Huntington National Bank 2005 Annual Report Download - page 60

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MANAGEMENT’S DISCUSSION AND ANALYSIS HUNTINGTON BANCSHARES INCORPORATED
portfolio performance changes over time. Management has the capability to judgmentally adjust the calculated
economic reserve amount by a maximum of +/– 20% to reflect, among other factors, differences in local versus national
economic conditions. This adjustment capability is deemed necessary given the newness of the model and the
continuing uncertainty of forecasting economic environment changes. This methodology allows for a more meaningful
discussion of our view of the current economic conditions and the potential impact on credit losses.
The table below presents the components of the ACL expressed as a percent of total period end loans and leases as of
December 31, 2005, 2004, and 2003:
Table 15 — ACL as % of Total Period End Loans and Leases
At December 31,
2005 2004 2003 2002 2001
Transaction reserve 0.89% 0.83% 1.02% N.A.% N.A.%
Economic reserve 0.21 0.32 0.40 N.A. N.A.
Total ALLL 1.10 1.15 1.42 1.62 1.87
Total AULC 0.15 0.14 0.17 0.19 0.13
Total ACL 1.25% 1.29% 1.59% 1.81% 2.00%
N.A., not applicable.
Table 16 — Allocation of Allowances for Credit Losses(1)
At December 31,
(in thousands of dollars) 2005 2004 2003 2002 2001
Commercial:
Middle market commercial and
industrial $ 82,963 20.8% $ 87,485 19.8% $103,237 21.0% $106,998 25.6% $131,489 26.6%
Middle market commercial real estate 60,667 14.4 54,927 14.9 63,294 15.1 35,658 15.5 43,574 14.8
Small business commercial and
industrial and commercial real estate 40,056 9.1 32,009 9.0 30,455 8.9 26,914 9.1 31,582 14.1
Total commercial 183,686 44.3 174,421 43.7 196,986 45.0 169,570 50.2 206,645 55.5
Consumer:
Automobile loans and leases 33,870 17.5 41,273 18.6 58,375 23.2 51,621 21.1 38,799 16.0
Home equity 30,245 19.0 29,275 19.3 25,995 17.7 16,878 16.9 24,054 19.0
Residential mortgage 13,172 17.1 18,995 16.3 11,124 12.0 8,566 9.4 6,013 6.1
Other loans 7,374 2.1 7,247 2.1 7,252 2.1 8,085 2.4 19,757 3.4
Total consumer 84,661 55.7 96,790 56.3 102,746 55.0 85,150 49.8 88,623 44.5
Total unallocated(2) —— — — — — 45,783 — 50,134 —
Total allowance for loan and
lease losses $268,347 100.0% $271,211 100.0% $299,732 100.0% $300,503 100.0% $345,402 100.0%
Allowance for unfunded loan
commitments and letters of credit 36,957 33,187 35,522 36,145 23,930
Total allowances for credit losses $ 305,304 $304,398 $335,254 $336,648 $369,332
(1) Percentages represent the percentage of each loan and lease category to total loans and leases.
(2) Prior to 2003, an unallocated component of the ALLL was maintained.
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