Huntington National Bank 2010 Annual Report Download - page 77

NALs were $777.9 million at December 31, 2010, compared with $1,917.0 million at December 31,
2009. The decrease of $1,139.0 million primarily reflected:
• $572.1 million decrease in CRE NALs, primarily reflecting both NCO activity and problem loan
resolutions including borrower payments and pay-offs. Payments and pay-offs received were substantial
and are a direct result of our commitment to the on-going proactive management of these problem
loans by our SAD. Also, inflow levels were significantly lower in 2010 compared to 2009. The level of
inflows, or migration, is an important indicator of the future trend for this portfolio.
• $317.6 million decrease in residential mortgage NALs, primarily reflecting the Franklin-related loan
sales in 2010.
• $231.7 million decrease in C&I NALs, primarily reflecting both NCO activity and problem loan
resolutions, including pay-offs. The decline was associated with loans throughout our footprint, with no
specific geographic or industry concentration.
• $17.6 million decrease in home equity NALs, primarily reflecting the Franklin-related loans sales in
2010.
Also, of the $710.4 million of CRE and C&I-related NALs at December 31, 2010, $183.4 million, or
26%, represented loans that were less than 30 days past due, demonstrating our commitment to proactive
credit risk management.
NPAs, which include NALs, were $844.8 million at December 31, 2010, and represented 2.21% of related
assets. This compared with $2,058.1 million, or 5.57%, at December 31, 2009. The $1,213.3 million decrease
reflected:
• $1,139.0 million decrease to NALs, discussed above.
• $73.3 million decrease to OREO. This reflected a focused effort to reduce our level of OREO properties
through active selling strategies during the year, as well as lower levels of new OREO properties
resulting from an increase in loss mitigation activity and short sales prior to foreclosure. We do not
believe there will be a meaningful improvement in property values in the near term, and believe it
prudent to dispose of the property instead of incurring the on-going expenses associated with
maintaining the property.
NPA activity for each of the past five years was as follows:
Table 22 — Nonperforming Asset Activity
(Dollar amounts in thousands) 2010 2009 2008 2007 2006
At December 31,
Nonperforming assets, beginning of
year .......................... $2,058,091 $ 1,636,646 $ 472,902 $ 193,620 $117,155
New nonperforming assets ......... 925,699 2,767,295 1,082,063 468,056 222,043
Franklin-related impact, net(1) ...... (329,023) (311,726) 650,225 — —
Acquired nonperforming assets ...... —— — 144,492 33,843
Returns to accruing status .......... (370,798) (215,336) (42,161) (24,952) (43,999)
Loan and lease losses ............. (639,766) (1,148,135) (202,249) (120,959) (45,648)
Other real estate owned losses ...... (7,936) (62,665) (19,582) (5,795) (543)
Payments ...................... (650,429) (497,076) (194,692) (86,093) (59,469)
Sales ......................... (141,086) (110,912) (109,860) (95,467) (29,762)
Nonperforming assets, end of year . . . $ 844,752 $ 2,058,091 $1,636,646 $ 472,902 $193,620
(1) The activity above excludes the 2007 impact of the placement of the loans to Franklin on nonaccrual status
and their return to accrual status upon the restructuring of these loans. At 2007 year-end, the loans to
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