Huntington National Bank 2011 Annual Report Download - page 28

new product / initiative reviews, frequent financial performance reviews, employee and client surveys,
monitoring market intelligence, periodic discussions between management and our board, and other such efforts.
In addition to the other information included or incorporated by reference into this report, readers should
carefully consider that the following important factors, among others, could negatively impact our business,
future results of operations, and future cash flows materially.
Credit Risks:
1. Our ACL level may prove to be inappropriate or be negatively affected by credit risk exposures which
could materially adversely affect our net income and capital.
Our business depends on the creditworthiness of our customers. Our ACL of $1.0 billion at December 31,
2011, represented Management’s estimate of probable losses inherent in our loan and lease portfolio as well as
our unfunded loan commitments and letters of credit. We periodically review our ACL for appropriateness. In
doing so, we consider economic conditions and trends, collateral values, and credit quality indicators, such as
past charge-off experience, levels of past due loans, and NPAs. There is no certainty that our ACL will be
appropriate over time to cover losses in the portfolio because of unanticipated adverse changes in the economy,
market conditions, or events adversely affecting specific customers, industries, or markets. If the credit quality of
our customer base materially decreases, if the risk profile of a market, industry, or group of customers changes
materially, or if the ACL is not appropriate, our net income and capital could be materially adversely affected
which, in turn, could have a material adverse effect on our financial condition and results of operations.
In addition, bank regulators periodically review our ACL and may require us to increase our provision for
loan and lease losses or loan charge-offs. Any increase in our ACL or loan charge-offs as required by these
regulatory authorities could have a material adverse effect on our financial condition and results of operations.
2. A sustained weakness or further weakening in economic conditions could materially adversely affect
our business.
Our performance could be negatively affected to the extent that further weaknesses in business and
economic conditions have direct or indirect material adverse impacts on us, our customers, and our
counterparties. These conditions could result in one or more of the following:
• A decrease in the demand for loans and other products and services offered by us;
• A decrease in customer savings generally and in the demand for savings and investment products offered
by us; and
• An increase in the number of customers and counterparties who become delinquent, file for protection
under bankruptcy laws, or default on their loans or other obligations to us.
An increase in the number of delinquencies, bankruptcies, or defaults could result in a higher level of NPAs,
NCOs, provision for credit losses, and valuation adjustments on loans held for sale. The markets we serve are
dependent on industrial and manufacturing businesses and thus are particularly vulnerable to adverse changes in
economic conditions affecting these sectors.
3. Uncertain economic conditions in our markets could result in higher delinquencies, greater charge-
offs, and increased losses on the sale of foreclosed real estate in future periods.
Like all financial institutions, we are subject to the effects of any economic downturn. There has been a
slowdown in the housing market across our geographic footprint, reflecting declining prices and excess
inventories of houses to be sold. These developments have had, and further declines may continue to have, a
negative effect on our financial conditions and results of operations. At December 31, 2011, we had:
• $8.2 billion of home equity loans and lines, representing 21% of total loans and leases.
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