Huntington National Bank 2012 Annual Report Download - page 36

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The C&I portfolio is expected to continue to see growth in 2013, although we expect growth will be more heavily weighted to the
back half of the year when we expect economic uncertainty driven by Washington to be resolved. Our C&I sales pipeline remains
robust with much of this reflecting the positive impact from our strategic initiatives, focused OCR sales process, and continued
support of middle market and small business lending in the Midwest. While on-balance sheet exposure is expected to increase, we
will continue to evaluate the use of automobile loan securitizations due to our expectation of continued strong levels of originations
and anticipate two securitizations in 2013. Residential mortgages and home equity loan balances are expected to increase modestly.
CRE loans likely will experience declines from current levels but are expected to remain in the $5.0 to $5.5 billion range.
Excluding potential future automobile loan securitizations, we anticipate the increase in total loans will modestly outpace growth
in total deposits. This reflects our continued focus on the overall cost of funds, the continued shift towards low- and no-cost demand
deposits and money market deposit accounts, and a reduction in balances with several larger relationships.
Noninterest income over the course of 2013, excluding the impact of any automobile loan sales, any net MSR impact, and typical
first quarter seasonality, is expected to be relatively stable at current levels. The anticipated slowdown in mortgage banking activity is
expected to be offset by continued growth in new customers, increased contribution from higher cross-sell, and the continued
maturation of our previous strategic investments.
Noninterest expense continued to run at levels above our long-term expectations relative to revenue. In response to changes in our
economic outlook, we have moderated the pace and size of our planned investments in order to drive positive operating leverage in
2013.
Credit quality is expected to experience improvement, and NCOs should approach normalized levels by the end of 2013. The
level of provision for credit losses in 2012 was at the low end of our long-term expectation, and we expect some quarterly volatility
within each of the loan categories given the absolute low level of the provision for credit losses and the uncertain and uneven nature of
the economic recovery.
We anticipate an effective tax rate for 2013 to approximate 35% of income before income taxes less approximately $75 to $90
million of permanent differences primarily related to tax-exempt income, tax advantaged investments, and general business credits.