Huntington National Bank 2008 Annual Report Download - page 46

Commercial Real Estate Portfolio
As shown in Table 23, commercial real estate loans totaled $10.1 billion and represented 25% of our total loan exposure at
December 31, 2008.
Table 23 — Commercial Real Estate Loans by Property Type and Borrower Location
(in millions) Ohio Michigan Pennsylvania Indiana West Virginia Other
Total
Amount
%of
portfolio
At December 31, 2008
Retail properties $1,610 $ 228 $ 222 $ 148 $ 54 $ 3 $ 2,265 22.4%
Single family home builders 1,127 246 97 73 33 13 1,589 15.7
Office 728 209 171 56 53 5 1,222 12.1
Multi family 845 83 106 116 29 9 1,188 11.8
Industrial and warehouse 719 198 39 72 24 2 1,054 10.4
Lines to real estate companies 771 172 39 16 31 1 1,030 10.2
Raw land and other land uses 512 111 87 42 14 — 766 7.6
Health care 283 63 59 3 3 — 411 4.1
Hotel 193 64 20 12 15 — 304 3.0
Other 214 12 16 12 6 9 269 2.7
Total $7,002 $1,386 $ 856 $ 550 $ 262 $ 42 $10,098 100.0%
Net charge-offs $ 40.2 $ 17.1 $ 0.6 $ 5.6 $ 2.3 $ 2.9 $ 68.7
Net charge-offs — annualized percentage 0.65% 1.34% 0.09% 1.06% 1.07% 0.36% 0.71%
Non-accrual loans $276.9 $124.3 $10.2 $23.1 $ 0.1 $ 11.1 $ 445.7
% of portfolio 3.95% 8.97% 1.19% 4.20% 0.04% 26.43% 4.41%
Accruing loans past due 90 days or more $ 47.2 $ 6.9 $ 2.0 $ 0.4 $ — $ 2.9 $ 59.4
% of portfolio 0.67% 0.50% 0.23% 0.07% —% 6.90% 0.59%
CRE loan credit quality data regarding NCOs, NALs, and accruing loans past due 90 days or more by industry classification code
for 2008 and 2007 are presented in the table below:
Table24—CommercialRealEstateLoansCreditQualityDatabyPropertyType
(in millions) Amount Percentage Amount Percentage
Net charge-offs Nonaccrual Loans Accruing loans past due
90 days or more
2008 2007 2008 2007 2008 2007
Year Ended December 31, At December 31,
Retail properties $ 7.0 0.38% $ 4.0 0.35% $ 78.3 $ 8.2 $ 4.2 $ 8.3
Single family home builder 35.0 2.87 23.2 2.19 200.4 65.1 8.6 6.4
Office 1.7 0.15 0.9 0.11 19.9 5.7 0.3 1.9
Multi family 9.5 0.84 2.0 0.24 42.9 23.3 12.3 0.4
Industrial and warehouse 2.3 0.24 2.8 0.44 20.4 8.6 2.1 0.2
Lines to real estate companies 4.6 0.46 ——26.3 16.0 5.2 0.6
Raw land and other land uses 5.1 0.34 5.3 0.48 33.5 15.5 7.9 6.2
Health care 1.0 0.27 0.6 0.24 6.2 1.3 3.7 0.0
Hotel —— 0.2 0.11 0.8 0.2 14.5 0.6
Other 2.4 0.97 0.1 0.05 16.9 4.5 0.4 —
Total $68.7 0.71% $39.1 0.57% $445.7 $148.5 $59.4 $24.6
We manage the risks inherent in this portfolio through origination policies, concentration limits, on-going loan level reviews,
recourse requirements, and continuous portfolio risk management activities. Our origination policies for this portfolio include
loan product-type specific policies such as loan-to-value (LTV), debt service coverage ratios, and pre-leasing requirements, as
applicable. Except for our mezzanine portfolio, we generally: (a) limit our loans to 80% of the appraised value of the commercial
real estate, (b) require net operating cash flows to be 125% of required interest and principal payments, and (c) if the commercial
real estate is non-owner occupied, require that at least 50% of the space of the project be pre-leased. We also may require more
conservative loan terms, depending on the project.
Dedicated commercial real estate professionals located in our banking regions originated the majority of this portfolio. Appraisals
from approved vendors are reviewed by an appraisal review group within Huntington to ensure the quality of the valuation used
in the underwriting process. The portfolio is diversified by project type and loan size. This diversification is a significant piece of
the credit risk management strategies employed for this portfolio. Our loan review staff provides an assessment of the quality of
the underwriting and structure and confirms that an appropriate internal risk rating has been assigned to the loan.
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Management’s Discussion and Analysis Huntington Bancshares Incorporated