Huntington National Bank 2007 Annual Report Download - page 28

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Table 5 shows changes in fully-taxable equivalent interest income, interest expense, and net interest income due to volume and rate
variances for major categories of earning assets and interest bearing liabilities.
Table 5 — Change in Net Interest Income Due to Changes in Average Volume and Interest Rates
(1)
Fully-taxable equivalent basis
(2)
(in millions of dollars) Volume
Yield/
Rate Total Volume
Yield/
Rate Total
Increase (Decrease) From
Previous Year Due To
Increase (Decrease) From
Previous Year Due To
2007 2006
Loans and direct financing leases $519.8 $ 97.8 $617.6 $100.7 $247.1 $347.8
Securities (27.7) 23.2 (4.5) 30.3 49.8 80.1
Other earning assets 60.2 2.4 62.6 (4.4) 7.8 3.4
Total interest income from earning assets 552.3 123.4 675.7 126.6 304.7 431.3
Deposits 281.2 28.0 309.2 52.7 217.6 270.3
Short-term borrowings 18.3 2.3 20.6 12.6 25.3 37.9
Federal Home Loan Bank advances 32.2 10.4 42.6 9.5 15.8 25.3
Subordinated notes and other long-term debt, including capital securities 6.6 11.1 17.7 (21.5) 59.9 38.4
Total interest expense of interest-bearing liabilities 338.3 51.8 390.1 53.3 318.6 371.9
Net interest income $214.0 $ 71.6 $285.6 $ 73.3 $(13.9) $ 59.4
(1) The change in interest rates due to both rate and volume has been allocated between the factors in proportion to the relationship of the absolute dollar amounts of the change in each.
(2) Calculated assuming a 35% tax rate.
2007 VERSUS 2006
Fully-taxable equivalent net interest income for 2007 increased $285.6 million, or 28%, from 2006. This reflected the favorable
impact of a $7.9 billion, or 25%, increase in average earning assets, of which $7.3 billion represented an increase in average loans
and leases, as well as the benefit of an increase in the fully-taxable net interest margin of seven basis points to 3.36%. The increase
to average earning assets, and to average loans and leases, was primarily merger-related.
The following table details the estimated merger-related impacts on our reported loans and deposits:
Table 6 — Average Loans/Leases and Deposits — Estimated Merger-Related Impacts
(in millions) 2007 2006 Amount %
Merger
Related Amount %
(1)
Twelve Months Ended
December 31, Change
Non-merger
Related
Loans/Leases
Total commercial $17,443 $11,865 $5,578 47.0% $4,373 $1,205 7.4%
Automobile loans and leases 4,118 4,088 30 0.7 216 (186) (4.3)
Home equity 6,173 4,970 1,203 24.2 1,193 10 0.2
Residential mortgage 4,939 4,581 358 7.8 556 (198) (3.9)
Other consumer 529 439 90 20.5 72 18 3.5
Total consumer 15,759 14,078 1,681 11.9 2,037 (356) (2.2)
Total loans $33,202 $25,943 $7,259 28.0% $6,410 $ 849 2.6%
Deposits
Demand deposits — non-interest bearing $ 4,438 $ 3,530 $ 908 25.7% $ 915 $ (7) (0.2)%
Demand deposits — interest bearing 3,129 2,138 991 46.4 730 261 9.1
Money market deposits 6,173 5,604 569 10.2 498 71 1.2
Savings and other domestic time deposits 3,895 2,992 903 30.2 1,297 (394) (9.2)
Core certificates of deposit 8,057 5,050 3,007 59.5 2,315 692 9.4
Total core deposits 25,692 19,314 6,378 33.0 5,755 623 2.5
Other deposits 5,374 4,870 504 10.3 672 (168) (3.0)
Total deposits $31,066 $24,184 $6,882 28.5% $6,427 $ 455 1.5%
(1) Calculated as non-merger related / (prior period + merger-related)
26
MANAGEMENT’S DISCUSSION AND ANALYSIS HUNTINGTON BANCSHARES INCORPORATED