Huntington National Bank 2012 Annual Report Download - page 96

88
Noninterest Expense
(This section should be read in conjunction with Significant Item 6.)
Noninterest expense increased $40.4 million, or 9%, from the year-ago quarter.
Table 49 - Noninterest Expense - 2012 Fourth Quarter vs. 2011 Fourth Quarter
Fourth Quarter Change
(dollar amounts in thousands) 2012 2011 Amount Percent
Personnel costs $ 253,952 $ 228,101 $ 25,851 11 %
Outside data processing and other services 48,699 53,934 (5,235) (10)
N
et occupancy 29,008 26,841 2,167 8
Equipment 26,580 25,884 696 3
Deposit and other insurance expense 16,327 18,481 (2,154) (12)
Professional services 22,514 16,257 6,257 38
Marketing 16,456 13,920 2,536 18
Amortization of intangibles 11,647 13,175 (1,528) (12)
OREO and foreclosure expense 4,233 5,009 (776) (15)
Loss (Gain) on early extinguishment of debt - (9,697) 9,697 N.R.
Other expense 41,212 38,369 2,843 7
Total noninterest expense $ 470,628 $ 430,274 $ 40,354 9 %
Full-time equivalent employees, at period-end 11,806 11,245 561 5 %
The $40.4 million increase reflected:
x$25.9 million, or 11%, increase in personnel costs, reflecting an increase in the number of full-time equivalent employees as
well as increased salaries and benefits.
x$9.7 million decrease in gain on the early extinguishment of debt related to the exchange of certain trust preferred securities
in the year ago quarter.
x$6.3 million, or 38%, increase in professional services, reflecting increased temporary regulatory related expense.
Partially offset by:
x$5.2 million, or 10%, decline in outside data processing and other services as the year ago quarter included costs associated
with the conversion to a new debit card processor.
Provision for Income Taxes
The provision for income taxes in the 2012 fourth quarter was $54.3 million and $42.0 million in the 2011 fourth quarter. The
effective tax rate in the 2012 fourth quarter was 24.5% compared to 24.9% in the 2011 fourth quarter. At December 31, 2012 and
2011 we had a net deferred tax asset of $203.9 million and $364.8 million, respectively. Based on both positive and negative evidence
and our level of forecasted future taxable income, we determined that no impairment existed to the net deferred tax asset at December
31, 2012 and 2011. For regulatory capital purposes, there is no net disallowed deferred tax asset at December 31, 2012 compared to
$39.1 million at December 31, 2011.
Credit Quality
Credit quality performance in the 2012 fourth quarter reflected continued improvement in the overall loan portfolio relating to
NCO activity, as well as in key credit quality metrics, including a 25% decline in NPAs and a 25% decline in the level of Criticized
commercial loans compared to the year-ago quarter.