Huntington National Bank 2011 Annual Report Download - page 53

of NCOs. The decline in average C&I loans reflected a general decrease in borrowing as evidenced by a
decline in line-of-credit utilization, NCO activity, and the reclassification in the 2010 first quarter of
variable rate demand notes to municipal securities.
Partially offset by:
• $1.2 billion, or 7%, increase in average total consumer loans. This growth reflected a $1.3 billion, or
38%, increase in average automobile loans and leases. On January 1, 2010, we adopted the new
accounting standard ASC 810 Consolidation, resulting in the consolidation of an off-balance sheet
securitization, which increased our automobile loan portfolio by $0.5 billion at December 31, 2010.
Underlying growth in automobile loans continued to be strong, reflecting a significant increase in loan
originations in 2010 as compared to 2009. The expansion into Eastern Pennsylvania and the five New
England states also had a positive impact on our volume.
Total average investment securities increased $2.9 billion, or 45%, reflecting the deployment of the cash
from core deposit growth and loan runoff over this period, as well as the proceeds from 2009 capital actions.
The $1.3 billion, or 3%, increase in average total deposits reflected:
• $3.1 billion, or 9%, growth in total core deposits. The primary driver of this growth was a 63% increase in
average money market deposits. Partially offsetting this growth was a 23% decline in average core
certificates of deposit.
Partially offset by:
• $1.7 billion, or 39%, decline in average noncore deposits, reflecting a managed decline in public fund
deposits as well as planned efforts to reduce our reliance on noncore funding sources.
Provision for Credit Losses
(This section should be read in conjunction with Significant Item 6 and the Credit Risk section.)
The provision for credit losses is the expense necessary to maintain the ALLL and the AULC at levels
appropriate to absorb our estimate of probable inherent credit losses in the loan and lease portfolio and the
portfolio of unfunded loan commitments and letters-of-credit.
The provision for credit losses in 2011 was $174.1 million, down $460.5 million, or 73%, from 2010,
primarily reflecting the combination of lower NCOs, NPAs, and commercial Criticized loans as a result of
improvement in the underlying quality of the loan portfolio. The provision for credit losses in 2011 was $263.0
less than total NCOs (see Credit Quality discussion).
Noninterest Income
(This section should be read in conjunction with Significant Item 2.)
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