Huntington National Bank 2011 Annual Report Download - page 104

Retail and Business Banking
Table 42 — Key Performance Indicators for Retail and Business Banking
Change from 2010
2011 2010 Amount Percent 2009
(dollar amounts in thousands unless otherwise noted)
Net interest income ............................. $932,385 $867,069 $ 65,316 8% $810,658
Provision for credit losses ........................ 120,018 157,994 (37,976) (24) 470,152
Noninterest income ............................. 405,265 394,705 10,560 3 415,471
Noninterest expense ............................ 947,794 902,186 45,608 5 796,714
Provision (benefit) for income taxes ................ 94,443 70,558 23,885 34 (14,258)
Net income (loss) ............................... $175,395 $131,036 $ 44,359 34% $ (26,479)
Number of employees (full-time equivalent) ......... 5,532 5,501 31 1% 4,911
Total average assets (in millions) .................. $ 13,453 $ 13,161 $ 292 2 $ 13,413
Total average loans/leases (in millions) ............. 12,041 11,668 373 3 12,269
Total average deposits (in millions) ................ 28,507 28,774 (267) (1) 27,604
Net interest margin ............................. 3.26% 3.00% 0.26% 9 2.93%
NCOs ........................................ $170,199 $287,320 $(117,121) (41) $325,210
NCOs as a % of average loans and leases ............ 1.41% 2.46% (1.05)% (43) 2.65%
Return on average common equity ................. 12.4 9.1 3.3 36 (2.4)
2011 vs. 2010
Retail and Business Banking reported net income of $175.4 million in 2011. This was an increase of $44.4
million, or 34%, when compared to 2010.
Results for the current year continued to be positively impacted by an increase in the number of households
and improved product penetration, along with loan balance growth, improvements in deposit mix plus deposit
spread management. The household and relationship growth for both consumer and small business customers has
come from an increase in direct mail and media, plus improvements in sales execution. The retail deposit strategy
is focused on increased checking balances and improved deposit margin on the remaining deposit portfolio
through reductions in CD balances and increased money market and savings balances. This strategy has
improved deposit spreads by 23 basis points compared to 2010. Provision for credit losses in 2011 was lower
than the prior year as loan credit quality benefitted from aggressive account management and disciplined
centralized underwriting both in consumer and small business. Finally, average loan and leases increased 3%
over the prior year even though $257 million of SBA loans were sold during 2011. The loan portfolio has also
had a 7 basis point improvement in the portfolio spread.
The increase in net income reflected a combination of factors including:
• $65.3 million, or 8%, increase in net interest income.
• $38.0 million, or 24%, decline in the provision for credit losses.
• $10.6 million, or 3%, increase in non-interest income.
Partially offset by:
• $45.6 million, or 5%, increase in noninterest expense.
The increase in net interest income from the year-ago period reflected:
• $0.4 billion, or 3%, increase in total average loans and leases.
• 23 basis point increase in our deposit spread.
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