Huntington National Bank 2011 Annual Report Download - page 57

• $19.9 million, or 20%, decrease in deposit and other insurance expenses.
• $18.2 million, or 20%, decrease in professional services, reflecting lower legal costs as collection
activities declined and consulting expenses.
• $17.0 million, or 46%, decrease in automobile operating lease expense as that portfolio continued to
run-off having exited that business in 2008.
• $9.7 gain on the early extinguishment of debt related to the exchange of certain trust preferred securities.
2010 vs. 2009
Noninterest expense decreased $2,359.6 million from 2009. Excluding the 2009 goodwill impairment of
$2,606.9 million, noninterest expense increased $247.3 million and primarily reflected:
• The absence of $147.4 million in gains on early extinguishment of debt in 2009.
• $98.5 million, or 14%, increase in personnel costs, primarily reflecting a 10% increase in full-time
equivalent staff in support of strategic initiatives, as well as higher commissions and other incentive
expenses, and the reinstatement of certain employee benefits such as 401(k) plan matching contribution,
merit increases, and bonuses.
• $32.9 million, or 99%, increase in marketing expense, reflecting increases in branding and product
advertising activities in support of strategic initiatives.
• $24.8 million, or 23%, increase in other expense, reflecting $13.1 million increase associated with the
provision for repurchase losses related to representations and warranties made on mortgage loans sold, as
well as increased travel and miscellaneous fees.
Partially offset by:
• $54.9 million, or 58%, decline in OREO and foreclosure expense.
• $16.3 million, or 14%, decrease in deposit and other insurance expense. This decrease was comprised of
two components: (1) $23.6 million FDIC special assessment during the 2009 second quarter, and
(2) increased assessments due to higher levels of deposits.
Provision for Income Taxes
(This section should be read in conjunction with Significant Items 6 and 8, and Note 17 of the Notes to
Consolidated Financial Statements.)
2011 versus 2010
The provision for income taxes was $164.6 million for 2011 compared with a provision of $40.0 million in
2010. Both years included the benefits from tax-exempt income, tax-advantaged investments, and general
business credits. At December 31, 2011, we had a net deferred tax asset of $364.8 million. Based on both
positive and negative evidence and our level of forecasted future taxable income, there was no impairment to the
deferred tax asset at December 31, 2011. The total disallowed deferred tax asset for regulatory capital purposes
decreased to $39.1 million at December 31, 2011 compared to the total disallowed deferred tax asset of $161.3
million at December 31, 2010.
We file income tax returns with the IRS and various state, city, and foreign jurisdictions. Federal income tax
audits have been completed for tax years through 2007. We have appealed certain proposed adjustments resulting
from the IRS examination of our 2006 and 2007 tax returns. We believe our positions related to such proposed
adjustments are correct and supported by applicable statutes, regulations, and judicial authority, and intend to
vigorously defend them. During 2011, we entered into discussions with the Appeals Division of the IRS. It is
possible the ultimate resolution of the proposed adjustments, if unfavorable, may be material to the results of
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