Huntington National Bank 2014 Annual Report Download - page 42

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2014 vs. 2013
Fully-taxable equivalent net interest income for 2014 increased $132.7 million, or 8%, from 2013. This reflected the impact of
12% earning asset growth, partially offset by 13% interest-bearing liability growth and a 13 basis point decrease in the NIM to 3.23%.
Average earning assets increased $6.1 billion, or 12%, from the prior year, driven by:
x $2.7 billion, or 29%, increase in average securities, reflecting an increase of Liquidity Coverage Ratio (LCR) Level 1
qualified securities and direct purchase municipal instruments.
x $2.0 billion, or 35%, increase in average Automobile loans, as originations remained strong.
x $1.2 billion, or 7%, increase in average C&I loans and leases, primarily reflecting growth in trade finance in support of our
middle market and corporate customers.
x $0.4 billion, or 8%, increase in average Residential mortgage loans as a result of the Camco Financial acquisition and a
decrease in the rate of payoffs due to lower levels of refinancing.
Average noninterest bearing deposits increased $1.1 billion, or 9%, while average interest-bearing liabilities increased $4.7
billion, or 13%, from 2013, primarily reflecting:
x $3.2 billion, or 104%, increase in short- and long-term borrowings, which are a cost effective method of funding incremental
securities growth.
x $2.2 billion, or 14%, increase in money market deposits, reflecting the strategic focus on customer growth and increased
share-of-wallet among both consumer and commercial customers.
x $0.5 billion, or 33%, increase in brokered deposits and negotiated CDs, which were used to efficiently finance balance sheet
growth while continuing to manage the overall cost of funds.
Partially offset by:
x $1.2 billion, or 27%, decrease in average core certificates of deposit due to the strategic focus on changing the funding
sources to no-cost demand deposits and lower-cost money market deposits.
The primary items impacting the decrease in the NIM were:
x 19 basis point negative impact from the mix and yield on earning assets, primarily reflecting lower rates on loans, and the
impact of an increased total securities balance.
x 3 basis point decrease in the benefit to the margin of non-interest bearing funds, reflecting lower interest rates on total interest
bearing liabilities from the prior year.
Partially offset by:
x 9 basis point positive impact from the mix and yield of total interest-bearing liabilities, reflecting the strategic focus on
changing the funding sources from higher rate time deposits to no-cost demand deposits and low-cost money market deposits.