Huntington National Bank 2011 Annual Report Download - page 79

The following table reflects NCO detail for each of the last five years.
Table 21 — Net Loan and Lease Charge-offs
Year Ended December 31,
2011 2010 2009 2008 2007
(dollar amounts in thousands)
Net charge-offs by loan and lease type
Commercial:
Commercial and industrial ................ $ 89,699 $254,932 $ 487,606 $526,165 $345,840
Commercial real estate:
Construction ......................... 31,524 109,008 192,706 6,626 11,854
Commercial .......................... 116,577 166,554 490,025 62,114 27,250
Total commercial real estate ............... 148,101 275,562 682,731 68,740 39,104
Total commercial .......................... 237,800 530,494 1,170,337 594,905 384,944
Consumer:
Automobile ............................ 15,067 26,572 56,332 54,565 27,692
Home equity ........................... 101,797 139,373 106,176 67,556 34,426
Residential mortgage ..................... 56,681 152,895 110,202 21,247 11,371
Other consumer ......................... 25,744 25,140 33,540 19,794 19,198
Total consumer ........................... 199,289 343,980 306,250 163,162 92,687
Total net charge-offs ........................ $437,089 $874,474 $1,476,587 $758,067 $477,631
Net charge-offs ratio:(1)
Commercial:
Commercial and industrial ................ 0.66% 2.05% 3.71% 3.87% 3.25%
Commercial real estate:
Construction ......................... 5.33 9.95 10.37 0.32 0.77
Commercial .......................... 2.08 2.72 6.71 0.81 0.52
Commercial real estate ................... 2.39 3.81 7.46 0.71 0.57
Total commercial .......................... 1.20 2.70 5.25 2.55 2.21
Consumer:
Automobile ............................ 0.26 0.54 1.59 1.21 0.67
Home equity ........................... 1.28 1.84 1.40 0.91 0.56
Residential mortgage ..................... 1.20 3.42 2.43 0.42 0.23
Other consumer ......................... 4.84 3.80 4.65 2.86 3.63
Total consumer ........................... 1.05 1.95 1.87 0.92 0.59
Net charge-offs as a % of average loans ........ 1.12% 2.35% 3.82% 1.85% 1.44%
(1) Percentage of related average loan balances.
In assessing NCO trends, it is helpful to understand the process of how commercial loans are treated as they
deteriorate over time. The ALLL established at origination is consistent with the level of risk associated with the
original underwriting. As part of our normal portfolio management process for commercial loans, the loan is
periodically reviewed and the risk rating is adjusted based on a current assessment of the borrower’s financial
position. The ALLL is increased or decreased based on the revised risk rating. In certain cases, the ALLL is
determined to not be sufficient, and a specific reserve is established based on the projected cash flow and
collateral value of the specific loan. Charge-offs, if necessary, are generally recognized in a period after the
specific ALLL was established. If the previously established ALLL exceeds that needed to satisfactorily resolve
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