricted
from doing so. PFGI Capital does not intend to acquire any interest-only or principal-only
mortgage-backed securities. PFGI Capital also will not be precluded from investing in
mortgage-backed securities when the Bank is the sponsor or issuer. PFGI Capital does not
intend to acquire any mortgage-backed securities that are not backed by pools of
commercial real estate properties.

(9)

---

PFGI
Capital currently anticipates that it will not acquire the right to service any loan
underlying a participation interest that it acquires in the future and that the Bank will
act as servicer of any such additional loans. PFGI Capital anticipates that any future
servicing arrangement with the Bank will contain fees and other terms that would be
substantially equivalent to or more favorable to PFGI Capital than those that would be
contained in servicing arrangements entered into with third parties unaffiliated with PFGI
Capital.

PFGI
Capital has a policy of not acquiring any participation interest in any loan that
constitutes more than 9% of the total book value of PFGI Capitals assets at the time
of acquisition.

PFGI
Capital has a policy of reinvesting the proceeds of PFGI Capitals assets in other
interest-earning assets so that PFGI Capitals funds from operations over any period
of four fiscal quarters will be anticipated to equal or exceed 140% of the amount that
would be required to pay full annual dividends on PFGI Capital Series A preferred stock,
except as may be necessary to maintain PFGI Capitals status as a REIT. As of
December 31, 2004 this ratio stands at 125% due to the impact of the lower interest rate
environment on the adjustable rate mortgage loans. Management does not believe the
shortfall constitutes a significant risk or has a negative impact on its ability to meet
its dividend commitments. PFGI Capitals charter provides that PFGI Capital cannot
amend or change this policy with respect to the reinvestment of proceeds without the
consent or affirmative vote of the holders of at least two thirds of PFGI Capital Series A
preferred stock, voting as a separate class.

Credit
Risk Management Policies: The Bank represents to PFGI Capital that at least 95% of the
participation interests acquired in the future will represent commercial mortgage loans in
which the Bank has a first lien position and will be originated by National City, the
Bank, one of its affiliates or an unaffiliated third party in the ordinary course of its
real estate lending activities based on the underwriting standards generally applied by or
substantially similar to those applied by the Bank at the time of origination for its own
account. The Bank also represents to PFGI Capital that all loans will be serviced by or
through the Bank pursuant to the participation agreement, which requires servicing in
conformity with any loan servicing guidelines promulgated by PFGI Capital.

Other
Policies: PFGI Capital intends to operate in a manner that will not subject PFGI Capital
to regulation under the Investment Company Act. PFGI Capital does not intend to:

o
borrow money at any time other than indebtedness incurred by PFGI Capital with the prior
approval of PFGI Capitals independent directors in an aggregate amount not to exceed
20% of PFGI Capitals stockholders equity as determined in accordance with
generally accepted accounting principles; provided, that PFGI Capital may incur
indebtedness in an aggregate amount not to exceed $10.0 million without such prior
approval so long as, at the time of incurrence of such indebtedness, PFGI Capitals
outstanding common stockholders equity is at least $150.0 million;

(10)

---

o
invest in the securities of other issuers for the purpose of exercising control over such
issuers;

o
underwrite securities of other issuers;

o actively
trade in loans or other investments;

o
offer securities in exchange for property; or

o make
loans to third parties, including its officers, directors, or other affiliates.

The
Investment Company Act exempts entities that, directly or through majority-owned
subsidiaries, are primarily engaged in the business of purchasing or otherwise
acquiring mortgages and other liens on and interests in real estate. PFGI Capital
refers to these interests as Qualifying Interests. Under current interpretations by the
staff of the SEC, in order to qualify for this exemption, PFGI Capital, among other
things, must maintain at least 55% of its total assets in Qualifying Interests and also
may be required to maintain an additional 25% of its total assets in Qualifying Interests
or other real estate-related assets. The assets that PFGI Capital may acquire, therefore,
may be limited by the provisions of the Investment Company Act. PFGI Capital established a
policy of limiting authorized investments which are not Qualifying Interests or real
estate-related assets to no more than 20% of the value of PFGI Capitals total
assets.

PFGI
Capital may, under certain circumstances, purchase PFGI Capital Series A preferred stock
and other stock in the open market or otherwise. PFGI Capital intends to redeem any of its
preferred stock which participates in the remarketing in 2005.

PFGI
Capital intends to distribute to its stockholders, in accordance with the Exchange Act,
annual reports containing financial statements prepared in accordance with generally
accepted accounting principles and audited by PFGI Capitals independent registered
public accounting firm. PFGI Capitals charter provides that it will maintain PFGI
Capitals status as a reporting company under the Exchange Act for so long as any of
PFGI Capital Series A preferred stock is outstanding and held by unaffiliated
stockholders.

PFGI
Capital intends to make investments and operate its business in such a manner consistent
with the requirements of the Internal Revenue Code to qualify as a REIT and to elect to be
treated as a REIT for federal income tax purposes. However, future economic, market,
legal, tax or other considerations may cause PFGI Capitals board of directors,
subject to approval by a majority of PFGI Capitals independent directors, to
determine that it is in PFGI Capitals best interest and the best interest of PFGI
Capitals stockholders to revoke PFGI Capitals status as a REIT. The Internal
Revenue Code prohibits PFGI Capital from electing REIT status for the four taxable years
following the year of such revocation.

Servicing

The
loans underlying PFGI Capitals participation interests are serviced by the Bank
pursuant to the terms of the participation agreement between the Bank and PFGI Capital.

Under
the participation agreement, the Bank has the right in its discretion to give consents,
waivers and modifications of the loan documents to the same extent as if the loans were
wholly owned by the Bank; provided, however, that the Bank may not do the following
without the written consent of an officer or director:

(11)

---

o
waive any payment default;

o
extend the maturity of the loans;

o
reduce the rate or rates of interest with respect to the loans;

o forgive
or reduce the principal sum of the loans;

o
increase the lending formula or advance rates; or

o amend
or modify the financial covenants contained in the loan documents in any way that would
make such financial covenants less restrictive.

The
Bank has the right to accept payment or prepayment of the whole principal sum and accrued
interest in accordance with the terms of the loans, waive prepayment charges in accordance
with the Banks policy for loans in which no participation interest has been granted
and accept additional security for the loans. No specific term is specified in the
participation agreement. The participation agreement may be terminated by mutual agreement
of the parties at any time, without penalty. Due to the relationship between the Bank and
PFGI Capital, PFGI Capital does not anticipate that the participation agreement will be
terminated by either party in the foreseeable future.

The
Bank, in its role as servicer under the terms of the participation agreement, receives a
servicing fee designed as a reimbursement for costs incurred to service the underlying
loans. PFGI Capital will pay the Bank a monthly servicing fee equal to (i) 1/12 multiplied
by (ii) .125% multiplied by the average daily outstanding principal balance of the loans
of PFGI Capital during each such calendar month. Based on these formulas, PFGI Capital
paid the Bank servicing compensation of $398,000, $401,000, and $221,000 for the years
ended December 31, 2004, 2003, and for the period June 12 to December 31, 2002,
respectively. The participation agreement does not limit or cap the servicing fees payable
to the Bank. Other than the compensation referred to in this paragraph, and the management
fee referred to in Business: Other Management Policies and Programs 
Management, PFGI Capital pays no other compensation to the Bank or its affiliates.
The Bank does, however, receive certain non-compensation benefits from its relationship
with PFGI Capital.

The
participation agreement requires the Bank to service the loans underlying PFGI
Capitals participation interests in a manner substantially similar to work performed
by the Bank for transactions on its own behalf. The Bank or its affiliates collect and
remit principal and interest payments, maintain perfected collateral positions and submit
and pursue insurance claims. The Bank and its affiliates also provide accounting and
reporting services required by PFGI Capital for PFGI Capitals participation
interests. PFGI Capital also may direct the Bank to dispose of any mortgage loans at the
time the real property securing the mortgage loan becomes classified as a OREO property,
the mortgage loan is in default or placed in a non-performing status, or, when any other
development occurs that adversely affects the value of the mortgaged property, the
borrowers financial condition or its ability to repay the loan in accordance with
its terms, including any renegotiation of loan terms due to the financial deterioration of
the borrower. The Bank is required to pay all expenses related to the performance of its
duties under the participation agreement, including any payment to its affiliates for
servicing the loans. The Bank or its affiliates may institute foreclosure proceedings at
the direction of PFGI Capital, exercise any power of sale contained in any mortgage or
deed of trust, obtain a deed in lieu of foreclosure or otherwise acquire title to a
mortgaged property underlying a mortgage loan by operation of law or otherwise in
accordance with the terms of the participation agreement.

(12)

---

Prior
to foreclosure of any commercial mortgage loan underlying PFGI Capitals
participation interests acquired by it from the Bank or its affiliates, PFGI Capital
currently intends to try to sell the participation interest in the underlying commercial
mortgage loan back to the Bank. The Bank will then bear all expenses related to the
foreclosure after that time.

Management

The
day-to-day operations of PFGI Capital will be managed pursuant to the terms of the
management agreement between the Bank and PFGI Capital. The Bank, in its role as manager
under the terms of the management agreement, will receive a management fee designed as a
reimbursement for costs incurred to manage PFGI Capital. The Bank is required to pay all
expenses related to the performance of its duties under the management agreement,
including any payment to its affiliates for managing PFGI Capital. PFGI Capital will pay
the Bank a monthly management fee equal to (i) 1/12 multiplied by (ii) .10% multiplied by
the average daily outstanding principal balance of the loans of PFGI Capital during each
such calendar month. Based on these formulas, PFGI Capital paid the Bank management
compensation of approximately $318,000, $320,000, and $177,000 for the years ended
December 31, 2004, 2003, and for the period June 12 to December 31, 2002, respectively. No
specific term is specified in the management agreement, and the management agreement may
be terminated by mutual agreement of the parties at any time, without penalty. Due to the
relationship between the Bank and PFGI Capital, PFGI Capital does not anticipate that the
management agreement will be terminated by either party in the foreseeable future.

Employees

PFGI
Capital has five executive officers. PFGI Capital does not anticipate that PFGI Capital
will require any employees because employees of the Bank and its affiliates are servicing
the loans and managing the day-to-day operations and affairs of PFGI Capital under the
participation and management agreements. All of PFGI Capitals officers are also
officers and/or employees of National City and/or the Bank. PFGI Capital intends to
maintain corporate records and audited financial statements that are separate from those
of National City and the Bank.

Although
there are no restrictions or limitations contained in PFGI Capitals charter or
bylaws, PFGI Capital does not anticipate that PFGI Capitals officers or directors
will have any direct or indirect pecuniary interest in any asset to be acquired or
disposed of by PFGI Capital or in any transaction in which PFGI Capital has an interest or
will engage in acquiring, holding and managing assets, other than as borrowers or
guarantors of commercial mortgage loans underlying PFGI Capitals participation
interests, in which case such commercial mortgage loans would be on substantially the same
terms, including interest rates and collateral, as those prevailing at the time for
comparable transaction with others and would not involve more than the normal risk of
collectibility or present other unfavorable features.

Competition

In
order to qualify as a REIT under the Internal Revenue Code, PFGI Capital cannot engage in
the business of originating loans. PFGI Capital anticipates that it will continue to
possess participation interests in mortgage and other loans in addition to those in the
current portfolio and that substantially all of these loans will be owned by the Bank,
although PFGI Capital may purchase loans from unaffiliated third parties. Accordingly,
PFGI Capital does not expect to compete with mortgage conduit programs, investment banking
firms, savings and loan associations, banks, thrift and loan associations, finance
companies, mortgage bankers or insurance companies in acquiring loans.

(13)

---

Regulatory Matters

The
Bank, a nationally-chartered bank, and its subsidiaries, including PFGI Capital, are
subject to supervision and examination by the Office of the Comptroller of the Currency.
In addition to the impact of federal regulation, the Bank is affected significantly by the
actions of the Federal Reserve Board as it attempts to control the money supply and credit
availability in order to influence the economy.

Overview of the Prides

In
June of 2002, PFGI Capital issued 6,600,000 units of PRIDES to the public for
$165,000,000. The proceeds of this issuance were used to purchase commercial mortgage loan
participations from the Bank. Each PRIDES is comprised of a unit consisting of:

(1)       
          a forward purchase contract pursuant to which (a) the holder will agree to
          purchase, and National City will agree to sell, for $25, newly issued shares of
          National City common stock on or before August 17, 2005, the number or fraction
          of which will be determined by the settlement rate described below, based on an
          average trading price of National City common stock for a period preceding that
          date; and (b) National City will make unsecured contract adjustment payments to
          the holder at a rate of 1.25% of the stated amount per year, paid quarterly,
          subject to National Citys right to defer these payments, and

(2)       
          one share of PFGI Capital Series A preferred stock with a liquidation preference
          of $25, on which PFGI Capital will pay dividends on a non-cumulative basis at
          the rate of 7.75%.

Each
forward purchase contract obligates the holder to buy, on August 17, 2005, for $25.00, a
number of newly issued shares of National City common stock equal to the settlement rate.
The settlement rate will be calculated as follows:

o
if the applicable market value of National City common stock is equal to or greater than
$25.6033, the settlement rate will be .9764;

o
if the applicable market value of National City common stock is between $25.6033 and
$21.5154, the settlement rate will be equal to the $25.00 stated amount divided by the
applicable market value; and

o
if the applicable market value is less than or equal to $21.5154, the settlement rate will
be 1.1620.

Applicable
market value is defined as the average of the closing price per share of National
City common stock on each of the twenty consecutive trading days ending on the fifth
trading day immediately preceding August 17, 2005.

Holders
of PFGI Capitals Series A preferred stock are entitled to receive, if, when, and as
authorized and declared by the board of directors out of legally available assets,
non-cumulative cash dividends at the rate of 7.75% per annum of the initial liquidation
preference which is $25.00 per share ($1.9375 per share). Dividends on the preferred stock
will be payable, if authorized and declared, quarterly in arrears on February 17, May 17,
August 17 and November 17 of each year, or if any such day is not a business day, on the
next business day. The preferred stock will rank senior to the Common Stock of PFGI
Capital as to dividend rights and rights upon liquidation, winding up or dissolution.

(14)

---

In
connection with the settlement of the forward purchase contract, National City has engaged
a remarketing agent to remarket the PFGI Capital preferred stock on behalf of the holders,
at which time the PFGI preferred stock will be permanently detached from the forward
purchase contract. Once the forward purchase contract is settled, there will be two
separate and distinct securities outstanding: PFGI Capital preferred stock and National
City common stock. The proceeds received from the remarketing will be used by the holders
of preferred stock to fulfill their commitment under the terms of the forward purchase
contract.

Upon
a successful remarketing of shares of the PFGI Capitals preferred stock, the
applicable dividend rate on the shares of preferred stock that have been purchased in the
remarketing will be reset to the reset rate described below. The dividend rate of shares
of preferred stock that are not remarketed will not be reset and will continue to be
7.75%.

The
reset rate will be determined by the reset agent as the dividend rate the preferred stock
should bear for the preferred stock to have a market value on the fifth business day
immediately preceding August 17, 2005 of 100.5% of the aggregate liquidation preference of
the preferred stock, plus declared and unpaid dividends, if any.

Each
share of PFGI Capitals preferred stock will be automatically exchanged for one newly
issued share of Bank Series A preferred stock upon the occurrence of an exchange event. An
exchange event occurs when:

o
the Bank becomes less than adequately capitalized according to regulations
established by the Office of the Comptroller of the Currency;

o
the Bank is placed into conservatorship or receivership;

o the
Office of the Comptroller of the Currency, in its sole discretion, directs such exchange
in writing, and, even if the Bank is not less than adequately capitalized, the
Office of the Comptroller of the Currency anticipates the Bank becoming less than
adequately capitalized in the near term; or

o
the Office of the Comptroller of the Currency, in its sole discretion, directs such
exchange in writing in the event that the Bank has a Tier 1 risk-based capital ratio of
less than 5.0%.

ITEM 2. PROPERTIES

None

(15)

---

ITEM 3. LEGAL PROCEEDINGS

On
May 3, 2003, a purported class action was filed in the U.S. District Court for the
Southern District of Ohio by shareholder Silverback Master Ltd. As amended August 22, 2003
the case names as defendants Provident, PFGI Capital, Providents President, Robert
L. Hoverson and Providents Chief Financial Officer, Christopher J. Carey, and is
allegedly, on behalf of all purchasers of PRIDES in or traceable to a June 6, 2002
offering of those securities registered with the Securities and Exchange Commission and
extending to March 5, 2003. This action is based upon circumstances involved in a
restatement of earnings announced by Provident on March 5, 2003. It alleges violations of
securities laws by the defendants in Providents financial disclosures during the
period from March 30, 1998 through March 5, 2003 and in the June 2002 offering. It seeks
an unspecified amount of compensatory damages.

This
action and other class actions have been consolidated before Judge S. Arthur Spiegel of
the United States District Court for the Southern District of Ohio under the caption,
Merzin v. Provident Financial Group, Inc., consolidated Civil Action Master File No.
C-1-03-165. PFGI Capital and other Defendants filed a Motion to Dismiss the Complaint on
November 5, 2003. The motion was granted on March 9, 2004 and the Court dismissed all
claims except those relating to the June 6, 2002 offering of 6,600,000 PRIDE securities.
However, the Courts order confined any later finding of damages to $0.70 per PRIDE
security.

National
City has reached a tentative agreement with the plaintiffs to settle this matter. The
negotiated settlement is pending court approval. PFGI Capital will not have any obligation
to the plaintiffs under the tentative settlement. Accordingly, there will be no impact on
PFGI Capitals financial condition, results of operations or cash flows.

ITEM 4. SUBMISSION OF
MATTERS TO A VOTE OF SECURITY HOLDERS

None in the fourth quarter

(16)

---

ITEM II

ITEM 5. MARKET FOR
REGISTRANT'S COMMON EQUITY,  RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES

There
is no public trading market for PFGI Capitals Common Stock as the Bank owns all of
the 5,940,000 shares of its outstanding Common Stock. As an alternative to distributing a
common dividend in cash, PFGI Capital has the option of distributing to the Bank, a
dividend using a procedure known as a consent dividend, as authorized by
Section 565 of the Internal Revenue Code. A consent dividend procedure is where a
stockholder, on the last day of a REITs tax year, agrees to treat as a dividend the
amount that the REIT so designates, without any distribution of cash or property actually
occurring. The effect of the consent dividend is that the REIT is considered to have paid
a dividend on the last day of its tax year, and the stockholder is treated as having
received that amount and contributed it back to the REIT. PFGI Capital, as a REIT,
receives a deduction for dividends paid, reducing its taxable income by the amount of the
consent dividend, but without the need to have cash available to distribute. For the years
ended December 31, 2004, 2003, and for the period June 12 to December 31, 2002, PFGI
Capital and the Bank have agreed to use the consent dividend procedure. As a result, PFGI
Capital will have additional funds available for investment purposes and/or for
distribution to its preferred stockholders than if PFGI Capital had paid a cash dividend
to the common stockholder.

PFGI
Capital has 6,600,000 shares of Series A Preferred Stock issued and outstanding. The
proceeds of this issuance were used by PFGI Capital to purchase commercial mortgage loan
participations from the Bank. One share of Series A Preferred Stock is included within
each PRIDES and is not traded separately from the PRIDES. For more information regarding
the Series A Preferred Stock and the Prides, see the section entitled Overview of
the Prides included in ITEM 1. For the years ended December 31, 2004 and 2003, PFGI
Capital paid dividends on the Series A Preferred Stock of $12,788,000, and its parent paid
contract adjustment payments of $2,062,000. For the period of June 12 to December 31,
2002, PFGI Capital paid dividends of $5,541,000 on the Series A Preferred Stock and its
parent paid contract adjustment payments of $894,000. On February 17, 2005, dividends of
$3,197,000 and a contract adjustment payment of $516,000 were paid on the Series A
Preferred Stock. A discussion of limitations and restrictions on the payment of dividends
by PFGI Capital is contained under Note 8 included in Notes to Financial
Statements.

The
PRIDES are traded on the New York Stock Exchange under the symbol PCE_pi. The
following table sets forth, for the periods indicated, the high, low and period end
closing sales prices as reported on the New York Stock Exchange.

|                 | 2004 | 2003
|---------------- | ---- | ----
|
|High Close       |      |     
|Low Close        |      |     
|Period End Close |      |     

At March 9, 2005, there were 566
holders of record of the PRIDES.

A report of purchases of equity
securities is not required for this period.

(17)

---

ITEM 6. SELECTED
FINANCIAL DATA

The
information presented below represents selected financial data relative to PFGI Capital
for the years ended December 31, 2004 and 2003, and for the period from June 12, 2002
(commencement of operations) to December 31, 2002.

|(Dollars in Thousands Except Per Share Amounts) | 2004 | 2003 | 2002
|----------------------------------------------- | ---- | ---- | ----
|Earnings for Period Ended:                      |      |      |     
|Interest Income                                 |      |      | $   
|Provision for Loan Participation Losses         |      |      |     
|Noninterest Expense                             |      |      |     
|Net Income Before Preferred Dividends           |      |      |     
|Net Income Available to Common Shares           |      |      |     
|Basic and Diluted Net Income Per Common Share   |      |      |     
|Preferred Stock Cash Dividends Paid             |      |      |     
|Common Stock Consent Dividends                  |      |      |     
|Consent Dividends Per Common Share              |      |      |     
|Average Yield on Earning Assets                 |      |      |     
|Selected Balances at December 31:               |      |     
|Loan Participation Interests,                   |      |     
|Net of Reserve for Loan Participation Losses    |      |      | $   
|All Other Assets                                |      |      |     
|Total Assets                                    |      |      |     
|Series A Preferred Stock                        |      |      |     
|Common Stock and Other Equity Items             |      |      |     

(18)

---

PFGI CAPITAL CORPORATION MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7.  MANAGEMENT'S
 DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION AND RESULTS OF OPERATIONS

INTRODUCTION

PFGI
Capitals principal business objective is to acquire, hold, and manage mortgage
assets and other authorized investments that will generate net income for distribution to
its stockholders. Since operations commenced in June 2002, PFGI Capital has been operating
as a REIT for federal income tax purposes.

PFGI
Capital is a subsidiary of the Bank, which is owned by National City. All of PFGI
Capitals day-to-day activities and the servicing of the loans underlying its
participation interests are administered by the Bank.

The
participation agreement between the Bank and PFGI Capital requires the Bank to service
PFGI Capitals loan portfolio in a manner substantially the same as for similar work
performed by the Bank for transactions on its own behalf. The Bank collects and remits
principal and interests payments, maintains perfected collateral positions, and submits
and pursues insurance claims. The Bank also provides to PFGI Capital accounting and
reporting services as required. The Bank is required to pay all expenses related to the
performance of its duties under the participation agreement.

SUMMARY

PFGI
Capital began its operations on June 12, 2002. PFGI Capital issued 5,940,000 shares of
Common Stock to the Bank in exchange for $165,000,000 of commercial mortgage loan
participations. As part of the PRIDES issuance, PFGI Capital also issued 6,600,000 shares
of Series A Preferred Stock to the public for $165,000,000. Such proceeds were used to
purchase an additional $165,000,000 of outstanding principal balance of commercial
mortgage loan participations from the Bank. Management views its financial condition and
results of operations as one operating segment.

PFGI
Capital reported net income and net income available to common stockholders of $15,948,000
and $3,160,000, respectively, for the year ended December 31, 2004, $16,869,000 and
$4,081,000, respectively, for the year ended December 31, 2003, and $9,617,000 and
$4,076,000, respectively, for the period June 12 to December 31, 2002. Earnings per common
share were $0.53, $0.69, and $0.69 for 2004, 2003, and 2002, respectively. Cash dividends
of $12,788,000 were paid to the Series A Preferred stockholders during 2004 and 2003. Cash
dividends of $5,541,000 were paid in 2002. Consent dividends of $2,560,000, $2,427,000,
and $2,633,000 were considered to be paid to the common stockholders and contributed back
to the REIT for 2004, 2003 and 2002, respectively.

At
December 31, 2004 and 2003, PFGI Capital had total assets of $335,756,000 and
$332,910,000, respectively. These assets were primarily comprised of net commercial loan
participations totaling $323,175,000 and $323,762,000 at year-end 2004 and 2003,
respectively. All loan participations were acquired from the Bank. Equity for PFGI Capital
was $335,756,000 and $332,596,000 as of December 31, 2004 and 2003, respectively.

(19)

---

RESULTS OF OPERATIONS

Interest Income

PFGI
Capitals primary source of revenue is interest income on its commercial mortgage
loan participations. A secondary source of interest income is interest earned on a deposit
account held at the Bank. PFGI Capital has no interest-bearing liabilities and no related
interest expense. Total interest income was $16,216,000 and $16,073,000 for the years
ended December 31, 2004 and 2003, respectively, and $10,065,000 for the period from June
12 to December 31, 2002. PFGI Capitals average yield on total earnings assets was
4.86%, 4.83%, and 5.51% during these same periods. The decrease in average yield in 2004
and 2003 compared to 2002 is due to the effect of a low interest rate environment on PFGI
Capitals variable rate loan participations.

The
following table provides average balances, along with their related interest income and
average rate earned for earning assets, for the years ended December 31, 2004 and 2003,
and for the period from June 12 to December 31, 2002.

|                                      | Year Ended December 31, 2004 | Year Ended December 31, 2003 | June 12 to December 31, 2002
|------------------------------------- | ---------------------------- | ---------------------------- | ----------------------------
|
|ASSETS:                               |                              |                              |                             
|Interest Earning Assets:              |                              |                             
|Loan Participations                   |                              |                              | $                           
|Deposit Account with Bank             |                              |                              |                             
|                                      |                              |                              |                             
|Total Interest Earning Assets         |                              |                              |                             
|                                      |                              |                              |                             
|Reserve for Loan Participation Losses |                              |                              |                             
|Other Noninterest Earning Assets      |                              |                              |                             
|                                      |                              |                              |                             
|Total Assets                          |                              |                              | $                           
|                                      |                              |                              |                             
|LIABILITIES AND STOCKHOLDERS' EQUITY: |                              |                             
|Noninterest Bearing Liabilities       |                              |                              | $                           
|Stockholders' Equity                  |                              |                              |                             
|                                      |                              |                              |                             
|Total Liabilities and                 |                              |                             
|Stockholders' Equity                  |                              |                              | $                           
|                                      |                              |                              |                             

Provision For Loan
Participation Losses

The
provision for loan participation losses is the charge to earnings necessary to maintain
the allowance for loan losses at a level adequate to absorb managements estimate of
inherent losses in the portfolio of loan participations. In 2004 and 2003, PFGI had a
negative provision for loan participation losses of $600,000 and $1,654,000, respectively,
as it was determined that the reserve for participation losses was higher than needed
based on managements estimate of inherent losses. For the period June 12 to December
31, 2002, no provision for loan losses was required.

Noninterest Income and
Expense

PFGI
Capital did not record any noninterest income for the years ended December 31, 2004, 2003,
or for the period June 12 to December 31, 2002. Noninterest expense of $868,000, $858,000,
and $448,000 was recognized during these same periods. Noninterest expense was comprised
primarily of compensation paid to the Bank for loan servicing and management fees. For the
years ended December 31, 2004 and 2003, loan servicing fees were $398,000 and $401,000,
respectively, and management fees were $318,000 and $320,000, respectively. For the period
June 12 to December 31, 2002, loan servicing fees were $221,000 and management fees were
$177,000. On an annual basis, loan servicing fees are assessed at a rate of .125% of the
average daily outstanding principal balance of the loan participations and management fees
are assessed at a rate of .10% of the average daily outstanding balance of loan
participations.

(20)

---

Income Taxes

PFGI
Capital has elected to be treated as a REIT for federal income tax purposes and intends to
maintain compliance with the provisions of the Code and therefore is not currently subject
to income taxes.

FINANCIAL CONDITION

Loan Participations

As
of December 31, 2004 and 2003, PFGI Capital had $323,175,000 and $323,762,000 of loan
participations, net of reserves, respectively. The participation portfolio was acquired
from the Bank. In order to qualify as a REIT, at least 75% of PFGI Capitals assets
must consist of real estate assets.

The
following table shows the composition of the loan participations by property type at
December 31, 2004:

|Property Type               | Number
of Loans | Aggregate
Principal
Balance
(In Thousands) | Percentage
by Aggregate
Principal
Balance
|--------------------------- | --------------- | ------------------------------------------ | -----------------------------------------
|Shopping / Retail           |                 | 39                                         |                                          
|Office / Warehouse          |                 | 60                                         |                                          
|Apartments                  |                 | 34                                         |                                          
|Hotel / Motel               |                 | 6                                          |                                          
|Residential Development     |                 | 18                                         |                                          
|Healthcare Facilities       |                 | 3                                          |                                          
|Other Commercial Properties |                 | 93                                         |                                          
|                            |                 |                                            |                                          
|Total                       |                 | 253                                        |                                          
|                            |                 |                                            |                                          

(21)

---

Some
of the loans underlying the loan participations bear interest at fixed rates, and some
bear interest at adjustable rates based on indices such as LIBOR and the prime rate. The
following tables show data with respect to interest rates of the loans underlying the loan
participations at December 31, 2004:

|               | Fixed Rate | Adjustable Rate
|-------------- | ---------- | ---------------
|
|Under 5.00%    |            |                
|5.00% to 5.99% |            |                
|6.00% to 6.99% |            |                
|7.00% to 7.99% |            |                
|Over 8.00%     |            |                
|               |            |                
|               |            |                
|               |            |                

|Interest Type         | Number
of
Loans | Aggregate
Principal
Balance
(In Thousands) | Percentage
by Aggregate
Principal
Balance | Weighted
Average
Interest
Rate
|--------------------- | --------------- | ------------------------------------------ | ----------------------------------------- | ------------------------------
|Fixed Rate Loans      |                 |                                            |                                           | 42                            
|Adjustable Rate Loans |                 |                                            |                                           | 211                           
|                      |                 |                                            |                                           |                               
|Total                 |                 |                                            |                                           | 253                           
|                      |                 |                                            |                                           |                               

Other Assets and
Liabilities

As
of December 31, 2004 and 2003, PFGI Capital had cash of $10,803,000 and $8,088,000,
respectively, in an interest bearing deposit account at the Bank. As of year-end 2004, the
account was yielding a rate of 2.188%

Additionally,
PFGI Capital had interest receivable of $1,087,000 and $1,019,000, accounts
receivable/(payable) of $657,000 and ($314,000), and prepaid expenses of $34,000 and
$41,000 as of December 31, 2004 and 2003, respectively.

INTEREST RATE RISK
MANAGEMENT

PFGI
Capitals income consists primarily of interest income on participation interests in
commercial mortgage loans. PFGI Capital does not intend to use any derivative products to
manage its interest rate risk. If there is a decline in market interest rates, PFGI
Capital may experience a reduction in interest income on its participation interests and a
corresponding decrease in funds available to be distributed to stockholders. The reduction
in interest income may result from downward adjustments of the indices upon which the
interest rates on loans are based and from prepayments of loans with fixed interest rates,
resulting in reinvestment of the proceeds in lower-yielding participation interests.
Further information regarding market risk can be found under Item 7A. Quantitative
and Qualitative Disclosures About Market Risk of this report.

(22)

---

LIQUIDITY AND CAPITAL
RESOURCES

The
objective of maintaining liquidity within PFGI Capital is to ensure the availability of
sufficient cash flows to meet all of PFGI Capitals financial and dividend
commitments. In managing liquidity, PFGI Capital takes into account various legal
limitations placed on a REIT.

PFGI
Capitals principal liquidity needs are to maintain the loan participation portfolio
size through the acquisition of additional commercial mortgages as loans currently in the
portfolio mature, or prepay, and to pay dividends to the holders of Preferred Stock and
Common Stock. The acquisition of additional commercial mortgage loan participations is
intended to be funded with the proceeds obtained from the repayment of principal balances
by individual borrowers. PFGI Capital does not anticipate any material capital
expenditures.

Holders
of PFGI Capitals Preferred Stock are entitled to receive, if authorized and declared
by the board of directors, non-cumulative dividends at the rate of 7.75% per annum, or
$1.9375 per share. The dividend rate on PFGI Capitals Preferred Stock which
participates in the remarketing will be reset in 2005. Dividends on Preferred Stock which
is not remarketed will continue at 7.75% per annum.

As
an alternative to distributing a common dividend in cash, PFGI Capital has the option of
distributing to the Bank, a dividend using a procedure known as a consent
dividend, as authorized by Section 565 of the Internal Revenue Code. For information
regarding the consent dividend procedure, see ITEM 5. For the years ended December 31,
2004, 2003 and for the period June 12 to December 31, 2002, PFGI Capital and the Bank have
agreed to use the consent dividend procedure. As a result, PFGI Capital will have
additional funds available for investment purposes and/or for distribution to its
preferred stockholders than if PFGI Capital had paid a cash dividend to the common
stockholder.

On
March 23, 2005, PFGI Capitals Board of Directors authorized the repurchase of up to
3 million shares of its Preferred Stock.

A
discussion of limitations and restrictions on the payment of dividends is provided in Note
8 included in Notes to Financial Statements.

OFF-BALANCE SHEET
ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS

PFGI
Capital does not have any off-balance sheet arrangements, such as guarantees, retained or
contingent interests, derivative instruments, or variable interests.

No
table is provided for contractual obligations as PFGI has no long-term debt obligations,
capital lease obligations, operating lease obligations, purchased obligations or other
long-term liabilities.

(23)

---

CRITICAL ACCOUNTING
POLICIES

Note
1 to the Notes to Financial Statements lists significant accounting policies
used in the development and presentation of PFGI Capitals financial statements.
However, the Reserve for Loan Participation Losses policy is considered to be
critical due to the level of sensitivity and subjectivity of its underlying accounting
estimates.

PFGI
Capitals exposure to credit risk is managed through its use of consistent
underwriting standards that emphasize in-market lending while avoiding
excessive property type and business activity concentrations. National Citys credit
administration function employs extensive risk management techniques to ensure that loans
adhere to corporate policy and problem loans are promptly identified. These procedures
provide executive management of National City and PFGI Capital with the information
necessary to implement policy adjustments where necessary, and take corrective actions on
a proactive basis. These procedures also include evaluating the adequacy of the reserve
for loan participation losses, which includes an analysis of specific credits and the
application of relevant reserve factors that represent relative risk, based on portfolio
trends, current and historic loss experience, and prevailing economic conditions, to
specific portfolio segments.

Concentration
of credit risk generally arises with respect to participation interests when a number of
underlying loans have borrowers in the same geographical region or with similar property
types. Concentration of credit risk may increase the relative sensitivity of performance
to both positive and negative developments affecting a particular region or property type.
PFGI Capitals balance sheet exposure to geographic concentrations directly affects
the credit risk of the underlying loans within the participation interests. Approximately
73% of the loans underlying the participation interests are located in Ohio as of December
31, 2004. Consequently, the portfolio may experience a higher default rate in the event of
adverse economic, political, or business developments or natural hazards in Ohio and may
affect the ability of borrowers to make payments of principal and interest on the
underlying loans. Shopping / Retail and Office / Warehouse
property types represent approximately 24% and 18% of the total loan participation
balance, respectively, as of year-end 2004. As a result, the portfolio may also experience
a higher default rate in the event of adverse business developments related to these
property types. Borrowers obligated in loans underlying PFGI Capitals participation
interests, however, do not represent a particular concentration of similar business
activity.

(24)

---

The
following table shows a progression of the reserve for loan participation losses for the
years ended December 31, 2004 and 2003:

|(In Thousands)                           | 2004 | Year Ended
December 31,
2003
|---------------------------------------- | ---- | ----------------------------
|Balance at Beginning of Period           |      |                             
|Transferred Reserves, Net                |      |                             
|Provision for Loan Losses                |      |                             
|Loans Charged Off                        |      |                             
|Recoveries                               |      |                             
|                                         |      |                             
|Balance at End of Period                 |      |                             
|                                         |      |                             
|Net Charge-Offs to Average               |      |                             
|Loan Participations                      |      |                             
|                                         |      |                             
|Reserve for Loan Participation Losses to |      |                             
|Loan Participations                      |      |                             
|                                         |      |                             

Non-performing
assets consist of underlying loans that are no longer accruing interest and property
acquired through foreclosure. Commercial mortgage loans are placed on non-accrual status
and stop accruing interest when collection of principal or interest is in doubt or
generally when the underlying loans are 90 days past due. When interest accruals are
suspended, accrued interest income is reversed with prior period accruals charged to
earnings. As of December 31, 2004 and 2003, no loans had been placed on non-accrual status
nor had any property been acquired through foreclosure. Additionally, no loan
participations were delinquent ninety days or more as of December 31, 2004 and 2003.

(25)

---

PFGI CAPITAL CORPORATION

ITEM 7A. QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Management
is concerned with the timing and magnitude of the repricing of assets and liabilities. It
is managements objective to attempt to control risks associated with interest rate
movements. Market risk is the risk of loss from adverse changes in market prices and
interest rates. Market risk arises primarily from interest rate risk inherent in lending
and other related activities. Management actively monitors interest rate risk exposure.
Management reviews, among other things, the sensitivity of assets and liabilities, as
applicable, to interest rate changes, the book and market values of assets and
liabilities, unrealized gains and losses, purchase and sale activity, maturities of
investments and anticipated loan participation pay-offs. PFGI Capitals
interest-rate-sensitive assets consisted largely of participation interests in commercial
mortgage loans. At December 31, 2004, 15% of PFGI Capitals loan participation
portfolio had fixed interest rates. Such loans tend to increase interest rate risk. At
December 31, 2004, PFGI Capital did not have any interest-rate-sensitive liabilities.

As
indicated earlier, PFGI Capitals income consists primarily of interest income from
participation interests. If there is a decline in market interest rates resulting from
downward adjustments in the indices upon which the interest rates on loans are based, PFGI
Capital may experience a reduction in interest income and a corresponding decrease in
funds available for distribution to holders of Preferred Stock. A decline in interest
income can also be realized from prepayments, including pay-offs, of loans with fixed
interest rates, resulting in reinvestment of proceeds in lower-yielding participation
interests. The borrower has the ability to prepay a loan with or without premium or
penalty depending on the provisions found in the underlying loan agreements. The level of
underlying loan prepayments is influenced by several factors, including the interest rate
environment, the real estate market in particular geographic areas, the timing of
transactions, and circumstances related to individual borrowers and loans.

An
earnings simulation model is provided by National City to analyze PFGI Capitals net
interest income sensitivity to movements in interest rates. The model evaluates the effect
on net interest income by running various interest rate scenarios up and down from a flat
rate scenario. Based on the results of the simulation model, net interest income would
change by the following over the next 12-month period:

|                          | 2004 | 2003
|------------------------- | ---- | ----
|100 Basis Points Decrease |      |     
|100 Basis Points Increase |      |     
|200 Basis Points Decrease |      |     
|200 Basis Points Increase |      |     

Due
to the low interest rate environment in 2003, nothing beyond a 100 basis point decrease
was simulated.

In
order for PFGI Capital to have sufficient cash flows to meet projected expenses and
scheduled dividend payments to holders of Preferred Stock, loan participations of PFGI
Capital cannot yield lower than approximately 4.20%. As of December 31, 2004, the average
weighted yield on loan participations was 5.64%. Assuming that the investment in
participation interests remain level, yields on loan participations would have to decrease
by 144 basis points before cash flows would be insufficient to cover the regular dividend
payments to holders of Preferred Stock.

(26)

---

ITEM 8. FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL
STATEMENTS

|                                                        |   
|------------------------------------------------------- | --
|Report of Independent Registered Public Accounting Firm | 28
|                                                       
|Financial Statements:                                  
|PFGI Capital Corporation:                              
|Balance Sheets                                          | 29
|Statements of Income                                    | 30
|Statements of Changes in Stockholders' Equity           | 31
|Statements of Cash Flows                                | 32
|Notes to Financial Statements                           | 33
|                                                       
|Supplementary Data:                                    
|Quarterly Results of Operations (unaudited)             | 43

(27)

---

REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and
StockholdersPFGI Capital Corporation

We
have audited the accompanying balance sheets of PFGI Capital Corporation as of December
31, 2004 and 2003, and the related statements of income, changes in stockholders
equity and cash flows for each of the three years in the period ended December 31, 2004.
These financial statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements based on our audits.

We
conducted our audits in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. We were not engaged to perform an audit of the Companys
internal control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Companys internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In
our opinion, the financial statements referred to above present fairly, in all material
respects, the financial position of PFGI Capital Corporation at December 31, 2004 and
2003, and the results of its operations and its cash flows for each of the three years in
the period ended December 31, 2004, in conformity with U.S. generally accepted accounting
principles.

/s/ ERNST & YOUNG
LLP

Cleveland, OhioMarch 23,
2005

(28)

---

|PFGI CAPITAL CORPORATION
BALANCE SHEETS            
|---------------------------------------------------
|
|
|ASSETS:                                            
|Commercial Mortgage Loan Participations            
|Reserve for Loan Participation Losses              
|                                                   
|Net Loan Participations                            
|Cash and Due From Banks                            
|Interest Receivable                                
|Accounts Receivable - Bank                         
|Other Assets                                       
|                                                   
|TOTAL ASSETS                                       
|                                                   
|LIABILITIES AND STOCKHOLDERS' EQUITY:              
|Liabilities:                                       
|Accounts Payable - Bank                            
|Stockholders' Equity:                              
|Series A Preferred Stock, $25 Stated Value,        
|6,600,000 Shares Authorized, Issued and Outstanding
|Common Stock, $.01 Par Value, 5,940,000 Shares     
|Authorized, Issued and Outstanding                 
|Capital Surplus                                    
|Retained Earnings                                  
|                                                   
|Total Stockholders' Equity                         
|                                                   
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY         
|                                                   
|See notes to financial statements                  

(29)

---

|PFGI CAPITAL CORPORATION
STATEMENTS OF INCOME    
|-------------------------------------------------
|
|
|Interest Income:                                 
|Interest on Loan Participations                  
|Interest on Cash Deposit                         
|                                                 
|Total Interest Income                            
|Provision (Benefit) for Loan Participation Losses
|                                                 
|Net Interest Income After Provision              
|for Loan Participation Losses                    
|Noninterest Expense:                             
|Loan Servicing Fees                              
|Management Fees                                  
|Other Noninterest Expense                        
|                                                 
|                                                 
|                                                 
|Income Before Income Taxes                       
|Income Taxes                                     
|                                                 
|Net Income / Comprehensive Income                
|                                                 
|Preferred Stock Dividends                        
|                                                 
|Net Income Available to Common Shares            
|                                                 
|Basic Earnings Per Common Share                  
|Diluted Earnings Per Common Share                
|Consent Dividends Per Common Share               
|                                                 
|See notes to financial statements                

(30)

---

|PFGI CAPITAL CORPORATION
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(In Thousands Except Per Share Data)
|-----------------------------------------------------------------------------------------------------------
|
|Balance at June 12, 2002                                                                                   
|Issuance of Common Stock                                                                                   
|(5,940,000 Shares)                                                                                         
|Issuance of Preferred Stock                                                                                
|(6,600,000 Shares)                                                                                         
|Offering Costs of Preferred Stock                                                                          
|Preferred Stock Dividends                                                                                  
|($0.8396 Per Share)                                                                                        
|Common Stock Consent Dividend                                                                              
|($0.4433 Per Share)                                                                                        
|Contribution of Consent Dividend                                                                           
|Net Income                                                                                                 
|                                                                                                           
|Balance at December 31, 2002                                                                               
|                                                                                                           
|Preferred Stock Dividends                                                                                  
|($1.9375 Per Share)                                                                                        
|Common Stock Consent Dividend                                                                              
|($0.4087 Per Share)                                                                                        
|Contribution of Consent Dividend                                                                           
|Net Income                                                                                                 
|                                                                                                           
|Balance at December 31, 2003                                                                               
|                                                                                                           
|Preferred Stock Dividends                                                                                  
|($1.9375 Per Share)                                                                                        
|Common Stock Consent Dividend                                                                              
|($0.4087 Per Share)                                                                                        
|Contribution of Consent Dividend                                                                           
|Net Income                                                                                                 
|                                                                                                           
|Balance at December 31, 2004                                                                               
|                                                                                                           
|See notes to financial statements                                                                          

(31)

---

|PFGI CAPITAL CORPORATION
STATEMENTS OF CASH FLOWS  
|---------------------------------------------------
|
|
|Operating Activities:                              
|Net Income                                         
|Adjustments to Reconcile Net Income to             
|Net Cash Provided by Operating Activities:         
|Provision for Loan Participation Losses            
|(Increase) Decrease in Interest Receivable         
|(Increase) Decrease in Accounts Receivable         
|and Other Assets                                   
|Increase (Decrease) in Accounts Payable            
|and Other Liabilities                              
|                                                   
|Net Cash Provided by Operating Activities          
|Investing Activities:                              
|Net Decrease (Increase) in Loan Participations     
|                                                   
|Net Cash Provided By (Used In) Investing Activities
|Financing Activities:                              
|Proceeds from Issuance of Preferred Stock          
|Offering Costs of Preferred Stock                  
|Cash Dividends Paid                                
|                                                   
|Net Cash (Used In) Provided By Financing Activities
|                                                   
|Increase in Cash and Cash Equivalents              
|Cash and Cash Equivalents at Beginning of Period   
|                                                   
|Cash and Cash Equivalents at End of Period         
|                                                   
|Supplemental Disclosures of Cash Flow Information: 
|Cash Paid for:                                     
|Interest                                           
|Income Taxes                                       
|Non-Cash Activity:                                 
|Exchange of Common Stock for Loan Participations   
|                                                   
|See notes to financial statements                  

(32)

---

PFGI CAPITAL CORPORATION

NOTES TO FINANCIAL STATEMENTS

NOTE 1. ACCOUNTING
POLICIES

The
following is a summary of significant accounting policies for PFGI Capital:

ORGANIZATION:
PFGI Capital Corporation (PFGI Capital) is a Maryland corporation that was incorporated on
May 9, 2002 and began operations on June 12, 2002 as a subsidiary of The Provident Bank.
On July 1, 2004, The Provident Bank was acquired by National City Corporation. All of PFGI
Capitals Common Stock is presently owned by National City Bank (the Bank) while its
Series A Preferred Stock is owned by outside investors. The principal business objective
of PFGI Capital is to acquire, hold, and manage commercial mortgage loan assets and other
authorized investments that will generate net income for distribution to PFGI
Capitals stockholders. PFGI Capital has elected to be treated as a real estate
investment trust (REIT). As a REIT, PFGI Capital generally is not liable for federal
income tax to the extent that it distributes its income to its stockholders and continues
to meet a number of other requirements.

The
Bank, a nationally-chartered bank, is a wholly owned subsidiary of National City
Corporation (National City) and provides full-service retail and commercial banking
operations.

BASIS
OF PRESENTATION: The accompanying financial statements include the accounts of PFGI
Capital. PFGI Capital has no equity ownership in any other entities or interest in
variable interest entities. Certain estimates are required to be made by
management in the preparation of the financial statements. Actual results may differ from
those estimates.

STATEMENT
OF CASH FLOWS: For cash flow purposes, cash equivalents include deposit accounts at banks.

BUSINESS
SEGMENTS: As PFGI Capitals operations consist of acquiring, holding and managing
loan participations, management views its financial condition and results of operations as
one business segment.

LOAN
PARTICIPATIONS: PFGI Capital holds participation interests in commercial mortgage loans
that are secured by real property such as office buildings; multi-family properties of
five units or more; industrial, warehouse and self-storage properties; office and
industrial condominiums; retail space; strip shopping centers; mixed use commercial
properties; mobile home parks; nursing homes; hotels and motels; churches and farms. Loan
participations are generally stated at the principal amount outstanding. Interest on loan
participations is computed on the outstanding principal balance. Late charges and other
loan fees are not transferred to PFGI Capital, but rather, kept by the Bank as part of its
loan servicing fees. Any premium or discount applicable to specific loans purchased is
amortized over the remaining lives of such loans using the interest method. Loans are
generally placed on nonaccrual status when the payment of principal or interest is past
due 90 days or more. However, loans that are well secured and in the process of collection
may not be placed on nonaccrual status. When a loan is placed on nonaccrual status, any
interest income previously recognized that has not been received is reversed. Future
interest income is recorded only when a payment is received and collection of principal is
considered reasonably assured.

(33)

---

PFGI
Capital considers a loan to be an impaired loan when it is probable that all amounts due
will not be collected according to the contractual terms of the loan agreement. PFGI
Capital measures the value of an impaired loan based on the present value of expected
future cash flows discounted at the loans effective interest rate or, if more
practical, at the loans observable market price, or the fair value of the
collateral. Income on impaired loans is recognized on a cash basis.

RESERVE
FOR LOAN PARTICIPATION LOSSES: The reserve for loan participation losses is maintained at
a level management estimates as necessary to absorb losses inherent in the loan
participation portfolio. When PFGI Capital purchases loan participations from the Bank, a
reserve for loan participation losses is transferred from the Bank to PFGI Capital. The
reserve is increased whenever further deterioration of the credit quality of the portfolio
occurs and decreased whenever credit quality improves. Loans deemed uncollectible are
charged off and deducted from the reserve and recoveries on loans previously charged off
are added back to the reserve. Loans sold back to the Bank are accompanied by a transfer
of the reserve for those loans from PFGI Capital to the Bank.

Managements
determination of the adequacy of the reserve is based on an assessment of the inherent
loss potential given the conditions at the time. This assessment consists of certain loans
being evaluated on an individual basis, as well as all loans being categorized based on
common characteristics related to the reserve factors and being evaluated as a group.
Loans reviewed on an individual basis include large non-homogeneous credits where their
internal credit rating is at or below a predetermined classification. Loans not
individually reviewed are segmented by characteristics related to the reserve factors.
Analyses are performed on segments of the portfolio based upon trends in delinquencies,
charge-offs, economic factors and business strategies. Adequacy factors may be adjusted
based on changes in expected potential losses in a particular segment.

DIVIDENDS:
Dividends on the Series A Preferred Stock are non-cumulative. Upon authorization of the
Board of Directors, dividends are payable in arrears and paid quarterly on February 17,
May 17, August 17 and November 17 of each year, or if any such day is not a business day,
on the next business day. Dividends are paid at a rate of 7.75% per annum of the initial
liquidation preference which is $25.00 per share.

Common
stockholders are entitled to receive dividends when, as and if declared by the Board of
Directors out of funds available after the preferred dividends have been paid. Both the
Common and Preferred Stock dividends are treated as ordinary income to the stockholders.

As
an alternative to distributing a cash dividend, PFGI Capital has the option of
distributing to its common stockholder, a dividend using a procedure known as a
consent dividend, as authorized by Section 565 of the Internal Revenue Code. A
consent dividend procedure is where a stockholder, on the last day of a REITs tax
year, agrees to treat as a dividend the amount that the REIT so designates, without any
distribution of cash or property actually occurring. The effect of the consent dividend is
that the REIT is considered to have paid a dividend on the last day of its tax year, and
the stockholder is treated as having received that amount and contributed it back to the
REIT. The dollar amount of the consent dividend is included, as if it were distributed, in
the calculation to determine that at least 90% of a REITs taxable income has been
distributed to its stockholders. PFGI Capital, as a REIT, receives a deduction for
dividends paid, reducing its taxable income by the amount of the consent dividend, but
without the need to have cash available to distribute. For the years ended December 31,
2004 and 2003, PFGI Capital and its common stockholder have agreed to use the consent
dividend procedure. As a result, PFGI Capital will have additional funds available for
investment purposes and/or for distribution to its preferred stockholders than if PFGI
Capital had paid a cash dividend to the common stockholder.

(34)

---

LOAN
FORECLOSURES: Prior to foreclosure of any commercial mortgage loan, PFGI Capital intends
to sell the participation interest in the underlying loan back to the Bank. The Bank will
then bear all expenses related to the foreclosure after that time.

INCOME
TAXES: PFGI Capital has elected to be treated as a REIT for Federal income tax purposes
and intends to comply with the provisions of the Internal Revenue Code and therefore is
not subject to income taxes. No provision for income taxes is included in the accompanying
financial statements.

NOTE 2. RECENT ACCOUNTING
PRONOUNCEMENTS

In
December 2003, the FASB issued revised FASB Interpretation No. 46, Consolidation of
Variable Interest Entities (FIN 46). FIN 46, which is an interpretation of
Accounting Research Bulletin No. 51, Consolidated Financial Statements,
addresses consolidation by business enterprises of variable interest entities (VIEs). A
VIE exists when (1) the equity investment at risk is not sufficient to permit the entity
to finance its activities without additional subordinated financial support; (2) equity
investors do not have the ability to make decisions about the entitys activities
through voting rights or do not have the obligation/right to absorb expected
losses/residual returns of the entity; or (3) equity investors have voting rights that are
not proportionate to their economic interests and the activities of the entity are
conducted on behalf of an investor with a disproportionately small voting interest. FIN 46
requires VIEs to be consolidated by their primary beneficiaries. The primary beneficiary
of a VIE is the party that absorbs a majority of the entitys expected losses and/or
receives a majority of its expected residual returns as a result of holding variable
interests. FIN 46 became effective for entities that have interest in special purpose
entities for periods ending after December 15, 2003, and for all other types of VIEs for
periods ending after March 15, 2004. As of December 31, 2004, PFGI Capital did not hold
any interest in VIEs, and therefore, the adoption of FIN 46 did not have a material impact
on PFGI Capitals results of operations or financial condition.

Also
in December 2003, the Accounting Standards Executive Committee of the American Institute
of Certified Public Accountants issued Statement of Position (SOP) 03-3, Accounting for
Certain Loans or Debt Securities Acquired in a Transfer. SOP 03-3 addresses the accounting
for acquired loans that show evidence of having deteriorated in terms of credit quality
since their origination (i.e. impaired loans). This SOP states that acquired loans should
be recorded at their fair value defined as the present value of future cash flows. An
allowance for loan losses would not be recognized at acquisition as credit losses would be
considered in future cash flows. Subsequent increases in expected cash flows would be
accounted for as a change in estimate of the accretable yield on a prospective basis.
Subsequent decreases in cash flows would be accounted for as a loss contingency in the
current period. SOP 03-03 is effective for loans that are acquired in fiscal years
beginning after December 15, 2004. The adoption of this standard is not expected to have a
material impact on PFGI Capitals financial condition, results of operations or
liquidity.

(35)

---

Note 3. LOAN
PARTICIPATIONS AND RESERVE FOR LOAN PARTICIPATION LOSSES

Participations
in loans are generally purchased from the Bank at the Banks carrying value, which
approximates fair value. Carrying value is the principal amount outstanding plus accrued
interest. A reserve for loan participation losses is transferred from the Bank to PFGI
Capital at the time participations are transferred. Loans sold back to the Bank are
accompanied by a transfer of the reserve for those loans from PFGI Capital to the Bank.
The reserve for loan participation losses reflects managements judgment as to the
level considered appropriate to absorb inherent losses in the loan participation
portfolio. PFGI did not have any nonperforming assets or impaired loans during 2004 or
2003.

At
December 31, 2004 and 2003, 73% and 93%, respectively, of the properties underlying the
loan participation interests of PFGI Capital were located in Ohio. Because of the
concentration of PFGI Capitals interests in Ohio, in the event of adverse economic,
political or business conditions or natural hazards in Ohio, PFGI Capital would likely
experience higher rates of loss and delinquency on PFGI Capitals loan participation
interests than if the underlying loans were more geographically diversified.

The
following table sets forth an analysis of the reserve for loan participation losses for
the years ended December 31, 2004 and 2003:

|(In Thousands)                 | 2004 | Year Ended
December 31,
2003
|------------------------------ | ---- | ----------------------------
|Balance at Beginning of Period |      |                             
|Transferred Reserves, Net      |      |                             
|Provision for Loan Losses      |      |                             
|Loans Charged Off              |      |                             
|Recoveries                     |      |                             
|                               |      |                             
|Balance at End of Period       |      |                             
|                               |      |                             

NOTE 4. EARNINGS PER
COMMON SHARE

Basic
earnings per common share is the amount of earnings for the period available to each share
of Common Stock outstanding during the reporting period. Diluted earnings per common share
is the amount of earnings available to each share of Common Stock outstanding during the
reporting period adjusted for the potential issuance of common shares for stock options,
convertible debt, etc. The earnings available to each share of Common Stock has been
reduced by Series A Preferred Stock dividends. PFGI Capital has no stock options or
convertible debt or other potential dilutive instruments and therefore basic and diluted
earnings per share are calculated on the same basis. The Bank owns all of the issued and
outstanding Common Stock of PFGI Capital.

(36)

---

The
following table sets forth the computation of basic and diluted earnings per common share
for the years ended December 31, 2004 and 2003, and for the period from June 12, 2002 to
December 31, 2002:

|                                           | Year Ended
December 31, | June 12 to
December 31,
|------------------------------------------ | ----------------------- | -----------------------
|
|Net Income                                 |                         |                        
|Less Preferred Stock Dividends             |                         |                        
|                                           |                         |                        
|Income Available to Common Stockholder     |                         |                        
|                                           |                         |                        
|Weighted-Average Common Shares Outstanding |                         |                        
|Basic and Diluted Earnings Per Share       |                         |                        

NOTE 5. DESCRIPTION OF
PRIDES

Each
PRIDES has a stated amount of $25.00 per unit and is comprised of two components  a
3-year forward purchase contract and PFGI Capital Series A Preferred Stock.

Each
forward purchase contract obligates the holder to buy, on or before August 17, 2005, for
$25.00, a number of newly issued shares of National City common stock equal to the
settlement rate. The settlement rate will be calculated as follows:

o
if the applicable market value of National City common stock is equal to or greater than
$25.6033, the settlement rate will be .9764;

o
if the applicable market value of National City common stock is between $25.6033 and
$21.5154, the settlement rate will be equal to the $25.00 stated amount divided by the
applicable market value; and

o
if the applicable market value is less than or equal to $21.5154, the settlement rate will
be 1.1620.

Applicable
market value is defined as the average of the closing price per share of National
City common stock on each of the twenty consecutive trading days ending on the fifth
trading day immediately preceding August 17, 2005.

Under
the forward purchase contract, National City will also make quarterly contract adjustment
payments to the PRIDES holders at an annualized rate of 1.25% of the stated amount
($0.3125 per share).

Holders
of PFGI Capitals Series A Preferred Stock are entitled to one-tenth of one vote per
share on all matters submitted to a vote of the stockholders, voting as a single class
with the holders of Common Stock. The holders of Preferred Stock will be entitled to
receive, if, when, and as authorized and declared by the board of directors out of legally
available assets, non-cumulative cash dividends at the rate of 7.75% per annum of the
initial liquidation preference which is $25.00 per share ($1.9375 per share). Dividends on
the Preferred Stock will be payable, if authorized and declared, quarterly in arrears on
February 17, May 17, August 17 and November 17 of each year, or if any such day is not a
business day, on the next business day. The Preferred Stock will rank senior to the Common
Stock of PFGI Capital as to dividend rights and rights upon liquidation, winding up or
dissolution.

(37)

---

In
connection with the settlement of the forward purchase contract, National City has engaged
a remarketing agent to remarket the PFGI Capital Preferred Stock on behalf of the holders,
at which time the PFGI Preferred Stock will be permanently detached from the forward
purchase contract. Once the forward purchase contract is settled, there will be two
separate and distinct securities outstanding: PFGI Capital Preferred Stock and National
City common stock. The proceeds received from the remarketing will be used by the holders
of Preferred Stock to fulfill their commitment under the terms of the forward purchase
contract.

Upon
a successful remarketing of shares of the PFGI Capitals Preferred Stock, the
applicable dividend rate on the shares of Preferred Stock that have been purchased in the
remarketing will be reset to the reset rate described below. The dividend rate of shares
of Preferred Stock that are not remarketed will not be reset and will continue to be
7.75%.

The
reset rate will be determined by the reset agent as the dividend rate the Preferred Stock
should bear for the Preferred Stock to have a market value on the fifth business day
immediately preceding August 17, 2005 of 100.5% of the aggregate liquidation preference of
the Preferred Stock, plus declared and unpaid dividends, if any.

Each
share of PFGI Capitals Preferred Stock will be automatically exchanged for one newly
issued share of Bank Series A Preferred Stock upon the occurrence of an exchange event. An
exchange event occurs when:

o
the Bank becomes less than adequately capitalized according to regulations
established by the Office of the Comptroller of the Currency;

o
the Bank is placed into conservatorship or receivership;

o the
Office of the Comptroller of the Currency, in its sole discretion, directs such exchange
in writing, and, even if the Bank is not less than adequately capitalized, the
Office of the Comptroller of the Currency anticipates the Bank becoming less than
adequately capitalized in the near term; or

o
the Office of the Comptroller of the Currency, in its sole discretion, directs such
exchange in writing in the event that the Bank has a Tier 1 risk-based capital ratio of
less than 5.0%.

On
March 23, 2005, PFGI Capitals Board of Directors authorized the repurchase of up to
3 million shares of its Preferred Stock.

NOTE 6. RELATED PARTY
TRANSACTIONS

PFGI
Capital holds a 95% participation interest through a participation agreement with the Bank
in certain loans originated by the Bank and its subsidiaries. Generally, the participation
interests are in commercial mortgage loans secured by real property that were either
directly underwritten by the Bank and its subsidiaries or acquired by the Bank. PFGI
Capital expects to continue to purchase such interests in the future from the Bank under
the terms of the participation agreement.

(38)

---

The
participation agreement also provides for the Bank to service the commercial mortgage
loans underlying the participations held by PFGI Capital in a manner substantially the
same for similar work performed by the Bank for transactions on its own behalf. The
servicing fee that the Bank charges is .125% per year of the average daily outstanding
principal balances of the commercial mortgage loans underlying the participation
interests. Loan servicing costs incurred by PFGI Capital totaled $398,000, $401,000, and
$221,000 for the years ended December 31, 2004, 2003, and for the period from June 12 to
December 31, 2002, respectively.

A
summary of loan participation activity between the Bank and PFGI Capital for the years
ended December 31, 2004 and 2003 follows:

|                                 | Year Ended
December 31,
|-------------------------------- | -----------------------
|
|Balance at Beginning of Period   |                        
|Transfers of Loan Participations |                        
|From Bank to PFGI Capital        |                        
|Loan Participation Advances      |                        
|Transfer of Loan Participations  |                        
|From PFGI Capital to the Bank    |                        
|Loan Participation Payments      |                        
|                                 |                        
|Balance at End of Period         |                        
|                                 |                        

The
day-to-day operations of PFGI Capital are managed pursuant to the terms of a management
agreement between the Bank and PFGI Capital. The Bank, in its role as manager under the
terms of the management agreement, receives a management fee designed as a reimbursement
for costs incurred to manage PFGI Capital. The Bank is required to pay all expenses
related to the performance of its duties under the management agreement, including any
payment to its affiliates for managing PFGI Capital. The management fee that the Bank
charges is .10% per year of the average daily outstanding principal balances of the
commercial mortgage loans underlying the participation interests. Management fees incurred
by PFGI Capital was $318,000, $320,000, and $177,000 for the years ended December 31,
2004, 2003, and for the period from June 12 to December 31, 2002, respectively.

The
Bank owns 100% of the Common Stock of PFGI Capital. Accordingly, the Bank is entitled to
all common dividends paid by PFGI Capital.

As
of December 31, 2004 and 2003, PFGI Capital had an interest-bearing deposit account of
$10,803,000 and $8,088,000, respectively, at the Bank and a net receivable/(payable) of
$657,000 and ($314,000), respectively, from the Bank.

(39)

---

NOTE 7. FAIR VALUE OF
FINANCIAL INTRUMENTS

Carrying
values and estimated fair values for certain financial instruments as of December 31 are
shown in the following table. In cases where quoted market prices are not available, fair
values are based on estimates using present value or other valuation techniques. Those
techniques are significantly affected by the assumptions used, including the discount rate
and estimates of future cash flows. Because no secondary market exists for most of PFGI
Capitals assets, the derived fair values are calculated estimates, and the fair
values provided herein do not necessarily represent the actual values which may be
realized in the disposition of these instruments. The aggregate fair value amounts
presented do not represent the underlying value of PFGI Capital. What is presented below
is a point-in-time valuation that is affected, in part, by unrealized gains and losses
resulting from managements implementation of its program to manage overall interest
rate risk. It is not managements intention to immediately dispose of a significant
portion of its financial instruments. As a result, the following fair value information
should not be interpreted as a forecast of future earnings and cash flows.

|                                            | 2004 | 2003
|------------------------------------------- | ---- | ----
|
|Financial Assets:                           |      |     
|Commercial Mortgage Loan Participations     |      |     
|Less: Reserve for Loan Participation Losses |      |     
|                                            |      |     
|Net Commercial Mortgage Loan Participations |      |     
|Cash and Due From Banks                     |      |     

The
following methods and assumptions were used by National City in estimating its fair value
disclosures for financial instruments:

o
Loan participations: The fair values for loan participations are estimated using
discounted cash flow analyses and interest rates currently being offered for loans with
similar terms to borrowers of similar credit quality.

o
Cash and due from banks: The carrying amounts reported in the balance sheet for cash and
due from banks approximate those assets fair values.

NOTE 8. DIVIDEND
RESTRICTIONS

Because
PFGI Capital is a direct subsidiary of the Bank, regulatory authorities will have the
right to examine PFGI Capital and PFGI Capitals activities and, under certain
circumstances, to impose restrictions on the Bank or PFGI Capital. If the Office of the
Comptroller of the Currency determines that the Banks relationship with PFGI Capital
results in an unsafe and unsound banking practice, the Banks regulators have the
authority to restrict PFGI Capitals ability to make distributions to its
stockholders, including dividends to holders of shares of PFGI Capital Series A preferred
stock.

(40)

---

Payment
of dividends on PFGI Capital Series A preferred stock could also be subject to
regulatory limitations if the Bank becomes less than well-capitalized for
purposes of regulations issued by the Office of the Comptroller of the Currency. Under
these regulations, the Bank will be deemed less than well-capitalized if it
has a total risk-based capital ratio of less than 10.0%; a Tier 1 risk-based capital ratio
of less than 6.0%; or a leverage ratio of less than 5.0%. At December 31, 2004 and 2003,
the Banks total risk-based capital ratio was 11.84% and 12.26%, respectively, its
Tier 1 risk-based capital ratio was 8.61% and 9.12%, respectively, and its leverage ratio
was 6.67% and 7.00%, respectively. The exercise of the Office of the Comptroller of the
Currencys power to restrict dividends on PFGI Capital Series A preferred stock
would, however, also have the effect of restricting the payment of dividends on PFGI
Capitals Common Stock and all series and classes of preferred stock. The inability
to pay dividends on PFGI Capitals Common Stock would prevent PFGI Capital from
meeting the statutory requirement for a REIT in effect to distribute 90% of its taxable
income and, therefore, would cause PFGI Capital to fail to qualify for the favorable tax
treatment accorded to REITs.

Legal
and regulatory limitations on the payment of dividends by the Bank could also affect PFGI
Capitals ability to pay dividends to unaffiliated third parties, including the
holders of shares of PFGI Capital Series A preferred stock. Regulatory approval is
required prior to the Banks declaration of any dividends in excess of available
retained earnings. The amount of dividends that may be declared without regulatory
approval is further limited to the sum of net income for the current year and retained net
income for the preceding two years, less any required transfers to surplus or common
stock. At December 31, 2004, the Bank could, without prior regulatory approval and absent
contrary supervisory guidance, declare dividends in 2005 of approximately $873 million
plus an additional amount equal to its net income through the date of declaration in 2005.
Since PFGI Capital is a member of National Citys consolidated group, payment of
common and preferred dividends by National City and/or any member of its consolidated
group to unaffiliated third parties, including PFGI Capitals payment of dividends to
the holders of shares of PFGI Capital Series A preferred stock, would require regulatory
approval if aggregate dividends on a consolidated basis exceed these limitations.

NOTE 9. LEGAL
CONTINGENCIES

On
May 3, 2003, a purported class action was filed in the U.S. District Court for the
Southern District of Ohio by shareholder Silverback Master Ltd. As amended August 22, 2003
the case names as defendants Provident, PFGI Capital, Providents President, Robert
L. Hoverson and Providents Chief Financial Officer, Christopher J. Carey, and is
allegedly, on behalf of all purchasers of PRIDES in or traceable to a June 6, 2002
offering of those securities registered with the Securities and Exchange Commission and
extending to March 5, 2003. This action is based upon circumstances involved in a
restatement of earnings announced by Provident on March 5, 2003. It alleges violations of
securities laws by the defendants in Providents financial disclosures during the
period from March 30, 1998 through March 5, 2003 and in the June 2002 offering. It seeks
an unspecified amount of compensatory damages.

(41)

---

This
action and other class actions have been consolidated before Judge S. Arthur Spiegel of
the United States District Court for the Southern District of Ohio under the caption,
Merzin v. Provident Financial Group, Inc., consolidated Civil Action Master File No.
C-1-03-165. PFGI Capital and other Defendants filed a Motion to Dismiss the Complaint on
November 5, 2003. The motion was granted on March 9, 2004 and the Court dismissed all
claims except those relating to the June 6, 2002 offering of 6,600,000 PRIDE securities.
However, the Courts order confined any later finding of damages to $0.70 per PRIDE
security.

National
City has reached a tentative agreement with the plaintiffs to settle this matter. The
negotiated settlement is pending court approval. PFGI Capital will not have any obligation
to the plaintiffs under the tentative settlement. Accordingly, there will be no impact on
PFGI Capitals financial condition, results of operations or cash flows.

(42)

---

NOTE 10. QUARTERLY
RESULTS OF OPERATIONS - (Unaudited)

The
following are quarterly results of operations for PFGI Capital for the years ended
December 31, 2004 and 2003, and for the period from June 12, 2002 to December 31, 2002:

|(In Thousands, Except Per Share Data)             | Fourth
Quarter | Third
Quarter | Second
Quarter | First
Quarter
|------------------------------------------------- | -------------- | ------------- | -------------- | -------------
|2004:                                             |                |               |                |              
|Interest Income                                   |                |               | $              | 4,469        
|Provision (Benefit) for Loan Participation Losses |                |               |                | (600         
|                                                  |                |               |                |              
|Net Interest Income After Provision               |                |              
|for Loan Participation Losses                     |                |               |                | 5,069        
|Noninterest Expense                               |                |               |                | 213          
|                                                  |                |               |                |              
|Income Before Income Taxes                        |                |               |                | 4,856        
|Income Taxes                                      |                |               |                | --           
|                                                  |                |               |                |              
|Net Income                                        |                |               | $              | 4,856        
|                                                  |                |               |                |              
|Preferred Stock Dividends                         |                |               | $              | 3,197        
|                                                  |                |               |                |              
|Net Income Available to Common Shares             |                |               | $              | 1,659        
|                                                  |                |               |                |              
|Per Common Share:                                 |                |              
|Basic and Diluted Earnings                        |                |               | $              | 0.28         
|Dividends                                         |                |               | $              | 0.43         

|                                                  | Fourth
Quarter | Third
Quarter | Second
Quarter | First
Quarter
|------------------------------------------------- | -------------- | ------------- | -------------- | -------------
|2003:                                             |                |               |                |              
|Interest Income                                   |                |               | $              | 3,825        
|Provision (Benefit) for Loan Participation Losses |                |               |                | (1,654       
|                                                  |                |               |                |              
|Net Interest Income After Provision               |                |              
|for Loan Participation Losses                     |                |               |                | 5,479        
|Noninterest Expense                               |                |               |                | 211          
|                                                  |                |               |                |              
|Income Before Income Taxes                        |                |               |                | 5,268        
|Income Taxes                                      |                |               |                | --           
|                                                  |                |               |                |              
|Net Income                                        |                |               | $              | 5,268        
|                                                  |                |               |                |              
|Preferred Stock Dividends                         |                |               | $              | 3,197        
|                                                  |                |               |                |              
|Net Income Available to Common Shares             |                |               | $              | 2,071        
|                                                  |                |               |                |              
|Per Common Share:                                 |                |              
|Basic and Diluted Earnings                        |                |               | $              | 0.35         
|Dividends                                         |                |               | $              | 0.41         

|                                             | Fourth
Quarter | Third
Quarter | June 12 to
June 30 |       
|-------------------------------------------- | -------------- | ------------- | ------------------ | ------
|2002:                                        |                |               |                    |       
|Interest Income                              |                |               | $                  | 4,331 
|Provision for Loan Participation Losses      |                |               |                    | --    
|                                             |                |               |                    |       
|Net Interest Income After Provision          |                |              
|for Loan Participation Losses                |                |               |                    | 4,331 
|Noninterest Expense                          |                |               |                    | 195   
|                                             |                |               |                    |       
|Income Before Income Taxes                   |                |               |                    | 4,136 
|Income Taxes                                 |                |               |                    | --    
|                                             |                |               |                    |       
|Net Income                                   |                |               | $                  | 4,136 
|                                             |                |               |                    |       
|Preferred Stock Dividends                    |                |               | $                  | 5,541 
|                                             |                |               |                    |       
|Net (Loss) Income Available to Common Shares |                |               | $                  | (1,405
|                                             |                |               |                    |       
|Per Common Share:                            |                |              
|Basic and Diluted Earnings                   |                |               | $                  | (0.24 
|Dividends                                    |                |               | $                  | 0.44  

Quarterly
earnings per share do not necessarily add to the year-to-date amounts due to rounding.

(43)

---

PFGI CAPITAL CORPORATION

ITEM 9. CHANGES IN AND
 DISAGREEMENTS  WITH  ACCOUNTANTS  ON ACCOUNTING AND FINANCIAL DISCLOSURE

None

ITEM 9A. CONTROLS AND
PROCEDURES

Management
is responsible for establishing and maintaining effective disclosure controls and
procedures, as defined under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act
of 1934. As of December 31, 2004, an evaluation was performed under the supervision and
with the participation of management, including the Principal Executive Officer and
Principal Financial Officer, of the effectiveness of the design and operation of PFGI
Capitals disclosure controls and procedures. Based on that evaluation, management
concluded that disclosure controls and procedures as of December 31, 2004 were effective
in ensuring material information required to be disclosed in the Annual Report on Form
10-K was recorded, processed, summarized, and reported on a timely basis. Additionally,
there were no changes in PFGI Capitals internal control over financial reporting
that occurred during the quarter ended December 31, 2004 that have materially affected, or
are reasonably likely to materially affect, PFGI Capitals internal control over
financial reporting.

Managements
responsibilities related to establishing and maintaining effective disclosure controls and
procedures include maintaining effective internal controls over financial reporting that
are designed to produce reliable financial statements in accordance with accounting
principles generally accepted in the United States.

There
have been no significant changes in PFGI Capitals internal controls or in other
factors that could significantly affect internal controls subsequent to December 31, 2004.

PART III

Items
10 through 14 are incorporated by reference to PFGI Capitals definitive information
statement to be filed with the Commission pursuant to Regulation 14C within 120 days after
the close of PFGI Capitals fiscal year ending December 31, 2004:

ITEM 10. DIRECTORS AND
EXECUTIVE OFFICERS OF THE REGISTRANT

ITEM 11. EXECUTIVE
COMPENSATION

ITEM 12. SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ANDRELATED STOCKHOLDER MATTERS

ITEM 13. CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS

ITEM 14. PRINCIPAL
ACCOUNTANT FEES AND SERVICES

(44)

---

PART IV

ITEM 15. EXHIBITS,
FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)  
          1. See Index to Financial Statements on page 32 for a list of all financial
          statements filed as a part of this report.

2.       
          Schedules to the financial statements required by Article 9 of Regulation S-X
          have been omitted as they are not required, not applicable or the information
          required thereby is set forth in the related financial statements.

3.       
          Exhibits:

1.0
Underwriting Agreement incorporated by reference to Exhibit 1 to PFGI Capitals
Amended Registration Statement on Form S-3/A (Registration No. 333-88446) Filed June 6,
2002.

3.1
By-Laws incorporated by reference to Exhibit 3.2 to PFGI Capitals Registration
Statement on Form S-3 (Registration No. 333-88446) Filed May 16, 2002.

3.2
Amended and Restated Articles of Incorporation incorporated by reference to Exhibit 3.5 to
PFGI Capitals Amended Registration Statement on Form S-3/A (Registration No.
333-88446) Filed June 6, 2002.

4.1
Forward Purchase Contract Agreement incorporated by reference to Exhibit 4.2 to PFGI
Capitals Amended Registration Statement on Form S-3/A (Registration No. 333-88446)
Filed June 6, 2002.

4.2
Income PRIDES incorporated by reference to Exhibit A to Exhibit 4.2 to PFGI Capitals
Amended Registration Statement on Form S-3/A (Registration No. 333-88446) Filed June 6,
2002.

4.3
Pledge Agreement incorporated by reference to Exhibit 4.4 to PFGI Capitals Amended
Registration Statement on Form S-3/A (Registration No. 333-88446) Filed June 6, 2002.

4.4
Series A Preferred Stock Certificate incorporated by reference to Exhibit 4.5 to PFGI
Capitals Amended Registration Statement on Form S-3/A (Registration No. 333-88446)
Filed June 6, 2002.

4.5
Remarketing Agreement incorporated by reference to Exhibit 4.6 to PFGI Capitals
Amended Registration Statement on Form S-3/A (Registration No. 333-88446) Filed June 6,
2002.

10.1
Master Participation and Servicing Agreement incorporated by reference to Exhibit 10.1 to
PFGI Capitals Amended Registration Statement on Form S-3/A (Registration No.
333-88446) Filed June 6, 2002.

10.2
Management Agreement incorporated by reference to Exhibit 10.2 to PFGI Capitals
Amended Registration Statement on Form S-3/A (Registration No. 333-88446) Filed June 6,
2002.

(45)

---

10.3
Exchange Agreement incorporated by reference to Exhibit 10.3 to PFGI Capitals
Amended Registration Statement on Form S-3/A (Registration No. 333-88446) Filed June 6,
2002.

11.0
 Statement re computation of per share earnings incorporated by reference
 to Note 4 of the Notes to Financial Statements of this report.

12.0
Statement of Computation of Ratio of Earnings to Fixed Charges attached to this report

14.0
Code of Conduct and Ethics is provided in the investor relations page of National
Citys web site at www.nationalcity.com and is available in print to any stockholder
upon request.

23.0
Consent of Independent Registered Public Accounting Firm attached to this report.

24.0 Power
of Attorney for Directors signatures attached to this report.

31.1
Sarbanes-Oxley Act Section 302, Certification of Chief Executive Officer attached to this
report.

31.2
Sarbanes-Oxley Act Section 302, Certification of Chief Financial Officer attached to this
report.

32.1
Section 1350 Certification of Principal Executive Officer attached to this report.

32.2 Section
1350 Certification of Principal Financial Officer attached to this report.

(b)  
          Reports on Form 8-K:

Form
8-K (Items 2.02, 5.02, 8.01, and 9.01) filed on October 20, 2004  Announcement of
Third Quarter 2004 Financial Results and Confirmation of Dividend Payment

Form
8-K (Items 2.02, 8.01, and 9.01) filed on January 19, 2005  Announcement of Fourth
Quarter 2004 Financial Results and Confirmation of Dividend Payment

(46)

---

SIGNATURES

Pursuant
to the requirements of Section 13 of the Securities Exchange Act of 1934, PFGI Capital
Corporation has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

PFGI Capital Corporation

/s/ Susan M. Kinsey
Susan M. Kinsey
President
 March 31, 2005

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of PFGI Capital Corporation and in the capacities
and on the dates indicated.

|Signature                | Capacity                      | Date          
|------------------------ | ----------------------------- | --------------
|/s/ Susan M. Kinsey *    | Director and President        | March 31, 2005
|Susan M. Kinsey          | (Principal Executive Officer)
|/s/ T. James Berry *     | Director                      | March 31, 2005
|T. James Berry          
|/s/ Dett Hunter *        | Director                      | March 31, 2005
|Dett Hunter             
|/s/ Linda K. Erkkila *   | Director and Secretary        | March 31, 2005
|Linda K. Erkkila        
|/s/ Darlene M. Lindsay * | Director, Vice President      | March 31, 2005
|Darlene M. Lindsay      
|/s/ J. David Rosenberg * | Director                      | March 31, 2005
|J. David Rosenberg      
|/s/ John E. Rubenbauer * | Director                      | March 31, 2005
|John E. Rubenbauer      
|/s/ David J. Lucido *    | Director, Chief Financial     | March 31, 2005
|David J. Lucido          | Officer and Treasurer        
|/s/ J. Richard Jordan *  | Director, Vice President      | March 31, 2005
|J. Richard Jordan        | and Assistant Secretary      

*
Linda K. Erkkila, as attorney-in-fact, signs this report on behalf of the above-named
officers and directors pursuant to powers of attorney duly executed by such officers and
directors empowering Linda K. Erkkila, Susan M. Kinsey or David J. Lucido to sign on their
behalf.

/s/ Linda K. Erkkila * Linda K.
Erkkila, attorney-in-fact

(47)