Huntington National Bank 2004 Annual Report Download - page 42

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MANAGEMENT’S DISCUSSION AND ANALYSIS HUNTINGTON BANCSHARES INCORPORATED
Table 6 — Loan and Lease Portfolio Composition
At December 31,
(in millions of dollars) 2004 2003 2002 2001 2000
Commercial(1)
Middle market commercial
and industrial $ 4,666 19.3% $ 4,416 19.7% $ 4,757 21.7% $ 4,922 21.7% $ 5,030 22.9%
Middle market real estate:
Construction 1,602 6.6 1,264 5.7 983 4.5 1,150 5.1 999 4.6
Commercial 1,917 7.9 1,919 8.6 1,896 8.7 1,575 6.9 1,484 6.8
Total middle market real estate 3,519 14.5 3,183 14.3 2,879 13.2 2,725 12.0 2,483 11.4
Small business commercial and
industrial and commercial real estate 2,118 8.8 1,887 8.4 1,695 7.7 2,607 11.5 2,581 11.8
Total commercial 10,303 42.6 9,486 42.4 9,331 42.6 10,254 45.2 10,094 46.1
Consumer:
Automobile loans 1,949 8.1 2,992 13.4 3,042 13.9 2,853 12.6 2,480 11.3
Automobile leases 2,443 10.1 1,902 8.5 874 4.0 110 0.5 147 0.7
Home equity 4,555 18.9 3,734 16.7 3,142 14.3 3,518 15.5 2,098 9.6
Residential mortgage 3,829 15.9 2,531 11.3 1,746 8.0 1,129 5.0 1,058 4.8
Other loans 481 2.0 430 1.9 452 2.1 607 2.7 1,746 8.0
Total consumer 13,257 55.0 11,589 51.8 9,256 42.3 8,217 36.3 7,529 34.4
Total loans and direct financing leases 23,560 97.6 21,075 94.2 18,587 84.9 18,471 81.5 17,623 80.5
Operating lease assets 587 2.4 1,260 5.6 2,201 10.0 3,006 13.2 2,934 13.4
Securitized loans —— 37 0.2 1,119 5.1 1,225 5.4 1,371 6.3
Total credit exposure $24,147 100.0% $22,372 100.0% $21,907 100.0% $22,702 100.0% $21,928 100.0%
Total automobile exposure(2) $ 4,979 20.6% $ 6,191 27.7% $ 7,236 33.0% $ 7,194 31.7% $ 6,932 31.6%
(1) There were no commercial loans outstanding that would be considered a concentration of lending to a particular industry or group of industries.
(2) Total loans and leases, operating lease assets, and securitized loans.
A
VERAGE
B
ALANCE
S
HEET
D
ISCUSSION
—L
OANS
, L
EASES
,
AND
O
THER
E
ARNING
A
SSETS
2004 versus 2003 Performance
Growth in average total loans and leases accounted for most of the 13% increase in earning assets, though investment securities also
increased reflecting the reinvestment of a portion of the proceeds from automobile loan sales.
Average total loans and leases increased 11% from the prior year. Most of this increase reflected growth in average total consumer
loans where the strong growth in residential mortgage and home equity loans was only partially offset by a decline in automobile
loans reflecting the sale of $1.5 billion of automobile loans in 2004. Average total commercial loans increased 4% reflecting growth in
CRE and small business loans, partially offset by a decline in average C&I loans.
2003 versus 2002 Performance
Growth in average total loans and leases accounted for most of the 18% increase in average earning assets, though investment
securities also increased reflecting the reinvestment of a portion of the proceeds from automobile loan sales.
Average total loans and leases increased 15% from the prior year. Most of this increase reflected growth in average total consumer
loans where the growth in automobile loans and leases, residential mortgages, and home equity loans was strong. The growth in
average automobile loans and leases reflected $2.8 billion of new automobile loan originations, as well as the consolidation of
$1.0 billion of securitized automobile loans due to the adoption of FIN 46, partially offset by the impact from the sale of $2.1 billion
of automobile loans. Average total commercial loans increased only 2% reflecting good growth in CRE and small business loans,
partially offset by a decline in average C&I loans.
A
VERAGE
B
ALANCE
S
HEET
D
ISCUSSION
—D
EPOSITS AND
O
THER
F
UNDING
2004 versus 2003 Performance
Average total deposits in 2004 increased 7% from the prior year, primarily reflecting 5% growth in average core deposits. Growth in
interest-bearing demand deposits, and to a lesser degree noninterest-bearing deposits, accounted for virtually all of the growth in
average core deposits, as average retail certificates of deposits (CDs) declined. With interest rates near historical low levels, demand for
retail CDs was greatly diminished in the first half of 2004. However, retail CDs grew in the second half of the year as interest rates and
40