Huntington National Bank 2008 Annual Report Download - page 50

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When we believe the borrower’s ability and intent to make periodic interest and principal payments has resumed, and collectibility
is no longer in doubt, the loan is returned to accrual status.
Table 26 reflects period-end NALs, NPAs, accruing restructured loans (ARLs), and past due loans and leases detail for each of the
last five years.
Table 26 — Nonaccrual Loans (NALs), Nonperforming Assets (NPAs) and Past Due Loans and Leases
(in thousands) 2008 2007 2006 2005 2004
At December 31,
Nonaccrual loans and leases (NALs):
Commercial and industrial $ 282,423 $ 87,679 $ 58,393 $ 55,273 $ 34,692
Franklin Credit Management Corporation 650,225 ————
Commercial real estate 445,717 148,467 37,947 18,309 8,670
Residential mortgage 98,951 59,557 32,527 17,613 13,545
Home equity 24,831 24,068 15,266 10,720 7,055
Total nonaccrual loans and leases 1,502,147 319,771 144,133 101,915 63,962
Other real estate, net:
Residential
(1)
63,058 60,804 47,898 14,214 8,762
Commercial 59,440 14,467 1,589 1,026 35,844
Total other real estate, net 122,498 75,271 49,487 15,240 44,606
Impaired loans held-for-sale
(2)
12,001 73,481 — — —
Other nonperforming assets
(3)
—4,379 — — —
Total nonperforming assets (NPAs) 1,636,646 472,902 193,620 117,155 108,568
Accruing restructured loans (ARLs):
Franklin —1,187,368 — — —
Other 306,417 ————
Total ARLs
(4)
306,417 1,187,368 — — —
Total NPAs and ARLs $1,943,063 $1,660,270 $193,620 $117,155 $108,568
Nonaccrual loans and leases as a % of total loans and leases 3.66% 0.80% 0.55% 0.42% 0.27%
NPA ratio
(5)
3.97 1.18 0.74 0.48 0.46
NPA and ARL ratio
(6)
4.71 4.13 0.74 0.48 0.46
Accruing loans and leases past due 90 days or more $ 203,985 $ 140,977 $ 59,114 $ 56,138 $ 54,283
Accruing loans and leases past due 90 days or more as a percent of total loans
and leases 0.50% 0.35% 0.23% 0.23% 0.23%
Total allowances for credit losses (ACL) as% of:
Total loans and leases 2.30 1.61 1.19 1.25 1.29
Nonaccrual loans and leases 63 202 217 300 476
NPAs 58 136 261 280 384
NPAs and ARLs 49 39 261 280 384
(1) Beginning in 2006, OREO includes balances of loans in foreclosure that are serviced for others and, which are fully guaranteed by the U.S. Government, that were reported in 90 day past due
loans and leases in prior periods.
(2) Impaired loans held-for-sale are carried at the lower of cost or fair value less costs to sell.
(3) Other nonperforming assets represent certain investment securities backed by mortgage loans to borrowers with lower FICO scores.
(4) Represents accruing loans that have been restructured. 2007 includes only Tranche A and B of the Franklin relationship. In 2008, Tranche B of the Franklin relationship was charged off, and
Tranche A was placed on nonaccrual status. In addition, 2008 includes only other commercial loans and residential mortgage loans that have been restructured.
(5) NPAs divided by the sum of loans and leases, impaired loans held-for-sale, net other real estate, and other NPAs.
(6) NPAs and ARLs divided by the sum of loans and leases, impaired loans held-for-sale, net other real estate, and other NPAs.
NPAs, which include NALs, were $1,636.6 million at December 31, 2008, and represented 3.97% of related assets. This compared
with $472.9 million, or 1.18%, at December 31, 2007. The $1,163.7 million increase reflected:
– $1,182.4 million increase to NALs, discussed below.
– $47.2 million increase to OREO, primarily reflecting two foreclosures during the 2008 fourth quarter.
Partially offset by:
– $61.5 million decrease in impaired loans held-for-sale, primarily reflecting loan sales and payments.
NALs were $1,502.1 million at December 31, 2008, compared with $319.8 million at December 31, 2007. The increase of
$1,182.4 million primarily reflected:
– $650.2 million increase related to the placing of the Franklin portfolio on nonaccrual status (see “Franklin relationship”
discussion).
– $297.3 million increase in CRE NALs reflecting the continued softness in the residential real estate development markets
and overall economic weakness in our markets. The increase was spread across all regions, but was more concentrated to
our borrowers in the Greater Cleveland, Northwest Ohio, and East Michigan regions.
48
Management’s Discussion and Analysis Huntington Bancshares Incorporated