Huntington National Bank 2011 Annual Report Download - page 106

The increase in noninterest expense from the year-ago period reflected:
• $27.0 million, or 10%, increase in personnel costs, primarily driven by full time salaries, higher sales
commissions, and increased benefits costs, due primarily to the addition of 41 in-store and traditional
branches in 2011.
• $18.6 million, or 3%, increase in other expenses, primarily due to a $12.9 million increase in outside
services related to the increase in debit card processes and conversion expenses, $7.8 million increase in
marketing expenses, which primarily reflected two additional quarters of advertising and additional direct
mail expenses. Our brand advertising did not start until June 2010; therefore 2011 represents a more
normalized run rate. Also contributing to the increase was a $6.2 million increase in occupancy expenses
associated with the rebranding and refurbishment effort of the branch and ATM network. These increases
were offset by a $4.5 million decrease in OREO loss and foreclosure expenses and a $5.4 million
decrease in intangible amortization.
2010 vs. 2009
Retail and Business Banking reported net income of $131.0 million in 2010, compared with a net loss of
$26.5 million in 2009. The $157.5 million increase included a $56.4 million, or 7%, increase in net interest
income and a $312.2 million, or 66%, decline in the provision for credit losses, partially offset by a $105.5
million, or 13%, increase in noninterest expense.
Regional and Commercial Banking
Table 43 — Key Performance Indicators for Regional and Commercial Banking
Change from 2010
2011 2010 Amount Percent 2009
(dollar amounts in thousands unless otherwise noted)
Net interest income ............................. $244,392 $211,511 $ 32,881 16% $ 190,955
Provision for credit losses ........................ 11,013 104,705 (93,692) (89) 393,984
Noninterest income ............................. 127,315 111,237 16,078 14 95,705
Noninterest expense ............................. 191,701 158,871 32,830 21 136,885
Provision (benefit) for income taxes ................ 59,147 20,710 38,437 186 (85,473)
Net income (loss) ............................... $109,846 $ 38,462 $ 71,384 186% $(158,736)
Number of employees (full-time equivalent) .......... 623 538 85 16% 467
Total average assets (in millions) ................... $ 9,283 $ 8,213 $ 1,070 13 $ 8,730
Total average loans/leases (in millions) .............. 8,326 7,414 912 12 8,113
Total average deposits (in millions) ................. 3,882 3,174 708 22 3,030
Net interest margin .............................. 2.95% 2.85% 0.10% 4 2.42%
NCOs ........................................ $ 39,568 $ 66,267 $(26,699) (40) $ 262,887
NCOs as a % of average loans and leases ............ 0.48% 0.89% (0.41)% (46) 3.24%
Return on average common equity ................. 15.1 5.8 9.3 160 (20.7)
2011 vs. 2010
Regional and Commercial Banking reported net income of $109.8 million in 2011. This was an increase of
$71.4 million, or 186%, compared to 2010.
Contributing to the increase in net income was growth in both net interest income and noninterest income
due to the successful execution of our strategic initiatives. In addition, current year results continued to reflect
significant improvement in provision for credit losses, resulting from the proactive treatment of problem credits
and an improved credit environment.
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