Huntington National Bank 2012 Annual Report Download - page 63

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The table below reflects the allocation of our ACL among our various loan categories during each of the past five years:
Table 19 - Allocation of Allowances for Credit Losses (1)
At December 31,
(dollar amounts in thousands) 2012 2011 2010 2009 2008
Commercial:
Commercial and industrial $ 241,051 42 %$ 275,367 38 % $ 340,614 34 % $ 492,205 35 % $ 412,201 33 %
Commercial real estate 285,369 14 388,706 14 588,251 18 751,875 21 322,681 25
Total commercial 526,420 56 664,073 52 928,865 52 1,244,080 56 734,882 58
Consumer:
Automobile 34,979 11 38,282 11 49,488 15 57,951 9 44,712 11
Home equity 118,764 20 143,873 21 150,630 20 102,039 21 63,538 18
Residential mortgage 61,658 12 87,194 13 93,289 12 55,903 12 44,463 12
Other loans 27,254 1 31,406 3 26,736 1 22,506 2 12,632 1
Total consumer 242,655 44 300,755 48 320,143 48 238,399 44 165,345 42
Total allowance for loan and
lease losses 769,075 100 % 964,828 100 % 1,249,008 100 % 1,482,479 100 % 900,227 100 %
Allowance for unfunded loan
commitments 40,651 48,456 42,127 48,879 44,139
Total allowance for credit
losses $ 809,726 $ 1,013,284 $ 1,291,135 $ 1,531,358 $ 944,366
Total allowance for loan and leases losses as % of:
Total loans and leases 1.89 % 2.48 % 3.28 % 4.03 % 2.19 %
N
onaccrual loans and
leases 189 178 161 77 60
N
onperforming assets 173 163 148 72 55
Total allowance for credit losses as % of:
Total loans and leases 1.99 % 2.60 % 3.39 % 4.16 % 2.30 %
N
onaccrual loans and
leases 199 187 166 80 63
N
onperforming assets 182 172 153 74 58
(1) Percentages represent the percentage of each loan and lease category to total loans and leases.
The reduction in the ALLL compared with December 31, 2011, reflected a decline in all portfolios. The declines in the C&I and
CRE ALLL reflected significant improvements in the level of criticized and classified loans combined with lower CRE loan balances.
The home equity ALLL declined as a result of a combination of the improving underlying asset quality and our view of expected
future performance. The residential mortgage ALLL declined as a result of the improving underlying asset quality, while the
automobile ALLL decreased slightly as the underlying asset quality remained relatively consistent.
Compared with December 31, 2011, the AULC decreased $7.8 million primarily reflecting a significant improvement in the
underlying risk profile of the borrowers with unfunded loan commitments.
The ACL to total loans declined to 1.99% at December 31, 2012, compared to 2.60% at December 31, 2011. We believe the
decline in the ratio is appropriate given the continued improvement in the risk profile of our loan portfolio. Further, we believe that
early identification of loans with changes in credit metrics and aggressive action plans for these loans, combined with originating high
quality new loans will contribute to continued improvement in our key credit quality metrics. We continue to see positive economic
trends within our Midwest markets relative to the broader United States. Nevertheless, broad based customer sentiment began to
change late in the 2012 fourth quarter, as customers have increased concerns regarding the U.S. economy. Some businesses are
hesitant to invest given the current uncertainty in the economy. Unemployment rates remain high, however, our footprint large
metropolitan statistical areas (MSA) unemployment rates were below the national average as of November 2012.