Huntington National Bank 2010 Annual Report Download - page 164

6. ALLOWANCE FOR CREDIT LOSSES
The Company maintains two reserves, both of which are available to absorb probable credit losses: the
ALLL and the AULC. When summed together, these reserves constitute the ACL. A summary of the
transactions in the ACL and details regarding impaired loans and leases follows for the three years ended
December 31, 2010, 2009, and 2008:
2010 2009 2008
Year Ended December 31,
(Dollar amounts in thousands)
Allowance for loan and leases losses, beginning of year
(ALLL) .......................................... $ 1,482,479 $ 900,227 $ 578,442
Loan charge-offs ..................................... (1,003,907) (1,561,378) (806,330)
Recoveries of loans previously charged-off .................. 129,433 84,791 48,263
Net loan and lease charge-offs . . . ........................ (874,474) (1,476,587) (758,067)
Provision for loan and lease losses ........................ 641,299 2,069,931 1,067,789
Economic reserve transfer .............................. —— 12,063
Allowance for assets sold and securitized ................... (296) (9,188) —
Allowance for loans transferred to loans held for sale .......... —(1,904) —
Allowance for loan and lease losses, end of year ............ $ 1,249,008 $ 1,482,479 $ 900,227
Allowance for unfunded loan commitments and letters of
credit, beginning of year (AULC) ...................... $ 48,879 $ 44,139 $ 66,528
(Reduction in) provision for unfunded loan commitments and
letters of credit losses ................................ (6,752) 4,740 (10,326)
Economic reserve transfer .............................. —— (12,063)
Allowance for unfunded loan commitments and letters of
credit, end of year ................................. $ 42,127 $ 48,879 $ 44,139
Total allowance for credit losses (ACL) ................... $ 1,291,135 $ 1,531,358 $ 944,366
Recorded balance of impaired loans, at end of year(1):
With specific reserves assigned to the loan and lease
balances(2) ...................................... $ 825,292 $ 873,215 $1,122,575
With no specific reserves assigned to the loan and lease
balances ........................................ 94,290 221,384 75,799
Total .............................................. $ 919,582 $ 1,094,599 $1,198,374
Average balance of impaired loans for the year(1) ............. $ 1,064,235 $ 1,010,044 $1,369,857
Allowance for loan and lease losses on impaired loans(1) ....... 143,860 175,442 301,457
(1) 2010 and 2009 includes impaired C&I and CRE loans with outstanding balances greater than $1 million.
2008 includes impaired C&I and CRE loans with outstanding balances greater than $1 million for business-
banking loans, and $500,000 for all other loans. A loan is impaired when it is probable that Huntington will
be unable to collect all amounts due according to the contractual terms of the loan agreement. The recovery
of the investment in impaired loans with no specific reserves generally is expected from the sale of collateral,
net of costs to sell that collateral.
(2) As a result of the troubled debt restructuring, the loans to Franklin of $0.7 billion are included in impaired
loans at the end of 2008.
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