Huntington National Bank 2013 Annual Report Download - page 51

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During a 2013 review of our consumer portfolios, we identified additional loans associated with borrowers who had filed Chapter
7 bankruptcy and had not reaffirmed their debt, thus meeting the definition of collateral dependent per OCC regulatory guidance.
These loans were not identified in the 2012 third quarter implementation of the OCC’s regulatory guidance. The bankruptcy court’s
discharge of the borrower’s debt is considered a concession when the discharged debt is not reaffirmed, and as such, the loan is placed
on nonaccrual status, and written down to collateral value, less anticipated selling costs. As a result of the review of our existing
consumer portfolios, additional NCOs of $22.8 million were recorded in 2013. The majority of the NCO impact was in the home
equity portfolio and relates to junior-lien loans that meet the regulatory guidance.
AUTOMOBILE PORTFOLIO
Our strategy in the automobile portfolio continued to focus on high quality borrowers as measured by both FICO and internal
custom scores, combined with appropriate LTVs, terms, and profitability. Our strategy and operational capabilities allow us to
appropriately manage the origination quality across the entire portfolio, including our newer markets. Although increased origination
volume and entering new markets can be associated with increased risk levels, we believe our disciplined strategy and operational
processes significantly mitigate these risks.
We have continued to consistently execute our value proposition and take advantage of available market opportunities.
Importantly, we have maintained our high credit quality standard while expanding the portfolio. We have developed and implemented
a successful loan securitization strategy to ensure we remain within our established portfolio concentration limits.
RESIDENTIAL REAL ESTATE SECURED PORTFOLIOS
The properties securing our residential mortgage and home equity portfolios are primarily located within our geographic footprint.
While home prices have clearly rebounded from the 2009-2010 levels, they remain below the peak, causing the performance in these
portfolios to remain weaker than historical levels. The residential-secured portfolio originations continue to be of high quality, with
the majority of the negative credit impact coming from loans originated in 2006 and earlier. We continue to evaluate all of our
policies and processes associated with managing these portfolios. Our portfolio management strategies associated with our Home
Savers group are consolidated in one location under common management. This structure allows us to focus on effectively helping
our customers with appropriate solutions for their specific circumstances.
Table 11 - Selected Home Equity and Residential Mortgage Portfolio Data
(dollar amounts in millions)
Home Equity Residential Mortgage
Secured by first-lien Secured by junior-lien
12/31/13 12/31/12 12/31/13 12/31/12 12/31/13 12/31/12
Ending balance $4,842 $4,380 $3,494 $3,955 $5,321 $4,970
Portfolio weighted average LTV ratio
(
1
)
71% 71% 81% 81% 74% 76%
Portfolio weighted average FICO score
(
2
)
758 755 741 741 743 738
Home Equity Residential Mortgage (3)
Secured by first-lien Secured by junior-lien
Year Ended December 31,
2013 2012 2013 2012 2013 2012
Originations $1,745 $1,665 $529 $559 $1,625 $1,019
Origination weighted average LTV ratio
(
1
)
69% 72% 81% 80% 79% 84%
Origination weighted average FICO score
(
2
)
771 771 756 756 757 754
(1) The LTV ratios for home equity loans and home equity lines-of-credit are cumulative and reflect the balance of any senior loans. LTV ratios
reflect collateral values at the time of loan origination.
(2) Portfolio weighted average FICO scores reflect currently updated customer credit scores whereas origination weighted average FICO scores
reflect the customer credit scores at the time of loan origination.
(3) Represents only owned-portfolio originations.