Huntington National Bank 2003 Annual Report Download - page 57

Download and view the complete annual report

Please find page 57 of the 2003 Huntington National Bank annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 146

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146

MANAGEMENT’S DISCUSSION AND ANALYSIS
maximizing efficiency. In addition to the retained consumer loan portfolio, the collection group is responsible for collection activity on
all sold and securitized loans and leases.
I
NVESTMENT
P
ORTFOLIO
Investment decisions that incorporate credit risk require the approval of the independent credit administration function. The degree of
initial due diligence and subsequent review is a function of the type, size, and collateral of the investment. Performance is monitored
on a regular basis, and reported to the asset and liability committee (ALCO) and the executive credit risk committee.
N
ET
C
HARGE
-
OFFS
Total net charge-offs as a percent of average total loans and leases were 0.81% in 2003, down from 1.13% in 2002, but comparable to
0.81% in 2001 (see Table 10). The decline from 2002 primarily reflected lower C&I and CRE net charge-offs, which represented 1.01%
of such loans in 2003, down from 1.46% in 2002. Performance in both periods was impacted by significant NPA sales in the fourth
quarter of each year (see Significant Factors item 7).
Table 10—Net Loan and Lease Charge-offs
(in thousands of dollars) 2003 2002 2001 2000 1999
Net Charge-offs by Type
C&I $ 84,858 $117,762 $ 59,568 $13,812 $10,900
CRE 10,517 17,641 3,729 1,327 1,585
Total Commercial 95,375 135,403 63,297 15,139 12,485
Consumer
Automobile leases and loans 45,994 40,546 55,071 32,280 28,582
Home equity 14,604 13,506 14,588 6,909 6,096
Residential mortgage 832 872 785 1,007 1,136
Other loans 5,004 6,585 12,528 6,312 21,230
Total Consumer 66,434 61,509 82,972 46,508 57,044
Total Net Charge-offs $161,809 $196,912 $146,269 $61,647 $69,529
Net Charge-offs as a % of Average Loans and Leases
C&I 1.54% 2.07% 0.90% 0.21% 0.18%
CRE 0.27 0.49 0.10 0.04 0.05
Total Commercial 1.01 1.46 0.62 0.15 0.13
Consumer
Automobile loans and leases 0.98 1.27 1.94 1.03 0.81
Home equity 0.42 0.44 0.43 0.23 0.26
Residential mortgage 0.04 0.06 0.07 0.07 0.08
Other consumer loans 1.32 1.55 2.12 1.19 1.93
Total Consumer 0.63 0.76 1.05 0.58 0.67
Total Net Charge-offs 0.81% 1.13% 0.81% 0.35% 0.39%
Total consumer net charge-offs represented 0.63% of such loans in 2003, down slightly from 0.76% in 2002, and much improved from
1.05% in 2001. The primary driver of this improvement was the origination of higher quality automobile loans and leases over this
period, as well as the increased significance of residential mortgages in the consumer loan portfolio mix. In 2003, the company
established long-term net charge-off ratio targets for certain portfolio segments, and for the total portfolio, assuming a comparable
portfolio mix, as well as a stable economic environment. The following table compares 2003 performance to these targets:
Net Charge-off Rates on an Annualized Basis 2003 Actual Long-term Targets (1)
Total C&I and CRE loans 1.01% 0.20% - 0.40%
Automobile loans and leases 0.98% 0.70% - 0.80%
Home equity loans and lines 0.42% 0.20% - 0.35%
Total loans and leases 0.81% 0.40% - 0.45%
(1) Assumes loan and lease portfolio mix comparable to 12/31/03, and stable economic environment.
HUNTINGTON BANCSHARES INCORPORATED 55