Huntington National Bank 2015 Annual Report Download - page 55

47
Home equity – Home equity lending includes both home equity loans and lines-of-credit. This type of lending, which is secured
by a first-lien or junior-lien on the borrower’s residence, allows customers to borrow against the equity in their home or refinance
existing mortgage debt. Products include closed-end loans which are generally fixed-rate with principal and interest payments, and
variable-rate, interest-only lines-of-credit which do not require payment of principal during the 10-year revolving period. The home
equity line of credit may convert to a 20-year amortizing structure at the end of the revolving period. Applications are underwritten
centrally in conjunction with an automated underwriting system. The home equity underwriting criteria is based on minimum credit
scores, debt-to-income ratios, and LTV ratios, with current collateral valuations. The underwriting for the floating rate lines of credit
also incorporates a stress analysis for a rising interest rate.
Residential mortgage – Residential mortgage loans represent loans to consumers for the purchase or refinance of a residence.
These loans are generally financed over a 15-year to 30-year term, and in most cases, are extended to borrowers to finance their
primary residence. Applications are underwritten centrally using consistent credit policies and processes. All residential mortgage loan
decisions utilize a full appraisal for collateral valuation. Huntington has not originated or acquired residential mortgages that allow
negative amortization or allow the borrower multiple payment options.
Other consumer – Other consumer loans primarily consists of consumer loans not secured by real estate, including personal
unsecured loans, overdraft balances, and credit cards.
The table below provides the composition of our total loan and lease portfolio:
Table 8 - Loan and Lease Portfolio Composition
(dollar amounts in millions)
At December 31,
2015 2014 2013 2012 2011
Commercial: (1)
Commercial and industrial $ 20,560 41% $19,033 40% $17,594 41% $ 16,971 42% $ 14,699 38%
Commercial real estate:
Construction 1,031 2 875 2 557 1 648 2 580 1
Commercial 4,237 8 4,322 9 4,293 10 4,751 12 5,246 13
Total commercial real estate 5,268 10 5,197 11 4,850 11 5,399 14 5,826 14
Total commercial 25,828 51 24,230 51 22,444 52 22,370 56 20,525 52
Consumer:
Automobile 9,481 19 8,690 18 6,639 15 4,634 11 4,458 11
Home equity 8,471 17 8,491 18 8,336 19 8,335 20 8,215 21
Residential mortgage 5,998 12 5,831 12 5,321 12 4,970 12 5,228 13
Other consumer 563 1 414 1 380 2 419 1 498 3
Total consumer 24,513 49 23,426 49 20,676 48 18,358 44 18,399 48
Total loans and leases $ 50,341 100% $47,656 100% $ 43,120 100% $40,728 100% $38,924 100%
(1) As defined by regulatory guidance, there were no commercial loans outstanding that would be considered a concentration of
lending to a particular industry or group of industries.
Our loan portfolio is diversified by consumer and commercial credit. At the corporate level, we manage the credit exposure in
part via a credit concentration policy. The policy designates specific loan types, collateral types, and loan structures to be formally
tracked and assigned limits as a percentage of capital. C&I lending by NAICS categories, specific limits for CRE primary project
types, loans secured by residential real estate, shared national credit exposure, and designated high risk loan definitions represent
examples of specifically tracked components of our concentration management process. Currently there are no identified
concentrations that exceed the established limit. Our concentration management policy is approved by the Risk Oversight Committee
(ROC) and is one of the strategies used to ensure a high quality, well diversified portfolio that is consistent with our overall objective
of maintaining an aggregate moderate-to-low risk profile. Changes to existing concentration limits require the approval of the ROC
prior to implementation, incorporating specific information relating to the potential impact on the overall portfolio composition and
performance metrics.
The table below provides our total loan and lease portfolio segregated by the type of collateral securing the loan or lease. The
changes in the collateral composition from December 31, 2014 are consistent with the portfolio growth metrics, with increases noted