Huntington National Bank 2012 Annual Report Download - page 64

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We have significant exposure to loans secured by residential real estate and continue to be an active lender in our communities.
The impact of the downturn in real estate values over the past several years has had a significant impact on some of our borrowers as
evidenced by the higher delinquencies and NCOs since late 2007. Recently, real estate values have begun to slowly rise from their
2007 levels. FHFA housing prices increased in the 2012 third quarter relative to the year-ago quarter in all of our footprint states,
except Pennsylvania, which was essentially unchanged. Strong affordability and continued economic growth should support
continued housing recovery in 2013, as long as risks to the overall U.S. economy are contained.
Given the combination of these noted positive and negative factors, we believe that our ACL is appropriate and its coverage level
is reflective of the quality of our portfolio and the current operating environment.
NCOs
(This section should be read in conjunction with Significant Item 5.)
Any loan in any portfolio may be charged-off prior to the policies described below if a loss confirming event has occurred. Loss
confirming events include, but are not limited to, bankruptcy (unsecured), continued delinquency, foreclosure, or receipt of an asset
valuation indicating a collateral deficiency and that asset is the sole source of repayment. Additionally, discharged, collateral
dependent non-reaffirmed debt in Chapter 7 bankruptcy filings will result in a charge-off to estimated collateral value, less anticipated
selling costs.
C&I and CRE loans are either charged-off or written down to net realizable value at 90-days past due. Automobile loans and
other consumer loans are charged-off at 120-days past due. First-lien and junior-lien home equity loans are charged-off to the
estimated fair value of the collateral, less anticipated selling costs, at 150-days past due and 120-days past due, respectively.
Residential mortgages are charged-off to the estimated fair value of the collateral, less anticipated selling costs, at 150-days past due.
The following table reflects NCO detail for each of the last five years:
Table 20 - Net Loan and Lease Charge-offs
Year Ended December 31,
(dollar amounts in thousands) 2012 2011 2010 2009 2008
N
et charge-offs by loan and lease type
Commercial:
Commercial and industrial $ 64,248 $ 89,699 $ 254,932 $ 487,606 $ 526,165
Commercial real estate:
Construction 8,041 31,524 109,008 192,706 6,626
Commercial 70,388 116,577 166,554 490,025 62,114
Total commercial real estate 78,429 148,101 275,562 682,731 68,740
Total commercial 142,677 237,800 530,494 1,170,337 594,905
Consumer:
Automobile 9,442 15,067 26,572 56,332 54,565
Home equity 116,379 101,797 139,373 106,176 67,556
Residential mortgage 47,923 56,681 152,895 110,202 21,247
Other consumer 26,041 25,744 25,140 33,540 19,794
Total consumer 199,785 199,289 343,980 306,250 163,162
Total net charge-offs $ 342,462 $ 437,089 $ 874,474 $ 1,476,587 $ 758,067
N
et charge-offs ratio: (1)
Commercial:
Commercial and industrial 0.40 % 0.66 % 2.05 % 3.71 % 3.87 %
Commercial real estate:
Construction 1.38 5.33 9.95 10.37 0.32
Commercial 1.35 2.08 2.72 6.71 0.81
Commercial real estate 1.36 2.39 3.81 7.46 0.71
Total commercial 0.66 1.20 2.70 5.25 2.55
Consumer:
Automobile 0.21 0.26 0.54 1.59 1.21
Home equity 1.40 1.28 1.84 1.40 0.91
Residential mortgage 0.92 1.20 3.42 2.43 0.42
Other consumer 5.72 4.85 3.80 4.65 2.86
Total consumer 1.08 1.05 1.95 1.87 0.92
N
et charge-offs as a % of average loans 0.85 % 1.12 % 2.35 % 3.82 % 1.85 %