Huntington National Bank 2010 Annual Report Download - page 61

• $98.5 million, or 14%, increase in personnel costs, primarily reflecting a 10% increase in full-time
equivalent staff in support of strategic initiatives, as well as higher commissions and other incentive
expenses, and the reinstatement of certain employee benefits such as 401(k) plan matching contribution,
merit increases, and bonuses.
• $32.9 million, or 99%, increase in marketing expense, reflecting increases in branding and product
advertising activities in support of strategic initiatives.
• $24.8 million, or 23%, increase in other expense, reflecting $13.1 million increase associated with the
provision for repurchase losses related to representations and warranties made on mortgage loans sold,
as well as increased travel and miscellaneous fees.
Partially offset by:
• $54.9 million, or 58%, decline in OREO and foreclosure expense.
• $16.3 million, or 14%, decrease in deposit and other insurance expense. This decrease was comprised
of two components: (1) $23.6 million FDIC special assessment during the 2009 second quarter, and
(2) increased assessments due to higher levels of deposits.
2009 versus 2008
Noninterest expense increased $2,556.1 million from 2008, and primarily reflected:
• $2,606.9 million of goodwill impairment recorded in 2009. The majority of the goodwill impairment,
$2,602.7 million, was recorded during the 2009 first quarter. The remaining $4.2 million of goodwill
impairment was recorded in the 2009 second quarter, and was related to the sale of a small payments-
related business in July 2009. (See Goodwill discussion located within the Critical Account Policies and
Use of Significant Estimates for additional information).
• $91.4 million increase in deposit and other insurance expense. This increase was comprised of two
components: (1) $23.6 million FDIC special assessment during the 2009 second quarter, and
(2) $67.8 million increase related to our 2008 FDIC assessments being significantly reduced by a
nonrecurring deposit assessment credit provided by the FDIC that was depleted during the 2008 fourth
quarter. This deposit insurance credit offset substantially all of our assessment in 2008. Higher levels of
deposits also contributed to the increase.
• $60.4 million increase in OREO and foreclosure expense, reflecting higher levels of problem assets, as
well as loss mitigation activities.
• $26.8 million, or 54%, increase in professional services, reflecting higher consulting and collection-
related expenses.
• $17.9 million, or 14%, increase in outside data processing and other services, primarily reflecting
portfolio servicing fees paid to Franklin resulting from the 2009 first quarter restructuring of this
relationship.
• $12.1 million, or 39%, increase in automobile operating lease expense, primarily reflecting a 21%
increase in average operating leases. However, we exited the automobile leasing business during the
2008 fourth quarter.
Partially offset by:
• $123.9 million positive impact related to gains on early extinguishment of debt.
• $83.1 million, or 11%, decline in personnel expense, reflecting a decline in salaries, and lower benefits
and commission expense. Full-time equivalent staff declined 6% from the comparable year-ago period.
• $30.2 million, or 22%, decline in other noninterest expense primarily reflecting lower automobile lease
residual value expense as used vehicle prices improved.
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