Huntington National Bank 2006 Annual Report Download - page 17

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MANAGEMENT’S DISCUSSION AND ANALYSIS HUNTINGTON BANCSHARES INCORPORATED
Table 2 — Selected Annual Income Statements(1)
Year Ended December 31,
Change from 2005 Change from 2004
(in thousands, except per share amounts) 2006 Amount % 2005 Amount % 2004 2003 2002
Interest income $2,070,519 $ 428,754 26.1% $1,641,765 $ 294,450 21.9% $1,347,315 $1,305,756 $1,293,195
Interest expense 1,051,342 371,988 54.8 679,354 243,413 55.8 435,941 456,770 543,621
Net interest income 1,019,177 56,766 5.9 962,411 51,037 5.6 911,374 848,986 749,574
Provision for credit losses 65,191 (16,108) (19.8) 81,299 26,237 47.7 55,062 163,993 194,426
Net interest income after provision for
credit losses 953,986 72,874 8.3 881,112 24,800 2.9 856,312 684,993 555,148
Service charges on deposit accounts 185,713 17,879 10.7 167,834 (3,281) (1.9) 171,115 167,840 153,564
Trust services 89,955 12,550 16.2 77,405 9,995 14.8 67,410 61,649 62,051
Brokerage and insurance income 58,835 5,216 9.7 53,619 (1,180) (2.2) 54,799 57,844 62,109
Other service charges and fees 51,354 7,006 15.8 44,348 2,774 6.7 41,574 41,446 42,888
Bank owned life insurance income 43,775 3,039 7.5 40,736 (1,561) (3.7) 42,297 43,028 43,123
Automobile operating lease income 43,115 (89,900) (67.6) 133,015 (152,416) (53.4) 285,431 489,698 657,074
Mortgage banking 41,491 13,158 46.4 28,333 1,547 5.8 26,786 58,180 32,751
Gain on sales of automobile loans 3,095 1,884 N.M. 1,211 (12,995) (91.5) 14,206 40,039 —
Securities (losses) gains (73,191) (65,136) N.M. (8,055) (23,818) N.M. 15,763 5,258 4,902
Gain on sale of Florida operations — — — — — — — — 182,470
Other 116,927 23,091 24.6 93,836 (5,381) (5.4) 99,217 104,171 100,772
Total non-interest income 561,069 (71,213) (11.3) 632,282 (186,316) (22.8) 818,598 1,069,153 1,341,704
Personnel costs 541,228 59,570 12.4 481,658 (4,148) (0.9) 485,806 447,263 418,037
Outside data processing and other services 78,779 4,141 5.5 74,638 2,523 3.5 72,115 66,118 67,368
Net occupancy 71,281 189 0.3 71,092 (4,849) (6.4) 75,941 62,481 59,539
Equipment 69,912 6,788 10.8 63,124 (218) (0.3) 63,342 65,921 68,323
Marketing 31,728 5,449 20.7 26,279 1,679 6.8 24,600 25,648 26,655
Automobile operating lease expense 31,286 (72,564) (69.9) 103,850 (131,230) (55.8) 235,080 393,270 518,970
Professional services 27,053 (7,516) (21.7) 34,569 (2,307) (6.3) 36,876 42,448 33,085
Telecommunications 19,252 604 3.2 18,648 (1,139) (5.8) 19,787 21,979 22,661
Printing and supplies 13,864 1,291 10.3 12,573 110 0.9 12,463 13,009 15,198
Amortization of intangibles 9,962 9,133 N.M. 829 12 1.5 817 816 2,019
Restructuring reserve (releases) charges ——— — 1,151 N.M. (1,151) (6,666) 48,973
Other 106,649 24,089 29.2 82,560 (14,008) (14.5) 96,568 97,872 93,319
Total non-interest expense 1,000,994 31,174 3.2 969,820 (152,424) (13.6) 1,122,244 1,230,159 1,374,147
Income before income taxes 514,061 (29,513) (5.4) 543,574 (9,092) (1.6) 552,666 523,987 522,705
Provision for income taxes 52,840 (78,643) (59.8) 131,483 (22,258) (14.5) 153,741 138,294 198,974
Income before cumulative effect of change in
accounting principle 461,221 49,130 11.9 412,091 13,166 3.3 398,925 385,693 323,731
Cumulative effect of change in accounting
principle, net of tax(2) — — — — (13,330) —
Net income $ 461,221 $ 49,130 11.9% $ 412,091 $ 13,166 3.3% $ 398,925 $ 372,363 $ 323,731
Average common shares — basic 236,699 6,557 2.8% 230,142 229 0.1% 229,913 229,401 242,279
Average common shares — diluted 239,920 6,445 2.8 233,475 (381) (0.2) 233,856 231,582 244,012
Per common share:
Income before cumulative effect of change
in accounting principle — basic $ 1.95 $ 0.16 8.9% $ 1.79 $ 0.05 2.9% $ 1.74 $ 1.68 $ 1.34
Net income — basic 1.95 0.16 8.9 1.79 0.05 2.9 1.74 1.62 1.34
Income before cumulative effect of change
in accounting principle — diluted 1.92 0.15 8.5 1.77 0.06 3.5 1.71 1.67 1.33
Net income — diluted 1.92 0.15 8.5 1.77 0.06 3.5 1.71 1.61 1.33
Cash dividends declared 1.000 0.16 18.3 0.845 0.10 12.7 0.750 0.670 0.640
Revenue — fully taxable equivalent (FTE)
Net interest income $1,019,177 $ 56,766 5.9% $ 962,411 $ 51,037 5.6% $ 911,374 $ 848,986 $ 749,574
FTE adjustment 16,025 2,632 19.7 13,393 1,740 14.9 11,653 9,684 5,205
Net interest income(3) 1,035,202 59,398 6.1 975,804 52,777 5.7 923,027 858,670 754,779
Non-interest income 561,069 (71,213) (11.3) 632,282 (186,316) (22.8) 818,598 1,069,153 1,341,704
Total revenue(3) $1,596,271 $ (11,815) (0.7)% $1,608,086 $(133,539) (7.7)% $1,741,625 $1,927,823 $2,096,483
N.M., not a meaningful value.
(1) Comparisons for presented periods are impacted by a number of factors. Refer to the ‘Significant Factors Influencing Financial Performance Comparisons’ for additional discussion regarding
these key factors.
(2) Due to adoption of FASB Interpretation No. 46 for variable interest entities.
(3) On a fully taxable equivalent (FTE) basis assuming a 35% tax rate.
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