Huntington National Bank 2013 Annual Report Download - page 42
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36
2012 vs. 2011
Fully-taxable equivalent net interest income for 2012 increased $86.8 million, or 5%, from 2011. This reflected the favorable
impact of a $2.1 billion, or 4%, increase in average earning assets, partially offset by a 3 basis point decline in the net interest margin.
The increase in average earning assets reflected:
x $1.9 billion, or 10%, increase in average commercial loans and leases.
x $0.8 billion, or 277% increase in average loans held for sale.
Partially offset by:
x $0.6 billion, or 3% decrease in average consumer loans including a $1.4 billion, or 23%, decrease in automobile loans,
reflecting $2.5 billion of automobile loans sold throughout the year.
The 3 basis point increase in the FTE net interest margin reflected:
x The positive impact of a 29 basis point decline in total deposit costs.
Partially offset by:
x 24 basis point declines in the yield on earnings assets and a 2 basis point decrease related to non-deposit funding and
other items.
The $3.1 billion, or 8%, increase in average total core deposits from the prior year reflected:
x $3.8 billion, or 27%, increase in total demand deposits.
x $0.6 billion, or 4%, increase in money market deposits.
Partially offset by:
x $1.5 billion, or 19%, decrease in core certificates of deposits.
Provision for Credit Losses
(This section should be read in conjunction with the Credit Risk section.)
The provision for credit losses is the expense necessary to maintain the ALLL and the AULC at levels appropriate to absorb our
estimate of inherent credit losses in the loan and lease portfolio and the portfolio of unfunded loan commitments and letters-of-credit.
The provision for credit losses in 2013 was $90.0 million, down $57.3 million, or 39%, from 2012, reflecting a $153.8 million, or
45%, decrease in NCOs. The provision for credit losses in 2013 was $98.6 million less than total NCOs. In addition, as a result of a
review of the existing consumer portfolios, 2013 also includes $22.8 million of Chapter 7 bankruptcy-related losses that were not
identified in the 2012 third quarter implementation of the OCC’s regulatory guidance. (see Credit Quality discussion)