Huntington National Bank 2007 Annual Report Download - page 67

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Fully-taxable equivalent net interest income increased $126.2 million from the year-ago quarter. This reflected the favorable impact
of a $15.6 billion increase in average earning assets, of which $13.8 billion represented an increase in average loans and leases,
partially offset by a slight decrease in the fully-taxable equivalent net interest margin of 2 basis points to 3.26%. The 2007 fourth
quarter net interest margin included a negative impact of 15 basis points, reflecting Franklin loans that were put on nonaccrual
status from November 16, 2007 until December 28, 2007. The increases in average earning assets, as well as loans and leases, were
primarily merger-related. Table 37 details the $13.8 billion reported increase in average loans and leases, and the $13.0 billion
reported increase in average total deposits.
Table 37 — Average Loans/Leases and Deposits — Estimated Merger Related Impacts
(in millions) 2007 2006 Amount %
Merger
Related Amount %
(1)
Fourth Quarter Change
Non-Merger
Related
Loans
Total commercial $22,323 $12,312 $10,011 81.3% $ 8,746 $1,265 6.0%
Automobile loans and leases 4,324 3,949 375 9.5 432 (57) (1.3)
Home equity 7,297 4,973 2,324 46.7 2,385 (61) (0.8)
Residential mortgage 5,437 4,635 802 17.3 1,112 (310) (5.4)
Other consumer 728 430 298 69.3 143 155 27.1
Total consumer 17,786 13,987 3,799 27.2 4,072 (273) (1.5)
Total loans $40,109 $26,299 $13,810 52.5% $12,818 $ 992 2.5%
Deposits
Demand deposits — non-interest bearing $ 5,218 $ 3,580 $ 1,638 45.8% $ 1,829 $ (191) (3.5)%
Demand deposits — interest bearing 3,929 2,219 1,710 77.1 1,460 250 6.8
Money market deposits 6,845 5,548 1,297 23.4 996 301 4.6
Savings and other domestic deposits 4,813 2,849 1,964 68.9 2,594 (630) (11.6)
Core certificates of deposit 10,674 5,380 5,294 98.4 4,630 664 6.6
Total core deposits 31,479 19,576 11,903 60.8 11,509 394 1.3
Other deposits 6,196 5,132 1,064 20.7 1,342 (278) (4.3)
Total deposits $37,675 $24,708 $12,967 52.5% $12,851 $ 116 0.3%
(1) Calculated as non-merger related / (prior period + merger-related)
The $1.0 billion, or 3%, non-merger-related increase in average total loans primarily reflected:
– $1.3 billion, or 6%, increase in average total commercial loans, reflecting continued strong growth in middle-market C&I
loans.
Partially offset by:
– $0.3 billion, or 2%, decrease in average total consumer loans. This reflected a decline in residential mortgages due to loan
sales over the last 12-month period. The declines in home equity loans and automobile loans and leases reflected weaker
demand, a softer economy, as well as the continued impact of competitive pricing.
Also contributing to the growth in average earning assets was a $1.0 billion increase in average trading account securities. The
increase in these assets reflected a change in our strategy to use trading account securities to hedge the change in fair value of our
MSRs.
The 3.26% fully-taxable net interest margin in the current period, reflected a negative impact of 15 basis points as the Franklin
loans were put on nonaccrual status from November 16, 2007 until December 28, 2007. The margin decline also reflected
competitive deposit pricing in our markets.
Virtually all of the increase in average total deposits was merger-related. The $0.1 billion non-merger-related increase reflected:
– $0.4 billion, or 1%, increase in average total core deposits, reflecting strong growth in interest bearing demand deposits and
money market accounts. While there was strong growth in core certificates of deposits, this was offset by the decline in
savings and other domestic deposits, as customers transferred funds from lower rate to higher rate accounts.
Partially offset by:
– $0.3 billion, or 4%, decline in other non-core deposits.
65
MANAGEMENT’S DISCUSSION AND ANALYSIS HUNTINGTON BANCSHARES INCORPORATED