Huntington National Bank 2005 Annual Report Download - page 95

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MANAGEMENT’S DISCUSSION AND ANALYSIS HUNTINGTON BANCSHARES INCORPORATED
NPAs were $117.2 million at December 31, 2005, and represented 0.48% of related assets, up from $108.6 million, or 0.46%, at
the end of last year. Non-performing loans and leases (NPLs), which exclude OREO, were $101.9 million at December 31, 2005,
up $38.0 million from the year-earlier period. NPLs expressed as a percent of total loans and leases were 0.42% at December 31,
2005, up from 0.27% a year earlier.
The over 90-day delinquent, but still accruing, ratio was 0.23% at December 31, 2005, unchanged from the end of the year-ago
quarter.
Allowances for Credit Losses (ACL)
The December 31, 2005, ALLL was $268.3 million, down from $271.2 million a year earlier. Expressed as a percent of period-end
loans and leases, the ALLL ratio at December 31, 2005, was 1.10%, down from 1.15% a year ago, reflecting the improvement in
economic conditions. The table below shows the change in the ALLL ratio and each reserve component from the 2004 fourth
quarter.
Components of ALLL as percent of total loans and leases:
4Q05 4Q04 Change
Transaction reserve 0.89% 0.83% 0.06%
Economic reserve 0.21 0.32 (0.11)
Total ALLL 1.10% 1.15% (0.05)%
The ALLL as a percent of NPAs was 229% at December 31, 2005, down from 250% a year ago. At December 31, 2005, the AULC
was $37.0 million, up from $33.2 million at the end of the year-ago quarter. On a combined basis, the ACL as a percent of total
loans and leases was 1.25% at December 31, 2005, down from 1.29% a year earlier. The ACL as a percent of NPAs was 261% at
December 31, 2005, down from 280% a year earlier.
The provision for credit losses in the 2005 fourth quarter was $30.8 million, an $18.2 million increase from the year-ago quarter.
The increase in provision expense from the year-ago quarter reflected a combination of higher non-performing assets, as well as
the downgrades in certain commercial credits discussed above.
Capital
At December 31, 2005, the tangible equity to assets ratio was 7.19%, up slightly from 7.18% a year ago. At December 31, 2005,
the tangible equity to risk-weighted assets ratio was 7.91%, up slightly from 7.86% at the end of the year-ago quarter. The
increase in these ratios from a year ago reflected growth in retained earnings, with the improvement in the risk-weighted ratio
also reflecting the reduced overall risk profile of earning assets.
During the quarter, 5.2 million shares of common stock were repurchased in the open market, leaving 9.8 million shares
remaining under the 15 million share repurchase authorization announced October 18, 2005.
Table 35 presents quarterly income statements and Table 36 presents quarterly stock summary, key ratios and statistics, and
capital data for eight quarters.
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