Huntington National Bank 2013 Annual Report Download - page 88
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82
Provision for Income Taxes
The provision for income taxes in the 2013 fourth quarter was $49.1 million and $54.3 million in the 2012 fourth quarter. The
effective tax rate in the 2013 fourth quarter was 23.7% compared to 24.5% in the 2012 fourth quarter. At December 31, 2013 and
2012 we had a net deferred tax asset of $137.6 million and $203.9 million, respectively.
Credit Quality
Credit quality performance in the 2013 fourth quarter reflected continued improvement in the overall loan portfolio relating to
NCO activity, as well as in key credit quality metrics, including a 21% decline in NPAs.
NCOs
Total NCOs for the 2013 fourth quarter were $46.4 million, or an annualized 0.43% of average total loans and leases. NCOs in
the year-ago quarter were $70.1 million, or an annualized 0.69%. These declines reflected improvement in the overall credit quality of
the portfolio.
NALs
Total NALs were $322.1 million at December 31, 2013, and represented 0.75% of total loans and leases. This was down $85.6
million, or 21%, from $407.6 million, or 1.00%, of total loans and leases at the end of the year ago period. This decrease primarily
reflected substantial improvement in the C&I and CRE portfolio, partially offset by an increase in consumer NALs resulting from
Chapter 7 bankruptcy consumer loans.
ACL
(This section should be read in conjunction with Note 3 of the Notes to Consolidated Financial Statements.)
ACL as a percent of total loans and leases at December 31, 2013, was 1.65%, down from 1.99% at December 31, 2012. We
believe the decline in the ratio is appropriate given the continued improvement in the risk profile of our loan portfolio. Further, we
believe that early identification of loans with changes in credit metrics and aggressive action plans for these loans, combined with
originating high quality new loans will contribute to continued improvement in our key credit quality metrics.