National City Corp. continues to grapple with the nasty effects of risky mortgage exposures, but its chief executive officer says the company is not in retreat.

It is instead pushing ahead with branch building, hoping to gain retail banking share in key markets. Peter E. Raskind, Nat City's CEO, said in an interview late Friday that its decision last week to add branches in Milwaukee punctuates this point and should be viewed as a show of confidence in its future as a stand-alone company.

"That is exactly what I'd suggest you read into it," he said from Milwaukee, where he met with Nat City employees last week. "We are confident that we can grow the business."

The Cleveland company said last week it would move its Wisconsin headquarters from suburban Brookfield to downtown Milwaukee in early 2009 and, in the next three years, open 11 branches and add 60 jobs in the metropolitan area. The moves would expand Nat City's branch network in the Milwaukee area by nearly 50%.

They come after last year's purchase of MAF Bancorp Inc., the parent of MidAmerica Bank, a deal that enabled Nat City to enter Milwaukee and add substantially to its presence in the coveted Chicago market.

After Nat City completed the MidAmerica integration this year, it became the fifth-largest banking company in the Milwaukee area, with 24 branches and $1.4 billion of deposits. It also became the fourth-largest in Chicago, climbing eight spots with 120 branches and $10 billion of deposits.

Mr. Raskind said Nat City has successfully built on other acquisitions with de novo branch building.

During this decade it bought banks in St. Louis and Cincinnati and has since doubled its network in St. Louis, to about 70 branches, and grown by about 40% in Cincinnati, to more than 70 branches.

Mr. Raskind said he envisions strong growth in Milwaukee and probably in other metropolitan markets, possibly as soon as next year, though he declined to specify any other city.

"We take very, very critical analysis across our footprint on a regular basis," he said of expansion planning. "We fully intend to look at de novo branches in 2009 and beyond."

Milwaukee is a relatively safe starting point, Nat City said, because the market has been stable in recent years and it avoided the deep mortgage woes that cities on the coasts and hard-hit Ohio and Michigan have suffered.

"This is a market that doesn't see a lot of highs and lows," Beth R. Wnuk, the president of Nat City's Wisconsin banking unit, said in an interview Friday.

Mr. Raskind did not give a growth target for Milwaukee, but he said the company wants to gain significant market share next year.

"The average household incomes in the Milwaukee area are pretty strong," he said, "and secondly, household growth in this area is better than most people think it might be, and that's obviously a very critical factor. And then, when we look at our own competitive position here, clearly, there's headroom to grow."

Terry J. McEvoy, an Oppenheimer & Co. analyst, said in an interview Monday that Milwaukee is a stable market relative to Cleveland, Detroit, and other Rust Belt cities where Nat City has major operations. He said the Cleveland company is aggressively marketing itself in Milwaukee and a big advertising push is bound to attract new customers.

However, Mr. McEvoy said, Nat City will have plenty of competition in Milwaukee, most notably from hometown market leader Marshall & Ilsley Corp. "M&I is still viewed as a pillar of strength in that market," he said.

Meanwhile, Mr. Raskind said, Nat City continues to downsize its national mortgage business and distance itself from the troubled housing markets in Florida and California that dragged the company into the red for three consecutive quarters. It has reduced its work force by 11% since last fall and quit subprime mortgage lending.

The $154 billion-asset company last month reported a record second-quarter loss of $1.76 billion compared with a year-earlier profit of $347 million. It reported a loan-loss provision of $1.59 billion.

It has been hurt by lingering exposure to First Franklin Financial Corp., the California subprime mortgage unit it sold to Merrill Lynch & Co. last year. After the markets closed Friday, the company acknowledged a new headache on that front: In a regulatory filing, it said the Securities and Exchange Commission had asked it for documents related to the First Franklin deal, as well as other paperwork related to its loan underwriting and regulatory compliance.

Jeff K. Davis, an analyst at First Horizon National Corp.'s FTN Midwest Securities Corp., said Monday that it is unclear what the SEC is seeking. Mr. McEvoy agreed.

"This kind of thing is not an everyday event for a bank, but it does come up periodically," Mr. McEvoy said. "It may just be a reflection of how active the company has been divesting businesses, raising capital, etc."

Nat City declined to comment on the SEC request, but in the filing it said the investigation was informal and that, to date, "the scope or outcome of the matter cannot be determined."

Though not commenting specifically on the SEC probe, Mr. Raskind acknowledged that Nat City's mortgage troubles remain a drag on profits. Its loan problems were largely contained to subprime mortgages, he said, however, and this would not distract the company from its goal of being a retail powerhouse when the credit cycle and economy improve.

Some positive trends were visible in Nat City's second-quarter earnings report. Average core deposits rose 15% from a year earlier, to $89.4 billion, reflecting a combination of organic growth and last year's MAF deal.

What's more, Nat City in April raised $7 billion from an investor group led by Corsair Capital LLC in New York. And it said last month that its Tier 1 capital ratio was 11% at June 30, well above regulators' target minimum of 6%, Mr. Raskind said, and this ensures that it has no need to raise more capital.

"While we obviously have experienced some challenges — largely in mortgage-related businesses that we aren't in anymore — our core businesses are healthy, doing well, and growing," he said.

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