Huntington National Bank 2014 Annual Report Download - page 83

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Automobile Finance and Commercial Real Estate
Table 38 - Key Performance Indicators for Automobile Finance and Commercial Real Estate
Change from 2013
(dollar amounts in thousands unless otherwise noted) 2014 2013 Amount Percent 2012
N
et interest income $ 379,363 $ 366,508 $ 12,855 4 % $ 369,376
Provision (reduction in allowance) for credit losses (52,843) (82,269) 29,426 (36) (16,557)
N
oninterest income 26,628 46,819 (20,191) (43) 91,314
N
oninterest expense 156,715 156,469 246 --- 160,434
Provision for income taxes 105,742 118,694 (12,952) (11) 110,885
N
et income $ 196,377 $ 220,433 $ (24,056) (11)% $ 205,928
N
umber of employees (average full-time equivalent) 271 285 (14) (5)% 287
Total average assets (in millions) $ 14,591 $ 12,981 $ 1,610 12 $ 12,717
Total average loans/leases (in millions) 14,224 12,391 1,833 15 11,677
Total average deposits (in millions) 1,204 1,039 165 16 967
N
et interest margin 2.61 % 2.82 % (0.21)% (7) 2.87 %
N
COs $ 2,100 $ 29,137 $ (27,037) (93) $ 83,043
N
COs as a % of average loans and leases 0.01 % 0.24 % (0.23)% (96) 0.71 %
Return on average common equity 32.4 36.9 (4.5) (12) 32.5
2014 vs. 2013
AFCRE reported net income of $196.4 million in 2014. This was a decrease of $24.1 million, or 11%, compared to the year-ago
period. The decrease in net income reflected a combination of factors described below.
The increase in net interest income from the year-ago period reflected:
x $2.0 billion, or 35%, increase in automobile loans and leases, primarily due to continued strong origination volume which
totaled $5.2 billion for the year, up 24% from $4.2 billion a year ago.
Partially offset by:
x 21 basis point decrease in the net interest margin, primarily due to an 20 basis point reduction in loan spreads. This decline
primarily reflects the impact of competitive pricing pressures in all of our portfolios, partially offset by a $5.1 million, or 4
basis points, recovery in 2014 from the unexpected pay-off of an acquired commercial real estate loan.
x $0.3 billion, or 100%, decrease in asset based lending portfolio average balances which were transferred to the Commercial
Banking segment retroactive to the beginning of 2014.
The decrease in the provision (reduction in allowance) for credit losses from the year-ago period reflected:
x Less improvement in credit quality than what was experienced in the year-ago period, reflecting a 23 basis point decline in
NPA/loans in the current period compared to a 51 basis point decline in the year-ago period, partially offset by lower NCOs.
The decrease in noninterest income from the year-ago period reflected:
x $18.0 million, or 44%, decrease in other noninterest income, primarily due to a $8.6 million decrease in fee income
associated with the asset based lending portfolio which was transferred to the Commercial Banking segment, as well as
decreases in market related gains associated with certain loans and investments carried at fair value, operating lease related
income and servicing income on securitized automobile loans.