Huntington National Bank 2010 Annual Report Download - page 111

a $64.6 million, or 40%, increase in total consumer NCOs. The decrease in NCOs reflected a lower level of
large dollar NCOs, an improvement in delinquencies, and an improved credit environment.
Noninterest income decreased $20.8 million, or 5%, reflecting a $35.7 million decline in deposit service
charges resulting from the amendment to Reg E, the voluntary reduction or elimination of NSF / OD fees, a
decline in the number of customers overdrafting their accounts, and our new 24-Hour Grace
TM
feature,
reflecting our Fair Play banking philosophy. The decrease was partially offset by: (1) $9.9 million increase in
electronic banking income, primarily reflecting an increased number of deposit accounts and transaction
volumes, (2) $3.2 million increase in mortgage banking income, and (3) $2.0 million increase in brokerage
and insurance income.
Noninterest expense increased $105.5 million, or 13%. This increase reflected: (1) $37.2 million of higher
allocated expenses, (2) $31.4 million increase in marketing expense related to brand and product advertising,
direct mail, and branch refurbishments, (3) $29.9 million increase in personnel expense, reflecting a 12%
increase in full-time equivalent employees associated with strategic initiatives, the re-instatement of certain
employee benefits such as a 401(k) plan matching contribution, merit increases, and bonus compensation, and
(4) $18.8 million increase in deposit and other insurance expense reflecting increased premiums due to higher
assessment rates and higher deposit balances. These increases were partially offset by a $9.8 million
improvement in OREO losses.
2009 versus 2008
Retail and Business Banking reported a net loss of $26.5 million in 2009, compared with net income of
$257.8 million in 2008. The $284.3 million decline reflected a $273.9 million increase to the provision for
credit losses. This increase reflected a $191.1 million increase in NCOs due to the impact of the overall
weakened economy across all of our regions. Also contributing to the decline in net income was:
(1) $48.8 million reduction in net interest income, primarily reflecting a 39 basis point decline in net interest
margin, and (2) $121.0 million increase in noninterest expense primarily resulting from an increase in deposit
and other insurance expense, as well as OREO and foreclosure expense.
Commercial Banking
Table 50 — Key Performance Indicators for Commercial Banking
2010 2009 Amount Percent 2008
Change from 2009
(Dollar amounts in thousands unless otherwise noted)
Net interest income ...................... $211,511 $ 190,955 $ 20,556 11% $279,014
Provision for credit losses.................. 104,705 393,984 (289,279) (73) 102,587
Noninterest income ...................... 111,237 95,705 15,532 16 102,929
Noninterest expense ...................... 158,871 136,885 21,986 16 155,798
Provision (benefit) for income taxes .......... 20,710 (85,473) 106,183 N.R. 43,245
Net income (loss) ........................ $ 38,462 $(158,736) $ 197,198 N.R.% $ 80,313
Number of employees (full-time equivalent) .... 538 467 71 15% 466
Total average assets (in millions) ............ $ 8,213 $ 8,730 $ (517) (6) $ 8,648
Total average loans/leases (in millions) ........ 7,414 8,113 (699) (9) 7,932
Total average deposits (in millions) ........... 3,174 3,030 144 5 3,452
Net interest margin....................... 2.85% 2.42% 0.43% 18 3.47%
NCOs ................................ $ 66,267 $ 262,887 $(196,620) (75) $ 75,650
NCOs as a % of average loans and leases . . .... 0.89% 3.24% (2.35)% (73) 0.95%
Return on average common equity ........... 5.8 (20.7) 26.5 N.R. 10.4
N.R. — Not relevant, as denominator of calculation is a loss in prior period compared with income in current
period.
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