Huntington National Bank 2012 Annual Report Download - page 54

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Collection action is initiated as needed through a centrally managed collection and recovery function. The collection group
employs a series of collection methodologies designed to maintain a high level of effectiveness while maximizing efficiency. In
addition to the consumer loan portfolio, the collection group is responsible for collection activity on all sold and securitized consumer
loans and leases. Collection practices include a single contact point for the majority of the residential real estate secured portfolios.
Effective with the 2012 third quarter, we identified certain loans within the consumer portfolio that met the definition of
collateral dependent as defined by regulatory guidance as the borrowers had not reaffirmed their debt discharged in a Chapter 7
bankruptcy filing. The bankruptcy court’s discharge of the borrower’s debt is considered a concession when the discharged debt is not
reaffirmed, and as such, the loans were classified as TDRs, placed on nonaccrual status, and written down to collateral value, less
anticipated selling costs. Previously, we recorded the charge-off when the loan reached 60-days past due and did not classify these
loans as TDRs. Many of these loans were current, with many borrowers having paid according to the contractual terms for several
years. In 2012, this change increased NCOs by $34.6 million, NALs by $60.1 million, and TDRs by $79.5 million across the
automobile, residential mortgage, and home equity portfolios. 
AUTOMOBILE PORTFOLIO
Our strategy in the automobile loan and lease portfolio continued to focus on high quality borrowers as measured by both FICO
and internal custom scores, combined with appropriate LTV’s, terms, and profitability. Our strategy and operational capabilities allow
us to appropriately manage the origination quality across the entire portfolio, including our newer markets. Although increased
origination volume and the entering new markets can be associated with increased risk levels, we believe our strategy and operational
capabilities significantly mitigate these risks.
We have continued to consistently execute our value proposition and take advantage of available market opportunities.
Importantly, we have maintained our high credit quality standard while growing the portfolio. We have developed and implemented a
loan securitization strategy to ensure we remain within our established portfolio concentration limits.
During 2012, a total of $2.3 billion of automobile loans were transferred to trusts in two separate securitization transactions.
Additional information regarding these securitization transactions is located in Note 21 of the Notes to Consolidated Financial
Statements.
RESIDENTIAL REAL ESTATE SECURED PORTFOLIOS
The properties securing our residential mortgage and home equity portfolios are primarily located within our geographic footprint.
The continued stress on home prices has caused the performance in these portfolios to remain weaker than historical levels. The
residential-secured portfolio originations continue to be of high quality, with the majority of the negative credit impact coming from
loans originated in 2006 and earlier. We continue to evaluate all of our policies and processes associated with managing these
portfolios. Our loss mitigation and foreclosure activities are consolidated in one location under common management. This structure
allows us to focus on effectively helping our customers with appropriate solutions for their specific circumstances.
Table 12 - Selected Home Equity and Residential Mortgage
Portfolio Data
(dollar amounts in millions)
Home Equity Residential Mortgage
Secured by first-lien Secured by junior-lien
12/31/12 12/31/11 12/31/12 12/31/11 12/31/12 12/31/11
Ending balance $4,380 $3,815 $3,955 $4,400 $4,970 $5,228
Portfolio weighted average LTV ratio(1) 71% 71% 81% 81% 76% 77%
Portfolio weighted average FICO score(2) 755 749 741 734 738 731
Home Equity Residential Mortgage (3)
Secured by first-lien Secured by junior-lien
Year Ended December 31,
2012 2011 2012 2011 2012 2011
Originations $1,665 $1,900 $559 $799 $1,019 $1,508
Origination weighted average LTV ratio(1) 72% 71% 80% 82% 84% 82%
Origination weighted average FICO
score(2) 771 769 756 762 754 759