Huntington National Bank 2011 Annual Report Download - page 52

2011 vs. 2010
Fully-taxable equivalent net interest income for 2011 increased $14.2 million, or 1%, from 2010. This
reflected the favorable impact of a $1.2 billion, or 2%, increase in average earning assets, partially offset by a 6
basis point decline in the net interest margin.
The increase in average earning assets reflected:
• $1.6 billion, or 4%, increase in average total loans and leases.
Partially offset by:
• $0.4 billion, or 4%, decrease average total available-for-sale and other securities.
The 6 basis point decline in the net interest margin reflected lower loan and securities yields partially offset
by the positive impacts of growth in low cost deposits and lower deposit pricing.
The $1.6 billion, or 4%, increase in average total loans and leases from the prior year primarily reflected:
• $1.2 billion, or 9%, increase in the average C&I portfolio due to a combination of factors. This included
benefits from our strategic initiatives focusing on large corporate, asset based lending, and equipment
finance. In addition, we continued to see growth in more traditional middle-market, business banking, and
automobile floorplan loans. This growth was evident despite utilization rates that remained well below
historical norms.
• $1.0 billion, or 20%, increase in the average automobile portfolio. Automobile lending is a core
competency and continues to be an area of targeted growth. The growth from the prior year exhibited
further penetration within our historical geographic footprint, as well as the positive impacts of our
expansion into Eastern Pennsylvania and five New England states. Origination quality remains high as
measured by all of our internal quality metrics.
• $0.4 billion, or 5%, increase in average home equity loans.
Partially offset by:
• $1.0 billion, or 14%, decrease in the average CRE portfolio reflecting the continued execution of our plan
to reduce the total CRE exposure, primarily in the noncore CRE portfolio. This reduction is expected to
continue, reflecting the combined impact of amortization, pay downs, refinancing, and restructures.
The $1.5 billion, or 4%, increase in average total deposits from the prior year reflected:
• $1.9 billion, or 5%, increase in average total core deposits. The drivers of this change were a $1.8 billion,
or 26%, increase in average noninterest-bearing demand deposits and a $1.6 billion, or 13%, increase in
average money market deposits, partially offset by a $1.5 billion, or 16%, decline in average core
certificates of deposits.
Partially offset by:
• $0.2 billion, or 33%, decline in average other domestic deposits of $250,000 or more, which reflected a
strategy of reducing such noncore funding.
2010 vs. 2009
Fully-taxable equivalent net interest income for 2010 increased $194.1 million, or 14%, from 2009. This
reflected the favorable impact of a $1.3 billion, or 3%, increase in average earning assets, due to a $2.9 billion, or
45%, increase in average total investment securities, which was partially offset by a $1.4 billion, or 4%, decrease
in average total loans and leases. Also contributing to the increase in net interest income was a 33 basis point
increase in the fully-taxable net interest margin to 3.44% in 2010 from 3.11% in 2009.
The $1.4 billion, or 4%, decrease in average total loans and leases primarily reflected:
• $2.6 billion, or 12%, decline in average total commercial loans. The decline in average CRE loans
reflected our planned efforts to shrink this portfolio through payoffs and paydowns, as well as the impact
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