Huntington National Bank 2005 Annual Report Download - page 49

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MANAGEMENT’S DISCUSSION AND ANALYSIS HUNTINGTON BANCSHARES INCORPORATED
– $9.4 million, or 29%, increase in mortgage banking income, reflecting a $6.9 million increase in secondary marketing and
other mortgage banking income, as well as a $3.0 million increase in MSR temporary impairment recoveries.
– $2.8 million, or 7%, increase in other service charges and fees, due to higher debit card fees, partially offset by lower bill
pay fees as a result of a decision to eliminate fees for this service beginning in the 2004 fourth quarter.
2004 versus 2003 Performance
Non-interest income for 2004 declined $250.6 million, or 23%, from 2003. Reflecting the run-off of the operating lease portfolio,
operating lease income declined $202.6 million, or 41%, from 2003. Of the remaining $47.9 million decline from a year ago, the
primary drivers were:
– $25.9 million decline in mortgage banking income reflected a combination of factors, all basically related to the lower level
of mortgage originations as interest rates increased during 2004. Such factors included lower net secondary marketing
revenue, as sales declined, and a 91% reduction in MSR recovery.
– $25.8 million decline in gains on the sale of automobile loans, reflecting both a decline in loan sales ($1.5 billion in 2004,
$2.1 billion in 2003), as well as lower relative gains on the sales as the loans sold in 2003 were older and originated at
higher rates.
– $13.1 million decline in gains on sale of branch offices, reflecting no such sales in 2004.
– $3.0 million decline in brokerage and insurance income primarily due to lower title insurance-related fees and reduced
credit life insurance revenue, as well as a decline in annuity fee income due to a 7% decline in annuity sales volume.
Partially offset by:
– $10.5 million increase in securities gains primarily related to MSR temporary impairment hedging activity.
– $5.8 million increase in trust services income primarily due to higher personal trust income and proprietary mutual fund
fees.
– $3.3 million increase in service charges on deposit accounts, reflecting higher NSF and overdraft fees, partially offset by
lower personal and commercial account maintenance charges.
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