Huntington National Bank 2009 Annual Report Download - page 76

materiall
y
affected. Our floorplan exposure is centered in lar
g
e, multi-dealership entities, and we have focused
on client selection and conservative underwritin
g
standards. We anticipate that the economic environment wil
l
affect our dealerships in the near-term, but we believe the ma
j
orit
y
of our portfolio will perform favorabl
y
relative to the industry in the increasingly stressed environment. The decline in floorplan loans outstanding a
t
Decem
b
er 31, 2009, compare
d
w
i
t
h
Decem
b
er 31, 2008, re
fl
ecte
d
re
d
uce
dd
ea
l
ers
hi
p
i
nventor
y
,
i
n part as
a
resu
l
to
f
t
h
e success
f
u
l
2009 “Cas
hf
or C
l
un
k
ers” pro
g
ram.
W
hil
et
h
e spec
ifi
c
i
mpacts assoc
i
ate
d
w
i
t
h
t
h
eon
g
o
i
n
g
c
h
an
g
es
i
nt
h
e
i
n
d
ustr
y
are un
k
nown, we
b
e
li
ev
e
that we have taken a
pp
ro
p
riate ste
p
s to limit our ex
p
osure. When we have chosen to extend credit, our clien
t
selection process has focused us on the most diversified and stron
g
est dealership
g
roups. We do not anticipate
an
y
mater
i
a
ld
ea
l
er-re
l
ate
dl
osses
i
nt
h
e port
f
o
li
o
d
esp
i
te numerous
d
ea
l
ers
hi
pc
l
os
i
n
g
s
d
ur
i
n
g
2009. Ou
r
d
ea
l
er se
l
ect
i
on cr
i
ter
i
a, w
i
t
h
a
f
ocus on mu
l
t
i
-
d
ea
l
ers
hi
p
g
roups
h
as proven
i
tse
lf i
nt
hi
senv
i
ronment
.
FR
A
NKLIN REL
A
TI
O
N
S
HIP
(T
h
is section s
h
ou
ld b
erea
d
in con
j
unction wit
h
Signi
f
icant Item 3 an
d
t
h
e “Fran
kl
in Loans Restructurin
g
Transaction”
d
iscussion
l
ocate
d
wit
h
in t
h
e “Critica
l
Accounting Po
l
icies an
d
Use o
f
Signi
f
icant Estimates
”
section.
)
As a result of the March 31, 2009, restructurin
g
, on a consolidated basis, the
$
650.2 million nonaccrua
l
commercial loan to Franklin at December 31, 2008, was no lon
g
er reported. Instead, we reported the loan
s
secure
db
y
fi
rst- an
d
secon
d
- mortgages on res
id
ent
i
a
l
propert
i
es an
d
OREO propert
i
es,
b
ot
h
o
f
w
hi
c
hh
a
d
prev
i
ous
ly b
een assets o
f
Fran
kli
nor
i
ts su
b
s
idi
ar
i
es, an
d
were p
l
e
dg
e
d
to secure our commerc
i
a
ll
oan t
o
Franklin. At the time of the restructurin
g
, the loans had a fair value of
$
493.6 million and the OREO
p
ro
p
erties had a fair value of $79.6 million. As of December 31, 2009, the balances had reduced t
o
$
443.9 million and
$
23.8 million, respectivel
y
. There is not a specific ALLL for the Franklin portfolio
.
T
he followin
g
table summarizes the Franklin-related balances for accruin
g
loans, NALs, and OREO sinc
e
t
h
e restructur
i
n
g:
Table 25 — Franklin-related Loan and
O
RE
O
Balances
December 31,
S
e
p
tember 30, June 30, March 31
,
2009
(
In millions
)
Total accruin
g
loan
s
...................
$
129.2
$
126.7
$
127.4
$
127.
5
Total nonaccrual loans
..................
314.7 338.5 344.6 366.1
Total Loan
s
...........................
4
43.
9
465.2 472.0 4
9
3.6
O
RE
O
...............................
23.8 31.0 43.
6
79.
6
Total Franklin loans and
O
RE
O
.............
$
467.7
$
496.2
$
515.6
$
573.2
T
h
ec
h
an
g
es
i
nt
h
e Fran
kli
n-re
l
ate
db
a
l
ances s
i
nce t
h
e restructur
i
n
gh
ave
b
een cons
i
stent w
i
t
h
ou
r
expectations based on the restructurin
g
a
g
reement. Collection strate
g
ies were desi
g
ned to
g
enerate cash flo
w
wi
t
h
t
h
e
i
ntent
i
on o
f
re
d
uc
i
n
g
our exposure assoc
i
ate
d
w
i
t
h
t
h
ese
l
oans
.
C
onsumer
C
re
d
it
Consumer cre
di
t approva
l
s are
b
ase
d
on, amon
g
ot
h
er
f
actors, t
h
e
fi
nanc
i
a
l
stren
g
t
h
an
d
pa
y
ment
hi
stor
y
o
f
t
h
e
b
orrower, t
y
pe o
f
exposure, an
d
t
h
e transact
i
on structure. Consumer cre
di
t
d
ec
i
s
i
ons are
g
enera
lly
ma
de
in a centralized environment utilizin
g
decision models. However, certain individuals who understand each loca
l
re
gi
on
h
ave t
h
e aut
h
or
i
t
y
to ma
k
e cre
di
t extens
i
on
d
ec
i
s
i
ons to preserve our
l
oca
ld
ec
i
s
i
on-ma
ki
n
gf
ocus. Eac
h
cre
di
t extens
i
on
i
s ass
ig
ne
d
a spec
ifi
c pro
b
a
bili
t
y
-o
f
-
d
e
f
au
l
tan
dl
oss-
gi
ven-
d
e
f
au
l
t. T
h
e pro
b
a
bili
t
y
-o
f
-
d
e
f
au
lt
is
g
enerall
y
based on the borrower’s most recent credit bureau score (FICO), which we update quarterl
y
, whil
e
the loss-
g
iven-default is related to the t
y
pe of collateral and the LTV ratio associated with the credit extension.
68