Huntington National Bank 2012 Annual Report Download - page 88

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x$0.5 billion, or 99%, increase in the healthcare portfolio average balance due to strategic focus on the banking needs of the
healthcare industry, specifically targeting alternate site real estate, seniors’ real estate, medical technology, community
hospitals, metro hospitals, and healthcare services.
Partially offset by:
x$0.2 billion, or 37%, decrease in commercial loans managed by SAD, which reflected improved credit quality in the
portfolio.
x$0.2 billion, or 5%, decrease in the middle market portfolio average balance primarily due to a decline in the full year
average utilization rate of commercial lines of credit.
The increase in total average deposits from the year-ago period reflected:
x$1.5 billion, or 40%, increase in average core deposits, which primarily reflected a $0.9 billion, or 42% increase in average
noninterest-bearing deposits. The Regional and Commercial Banking OCR initiative was targeted to provide liquidity
solutions for certain key relationships and resulted in significant deposit growth. Middle market accounts, such as not-for-
profit universities and healthcare, contributed $0.9 billion of the balance growth, while large corporate accounts contributed
$0.6 billion.
The decrease in the provision for credit losses from the year-ago period reflected:
x$4.4 million decrease in NCOs. Expressed as a percentage of related average balance, NCOs decreased to 0.35% in 2012
from 0.48% in 2011. The decrease in NCOs was the result of improved credit quality in the portfolio.
The increase in noninterest income from the year-ago period reflected:
x$9.6 million, or 26%, increase in capital market fees including a $4.1 million, or 40%, increase in institutional brokerage
income driven by stronger underwriting fees and fixed-income commissions compared to the prior year, a $4.5 million, or
28%, increase in sales of customer interest rate protection products, and a $1.0 million, or 9%, increase in foreign exchange
revenue.
x$4.0 million, or 14%, increase in other income primarily due to an increase in commitment and other loan fees, reflecting the
deployment of loan syndications.
Partially offset by:
x$2.5 million, or 5%, decrease in deposit service charge income and other treasury management-related revenue reflected the
impact of an increase in the use of earnings credits by our customers.
x$1.3 million, or 50%, decrease in operating lease income as lease originations were structured as direct finance leases
beginning in the 2009 second quarter.
The increase in noninterest expense from the year-ago period reflected:
x$15.8 million, or 17%, increase in personnel costs, which represents a 16% increase in FTE employees. This increase in
personnel is attributable to our strategic investments in our core footprint markets, vertical strategies, and product
capabilities.
x$3.6 million, or 43%, increase in FDIC insurance expense reflected the significant growth in commercial loans.
x$1.2 million, or 9%, increase in in expanded marketing efforts and community development.
Partially offset by:
x$6.2 million, or 48%, decrease in legal, outside appraisal, and consulting expense.
x$3.3 million, or 12%, decrease in allocated overhead expense.