Huntington National Bank 2008 Annual Report Download - page 77

Download and view the complete annual report

Please find page 77 of the 2008 Huntington National Bank annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 132

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132

PROVISION FOR CREDIT LOSSES
(This section should be read in conjunction with Significant Item 2.)
The provision for credit losses in the 2008 fourth quarter was $722.6 million, up $597.2 million from the third quarter, of which
$438.0 million reflected the Franklin relationship actions during the current quarter. The provision for credit losses in the current
quarter was $210.5 million higher than in the year-ago quarter. (See “Franklin Relationship” located within the “Credit Risk” section
and “Significant Items” located within the “Discussion of Results of Operations” section for additional details).
NONINTEREST INCOME
(This section should be read in conjunction with Significant Items 2, 4, 5 and 6.)
Noninterest income decreased $103.5 million, or 61%, from the year-ago quarter.
Table 49 — Noninterest Income — 4Q08 vs. 4Q07
(in thousands) 2008 2007 Amount Percent
Significant
Items Amount Percent
Fourth Quarter Change Other
Change attributable to:
Service charges on deposit accounts $ 75,247 $ 81,276 $ (6,029) (7.4)% $ — $ (6,029) (7.4)%
Brokerage and insurance income 31,233 30,288 945 3.1 — 945 3.1
Trust services 27,811 35,198 (7,387) (21.0) — (7,387) (21.0)
Electronic banking 22,838 21,891 947 4.3 — 947 4.3
Bank owned life insurance income 13,577 13,253 324 2.4 — 324 2.4
Automobile operating lease income 13,170 2,658 10,512 N.M. — 10,512 N.M.
Mortgage banking income (6,747) 3,702 (10,449) N.M. (10,318)
(1)
(131) (3.5)
Securities (losses) gains (127,082) (11,551) (115,531) N.M. (115,531)
(2)
— 0.0
Other income 17,052 (6,158) 23,210 N.M. 34,088
(3)
(10,878) N.M.
Total noninterest income $ 67,099 $170,557 $(103,458) (60.7)% $ (91,761) $(11,697) (6.9)%
N.M., not a meaningful value.
(1) Refer to Significant Item 4 of the “Significant Items” discussion.
(2) Refer to Significant Item 5 of the “Significant Items” discussion.
(3) Refer to Significant Items 2, 5, and 7 of the “Significant Items” discussion.
The $103.5 million decrease in total noninterest income reflected the $91.8 million negative impact in the current quarter from
significant items (see “Significant Items” located within the “Discussion of Results of Operations” section), as well as a 12% decline in the
remaining components of noninterest income. The $10.9 million decline in other income reflected lower capital markets income.
NONINTEREST EXPENSE
(This section should be read in conjunction with Significant Items 1 and 3.)
Noninterest expense decreased $49.5 million, or 11%, from the year-ago quarter.
Table 50 — Noninterest Expense — 4Q08 vs. 4Q07
(in thousands) 2008 2007 Amount Percent
Restructuring/
Merger Costs
Significant
Items Amount Percent
(1)
Fourth Quarter Change Other
Change attributable to:
Personnel costs $196,785 $214,850 $(18,065) (8.4)% $(22,780) $ — $ 4,715 2.5%
Outside data processing and
other services 31,230 39,130 (7,900) (20.2) (7,005) — (895) (2.8)
Net occupancy 22,999 26,714 (3,715) (13.9) (1,204) — (2,511) (9.8)
Equipment 22,329 22,816 (487) (2.1) (175) — (312) (1.4)
Amortization of intangibles 19,187 20,163 (976) (4.8) — — (976) (4.8)
Professional services 17,420 14,464 2,956 20.4 (3,447) — 6,403 58.1
Marketing 9,357 16,175 (6,818) (42.2) (6,915) — 97 1.0
Automobile operating lease
expense 10,483 1,918 8,565 N.M. — — 8,565 N.M.
Telecommunications 5,892 8,513 (2,621) (30.8) (954) — (1,667) (22.1)
Printing and supplies 4,175 6,594 (2,419) (36.7) (1,043) — (1,376) (24.8)
Other expense 50,237 68,215 (17,978) (26.4) (893) (29,430)
(2)
12,345 18.3
Total noninterest expense $390,094 $439,552 $(49,458) (11.3)% $(44,416) $(29,430) $24,388 6.2%
N.M., not a meaningful value.
(1) Calculated as other / (prior period + restructuring/merger costs)
(2) Refer to Significant Item 3 of the “Significant Items” discussion.
75
Management’s Discussion and Analysis Huntington Bancshares Incorporated