Huntington National Bank 2013 Annual Report Download - page 81

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profit universities and healthcare, contributed $0.4 billion of the balance growth, while large corporate accounts contributed
$0.1 billion.
The increase in the provision for credit losses from the year-ago period reflected:
x Provision expense increased, as a result of our enhanced commercial risk rating system that increases the granularity of the
risk ratings resulting in an increase in the portfolio risk rating profile. However, there was a net reduction in loss given
default rates within the C&I portfolio due to the incorporation of current collateral values in the risk determination process.
Partially offset by:
x A continued improvement in the credit quality of the portfolio, as evidenced by a 38 basis point reduction in NCOs and a $23
million, or 59% decline in non-performing assets.
The increase in noninterest income from the year-ago period reflected:
x $6.3 million, or 25%, increase in commitment and other loan fees, primarily due to increased syndications activity.
x $1.1 million, or 100%, increase in the sale of Huntington Investment Company related products.
Partially offset by:
x $4.1 million, or 10%, decrease in deposit service charge income and other Treasury Management related revenue, primarily
due to the impact of earnings credits by our customers.
x $1.8 million, or 4%, decrease in capital markets related income attributed to a $3.3 million, or 15%, decrease in sales of
customer interest rate protection products, partially offset by a $1.0 million, or 9% increase in foreign exchange revenue.
The increase in noninterest expense from the year-ago period reflected:
x $7.2 million, or 31%, increase in allocated overhead.
x $6.5 million, or 6%, increase in personnel costs, primarily due to our strategic investments in our core footprint markets,
vertical strategies, and product capabilities.
x $2.7 million, or 31%, increase in outside data processing and other services, primarily due to Treasury Management products
and services, such as the new Commercial Card product implemented in 2013.
x $1.1 million, or 35%, increase in equipment expense, primarily due to the increased deployment of Treasury Management
remote deposit capture units, as well as investments in a Treasury Management payables project, commodities system, and
syndications system.
Partially offset by:
x $2.4 million, or 22%, decrease in credit administration related expenses, reflecting the continued improvement in the
commercial loan portfolio, as evidenced by a 41% reduction in the average balance of the SAD portfolio compared to the
year ago period.
2012 vs. 2011
Regional and Commercial Banking reported net income of $129.1 million in 2012, compared with a net income of $109.8 million
in 2011. The $19.3 million increase included a $29.5 million, or 12%, increase in net interest income, a $11.1 million, or 9%, increase
in noninterest income, and a $0.3 million, or 3%, decrease in the provision for credit losses, partially offset by a $11.3 million, or 6%,
increase in noninterest expense.