Huntington National Bank 2011 Annual Report Download - page 110

Total average loans and leases were essentially unchanged from the year-ago period and reflected:
• $1.0 billion, or 20%, increase in the average consumer automobile portfolio. This increase resulted from
continued strong origination levels. Total production for 2011 was $3.6 billion compared to $3.4 billion
for the year-ago period. Contributing to this increase was the positive impact of our expansion into
eastern Pennsylvania and New England.
Partially offset by:
• $1.0 billion, or 12%, decrease in our average commercial portfolio. This decrease primarily reflected a
$1.0 billion decrease in CRE loans offset, in part, by a $0.3 billion increase in automobile floor plan
loans. The decline in CRE loans continued to reflect our managed reduction of this overall exposure,
particularly in the noncore portfolio.
The increase in total average deposits from the year-ago period reflected:
• $79 million, or 12%, increase in average core deposits reflecting our commitment to strengthening
relationships with core customers and prospects as well as new commercial automobile dealer
relationships developed in 2010 and 2011.
The decrease in the provision for credit losses from the year-ago period reflected:
• $183.7 million, or 57%, decrease in commercial NCOs. Expressed as a percentage of related average
balances, commercial NCO’s decreased to 1.97% in 2011 from 4.03% in 2010.
• $11.5 million, or 43%, decrease in indirect automobile-related NCOs. As a percentage of related average
balances, indirect automobile-related NCO’s were 0.26% in 2011 compared to 0.54% in 2010. This
decrease reflected our consistent focus on high credit quality of originations combined with a very strong
resale market for used vehicles.
• A reduction in required reserve levels, primarily due to lower levels of commercial NALs which totaled
$230 million at December 31, 2011, down 39% compared to December 31, 2010.
The increase in noninterest income from the year-ago period reflected:
• $22.4 million, or 89%, increase in other income which reflected a $15.5 million gain on the securitization,
a sale of $1.0 billion of indirect auto loans, and a $12.1 million increase in market-related gains on
various equity investments. Partially offsetting these increases was a decrease in fee income associated
with a lower volume of vehicles being returned at the end of their lease terms.
Partially offset by:
• $19.2 million, or 42%, decrease in operating lease income resulting from the continued runoff of that
portfolio as we exited that business at the end of 2008.
The increase in noninterest expense from the year-ago period reflected:
• $20.9 million, or 22%, increase in other expenses, primarily reflecting a $21.7 million increase in
allocated costs associated with higher production and other activity levels. In addition, other expense in
the year-ago period was reduced by $3.1 million of OREO-related gains as compared to $0.1 million of
OREO losses in 2011. These increases were partially offset by lower legal and other collection-related
costs.
• $4.7 million, or 19%, increase in personnel costs, which primarily related to higher origination related
activities, including automobile lending market expansion and additions to the CRE team to support our
core CRE customers.
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