Huntington National Bank 2007 Annual Report Download - page 48

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Net Charge-offs
(This section should be read in conjunction with Significant Items 1, 2, and 3.)
Table 22 reflects net loan and lease charge-off detail for each of the last five years.
Table 22 — Net Loan and Lease Charge-offs
(in thousands of dollars) 2007 2006 2005 2004 2003
At December 31,
Net charge-offs by loan and lease type:
Commercial:
Middle market commercial and industrial
(1)
$329,862 $ 6,318 $13,578 $ 1,920 $ 75,803
Construction 11,845 3,553 135 2,465 2,928
Commercial 26,400 2,555 3,910 5,506 5,019
Middle market commercial real estate 38,245 6,108 4,045 7,971 7,947
Small business commercial and industrial and commercial real estate 16,837 15,225 11,951 5,566 11,625
Total commercial 384,944 27,651 29,574 15,457 95,375
Consumer:
Automobile loans 17,185 8,330 11,988 28,574 40,266
Automobile leases 10,507 10,445 11,664 10,837 5,728
Automobile loans and leases 27,692 18,775 23,652 39,411 45,994
Home equity 34,426 21,854 17,619 15,074 12,114
Residential mortgage 11,371 4,505 2,332 1,760 832
Other loans 19,198 9,591 6,880 6,833 7,494
Total consumer 92,687 54,725 50,483 63,078 66,434
Total net charge-offs $477,631 $82,376 $80,057 $78,535 $161,809
Net charge-offs — annualized percentages:
Commercial:
Middle market commercial and industrial
(1)
4.00% 0.11% 0.28% 0.04% 1.64%
Construction 0.78 0.29 0.01 0.17 0.24
Commercial 0.62 0.09 0.20 0.29 0.28
Middle market commercial real estate 0.66 0.15 0.11 0.24 0.26
Small business commercial and industrial and commercial real estate 0.49 0.66 0.54 0.28 0.65
Total commercial 2.21 0.23 0.28 0.16 1.01
Consumer:
Automobile loans 0.65 0.40 0.59 1.25 1.24
Automobile leases 0.71 0.51 0.48 0.49 0.40
Automobile loans and leases 0.67 0.46 0.53 0.88 0.98
Home equity 0.56 0.44 0.37 0.36 0.36
Residential mortgage 0.23 0.10 0.06 0.05 0.04
Other loans 3.63 2.18 1.79 1.74 1.76
Total consumer 0.59 0.39 0.37 0.51 0.63
Net charge-offs as a % of average loans 1.44% 0.32% 0.33% 0.35% 0.81%
(1) 2007 includes net charge-offs associated with loans to Franklin.
Total commercial net charge-offs during 2007 were $384.9 million, or an annualized 2.21% of average related balances, including
$308.5 million related to the Franklin restructuring. The remaining $76.4 million of net charge-offs that were non-Franklin-related
was higher than the $27.7 million in the prior year-end. In 2007, we provided an additional $24.8 million for loan losses related to
two eastern Michigan home builder credits and one northern Ohio automotive supplier credit. Also in 2007, we charged off
$22.2 million against these reserves. The remaining increase reflected continued economic weakness in our Midwest markets, most
notably among our borrowers in eastern Michigan and northern Ohio, as well as the impact of the Sky Financial acquisition.
Total consumer net charge-offs during 2007 were $92.7 million, or an annualized 0.59% of average related balances. This was
higher than the 0.39% in the prior year-end period. The increases in automobile loan and lease net charge-offs from the prior
year-end reflected the impact of the acquisition of the Sky Financial portfolio, as well as seasonal factors. The increases in
residential mortgage and home equity net charge-offs reflected continued market weakness, particularly in the eastern Michigan
and northern Ohio markets.
46
MANAGEMENT’S DISCUSSION AND ANALYSIS HUNTINGTON BANCSHARES INCORPORATED