Huntington National Bank 2015 Annual Report Download - page 132

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During the 2015 third quarter, we reviewed our existing commercial and consumer credit models and completed a periodic
reassessment of certain ACL assumptions. Specifically, we updated our analysis of the loss emergence periods used for commercial
receivables collectively evaluated for impairment. Based on our observed portfolio experience, we extended our loss emergence
periods for the C&I portfolio and CRE portfolios. We also updated loss factors in our consumer home equity and residential mortgage
portfolios based on more recently observed portfolio experience. The net ACL impact of these enhancements was immaterial.
The following table presents ALLL and AULC activity by portfolio segment for the years ended December 31, 2015, 2014, and
2013:
(dollar amounts in thousands)
Commercial
and Industrial
Commercial
Real Estate Automobile
Home
Equity
Residential
Mortgage
Other
Consumer Total
Year ended December 31, 2015:
ALLL balance, beginning of period $ 286,995 $ 102,839 $ 33,466 $ 96,413 $ 47,211 $ 38,272 $ 605,196
Loan charge-offs (79,724) (18,076) (36,489) (36,481) (15,696) (31,415) (217,881)
Recoveries of loans previously charged-off 51,800 34,619 16,198 16,631 5,570 5,270 130,088
Provision (reduction in allowance) for loan and
lease losses 39,675 (19,375) 38,621 12,173 5,443 12,142 88,679
Write-downs of loans sold or transferred to loans
held for sale — — (2,292) (5,065) (882) — (8,239)
ALLL balance, end of period $ 298,746 $ 100,007 $ 49,504 $ 83,671 $ 41,646 $ 24,269 $ 597,843
AULC balance, beginning of period $ 48,988 $ 6,041 $ — $ 1,924 $ 8 $ 3,845 $ 60,806
Provision (reduction in allowance) for unfunded
loan commitments and letters of credit 6,898 1,521 — 144 10 2,702 11,275
AULC balance, end of period $ 55,886 $ 7,562 $ — $ 2,068 $ 18 $ 6,547 $ 72,081
ACL balance, end of period $ 354,632 $ 107,569 $ 49,504 $ 85,739 $ 41,664 $ 30,816 $ 669,924
Year ended December 31, 2014:
ALLL balance, beginning of period $ 265,801 $ 162,557 $ 31,053 $ 111,131 $ 39,577 $ 37,751 $ 647,870
Loan charge-offs (76,654) (24,704) (31,330) (54,473) (25,946) (33,494) (246,601)
Recoveries of loans previously charged-off 44,531 34,071 13,762 17,526 6,194 5,890 121,974
Provision (reduction in allowance) for loan and
lease losses 53,317 (69,085) 19,981 22,229 27,386 29,254 83,082
Write-downs of loans sold or transferred to loans
held for sale — — — — — (1,129) (1,129)
ALLL balance, end of period $ 286,995 $ 102,839 $ 33,466 $ 96,413 $ 47,211 $ 38,272 $ 605,196
AULC balance, beginning of period $ 49,596 $ 9,891 $ — $ 1,763 $ 9 $ 1,640 $ 62,899
Provision (reduction in allowance) for unfunded
loan commitments and letters of credit (608) (3,850) — 161 (1) 2,205 (2,093)
AULC balance, end of period $ 48,988 $ 6,041 $ — $ 1,924 $ 8 $ 3,845 $ 60,806
ACL balance, end of period $ 335,983 $ 108,880 $ 33,466 $ 98,337 $ 47,219 $ 42,117 $ 666,002
(dollar amounts in thousands)
Year Ended December 31, 2013:
ALLL balance, beginning of period $ 241,051 $ 285,369 $ 34,979 $ 118,764 $ 61,658 $ 27,254 $ 769,075
Loan charge-offs (45,904) (69,512) (23,912) (98,184) (34,236) (34,568) (306,316)
Recoveries of loans previously charged-off 29,514 44,658 13,375 15,921 7,074 7,108 117,650
Provision (reduction in allowance) for loan and
lease losses 41,140 (97,958) 6,611 74,630 5,417 37,957 67,797
Write-downs of loans sold or transferred to loans
held for sale — — — — (336) — (336)
ALLL balance, end of period $ 265,801 $ 162,557 $ 31,053 $ 111,131 $ 39,577 $ 37,751 $ 647,870
AULC balance, beginning of period $ 33,868 $ 4,740 $ — $ 1,356 $ 3 $ 684 $ 40,651
Provision (reduction in allowance) for unfunded
loan commitments and letters of credit 15,728 5,151 — 407 6 956 22,248
AULC balance, end of period $ 49,596 $ 9,891 $ — $ 1,763 $ 9 $ 1,640 $ 62,899
ACL balance, end of period $ 315,397 $ 172,448 $ 31,053 $ 112,894 $ 39,586 $ 39,391 $ 710,769
Credit Quality Indicators
To facilitate the monitoring of credit quality for C&I and CRE loans, and for purposes of determining an appropriate ACL level
for these loans, Huntington utilizes the following categories of credit grades:
Pass - Higher quality loans that do not fit any of the other categories described below.