Huntington National Bank 2011 Annual Report Download - page 109

Automobile Finance and Commercial Real Estate
Table 44 — Key Performance Indicators for Automobile Finance and Commercial Real Estate
Change from 2010
2011 2010 Amount Percent 2009
(dollar amounts in thousands unless otherwise noted)
Net interest income ............................ $364,449 $338,312 $ 26,137 8% $ 277,450
Provision for credit losses ...................... (8,939) 184,757 (193,696) (105) 1,096,030
Noninterest income ............................ 77,623 73,933 3,690 5 63,929
Noninterest expense ........................... 164,626 155,963 8,663 6 150,200
Provision (benefit) for income taxes .............. 100,234 25,033 75,201 300 (316,697)
Net income (loss) ............................. $186,151 $ 46,492 $ 139,659 300% $ (588,154)
Number of employees (full-time equivalent) ........ 272 270 2 1% 219
Total average assets (in millions) ................. $ 13,025 $ 12,908 $ 117 1 $ 13,163
Total average loans/leases (in millions) ............ 12,985 13,024 (39) — 13,076
Total average deposits (in millions) ............... 786 692 94 14 572
Net interest margin ............................ 2.74% 2.54% 0.20% 8 2.07%
NCOs ...................................... $153,715 $349,869 $(196,154) (56) $ 670,327
NCOs as a % of average loans and leases .......... 1.18% 2.69% (1.51)% (56) 5.13%
Return on average common equity ................ 27.3 5.5 21.8 396 (78.3)
2011 vs. 2010
AFCRE reported net income of $186.2 million in 2011. This was an increase of $139.7 million when
compared to 2010.
Results for 2011 continued to be significantly and positively impacted by lower provisions for credit losses
due to reductions in required reserve levels as the underlying credit quality of the portfolios continued to improve
and / or stabilize. This was in contrast to 2010, which included higher provisions for credit losses in order to
increase reserves due to economic and CRE-related weaknesses in our markets. Also contributing to the increase
in net income was growth in net interest income. This primarily reflected the benefit of a higher net interest
margin due to improved risk-based pricing. Growth in average total loans and leases reflected the positive impact
of an increase in auto finance loan production, which exceeded the record production levels reached in 2010,
partially offset by the planned continued reduction in our CRE exposure and the sale of $1.0 billion of indirect
auto loans in the third quarter of 2011.
The increase in net income reflected a combination of factors including:
• $193.7 million, or 105%, decline in the provision for credit losses.
• $26.1 million, or 8%, increase in net interest income.
• $3.7 million, or 5%, increase in noninterest income.
Partially offset by:
• $8.7 million, or 6%, increase in noninterest expense.
The increase in net interest income from the year-ago period reflected:
• 20 basis point increase in the net interest margin. This increase primarily reflected the continuation of a
risk-based pricing strategy in the CRE portfolio that began in early 2009 and has resulted in improved
spreads on CRE loan renewals as well as new business originated.
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