Huntington National Bank 2009 Annual Report Download - page 85

NPA activit
y
for each of the past five
y
ears was as follows
:
Table 30 — Nonperforming Asset Activit
y
2009 2008 200
7
2006 2005
A
t December 31
,
(
In thousands
)
Nonperformin
g
assets, be
g
innin
g
of
y
ear . . $1
,
636
,
646 $ 472
,
902 $ 193
,
620 $117
,
155 $108
,
56
8
New nonperformin
g
asset
s
...........
2
,
767
,
29
5
1,
082
,
063 468
,
056 222
,
043 171
,
15
0
Franklin im
p
act, net(1
)
.............
(311
,
726
)
650
,
225 — —
—
Acqu
i
re
d
nonper
f
orm
i
n
g
asset
s
.......
—
—
144,492 33,843 —
Returns to accru
i
n
g
statu
s
...........
(
215
,
336
)
(
42,161
)(
24,9
5
2
)(
43,999
)(
7,
5
47
)
Loan an
dl
ease
l
osse
s
..............
(
1
,
148
,
135
)
(
202,249
)(
120,9
5
9
)(
4
5
,648
)(
38,198
)
O
RE
Ol
osse
s
....................
(
62
,
665
)
(
19,
5
82
)(5
,79
5) (5
43
)(
621
)
Pa
y
ment
s
.......................
(
497
,
076
)
(
194,692
)(
86,093
)(5
9,469
)(
64,861
)
Sales
..........................
(110
,
912
)
(
109,860
)(
95,467
)(
29,762
)(
51,336
)
Nonperformin
g
assets, end of
y
ea
r
......
$2
,
058
,
091 $1
,
636
,
646 $ 472
,
902 $193
,
620 $117
,
15
5
(1) The activit
y
above excludes the 2007 impact of the placement of the loans to Franklin on nonaccrual statu
s
an
d
t
h
e
i
r return to accrua
l
status upon t
h
e restructur
i
n
g
o
f
t
h
ese
l
oans. At 2007
y
ear-en
d
,t
h
e
l
oans to
Fran
kli
n were not
i
nc
l
u
d
e
di
nt
h
e nonper
f
orm
i
n
g
assets tota
l
. At 2008
y
ear-en
d
,t
h
e
l
oans to Fran
kli
n wer
e
reported as nonaccrual commercial and industrial loans. At 2009
y
ear-end, nonaccrual Franklin loans wer
e
reported as residential mort
g
a
g
e loans, home equit
y
loans, and OREO. The 2009 impact primaril
y
reflect
s
l
oan an
dl
ease
l
osses, as we
ll
as pa
y
ments
.
A
LLOWANCES FOR CREDIT LOSSES
(
ACL
)
(T
h
is section s
h
ou
ld b
erea
d
in con
j
unction wit
h
Signi
f
icant Item 3, “Critica
l
Accounting Po
l
icies an
d
Us
e
o
f
Signi
f
icant Estimates”, and Note 1 o
f
the Notes to the Consolidated Financial Statements.
)
We maintain two reserves
,
both of which are available to absorb credit losses: the ALLL and the AULC
.
W
h
en summe
d
to
g
et
h
er, t
h
ese reserves compr
i
se t
h
e tota
l
ACL. Our cre
di
ta
d
m
i
n
i
strat
i
on
g
roup
i
s respons
ible
f
or
d
eve
l
op
i
n
g
met
h
o
d
o
l
o
gy
assumpt
i
ons an
d
est
i
mates, as we
ll
as
d
eterm
i
n
i
n
g
t
h
ea
d
equac
y
o
f
t
h
e ACL. T
h
e
ALLL re
p
resents t
h
e est
i
mate o
fp
ro
b
a
bl
e
l
osses
i
n
h
erent
i
nt
h
e
l
oan
p
ort
f
o
li
oatt
h
e
b
a
l
ance s
h
eet
d
ate.
Additions to the ALLL result from recordin
g
provision expense for loan losses or recoveries, while reduction
s
re
fl
ect c
h
ar
g
e-o
ff
s, net o
f
recover
i
es, or t
h
esa
l
eo
fl
oans. T
h
e AULC
i
s
d
eterm
i
ne
dby
app
lyi
n
g
t
h
e transact
i
o
n
reserve
p
rocess, w
hi
c
hi
s
d
escr
ib
e
di
n Note 1 o
f
t
h
e Notes to t
h
e Conso
lid
ate
d
F
i
nanc
i
a
l
Statements, to t
he
unfunded portion of the portfolio ad
j
usted b
y
an applicable fundin
g
expectation.
As shown in the followin
g
tables below, the ALLL increased to $1,482.5 million at December 31, 2009
,
com
p
ared with $900.2 million at December 31, 2008. Ex
p
ressed as a
p
ercent of
p
eriod-end loans and leases
,
t
h
e ALLL rat
i
o
i
ncrease
d
to 4.03% at Decem
b
er 31, 2009, com
p
are
d
w
i
t
h
2.19% at Decem
b
er 31, 2008
.
The
$
582.3 million increase in the ALLL primaril
y
reflected an increase in specific reserves associated
w
i
t
hi
mpa
i
re
dl
oans, an
d
an
i
ncrease assoc
i
ate
d
w
i
t
h
r
i
s
k
-
g
ra
d
em
ig
rat
i
on, pre
d
om
i
nant
ly i
nt
h
e commerc
i
a
l
port
f
o
li
o. T
h
e
i
ncrease
i
sa
l
so a resu
l
to
f
ac
h
an
g
e
i
n est
i
mate resu
l
t
i
n
gf
rom t
h
e 2009
f
ourt
h
quarter rev
i
ew o
f
our ACL practices and assumptions, consistin
g
of:
• Approximatel
y
$200 million increase in the
j
ud
g
mental component.
• Approximatel
y
$200 million allocated primaril
y
to the CRE portfolio addressin
g
the severit
y
of CRE
loss-
g
iven-default percenta
g
es and a lon
g
er term view of the loss emer
g
ence time period.
• Approximatel
y
$50 million from updatin
g
the consumer reserve factors to include the curren
t
d
e
li
nquenc
y
status.
77