Huntington National Bank 2003 Annual Report Download - page 84

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MANAGEMENT’S DISCUSSION AND ANALYSIS
each taxable or tax-free bond fund produced positive returns. Mutual fund and annuity sales expressed as a percent of the company’s
retail deposits were 6.2% in 2003, and comparable to 6.0% in 2002. Compared with peers, this level of sales penetration represented
top quartile performance.
The return on average assets and return on average equity for PFG, were 1.94% and 24.5%, respectively, compared with 2.39% and
22.4% in 2002.
2002 versus 2001 Performance
PFG’s operating earnings for 2002 were $24.8 million, up 31% from 2001, due primarily to a 17% increase in revenues, partially offset
by 10% growth in non-interest expense and higher provision for loans losses.
Net interest income declined 2% driven by growth in lower margin loans, as well as a decline in the deposit rate credit, reflecting a
lower interest rate environment. Average loans and leases increased 36%, reflecting strong growth in lower margin residential and
home equity loans and lines. Average deposits increased 31%, reflecting 39% growth in interest bearing deposits.
Provision for loan and lease losses in 2002 increased $3.0 million, largely reflecting growth in loans and leases.
Non-interest income increased 26% from 2001 driven primarily by higher brokerage and trust revenue. Non-interest income in 2001
also reflected a $5.2 million securities loss related to the sale of securities of a California utility.
Non-interest expense increased 10% from 2001 driven by the acquisition of Haberer Registered Investment Advisors, as well as higher
salary expense and a $1.7 million increase in sales commissions, reflective of the growth in brokerage and trust revenue.
82 HUNTINGTON BANCSHARES INCORPORATED