Huntington National Bank 2006 Annual Report Download - page 33

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MANAGEMENT’S DISCUSSION AND ANALYSIS HUNTINGTON BANCSHARES INCORPORATED
December 31, 2002, reflecting weak demand, but also a specific objective to reduce exposure to large individual credits, as well as
a strategy to focus on commercial lending to customers with existing or potential relationships within our primary markets. Since
then, that concentration increased to 23%, reflecting increased customer demand.
Table 10 — Loan and Lease Portfolio Composition
At December 31,
(in millions of dollars) 2006 2005 2004 2003 2002
Commercial(1)
Middle market commercial and industrial $ 5,953 22.7% $ 5,084 20.6% $ 4,666 19.3% $ 4,416 19.7% $ 4,757 21.7%
Construction 987 3.8 1,522 6.2 1,602 6.6 1,264 5.6 983 4.5
Commercial 2,874 11.0 2,015 8.2 1,917 7.9 1,919 8.6 1,896 8.7
Total middle market real estate 3,861 14.8 3,537 14.4 3,519 14.5 3,183 14.2 2,879 13.2
Small business commercial and industrial
and commercial real estate 2,540 9.6 2,224 9.1 2,118 8.8 1,887 8.4 1,695 7.7
Total commercial 12,354 47.1 10,845 44.1 10,303 42.6 9,486 42.3 9,331 42.6
Consumer:
Automobile loans 2,126 8.1 1,985 8.1 1,949 8.1 2,992 13.4 3,042 13.9
Automobile leases 1,769 6.8 2,289 9.3 2,443 10.1 1,902 8.5 874 4.0
Home equity 4,927 18.8 4,763 19.3 4,647 19.2 3,746 16.7 3,142 14.3
Residential mortgage 4,549 17.4 4,193 17.0 3,829 15.9 2,531 11.3 1,746 8.0
Other loans 428 1.7 397 1.4 389 1.7 418 2.0 452 2.1
Total consumer 13,799 52.8 13,627 55.1 13,257 55.0 11,589 51.9 9,256 42.3
Total loans and direct financing leases 26,153 99.9 24,472 99.2 23,560 97.6 21,075 94.2 18,587 84.9
Operating lease assets 28 0.1 189 0.8 587 2.4 1,260 5.6 2,201 10.0
Securitized loans —— — — — — 37 0.2 1,119 5.1
Total credit exposure $ 26,181 100.0% $24,661 100.0% $24,147 100.0% $22,372 100.0% $21,907 100.0%
Total automobile exposure(2) $ 3,923 15.0% $ 4,463 18.1% $ 4,979 20.6% $ 6,191 27.7% $ 7,236 33.0%
(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 automobile loans and leases, operating lease assets, and securitized loans.
Table 11 — Commercial & Industrial and CRE Loan and Lease Detail
At December 31,
(in millions of dollars) 2006 2005 2004 2003 2002
Commercial and industrial loans $ 4,735 $ 3,998 $ 3,632 $3,463 $4,031
Dealer floor plan loans 631 615 645 635 534
Equipment direct financing leases 587 471 389 318 192
Middle market commercial and industrial loans and leases 5,953 5,084 4,666 4,416 4,757
Small business commercial and industrial loans 1,897 1,725 1,164 898 851
Commercial and industrial loans and leases 7,850 6,809 5,830 5,314 5,608
Middle market commercial real estate loans 3,861 3,537 3,519 3,183 2,879
Small business commercial real estate loans 643 499 954 989 844
Commercial real estate loans 4,504 4,036 4,473 4,172 3,723
Total commercial loans and leases $12,354 $10,845 $10,303 $9,486 $9,331
Commercial Credit
Commercial credit approvals are based on the financial strength of the borrower, assessment of the borrower’s management
capabilities, industry sector trends, and type of exposure, transaction structure, and the general economic outlook. While these
are the primary factors considered, there are a number of other factors that may be considered in the decision process. There are
two processes for approving credit risk exposures. The first involves a centralized loan approval process for the standard products
and structures utilized in small business lending. Even in this centralized decision environment, individual credit authority is
granted to certain individuals on a regional basis to preserve our local decision-making focus. The second, and more prevalent
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