Huntington National Bank 2007 Annual Report Download - page 116

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Dealer Sales: This segment provides a variety of banking products and services to more than 3,600 automotive dealerships within
the Company’s primary banking markets, as well as in Arizona, Florida, Georgia, Nevada, New Jersey, New York, North Carolina,
South Carolina, and Tennessee. Dealer Sales finances the purchase of automobiles by customers at the automotive dealerships,
purchases automobiles from dealers and simultaneously leases the automobiles to consumers under long-term leases, finances the
dealerships’ new and used vehicle inventories, land, buildings, and other real estate owned by the dealerships, or dealer working
capital needs; and provides other banking services to the automotive dealerships and their owners. Competition from the financing
divisions of automobile manufacturers and from other financial institutions is intense. Dealer Sales’ production opportunities are
directly impacted by the general automotive sales business, including programs initiated by manufacturers to enhance and increase
sales directly. Huntington has been in this line of business for over 50 years.
Private Financial and Capital Markets Group (PFCMG): This segment provides products and services designed to meet the needs
of higher net worth customers. Revenue is derived through the sale of trust, asset management, investment advisory, brokerage,
and private banking products and services. PFCMG also focuses on financial solutions for corporate and institutional customers
that include investment banking, sales and trading of securities, mezzanine capital financing, and risk management products. To
serve high net worth customers, a unique distribution model is used that employs a single, unified sales force to deliver products
and services mainly through Regional Banking distribution channels.
Treasury/Other: This segment includes revenue and expense related to assets, liabilities, and equity that are not directly assigned
or allocated to one of the other three business segments. Assets in this segment include investment securities and bank owned life
insurance. Net interest income/(expense) includes the net impact of administering our investment securities portfolios as part of
overall liquidity management. A match-funded transfer pricing system is used to attribute appropriate funding interest income and
interest expense to other business segments. As such, net interest income includes the net impact of any over or under allocations
arising from centralized management of interest rate risk. Furthermore, net interest income includes the net impact of derivatives
used to hedge interest rate sensitivity. Non-interest income includes miscellaneous fee income not allocated to other business
segments, including bank owned life insurance income. Fee income also includes asset revaluations not allocated to other business
segments, as well as any investment securities and trading assets gains or losses. The non-interest expense includes certain corporate
administrative, merger costs, and other miscellaneous expenses not allocated to other business segments. This segment also includes
any difference between the actual effective tax rate of Huntington and the statutory tax rate used to allocate income taxes to the
other segments.
114
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS HUNTINGTON BANCSHARES INCORPORATED