Huntington National Bank 2009 Annual Report Download - page 73

As shown in the above table, substantial reserves for the noncore
p
ortfolio have been established. A
t
D
ecember 31, 2009, the ACL of related total loans and leases for the noncore portfolio was 1
6
.32%. W
e
believe se
g
re
g
atin
g
the noncore CRE from core CRE improves our abilit
y
to understandin
g
the nature
,
performance prospects, and problem resolution opportunities of this se
g
ment, thus allowin
g
us to continue t
o
d
ea
l
proact
i
ve
ly
w
i
t
hf
uture cre
di
t
i
ssues.
Th
e com
bi
nat
i
on o
f
pr
i
or NCOs an
d
t
h
eex
i
st
i
n
g
ACL represents t
h
e tota
l
cre
di
t act
i
ons ta
k
en on eac
h
se
g
ment o
f
t
h
e port
f
o
li
o. From t
hi
s
d
ata, we ca
l
cu
l
ate a measurement, ca
ll
e
d
a “Cre
di
t Mar
k
”, t
h
at prov
id
es
a
consistent measurement of the cumulative credit actions taken a
g
ainst a specific portfolio se
g
ment. We believe
that the combined credit activit
y
is appropriate for each of the CRE se
g
ments.
COMMERCIAL AND INDUSTRIAL
(
C&I) PORTFOLIO
The C&I portfolio is comprised of loans to businesses where the source of repa
y
ment is associated wit
h
t
h
eon
g
o
i
n
g
operat
i
ons o
f
t
h
e
b
us
i
ness. Genera
lly
,t
h
e
l
oans are secure
d
w
i
t
h
t
h
e
fi
nanc
i
n
g
o
f
t
h
e
b
orrower’s
assets, suc
h
as equ
i
pment, accounts rece
i
va
bl
e, or
i
nventor
y
. In man
y
cases, t
h
e
l
oans are secure
dby
rea
l
estate, althou
g
h the sale of the real estate is not a primar
y
source of repa
y
ment for the loan. For loans secure
d
b
y
real estate, appropriate appraisals are obtained at ori
g
ination, and updated on an as needed basis, i
n
comp
li
ance w
i
t
h
re
g
u
l
ator
y
requ
i
rements
.
T
h
ere were no outstan
di
n
g
commerc
i
a
ll
oans t
h
at wou
ld b
e cons
id
ere
d
a concentrat
i
on o
fl
en
di
n
g
to
a
part
i
cu
l
ar
i
n
d
ustr
y
or w
i
t
hi
na
g
eo
g
rap
hi
c stan
d
po
i
nt. Current
ly
,
high
er-r
i
s
k
se
g
ments o
f
t
h
e C&I port
f
o
li
o
include loans to borrowers supportin
g
the home buildin
g
industr
y
, contractors, and automotive suppliers.
However, the combined total of these se
g
ments represent less than 10% of the total C&I portfolio. We mana
ge
t
h
er
i
s
k
s
i
n
h
erent
i
nt
hi
s port
f
o
li
ot
h
rou
gh
or
igi
nat
i
on po
li
c
i
es, concentrat
i
on
li
m
i
ts, on
g
o
i
n
gl
oan
l
eve
l
rev
i
ews, recourse requ
i
rements, an
d
cont
i
nuous port
f
o
li
or
i
s
k
mana
g
ement act
i
v
i
t
i
es. Our or
igi
nat
i
on po
li
c
i
es
for this portfolio include loan product-t
y
pe specific policies such as loan-to-value (LTV), and debt service
covera
g
e rat
i
os, as app
li
ca
bl
e.
C
&I
b
orrowers
h
ave
b
een c
h
a
ll
en
g
e
dby
t
h
e wea
k
econom
yf
or consecut
i
ve
y
ears, an
d
some
b
orrower
s
ma
y
no
l
on
g
er
h
ave su
ffi
c
i
ent cap
i
ta
l
to w
i
t
h
stan
d
t
h
e protracte
d
stress an
d
, as a resu
l
t, ma
y
not
b
ea
bl
et
o
comp
ly
w
i
t
h
t
h
eor
igi
na
l
terms o
f
t
h
e
i
r cre
di
ta
g
reements. We cont
i
nue to
f
ocus on
g
o
i
n
g
attent
i
on on t
he
portfolio mana
g
ement process to proactivel
y
identif
y
borrowers that ma
y
be facin
g
financial difficult
y.
To the extent C&I loans are secured b
y
real estate collateral, appropriate appraisals are obtained a
t
or
igi
nat
i
on, an
d
up
d
ate
d
on an as nee
d
e
db
as
i
s,
i
n comp
li
ance w
i
t
h
re
g
u
l
ator
y
requ
i
rements.
6
5