Huntington National Bank 2013 Annual Report Download - page 45

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Partially offset by:
x $14.2 million, or 13%, increase in net occupancy expense, reflecting $12.1 million of franchise repositioning expense related
to branch consolidation and facilities optimization.
x $13.4 million, or 1%, increase in personnel costs, primarily reflecting the $38.8 million increase in salaries due to a 4%
increase in the number of average full-time equivalent employees as employee count increased mainly in technology and
consumer areas and $6.7 million of franchise repositioning expense related to branch consolidation and severance expenses.
This was partially offset by the $33.9 million one-time, non-cash gain related to the pension curtailment.
x $9.3 million, or 5%, increase in outside data processing as we continue to invest in technology supporting our products,
services, and our Continuous Improvement initiatives.
x $3.9 million, or 4%, increase in equipment, including $2.4 million of branch consolidation and facilities optimization related
expenses.
2012 vs. 2011
Noninterest expense increased $107.4 million, or 6%, from 2011 and primarily reflected:
x $95.7 million, or 11%, increase in personnel costs, primarily reflecting an increase in bonuses, commissions, and full-time
equivalent employees, as well as increased salaries and benefits.
x $10.4 million, or 11%, increase in equipment, primarily reflecting the impact of depreciation from our in-store branch
expansions and other technology investments.
x $9.3 million, or 5%, increase in other expense primarily reflecting higher litigation reserves, increased sponsorships and
public relations expense, and an increase in the provision for mortgage representations and warranties.
Partially offset by:
x $9.4 million, or 12%, decline in deposit and other insurance expense.
Provision for Income Taxes
(This section should be read in conjunction with Significant Item 3, and Note 17 of the Notes to Consolidated Financial Statements.)
2013 versus 2012
The provision for income taxes was $215.8 million for 2013 compared with a provision for income taxes of $184.1 million in 2012.
Both years included the benefits from tax-exempt income, tax-advantaged investments, and general business credits. In 2013, a $6.0
million reduction in the 2013 provision for state income taxes, net of federal, was recorded for the portion of state deferred tax assets
and state net operating loss carryforwards that are more likely than not to be realized, compared to a $21.3 million reduction in 2012.
At December 31, 2013, we had a net federal and state deferred tax asset of $137.6 million. Based on both positive and negative
evidence and our level of forecasted future taxable income, we determined no impairment existed to the net federal and state deferred
tax asset at December 31, 2013. For regulatory capital purposes, there was no disallowed net deferred tax asset at December 31, 2013
and December 31, 2012.
We file income tax returns with the IRS and various state, city, and foreign jurisdictions. Federal income tax audits have been
completed for tax years through 2009. In the first quarter of 2013, the IRS began an examination of our 2010 and 2011 consolidated
federal income tax returns. We have appealed certain proposed adjustments resulting from the IRS examination of our 2006, 2007,
2008, 2009, and 2010 tax returns. We believe the tax positions taken related to such proposed adjustments are correct and supported by
applicable statutes, regulations, and judicial authority, and intend to vigorously defend them. It is possible the ultimate resolution of the
proposed adjustments, if unfavorable, may be material to the results of operations in the period it occurs. Nevertheless, although no
assurances can be given, we believe the resolution of these examinations will not, individually or in the aggregate, have a material
adverse impact on our consolidated financial position. Various state and other jurisdictions remain open to examination, including
Kentucky, Indiana, Michigan, Pennsylvania, West Virginia and Illinois.