Huntington National Bank 2010 Annual Report Download - page 113

increase in NCOs. Also contributing to the decline in net income was a $88.1 million reduction in net interest
income, primarily reflecting a 105 basis point decline in the net interest margin.
Automobile Finance and Commercial Real Estate
Table 51 — Key Performance Indicators for Automobile Finance and Commercial Real Estate (AFCRE)
2010 2009 Amount Percent 2008
Change from 2009
(Dollar amounts in thousands unless otherwise noted)
Net interest income ......................... $338,312 $ 277,450 $ 60,862 22% $352,328
Provision for credit losses . ................... 184,757 1,096,030 (911,273) (83) 284,691
Noninterest income ......................... 73,933 63,929 10,004 16 64,114
Noninterest expense ......................... 155,963 150,200 5,763 4 153,533
Provision (benefit) for income taxes ............. 25,033 (316,697) 341,730 N.R. (7,624)
Net income (loss)........................... $ 46,492 $ (588,154) $ 634,646 N.R.% $ (14,158)
Number of employees (full-time equivalent) ....... 270 219 51 23% 261
Total average assets (in millions) ............... $ 12,908 $ 13,163 $ (255) (2) $ 13,523
Total average loans/leases (in millions) ........... 13,024 13,076 (52) — 13,760
Total average deposits (in millions) ............. 692 572 120 21 612
Net interest margin ......................... 2.54% 2.07% 0.47% 23 2.54%
NCOs ................................... $349,869 $ 670,327 $(320,458) (48) $103,913
NCOs as a % of average loans and leases ......... 2.69% 5.13% (2.44)% (48) 0.76%
Return on average common equity .............. 5.5 (78.3) 83.8 N.R. (2.4)
Automobile loans production (in millions) ........ $ 3,427 $ 1,589 $ 1,838 116 $ 2,213
Noninterest Income ......................... 73,933 63,929 10,004 16 64,114
Operating lease income . . . ................... 45,963 51,811 (5,848) (11) 39,828
Noninterest income, excluding operating lease
income................................. $ 27,970 $ 12,118 $ 15,852 131% $ 24,286
Noninterest expense ......................... $155,963 $ 150,200 $ 5,763 4% $153,533
Operating lease expense . . . ................... 37,034 43,360 (6,326) (15) 31,282
Noninterest expense, excluding operating lease
expense ................................ $118,929 $ 106,840 $ 12,089 11% $122,251
N.R. — Not relevant, as denominator of calculation is a loss in prior period compared with income in current
period.
2010 vs. 2009
AFCRE reported net income of $46.5 million in 2010, compared with a net loss of $588.2 million in
2009. Net income for the automobile finance business was $76.9 million in 2010 compared to $10.7 million in
2009 while the commercial real estate business incurred a net loss of $30.4 million in 2010 compared to a net
loss of $598.9 million in 2009. The $634.6 million increase in net income reflected a $911.3 million decline
in the provision for credit losses, primarily due to a reduction in reserves as the underlying credit quality of
the loan portfolios continues to improve and / or stabilize. The comparable year-ago period included higher
provisions for credit losses to increase reserves due to economic and commercial real estate and automobile-
industry-related weaknesses in our markets. Total NCOs declined $320.5 million, or 48%, including a
$323.1 million decline in CRE loan NCOs and a $29.5 million decline in automobile loan and lease related
NCOs. This was partially offset by an increase in C&I NCOs of $33.5 million.
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