Maryland | 31-0724920 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
76 | ||||||||
77 | ||||||||
78 | ||||||||
79 | ||||||||
80 | ||||||||
7 | ||||||||
10 | ||||||||
29 | ||||||||
48 | ||||||||
50 | ||||||||
54 | ||||||||
55 | ||||||||
55 | ||||||||
59 | ||||||||
73 | ||||||||
142 | ||||||||
142 | ||||||||
142 | ||||||||
142 | ||||||||
142 | ||||||||
144 | ||||||||
Exhibit 12.1 | ||||||||
Exhibit 12.2 | ||||||||
Exhibit 31.1 | ||||||||
Exhibit 31.2 | ||||||||
Exhibit 32.1 | ||||||||
Exhibit 32.2 | ||||||||
EX-101 INSTANCE DOCUMENT | ||||||||
EX-101 SCHEMA DOCUMENT | ||||||||
EX-101 CALCULATION LINKBASE DOCUMENT | ||||||||
EX-101 LABELS LINKBASE DOCUMENT | ||||||||
EX-101 PRESENTATION LINKBASE DOCUMENT | ||||||||
EX-101 DEFINITION LINKBASE DOCUMENT |
2
2010 Form 10-K
|
Annual Report on Form 10-K for the year ended December 31, 2010 | |
ABL
|
Asset Based Lending | |
ACL
|
Allowance for Credit Losses | |
AFCRE
|
Automobile Finance and Commercial Real Estate | |
ALCO
|
Asset & Liability Management Committee | |
ALLL
|
Allowance for Loan and Lease Losses | |
ARM
|
Adjustable Rate Mortgage | |
ARRA
|
American Recovery and Reinvestment Act of 2009 | |
ASC
|
Accounting Standards Codification | |
ASU
|
Accounting Standards Update | |
ATM
|
Automated Teller Machine | |
AULC
|
Allowance for Unfunded Loan Commitments | |
AVM
|
Automated Valuation Methodology | |
C&I
|
Commercial and Industrial | |
CDARS
|
Certificate of Deposit Account Registry Service | |
CDO
|
Collateralized Debt Obligations | |
CDs
|
Certificates of Deposit | |
CFPB
|
Bureau of Consumer Financial Protection | |
CMO
|
Collateralized Mortgage Obligations | |
CPP
|
Capital Purchase Program | |
CRE
|
Commercial Real Estate | |
DDA
|
Demand Deposit Account | |
DIF
|
Deposit Insurance Fund | |
Dodd-Frank Act
|
Dodd-Frank Wall Street Reform and Consumer Protection Act | |
EESA
|
Emergency Economic Stabilization Act of 2008 | |
EPS
|
Earnings Per Share | |
ERISA
|
Employee Retirement Income Security Act | |
EVE
|
Economic Value of Equity | |
FASB
|
Financial Accounting Standards Board | |
FDIC
|
Federal Deposit Insurance Corporation | |
FDICIA
|
Federal Deposit Insurance Corporation Improvement Act of 1991 | |
FFIEC
|
Federal Financial Institutions Examination Council | |
FHA
|
Federal Housing Administration | |
FHFA
|
Federal Housing Finance Agency | |
FHLB
|
Federal Home Loan Bank | |
FHLMC
|
Federal Home Loan Mortgage Corporation | |
FICA
|
Federal Insurance Contributions Act | |
FICO
|
Fair Isaac Corporation | |
FOMC
|
Federal Open Market Committee | |
FNMA
|
Federal National Mortgage Association | |
Franklin
|
Franklin Credit Management Corporation | |
FRB
|
Federal Reserve Bank | |
FSP
|
Financial Stability Plan | |
FTE
|
Fully-Taxable Equivalent |
3
FTP
|
Funds Transfer Pricing | |
GAAP
|
Generally Accepted Accounting Principles in the United States of America | |
GSIFI
|
Globally Systemically Important Financial Institution | |
GSE
|
Government Sponsored Enterprise | |
HASP
|
Homeowner Affordability and Stability Plan | |
HCER Act
|
Health Care and Education Reconciliation Act of 2010 | |
IPO
|
Initial Public Offering | |
IRS
|
Internal Revenue Service | |
ISE
|
Interest Sensitive Earnings | |
LIBOR
|
London Interbank Offered Rate | |
LGD
|
Loss-Given-Default | |
LTV
|
Loan to Value | |
MD&A
|
Managements Discussion and Analysis of Financial Condition and Results of Operations | |
MRC
|
Market Risk Committee | |
MSA
|
Metropolitan Statistical Area | |
MSR
|
Mortgage Servicing Rights | |
NALs
|
Nonaccrual Loans | |
NAV
|
Net Asset Value | |
NCO
|
Net Charge-off | |
NPAs
|
Nonperforming Assets | |
NSF / OD
|
Nonsufficient Funds and Overdraft | |
OCC
|
Office of the Comptroller of the Currency | |
OCI
|
Other Comprehensive Income (Loss) | |
OCR
|
Optimal Customer Relationship | |
OLEM
|
Other Loans Especially Mentioned | |
OREO
|
Other Real Estate Owned | |
OTTI
|
Other-Than-Temporary Impairment | |
PD
|
Probability-Of-Default | |
Plan
|
Huntington Bancshares Retirement Plan | |
Reg E
|
Regulation E, of the Electronic Fund Transfer Act | |
REIT
|
Real Estate Investment Trust | |
SAD
|
Special Assets Division | |
SBA
|
Small Business Administration | |
SEC
|
Securities and Exchange Commission | |
SERP
|
Supplemental Executive Retirement Plan | |
SIFIs
|
Systemically Important Financial Institutions | |
Sky Financial
|
Sky Financial Group, Inc. | |
SRIP
|
Supplemental Retirement Income Plan | |
Sky Trust
|
Sky Bank and Sky Trust, National Association | |
TAGP
|
Transaction Account Guarantee Program | |
TARP
|
Troubled Asset Relief Program | |
TARP Capital
|
Series B Preferred Stock | |
TCE
|
Tangible Common Equity | |
TDR
|
Troubled Debt Restructured Loan | |
TLGP
|
Temporary Liquidity Guarantee Program | |
Treasury
|
U.S. Department of the Treasury |
4
UCS
|
Uniform Classification System | |
Unizan
|
Unizan Financial Corp. | |
UPB
|
Unpaid Principal Balance | |
USDA
|
U.S. Department of Agriculture | |
VA
|
U.S. Department of Veteran Affairs | |
VIE
|
Variable Interest Entity | |
WGH
|
Wealth Advisors, Government Finance, and Home Lending |
5
Item 2: | Managements Discussion and Analysis of Financial Condition and Results of Operations |
| Executive Overview - Provides a summary of our current financial performance, and business overview, including our thoughts on the impact of the economy, legislative and regulatory initiatives, and recent industry developments. This section also provides our outlook regarding our expectations for the remainder of 2011. |
| Discussion of Results of Operations - Reviews financial performance from a consolidated Company perspective. It also includes a Significant Items section that summarizes key issues helpful for understanding performance trends. Key consolidated average balance sheet and income statement trends are also discussed in this section. |
| Risk Management and Capital - Discusses credit, market, liquidity, operational, and compliance risks, including how these are managed, as well as performance trends. It also includes a discussion of liquidity policies, how we obtain funding, and related performance. In addition, there is a discussion of guarantees and / or commitments made for items such as standby letters of credit and commitments to sell loans, and a discussion that reviews the adequacy of capital, including regulatory capital requirements. |
| Business Segment Discussion - Provides an overview of financial performance for each of our major business segments and provides additional discussion of trends underlying consolidated financial performance. |
| Additional Disclosures - Provides comments on important matters including forward-looking statements, critical accounting policies and use of significant estimates, recent accounting pronouncements and developments, and acquisitions. |
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7
8
9
10
2011 | 2010 | |||||||||||||||||||
(dollar amounts in thousands, except per share amounts) | Third | Second | First | Fourth | Third | |||||||||||||||
Interest income |
$ | 490,996 | $ | 492,137 | $ | 501,877 | $ | 528,291 | $ | 534,669 | ||||||||||
Interest expense |
84,518 | 88,800 | 97,547 | 112,997 | 124,707 | |||||||||||||||
Net interest income |
406,478 | 403,337 | 404,330 | 415,294 | 409,962 | |||||||||||||||
Provision for credit losses |
43,586 | 35,797 | 49,385 | 86,973 | 119,160 | |||||||||||||||
Net interest income after provision for credit losses |
362,892 | 367,540 | 354,945 | 328,321 | 290,802 | |||||||||||||||
Service charges on deposit accounts |
65,184 | 60,675 | 54,324 | 55,810 | 65,932 | |||||||||||||||
Mortgage banking income |
12,791 | 23,835 | 22,684 | 53,169 | 52,045 | |||||||||||||||
Trust services |
29,473 | 30,392 | 30,742 | 29,394 | 26,997 | |||||||||||||||
Electronic banking |
32,714 | 31,728 | 28,786 | 28,900 | 28,090 | |||||||||||||||
Insurance income |
17,220 | 16,399 | 17,945 | 19,678 | 19,801 | |||||||||||||||
Brokerage income |
20,349 | 20,819 | 20,511 | 16,953 | 16,575 | |||||||||||||||
Bank owned life insurance income |
15,644 | 17,602 | 14,819 | 16,113 | 14,091 | |||||||||||||||
Automobile operating lease income |
5,890 | 7,307 | 8,847 | 10,463 | 11,356 | |||||||||||||||
Securities gains (losses) |
(1,350 | ) | 1,507 | 40 | (103 | ) | (296 | ) | ||||||||||||
Other income |
60,644 | 45,503 | 38,247 | 33,843 | 32,552 | |||||||||||||||
Total noninterest income |
258,559 | 255,767 | 236,945 | 264,220 | 267,143 | |||||||||||||||
Personnel costs |
226,835 | 218,570 | 219,028 | 212,184 | 208,272 | |||||||||||||||
Outside data processing and other services |
49,602 | 43,889 | 40,282 | 40,943 | 38,553 | |||||||||||||||
Net occupancy |
26,967 | 26,885 | 28,436 | 26,670 | 26,718 | |||||||||||||||
Deposit and other insurance expense |
17,492 | 23,823 | 17,896 | 23,320 | 23,406 | |||||||||||||||
Professional services |
20,281 | 20,080 | 13,465 | 21,021 | 20,672 | |||||||||||||||
Equipment |
22,262 | 21,921 | 22,477 | 22,060 | 21,651 | |||||||||||||||
Marketing |
22,251 | 20,102 | 16,895 | 16,168 | 20,921 | |||||||||||||||
Amortization of intangibles |
13,387 | 13,386 | 13,370 | 15,046 | 15,145 | |||||||||||||||
OREO and foreclosure expense |
4,668 | 4,398 | 3,931 | 10,502 | 12,047 | |||||||||||||||
Automobile operating lease expense |
4,386 | 5,434 | 6,836 | 8,142 | 9,159 | |||||||||||||||
Other expense |
30,987 | 29,921 | 48,083 | 38,537 | 30,765 | |||||||||||||||
Total noninterest expense |
439,118 | 428,409 | 430,699 | 434,593 | 427,309 | |||||||||||||||
Income before income taxes |
182,333 | 194,898 | 161,191 | 157,948 | 130,636 | |||||||||||||||
Provision for income taxes |
38,942 | 48,980 | 34,745 | 35,048 | 29,690 | |||||||||||||||
Net income |
$ | 143,391 | $ | 145,918 | $ | 126,446 | $ | 122,900 | $ | 100,946 | ||||||||||
Dividends on preferred shares |
7,703 | 7,704 | 7,703 | 83,754 | 29,495 | |||||||||||||||
Net income applicable to common shares |
$ | 135,688 | $ | 138,214 | $ | 118,743 | $ | 39,146 | $ | 71,451 | ||||||||||
Average common shares basic |
863,911 | 863,358 | 863,359 | 757,924 | 716,911 | |||||||||||||||
Average common shares diluted (2) |
867,633 | 867,469 | 867,237 | 760,582 | 719,567 | |||||||||||||||
Net income per common share basic |
$ | 0.16 | $ | 0.16 | $ | 0.14 | $ | 0.05 | $ | 0.10 | ||||||||||
Net income per common share diluted |
0.16 | 0.16 | 0.14 | 0.05 | 0.10 | |||||||||||||||
Cash dividends declared per common share |
0.04 | 0.01 | 0.01 | 0.01 | 0.01 | |||||||||||||||
Return on average total assets |
1.05 | % | 1.11 | % | 0.96 | % | 0.90 | % | 0.76 | % | ||||||||||
Return on average common shareholders equity |
10.8 | 11.6 | 10.3 | 3.8 | 7.4 | |||||||||||||||
Return on average tangible common shareholders equity (3) |
13.0 | 13.3 | 12.7 | 5.6 | 10.0 | |||||||||||||||
Net interest margin (4) |
3.34 | 3.40 | 3.42 | 3.37 | 3.45 | |||||||||||||||
Efficiency ratio (5) |
63.5 | 62.7 | 64.7 | 61.4 | 60.6 | |||||||||||||||
Effective tax rate |
21.4 | 25.1 | 21.6 | 22.2 | 22.7 | |||||||||||||||
Revenue FTE |
||||||||||||||||||||
Net interest income |
$ | 406,478 | $ | 403,337 | $ | 404,330 | $ | 415,294 | $ | 409,962 | ||||||||||
FTE adjustment |
3,658 | 3,834 | 3,945 | 3,708 | 2,631 | |||||||||||||||
Net interest income (4) |
410,136 | 407,171 | 408,275 | 419,002 | 412,593 | |||||||||||||||
Noninterest income |
258,559 | 255,767 | 236,945 | 264,220 | 267,143 | |||||||||||||||
Total revenue (4) |
$ | 668,695 | $ | 662,938 | $ | 645,220 | $ | 683,222 | $ | 679,736 | ||||||||||
(1) | Comparisons for presented periods are impacted by a number of factors. Refer to Significant Items. | |
(2) | For periods presented prior to their repurchase, the impact of the convertible preferred stock issued in 2008 and the warrants issued to the U.S. Department of the Treasury in 2008 related to Huntingtons participation in the voluntary Capital Purchase Program was excluded from the diluted share calculation because the result was more than basic earnings per common share (anti-dilutive) for those periods. The convertible preferred stock and warrants were repurchased in December 2010 and January 2011, respectively. |
11
(3) | Net income excluding expense for amortization of intangibles for the period divided by average tangible common shareholders equity. Average tangible common shareholders equity equals average total common shareholders equity less average intangible assets and goodwill. Expense for amortization of intangibles and average intangible assets are net of deferred tax liability, and calculated assuming a 35% tax rate. | |
(4) | On a fully-taxable equivalent (FTE) basis assuming a 35% tax rate. | |
(5) | Noninterest expense less amortization of intangibles and goodwill impairment divided by the sum of FTE net interest income and noninterest income excluding securities gains (losses). |
12
Nine Months Ended September 30, | Change | ||||||||||||||||
(dollar amounts in thousands, except per share amounts) | 2011 | 2010 | Amount | Percent | |||||||||||||
Interest income |
$ | 1,485,010 | $ | 1,617,101 | $ | (132,091 | ) | (8 | )% | ||||||||
Interest expense |
270,865 | 413,590 | (142,725 | ) | (35 | ) | |||||||||||
Net interest income |
1,214,145 | 1,203,511 | 10,634 | 1 | |||||||||||||
Provision for credit losses |
128,768 | 547,574 | (418,806 | ) | (76 | ) | |||||||||||
Net interest income after provision for credit losses |
1,085,377 | 655,937 | 429,440 | 65 | |||||||||||||
Service charges on deposit accounts |
180,183 | 211,205 | (31,022 | ) | (15 | ) | |||||||||||
Mortgage banking income |
59,310 | 122,613 | (63,303 | ) | (52 | ) | |||||||||||
Trust services |
90,607 | 83,161 | 7,446 | 9 | |||||||||||||
Electronic banking |
93,228 | 81,334 | 11,894 | 15 | |||||||||||||
Insurance income |
51,564 | 56,735 | (5,171 | ) | (9 | ) | |||||||||||
Brokerage income |
61,679 | 51,901 | 9,778 | 19 | |||||||||||||
Bank owned life insurance income |
48,065 | 44,953 | 3,112 | 7 | |||||||||||||
Automobile operating lease income |
22,044 | 35,501 | (13,457 | ) | (38 | ) | |||||||||||
Securities gains (losses) |
197 | (171 | ) | 368 | N.R. | ||||||||||||
Other income |
144,394 | 90,406 | 53,988 | 60 | |||||||||||||
Total noninterest income |
751,271 | 777,638 | (26,367 | ) | (3 | ) | |||||||||||
Personnel costs |
664,433 | 586,789 | 77,644 | 13 | |||||||||||||
Outside data processing and other services |
133,773 | 118,305 | 15,468 | 13 | |||||||||||||
Net occupancy |
82,288 | 81,192 | 1,096 | 1 | |||||||||||||
Deposit and other insurance expense |
59,211 | 74,228 | (15,017 | ) | (20 | ) | |||||||||||
Professional services |
53,826 | 67,757 | (13,931 | ) | (21 | ) | |||||||||||
Equipment |
66,660 | 63,860 | 2,800 | 4 | |||||||||||||
Marketing |
59,248 | 49,756 | 9,492 | 19 | |||||||||||||
Amortization of intangibles |
40,143 | 45,432 | (5,289 | ) | (12 | ) | |||||||||||
OREO and foreclosure expense |
12,997 | 28,547 | (15,550 | ) | (54 | ) | |||||||||||
Automobile operating lease expense |
16,656 | 28,892 | (12,236 | ) | (42 | ) | |||||||||||
Other expense |
108,991 | 94,455 | 14,536 | 15 | |||||||||||||
Total noninterest expense |
1,298,226 | 1,239,213 | 59,013 | 5 | |||||||||||||
Income before income taxes |
538,422 | 194,362 | 344,060 | 177 | |||||||||||||
Provision for income taxes |
122,667 | 4,915 | 117,752 | 2,396 | |||||||||||||
Net income |
$ | 415,755 | $ | 189,447 | $ | 226,308 | 119 | % | |||||||||
Dividends declared on preferred shares |
23,110 | 88,278 | (65,168 | ) | (74 | ) | |||||||||||
Net income applicable to common shares |
$ | 392,645 | $ | 101,169 | $ | 291,476 | 288 | % | |||||||||
Average common shares basic |
863,542 | 716,604 | 146,938 | 21 | % | ||||||||||||
Average common shares diluted (2) |
867,446 | 719,182 | 148,264 | 21 | |||||||||||||
Per common share |
|||||||||||||||||
Net income per common share basic |
$ | 0.45 | $ | 0.14 | $ | 0.31 | 221 | % | |||||||||
Net income per common share diluted |
0.45 | 0.14 | 0.31 | 221 | |||||||||||||
Cash dividends declared |
0.06 | 0.03 | 0.03 | 100 | |||||||||||||
Return on average total assets |
1.04 | % | 0.49 | % | 0.55 | % | 112 | % | |||||||||
Return on average common shareholders equity |
10.9 | 3.6 | 7.3 | 203 | |||||||||||||
Return on average tangible common shareholders equity (3) |
13.2 | 5.6 | 7.6 | 136 | |||||||||||||
Net interest margin (4) |
3.39 | 3.46 | (0.07 | ) | (2 | ) | |||||||||||
Efficiency ratio (5) |
63.6 | 60.0 | 3.6 | 6 | |||||||||||||
Effective tax rate |
22.8 | 2.5 | 20.3 | 812 | |||||||||||||
Revenue FTE |
|||||||||||||||||
Net interest income |
$ | 1,214,145 | $ | 1,203,511 | $ | 10,634 | 1 | % | |||||||||
FTE adjustment |
11,437 | 7,369 | 4,068 | 55 | |||||||||||||
Net interest income (4) |
1,225,582 | 1,210,880 | 14,702 | 1 | |||||||||||||
Noninterest income |
751,271 | 777,638 | (26,367 | ) | (3 | ) | |||||||||||
Total revenue (4) |
$ | 1,976,853 | $ | 1,988,518 | $ | (11,665 | ) | (1) | % | ||||||||
N.R. | - Not relevant, as denominator of calculation is a loss in prior period compared with income in current period. | |
(1) | Comparisons for presented periods are impacted by a number of factors. Refer to Significant Items. |
13
(2) | For all periods presented, the impact of the convertible preferred stock issued in 2008 and the warrants issued to the U.S. Department of the Treasury in 2008 related to Huntingtons participation in the voluntary Capital Purchase Program was excluded from the diluted share calculation because the result was more than basic earnings per common share (anti-dilutive) for the periods. The convertible preferred stock and warrants were repurchased in December 2010 and January 2011, respectively. | |
(3) | Net income excluding expense for amortization of intangibles for the period divided by average tangible common shareholders equity. Average tangible common shareholders equity equals average total common shareholders equity less average intangible assets and goodwill. Expense for amortization of intangibles and average intangible assets are net of deferred tax liability, and calculated assuming a 35% tax rate. | |
(4) | On a fully-taxable equivalent (FTE) basis assuming a 35% tax rate. | |
(5) | Noninterest expense less amortization of intangibles and goodwill impairment divided by the sum of FTE net interest income and noninterest income excluding securities gains (losses). |
1. | Litigation Reserve. During the 2011 first quarter, $17.0 million of additions to litigation reserves were recorded as other noninterest expense. This resulted in a negative impact of $0.01 per common share. |
2. | Franklin Relationship. Our relationship with Franklin was acquired in the Sky Financial acquisition in 2007. Significant events relating to this relationship following the acquisition, and the impacts of those events on our reported results were as follows: |
| On March 31, 2009, we restructured our relationship with Franklin. During the 2010 first quarter, a $38.2 million ($0.05 per common share) net tax benefit was recognized, primarily reflecting the increase in the net deferred tax asset relating to the assets acquired from the March 31, 2009 restructuring. | ||
| During the 2010 second quarter, the remaining portfolio of Franklin-related loans ($333.0 million of residential mortgages, and $64.7 million of home equity loans) was transferred to loans held for sale. At the time of the transfer, the loans were marked to the lower of cost or fair value, less costs to sell, of $323.4 million, resulting in $75.5 million of charge-offs, and the provision for credit losses commensurately increased $75.5 million ($0.07 per common share). |
14
Three Months Ended | ||||||||||||||||||||||||
(dollar amounts in thousands, except per | September 30, 2011 | June 30, 2011 | September 30, 2010 | |||||||||||||||||||||
share amounts) | After-tax | EPS | After-tax | EPS | After-tax | EPS | ||||||||||||||||||
Net income |
$ | 143,391 | $ | 145,918 | $ | 100,946 | ||||||||||||||||||
Earnings per share, after-tax |
$ | 0.16 | $ | 0.16 | $ | 0.10 | ||||||||||||||||||
Change from prior quarter $ |
| 0.02 | 0.07 | |||||||||||||||||||||
Change from prior quarter % |
| % | 14.3 | % | 233.3 | % | ||||||||||||||||||
Change from year-ago $ |
$ | 0.06 | $ | 0.13 | $ | 0.43 | ||||||||||||||||||
Change from year-ago % |
60 | % | 433 | % | N.R. | % |
Nine Months Ended | ||||||||||||||||
September 30, 2011 | September 30, 2010 | |||||||||||||||
(dollar amounts in thousands) | After-tax | EPS | After-tax | EPS | ||||||||||||
Net income |
$ | 415,755 | $ | 189,447 | ||||||||||||
Earnings per share, after-tax |
$ | 0.45 | $ | 0.14 | ||||||||||||
Change from a year-ago $ |
0.31 | 6.22 | ||||||||||||||
Change from a year-ago % |
221 | % | N.R. | % |
Significant Items - favorable (unfavorable) impact: | Earnings (1) | EPS | Earnings (1) | EPS | ||||||||||||
Franklin-related loans transferred to held for sale |
$ | | $ | | $ | (75,500 | ) | $ | (0.07 | ) | ||||||
Net tax benefit recognized (2) |
| | 38,222 | 0.05 | ||||||||||||
Litigation reserves addition |
(17,028 | ) | (0.01 | ) | | |
N.R. | - Not relevant, as denominator of calculation is a loss in prior period compared with income in current period. | |
(1) | Pretax unless otherwise noted. | |
(2) | After-tax. |
15
2011 | 2010 | |||||||||||||||||||
(dollar amounts in thousands) | Third | Second | First | Fourth | Third | |||||||||||||||
Income before income taxes |
$ | 182,333 | $ | 194,898 | $ | 161,191 | $ | 157,948 | $ | 130,636 | ||||||||||
Add: Provision for credit losses |
43,586 | 35,797 | 49,385 | 86,973 | 119,160 | |||||||||||||||
Less: Securities gains (losses) |
(1,350 | ) | 1,507 | 40 | (103 | ) | (296 | ) | ||||||||||||
Add: Amortization of intangibles |
13,387 | 13,386 | 13,370 | 15,046 | 15,145 | |||||||||||||||
Less: Litigation reserves addition |
| | (17,028 | ) | | | ||||||||||||||
Total pretax, pre-provision income |
$ | 240,656 | $ | 242,574 | $ | 240,934 | $ | 260,070 | $ | 265,237 | ||||||||||
Change in total pretax, pre-provision income: |
||||||||||||||||||||
Prior quarter change amount |
$ | (1,918 | ) | $ | 1,640 | $ | (19,136 | ) | $ | (5,167 | ) | $ | (5,237 | ) | ||||||
Prior quarter change percent |
(1) | % | 1 | % | (7) | % | (2) | % | (2) | % |
(1) | Pretax, pre-provision income is a non-GAAP financial measure. Any ratio utilizing this financial measure is also non-GAAP. This financial measure has been included as it is considered to be an important metric with which to analyze and evaluate our results of operations and financial strength. Other companies may calculate this financial measure differently. |
Third Quarter | Second Quarter | 3Q11 vs 3Q10 | 3Q11 vs 2Q11 | |||||||||||||||||||||||||
(dollar amounts in millions) | 2011 | 2010 | 2011 | Amount | Percent | Amount | Percent | |||||||||||||||||||||
Loans/Leases |
||||||||||||||||||||||||||||
Commercial and industrial |
$ | 13,664 | $ | 12,393 | $ | 13,370 | $ | 1,271 | 10 | % | $ | 294 | 2 | % | ||||||||||||||
Commercial real estate |
6,111 | 7,073 | 6,233 | (962 | ) | (14 | ) | (122 | ) | (2 | ) | |||||||||||||||||
Total commercial |
19,775 | 19,466 | 19,603 | 309 | 2 | 172 | 1 | |||||||||||||||||||||
Automobile |
6,211 | 5,140 | 5,954 | 1,071 | 21 | 257 | 4 | |||||||||||||||||||||
Home equity |
8,002 | 7,567 | 7,874 | 435 | 6 | 128 | 2 | |||||||||||||||||||||
Residential mortgage |
4,788 | 4,389 | 4,566 | 399 | 9 | 222 | 5 | |||||||||||||||||||||
Other loans |
521 | 653 | 538 | (132 | ) | (20 | ) | (17 | ) | (3 | ) | |||||||||||||||||
Total consumer |
19,522 | 17,749 | 18,932 | 1,773 | 10 | 590 | 3 | |||||||||||||||||||||
Total loans and leases |
$ | 39,297 | $ | 37,215 | $ | 38,535 | $ | 2,082 | 6 | % | $ | 762 | 2 | % | ||||||||||||||
Deposits |
||||||||||||||||||||||||||||
Demand deposits noninterest-bearing |
$ | 8,719 | $ | 6,768 | $ | 7,806 | $ | 1,951 | 29 | % | $ | 913 | 12 | % | ||||||||||||||
Demand deposits interest-bearing |
5,573 | 5,319 | 5,565 | 254 | 5 | 8 | | |||||||||||||||||||||
Money market deposits |
13,321 | 12,336 | 12,879 | 985 | 8 | 442 | 3 | |||||||||||||||||||||
Savings and other domestic time
deposits |
4,752 | 4,639 | 4,778 | 113 | 2 | (26 | ) | (1 | ) | |||||||||||||||||||
Core certificates of deposit |
7,592 | 8,948 | 8,079 | (1,356 | ) | (15 | ) | (487 | ) | (6 | ) | |||||||||||||||||
Total core deposits |
39,957 | 38,010 | 39,107 | 1,947 | 5 | 850 | 2 | |||||||||||||||||||||
Other deposits |
2,321 | 2,636 | 2,147 | (315 | ) | (12 | ) | 174 | 8 | |||||||||||||||||||
Total deposits |
$ | 42,278 | $ | 40,646 | $ | 41,254 | $ | 1,632 | 4 | % | $ | 1,024 | 2 | % | ||||||||||||||
16
| $2.1 billion, or 6%, increase in average total loans and leases. |
| $0.3 billion, or 3%, decrease in average total available-for-sale and other securities and held-to-maturity securities. |
| $0.4 billion, or 64%, decrease in average loans held for sale. |
| $1.3 billion, or 10%, growth in the average C&I portfolio reflected a combination of factors. This included the benefits from our strategic initiatives including a focus on large corporate, asset based lending, and equipment finance. In addition, we continued to see growth in more traditional middle-market, business banking, and automobile floorplan loans. This growth was evident despite line utilization rates that remained well below historical norms. |
| $1.1 billion, or 21%, increase in the average automobile portfolio. Automobile lending is a core competency and continues to be an area of targeted growth. The growth from the year-ago quarter exhibited further penetration within our historical geographic footprint, as well as the positive impacts of our expansion into Eastern Pennsylvania and five New England states. Origination quality remained high as measured by all of our internal quality metrics. |
| $0.4 billion, or 9%, increase in average residential mortgages. |
| $0.4 billion, or 6%, increase in average home equity loans. |
| $1.0 billion, or 14%, decrease in the average CRE portfolio, reflecting the continued execution of our plan to reduce the total CRE exposure, primarily in the noncore CRE portfolio. This reduction is expected to continue, reflecting the combined impact of amortization, pay downs, refinancing, and restructures. |
| $1.9 billion, or 5%, growth in average total core deposits. The drivers of this change were a $2.2 billion, or 18%, growth in average total demand deposits, and a $1.0 billion, or 8%, growth in average money market deposits. Partially offset by $1.4 billion, or 15%, decline in average core certificates of deposit. |
| $0.3 billion, or 44%, decline in average other domestic deposits of $250,000 or more, reflecting a strategy of reducing such noncore funding. |
| $0.8 billion, or 2%, increase in average total loans and leases. |
17
| $0.3 billion, or 2% (9% annualized), growth in the average C&I portfolio. The growth in the C&I portfolio during the third quarter came from several business lines including large corporate, equipment finance, business banking, and middle market. C&I utilization rates were little changed from the end of the prior quarter. |
| $0.3 billion, or 4% (17% annualized), growth in the average automobile portfolio. In September, the bank completed a $1.0 billion securitization of automobile loans. We continued to originate very high quality loans with attractive returns. We focus on larger, multi-franchised, well-capitalized dealers that are rarely reliant on the success of one franchise to generate profitability. While the used car market remained very strong, we increased our originations of new vehicle loans, which reflected a reduced level of manufacturer captive finance company incentive programs due to lower new vehicle inventory levels in the market. |
| $0.2 billion, or 5% (19% annualized), growth in residential mortgages as the bank experienced the continuation of a year-long trend of customer preferences shifting to shorter-term and variable rate mortgages. |
| $0.1 billion, or 2% (8% annualized), decline in the average CRE portfolio, primarily as a result of our on-going strategy to reduce our exposure to the commercial real estate market. We were successful in reducing exposure across virtually all of the CRE project types that we actively manage via our concentration management process. The decline in the noncore CRE portfolio accounted for the vast majority of the decline in the total CRE portfolio. The noncore CRE portfolio declines reflected paydowns, refinancing, and NCOs. The core CRE portfolio continued to exhibit high quality characteristics with minimal downgrade or NCO activity. |
| $0.9 billion, or 7% (28% annualized), increase in total demand deposits. This was driven primarily by growth in commercial and consumer noninterest-bearing demand deposits. Commercial demand deposit growth reflected, in part, temporary deposits from several large relationships. |
| $0.4 billion, or 3% (14% annualized), increase in average money market deposits. |
| $0.5 billion, or 6% (24% annualized), decrease in core certificates of deposits. |
18
Average Balances | Change | |||||||||||||||||||||||||||
2011 | 2010 | 3Q11 vs. 3Q10 | ||||||||||||||||||||||||||
(dollar amounts in millions) | Third | Second | First | Fourth | Third | Amount | Percent | |||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||
Interest-bearing deposits in banks |
$ | 164 | $ | 131 | $ | 130 | $ | 218 | $ | 282 | $ | (118 | ) | (42) | % | |||||||||||||
Trading account securities |
92 | 112 | 144 | 297 | 110 | (18 | ) | (16 | ) | |||||||||||||||||||
Federal
funds sold and securities purchased under resale agreement |
| 21 | | | | | | |||||||||||||||||||||
Loans held for sale |
237 | 181 | 420 | 779 | 663 | (426 | ) | (64 | ) | |||||||||||||||||||
Available-for-sale and other securities: |
||||||||||||||||||||||||||||
Taxable |
7,902 | 8,428 | 9,108 | 9,747 | 8,876 | (974 | ) | (11 | ) | |||||||||||||||||||
Tax-exempt |
421 | 436 | 445 | 449 | 365 | 56 | 15 | |||||||||||||||||||||
Total available-for-sale and other securities |
8,323 | 8,864 | 9,553 | 10,196 | 9,241 | (918 | ) | (10 | ) | |||||||||||||||||||
Held-to-maturity securities taxable |
665 | 174 | | | | 665 | | |||||||||||||||||||||
Loans and leases: (1) |
||||||||||||||||||||||||||||
Commercial: |
||||||||||||||||||||||||||||
Commercial and industrial |
13,664 | 13,370 | 13,121 | 12,767 | 12,393 | 1,271 | 10 | |||||||||||||||||||||
Commercial real estate: |
||||||||||||||||||||||||||||
Construction |
670 | 554 | 611 | 716 | 989 | (319 | ) | (32 | ) | |||||||||||||||||||
Commercial |
5,441 | 5,679 | 5,913 | 6,082 | 6,084 | (643 | ) | (11 | ) | |||||||||||||||||||
Commercial real estate |
6,111 | 6,233 | 6,524 | 6,798 | 7,073 | (962 | ) | (14 | ) | |||||||||||||||||||
Total commercial |
19,775 | 19,603 | 19,645 | 19,565 | 19,466 | 309 | 2 | |||||||||||||||||||||
Consumer: |
||||||||||||||||||||||||||||
Automobile |
6,211 | 5,954 | 5,701 | 5,520 | 5,140 | 1,071 | 21 | |||||||||||||||||||||
Home equity |
8,002 | 7,874 | 7,728 | 7,709 | 7,567 | 435 | 6 | |||||||||||||||||||||
Residential mortgage |
4,788 | 4,566 | 4,465 | 4,430 | 4,389 | 399 | 9 | |||||||||||||||||||||
Other consumer |
521 | 538 | 559 | 576 | 653 | (132 | ) | (20 | ) | |||||||||||||||||||
Total consumer |
19,522 | 18,932 | 18,453 | 18,235 | 17,749 | 1,773 | 10 | |||||||||||||||||||||
Total loans and leases |
39,297 | 38,535 | 38,098 | 37,800 | 37,215 | 2,082 | 6 | |||||||||||||||||||||
Allowance for loan and lease losses |
(1,066 | ) | (1,128 | ) | (1,231 | ) | (1,323 | ) | (1,384 | ) | 318 | (23 | ) | |||||||||||||||
Net loans and leases |
38,231 | 37,407 | 36,867 | 36,477 | 35,831 | 2,400 | 7 | |||||||||||||||||||||
Total earning assets |
48,778 | 48,018 | 48,345 | 49,290 | 47,511 | 1,267 | 3 | |||||||||||||||||||||
Cash and due from banks |
1,700 | 1,068 | 1,299 | 1,187 | 1,618 | 82 | 5 | |||||||||||||||||||||
Intangible assets |
639 | 652 | 665 | 679 | 695 | (56 | ) | (8 | ) | |||||||||||||||||||
All other assets |
4,142 | 4,160 | 4,291 | 4,313 | 4,277 | (135 | ) | (3 | ) | |||||||||||||||||||
Total assets |
$ | 54,193 | $ | 52,770 | $ | 53,369 | $ | 54,146 | $ | 52,717 | $ | 1,476 | 3 | % | ||||||||||||||
Liabilities and Shareholders Equity |
||||||||||||||||||||||||||||
Deposits: |
||||||||||||||||||||||||||||
Demand deposits noninterest-bearing |
$ | 8,719 | $ | 7,806 | $ | 7,333 | $ | 7,188 | $ | 6,768 | $ | 1,951 | 29 | % | ||||||||||||||
Demand deposits interest-bearing |
5,573 | 5,565 | 5,357 | 5,317 | 5,319 | 254 | 5 | |||||||||||||||||||||
Money market deposits |
13,321 | 12,879 | 13,492 | 13,158 | 12,336 | 985 | 8 | |||||||||||||||||||||
Savings and other domestic deposits |
4,752 | 4,778 | 4,701 | 4,640 | 4,639 | 113 | 2 | |||||||||||||||||||||
Core certificates of deposit |
7,592 | 8,079 | 8,391 | 8,646 | 8,948 | (1,356 | ) | (15 | ) | |||||||||||||||||||
Total core deposits |
39,957 | 39,107 | 39,274 | 38,949 | 38,010 | 1,947 | 5 | |||||||||||||||||||||
Other domestic time deposits of $250,000 or more |
387 | 467 | 606 | 737 | 690 | (303 | ) | (44 | ) | |||||||||||||||||||
Brokered deposits and negotiable CDs |
1,533 | 1,333 | 1,410 | 1,575 | 1,495 | 38 | 3 | |||||||||||||||||||||
Deposits in foreign offices |
401 | 347 | 374 | 443 | 451 | (50 | ) | (11 | ) | |||||||||||||||||||
Total deposits |
42,278 | 41,254 | 41,664 | 41,704 | 40,646 | 1,632 | 4 | |||||||||||||||||||||
Short-term borrowings |
2,251 | 2,112 | 2,134 | 2,134 | 1,739 | 512 | 29 | |||||||||||||||||||||
Federal Home Loan Bank advances |
285 | 97 | 30 | 112 | 188 | 97 | 52 | |||||||||||||||||||||
Subordinated notes and other long-term debt |
3,030 | 3,249 | 3,525 | 3,558 | 3,672 | (642 | ) | (17 | ) | |||||||||||||||||||
Total interest-bearing liabilities |
39,125 | 38,906 | 40,020 | 40,320 | 39,477 | (352 | ) | (1 | ) | |||||||||||||||||||
All other liabilities |
1,017 | 913 | 994 | 993 | 952 | 65 | 7 | |||||||||||||||||||||
Shareholders equity |
5,332 | 5,145 | 5,022 | 5,645 | 5,520 | (188 | ) | (3 | ) | |||||||||||||||||||
Total liabilities and shareholders equity |
$ | 54,193 | $ | 52,770 | $ | 53,369 | $ | 54,146 | $ | 52,717 | $ | 1,476 | 3 | % | ||||||||||||||
(1) | For purposes of this analysis, NALs are reflected in the average balances of loans. |
19
Average Rates (2) | ||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||
Fully-taxable equivalent basis (1) | Third | Second | First | Fourth | Third | |||||||||||||||
Assets |
||||||||||||||||||||
Interest-bearing deposits in banks |
0.04 | % | 0.22 | % | 0.11 | % | 0.63 | % | 0.21 | % | ||||||||||
Trading account securities |
1.41 | 1.59 | 1.37 | 1.98 | 1.20 | |||||||||||||||
Federal funds sold and securities purchased under
resale agreement |
| 0.09 | | | | |||||||||||||||
Loans held for sale |
4.46 | 4.97 | 4.08 | 4.01 | 5.75 | |||||||||||||||
Available-for-sale and other securities: |
||||||||||||||||||||
Taxable |
2.43 | 2.59 | 2.53 | 2.42 | 2.77 | |||||||||||||||
Tax-exempt |
4.17 | 4.02 | 4.70 | 4.59 | 4.70 | |||||||||||||||
Total available-for-sale and other securities |
2.52 | 2.66 | 2.63 | 2.52 | 2.84 | |||||||||||||||
Held-to-maturity securities taxable |
3.04 | 2.96 | | | | |||||||||||||||
Loans and leases: (3) |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Commercial and industrial |
4.13 | 4.31 | 4.57 | 4.94 | 5.14 | |||||||||||||||
Commercial real estate: |
||||||||||||||||||||
Construction |
3.87 | 3.37 | 3.36 | 3.07 | 2.83 | |||||||||||||||
Commercial |
3.91 | 3.90 | 3.93 | 3.92 | 3.91 | |||||||||||||||
Commercial real estate |
3.91 | 3.84 | 3.88 | 3.83 | 3.76 | |||||||||||||||
Total commercial |
4.06 | 4.16 | 4.34 | 4.56 | 4.64 | |||||||||||||||
Consumer: |
||||||||||||||||||||
Automobile |
4.89 | 5.06 | 5.22 | 5.46 | 5.79 | |||||||||||||||
Home equity |
4.45 | 4.49 | 4.54 | 4.64 | 4.74 | |||||||||||||||
Residential mortgage |
4.47 | 4.62 | 4.76 | 4.82 | 4.97 | |||||||||||||||
Other consumer |
7.57 | 7.76 | 7.85 | 7.92 | 7.10 | |||||||||||||||
Total consumer |
4.68 | 4.79 | 4.90 | 5.04 | 5.19 | |||||||||||||||
Total loans and leases |
4.37 | 4.47 | 4.61 | 4.79 | 4.90 | |||||||||||||||
Total earning assets |
4.02 | % | 4.14 | % | 4.24 | % | 4.29 | % | 4.49 | % | ||||||||||
Liabilities |
||||||||||||||||||||
Deposits: |
||||||||||||||||||||
Demand deposits noninterest-bearing |
| % | | % | | % | | % | | % | ||||||||||
Demand deposits interest-bearing |
0.10 | 0.09 | 0.09 | 0.13 | 0.17 | |||||||||||||||
Money market deposits |
0.41 | 0.40 | 0.50 | 0.77 | 0.86 | |||||||||||||||
Savings and other domestic deposits |
0.69 | 0.74 | 0.81 | 0.90 | 0.99 | |||||||||||||||
Core certificates of deposit |
1.95 | 2.04 | 2.07 | 2.11 | 2.31 | |||||||||||||||
Total core deposits |
0.77 | 0.82 | 0.89 | 1.05 | 1.18 | |||||||||||||||
Other domestic time deposits of $250,000 or more |
0.93 | 1.01 | 1.08 | 1.21 | 1.28 | |||||||||||||||
Brokered deposits and negotiable CDs |
0.77 | 0.89 | 1.11 | 1.53 | 2.21 | |||||||||||||||
Deposits in foreign offices |
0.26 | 0.26 | 0.20 | 0.17 | 0.22 | |||||||||||||||
Total deposits |
0.77 | 0.82 | 0.90 | 1.06 | 1.21 | |||||||||||||||
Short-term borrowings |
0.16 | 0.16 | 0.18 | 0.20 | 0.22 | |||||||||||||||
Federal Home Loan Bank advances |
0.32 | 0.88 | 2.98 | 0.95 | 1.25 | |||||||||||||||
Subordinated notes and other long-term debt |
2.43 | 2.39 | 2.34 | 2.15 | 2.15 | |||||||||||||||
Total interest-bearing liabilities |
0.86 | % | 0.91 | % | 0.99 | % | 1.11 | % | 1.25 | % | ||||||||||
Net interest rate spread |
3.11 | % | 3.19 | % | 3.21 | % | 3.16 | % | 3.24 | % | ||||||||||
Impact of noninterest-bearing funds on margin |
0.23 | 0.21 | 0.21 | 0.21 | 0.21 | |||||||||||||||
Net interest margin |
3.34 | % | 3.40 | % | 3.42 | % | 3.37 | % | 3.45 | % | ||||||||||
(1) | FTE yields are calculated assuming a 35% tax rate. | |
(2) | Loan and lease and deposit average rates include impact of applicable derivatives, non-deferrable fees, and amortized deferred fees. | |
(3) | For purposes of this analysis, NALs are reflected in the average balances of loans. |
20
YTD Average Balances | YTD Average Rates (2) | ||||||||||||||||||||||||
Fully-taxable equivalent basis (1) | Nine Months Ended September 30, | Change | Nine Months Ended September 30, | ||||||||||||||||||||||
(dollar amounts in millions) | 2011 | 2010 | Amount | Percent | 2011 | 2010 | |||||||||||||||||||
Assets |
|||||||||||||||||||||||||
Interest-bearing deposits in banks |
$ | 141 | $ | 313 | $ | (172 | ) | (55) | % | 0.12 | % | 0.20 | % | ||||||||||||
Trading account securities |
116 | 111 | 5 | 5 | 1.46 | 1.68 | |||||||||||||||||||
Federal
funds sold and securities purchased under resale agreement |
7 | | 7 | | 0.09 | | |||||||||||||||||||
Loans held for sale |
279 | 445 | (166 | ) | (37 | ) | 4.39 | 5.36 | |||||||||||||||||
Available-for-sale and other securities: |
|||||||||||||||||||||||||
Taxable |
8,475 | 8,428 | 47 | 1 | 2.52 | 2.85 | |||||||||||||||||||
Tax-exempt |
434 | 399 | 35 | 9 | 4.30 | 4.56 | |||||||||||||||||||
Total available-for-sale and other securities |
8,909 | 8,827 | 82 | 1 | 2.61 | 2.93 | |||||||||||||||||||
Total held-to-maturity securities |
282 | | 282 | | 3.00 | | |||||||||||||||||||
Loans and leases: (3) |
|||||||||||||||||||||||||
Commercial: |
|||||||||||||||||||||||||
Commercial and industrial |
13,387 | 12,317 | 1,070 | 9 | 4.33 | 5.35 | |||||||||||||||||||
Commercial real estate: |
|||||||||||||||||||||||||
Construction |
612 | 1,224 | (612 | ) | (50 | ) | 3.55 | 2.69 | |||||||||||||||||
Commercial |
5,676 | 6,145 | (469 | ) | (8 | ) | 3.91 | 3.73 | |||||||||||||||||
Commercial real estate |
6,288 | 7,369 | (1,081 | ) | (15 | ) | 3.88 | 3.56 | |||||||||||||||||
Total commercial |
19,675 | 19,686 | (11 | ) | | 4.19 | 4.68 | ||||||||||||||||||
Consumer: |
|||||||||||||||||||||||||
Automobile |
5,958 | 4,678 | 1,280 | 27 | 5.05 | 6.27 | |||||||||||||||||||
Home equity |
7,869 | 7,550 | 319 | 4 | 4.49 | 5.20 | |||||||||||||||||||
Residential mortgage |
4,607 | 4,491 | 116 | 3 | 4.61 | 4.85 | |||||||||||||||||||
Other consumer |
539 | 690 | (151 | ) | (22 | ) | 7.73 | 6.98 | |||||||||||||||||
Total consumer |
18,973 | 17,409 | 1,564 | 9 | 4.79 | 5.46 | |||||||||||||||||||
Total loans and leases |
38,648 | 37,095 | 1,553 | 4 | 4.48 | 5.05 | |||||||||||||||||||
Allowance for loan and lease losses |
(1,141 | ) | (1,466 | ) | 325 | (22 | ) | ||||||||||||||||||
Net loans and leases |
37,507 | 35,629 | 1,878 | 5 | |||||||||||||||||||||
Total earning assets |
48,382 | 46,791 | 1,591 | 3 | 4.14 | % | 4.64 | % | |||||||||||||||||
Cash and due from banks |
1,358 | 1,629 | (271 | ) | (17 | ) | |||||||||||||||||||
Intangible assets |
652 | 709 | (57 | ) | (8 | ) | |||||||||||||||||||
All other assets |
4,196 | 4,381 | (185 | ) | (4 | ) | |||||||||||||||||||
Total assets |
$ | 53,447 | $ | 52,044 | $ | 1,403 | 3 | % | |||||||||||||||||
Liabilities and Shareholders Equity |
|||||||||||||||||||||||||
Deposits: |
|||||||||||||||||||||||||
Demand deposits noninterest-bearing |
$ | 7,958 | $ | 6,748 | $ | 1,210 | 18 | % | | % | | % | |||||||||||||
Demand deposits interest-bearing |
5,499 | 5,667 | (168 | ) | (3 | ) | 0.10 | 0.20 | |||||||||||||||||
Money market deposits |
13,230 | 11,267 | 1,963 | 17 | 0.44 | 0.92 | |||||||||||||||||||
Savings and other domestic deposits |
4,744 | 4,643 | 101 | 2 | 0.75 | 1.08 | |||||||||||||||||||
Core certificates of deposit |
8,017 | 9,371 | (1,354 | ) | (14 | ) | 2.02 | 2.65 | |||||||||||||||||
Total core deposits |
39,448 | 37,696 | 1,752 | 5 | 0.83 | 1.34 | |||||||||||||||||||
Other domestic time deposits of $250,000 or more |
486 | 683 | (197 | ) | (29 | ) | 1.02 | 1.36 | |||||||||||||||||
Brokered deposits and negotiable CDs |
1,426 | 1,613 | (187 | ) | (12 | ) | 0.92 | 2.43 | |||||||||||||||||
Deposits in foreign offices |
374 | 421 | (47 | ) | (11 | ) | 0.24 | 0.20 | |||||||||||||||||
Total deposits |
41,734 | 40,413 | 1,321 | 3 | 0.83 | 1.38 | |||||||||||||||||||
Short-term borrowings |
2,166 | 1,214 | 952 | 78 | 0.17 | 0.21 | |||||||||||||||||||
Federal Home Loan Bank advances |
138 | 193 | (55 | ) | (28 | ) | 0.64 | 1.94 | |||||||||||||||||
Subordinated notes and other long-term debt |
3,266 | 3,855 | (589 | ) | (15 | ) | 2.38 | 2.15 | |||||||||||||||||
Total interest-bearing liabilities |
39,346 | 38,927 | 419 | 1 | 0.92 | 1.42 | |||||||||||||||||||
All other liabilities |
975 | 941 | 34 | 4 | |||||||||||||||||||||
Shareholders equity |
5,168 | 5,428 | (260 | ) | (5 | ) | |||||||||||||||||||
Total liabilities and shareholders equity |
$ | 53,447 | $ | 52,044 | $ | 1,403 | 3 | % | |||||||||||||||||
Net interest rate spread |
3.17 | 3.22 | |||||||||||||||||||||||
Impact of noninterest-bearing funds on margin |
0.22 | 0.24 | |||||||||||||||||||||||
Net interest margin |
3.39 | % | 3.46 | % | |||||||||||||||||||||
21
(1) | FTE yields are calculated assuming a 35% tax rate. | |
(2) | Loan, lease, and deposit average rates include the impact of applicable derivatives, non-deferrable fees, and amortized deferred fees. | |
(3) | For purposes of this analysis, nonaccrual loans are reflected in the average balances of loans. |
| $1.6 billion, or 4%, increase in average total loans and leases. |
| $0.4 billion, or 4%, increase in average total available-for-sale and other and held-to-maturity securities. |
Nine Months Ended September 30, | Change | |||||||||||||||
(dollar amounts in millions) | 2011 | 2010 | Amount | Percent | ||||||||||||
Loans/Leases |
||||||||||||||||
Commercial and industrial |
$ | 13,387 | $ | 12,317 | $ | 1,070 | 9 | % | ||||||||
Commercial real estate |
6,288 | 7,369 | (1,081 | ) | (15 | ) | ||||||||||
Total commercial |
19,675 | 19,686 | (11 | ) | | |||||||||||
Automobile |
5,958 | 4,678 | 1,280 | 27 | ||||||||||||
Home equity |
7,869 | 7,550 | 319 | 4 | ||||||||||||
Residential mortgage |
4,607 | 4,491 | 116 | 3 | ||||||||||||
Other consumer |
539 | 690 | (151 | ) | (22 | ) | ||||||||||
Total consumer |
18,973 | 17,409 | 1,564 | 9 | ||||||||||||
Total loans and leases |
$ | 38,648 | $ | 37,095 | $ | 1,553 | 4 | % | ||||||||
Deposits |
||||||||||||||||
Demand deposits noninterest-bearing |
$ | 7,958 | $ | 6,748 | $ | 1,210 | 18 | % | ||||||||
Demand deposits interest-bearing |
5,499 | 5,667 | (168 | ) | (3 | ) | ||||||||||
Money market deposits |
13,230 | 11,267 | 1,963 | 17 | ||||||||||||
Savings and other domestic deposits |
4,744 | 4,643 | 101 | 2 | ||||||||||||
Core certificates of deposit |
8,017 | 9,371 | (1,354 | ) | (14 | ) | ||||||||||
Total core deposits |
39,448 | 37,696 | 1,752 | 5 | ||||||||||||
Other deposits |
2,286 | 2,717 | (431 | ) | (16 | ) | ||||||||||
Total deposits |
$ | 41,734 | $ | 40,413 | $ | 1,321 | 3 | % | ||||||||
| $1.3 billion, or 27%, increase in the average automobile portfolio. Automobile lending is a core competency and continued area of growth. The growth from the year-ago period exhibited further penetration within our historical geographic footprint, as well as the positive impact of our expansion into Eastern Pennsylvania and selected New England states. Origination quality remained high. |
| $1.1 billion, or 9%, increase in the average C&I portfolio. Growth from the year-ago period reflected the benefits from our strategic initiatives including large corporate, asset based lending, business banking, automobile floor plan lending, and equipment finance. Traditional middle-market loans continued to grow despite line utilization rates that remain well below historical norms. |
| $0.3 billion, or 4%, increase in the average home equity portfolio, reflecting higher originations and continued slower runoff. |
22
| $1.1 billion, or 15%, decrease in the average CRE portfolio reflecting the continued execution of our plan to reduce the CRE exposure, primarily in the noncore CRE portfolio. This reduction is expected to continue through 2011, reflecting normal amortization, paydowns, and refinancing. |
| $1.8 billion, or 5%, growth in average total core deposits. The drivers of this change were a $2.0 billion, or 17%, growth in average money market deposits, and a $1.2 billion, or 18%, growth in average noninterest-bearing demand deposits. These increases were partially offset by a $1.4 billion, or 14%, decline in average core certificates of deposit. |
| $0.4 billion, or 16%, decline in other deposits including a $0.2 billion, or 29%, decrease in other domestic time deposits of $250,000 or more, and a $0.2 billion, or 12%, decline in average brokered deposits and negotiable CDs, reflecting a strategy of reducing such noncore funding. |
23
2011 | 2010 | 3Q11 vs 3Q10 | 3Q11 vs 2Q11 | ||||||||||||||||||||||||||||||||||
(dollar amounts in thousands) | Third | Second | First | Fourth | Third | Amount | Percent | Amount | Percent | ||||||||||||||||||||||||||||
Service charges on
deposit accounts |
$ | 65,184 | $ | 60,675 | $ | 54,324 | $ | 55,810 | $ | 65,932 | $ | (748 | ) | (1 | )% | $ | 4,509 | 7 | % | ||||||||||||||||||
Mortgage banking income |
12,791 | 23,835 | 22,684 | 53,169 | 52,045 | (39,254 | ) | (75 | ) | (11,044 | ) | (46 | ) | ||||||||||||||||||||||||
Trust services |
29,473 | 30,392 | 30,742 | 29,394 | 26,997 | 2,476 | 9 | (919 | ) | (3 | ) | ||||||||||||||||||||||||||
Electronic banking |
32,714 | 31,728 | 28,786 | 28,900 | 28,090 | 4,624 | 16 | 986 | 3 | ||||||||||||||||||||||||||||
Insurance income |
17,220 | 16,399 | 17,945 | 19,678 | 19,801 | (2,581 | ) | (13 | ) | 821 | 5 | ||||||||||||||||||||||||||
Brokerage income |
20,349 | 20,819 | 20,511 | 16,953 | 16,575 | 3,774 | 23 | (470 | ) | (2 | ) | ||||||||||||||||||||||||||
Bank owned life
insurance income |
15,644 | 17,602 | 14,819 | 16,113 | 14,091 | 1,553 | 11 | (1,958 | ) | (11 | ) | ||||||||||||||||||||||||||
Automobile operating
lease income |
5,890 | 7,307 | 8,847 | 10,463 | 11,356 | (5,466 | ) | (48 | ) | (1,417 | ) | (19 | ) | ||||||||||||||||||||||||
Securities gains (losses) |
(1,350 | ) | 1,507 | 40 | (103 | ) | (296 | ) | (1,054 | ) | 356 | (2,857 | ) | (190 | ) | ||||||||||||||||||||||
Other income |
60,644 | 45,503 | 38,247 | 33,843 | 32,552 | 28,092 | 86 | 15,141 | 33 | ||||||||||||||||||||||||||||
Total noninterest income |
$ | 258,559 | $ | 255,767 | $ | 236,945 | $ | 264,220 | $ | 267,143 | $ | (8,584 | ) | (3 | )% | $ | 2,792 | 1 | % | ||||||||||||||||||
| $39.3 million, or 75%, decrease in mortgage banking income. This primarily reflected a $21.4 million decrease in net MSR activity and a $20.2 million, or 56%, decrease in origination and secondary marketing income, as originations decreased 41% from the year-ago quarter. |
| $5.5 million, or 48%, decline in automobile operating lease income reflecting the impact of a declining portfolio as a result of having exited that business in 2008. |
| $28.1 million, or 86%, increase in other income, of which $15.5 million related to the automobile loan securitization. Also contributing to the growth were increases totaling $6.4 million from the sale of interest rate protection products and capital markets activities. |
| $4.6 million, or 16%, increase in electronic banking income, reflecting an increase in debit card transaction volume and new account growth. |
| $3.8 million, or 23%, increase in brokerage income, primarily reflecting increased sales of investment products. |
24
| $15.1 million, or 33%, increase in other income, reflecting a $15.5 million automobile loan securitization gain on sale, $2.8 million higher market-related gains and capital markets income; partially offset by a $5.8 million reduction in SBA-related servicing income. |
| $4.5 million, or 7%, increase in service charges on deposit accounts, primarily reflecting an increase in personal services charges, mostly due to strong customer growth. |
| $11.0 million, or 46%, decline in mortgage banking income reflecting a $13.9 million decrease in net MSR activity, partially offset by a $4.1 million, or 36%, increase in origination and secondary marketing income. |
| $1.4 million securities loss in the current period compared with a $1.5 million securities gain in the second quarter. |
Nine Months Ended September 30, | Change | |||||||||||||||
(dollar amounts in thousands) | 2011 | 2010 | Amount | Percent | ||||||||||||
Service charges on
deposit accounts |
$ | 180,183 | $ | 211,205 | $ | (31,022 | ) | (15) | % | |||||||
Mortgage banking income |
59,310 | 122,613 | (63,303 | ) | (52 | ) | ||||||||||
Trust services |
90,607 | 83,161 | 7,446 | 9 | ||||||||||||
Electronic banking |
93,228 | 81,334 | 11,894 | 15 | ||||||||||||
Insurance income |
51,564 | 56,735 | (5,171 | ) | (9 | ) | ||||||||||
Brokerage income |
61,679 | 51,901 | 9,778 | 19 | ||||||||||||
Bank owned life
insurance income |
48,065 | 44,953 | 3,112 | 7 | ||||||||||||
Automobile operating
lease income |
22,044 | 35,501 | (13,457 | ) | (38 | ) | ||||||||||
Securities gains (losses) |
197 | (171 | ) | 368 | N.R. | |||||||||||
Other income |
144,394 | 90,406 | 53,988 | 60 | ||||||||||||
Total noninterest income |
$ | 751,271 | $ | 777,638 | $ | (26,367 | ) | (3) | % | |||||||
N.R. | - Not relevant, as denominator of calculation is a loss in prior period compared with income in current period. |
| $63.3 million, or 52%, decrease in mortgage banking income. This primarily reflected a $46.2 million decrease in net MSR activity and a $22.2 million, or 32%, decrease in origination and secondary marketing income, as originations decreased 23% from the year-ago period. |
| $31.0 million, or 15%, decline in service charges on deposit accounts, reflecting lower personal service charges due to the implementation of the amendment to Reg E and our Fair Play consumer banking initiatives. |
| $13.5 million, or 38%, decline in automobile operating lease income reflecting the impact of a declining portfolio as a result of having exited that business in 2008. |
| $54.0 million, or 60%, increase in other income, of which $19.3 million was associated with SBA-related loan fees and gains from SBA loan sales, and a $15.5 million automobile loan securitization gain on sale. Also contributing to the growth were increases totaling $13.4 million from the sale of interest rate protection products and capital markets activities. |
| $11.9 million, or 15%, increase in electronic banking income, reflecting an increase in debit card transaction volume and new account growth. |
25
| $9.8 million, or 19%, increase in brokerage income, primarily reflecting increased sales of investment products. |
| $7.4 million, or 9%, increase in trust services income, due to a $0.8 billion increase in assets under management. This increase reflected improved market values and net growth in accounts. |
For additional information regarding noninterest income, see the Legislative and Regulatory section located within the Executive Overview. |
2011 | 2010 | 3Q11 vs 3Q10 | 3Q11 vs 2Q11 | ||||||||||||||||||||||||||||||||||
(dollar amounts in thousands) | Third | Second | First | Fourth | Third | Amount | Percent | Amount | Percent | ||||||||||||||||||||||||||||
Personnel costs |
$ | 226,835 | $ | 218,570 | $ | 219,028 | $ | 212,184 | $ | 208,272 | $ | 18,563 | 9 | % | $ | 8,265 | 4 | % | |||||||||||||||||||
Outside data processing and
other services |
49,602 | 43,889 | 40,282 | 40,943 | 38,553 | 11,049 | 29 | 5,713 | 13 | ||||||||||||||||||||||||||||
Net occupancy |
26,967 | 26,885 | 28,436 | 26,670 | 26,718 | 249 | 1 | 82 | | ||||||||||||||||||||||||||||
Deposit and other insurance
expense |
17,492 | 23,823 | 17,896 | 23,320 | 23,406 | (5,914 | ) | (25 | ) | (6,331 | ) | (27 | ) | ||||||||||||||||||||||||
Professional services |
20,281 | 20,080 | 13,465 | 21,021 | 20,672 | (391 | ) | (2 | ) | 201 | 1 | ||||||||||||||||||||||||||
Equipment |
22,262 | 21,921 | 22,477 | 22,060 | 21,651 | 611 | 3 | 341 | 2 | ||||||||||||||||||||||||||||
Marketing |
22,251 | 20,102 | 16,895 | 16,168 | 20,921 | 1,330 | 6 | 2,149 | 11 | ||||||||||||||||||||||||||||
Amortization of intangibles |
13,387 | 13,386 | 13,370 | 15,046 | 15,145 | (1,758 | ) | (12 | ) | 1 | | ||||||||||||||||||||||||||
OREO and foreclosure expense |
4,668 | 4,398 | 3,931 | 10,502 | 12,047 | (7,379 | ) | (61 | ) | 270 | 6 | ||||||||||||||||||||||||||
Automobile operating lease
expense |
4,386 | 5,434 | 6,836 | 8,142 | 9,159 | (4,773 | ) | (52 | ) | (1,048 | ) | (19 | ) | ||||||||||||||||||||||||
Other expense |
30,987 | 29,921 | 48,083 | 38,537 | 30,765 | 222 | 1 | 1,066 | 4 | ||||||||||||||||||||||||||||
Total noninterest expense |
$ | 439,118 | $ | 428,409 | $ | 430,699 | $ | 434,593 | $ | 427,309 | $ | 11,809 | 3 | % | $ | 10,709 | 2 | % | |||||||||||||||||||
Number of employees (full-time equivalent), at
period-end |
11,473 | 11,457 | 11,319 | 11,341 | 11,279 | 194 | 2 | % | 16 | | % |
| $18.6 million, or 9%, increase in personnel costs, primarily reflecting a 2% increase in full-time equivalent staff in support of strategic initiatives, as well as higher benefit-related expenses, including $4.2 million of healthcare related costs. |
| $11.0 million, or 29%, increase in outside data processing and other service, reflecting the costs associated with the conversion to a new debit card processor and outside services supporting increased regulations. |
| $7.4 million, or 61%, decrease in OREO and foreclosure expense. |
| $5.9 million, or 25%, decline in deposit and other insurance expenses. |
| $4.8 million, or 52%, decline in automobile operating lease expense as that portfolio continued to run-off having exited that business in 2008. |
| $8.3 million, or 4%, increase in personnel costs, primarily reflecting higher salaries, severance, and healthcare costs. |
| $5.7 million, or 13%, increase in outside data processing and other services, reflecting the costs associated with the conversion to a new debit card processor and the implementation of strategic initiatives. |
26
| $6.3 million, or 27%, decline in deposit and other insurance expenses. |
Nine Months Ended September 30, | Change | |||||||||||||||
(dollar amounts in thousands) | 2011 | 2010 | Amount | Percent | ||||||||||||
Personnel costs |
$ | 664,433 | $ | 586,789 | $ | 77,644 | 13 | % | ||||||||
Outside data processing and other services |
133,773 | 118,305 | 15,468 | 13 | ||||||||||||
Net occupancy |
82,288 | 81,192 | 1,096 | 1 | ||||||||||||
Deposit and other insurance expense |
59,211 | 74,228 | (15,017 | ) | (20 | ) | ||||||||||
Professional services |
53,826 | 67,757 | (13,931 | ) | (21 | ) | ||||||||||
Equipment |
66,660 | 63,860 | 2,800 | 4 | ||||||||||||
Marketing |
59,248 | 49,756 | 9,492 | 19 | ||||||||||||
Amortization of intangibles |
40,143 | 45,432 | (5,289 | ) | (12 | ) | ||||||||||
OREO and foreclosure expense |
12,997 | 28,547 | (15,550 | ) | (54 | ) | ||||||||||
Automobile operating lease expense |
16,656 | 28,892 | (12,236 | ) | (42 | ) | ||||||||||
Other expense |
108,991 | 94,455 | 14,536 | 15 | ||||||||||||
Total noninterest expense |
$ | 1,298,226 | $ | 1,239,213 | $ | 59,013 | 5 | % | ||||||||
| $77.6 million, or 13%, increase in personnel costs, primarily reflecting an increase in full-time equivalent staff in support of strategic initiatives, as well as higher benefit related expenses, including the reinstatement of our 401(k) plan matching contribution in May of 2010. |
| $15.5 million, or 13%, increase in outside data processing and other service, reflecting the costs associated with the conversion to a new debit card processor and the implementation of strategic initiatives. |
| $14.5 million, or 15%, increase in other expense, primarily reflecting the 2011 first quarter $17.0 million addition to litigation reserves (see Significant Items). |
| $9.5 million, or 19%, increase in marketing expense, reflecting higher advertising costs. |
| $15.6 million, or 54%, decline in OREO and foreclosure expenses as OREO balances declined 69% in the current period. |
| $15.0 million, or 20%, decrease in deposit and other insurance expenses. |
| $13.9 million, or 21%, decrease in professional services, reflecting lower legal costs, as collection activities declined, and consulting expenses. |
| $12.2 million, or 42%, decline in automobile operating lease expense as that portfolio continued to run-off having exited that business in 2008. |
27
28
29
2011 | 2010 | |||||||||||||||||||||||||||||||||||||||
(dollar amounts in millions) | September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||||||||||||||
Commercial:(1) |
||||||||||||||||||||||||||||||||||||||||
Commercial and industrial |
$ | 13,939 | 36 | % | $ | 13,544 | 34 | % | $ | 13,299 | 35 | % | $ | 13,063 | 34 | % | $ | 12,425 | 33 | % | ||||||||||||||||||||
Commercial real estate: |
||||||||||||||||||||||||||||||||||||||||
Construction |
520 | 1 | 591 | 2 | 587 | 2 | 650 | 2 | 738 | 2 | ||||||||||||||||||||||||||||||
Commercial |
5,414 | 14 | 5,573 | 14 | 5,711 | 15 | 6,001 | 16 | 6,174 | 16 | ||||||||||||||||||||||||||||||
Total commercial real estate |
5,934 | 15 | 6,164 | 16 | 6,298 | 17 | 6,651 | 18 | 6,912 | 18 | ||||||||||||||||||||||||||||||
Total commercial |
19,873 | 51 | 19,708 | 50 | 19,597 | 52 | 19,714 | 52 | 19,337 | 51 | ||||||||||||||||||||||||||||||
Consumer: |
||||||||||||||||||||||||||||||||||||||||
Automobile |
5,558 | 14 | 6,190 | 16 | 5,802 | 15 | 5,614 | 15 | 5,385 | 14 | ||||||||||||||||||||||||||||||
Home equity |
8,079 | 21 | 7,952 | 20 | 7,784 | 20 | 7,713 | 20 | 7,690 | 21 | ||||||||||||||||||||||||||||||
Residential mortgage |
4,986 | 13 | 4,751 | 12 | 4,517 | 12 | 4,500 | 12 | 4,511 | 12 | ||||||||||||||||||||||||||||||
Other consumer |
516 | 1 | 525 | 2 | 546 | 1 | 566 | 1 | 578 | 2 | ||||||||||||||||||||||||||||||
Total consumer |
19,139 | 49 | 19,418 | 50 | 18,649 | 48 | 18,393 | 48 | 18,164 | 49 | ||||||||||||||||||||||||||||||
Total loans and leases |
$ | 39,012 | 100 | % | $ | 39,126 | 100 | % | $ | 38,246 | 100 | % | $ | 38,107 | 100 | % | $ | 37,501 | 100 | % | ||||||||||||||||||||
(1) | There were no commercial loans outstanding that would be considered a concentration of lending to a particular industry or group of industries. |
30
2011 | 2010 | |||||||||||||||||||||||||||||||||||||||
(dollar amounts in millions) | September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||||||||||||||
Secured loans: |
||||||||||||||||||||||||||||||||||||||||
Real estate commercial |
$ | 9,554 | 24 | % | $ | 9,781 | 25 | % | $ | 9,931 | 26 | % | $ | 10,389 | 27 | % | $ | 10,516 | 28 | % | ||||||||||||||||||||
Real estate consumer |
13,065 | 33 | 12,703 | 32 | 12,300 | 32 | 12,214 | 32 | 12,201 | 33 | ||||||||||||||||||||||||||||||
Vehicles |
6,898 | 18 | 7,594 | 19 | 7,333 | 19 | 7,134 | 19 | 6,652 | 18 | ||||||||||||||||||||||||||||||
Receivables/Inventory |
4,297 | 11 | 4,171 | 11 | 3,819 | 10 | 3,763 | 10 | 3,524 | 9 | ||||||||||||||||||||||||||||||
Machinery/Equipment |
1,864 | 5 | 1,784 | 5 | 1,787 | 5 | 1,766 | 5 | 1,763 | 5 | ||||||||||||||||||||||||||||||
Securities/Deposits |
805 | 2 | 802 | 2 | 778 | 2 | 734 | 2 | 730 | 2 | ||||||||||||||||||||||||||||||
Other |
1,103 | 3 | 1,095 | 3 | 1,139 | 3 | 990 | 2 | 1,097 | 2 | ||||||||||||||||||||||||||||||
Total secured loans and leases |
37,586 | 96 | 37,930 | 97 | 37,087 | 97 | 36,990 | 97 | 36,483 | 97 | ||||||||||||||||||||||||||||||
Unsecured loans and leases |
1,426 | 4 | 1,196 | 3 | 1,159 | 3 | 1,117 | 3 | 1,018 | 3 | ||||||||||||||||||||||||||||||
Total loans and leases |
$ | 39,012 | 100 | % | $ | 39,126 | 100 | % | $ | 38,246 | 100 | % | $ | 38,107 | 100 | % | $ | 37,501 | 100 | % | ||||||||||||||||||||
31
September 30, 2011 | ||||||||||||||||
Commitments | Loans Outstanding | |||||||||||||||
(dollar amounts in millions) | Amount | Percent | Amount | Percent | ||||||||||||
Class: |
||||||||||||||||
Owner occupied |
$ | 4,390 | 21 | % | $ | 3,978 | 29 | % | ||||||||
Other commercial and industrial |
17,020 | 79 | 9,961 | 71 | ||||||||||||
Total |
$ | 21,410 | 100 | % | $ | 13,939 | 100 | % | ||||||||
32
September 30, 2011 | ||||||||||||||||||||||||||||||||||||||||
West | ||||||||||||||||||||||||||||||||||||||||
(dollar amounts in millions) | Ohio | Michigan | Pennsylvania | Indiana | Kentucky | Florida | Virginia | Other | Total | % | ||||||||||||||||||||||||||||||
Core portfolio: |
||||||||||||||||||||||||||||||||||||||||
Retail properties |
$ | 505 | $ | 64 | $ | 69 | $ | 84 | $ | 9 | $ | 39 | $ | 29 | $ | 363 | $ | 1,162 | 20 | % | ||||||||||||||||||||
Office |
337 | 105 | 93 | 17 | 11 | | 39 | 56 | 658 | 11 | ||||||||||||||||||||||||||||||
Multi family |
217 | 91 | 66 | 35 | 28 | 1 | 27 | 56 | 521 | 9 | ||||||||||||||||||||||||||||||
Industrial and warehouse |
222 | 66 | 21 | 49 | 3 | 2 | 5 | 82 | 450 | 8 | ||||||||||||||||||||||||||||||
Other commercial real
estate |
701 | 121 | 37 | 38 | | 19 | 53 | 111 | 1,080 | 18 | ||||||||||||||||||||||||||||||
Total core portfolio |
1,982 | 447 | 286 | 223 | 51 | 61 | 153 | 668 | 3,871 | 65 | ||||||||||||||||||||||||||||||
Total noncore portfolio |
1,149 | 350 | 123 | 173 | 28 | 100 | 40 | 100 | 2,063 | 35 | ||||||||||||||||||||||||||||||
Total |
$ | 3,131 | $ | 797 | $ | 409 | $ | 396 | $ | 79 | $ | 161 | $ | 193 | $ | 768 | $ | 5,934 | 100 | % | ||||||||||||||||||||
September 30, 2011 | ||||||||||||||||||||||||
Ending | Nonaccrual | |||||||||||||||||||||||
(dollar amounts in millions) | Balance | Prior NCOs | ACL $ | ACL % | Credit Mark (1) | Loans | ||||||||||||||||||
Total core |
$ | 3,871 | $ | 16 | $ | 122 | 3.15 | % | 3.55 | % | $ | 25 | ||||||||||||
Noncore SAD (2) |
910 | 286 | 213 | 23.41 | 41.72 | 202 | ||||||||||||||||||
Noncore Other |
1,153 | 14 | 89 | 7.72 | 8.83 | 30 | ||||||||||||||||||
Total noncore |
2,063 | 300 | 302 | 14.64 | 25.48 | 232 | ||||||||||||||||||
Total commercial real estate |
$ | 5,934 | $ | 316 | $ | 424 | 7.15 | % | 11.84 | % | $ | 257 | ||||||||||||
December 31, 2010 | ||||||||||||||||||||||||
Total core |
$ | 4,042 | $ | 5 | $ | 160 | 3.96 | % | 4.08 | % | $ | 16 | ||||||||||||
Noncore SAD (2) |
1,400 | 379 | 329 | 23.50 | 39.80 | 307 | ||||||||||||||||||
Noncore Other |
1,209 | 5 | 105 | 8.68 | 9.06 | 41 | ||||||||||||||||||
Total noncore |
2,609 | 384 | 434 | 16.63 | 27.33 | 348 | ||||||||||||||||||
Total commercial real estate |
$ | 6,651 | $ | 389 | $ | 594 | 8.93 | % | 13.96 | % | $ | 364 | ||||||||||||
(1) | Calculated as (Prior NCOs + ACL $) / (Ending Balance + Prior NCOs). |
|
(2) | Noncore loans managed by SAD, the area responsible for managing loans and relationships designated as Classified Loans. |
33
34
Home Equity | Residential Mortgage | |||||||||||||||||||||||
Secured by first-lien | Secured by second-lien | |||||||||||||||||||||||
09/30/11 | 12/31/10 | 09/30/11 | 12/31/10 | 09/30/11 | 12/31/10 | |||||||||||||||||||
Ending balance |
$ | 3,589 | $ | 3,041 | $ | 4,490 | $ | 4,672 | $ | 4,986 | $ | 4,500 | ||||||||||||
Portfolio weighted average LTV ratio(1) |
71 | % | 70 | % | 80 | % | 80 | % | 78 | % | 77 | % | ||||||||||||
Portfolio weighted average FICO score(2) |
749 | 745 | 734 | 733 | 731 | 721 |
Home Equity | Residential Mortgage (3) | |||||||||||||||||||||||
Secured by first-lien | Secured by second-lien | |||||||||||||||||||||||
Nine Months Ended September 30, | ||||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||
Originations |
$ | 1,392 | $ | 922 | $ | 630 | $ | 523 | $ | 1,102 | $ | 1,179 | ||||||||||||
Origination weighted average LTV ratio(1) |
71 | % | 69 | % | 82 | % | 79 | % | 84 | % | 81 | % | ||||||||||||
Origination weighted average FICO
score(2) |
768 | 767 | 759 | 756 | 758 | 760 |
(1) | The LTV ratios for home equity loans and home equity lines-of-credit are cumulative and
reflect the balance of any senior loans. LTV ratios reflect collateral values at the time of
loan origination. |
|
(2) | Portfolio weighted average FICO scores reflect currently updated customer credit scores
whereas origination weighted average FICO scores reflect the customer credit scores at the
time of loan origination. |
|
(3) | Represents only owned-portfolio originations. |
35
36
37
2011 | 2010 | |||||||||||||||||||
(dollar amounts in thousands) | September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
Nonaccrual loans and leases: |
||||||||||||||||||||
Commercial and industrial |
$ | 209,632 | $ | 229,327 | $ | 260,397 | $ | 346,720 | $ | 398,353 | ||||||||||
Commercial real estate |
257,086 | 291,500 | 305,793 | 363,692 | 478,754 | |||||||||||||||
Residential mortgage |
61,129 | 59,853 | 44,812 | 45,010 | 82,984 | |||||||||||||||
Home equity |
37,156 | 33,545 | 25,255 | 22,526 | 21,689 | |||||||||||||||
Total nonaccrual loans and leases |
565,003 | 614,225 | 636,257 | 777,948 | 981,780 | |||||||||||||||
Other real estate owned, net |
||||||||||||||||||||
Residential |
18,588 | 20,803 | 28,668 | 31,649 | 65,775 | |||||||||||||||
Commercial |
19,418 | 17,909 | 25,961 | 35,155 | 57,309 | |||||||||||||||
Total other real estate owned, net |
38,006 | 38,712 | 54,629 | 66,804 | 123,084 | |||||||||||||||
Other nonperforming assets(1) |
10,972 | | | | | |||||||||||||||
Total nonperforming assets |
$ | 613,981 | $ | 652,937 | $ | 690,886 | $ | 844,752 | $ | 1,104,864 | ||||||||||
Nonaccrual loans as a % of total loans and leases |
1.45 | % | 1.57 | % | 1.66 | % | 2.04 | % | 2.62 | % | ||||||||||
Nonperforming assets ratio(2) |
1.57 | 1.67 | 1.80 | 2.21 | 2.94 | |||||||||||||||
Nonperforming Franklin assets: |
||||||||||||||||||||
Residential mortgage |
$ | | $ | | $ | | $ | | $ | | ||||||||||
Home equity |
| | | | | |||||||||||||||
OREO |
534 | 883 | 5,971 | 9,477 | 15,330 | |||||||||||||||
Impaired loans held for sale |
| | | | | |||||||||||||||
Total nonperforming Franklin assets |
$ | 534 | $ | 883 | $ | 5,971 | $ | 9,477 | $ | 15,330 | ||||||||||
(1) | Other nonperforming assets represent an investment security backed by a municipal bond. |
|
(2) | This ratio is calculated as nonperforming assets divided by the sum of loans and leases, other
nonperforming assets, and net other real estate. |
| $34.4 million, or 12%, decline in CRE NALs, reflecting both NCO activity and problem
credit resolutions, including borrower payments and payoffs. We continue to focus on early
recognition of risks through our on-going portfolio management processes. |
| $19.7 million, or 9%, decline in C&I NALs, reflecting both NCO activity and problem
credit resolutions, including payoffs. The decline was associated with loans throughout
our footprint, with no specific industry concentration. |
| $11.0 million increase in other NPAs reflecting an investment security backed by a
municipal bond. |
| $3.6 million, or 11%, increase in home equity NALs, primarily reflecting the current
weak economic conditions and the continued decline of residential real estate property
values. Home equity NALs have been written down to net realizable value, less anticipated
selling costs, which substantially limits any significant future risk of loss. |
38
| $137.1 million, or 40%, decline in C&I NALs, reflecting both NCO activity and problem
credit resolutions, including payoffs. The decline was associated with loans throughout
our footprint, with no specific geographic concentration. From an industry perspective,
improvement in the manufacturing-related segment accounted for a significant portion of the
decrease. |
| $106.6 million, or 29%, decline in CRE NALs, reflecting both NCO activity and problem
credit resolutions, including borrower payments and payoffs. This decline was a direct
result of our on-going proactive management of these credits by our SAD. |
| $28.8 million, or 43%, decrease in OREO properties, reflecting lower inflow levels
combined with aggressive sales activities. |
| $16.1 million, or 36%, increase in residential mortgage NALs, reflecting the current
weak economic conditions and the continued decline in residential real estate property
values, as well as a change in our nonaccrual policy (see Consumer Credit section). |
| $14.6 million, or 65%, increase in home equity NALs, also reflecting the current weak
economic conditions and the continued decline in residential real estate property values,
as well as a change in our nonaccrual policy (see Consumer Credit section). |
| $11.0 million increase in other NPAs reflecting an investment security backed by a
municipal bond. |
2011 | 2010 | |||||||||||||||||||
(dollar amounts in thousands) | Third | Second | First | Fourth | Third | |||||||||||||||
Nonperforming assets, beginning of period |
$ | 652,937 | $ | 690,886 | $ | 844,752 | $ | 1,104,864 | $ | 1,582,702 | ||||||||||
New nonperforming assets |
153,626 | 210,255 | 192,044 | 237,802 | 278,388 | |||||||||||||||
Franklin-related impact, net |
(349 | ) | (5,088 | ) | (3,506 | ) | (5,853 | ) | (251,412 | ) | ||||||||||
Returns to accruing status |
(25,794 | ) | (68,429 | ) | (70,886 | ) | (100,051 | ) | (111,168 | ) | ||||||||||
Loan and lease losses |
(79,992 | ) | (74,945 | ) | (128,730 | ) | (126,047 | ) | (151,013 | ) | ||||||||||
Other real estate owned gains (losses) |
(242 | ) | 388 | 1,492 | (5,117 | ) | (5,302 | ) | ||||||||||||
Payments |
(76,510 | ) | (73,009 | ) | (87,041 | ) | (191,296 | ) | (210,612 | ) | ||||||||||
Sales |
(9,695 | ) | (27,121 | ) | (57,239 | ) | (69,550 | ) | (26,719 | ) | ||||||||||
Nonperforming assets, end of period |
$ | 613,981 | $ | 652,937 | $ | 690,886 | $ | 844,752 | $ | 1,104,864 | ||||||||||
39
2011 | 2010 | |||||||||||||||||||
(dollar amounts in thousands) | September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
Accruing loans and leases past due 90 days or more: |
||||||||||||||||||||
Commercial and industrial |
$ | | $ | | $ | | $ | | $ | | ||||||||||
Residential mortgage (excluding loans guaranteed
by the U.S. government) |
32,850 | 33,975 | 41,858 | 53,983 | 56,803 | |||||||||||||||
Home equity |
20,420 | 17,451 | 24,130 | 23,497 | 27,160 | |||||||||||||||
Other consumer |
7,755 | 6,227 | 7,578 | 10,177 | 11,423 | |||||||||||||||
Total, excl. loans guaranteed by the U.S. government |
61,025 | 57,653 | 73,566 | 87,657 | 95,386 | |||||||||||||||
Add: loans guaranteed by the U.S. government |
84,413 | 76,979 | 94,440 | 98,288 | 94,249 | |||||||||||||||
Total accruing loans and leases past due 90 days
or more, including loans guaranteed by the
U.S. government |
$ | 145,438 | $ | 134,632 | $ | 168,006 | $ | 185,945 | $ | 189,635 | ||||||||||
Ratios: (1) |
||||||||||||||||||||
Excluding loans guaranteed by the U.S. government,
as a percent of total loans and leases |
0.16 | % | 0.15 | % | 0.19 | % | 0.23 | % | 0.25 | % | ||||||||||
Guaranteed by the U.S. government, as a percent of
total loans and leases |
0.21 | 0.19 | 0.25 | 0.26 | 0.26 | |||||||||||||||
Including loans guaranteed by the U.S. government,
as a percent of total loans and leases |
0.37 | 0.34 | 0.44 | 0.49 | 0.51 |
(1) | Ratios are calculated as a percentage of related loans and leases. |
40
2011 | 2010 | |||||||||||||||||||
(dollar amounts in thousands) | September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
Troubled debt restructured loans accruing: |
||||||||||||||||||||
Residential mortgage |
$ | 304,365 | $ | 313,772 | $ | 333,492 | $ | 328,411 | $ | 304,356 | ||||||||||
Other consumer(1) |
89,596 | 75,036 | 78,488 | 76,586 | 73,210 | |||||||||||||||
Commercial |
321,598 | 240,126 | 206,462 | 222,632 | 157,971 | |||||||||||||||
Total troubled debt restructured loans accruing |
715,559 | 628,934 | 618,442 | 627,629 | 535,537 | |||||||||||||||
Troubled debt restructured loans nonaccruing: |
||||||||||||||||||||
Residential mortgage |
20,877 | 14,378 | 8,523 | 5,789 | 10,581 | |||||||||||||||
Other consumer(1) |
279 | 140 | 14 | | | |||||||||||||||
Commercial |
74,264 | 77,745 | 37,858 | 33,462 | 33,236 | |||||||||||||||
Total troubled debt restructured loans
nonaccruing |
95,420 | 92,263 | 46,395 | 39,251 | 43,817 | |||||||||||||||
Total troubled debt restructured loans |
$ | 810,979 | $ | 721,197 | $ | 664,837 | $ | 666,880 | $ | 579,354 | ||||||||||
(1) | Includes automobile, home equity, and other consumer TDRs. |
41
2011 | 2010 | |||||||||||||||||||
(dollar amounts in thousands) | Third | Second | First | Fourth | Third | |||||||||||||||
Allowance for loan and lease losses,
beginning of period |
$ | 1,071,126 | $ | 1,133,226 | $ | 1,249,008 | $ | 1,336,352 | $ | 1,402,160 | ||||||||||
Loan and lease losses |
(115,899 | ) | (128,701 | ) | (199,007 | ) | (205,587 | ) | (221,144 | ) | ||||||||||
Recoveries of loans previously charged-off |
25,344 | 31,167 | 33,924 | 33,336 | 36,630 | |||||||||||||||
Net loan and lease losses |
(90,555 | ) | (97,534 | ) | (165,083 | ) | (172,251 | ) | (184,514 | ) | ||||||||||
Provision for loan and lease losses |
45,867 | 36,948 | 49,301 | 84,907 | 118,788 | |||||||||||||||
Allowance for assets sold |
(6,728 | ) | (1,514 | ) | | | (82 | ) | ||||||||||||
Allowance for loan and lease losses, end of period |
$ | 1,019,710 | $ | 1,071,126 | $ | 1,133,226 | $ | 1,249,008 | $ | 1,336,352 | ||||||||||
Allowance for unfunded loan commitments
and letters of credit, beginning of period |
$ | 41,060 | $ | 42,211 | $ | 42,127 | $ | 40,061 | $ | 39,689 | ||||||||||
Provision for (reduction in) unfunded loan
commitments and letters of credit losses |
(2,281 | ) | (1,151 | ) | 84 | 2,066 | 372 | |||||||||||||
Allowance for unfunded loan commitments
and letters of credit, end of period |
$ | 38,779 | $ | 41,060 | $ | 42,211 | $ | 42,127 | $ | 40,061 | ||||||||||
Total allowance for credit losses, end of period |
$ | 1,058,489 | $ | 1,112,186 | $ | 1,175,437 | $ | 1,291,135 | $ | 1,376,413 | ||||||||||
Allowance for loan and lease losses as % of: |
||||||||||||||||||||
Total loans and leases |
2.61 | % | 2.74 | % | 2.96 | % | 3.28 | % | 3.56 | % | ||||||||||
Nonaccrual loans and leases |
180 | 174 | 178 | 161 | 136 | |||||||||||||||
Nonperforming assets |
166 | 164 | 164 | 148 | 121 | |||||||||||||||
Total allowance for credit losses as % of: |
||||||||||||||||||||
Total loans and leases |
2.71 | % | 2.84 | % | 3.07 | % | 3.39 | % | 3.67 | % | ||||||||||
Nonaccrual loans and leases |
187 | 181 | 185 | 166 | 140 | |||||||||||||||
Nonperforming assets |
172 | 170 | 170 | 153 | 125 |
2011 | 2010 | |||||||||||||||||||||||||||||||||||||||
(dollar amounts in thousands) | September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||||||||||||||
Commercial |
||||||||||||||||||||||||||||||||||||||||
Commercial and
industrial |
$ | 285,254 | 36 | % | $ | 281,016 | 35 | % | $ | 299,564 | 35 | % | $ | 340,614 | 34 | % | $ | 353,431 | 33 | % | ||||||||||||||||||||
Commercial real
estate |
418,895 | 15 | 463,874 | 16 | 511,068 | 17 | 588,251 | 18 | 654,219 | 18 | ||||||||||||||||||||||||||||||
Total commercial |
704,149 | 51 | 744,890 | 51 | 810,632 | 52 | 928,865 | 52 | 1,007,650 | 51 | ||||||||||||||||||||||||||||||
Consumer |
||||||||||||||||||||||||||||||||||||||||
Automobile |
49,402 | 14 | 55,428 | 16 | 50,862 | 15 | 49,488 | 15 | 44,505 | 14 | ||||||||||||||||||||||||||||||
Home equity |
139,616 | 21 | 146,444 | 20 | 149,370 | 20 | 150,630 | 20 | 154,323 | 21 | ||||||||||||||||||||||||||||||
Residential mortgage |
98,974 | 13 | 98,992 | 12 | 96,741 | 12 | 93,289 | 12 | 93,407 | 12 | ||||||||||||||||||||||||||||||
Other consumer |
27,569 | 1 | 25,372 | 1 | 25,621 | 1 | 26,736 | 1 | 36,467 | 2 | ||||||||||||||||||||||||||||||
Total consumer |
315,561 | 49 | 326,236 | 49 | 322,594 | 48 | 320,143 | 48 | 328,702 | 49 | ||||||||||||||||||||||||||||||
Total allowance for loan and lease
losses |
1,019,710 | 100 | % | 1,071,126 | 100 | % | 1,133,226 | 100 | % | 1,249,008 | 100 | % | 1,336,352 | 100 | % | |||||||||||||||||||||||||
Allowance for unfunded loan
commitments |
38,779 | 41,060 | 42,211 | 42,127 | 40,061 | |||||||||||||||||||||||||||||||||||
Total allowance for credit losses |
$ | 1,058,489 | $ | 1,112,186 | $ | 1,175,437 | $ | 1,291,135 | $ | 1,376,413 | ||||||||||||||||||||||||||||||
(1) | Percentages represent the percentage of each loan and lease category to total loans and leases. |
42
2011 | 2010 | |||||||||||||||||||
(dollar amounts in thousands) | Third | Second | First | Fourth | Third | |||||||||||||||
Criticized commercial loans, beginning of period |
$ | 2,379,150 | $ | 2,660,792 | $ | 3,074,481 | $ | 3,637,533 | $ | 4,106,602 | ||||||||||
New additions / increases |
357,057 | 250,422 | 169,884 | 289,850 | 407,514 | |||||||||||||||
Advances |
46,148 | 44,442 | 61,516 | 52,282 | 75,386 | |||||||||||||||
Upgrades to Pass |
(252,388 | ) | (271,698 | ) | (238,518 | ) | (382,713 | ) | (391,316 | ) | ||||||||||
Payments |
(180,845 | ) | (231,819 | ) | (294,564 | ) | (401,302 | ) | (408,698 | ) | ||||||||||
Loan losses |
(58,035 | ) | (72,989 | ) | (112,008 | ) | (121,169 | ) | (151,955 | ) | ||||||||||
Criticized commercial loans, end of period |
$ | 2,291,088 | $ | 2,379,150 | $ | 2,660,792 | $ | 3,074,481 | $ | 3,637,533 | ||||||||||
43
Nine Months Ended September 30, | ||||||||
(dollar amounts in thousands) | 2011 | 2010 | ||||||
Allowance for loan and lease losses,
beginning of period |
$ | 1,249,008 | $ | 1,482,479 | ||||
Loan and lease losses |
(443,607 | ) | (798,320 | ) | ||||
Recoveries of loans previously charged-off |
90,435 | 96,097 | ||||||
Net loan and lease losses |
(353,172 | ) | (702,223 | ) | ||||
Provision for loan and lease losses |
132,116 | 556,392 | ||||||
Allowance for assets sold |
(8,242 | ) | (296 | ) | ||||
Allowance for loan and lease losses, end of period |
$ | 1,019,710 | $ | 1,336,352 | ||||
Allowance for unfunded loan commitments
and letters of credit, beginning of period |
$ | 42,127 | $ | 48,879 | ||||
Provision for (reduction in) unfunded loan commitments
and letters of credit losses |
(3,348 | ) | (8,818 | ) | ||||
Allowance for unfunded loan commitments
and letters of credit, end of period |
$ | 38,779 | $ | 40,061 | ||||
Total allowance for credit losses |
$ | 1,058,489 | $ | 1,376,413 | ||||
Allowance for loan and lease losses as % of: |
||||||||
Total loans and leases |
2.61 | % | 3.56 | % | ||||
Nonaccrual loans and leases |
180 | 136 | ||||||
Nonperforming assets |
166 | 121 | ||||||
Total allowance for credit losses as % of: |
||||||||
Total loans and leases |
2.71 | % | 3.67 | % | ||||
Nonaccrual loans and leases |
187 | 140 | ||||||
Nonperforming assets |
172 | 125 |
44
2011 | 2010 | |||||||||||||||||||
(dollar amounts in thousands) | Third | Second | First | Fourth | Third | |||||||||||||||
Net charge-offs by loan and lease type: |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Commercial and industrial |
$ | 17,891 | $ | 18,704 | $ | 42,191 | $ | 59,124 | $ | 62,241 | ||||||||||
Commercial real estate: |
||||||||||||||||||||
Construction |
1,450 | 4,145 | 28,400 | 11,084 | 17,936 | |||||||||||||||
Commercial |
22,990 | 23,450 | 39,283 | 33,787 | 45,725 | |||||||||||||||
Commercial real estate |
24,440 | 27,595 | 67,683 | 44,871 | 63,661 | |||||||||||||||
Total commercial |
42,331 | 46,299 | 109,874 | 103,995 | 125,902 | |||||||||||||||
Consumer: |
||||||||||||||||||||
Automobile |
3,863 | 2,255 | 4,712 | 7,035 | 5,570 | |||||||||||||||
Home equity |
26,222 | 25,441 | 26,715 | 29,175 | 27,827 | |||||||||||||||
Residential mortgage(1) |
11,562 | 16,455 | 18,932 | 26,775 | 18,961 | |||||||||||||||
Other consumer |
6,577 | 7,084 | 4,850 | 5,271 | 6,254 | |||||||||||||||
Total consumer |
48,224 | 51,235 | 55,209 | 68,256 | 58,612 | |||||||||||||||
Total net charge-offs |
$ | 90,555 | $ | 97,534 | $ | 165,083 | $ | 172,251 | $ | 184,514 | ||||||||||
Net charge-offs annualized percentages: |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Commercial and industrial |
0.52 | % | 0.56 | % | 1.29 | % | 1.85 | % | 2.01 | % | ||||||||||
Commercial real estate: |
||||||||||||||||||||
Construction |
0.87 | 2.99 | 18.59 | 6.19 | 7.25 | |||||||||||||||
Commercial |
1.69 | 1.65 | 2.66 | 2.22 | 3.01 | |||||||||||||||
Commercial real estate |
1.60 | 1.77 | 4.15 | 2.64 | 3.60 | |||||||||||||||
Total commercial |
0.86 | 0.94 | 2.24 | 2.13 | 2.59 | |||||||||||||||
Consumer: |
||||||||||||||||||||
Automobile |
0.25 | 0.15 | 0.33 | 0.51 | 0.43 | |||||||||||||||
Home equity |
1.31 | 1.29 | 1.38 | 1.51 | 1.47 | |||||||||||||||
Residential mortgage(1) |
0.97 | 1.44 | 1.70 | 2.42 | 1.73 | |||||||||||||||
Other consumer |
5.05 | 5.27 | 3.47 | 3.66 | 3.83 | |||||||||||||||
Total consumer |
0.99 | 1.08 | 1.20 | 1.50 | 1.32 | |||||||||||||||
Net charge-offs as a % of average loans |
0.92 | % | 1.01 | % | 1.73 | % | 1.82 | % | 1.98 | % | ||||||||||
(1) | The 2010 fourth quarter included net charge-offs of $16,389 thousand related to the sale
of certain underperforming residential mortgage loans. |
45
46
Nine Months Ended September 30, | ||||||||
(dollar amounts in thousands) | 2011 | 2010 | ||||||
Net charge-offs by loan and lease type: |
||||||||
Commercial: |
||||||||
Commercial and industrial |
$ | 78,786 | $ | 195,808 | ||||
Commercial real estate: |
||||||||
Construction |
33,995 | 97,924 | ||||||
Commercial |
85,723 | 132,767 | ||||||
Commercial real estate |
119,718 | 230,691 | ||||||
Total commercial |
198,504 | 426,499 | ||||||
Consumer: |
||||||||
Automobile |
10,830 | 19,537 | ||||||
Home equity(1) |
78,378 | 110,198 | ||||||
Residential mortgage(2) |
46,949 | 126,120 | ||||||
Other loans |
18,511 | 19,869 | ||||||
Total consumer |
154,668 | 275,724 | ||||||
Total net charge-offs |
$ | 353,172 | $ | 702,223 | ||||
Net charge-offs annualized percentages: |
||||||||
Commercial: |
||||||||
Commercial and industrial |
0.78 | % | 2.12 | % | ||||
Commercial real estate: |
||||||||
Construction |
7.41 | 10.67 | ||||||
Commercial |
2.01 | 2.88 | ||||||
Commercial real estate |
2.54 | 4.17 | ||||||
Total commercial |
1.35 | 2.89 | ||||||
Consumer: |
||||||||
Automobile |
0.24 | 0.56 | ||||||
Home equity(1) |
1.33 | 1.95 | ||||||
Residential mortgage(2) |
1.36 | 3.74 | ||||||
Other loans |
4.58 | 3.84 | ||||||
Total consumer |
1.09 | 2.11 | ||||||
Net charge-offs as a % of average loans |
1.22 | % | 2.52 | % | ||||
(1) | The 2010 first nine-month period included net charge-offs totaling $14,678 thousand associated
with the transfer of Franklin-related home equity loans to loans held for sale and $6,143 thousand
of other Franklin-related net charge-offs. |
|
(2) | The 2010 first nine-month period included net charge-offs totaling $60,822 thousand associated
with the transfer of Franklin-related residential mortgage loans to loans held for sale and $14,914
thousand of other Franklin-related net charge-offs. |
47
48
Interest Sensitive Earnings at Risk (%) | ||||||||||||||||
Basis point change scenario |
-200 | -100 | +100 | +200 | ||||||||||||
Board policy limits |
-4.0 | % | -2.0 | % | -2.0 | % | -4.0 | % | ||||||||
September 30, 2011 |
-2.1 | -1.3 | 1.1 | 2.2 | ||||||||||||
December 31, 2010 |
-3.2 | -1.8 | 0.3 | 0.0 |
Percent of | Percent Change in Interest Income/Expense for a Given | |||||||||||||||||||
Total Earning | Change in Interest Rates | |||||||||||||||||||
Assets (1) | Over / (Under) Base Case Parallel Ramp | |||||||||||||||||||
Basis point change scenario |
-200 | -100 | +100 | +200 | ||||||||||||||||
Total loans |
80 | % | -16.2 | % | -25.3 | % | 37.9 | % | 39.4 | % | ||||||||||
Total investments and other earning assets |
20 | -17.8 | -22.1 | 32.5 | 30.2 | |||||||||||||||
Total interest sensitive income |
-16.0 | -24.0 | 36.1 | 36.8 | ||||||||||||||||
Total interest-bearing deposits |
71 | -11.5 | -18.9 | 35.5 | 36.5 | |||||||||||||||
Total borrowings |
11 | -21.0 | -37.6 | 62.7 | 66.0 | |||||||||||||||
Total interest-sensitive expense |
-12.7 | -21.2 | 38.9 | 40.2 | ||||||||||||||||
(1) | At September 30, 2011. |
Economic Value of Equity at Risk (%) | ||||||||||||||||
Basis point change scenario |
-200 | -100 | +100 | +200 | ||||||||||||
Board policy limits |
-12.0 | % | -5.0 | % | -5.0 | % | -12.0 | % | ||||||||
September 30, 2011 |
-4.2 | -0.7 | -1.0 | -3.3 | ||||||||||||
December 31, 2010 |
-0.5 | 1.3 | -4.0 | -8.9 |
49
Percent of | ||||||||||||||||||||
Total Net | Percent Change in Economic Value for a Given | |||||||||||||||||||
Tangible | Change in Interest Rates | |||||||||||||||||||
Assets (1) | Over / (Under) Base Case Parallel Shocks | |||||||||||||||||||
Basis point change scenario |
-200 | -100 | +100 | +200 | ||||||||||||||||
Total loans |
71 | % | 0.9 | % | 0.8 | % | -1.3 | % | -2.6 | % | ||||||||||
Total investments and other earning assets |
18 | 2.0 | 2.0 | -2.8 | -5.9 | |||||||||||||||
Total net tangible assets (2) |
1.1 | 1.0 | -1.5 | -3.1 | ||||||||||||||||
Total deposits |
79 | -2.1 | -1.4 | 1.7 | 3.3 | |||||||||||||||
Total borrowings |
9 | -1.1 | -0.8 | 0.8 | 1.6 | |||||||||||||||
Total net tangible liabilities (3) |
-2.0 | -1.3 | 1.6 | 3.1 | ||||||||||||||||
(1) | At September 30, 2011. |
|
(2) | Tangible assets excluding ALLL. |
|
(3) | Tangible liabilities excluding AULC. |
50
2011 | 2010 | |||||||||||||||||||||||||||||||||||||||
(dollar amounts in millions) | September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||||||||||||||
By Type |
||||||||||||||||||||||||||||||||||||||||
Demand deposits -
noninterest-bearing |
$ | 9,502 | 22 | % | $ | 8,210 | 20 | % | $ | 7,597 | 18 | % | $ | 7,217 | 17 | % | $ | 6,926 | 17 | % | ||||||||||||||||||||
Demand deposits interest-bearing |
5,763 | 13 | 5,642 | 14 | 5,532 | 13 | 5,469 | 13 | 5,347 | 13 | ||||||||||||||||||||||||||||||
Money market deposits |
13,759 | 32 | 12,643 | 31 | 13,105 | 32 | 13,410 | 32 | 12,679 | 31 | ||||||||||||||||||||||||||||||
Savings and other domestic
deposits |
4,711 | 11 | 4,752 | 11 | 4,762 | 12 | 4,643 | 11 | 4,613 | 11 | ||||||||||||||||||||||||||||||
Core certificates of deposit |
7,084 | 16 | 7,936 | 19 | 8,208 | 20 | 8,525 | 20 | 8,765 | 21 | ||||||||||||||||||||||||||||||
Total core deposits |
40,819 | 94 | 39,183 | 95 | 39,204 | 95 | 39,264 | 93 | 38,330 | 93 | ||||||||||||||||||||||||||||||
Other domestic deposits of $250,000
or more |
421 | 1 | 436 | 1 | 531 | 1 | 675 | 2 | 730 | 2 | ||||||||||||||||||||||||||||||
Brokered deposits and negotiable CDs |
1,535 | 4 | 1,486 | 4 | 1,253 | 3 | 1,532 | 4 | 1,576 | 4 | ||||||||||||||||||||||||||||||
Deposits in foreign offices |
445 | 1 | 297 | | 378 | 1 | 383 | 1 | 436 | 1 | ||||||||||||||||||||||||||||||
Total deposits |
$ | 43,220 | 100 | % | $ | 41,402 | 100 | % | $ | 41,366 | 100 | % | $ | 41,854 | 100 | % | $ | 41,072 | 100 | % | ||||||||||||||||||||
Total core deposits: |
||||||||||||||||||||||||||||||||||||||||
Commercial |
$ | 15,526 | 38 | % | $ | 13,541 | 35 | % | $ | 12,785 | 33 | % | $ | 12,476 | 32 | % | $ | 12,262 | 32 | % | ||||||||||||||||||||
Consumer |
25,293 | 62 | 25,642 | 65 | 26,419 | 67 | 26,788 | 68 | 26,068 | 68 | ||||||||||||||||||||||||||||||
Total core deposits |
$ | 40,819 | 100 | % | $ | 39,183 | 100 | % | $ | 39,204 | 100 | % | $ | 39,264 | 100 | % | $ | 38,330 | 100 | % | ||||||||||||||||||||
51
2011 | 2010 | |||||||||||||||||||
(dollar amounts in millions) | September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
Balance at period-end |
||||||||||||||||||||
Federal Funds purchased
and securities sold under
agreements to repurchase |
$ | 2,201 | $ | 1,983 | $ | 2,017 | $ | 1,966 | $ | 1,773 | ||||||||||
Other short-term borrowings |
24 | 40 | 34 | 75 | 86 | |||||||||||||||
Weighted average interest rate at period-end |
||||||||||||||||||||
Federal Funds purchased
and securities sold under
agreements to repurchase |
0.16 | % | 0.15 | % | 0.17 | % | 0.19 | % | 0.22 | % | ||||||||||
Other short-term borrowings |
1.01 | 0.69 | 0.92 | 0.53 | 0.40 | |||||||||||||||
Maximum amount outstanding at month-end
during the period |
||||||||||||||||||||
Federal Funds purchased
and securities sold under
agreements to repurchase |
$ | 2,431 | $ | 2,361 | $ | 2,091 | $ | 2,084 | $ | 1,773 | ||||||||||
Other short-term borrowings |
53 | 50 | 86 | 108 | 99 | |||||||||||||||
Average amount outstanding during the period |
||||||||||||||||||||
Federal Funds purchased
and securities sold under
agreements to repurchase |
$ | 2,200 | $ | 2,067 | $ | 2,064 | $ | 2,045 | $ | 1,645 | ||||||||||
Other short-term borrowings |
51 | 45 | 69 | 89 | 94 | |||||||||||||||
Weighted average interest rate during the period |
||||||||||||||||||||
Federal Funds purchased
and securities sold under
agreements to repurchase |
0.16 | % | 0.15 | % | 0.17 | % | 0.19 | % | 0.21 | % | ||||||||||
Other short-term borrowings |
0.56 | 0.58 | 0.52 | 0.38 | 0.35 |
September 30, | December 31, | |||||||
(dollar amounts in billions) | 2011 | 2010 | ||||||
Loans and securities pledged: |
||||||||
Federal Reserve Bank |
$ | 10.2 | $ | 9.7 | ||||
FHLB |
7.9 | 7.8 | ||||||
Total loans and securities pledged |
$ | 18.1 | $ | 17.5 | ||||
Total unused borrowing capacity at Federal Reserve Bank and FHLB |
$ | 9.8 | $ | 8.8 |
52
53
54
2011 | 2010 | |||||||||||||||||||
(dollar amounts in thousands) | Third | Second | First | Fourth | Third | |||||||||||||||
Reserve for representations and warranties, beginning of period |
$ | 24,496 | $ | 23,785 | $ | 20,170 | $ | 18,026 | $ | 10,519 | ||||||||||
Assumed reserve for representations and warranties |
| | | | 7,000 | |||||||||||||||
Reserve charges |
(3,340 | ) | (365 | ) | (270 | ) | (4,242 | ) | (1,787 | ) | ||||||||||
Provision for representations and warranties |
2,697 | 1,076 | 3,885 | 6,386 | 2,294 | |||||||||||||||
Reserve for representations and warranties, end of period |
$ | 23,853 | $ | 24,496 | $ | 23,785 | $ | 20,170 | $ | 18,026 | ||||||||||
2011 | 2010 | |||||||||||||||||||
(dollar amounts in thousands) | Third | Second | First | Fourth | Third | |||||||||||||||
Number of loans sold |
3,877 | 3,875 | 8,933 | 10,314 | 6,944 | |||||||||||||||
Amount of loans sold (UPB) |
$ | 529,722 | $ | 512,069 | $ | 1,313,994 | $ | 1,577,879 | $ | 1,043,024 | ||||||||||
Number of loans repurchased |
43 | 36 | 15 | 71 | 118 | |||||||||||||||
Amount of loans repurchased (UPB) |
$ | 7,325 | $ | 4,755 | $ | 2,343 | $ | 13,198 | $ | 15,356 | ||||||||||
Number of claims received |
96 | 130 | 118 | 105 | 108 | |||||||||||||||
Successful dispute rate (1) |
27 | % | 49 | % | 86 | % | 21 | % | 36 | % | ||||||||||
Number of make whole payments |
38 | 8 | 6 | 44 | 19 | |||||||||||||||
Amount of make whole payments |
$ | 3,392 | $ | 445 | $ | 560 | $ | 3,835 | $ | 1,444 |
(1) | Successful disputes are a percent of close out requests. Process changes in
2011 significantly decreased close out requests inflating this ratio. |
55
2011 | 2010 | |||||||||||||||||||
(dollar amounts in millions) | September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
Consolidated capital calculations: |
||||||||||||||||||||
Common shareholders equity |
$ | 5,037 | $ | 4,890 | $ | 4,676 | $ | 4,618 | $ | 3,867 | ||||||||||
Preferred shareholders equity |
363 | 363 | 363 | 363 | 1,700 | |||||||||||||||
Total shareholders equity |
5,400 | 5,253 | 5,039 | 4,981 | 5,567 | |||||||||||||||
Goodwill |
(444 | ) | (444 | ) | (444 | ) | (444 | ) | (444 | ) | ||||||||||
Other intangible assets |
(188 | ) | (202 | ) | (215 | ) | (229 | ) | (244 | ) | ||||||||||
Other intangible assets
deferred tax liability (1) |
66 | 71 | 75 | 80 | 85 | |||||||||||||||
Total tangible equity (2) |
4,834 | 4,678 | 4,455 | 4,388 | 4,964 | |||||||||||||||
Preferred shareholders equity |
(363 | ) | (363 | ) | (363 | ) | (363 | ) | (1,700 | ) | ||||||||||
Total tangible common equity (2) |
$ | 4,471 | $ | 4,315 | $ | 4,092 | $ | 4,025 | $ | 3,264 | ||||||||||
Total assets |
$ | 54,979 | $ | 53,050 | $ | 52,949 | $ | 53,820 | $ | 53,247 | ||||||||||
Goodwill |
(444 | ) | (444 | ) | (444 | ) | (444 | ) | (444 | ) | ||||||||||
Other intangible assets |
(188 | ) | (202 | ) | (215 | ) | (229 | ) | (244 | ) | ||||||||||
Other intangible assets
deferred tax liability (1) |
66 | 71 | 75 | 80 | 85 | |||||||||||||||
Total tangible assets (2) |
$ | 54,413 | $ | 52,475 | $ | 52,365 | $ | 53,227 | $ | 52,644 | ||||||||||
Tier 1 capital |
$ | 5,488 | $ | 5,352 | $ | 5,179 | $ | 5,022 | $ | 5,480 | ||||||||||
Preferred shareholders equity |
(363 | ) | (363 | ) | (363 | ) | (363 | ) | (1,700 | ) | ||||||||||
Trust-preferred securities |
(565 | ) | (565 | ) | (570 | ) | (570 | ) | (570 | ) | ||||||||||
REIT-preferred stock |
(50 | ) | (50 | ) | (50 | ) | (50 | ) | (50 | ) | ||||||||||
Tier 1 common equity (2) |
$ | 4,510 | $ | 4,374 | $ | 4,196 | $ | 4,039 | $ | 3,160 | ||||||||||
Risk-weighted assets (RWA) |
$ | 44,376 | $ | 44,080 | $ | 43,024 | $ | 43,471 | $ | 42,759 | ||||||||||
Tier 1 common equity / RWA ratio (2) |
10.17 | % | 9.92 | % | 9.75 | % | 9.29 | % | 7.39 | % | ||||||||||
Tangible equity / tangible asset ratio (2) |
8.88 | 8.91 | 8.51 | 8.24 | 9.43 | |||||||||||||||
Tangible common equity / tangible asset ratio (2) |
8.22 | 8.22 | 7.81 | 7.56 | 6.20 | |||||||||||||||
Tangible common equity / RWA ratio (2) |
10.08 | 9.79 | 9.51 | 9.26 | 7.63 |
(1) | Other intangible assets are net of deferred tax liability, and calculated assuming a 35% tax
rate. |
|
(2) | Tangible equity, Tier 1 common equity, tangible common equity, and tangible assets are non-GAAP
financial measures. Additionally, any ratios utilizing these financial measures are also non-GAAP.
These financial measures have been included as they are considered to be critical metrics with
which to analyze and evaluate financial condition and capital strength. Other companies may
calculate these financial measures differently. |
56
Tier 1 Capital | ||||||||||||||||||||||||
Common | Preferred | Disallowed | Disallowed | Total | ||||||||||||||||||||
Shareholders | Shareholders | Qualifying | Goodwill & | Other | Tier 1 | |||||||||||||||||||
(dollar amounts in millions) | Equity (1) | Equity | Core Capital (2) | Intangible assets | Adjustments (net) | Capital | ||||||||||||||||||
Balance at December 31, 2010 |
$ | 4,815 | $ | 363 | $ | 620 | $ | (607 | ) | $ | (169 | ) | $ | 5,022 | ||||||||||
Earnings |
416 | | | | | 416 | ||||||||||||||||||
Changes to disallowed adjustments |
| | | 39 | (13 | ) | 26 | |||||||||||||||||
Dividends |
(75 | ) | | | | | (75 | ) | ||||||||||||||||
Repurchase of TARP Capital warrant |
(49 | ) | | | | | (49 | ) | ||||||||||||||||
Repurchase of qualifying trust
preferred securities |
| | (5 | ) | | | (5 | ) | ||||||||||||||||
Disallowance of deferred tax assets |
| | | | 142 | 142 | ||||||||||||||||||
Other |
11 | | | | | 11 | ||||||||||||||||||
Balance at September 30, 2011 |
$ | 5,118 | $ | 363 | $ | 615 | $ | (568 | ) | $ | (40 | ) | $ | 5,488 | ||||||||||
Total risk-based capital | ||||||||||||||||||||
Qualifying | Total | |||||||||||||||||||
Qualifying | Subordinated | Tier 1 Capital | risk-based | |||||||||||||||||
ACL | Debt | Tier 2 Capital | (from above) | capital | ||||||||||||||||
Balance at December 31, 2010 |
$ | 552 | $ | 711 | $ | 1,263 | $ | 5,022 | $ | 6,285 | ||||||||||
Change in qualifying subordinated
debt |
| (56 | ) | (56 | ) | | (56 | ) | ||||||||||||
Change in qualifying ACL |
9 | | 9 | | 9 | |||||||||||||||
Changes to Tier 1 Capital (see
above) |
| | | 466 | 466 | |||||||||||||||
Balance at September 30, 2011 |
$ | 561 | $ | 655 | $ | 1,216 | $ | 5,488 | $ | 6,704 | ||||||||||
(1) | Excludes accumulated other comprehensive income and minority interest. |
|
(2) | Includes minority interest. |
57
2011 | 2010 | |||||||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||
Total risk-weighted assets (in
millions) |
Consolidated | $ | 44,376 | $ | 44,080 | $ | 43,024 | $ | 43,471 | $ | 42,759 | |||||||||||||
Bank | 44,242 | 43,907 | 42,750 | 43,281 | 42,503 | |||||||||||||||||||
Tier 1 leverage ratio |
Consolidated | 10.24 | % | 10.25 | % | 9.80 | % | 9.41 | % | 10.54 | % | |||||||||||||
Bank | 7.79 | 7.62 | 7.23 | 6.97 | 6.85 | |||||||||||||||||||
Tier 1 risk-based capital ratio |
Consolidated | 12.37 | 12.14 | 12.04 | 11.55 | 12.82 | ||||||||||||||||||
Bank | 9.40 | 9.01 | 8.87 | 8.51 | 8.28 | |||||||||||||||||||
Total risk-based capital ratio |
Consolidated | 15.11 | 14.89 | 14.85 | 14.46 | 15.08 | ||||||||||||||||||
Bank | 13.54 | 13.17 | 13.11 | 12.82 | 12.69 |
58
59
2011 | 2010 | |||||||||||||||||||
Third | Second | First | Fourth | Third | ||||||||||||||||
Number of households |
1,073,708 | 1,042,424 | 1,015,951 | 993,272 | 980,167 | |||||||||||||||
Product Penetration by Number of
Services |
||||||||||||||||||||
1 Service |
4.4 | % | 4.5 | % | 4.9 | % | 5.3 | % | 5.5 | % | ||||||||||
2-3 Services |
22.8 | 24.2 | 24.6 | 25.3 | 26.0 | |||||||||||||||
4+ Services |
72.8 | 71.3 | 70.5 | 69.4 | 68.5 | |||||||||||||||
Total revenue (in millions) |
$ | 251.9 | $ | 260.0 | $ | 248.6 | $ | 240.3 | $ | 239.6 | ||||||||||
2011 | 2010 | |||||||||||||||||||
Third | Second | First | Fourth | Third | ||||||||||||||||
Commercial Relationships |
135,826 | 133,165 | 130,240 | 127,596 | 126,569 | |||||||||||||||
Product Penetration by Number of
Services |
||||||||||||||||||||
1 Service |
29.7 | % | 30.7 | % | 32.1 | % | 32.9 | % | 33.8 | % | ||||||||||
2-3 Services |
41.1 | 42.6 | 42.5 | 42.9 | 43.1 | |||||||||||||||
4+ Services |
29.2 | 26.7 | 25.4 | 24.2 | 23.1 | |||||||||||||||
Total revenue (in millions) |
$ | 175.5 | $ | 166.6 | $ | 157.7 | $ | 160.8 | $ | 151.9 | ||||||||||
60
Nine Months Ended | ||||||||
September 30, | ||||||||
(dollar amounts in thousands) | 2011 | 2010 | ||||||
Retail and Business Banking |
$ | 139,245 | $ | 76,393 | ||||
Regional and Commercial Banking |
69,744 | 41,138 | ||||||
AFCRE |
151,968 | (7,060 | ) | |||||
WGH |
18,115 | 38,764 | ||||||
Treasury/Other |
36,683 | 40,212 | ||||||
Total net income |
$ | 415,755 | $ | 189,447 | ||||
61
Nine Months Ended September 30, 2011 | ||||||||||||||||||||||||
Regional and | ||||||||||||||||||||||||
Retail and | Commercial | Treasury / | ||||||||||||||||||||||
(dollar amounts in millions) | Business Banking | Banking | AFCRE | WGH | Other | TOTAL | ||||||||||||||||||
Average Loans/Leases |
||||||||||||||||||||||||
Commercial and industrial |
$ | 3,039 | $ | 7,763 | $ | 1,739 | $ | 765 | $ | 81 | $ | 13,387 | ||||||||||||
Commercial real estate |
442 | 347 | 5,325 | 174 | | 6,288 | ||||||||||||||||||
Total commercial |
3,481 | 8,110 | 7,064 | 939 | 81 | 19,675 | ||||||||||||||||||
Automobile |
| | 5,957 | | 1 | 5,958 | ||||||||||||||||||
Home equity |
7,043 | 12 | 1 | 791 | 22 | 7,869 | ||||||||||||||||||
Residential mortgage |
1,032 | 5 | | 3,566 | 4 | 4,607 | ||||||||||||||||||
Other consumer |
397 | 5 | 128 | 42 | (33 | ) | 539 | |||||||||||||||||
Total consumer |
8,472 | 22 | 6,086 | 4,399 | (6 | ) | 18,973 | |||||||||||||||||
Total loans and leases |
$ | 11,953 | $ | 8,132 | $ | 13,150 | $ | 5,338 | $ | 75 | $ | 38,648 | ||||||||||||
Average Deposits |
||||||||||||||||||||||||
Demand deposits
noninterest-bearing |
$ | 3,748 | $ | 2,059 | $ | 421 | $ | 1,565 | $ | 165 | $ | 7,958 | ||||||||||||
Demand deposits interest-bearing |
4,459 | 94 | 44 | 897 | 5 | 5,499 | ||||||||||||||||||
Money market deposits |
7,923 | 1,273 | 248 | 3,784 | 2 | 13,230 | ||||||||||||||||||
Savings and other domestic deposits |
4,579 | 13 | 13 | 140 | (1 | ) | 4,744 | |||||||||||||||||
Core certificates of deposit |
7,835 | 28 | 3 | 146 | 5 | 8,017 | ||||||||||||||||||
Total core deposits |
28,544 | 3,467 | 729 | 6,532 | 176 | 39,448 | ||||||||||||||||||
Other deposits |
190 | 217 | 53 | 1,171 | 655 | 2,286 | ||||||||||||||||||
Total deposits |
$ | 28,734 | $ | 3,684 | $ | 782 | $ | 7,703 | $ | 831 | $ | 41,734 | ||||||||||||
62
Nine Months Ended September 30, | Change | |||||||||||||||
(dollar amounts in thousands unless otherwise noted) | 2011 | 2010 | Amount | Percent | ||||||||||||
Net interest income |
$ | 702,666 | $ | 637,863 | $ | 64,803 | 10 | % | ||||||||
Provision for credit losses |
94,825 | 150,320 | (55,495 | ) | (37 | ) | ||||||||||
Noninterest income |
311,598 | 300,444 | 11,154 | 4 | ||||||||||||
Noninterest expense |
705,216 | 670,458 | 34,758 | 5 | ||||||||||||
Provision for income taxes |
74,978 | 41,136 | 33,842 | 82 | ||||||||||||
Net income |
$ | 139,245 | $ | 76,393 | $ | 62,852 | 82 | % | ||||||||
Number of employees (full-time equivalent) |
5,649 | 5,421 | 228 | 4 | % | |||||||||||
Total average assets (in millions) |
$ | 13,345 | $ | 13,165 | $ | 180 | 1 | |||||||||
Total average loans/leases (in millions) |
11,953 | 11,801 | 152 | 1 | ||||||||||||
Total average deposits (in millions) |
28,734 | 28,615 | 119 | | ||||||||||||
Net interest margin |
3.25 | % | 2.96 | % | 0.29 | 10 | ||||||||||
NCOs |
$ | 125,360 | $ | 239,083 | $ | (113,723 | ) | (48 | ) | |||||||
NCOs as a % of average loans and leases |
1.40 | % | 2.70 | % | (1.30 | ) | (48 | ) | ||||||||
Return on average common equity |
13.1 | 7.1 | 6.0 | 85 |
| $64.8 million, or 10%, increase in net interest income. |
| $55.5 million, or 37%, decline in the provision of credit losses. |
| $34.8 million, or 5%, increase in noninterest expense. |
| $0.2 billion, or 1%, increase in total average loans and leases. |
| 27 basis point increase in our deposit spread. |
63
| $9.9 million of lower equity funding related to lower rate environment. |
| $266 million, or 4%, increase in the consumer portfolio. |
| $102 million, or 3%, increase in our C&I (Business Banking) portfolio. |
| $149 million, or 13%, decrease in the residential portfolio reflecting the continued strategy of originating residential real estate for sale and not to hold in the portfolio. |
| $143 million increase in sales of SBA loans involving $13.7 million in additional gains. |
| $95 million, or 18%, decrease in the CRE portfolio reflecting our commitment to reduce exposure to CRE loans. |
| $0.6 billion, or 8%, increase in money market deposits. |
| $0.5 billion, or 16%, increase in noninterest-bearing demand deposits. |
| $0.3 billion, or 7%, increase in interest-bearing demand deposits. |
| $1.3 billion, or 15% decrease in core certificates of deposit. |
| $92.2 million, or 49%, decrease in consumer NCOs and a $21.6 million, or 42%, decrease in commercial NCOs. Expressed as an annualized percentage of related average balance, total NCOs decreased to 1.40% in the first nine-month period of 2011 from 2.70% in the year-ago period. The overall decline in NCOs was the result of improved credit quality of the portfolio. |
| $24.9 million, or 122%, increase in other income, which is primarily related to gains on sale of SBA loans and loan fees. |
| $11.7 million, or 15%, increase in electronic banking income, which reflected higher activation rates on new and existing cards coupled with higher transaction volumes. |
| $2.5 million, or 6%, increase in fee sharing income due to an increase in brokerage income driven by increased sales in structured investment products. |
| $28.5 million, or 17%, decrease in deposit service charge income due to an amendment to Reg E relating to certain overdraft fees and the launch of Huntingtons 24-Hour Grace® feature on all consumer checking accounts in September 2010. |
64
| $20.0 million, or 10%, increase in personnel costs, which represent a 4% increase in full-time equivalent employees in support of strategic initiatives, such as the introduction of the in-store branches during the 2010 fourth quarter and the first nine-month period of 2011, as well as expanded Saturday hours in traditional branches. |
| $6.7 million, or 2%, increase in other expenses, primarily due to a $4.0 million increase in services expense related to the increase in debit card processes and conversion expenses, $3.7 million increase in Building and Equipment associated with the rebrand and refurbishment effort of the branch and ATM network, and a $3.3 million increase in FDIC expense due to higher balances. This was offset by a $2.9 million decrease in OREO loss expenses. |
| $8.1 million, or 20%, increase in marketing expenses, which primarily reflected a greater focus on direct mail and advertising. Our brand advertising did not start until June 2010; therefore 2011 is a more normalized run rate. |
65
Nine Months Ended September 30, | Change | |||||||||||||||
(dollar amounts in thousands unless otherwise noted) | 2011 | 2010 | Amount | Percent | ||||||||||||
Net interest income |
$ | 178,787 | $ | 155,686 | $ | 23,101 | 15 | % | ||||||||
Provision for credit losses |
23,957 | 57,607 | (33,650 | ) | (58 | ) | ||||||||||
Noninterest income |
94,657 | 80,667 | 13,990 | 17 | ||||||||||||
Noninterest expense |
142,189 | 115,457 | 26,732 | 23 | ||||||||||||
Provision for income taxes |
37,554 | 22,151 | 15,403 | 70 | ||||||||||||
Net income |
$ | 69,744 | $ | 41,138 | $ | 28,606 | 70 | % | ||||||||
Number of employees (full-time equivalent) |
662 | 516 | 146 | 28 | % | |||||||||||
Total average assets (in millions) |
$ | 9,062 | $ | 8,127 | $ | 935 | 12 | |||||||||
Total average loans/leases (in millions) |
8,132 | 7,333 | 799 | 11 | ||||||||||||
Total average deposits (in millions) |
3,684 | 3,074 | 610 | 20 | ||||||||||||
Net interest margin |
2.95 | % | 2.83 | % | 0.12 | 4 | ||||||||||
NCOs |
$ | 38,619 | $ | 28,415 | $ | 10,204 | 36 | |||||||||
NCOs as a % of average loans and leases |
0.63 | % | 0.52 | % | 0.11 | 21 | ||||||||||
Return on average common equity |
13.2 | 8.2 | 5.0 | 61 |
| $23.1 million, or 15%, increase in net interest income. |
| $14.0 million, or 17%, increase in noninterest income. |
| $33.7 million, or 58%, decline in the provision of credit losses. |
| $26.7 million, or 23%, increase in noninterest expense, due to our strategic initiatives investments. |
66
| $0.8 billion, or 11%, increase in total average loans and leases. |
| $0.7 billion, or 24%, increase in average core deposits. |
| 12 basis point increase in the net interest margin due to a 46 basis point increase in the commercial loan spread. The commercial loan spread increase reflected lower cost of funds on our renewals. In addition, as the liquidity position of the Bank improved in 2010, the liquidity premium was lowered for new and renewed loans. |
| $0.4 billion, or 10%, increase in the core middle market loan portfolio average balance. The majority of this growth was due to marketing efforts and community development within our Michigan and Cleveland markets. |
| $0.4 billion, or 62%, increase in the large corporate portfolio average balance due to establishing relationships with targeted prospects within our footprint. |
| $0.2 billion, or 20%, increase in the equipment finance portfolio average balance which reflected our focus on developing vertical strategies in business aircraft, rail industry, lender finance and syndications. |
| $0.7 billion, or 24%, increase in average core deposits reflected a $0.5 billion increase in average money market deposits. |
| Strategic initiatives to deepen customer relationships, new and innovative product offerings, pricing discipline, and sales and retention initiatives. |
| Targeted money market promotions and sales campaigns for loans and other products. They served as an effective door opener to drive success in ultimately obtaining operating accounts supported with treasury management solutions to promote customer retention. |
| Best practices from each region were shared and institutionalized. |
| A money desk was created to assist commercial bankers with tailored solutions for customers having large dollar depository needs. This additional support and expertise provided additional value and helped our bankers win relationships and encouraged their expanded prospecting efforts. |
| Improved credit quality of the portfolio. |
| $10.2 million increase in NCOs. Expressed as a percentage of related average balance, NCOs increased to 0.63% in the first nine-month period of 2011 from 0.52% in the year-ago period. The increase in NCOs was the result of proactive treatment of problem credits in the portfolio. |
| $13.7 million, or 35%, increase in other income resulting primarily from increased sales of customer interest rate derivatives. |
| $4.4 million, or 216%, increase in brokerage income primarily due to the transfer of our institutional sales business to our business segment from WGH during the nine-month period of 2011. |
| $3.4 million, or 85%, increase in capital markets income resulting from strategic investments made over the last year in these types of products and services. |
| $2.1 million, or 6%, decrease in deposit service charge income resulting primarily from completed strategic exits. |
| $1.9 million, or 46%, decrease in operating lease income as lease originations were structured as direct finance leases beginning in the 2009 second quarter. |
67
| $22.0 million, or 48%, increase in personnel costs, which represent a 28% increase in FTE employees. This increase in personnel is attributable to our strategic investments in our core footprint markets, vertical strategies, and product capabilities. |
| $6.1 million, or 9%, increase in other expenses, which reflect expanded marketing efforts and community development. |
| $1.4 million, or 42%, decrease in operating lease expense. |
68
Nine Months Ended September 30, | Change | |||||||||||||||
(dollar amounts in thousands unless otherwise noted) | 2011 | 2010 | Amount | Percent | ||||||||||||
Net interest income |
$ | 271,510 | $ | 247,319 | $ | 24,191 | 10 | % | ||||||||
Provision for credit losses |
(30,050 | ) | 202,440 | (232,490 | ) | 115 | ||||||||||
Noninterest income |
57,886 | 58,625 | (739 | ) | (1 | ) | ||||||||||
Noninterest expense |
125,649 | 114,366 | 11,283 | 10 | ||||||||||||
Provision (benefit) for income taxes |
81,829 | (3,802 | ) | 85,631 | N.R. | |||||||||||
Net income (loss) |
$ | 151,968 | $ | (7,060 | ) | $ | 159,028 | N.R. | % | |||||||
Number of employees (full-time equivalent) |
273 | 267 | 6 | 2 | % | |||||||||||
Total average assets (in millions) |
$ | 13,157 | $ | 12,803 | $ | 354 | 3 | |||||||||
Total average loans/leases (in millions) |
13,150 | 12,931 | 219 | 2 | ||||||||||||
Total average deposits (in millions) |
782 | 673 | 109 | 16 | ||||||||||||
Net interest margin |
2.70 | % | 2.50 | % | 0.20 | 8 | ||||||||||
NCOs |
$ | 124,877 | $ | 291,565 | $ | (166,688 | ) | (57 | ) | |||||||
NCOs as a % of average loans and leases |
1.27 | % | 3.01 | % | (1.74 | ) | (58 | ) | ||||||||
Return on average common equity |
29.3 | (1.1 | ) | 30.4 | N.R. |
| $24.2 million, or 10%, increase in net interest income. |
| $232.5 million, or 115%, decline in the provision of credit losses. |
| $11.3 million, or 10%, increase in noninterest expense. |
| 20 basis point increase in the net interest margin. This increase primarily reflected the continuation of a risk-based pricing strategy in the CRE portfolio that began in early 2009 and has resulted in improved spreads on CRE loan renewals as well as new business originated. |
| $0.2 billion, or 2%, increase in total average loans and leases. |
69
| $1.3 billion, or 27%, increase in the average consumer automobile portfolio. This increase resulted from continued strong origination levels. Total production for the first nine months of 2011 was $2.8 billion compared to $2.6 billion for the year-ago period. Contributing to this increase was the positive impact of our expansion into eastern Pennsylvania and New England. |
| $1.0 billion, or 13%, decrease in our average commercial portfolio. This decrease primarily reflected a $1.1 billion decrease in CRE loans offset, in part, by a $0.3 billion increase in automobile floor plan loans. The decline in CRE loans continued to reflect our managed reduction of this overall exposure, particularly in the noncore portfolio. |
| $92 million, or 14%, increase in average core deposits reflecting our commitment to strengthening relationships with core customers and prospects as well as new commercial automobile dealer relationships developed in 2010 and 2011. |
| $157.3 million, or 58%, decrease in commercial NCOs. Expressed as a percentage of related average balances, commercial NCOs decreased to 1.27% in the first nine months of 2011 from 3.01% in the year-ago period. |
| $8.7 million, or 45%, decrease in indirect automobile-related NCOs. As a percentage of related average balances, indirect automobile-related NCOs were 0.24% in the first nine months of 2011 compared to 0.56% in the year-ago period. This decrease reflected our consistent focus on high credit quality of originations combined with a very strong resale market for used vehicles. |
| A reduction in required reserve levels, primarily due to lower levels of commercial NALs which totaled $255 million at September 30, 2011, down 50% compared to September 30, 2010. |
| $13.5 million, or 38%, decrease in operating lease income resulting from the continued runoff of that portfolio as we exited that business at the end of 2008. |
| $12.4 million, or 59%, increase in other income which reflected a $15.5 million gain on securitization and sale of $1.0 billion of indirect auto loans, partially offset by a $3.1 million decrease in net gains resulting from valuation adjustments of certain loans and associated notes payable that are recorded at fair value. |
| $19.0 million, or 28%, increase in other expenses, primarily reflecting a $15.8 million increase in allocated costs associated with higher production and other activity levels. In addition, other expense in the year-ago period was reduced by $3.7 million of OREO-related gains. There were no comparable OREO gains in the current nine-month period. |
| $4.6 million, or 26%, increase in personnel costs, which primarily related to higher origination related activities, including automobile lending market expansion and additions to the CRE team to support our core CRE customers. |
| $12.2 million, or 42%, decrease in operating lease expense resulting from the continued runoff of that portfolio. |
70
Nine Months Ended September 30, | Change | |||||||||||||||
(dollar amounts in thousands unless otherwise noted) | 2011 | 2010 | Amount | Percent | ||||||||||||
Net interest income |
$ | 145,614 | $ | 120,511 | $ | 25,103 | 21 | % | ||||||||
Provision for credit losses |
40,036 | 45,700 | (5,664 | ) | (12 | ) | ||||||||||
Noninterest income |
187,443 | 246,704 | (59,261 | ) | (24 | ) | ||||||||||
Noninterest expense |
265,151 | 261,876 | 3,275 | 1 | ||||||||||||
Provision for income taxes |
9,755 | 20,875 | (11,120 | ) | (53 | ) | ||||||||||
Net income |
$ | 18,115 | $ | 38,764 | $ | (20,649 | ) | (53 | )% | |||||||
Number of employees (full-time equivalent) |
2,041 | 2,223 | (182 | ) | (8 | )% | ||||||||||
Total average assets (in millions) |
$ | 6,633 | $ | 6,161 | $ | 472 | 8 | |||||||||
Total average loans/leases (in millions) |
5,338 | 4,752 | 586 | 12 | ||||||||||||
Total average deposits (in millions) |
7,703 | 6,874 | 829 | 12 | ||||||||||||
Net interest margin |
2.17 | % | 2.22 | % | (0.05 | ) | (2 | ) | ||||||||
NCOs |
$ | 48,002 | $ | 51,789 | $ | (3,787 | ) | (7 | ) | |||||||
NCOs as a % of average loans and leases |
1.20 | % | 1.45 | % | (0.25 | ) | (17 | ) | ||||||||
Return on average common equity |
3.6 | 8.7 | (5.1 | ) | (59 | ) | ||||||||||
Mortgage banking origination volume (in millions) |
$ | 2,797 | $ | 3,649 | $ | (852 | ) | (23 | ) | |||||||
Noninterest income shared with other business segments(1) |
$ | 31,295 | $ | 31,363 | $ | (68 | ) | | ||||||||
Total assets under management (in billions) eop |
14.4 | 13.6 | 0.8 | 6 | ||||||||||||
Total trust assets (in billions) eop |
58.6 | 58.9 | (0.3 | ) | (1 | ) |
(1) | Amount is not included in noninterest income reported above. | |
eop End of Period. |
| $59.3 million, or 24%, decrease in noninterest income. |
| $25.1 million, or 21%, increase in net interest income. |
| $5.7 million, or 12%, decrease in the provision for credit losses. |
71
| $0.6 billion, or 12%, increase in average total loans and leases. |
| $0.8 billion, or 12%, increase in average total deposits. |
| 5 basis point decrease in the net interest margin. |
| $0.5 billion, or 15%, increase in the residential mortgage portfolio driven by historically low interest rates. |
| $0.9 billion, or 30%, increase in money market deposits. |
| $0.4 billion, or 32%, decrease in interest-bearing demand deposits. |
| $3.8 million, or 7%, decrease in NCOs. Expressed as an annualized percentage of related average balance, NCOs decreased to 1.20% in the first nine-month period of 2011 from 1.45% in the year-ago period. The overall decline in NCOs was the result of improved credit quality of the portfolio. |
| $64.6 million, or 60%, decrease in mortgage banking income due primarily to a $46.2 million decline in the net impact of MSR hedging. |
| $1.7 million, or 19%, decrease in insurance-related income which reflected lower sales of wealth transfer products in 2011. |
| $7.4 million, or 9%, increase in trust service income reflecting a $0.8 billion increase in assets under management and growth in new accounts. |
| $2.9 million, or 9%, increase in brokerage income. Brokerage commissions increased $8.3 million, or 18%. The increase in retail brokerage commissions reflected improved sales of structured investment products. Institutional brokerage was transferred to the Commercial segment and the amount reported in WGH declined by $3.0 million. The first nine-month period of 2011 also included $2.4 million of higher commissions shared with other segments. |
| $8.1 million, or 6%, increase in personnel costs, which reflected higher benefit-related expenses as well as higher sales commissions. |
| $4.8 million, or 4%, decrease in other expenses, which reflected primarily lower expenses allocated from other segments. |
72
73
| Level 1 quoted prices (unadjusted) for identical assets or liabilities in active markets. |
| Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices of identical or similar assets or liabilities in markets that are not active, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. |
| Level 3 inputs that are unobservable and significant to the fair value measurement. Financial instruments are considered Level 3 when values are determined using pricing models, discounted cash flow methodologies, or similar techniques, and at least one significant model assumption or input is unobservable. |
74
Nine Months Ended | ||||||||
September 30, | ||||||||
(dollar amounts in millions) | 2011 | 2010 | ||||||
Total home equity net charge-offs (recoveries): |
||||||||
Franklin |
$ | | $ | 20.7 | ||||
Non-Franklin |
78.4 | 89.5 | ||||||
Total |
$ | 78.4 | $ | 110.2 | ||||
Total home equity net charge-offs annualized percentages: |
||||||||
Total |
1.33 | % | 1.95 | % | ||||
Non-Franklin |
1.33 | 1.59 | ||||||
Total residential mortgage net charge-offs (recoveries): |
||||||||
Franklin |
$ | (2.5 | ) | $ | 75.7 | |||
Non-Franklin |
49.4 | 50.4 | ||||||
Total |
$ | 46.9 | $ | 126.1 | ||||
Total residential mortgage net charge-offs annualized percentages: |
||||||||
Total |
1.36 | % | 3.74 | % | ||||
Non-Franklin |
1.43 | 1.58 | ||||||
Total consumer net charge-offs (recoveries): |
||||||||
Franklin |
$ | (2.5 | ) | $ | 96.6 | |||
Non-Franklin |
157.2 | 179.1 | ||||||
Total |
$ | 154.7 | $ | 275.7 | ||||
Total consumer net charge-offs annualized percentages: |
||||||||
Total |
1.09 | % | 2.11 | % | ||||
Non-Franklin |
1.11 | 1.39 | ||||||
Total net charge-offs (recoveries): |
||||||||
Franklin |
$ | (2.5 | ) | $ | 91.5 | |||
Non-Franklin |
355.7 | 610.7 | ||||||
Total |
$ | 353.2 | $ | 702.2 | ||||
Total net charge-offs annualized percentages: |
||||||||
Total |
1.22 | % | 2.52 | % | ||||
Non-Franklin |
1.23 | 2.21 |
75
Item 1: | Financial Statements |
2011 | 2010 | |||||||||||
(dollar amounts in thousands, except number of shares) | September 30, | December 31, | September 30, | |||||||||
Assets |
||||||||||||
Cash and due from banks |
$ | 2,190,276 | $ | 847,888 | $ | 1,139,226 | ||||||
Interest-bearing deposits in banks |
105,454 | 135,038 | 274,240 | |||||||||
Trading account securities |
85,711 | 185,404 | 138,677 | |||||||||
Loans held for sale
(includes $331,883, $754,117 and $699,001 respectively, measured at fair value) (1) |
334,606 | 793,285 | 744,439 | |||||||||
Available-for-sale and other securities |
8,713,530 | 9,895,244 | 9,723,558 | |||||||||
Held-to-maturity securities |
658,250 | | | |||||||||
Loans and leases (includes $344,529, $522,717 and $590,223 respectively, measured at fair value) (2) |
39,011,894 | 38,106,507 | 37,500,587 | |||||||||
Allowance for loan and lease losses |
(1,019,710 | ) | (1,249,008 | ) | (1,336,352 | ) | ||||||
Net loans and leases |
37,992,184 | 36,857,499 | 36,164,235 | |||||||||
Bank owned life insurance |
1,494,251 | 1,458,224 | 1,450,335 | |||||||||
Premises and equipment |
543,324 | 491,602 | 489,349 | |||||||||
Goodwill |
444,268 | 444,268 | 444,268 | |||||||||
Other intangible assets |
188,477 | 228,620 | 243,666 | |||||||||
Accrued income and other assets |
2,228,376 | 2,482,570 | 2,434,783 | |||||||||
Total assets |
$ | 54,978,707 | $ | 53,819,642 | $ | 53,246,776 | ||||||
Liabilities and shareholders equity |
||||||||||||
Liabilities |
||||||||||||
Deposits |
$ | 43,219,727 | $ | 41,853,898 | $ | 41,072,371 | ||||||
Short-term borrowings |
2,224,986 | 2,040,732 | 1,859,134 | |||||||||
Federal Home Loan Bank advances |
14,157 | 172,519 | 23,643 | |||||||||
Other long-term debt (includes $173,045, $356,089 and $422,294 respectively, measured at fair value) (2) |
1,421,518 | 2,144,092 | 2,393,071 | |||||||||
Subordinated notes |
1,537,293 | 1,497,216 | 1,202,568 | |||||||||
Accrued expenses and other liabilities |
1,160,547 | 1,130,643 | 1,128,586 | |||||||||
Total liabilities |
49,578,228 | 48,839,100 | 47,679,373 | |||||||||
Shareholders equity |
||||||||||||
Preferred stock authorized 6,617,808 shares; |
||||||||||||
5.00% Series B Non-voting, Cumulative Preferred Stock, par value
of $0.01 and liquidation value per share of $1,000 |
| | 1,337,749 | |||||||||
8.50% Series A Non-cumulative Perpetual Convertible Preferred
Stock, par value of $0.01 and liquidation value per share of $1,000 |
362,507 | 362,507 | 362,507 | |||||||||
Common stock |
8,652 | 8,642 | 7,180 | |||||||||
Capital surplus |
7,594,090 | 7,630,093 | 6,743,724 | |||||||||
Less treasury shares, at cost |
(10,161 | ) | (8,771 | ) | (8,969 | ) | ||||||
Accumulated other comprehensive loss |
(80,404 | ) | (197,496 | ) | (28,396 | ) | ||||||
Retained (deficit) earnings |
(2,474,205 | ) | (2,814,433 | ) | (2,846,392 | ) | ||||||
Total shareholders equity |
5,400,479 | 4,980,542 | 5,567,403 | |||||||||
Total liabilities and shareholders equity |
$ | 54,978,707 | $ | 53,819,642 | $ | 53,246,776 | ||||||
Common shares authorized (par value of $0.01) |
1,500,000,000 | 1,500,000,000 | 1,500,000,000 | |||||||||
Common shares issued |
865,204,511 | 864,195,369 | 718,015,276 | |||||||||
Common shares outstanding |
864,074,883 | 863,319,435 | 717,132,197 | |||||||||
Treasury shares outstanding |
1,129,628 | 875,934 | 883,079 | |||||||||
Preferred shares issued |
1,967,071 | 1,967,071 | 1,967,071 | |||||||||
Preferred shares outstanding |
362,507 | 362,507 | 1,760,578 |
(1) | Amounts represent loans for which Huntington has elected the fair value option. | |
(2) | Amounts represent certain assets and liabilities of a consolidated VIE for which Huntington has elected the fair value option. |
76
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(dollar amounts in thousands, except per share amounts) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Interest and fee income |
||||||||||||||||
Loans and leases |
||||||||||||||||
Taxable |
$ | 430,032 | $ | 458,792 | $ | 1,292,259 | $ | 1,405,181 | ||||||||
Tax-exempt |
2,756 | 1,806 | 8,487 | 3,821 | ||||||||||||
Available-for-sale and other securities |
||||||||||||||||
Taxable |
47,947 | 61,438 | 160,201 | 180,039 | ||||||||||||
Tax-exempt |
2,321 | 2,725 | 7,517 | 8,675 | ||||||||||||
Held-to-maturity securities taxable |
5,059 | | 6,346 | | ||||||||||||
Other |
2,881 | 9,908 | 10,200 | 19,385 | ||||||||||||
Total interest income |
490,996 | 534,669 | 1,485,010 | 1,617,101 | ||||||||||||
Interest expense |
||||||||||||||||
Deposits |
64,985 | 103,380 | 209,085 | 346,504 | ||||||||||||
Short-term borrowings |
932 | 945 | 2,737 | 1,936 | ||||||||||||
Federal Home Loan Bank advances |
234 | 601 | 669 | 2,848 | ||||||||||||
Subordinated notes and other long-term debt |
18,367 | 19,781 | 58,374 | 62,302 | ||||||||||||
Total interest expense |
84,518 | 124,707 | 270,865 | 413,590 | ||||||||||||
Net interest income |
406,478 | 409,962 | 1,214,145 | 1,203,511 | ||||||||||||
Provision for credit losses |
43,586 | 119,160 | 128,768 | 547,574 | ||||||||||||
Net interest income after provision for credit losses |
362,892 | 290,802 | 1,085,377 | 655,937 | ||||||||||||
Service charges on deposit accounts |
65,184 | 65,932 | 180,183 | 211,205 | ||||||||||||
Mortgage banking income |
12,791 | 52,045 | 59,310 | 122,613 | ||||||||||||
Trust services income |
29,473 | 26,997 | 90,607 | 83,161 | ||||||||||||
Electronic banking income |
32,714 | 28,090 | 93,228 | 81,334 | ||||||||||||
Insurance income |
17,220 | 19,801 | 51,564 | 56,735 | ||||||||||||
Brokerage income |
20,349 | 16,575 | 61,679 | 51,901 | ||||||||||||
Bank owned life insurance income |
15,644 | 14,091 | 48,065 | 44,953 | ||||||||||||
Automobile operating lease income |
5,890 | 11,356 | 22,044 | 35,501 | ||||||||||||
Net gains on sales of investment securities |
14 | 2,421 | 5,908 | 11,831 | ||||||||||||
Impairment losses on investment securities: |
||||||||||||||||
Impairment recoveries (losses) on investment securities |
(5,726 | ) | 27,775 | 5,368 | 24,568 | |||||||||||
Noncredit-related (recoveries) losses on securities not expected
to be sold (recognized in other comprehensive income) |
4,362 | (30,492 | ) | (11,079 | ) | (36,570 | ) | |||||||||
Net impairment losses on investment securities |
(1,364 | ) | (2,717 | ) | (5,711 | ) | (12,002 | ) | ||||||||
Other income |
60,644 | 32,552 | 144,394 | 90,406 | ||||||||||||
Total noninterest income |
258,559 | 267,143 | 751,271 | 777,638 | ||||||||||||
Personnel costs |
226,835 | 208,272 | 664,433 | 586,789 | ||||||||||||
Outside data processing and other services |
49,602 | 38,553 | 133,773 | 118,305 | ||||||||||||
Net occupancy |
26,967 | 26,718 | 82,288 | 81,192 | ||||||||||||
Deposit and other insurance expense |
17,492 | 23,406 | 59,211 | 74,228 | ||||||||||||
Professional services |
20,281 | 20,672 | 53,826 | 67,757 | ||||||||||||
Equipment |
22,262 | 21,651 | 66,660 | 63,860 | ||||||||||||
Marketing |
22,251 | 20,921 | 59,248 | 49,756 | ||||||||||||
Amortization of intangibles |
13,387 | 15,145 | 40,143 | 45,432 | ||||||||||||
OREO and foreclosure expense |
4,668 | 12,047 | 12,997 | 28,547 | ||||||||||||
Automobile operating lease expense |
4,386 | 9,159 | 16,656 | 28,892 | ||||||||||||
Other expense |
30,987 | 30,765 | 108,991 | 94,455 | ||||||||||||
Total noninterest expense |
439,118 | 427,309 | 1,298,226 | 1,239,213 | ||||||||||||
Income before income taxes |
182,333 | 130,636 | 538,422 | 194,362 | ||||||||||||
Provision for income taxes |
38,942 | 29,690 | 122,667 | 4,915 | ||||||||||||
Net income |
143,391 | 100,946 | 415,755 | 189,447 | ||||||||||||
Dividends on preferred shares |
7,703 | 29,495 | 23,110 | 88,278 | ||||||||||||
Net income applicable to common shares |
$ | 135,688 | $ | 71,451 | $ | 392,645 | $ | 101,169 | ||||||||
Average common shares basic |
863,911 | 716,911 | 863,542 | 716,604 | ||||||||||||
Average common shares diluted |
867,633 | 719,567 | 867,446 | 719,182 | ||||||||||||
Per common share: |
||||||||||||||||
Net income basic |
$ | 0.16 | $ | 0.10 | $ | 0.45 | $ | 0.14 | ||||||||
Net income diluted |
0.16 | 0.10 | 0.45 | 0.14 | ||||||||||||
Cash dividends declared |
0.04 | 0.01 | 0.06 | 0.03 |
77
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Other | Retained | ||||||||||||||||||||||||||||||||||||||||||||||
Series B | Series A | Common Stock | Capital | Treasury Stock | Comprehensive | Earnings | ||||||||||||||||||||||||||||||||||||||||||
(All amounts in thousands, except for per share amounts) | Shares | Amount | Shares | Amount | Shares | Amount | Surplus | Shares | Amount | Loss | (Deficit) | Total | ||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2010 |
||||||||||||||||||||||||||||||||||||||||||||||||
Balance, beginning of period |
1,398 | $ | 1,325,008 | 363 | $ | 362,507 | 716,741 | $ | 7,167 | $ | 6,731,796 | (980 | ) | $ | (11,465 | ) | $ | (156,985 | ) | $ | (2,922,026 | ) | $ | 5,336,002 | ||||||||||||||||||||||||
Cumulative effect of change in accounting
principle for consolidation of variable
interest entities, net of tax of
$3,980 |
(4,249 | ) | (3,462 | ) | (7,711 | ) | ||||||||||||||||||||||||||||||||||||||||||
Balance, beginning of period as adjusted |
1,398 | $ | 1,325,008 | 363 | $ | 362,507 | 716,741 | $ | 7,167 | $ | 6,731,796 | (980 | ) | $ | (11,465 | ) | (161,234 | ) | $ | (2,925,488 | ) | $ | 5,328,291 | |||||||||||||||||||||||||
Comprehensive Income: |
||||||||||||||||||||||||||||||||||||||||||||||||
Net income |
189,447 | 189,447 | ||||||||||||||||||||||||||||||||||||||||||||||
Noncredit-related impairment recoveries
(losses) on debt securities not expected
to be sold |
23,771 | 23,771 | ||||||||||||||||||||||||||||||||||||||||||||||
Unrealized net gains (losses) on
available-for-sale and other
securities
arising during the period, net of
reclassification for net realized
gains |
88,428 | 88,428 | ||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gains (losses) on cash flow
hedging derivatives |
17,141 | 17,141 | ||||||||||||||||||||||||||||||||||||||||||||||
Change in accumulated unrealized
losses for pension and other post-
retirement obligations |
3,498 | 3,498 | ||||||||||||||||||||||||||||||||||||||||||||||
Total comprehensive income |
322,285 | |||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock |
537 | 5 | 2,264 | 2,269 | ||||||||||||||||||||||||||||||||||||||||||||
Preferred Series B stock discount accretion |
12,741 | (12,741 | ) | | ||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared: |
||||||||||||||||||||||||||||||||||||||||||||||||
Common ($0.03 per share) |
(21,505 | ) | (21,505 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Preferred Series B ($37.50 per share) |
(52,427 | ) | (52,427 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Preferred Series A ($63.75 per share) |
(23,110 | ) | (23,110 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Recognition of the fair value of
share-based compensation |
3 | 11,410 | 11,413 | |||||||||||||||||||||||||||||||||||||||||||||
Other share-based compensation activity |
737 | 5 | 457 | (525 | ) | (63 | ) | |||||||||||||||||||||||||||||||||||||||||
Other |
(2,203 | ) | 97 | 2,496 | (43 | ) | 250 | |||||||||||||||||||||||||||||||||||||||||
Balance, end of period |
1,398 | $ | 1,337,749 | 363 | $ | 362,507 | 718,015 | $ | 7,180 | $ | 6,743,724 | (883 | ) | $ | (8,969 | ) | $ | (28,396 | ) | $ | (2,846,392 | ) | $ | 5,567,403 | ||||||||||||||||||||||||
Nine Months Ended September 30, 2011 |
||||||||||||||||||||||||||||||||||||||||||||||||
Balance, beginning of period |
| $ | | 363 | $ | 362,507 | 864,195 | $ | 8,642 | $ | 7,630,093 | (876 | ) | $ | (8,771 | ) | $ | (197,496 | ) | $ | (2,814,433 | ) | $ | 4,980,542 | ||||||||||||||||||||||||
Comprehensive Income: |
||||||||||||||||||||||||||||||||||||||||||||||||
Net income |
415,755 | 415,755 | ||||||||||||||||||||||||||||||||||||||||||||||
Noncredit-related impairment recoveries
(losses) on debt securities not expected
to be sold |
7,201 | 7,201 | ||||||||||||||||||||||||||||||||||||||||||||||
Unrealized net gains (losses) on
available-for-sale and other
securities
arising during the period, net of
reclassification for net realized
gains |
85,906 | 85,906 | ||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gains (losses) on cash flow
hedging derivatives |
16,183 | 16,183 | ||||||||||||||||||||||||||||||||||||||||||||||
Change in accumulated unrealized
losses for pension and other post-
retirement obligations |
7,802 | 7,802 | ||||||||||||||||||||||||||||||||||||||||||||||
Total comprehensive income |
532,847 | |||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of warrants convertible to
common stock |
(49,100 | ) | (49,100 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared: |
||||||||||||||||||||||||||||||||||||||||||||||||
Common ($0.06 per share) |
(51,869 | ) | (51,869 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Preferred Series A ($63.75 per share) |
(23,110 | ) | (23,110 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Recognition of the fair value of
share-based compensation |
13,986 | 13,986 | ||||||||||||||||||||||||||||||||||||||||||||||
Other share-based compensation activity |
1,010 | 10 | (552 | ) | (279 | ) | (821 | ) | ||||||||||||||||||||||||||||||||||||||||
Other |
(337 | ) | (254 | ) | (1,390 | ) | (269 | ) | (1,996 | ) | ||||||||||||||||||||||||||||||||||||||
Balance, end of period |
| $ | | 363 | $ | 362,507 | 865,205 | $ | 8,652 | $ | 7,594,090 | (1,130 | ) | $ | (10,161 | ) | $ | (80,404 | ) | $ | (2,474,205 | ) | $ | 5,400,479 | ||||||||||||||||||||||||
78
Nine Months Ended | ||||||||
September 30, | ||||||||
(dollar amounts in thousands) | 2011 | 2010 | ||||||
Operating activities |
||||||||
Net income |
$ | 415,755 | $ | 189,447 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Provision for credit losses |
128,768 | 547,574 | ||||||
Depreciation and amortization |
213,084 | 209,070 | ||||||
Change in current and deferred income taxes |
54,280 | 175,715 | ||||||
Net sales (purchases) of trading account securities |
99,693 | (55,020 | ) | |||||
Originations of loans held for sale |
(1,697,186 | ) | (2,468,265 | ) | ||||
Principal payments on and proceeds from loans held for sale |
2,121,284 | 2,213,303 | ||||||
Securities (gains) losses |
(197 | ) | 171 | |||||
Other, net |
51,233 | 54,121 | ||||||
Net cash provided by (used for) operating activities |
1,386,714 | 866,116 | ||||||
Investing activities |
||||||||
Increase (decrease) in interest bearing deposits in banks |
45,052 | 22,754 | ||||||
Proceeds from: |
||||||||
Maturities and calls of available-for-sale and other securities |
1,596,552 | 2,639,403 | ||||||
Maturities of held-to-maturity securities |
14,238 | | ||||||
Sales of available-for-sale and other securities |
2,804,769 | 3,120,777 | ||||||
Purchases of available-for-sale and other securities |
(3,578,931 | ) | (6,610,248 | ) | ||||
Purchases of held-to-maturity securities |
(204,188 | ) | | |||||
Net proceeds from sales of loans |
1,493,056 | 685,592 | ||||||
Net loan and lease activity, excluding sales |
(2,725,678 | ) | (1,744,418 | ) | ||||
Proceeds from sale of operating lease assets |
50,461 | 17,585 | ||||||
Purchases of premises and equipment |
(102,431 | ) | (45,951 | ) | ||||
Proceeds from sales of other real estate |
48,901 | 78,073 | ||||||
Other, net |
(59,763 | ) | 1,917 | |||||
Net cash provided by (used for) investing activities |
(617,962 | ) | (1,834,516 | ) | ||||
Financing activities |
||||||||
Increase (decrease) in deposits |
1,358,146 | 563,474 | ||||||
Increase (decrease) in short-term borrowings |
193,901 | 893,501 | ||||||
Maturity/redemption of subordinated notes |
(5,000 | ) | (83,870 | ) | ||||
Proceeds from Federal Home Loan Bank advances |
200,000 | 450,000 | ||||||
Maturity/redemption of Federal Home Loan Bank advances |
(358,509 | ) | (595,536 | ) | ||||
Maturity/redemption of long-term debt |
(714,942 | ) | (544,250 | ) | ||||
Repurchase of Warrant to the Treasury |
(49,100 | ) | | |||||
Dividends paid on preferred stock |
(23,110 | ) | (75,537 | ) | ||||
Dividends paid on common stock |
(27,042 | ) | (21,437 | ) | ||||
Other, net |
(708 | ) | (63 | ) | ||||
Net cash provided by (used for) financing activities |
573,636 | 586,282 | ||||||
Increase (decrease) in cash and cash equivalents |
1,342,388 | (382,118 | ) | |||||
Cash and cash equivalents at beginning of period |
847,888 | 1,521,344 | ||||||
Cash and cash equivalents at end of period |
$ | 2,190,276 | $ | 1,139,226 | ||||
Supplemental disclosures: |
||||||||
Income taxes paid (refunded) |
$ | 68,366 | $ | (148,518 | ) | |||
Interest paid |
276,915 | 435,272 | ||||||
Non-cash activities |
||||||||
Dividends accrued, paid in subsequent quarter |
40,742 | 23,373 |
79
80
September 30, | December 31, | September 30, | ||||||||||
(dollar amounts in thousands) | 2011 | 2010 | 2010 | |||||||||
Loans and leases: |
||||||||||||
Commercial and industrial |
$ | 13,938,885 | $ | 13,063,293 | $ | 12,424,529 | ||||||
Commercial real estate |
5,934,444 | 6,651,156 | 6,912,573 | |||||||||
Automobile |
5,558,415 | 5,614,711 | 5,385,196 | |||||||||
Home equity |
8,078,887 | 7,713,154 | 7,689,420 | |||||||||
Residential mortgage |
4,986,023 | 4,500,366 | 4,511,272 | |||||||||
Other consumer |
515,240 | 563,827 | 577,597 | |||||||||
Loans and leases |
39,011,894 | 38,106,507 | 37,500,587 | |||||||||
Allowance for loan and lease losses |
(1,019,710 | ) | (1,249,008 | ) | (1,336,352 | ) | ||||||
Net loans and leases |
$ | 37,992,184 | $ | 36,857,499 | $ | 36,164,235 | ||||||
81
Commercial | Commercial | Home | Residential | Other | ||||||||||||||||||||||||
(dollar amounts in thousands) | and Industrial | Real Estate | Automobile | Equity | Mortgage | Consumer | Total | |||||||||||||||||||||
Portfolio loans purchased during
the: |
||||||||||||||||||||||||||||
Three-month period
ended September 30,
2011 |
$ | | $ | | $ | 59,578 | (1) | $ | | $ | | $ | | $ | 59,578 | |||||||||||||
Nine-month period
ended September 30,
2011 |
| | 59,578 | (1) | | | | 59,578 | ||||||||||||||||||||
Portfolio loans sold or transferred
to loans held for sale during the: |
||||||||||||||||||||||||||||
Three-month period
ended September 30,
2011 |
48,530 | | 1,000,033 | | | | 1,048,563 | |||||||||||||||||||||
Nine-month period
ended September 30,
2011 |
204,012 | 56,123 | 1,000,033 | | 170,757 | | 1,430,925 |
(1) | Reflected the purchase of $59.6 million of automobile loans as a result of exercising a clean-up call option related to loans previously sold under Huntingtons automobile loan sale program. |
82
2011 | 2010 | |||||||
(dollar amounts in thousands) | September 30, | December 31, | ||||||
Commercial and industrial: |
||||||||
Owner occupied |
$ | 98,998 | $ | 138,822 | ||||
Other commercial and industrial |
110,634 | 207,898 | ||||||
Total commercial and industrial |
209,632 | 346,720 | ||||||
Commercial real estate: |
||||||||
Retail properties |
51,342 | 96,644 | ||||||
Multi family |
38,301 | 44,819 | ||||||
Office |
37,010 | 47,950 | ||||||
Industrial and warehouse |
49,102 | 39,770 | ||||||
Other commercial real estate |
81,331 | 134,509 | ||||||
Total commercial real estate |
257,086 | 363,692 | ||||||
Automobile |
| | ||||||
Home equity: |
||||||||
Secured by first-lien |
17,771 | 10,658 | ||||||
Secured by second-lien |
19,385 | 11,868 | ||||||
Residential mortgage |
61,129 | 45,010 | ||||||
Other consumer |
| | ||||||
Total nonaccrual loans |
$ | 565,003 | $ | 777,948 | ||||
83
September 30, 2011 | ||||||||||||||||||||||||||||
90 or more | ||||||||||||||||||||||||||||
Past Due | Total Loans | days past due | ||||||||||||||||||||||||||
(dollar amounts in thousands) | 30-59 Days | 60-89 Days | 90 or more days | Total | Current | and Leases | and accruing | |||||||||||||||||||||
Commercial and industrial: |
||||||||||||||||||||||||||||
Owner occupied |
$ | 16,165 | $ | 7,883 | $ | 63,265 | $ | 87,313 | $ | 3,890,718 | $ | 3,978,031 | $ | | ||||||||||||||
Other commercial and
industrial |
16,426 | 7,776 | 63,410 | 87,612 | 9,873,242 | 9,960,854 | | |||||||||||||||||||||
Total commercial and industrial |
$ | 32,591 | $ | 15,659 | $ | 126,675 | $ | 174,925 | $ | 13,763,960 | $ | 13,938,885 | $ | | ||||||||||||||
Commercial real estate: |
||||||||||||||||||||||||||||
Retail properties |
$ | 9,160 | $ | 8,919 | $ | 33,148 | $ | 51,227 | $ | 1,597,313 | $ | 1,648,540 | $ | | ||||||||||||||
Multi family |
7,884 | 1,181 | 27,229 | 36,294 | 968,020 | 1,004,314 | | |||||||||||||||||||||
Office |
1,252 | 706 | 31,729 | 33,687 | 977,554 | 1,011,241 | | |||||||||||||||||||||
Industrial and
warehouse |
2,775 | 1,175 | 25,384 | 29,334 | 704,663 | 733,997 | | |||||||||||||||||||||
Other commercial
real estate |
12,862 | 13,166 | 59,853 | 85,881 | 1,450,471 | 1,536,352 | | |||||||||||||||||||||
Total commercial real estate |
$ | 33,933 | $ | 25,147 | $ | 177,343 | $ | 236,423 | $ | 5,698,021 | $ | 5,934,444 | $ | | ||||||||||||||
Automobile |
$ | 38,866 | 9,699 | $ | 5,722 | $ | 54,287 | $ | 5,504,128 | $ | 5,558,415 | $ | 5,722 | |||||||||||||||
Home equity: |
||||||||||||||||||||||||||||
Secured by first-lien |
20,043 | 8,972 | 27,333 | 56,348 | 3,532,416 | 3,588,764 | 9,561 | |||||||||||||||||||||
Secured by
second-lien |
29,642 | 15,108 | 30,243 | 74,993 | 4,415,130 | 4,490,123 | 10,859 | |||||||||||||||||||||
Residential mortgage |
144,074 | 46,791 | 172,435 | 363,300 | 4,622,723 | 4,986,023 | 117,263 | (2) | ||||||||||||||||||||
Other consumer |
6,455 | 1,972 | 2,033 | 10,460 | 504,780 | 515,240 | 2,033 |
December 31, 2010 | ||||||||||||||||||||||||||||
90 or more | ||||||||||||||||||||||||||||
Past Due | Total Loans | days past due | ||||||||||||||||||||||||||
(dollar amounts in thousands) | 30-59 Days | 60-89 Days | 90 or more days | Total | Current | and Leases | and accruing | |||||||||||||||||||||
Commercial and industrial: |
||||||||||||||||||||||||||||
Owner occupied |
$ | 16,393 | $ | 9,084 | $ | 80,114 | $ | 105,591 | $ | 3,717,872 | $ | 3,823,463 | $ | | ||||||||||||||
Other commercial and
industrial |
34,723 | 35,698 | 110,491 | 180,912 | 9,058,918 | 9,239,830 | | |||||||||||||||||||||
Total commercial and industrial |
$ | 51,116 | $ | 44,782 | $ | 190,605 | $ | 286,503 | $ | 12,776,790 | $ | 13,063,293 | $ | | ||||||||||||||
Commercial real estate: |
||||||||||||||||||||||||||||
Retail properties |
$ | 23,726 | $ | 694 | $ | 72,856 | $ | 97,276 | $ | 1,664,941 | $ | 1,762,217 | $ | | ||||||||||||||
Multi family |
8,993 | 8,227 | 31,519 | 48,739 | 1,072,877 | 1,121,616 | | |||||||||||||||||||||
Office |
20,888 | 6,032 | 36,401 | 63,321 | 1,059,806 | 1,123,127 | | |||||||||||||||||||||
Industrial and
warehouse |
4,073 | 7,782 | 13,006 | 24,861 | 828,091 | 852,952 | | |||||||||||||||||||||
Other commercial
real estate |
45,792 | 9,243 | 91,718 | 146,753 | 1,644,491 | 1,791,244 | | |||||||||||||||||||||
Total commercial real estate |
$ | 103,472 | $ | 31,978 | $ | 245,500 | $ | 380,950 | $ | 6,270,206 | $ | 6,651,156 | $ | | ||||||||||||||
Automobile |
$ | 47,981 | $ | 12,246 | $ | 7,721 | $ | 67,948 | $ | 5,546,763 | $ | 5,614,711 | $ | 7,721 | ||||||||||||||
Home equity: |
||||||||||||||||||||||||||||
Secured by first-lien |
14,810 | 8,166 | 18,630 | 41,606 | 2,999,146 | 3,040,752 | 7,972 | |||||||||||||||||||||
Secured by
second-lien |
36,488 | 16,551 | 27,392 | 80,431 | 4,591,971 | 4,672,402 | 15,525 | |||||||||||||||||||||
Residential mortgage |
115,290 | 57,580 | 197,280 | 370,150 | 4,130,216 | 4,500,366 | 152,271 | (3) | ||||||||||||||||||||
Other consumer |
7,204 | 2,280 | 2,456 | 11,940 | 551,887 | 563,827 | 2,456 |
(1) | NALs are included in this aging analysis based on the loans past due status. | |
(2) | Includes $84,413 thousand guaranteed by the U.S. government. | |
(3) | Includes $98,288 thousand guaranteed by the U.S. government. |
84
85
Commercial | Commercial | Home | Residential | Other | ||||||||||||||||||||||||
(dollar amounts in thousands) | and Industrial | Real Estate | Automobile | Equity | Mortgage | Consumer | Total | |||||||||||||||||||||
Three-month period ended September 30, 2011: |
||||||||||||||||||||||||||||
ALLL balance, beginning of period |
$ | 281,016 | $ | 463,874 | $ | 55,428 | $ | 146,444 | $ | 98,992 | $ | 25,372 | $ | 1,071,126 | ||||||||||||||
Loan charge-offs |
(28,624 | ) | (29,621 | ) | (8,087 | ) | (27,916 | ) | (13,422 | ) | (8,229 | ) | (115,899 | ) | ||||||||||||||
Recoveries of loans
previously
charged-off |
10,733 | 5,181 | 4,224 | 1,694 | 1,860 | 1,652 | 25,344 | |||||||||||||||||||||
Provision for loan
and lease losses |
22,129 | (20,539 | ) | 4,565 | 19,394 | 11,544 | 8,774 | 45,867 | ||||||||||||||||||||
Allowance for loans
sold or transferred
to loans held for
sale |
| | (6,728 | ) | | | | (6,728 | ) | |||||||||||||||||||
ALLL balance, end of period |
$ | 285,254 | $ | 418,895 | $ | 49,402 | $ | 139,616 | $ | 98,974 | $ | 27,569 | $ | 1,019,710 | ||||||||||||||
AULC balance, beginning of period |
$ | 31,341 | $ | 6,632 | $ | | $ | 2,249 | $ | 1 | $ | 837 | $ | 41,060 | ||||||||||||||
Provision for
unfunded loan
commitments and
letters of credit |
(882 | ) | (1,316 | ) | | (67 | ) | | (16 | ) | (2,281 | ) | ||||||||||||||||
AULC balance, end of period |
$ | 30,459 | $ | 5,316 | $ | | $ | 2,182 | $ | 1 | $ | 821 | $ | 38,779 | ||||||||||||||
ACL balance, end of period |
$ | 315,713 | $ | 424,211 | $ | 49,402 | $ | 141,798 | $ | 98,975 | $ | 28,390 | $ | 1,058,489 | ||||||||||||||
Nine-month period ended September 30, 2011: |
||||||||||||||||||||||||||||
ALLL balance, beginning of period |
$ | 340,614 | $ | 588,251 | $ | 49,488 | $ | 150,630 | $ | 93,289 | $ | 26,736 | $ | 1,249,008 | ||||||||||||||
Loan charge-offs |
(110,590 | ) | (146,991 | ) | (24,939 | ) | (83,598 | ) | (53,773 | ) | (23,716 | ) | (443,607 | ) | ||||||||||||||
Recoveries of loans
previously
charged-off |
31,804 | 27,273 | 14,109 | 5,220 | 6,824 | 5,205 | 90,435 | |||||||||||||||||||||
Provision for loan
and lease losses |
23,426 | (49,638 | ) | 17,472 | 67,364 | 54,148 | 19,344 | 132,116 | ||||||||||||||||||||
Allowance for loans
sold or transferred
to loans held for
sale |
| | (6,728 | ) | | (1,514 | ) | | (8,242 | ) | ||||||||||||||||||
ALLL balance, end of period |
$ | 285,254 | $ | 418,895 | $ | 49,402 | $ | 139,616 | $ | 98,974 | $ | 27,569 | $ | 1,019,710 | ||||||||||||||
AULC balance, beginning of period |
$ | 32,726 | $ | 6,158 | $ | | $ | 2,348 | $ | 1 | $ | 894 | $ | 42,127 | ||||||||||||||
Provision for
unfunded loan
commitments and
letters of credit |
(2,267 | ) | (842 | ) | | (166 | ) | | (73 | ) | (3,348 | ) | ||||||||||||||||
AULC balance, end of period |
$ | 30,459 | $ | 5,316 | $ | | $ | 2,182 | $ | 1 | $ | 821 | $ | 38,779 | ||||||||||||||
ACL balance, end of period |
$ | 315,713 | $ | 424,211 | $ | 49,402 | $ | 141,798 | $ | 98,975 | $ | 28,390 | $ | 1,058,489 | ||||||||||||||
86
87
September 30, 2011 | ||||||||||||||||||||
Credit Risk Profile by UCS classification | ||||||||||||||||||||
(dollar amounts in thousands) | Pass | OLEM | Substandard | Doubtful | Total | |||||||||||||||
Commercial and industrial: |
||||||||||||||||||||
Owner occupied |
$ | 3,531,028 | $ | 108,665 | $ | 337,037 | $ | 1,301 | $ | 3,978,031 | ||||||||||
Other commercial and
industrial |
9,318,615 | 204,594 | 432,760 | 4,885 | 9,960,854 | |||||||||||||||
Total commercial and industrial |
$ | 12,849,643 | $ | 313,259 | $ | 769,797 | $ | 6,186 | $ | 13,938,885 | ||||||||||
Commercial real estate: |
||||||||||||||||||||
Retail properties |
$ | 1,303,839 | $ | 133,512 | $ | 211,189 | $ | | $ | 1,648,540 | ||||||||||
Multi family |
849,886 | 52,630 | 101,548 | 250 | 1,004,314 | |||||||||||||||
Office |
849,981 | 91,098 | 70,034 | 128 | 1,011,241 | |||||||||||||||
Industrial and warehouse |
634,183 | 26,074 | 73,740 | | 733,997 | |||||||||||||||
Other commercial real estate |
1,094,653 | 107,116 | 333,876 | 707 | 1,536,352 | |||||||||||||||
Total commercial real estate |
$ | 4,732,542 | $ | 410,430 | $ | 790,387 | $ | 1,085 | $ | 5,934,444 |
Credit Risk Profile by FICO score (1) | ||||||||||||||||||||
750+ | 650-749 | <650 | Other (2) | Total | ||||||||||||||||
Automobile |
$ | 2,552,438 | $ | 2,200,114 | $ | 697,307 | $ | 108,556 | $ | 5,558,415 | ||||||||||
Home equity: |
||||||||||||||||||||
Secured by first-lien |
2,039,431 | 1,219,344 | 318,745 | 11,244 | 3,588,764 | |||||||||||||||
Secured by second-lien |
2,168,899 | 1,686,926 | 633,704 | 594 | 4,490,123 | |||||||||||||||
Residential mortgage |
2,301,637 | 1,731,554 | 718,477 | 234,355 | 4,986,023 | |||||||||||||||
Other consumer |
196,729 | 212,512 | 84,725 | 21,274 | 515,240 |
December 31, 2010 | ||||||||||||||||||||
Credit Risk Profile by UCS classification | ||||||||||||||||||||
(dollar amounts in thousands) | Pass | OLEM | Substandard | Doubtful | Total | |||||||||||||||
Commercial and industrial: |
||||||||||||||||||||
Owner occupied |
$ | 3,265,266 | $ | 159,398 | $ | 392,969 | $ | 5,830 | $ | 3,823,463 | ||||||||||
Other commercial and
industrial |
8,434,969 | 264,679 | 524,867 | 15,315 | 9,239,830 | |||||||||||||||
Total commercial and industrial |
$ | 11,700,235 | $ | 424,077 | $ | 917,836 | $ | 21,145 | $ | 13,063,293 | ||||||||||
Commercial real estate: |
||||||||||||||||||||
Retail properties |
$ | 1,283,667 | $ | 128,067 | $ | 350,478 | $ | 5 | $ | 1,762,217 | ||||||||||
Multi family |
898,935 | 78,577 | 143,689 | 415 | 1,121,616 | |||||||||||||||
Office |
867,970 | 122,173 | 132,833 | 151 | 1,123,127 | |||||||||||||||
Industrial and warehouse |
668,452 | 72,177 | 112,323 | | 852,952 | |||||||||||||||
Other commercial real estate |
1,220,708 | 88,288 | 481,136 | 1,112 | 1,791,244 | |||||||||||||||
Total commercial real estate |
$ | 4,939,732 | $ | 489,282 | $ | 1,220,459 | $ | 1,683 | $ | 6,651,156 |
Credit Risk Profile by FICO score (1) | ||||||||||||||||||||
750+ | 650-749 | <650 | Other (2) | Total | ||||||||||||||||
Automobile |
$ | 2,516,130 | $ | 2,267,363 | $ | 724,584 | $ | 106,634 | $ | 5,614,711 | ||||||||||
Home equity: |
||||||||||||||||||||
Secured by first-lien |
1,643,792 | 1,082,143 | 313,961 | 856 | 3,040,752 | |||||||||||||||
Secured by second-lien |
2,224,545 | 1,768,450 | 678,738 | 669 | 4,672,402 | |||||||||||||||
Residential mortgage |
1,978,843 | 1,580,266 | 795,676 | 145,581 | 4,500,366 | |||||||||||||||
Other consumer |
206,952 | 234,558 | 102,254 | 20,063 | 563,827 |
(1) | Reflects currently updated customer credit scores. | |
(2) | Reflects deferred fees and costs, loans in process, loans to legal entities, etc. |
88
89
Commercial | Commercial | Residential | Other | |||||||||||||||||||||||||
and Industrial | Real Estate | Automobile | Home Equity | Mortgage | Consumer | Total | ||||||||||||||||||||||
ALLL at September 30, 2011: |
||||||||||||||||||||||||||||
(dollar amounts in thousands) |
||||||||||||||||||||||||||||
Portion of ending balance: |
||||||||||||||||||||||||||||
Attributable to
loans individually
evaluated for
impairment |
$ | 31,249 | $ | 61,472 | $ | 1,344 | $ | 1,610 | $ | 14,757 | $ | 311 | $ | 110,743 | ||||||||||||||
Attributable to
loans collectively
evaluated for
impairment |
254,005 | 357,423 | 48,058 | 138,006 | 84,217 | 27,258 | 908,967 | |||||||||||||||||||||
Total ALLL balance at September 30,
2011 |
$ | 285,254 | $ | 418,895 | $ | 49,402 | $ | 139,616 | $ | 98,974 | $ | 27,569 | $ | 1,019,710 | ||||||||||||||
ALLL associated with portfolio loans
acquired with deteriorated credit
quality |
$ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||
Loans and Leases at September 30, 2011: |
||||||||||||||||||||||||||||
(dollar amounts in thousands) |
||||||||||||||||||||||||||||
Portion of loans and leases at
September 30, 2011: |
||||||||||||||||||||||||||||
Individually
evaluated for
impairment |
161,939 | 400,952 | 37,371 | 47,877 | 325,242 | 4,626 | 978,007 | |||||||||||||||||||||
Collectively
evaluated for
impairment |
13,776,946 | 5,533,492 | 5,521,044 | 8,031,010 | 4,660,781 | 510,614 | 38,033,887 | |||||||||||||||||||||
Total loans evaluated for impairment |
$ | 13,938,885 | $ | 5,934,444 | $ | 5,558,415 | $ | 8,078,887 | $ | 4,986,023 | $ | 515,240 | $ | 39,011,894 | ||||||||||||||
Portfolio loans acquired with
deteriorated credit quality |
$ | | $ | | $ | | $ | | $ | | $ | | $ | |
90
Commercial and | Commercial | Residential | Other | |||||||||||||||||||||||||
Industrial | Real Estate | Automobile | Home Equity | Mortgage | Consumer | Total | ||||||||||||||||||||||
ALLL at December 31, 2010 |
||||||||||||||||||||||||||||
(dollar amounts in thousands) |
||||||||||||||||||||||||||||
Portion of ALLL balance at December
31, 2010: |
||||||||||||||||||||||||||||
Attributable to
loans individually
evaluated for
impairment |
$ | 63,307 | $ | 65,130 | $ | 1,477 | $ | 1,498 | $ | 11,780 | $ | 668 | $ | 143,860 | ||||||||||||||
Attributable to
loans collectively
evaluated for
impairment |
277,307 | 523,121 | 48,011 | 149,132 | 81,509 | 26,068 | 1,105,148 | |||||||||||||||||||||
ALLL balance at December 31, 2010: |
$ | 340,614 | $ | 588,251 | $ | 49,488 | $ | 150,630 | $ | 93,289 | $ | 26,736 | $ | 1,249,008 | ||||||||||||||
ALLL associated with portfolio
loans acquired with deteriorated
credit quality |
$ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||
Loans and Leases at December 31, 2010: |
||||||||||||||||||||||||||||
(dollar amounts in thousands) |
||||||||||||||||||||||||||||
Portion of loans and leases at
December 31, 2010: |
||||||||||||||||||||||||||||
Individually
evaluated for
impairment |
198,120 | 310,668 | 29,764 | 37,257 | 334,207 | 9,565 | 919,581 | |||||||||||||||||||||
Collectively
evaluated for
impairment |
12,865,173 | 6,340,488 | 5,584,947 | 7,675,897 | 4,166,159 | 554,262 | 37,186,926 | |||||||||||||||||||||
Total loans evaluated for impairment |
$ | 13,063,293 | $ | 6,651,156 | $ | 5,614,711 | $ | 7,713,154 | $ | 4,500,366 | $ | 563,827 | $ | 38,106,507 | ||||||||||||||
Portfolio loans acquired with
deteriorated credit quality |
$ | | $ | | $ | | $ | | $ | | $ | | $ | |
91
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||
September 30, 2011 | September 30, 2011 | September 30, 2011 | ||||||||||||||||||||||||||
Unpaid | Interest | Interest | ||||||||||||||||||||||||||
Ending | Principal | Related | Average | Income | Average | Income | ||||||||||||||||||||||
(dollar amounts in thousands) | Balance | Balance (5) | Allowance | Balance | Recognized | Balance | Recognized | |||||||||||||||||||||
With no related allowance recorded: |
||||||||||||||||||||||||||||
Commercial and industrial: |
||||||||||||||||||||||||||||
Owner occupied |
$ | 10,105 | $ | 14,456 | $ | | $ | 4,284 | $ | 122 | $ | 7,121 | $ | 139 | ||||||||||||||
Other commercial and
industrial |
3,782 | 6,165 | | 3,324 | 37 | 6,102 | 162 | |||||||||||||||||||||
Total commercial and industrial |
$ | 13,887 | $ | 20,621 | $ | | $ | 7,608 | $ | 159 | $ | 13,223 | $ | 301 | ||||||||||||||
Commercial real estate: |
||||||||||||||||||||||||||||
Retail properties |
$ | 43,746 | $ | 55,370 | $ | | $ | 29,895 | $ | 348 | $ | 21,158 | $ | 362 | ||||||||||||||
Multi family |
21,156 | 21,345 | | 16,187 | 188 | 12,951 | 499 | |||||||||||||||||||||
Office |
1,105 | 1,431 | | 1,542 | | 1,804 | | |||||||||||||||||||||
Industrial and warehouse |
1,866 | 2,908 | | 3,098 | 36 | 2,755 | 41 | |||||||||||||||||||||
Other commercial real
estate |
23,032 | 42,611 | | 27,559 | 251 | 25,988 | 609 | |||||||||||||||||||||
Total commercial real estate |
$ | 90,905 | $ | 123,665 | $ | | $ | 78,281 | $ | 823 | $ | 64,656 | $ | 1,511 | ||||||||||||||
Automobile |
$ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||
Home equity: |
||||||||||||||||||||||||||||
Secured by first-lien |
| | | | | | | |||||||||||||||||||||
Secured by second-lien |
| | | | | | | |||||||||||||||||||||
Residential mortgage |
| | | | | | | |||||||||||||||||||||
Other consumer |
| | | | | | | |||||||||||||||||||||
With an allowance recorded: |
||||||||||||||||||||||||||||
Commercial and industrial: (3) |
||||||||||||||||||||||||||||
Owner occupied |
$ | 40,311 | $ | 58,925 | $ | 5,891 | $ | 49,354 | $ | 499 | $ | 56,747 | $ | 1,362 | ||||||||||||||
Other commercial and
industrial |
107,741 | 138,751 | 25,358 | 102,193 | 946 | 99,629 | 2,246 | |||||||||||||||||||||
Total commercial and industrial |
$ | 148,052 | $ | 197,676 | $ | 31,249 | $ | 151,547 | $ | 1,445 | $ | 156,376 | $ | 3,608 | ||||||||||||||
Commercial real estate: (4) |
||||||||||||||||||||||||||||
Retail properties |
$ | 118,010 | $ | 146,923 | $ | 29,030 | $ | 99,018 | $ | 863 | $ | 96,231 | $ | 1,975 | ||||||||||||||
Multi family |
22,365 | 29,085 | 4,170 | 23,943 | 130 | 29,348 | 625 | |||||||||||||||||||||
Office |
24,863 | 41,496 | 3,490 | 25,061 | 53 | 27,716 | 197 | |||||||||||||||||||||
Industrial and warehouse |
50,423 | 61,563 | 7,141 | 54,345 | 166 | 44,649 | 588 | |||||||||||||||||||||
Other commercial real
estate |
94,386 | 131,350 | 17,641 | 107,635 | 873 | 85,949 | 1,510 | |||||||||||||||||||||
Total commercial real estate |
$ | 310,047 | $ | 410,417 | $ | 61,472 | $ | 310,002 | $ | 2,085 | $ | 283,893 | $ | 4,895 | ||||||||||||||
Automobile |
$ | 37,371 | $ | 37,371 | $ | 1,344 | $ | 33,215 | $ | 847 | $ | 31,451 | $ | 2,154 | ||||||||||||||
Home equity: |
||||||||||||||||||||||||||||
Secured by first-lien |
32,681 | 32,681 | 638 | 27,758 | 354 | 24,734 | 816 | |||||||||||||||||||||
Secured by second-lien |
15,196 | 15,196 | 972 | 14,714 | 187 | 15,746 | 550 | |||||||||||||||||||||
Residential mortgage |
325,242 | 347,843 | 14,757 | 329,685 | 3,038 | 335,400 | 9,848 | |||||||||||||||||||||
Other consumer |
4,626 | 4,626 | 311 | 6,768 | 41 | 8,068 | 373 |
92
December 31, 2010 | ||||||||||||
Unpaid | ||||||||||||
Ending | Principal | Related | ||||||||||
(dollar amounts in thousands) | Balance | Balance (5) | Allowance | |||||||||
With no related allowance recorded: |
||||||||||||
Commercial and industrial: |
||||||||||||
Owner occupied |
$ | 13,750 | $ | 26,603 | $ | | ||||||
Other commercial and
industrial |
11,127 | 22,688 | | |||||||||
Total commercial and industrial |
$ | 24,877 | $ | 49,291 | $ | | ||||||
Commercial real estate: |
||||||||||||
Retail properties |
$ | 31,972 | $ | 67,487 | $ | | ||||||
Multi family |
5,058 | 5,675 | | |||||||||
Office |
2,270 | 3,562 | | |||||||||
Industrial and warehouse |
3,305 | 6,912 | | |||||||||
Other commercial real estate |
26,807 | 58,996 | | |||||||||
Total commercial real estate |
$ | 69,412 | $ | 142,632 | $ | | ||||||
Automobile |
$ | | $ | | $ | | ||||||
Home equity: |
||||||||||||
Secured by first-lien |
| | | |||||||||
Secured by second-lien |
| | | |||||||||
Residential mortgage |
| | | |||||||||
Other consumer |
| | | |||||||||
With an allowance recorded: |
||||||||||||
Commercial and industrial: |
||||||||||||
Owner occupied |
$ | 63,951 | $ | 85,279 | $ | 14,322 | ||||||
Other commercial and
industrial |
109,292 | 154,424 | 48,986 | |||||||||
Total commercial and industrial |
$ | 173,243 | $ | 239,703 | $ | 63,308 | ||||||
Commercial real estate: |
||||||||||||
Retail properties |
$ | 74,732 | $ | 120,051 | $ | 14,846 | ||||||
Multi family |
38,758 | 39,299 | 7,760 | |||||||||
Office |
26,595 | 31,261 | 9,466 | |||||||||
Industrial and warehouse |
34,588 | 44,168 | 10,453 | |||||||||
Other commercial real estate |
66,583 | 104,485 | 22,604 | |||||||||
Total commercial real estate |
$ | 241,256 | $ | 339,264 | $ | 65,129 | ||||||
Automobile |
$ | 29,764 | $ | 29,764 | $ | 1,477 | ||||||
Home equity: |
||||||||||||
Secured by first-lien |
20,553 | 20,675 | 511 | |||||||||
Secured by second-lien |
16,704 | 17,060 | 987 | |||||||||
Residential mortgage |
334,207 | 347,571 | 11,780 | |||||||||
Other consumer |
9,565 | 9,565 | 668 |
(1) | These tables do not include loans fully charged-off. | |
(2) | All automobile, home equity, residential mortgage, and other consumer impaired loans included in the tables below are considered impaired due to their status as a TDR. | |
(3) | At September 30, 2011, $32,685 thousand of the $148,052 thousand commercial and industrial loans with an allowance recorded were considered impaired due to their status as a TDR. | |
(4) | At September 30, 2011, $26,916 thousand of the $310,047 thousand commercial real estate loans with an allowance recorded were considered impaired due to their status as a TDR. | |
(5) | The differences between the ending balance and the unpaid principal balance amounts represent partial charge-offs. |
93
| Interest rate reduction: A reduction of the stated interest rate to a nonmarket rate for the remaining original life of the debt. |
| Amortization or maturity date change beyond what the collateral supports, including any of the following: |
(1) | Lengthens the amortization period of the amortized principal beyond market terms. This concession reduces the minimum monthly payment and increases the amount of the balloon payment at then end of the term of the loan. Principal is generally not forgiven. |
(2) | Reduces the amount of loan principal to be amortized. This concession also reduces the minimum monthly payment and increases the amount of the balloon payment at the end of the term of the loan. Principal is generally not forgiven. |
(3) | Extends the maturity date or dates of the debt beyond what the collateral supports. This concession generally applies to loans without a balloon payment at the end of the term of the loan. |
| Other: A concession that is not categorized as one of the concessions described above. These concessions include, but are not limited to: principal forgiveness, collateral concessions, covenant concessions, and reduction of accrued interest. Principal forgiveness may result from any TDR modification of any concession type. However, the aggregate amount of principal forgiven as a result of loans modified as TDRs during the three-month and nine-month periods ended September 30, 2011, was not significant. |
94
95
New Troubled Debt Restructurings During The | ||||||||||||
Three-Month Period Ended September 30, 2011 | ||||||||||||
Post-modification | Net change in | |||||||||||
Number of | Outstanding | ALLL resulting | ||||||||||
(dollar amounts in thousands) | Contracts | Balance (1) | from modification | |||||||||
C&I Owner occupied: |
||||||||||||
Interest rate reduction |
3 | $ | 638 | $ | (68 | ) | ||||||
Amortization or maturity date change |
16 | 11,023 | (1,085 | ) | ||||||||
Other |
2 | 729 | (1 | ) | ||||||||
Total C&I Owner occupied |
21 | $ | 12,390 | $ | (1,154 | ) | ||||||
C&I Other commercial and industrial: |
||||||||||||
Interest rate reduction |
6 | $ | 18,292 | $ | 1,225 | |||||||
Amortization or maturity date change |
11 | 2,175 | 13 | |||||||||
Other |
2 | 3,027 | 64 | |||||||||
Total C&I Other commercial and industrial |
19 | $ | 23,494 | $ | 1,302 | |||||||
CRE Retail properties: |
||||||||||||
Interest rate reduction |
2 | $ | 19,883 | $ | 5,603 | |||||||
Amortization or maturity date change |
7 | 17,984 | 1,012 | |||||||||
Other |
1 | 2,595 | 5 | |||||||||
Total CRE Retail properties |
10 | $ | 40,462 | $ | 6,620 | |||||||
CRE Multi family: |
||||||||||||
Interest rate reduction |
4 | $ | 1,275 | $ | 103 | |||||||
Amortization or maturity date change |
1 | 1,066 | (51 | ) | ||||||||
Other |
| | | |||||||||
Total CRE Multi family |
5 | $ | 2,341 | $ | 52 | |||||||
CRE Office: |
||||||||||||
Interest rate reduction |
| $ | | $ | | |||||||
Amortization or maturity date change |
| | | |||||||||
Other |
| | | |||||||||
Total CRE Office |
| $ | | $ | | |||||||
CRE Industrial and warehouse: |
||||||||||||
Interest rate reduction |
| $ | | $ | | |||||||
Amortization or maturity date change |
2 | 229 | (2 | ) | ||||||||
Other |
1 | 2,147 | (145 | ) | ||||||||
Total CRE Industrial and Warehouse |
3 | $ | 2,376 | $ | (147 | ) | ||||||
CRE Other commercial real estate: |
||||||||||||
Interest rate reduction |
10 | $ | 7,834 | $ | (374 | ) | ||||||
Amortization or maturity date change |
12 | 31,470 | (365 | ) | ||||||||
Other |
2 | 2,492 | | |||||||||
Total CRE Other commercial real estate |
24 | $ | 41,796 | $ | (739 | ) | ||||||
Automobile: |
||||||||||||
Interest rate reduction |
12 | $ | 147 | $ | 3 | |||||||
Amortization or maturity date change |
822 | 7,687 | (68 | ) | ||||||||
Other |
| | | |||||||||
Total Automobile |
834 | $ | 7,834 | $ | (65 | ) |
96
New Troubled Debt Restructurings During The | ||||||||||||
Three-Month Period Ended September 30, 2011 | ||||||||||||
Post-modification | Net change in | |||||||||||
Number of | Outstanding | ALLL resulting | ||||||||||
(dollar amounts in thousands) | Contracts | Balance (1) | from modification | |||||||||
Residential mortgage: |
||||||||||||
Interest rate reduction |
2 | $ | 181 | $ | | |||||||
Amortization or maturity date change |
164 | 22,120 | 649 | |||||||||
Other |
5 | 600 | 33 | |||||||||
Total Residential mortgage |
171 | $ | 22,901 | $ | 682 | |||||||
First-lien home equity: |
||||||||||||
Interest rate reduction |
48 | $ | 5,857 | $ | 1,016 | |||||||
Amortization or maturity date change |
49 | 5,820 | 111 | |||||||||
Other |
| | | |||||||||
Total First-lien home equity |
97 | $ | 11,677 | $ | 1,127 | |||||||
Second-lien home equity: |
||||||||||||
Interest rate reduction |
55 | $ | 2,992 | $ | 22 | |||||||
Amortization or maturity date change |
44 | 1,631 | 40 | |||||||||
Other |
| | | |||||||||
Total Second-lien home equity |
99 | $ | 4,623 | $ | 62 | |||||||
Other consumer: |
||||||||||||
Interest rate reduction |
6 | $ | 561 | $ | 48 | |||||||
Amortization or maturity date change |
50 | 348 | (18 | ) | ||||||||
Other |
| | | |||||||||
Total Other consumer |
56 | $ | 909 | $ | 30 |
97
New Troubled Debt Restructurings During The | ||||||||||||
Nine-Month Period Ended September 30, 2011 | ||||||||||||
Post-modification | Net change in | |||||||||||
Number of | Outstanding | ALLL resulting | ||||||||||
(dollar amounts in thousands) | Contracts | Balance (1) | from modification | |||||||||
C&I Owner occupied: |
||||||||||||
Interest rate reduction |
27 | $ | 12,240 | $ | (749 | ) | ||||||
Amortization or maturity date change |
35 | 19,294 | (1,733 | ) | ||||||||
Other |
4 | 3,072 | 243 | |||||||||
Total C&I Owner occupied |
66 | $ | 34,606 | $ | (2,239 | ) | ||||||
C&I Other commercial and industrial: |
||||||||||||
Interest rate reduction |
18 | $ | 21,382 | $ | 1,067 | |||||||
Amortization or maturity date change |
41 | 23,145 | (2,651 | ) | ||||||||
Other |
17 | 25,421 | (3,020 | ) | ||||||||
Total C&I Other commercial and industrial |
76 | $ | 69,948 | $ | (4,604 | ) | ||||||
CRE Retail properties: |
||||||||||||
Interest rate reduction |
8 | $ | 46,534 | $ | 4,359 | |||||||
Amortization or maturity date change |
14 | 25,689 | 1,858 | |||||||||
Other |
6 | 14,253 | (1,974 | ) | ||||||||
Total CRE Retail properties |
28 | $ | 86,476 | $ | 4,243 | |||||||
CRE Multi family: |
||||||||||||
Interest rate reduction |
10 | $ | 4,378 | $ | (9 | ) | ||||||
Amortization or maturity date change |
5 | 2,256 | 25 | |||||||||
Other |
| | | |||||||||
Total CRE Multi family |
15 | $ | 6,634 | $ | 16 | |||||||
CRE Office: |
||||||||||||
Interest rate reduction |
3 | $ | 1,505 | $ | 259 | |||||||
Amortization or maturity date change |
2 | 1,238 | 97 | |||||||||
Other |
| | | |||||||||
Total CRE Office |
5 | $ | 2,743 | $ | 356 | |||||||
CRE Industrial and warehouse: |
||||||||||||
Interest rate reduction |
1 | $ | 2,165 | $ | (299 | ) | ||||||
Amortization or maturity date change |
6 | 19,300 | (5,446 | ) | ||||||||
Other |
1 | 2,147 | (145 | ) | ||||||||
Total CRE Industrial and Warehouse |
8 | $ | 23,612 | $ | (5,890 | ) | ||||||
CRE Other commercial real estate: |
||||||||||||
Interest rate reduction |
15 | $ | 17,893 | $ | (1,180 | ) | ||||||
Amortization or maturity date change |
48 | 103,120 | (3,602 | ) | ||||||||
Other |
5 | 8,199 | 32 | |||||||||
Total CRE Other commercial real estate |
68 | $ | 129,212 | $ | (4,750 | ) | ||||||
Automobile: |
||||||||||||
Interest rate reduction |
14 | $ | 186 | $ | 3 | |||||||
Amortization or maturity date change |
1,534 | 13,832 | (113 | ) | ||||||||
Other |
| | | |||||||||
Total Automobile |
1,548 | $ | 14,018 | $ | (110 | ) |
98
New Troubled Debt Restructurings During The | ||||||||||||
Nine-Month Period Ended September 30, 2011 | ||||||||||||
Post-modification | Net change in | |||||||||||
Number of | Outstanding | ALLL resulting | ||||||||||
(dollar amounts in thousands) | Contracts | Balance (1) | from modification | |||||||||
Residential mortgage: |
||||||||||||
Interest rate reduction |
8 | $ | 6,604 | $ | (589 | ) | ||||||
Amortization or maturity date change |
499 | 67,351 | 2,289 | |||||||||
Other |
18 | 3,555 | 115 | |||||||||
Total Residential mortgage |
525 | $ | 77,510 | $ | 1,815 | |||||||
First-lien home equity: |
||||||||||||
Interest rate reduction |
95 | $ | 11,836 | $ | 1,899 | |||||||
Amortization or maturity date change |
75 | 9,073 | 587 | |||||||||
Other |
| | | |||||||||
Total First-lien home equity |
170 | $ | 20,909 | $ | 2,486 | |||||||
Second-lien home equity: |
||||||||||||
Interest rate reduction |
109 | $ | 5,480 | $ | 287 | |||||||
Amortization or maturity date change |
89 | 2,975 | 59 | |||||||||
Other |
| | | |||||||||
Total Second-lien home equity |
198 | $ | 8,455 | $ | 346 | |||||||
Other consumer: |
||||||||||||
Interest rate reduction |
11 | $ | 837 | $ | 73 | |||||||
Amortization or maturity date change |
57 | 363 | (19 | ) | ||||||||
Other |
| | | |||||||||
Total Other consumer |
68 | $ | 1,200 | $ | 54 |
(1) | Post-modification balances approximate pre-modification balances. The aggregate amount of charge-offs as a result of a restructuring are not significant. |
Troubled Debt Restructurings Within The Previous Twelve Months | ||||||||||||||||
That Have Subsequently Defaulted During The (1) | ||||||||||||||||
Three-month period ended | Nine-month period ended | |||||||||||||||
September 30, 2011 | September 30, 2011 | |||||||||||||||
Number of | Ending | Number of | Ending | |||||||||||||
(dollar amounts in thousands) | Contracts | Balance | Contracts | Balance | ||||||||||||
C&I Owner occupied: |
||||||||||||||||
Interest rate reduction |
| $ | | 9 | $ | 3,850 | ||||||||||
Amortization or maturity date change |
3 | 3,224 | 7 | 4,072 | ||||||||||||
Other |
| | 2 | 2,352 | ||||||||||||
Total C&I Owner occupied |
3 | $ | 3,224 | 18 | $ | 10,274 | ||||||||||
C&I Other commercial and industrial: |
||||||||||||||||
Interest rate reduction |
| $ | | 1 | $ | 193 | ||||||||||
Amortization or maturity date change |
2 | 9,300 | 6 | 9,932 | ||||||||||||
Other |
| | | | ||||||||||||
Total C&I Other commercial and industrial |
2 | $ | 9,300 | 7 | $ | 10,125 |
99
Troubled Debt Restructurings Within The Previous Twelve Months | ||||||||||||||||
That Have Subsequently Defaulted During The (1) | ||||||||||||||||
Three-month period ended | Nine-month period ended | |||||||||||||||
September 30, 2011 | September 30, 2011 | |||||||||||||||
Number of | Ending | Number of | Ending | |||||||||||||
(dollar amounts in thousands) | Contracts | Balance | Contracts | Balance | ||||||||||||
CRE Retail Properties: |
||||||||||||||||
Interest rate reduction |
| $ | | | $ | | ||||||||||
Amortization or maturity date change |
| | 1 | 796 | ||||||||||||
Other |
| | | | ||||||||||||
Total CRE Retail properties |
| $ | | 1 | $ | 796 | ||||||||||
CRE Multi family: |
||||||||||||||||
Interest rate reduction |
2 | $ | 812 | 4 | $ | 1,180 | ||||||||||
Amortization or maturity date change |
| | 2 | 465 | ||||||||||||
Other |
| | | | ||||||||||||
Total CRE Multi family |
2 | $ | 812 | 6 | $ | 1,645 | ||||||||||
CRE Office: |
||||||||||||||||
Interest rate reduction |
| $ | | 1 | $ | 116 | ||||||||||
Amortization or maturity date change |
| | 1 | 334 | ||||||||||||
Other |
| | | | ||||||||||||
Total CRE Office |
| $ | | 2 | $ | 450 | ||||||||||
CRE Industrial and Warehouse: |
||||||||||||||||
Interest rate reduction |
| $ | | | $ | | ||||||||||
Amortization or maturity date change |
2 | 229 | 7 | 2,581 | ||||||||||||
Other |
| | | | ||||||||||||
Total CRE Industrial and Warehouse |
2 | $ | 229 | 7 | $ | 2,581 | ||||||||||
CRE Other commercial real estate: |
||||||||||||||||
Interest rate reduction |
2 | $ | 132 | 7 | $ | 2,214 | ||||||||||
Amortization or maturity date change |
| | 10 | 2,037 | ||||||||||||
Other |
| | | | ||||||||||||
Total CRE Other commercial real estate |
2 | $ | 132 | 17 | $ | 4,251 | ||||||||||
Automobile: |
||||||||||||||||
Interest rate reduction |
| $ | | 1 | $ | | (2) | |||||||||
Amortization or maturity date change |
41 | | (2) | 112 | | (2) | ||||||||||
Other |
| | | | ||||||||||||
Total Automobile |
41 | $ | | (2) | 113 | $ | | (2) | ||||||||
Residential mortgage: |
||||||||||||||||
Interest rate reduction |
1 | $ | 65 | 2 | $ | 221 | ||||||||||
Amortization or maturity date change |
22 | 2,276 | 51 | 5,544 | ||||||||||||
Other |
1 | 149 | 5 | 757 | ||||||||||||
Total Residential mortgage |
24 | $ | 2,490 | 58 | $ | 6,522 | ||||||||||
First-lien home equity: |
||||||||||||||||
Interest rate reduction |
| $ | | | $ | | ||||||||||
Amortization or maturity date change |
| | 3 | 121 | ||||||||||||
Other |
| | | | ||||||||||||
Total First-lien home equity |
| $ | | 3 | $ | 121 |
100
Troubled Debt Restructurings Within The Previous Twelve Months | ||||||||||||||||
That Have Subsequently Defaulted During The (1) | ||||||||||||||||
Three-month period ended | Nine-month period ended | |||||||||||||||
September 30, 2011 | September 30, 2011 | |||||||||||||||
Number of | Ending | Number of | Ending | |||||||||||||
(dollar amounts in thousands) | Contracts | Balance | Contracts | Balance | ||||||||||||
Second-lien home equity: |
||||||||||||||||
Interest rate reduction |
| $ | | 2 | $ | 153 | ||||||||||
Amortization or maturity date change |
| | 5 | 249 | ||||||||||||
Other |
| | | | ||||||||||||
Total Second-lien home equity |
| $ | | 7 | $ | 402 | ||||||||||
Other consumer: |
||||||||||||||||
Interest rate reduction |
| $ | | | $ | | ||||||||||
Amortization or maturity date change |
| | 2 | 11 | (3) | |||||||||||
Other |
| | | | ||||||||||||
Total Other consumer |
| $ | | 2 | $ | 11 |
(1) | Subsequent default is defined as a payment redefault within 12 months of the restructuring date. | |
(2) | Automobile loans are charged-off at time of subsequent default. During the three-month period ended September 30, 2011, $220 thousand of total automobile loans were charged-off at the time of subsequent redefault. During the nine-month period ended September 30, 2011, $813 thousand of total automobile loans were charged-off at the time of subsequent default. | |
(3) | Other consumer loans are charged-off at time of subsequent default. During the nine-month period ended September 30, 2011, $11 thousand of total other consumer loans were charged-off at the time of subsequent default. |
101
September 30, 2011 | December 31, 2010 | September 30, 2010 | ||||||||||||||||||||||
Amortized | Amortized | Amortized | ||||||||||||||||||||||
(dollar amounts in thousands) | Cost | Fair Value | Cost | Fair Value | Cost | Fair Value | ||||||||||||||||||
U.S. Treasury: |
||||||||||||||||||||||||
Under 1 year |
$ | | $ | | $ | | $ | | $ | 49,998 | $ | 50,334 | ||||||||||||
1-5 years |
51,939 | 52,793 | 52,425 | 51,781 | | | ||||||||||||||||||
6-10 years |
510 | 528 | | | | | ||||||||||||||||||
Over 10 years |
| | | | | | ||||||||||||||||||
Total U.S. Treasury |
52,449 | 53,321 | 52,425 | 51,781 | 49,998 | 50,334 | ||||||||||||||||||
Federal agencies: mortgage-backed securities: |
||||||||||||||||||||||||
Under 1 year |
| | | | | | ||||||||||||||||||
1-5 years |
227,117 | 227,885 | | | | | ||||||||||||||||||
6-10 years |
406,019 | 416,966 | 656,176 | 664,793 | 715,725 | 731,869 | ||||||||||||||||||
Over 10 years |
3,699,665 | 3,790,395 | 4,077,655 | 4,089,611 | 3,825,377 | 3,951,671 | ||||||||||||||||||
Total Federal agencies: mortgage-backed securities |
4,332,801 | 4,435,246 | 4,733,831 | 4,754,404 | 4,541,102 | 4,683,540 | ||||||||||||||||||
TLGP securities: |
||||||||||||||||||||||||
Under 1 year |
105,267 | 105,537 | 156,450 | 157,931 | 50,148 | 50,564 | ||||||||||||||||||
1-5 years |
| | 25,230 | 25,536 | 527,581 | 530,350 | ||||||||||||||||||
6-10 years |
| | | | | | ||||||||||||||||||
Over 10 years |
| | | | | | ||||||||||||||||||
Total TLGP securities |
105,267 | 105,537 | 181,680 | 183,467 | 577,729 | 580,914 | ||||||||||||||||||
Other agencies: |
||||||||||||||||||||||||
Under 1 year |
101,509 | 102,056 | 158,273 | 159,288 | 114,396 | 115,200 | ||||||||||||||||||
1-5 years |
1,012,874 | 1,022,914 | 1,898,867 | 1,885,230 | 1,890,250 | 1,903,181 | ||||||||||||||||||
6-10 years |
12,138 | 12,984 | 13,082 | 13,359 | 13,232 | 13,794 | ||||||||||||||||||
Over 10 years |
| | 500 | 499 | | | ||||||||||||||||||
Total other agencies |
1,126,521 | 1,137,954 | 2,070,722 | 2,058,376 | 2,017,878 | 2,032,175 | ||||||||||||||||||
Total U.S. Government backed agencies |
5,617,038 | 5,732,058 | 7,038,658 | 7,048,028 | 7,186,707 | 7,346,963 | ||||||||||||||||||
Municipal securities: |
||||||||||||||||||||||||
Under 1 year |
855 | 855 | | | | | ||||||||||||||||||
1-5 years |
182,875 | 186,856 | 149,151 | 148,587 | 61,488 | 63,329 | ||||||||||||||||||
6-10 years |
105,874 | 110,165 | 124,552 | 125,656 | 67,297 | 70,466 | ||||||||||||||||||
Over 10 years |
112,787 | 115,513 | 182,341 | 181,472 | 230,485 | 234,077 | ||||||||||||||||||
Total municipal securities |
402,391 | 413,389 | 456,044 | 455,715 | 359,270 | 367,872 | ||||||||||||||||||
Private-label CMO: |
||||||||||||||||||||||||
Under 1 year |
| | | | | | ||||||||||||||||||
1-5 years |
| | | | | | ||||||||||||||||||
6-10 years |
12,791 | 12,883 | 10,429 | 10,887 | 13,004 | 13,424 | ||||||||||||||||||
Over 10 years |
77,618 | 66,017 | 124,080 | 111,038 | 282,639 | 262,800 | ||||||||||||||||||
Total private-label CMO |
90,409 | 78,900 | 134,509 | 121,925 | 295,643 | 276,224 | ||||||||||||||||||
Asset-backed securities: |
||||||||||||||||||||||||
Under 1 year |
| | 19,669 | 19,694 | 40,000 | 40,115 | ||||||||||||||||||
1-5 years |
631,103 | 635,556 | 697,001 | 700,749 | 657,980 | 664,940 | ||||||||||||||||||
6-10 years |
165,722 | 167,483 | 323,411 | 323,995 | 273,246 | 274,611 | ||||||||||||||||||
Over 10 years |
287,945 | 153,019 | 301,326 | 162,684 | 349,527 | 197,958 | ||||||||||||||||||
Total asset-backed securities (1) |
1,084,770 | 956,058 | 1,341,407 | 1,207,122 | 1,320,753 | 1,177,624 | ||||||||||||||||||
Covered bonds: |
||||||||||||||||||||||||
Under 1 year |
| | | | | | ||||||||||||||||||
1-5 years |
698,671 | 703,630 | 379,711 | 367,209 | 150,391 | 151,310 | ||||||||||||||||||
6-10 years |
| | | | | | ||||||||||||||||||
Over 10 years |
| | | | | | ||||||||||||||||||
Total covered bonds |
698,671 | 703,630 | 379,711 | 367,209 | 150,391 | 151,310 | ||||||||||||||||||
Corporate debt: |
||||||||||||||||||||||||
Under 1 year |
| | | | | | ||||||||||||||||||
1-5 years |
459,098 | 454,852 | 329,988 | 323,389 | 30,000 | 30,154 | ||||||||||||||||||
6-10 years |
| | | | | | ||||||||||||||||||
Over 10 years |
| | | | | | ||||||||||||||||||
Total corporate debt |
459,098 | 454,852 | 329,988 | 323,389 | 30,000 | 30,154 | ||||||||||||||||||
Other: |
||||||||||||||||||||||||
Under 1 year |
750 | 750 | 800 | 802 | 300 | 305 | ||||||||||||||||||
1-5 years |
8,216 | 8,411 | 7,810 | 8,009 | 7,486 | 7,715 | ||||||||||||||||||
6-10 years |
912 | 966 | 1,007 | 1,037 | 1,205 | 1,336 | ||||||||||||||||||
Over 10 years |
| | | | | | ||||||||||||||||||
Non-marketable equity securities |
310,280 | 310,280 | 308,722 | 308,722 | 310,142 | 310,142 | ||||||||||||||||||
Marketable equity securities |
55,039 | 54,236 | 53,944 | 53,286 | 54,649 | 53,913 | ||||||||||||||||||
Total other |
375,197 | 374,643 | 372,283 | 371,856 | 373,782 | 373,411 | ||||||||||||||||||
Total available-for-sale and other securities |
$ | 8,727,574 | $ | 8,713,530 | $ | 10,052,600 | $ | 9,895,244 | $ | 9,716,546 | $ | 9,723,558 | ||||||||||||
(1) | Amounts at September 30, 2011, December 31, 2010, and September 30, 2010 include automobile asset backed securities with a fair value of $189 million, $509 million and $564 million, respectively, which meet the eligibility requirements for the Term Asset-Backed Securities Loan Facility, or TALF, administered by the Federal Reserve Bank of New York. |
102
Unrealized | ||||||||||||||||
Amortized | Gross | Gross | Fair | |||||||||||||
(dollar amounts in thousands) | Cost | Gains | Losses | Value | ||||||||||||
September 30, 2011 |
||||||||||||||||
U.S. Treasury |
$ | 52,449 | $ | 872 | $ | | $ | 53,321 | ||||||||
Federal agencies: |
||||||||||||||||
Mortgage-backed securities |
4,332,801 | 104,884 | (2,439 | ) | 4,435,246 | |||||||||||
TLGP securities |
105,267 | 270 | | 105,537 | ||||||||||||
Other agencies |
1,126,521 | 11,505 | (72 | ) | 1,137,954 | |||||||||||
Total U.S. Government
backed securities |
5,617,038 | 117,531 | (2,511 | ) | 5,732,058 | |||||||||||
Municipal securities |
402,391 | 11,023 | (25 | ) | 413,389 | |||||||||||
Private-label CMO |
90,409 | 745 | (12,254 | ) | 78,900 | |||||||||||
Asset-backed securities |
1,084,770 | 6,306 | (135,018 | ) | 956,058 | |||||||||||
Covered bonds |
698,671 | 8,203 | (3,244 | ) | 703,630 | |||||||||||
Corporate debt |
459,098 | 347 | (4,593 | ) | 454,852 | |||||||||||
Other securities |
375,197 | 448 | (1,002 | ) | 374,643 | |||||||||||
Total available-for-sale and other securities |
$ | 8,727,574 | $ | 144,603 | $ | (158,647 | ) | $ | 8,713,530 | |||||||
Unrealized | ||||||||||||||||
Amortized | Gross | Gross | Fair | |||||||||||||
(dollar amounts in thousands) | Cost | Gains | Losses | Value | ||||||||||||
December 31, 2010 |
||||||||||||||||
U.S. Treasury |
$ | 52,425 | $ | | $ | (644 | ) | $ | 51,781 | |||||||
Federal agencies: |
||||||||||||||||
Mortgage-backed securities |
4,733,831 | 71,901 | (51,328 | ) | 4,754,404 | |||||||||||
TLGP securities |
181,680 | 1,787 | | 183,467 | ||||||||||||
Other agencies |
2,070,722 | 4,874 | (17,220 | ) | 2,058,376 | |||||||||||
Total U.S. Government
backed securities |
7,038,658 | 78,562 | (69,192 | ) | 7,048,028 | |||||||||||
Municipal securities |
456,044 | 6,154 | (6,483 | ) | 455,715 | |||||||||||
Private-label CMO |
134,509 | 1,236 | (13,820 | ) | 121,925 | |||||||||||
Asset-backed securities |
1,341,407 | 6,563 | (140,848 | ) | 1,207,122 | |||||||||||
Covered bonds |
379,711 | | (12,502 | ) | 367,209 | |||||||||||
Corporate debt |
329,988 | 24 | (6,623 | ) | 323,389 | |||||||||||
Other securities |
372,283 | 364 | (791 | ) | 371,856 | |||||||||||
Total available-for-sale and other securities |
$ | 10,052,600 | $ | 92,903 | $ | (250,259 | ) | $ | 9,895,244 | |||||||
103
Unrealized | ||||||||||||||||
Amortized | Gross | Gross | Fair | |||||||||||||
(dollar amounts in thousands) | Cost | Gains | Losses | Value | ||||||||||||
September 30, 2010 |
||||||||||||||||
U.S. Treasury |
$ | 49,998 | $ | 336 | $ | | $ | 50,334 | ||||||||
Federal agencies: |
||||||||||||||||
Mortgage-backed securities |
4,541,102 | 142,537 | (99 | ) | 4,683,540 | |||||||||||
TLGP securities |
577,729 | 3,185 | | 580,914 | ||||||||||||
Other agencies |
2,017,878 | 14,420 | (123 | ) | 2,032,175 | |||||||||||
Total U.S. Government
backed securities |
7,186,707 | 160,478 | (222 | ) | 7,346,963 | |||||||||||
Municipal securities |
359,270 | 8,776 | (174 | ) | 367,872 | |||||||||||
Private-label CMO |
295,643 | 1,177 | (20,596 | ) | 276,224 | |||||||||||
Asset-backed securities |
1,320,753 | 8,928 | (152,057 | ) | 1,177,624 | |||||||||||
Covered bonds |
150,391 | 929 | (10 | ) | 151,310 | |||||||||||
Corporate debt |
30,000 | 154 | | 30,154 | ||||||||||||
Other securities |
373,782 | 439 | (810 | ) | 373,411 | |||||||||||
Total available-for-sale and other securities |
$ | 9,716,546 | $ | 180,881 | $ | (173,869 | ) | $ | 9,723,558 | |||||||
Less than 12 Months | Over 12 Months | Total | ||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||
(dollar amounts in thousands) | Value | Losses | Value | Losses | Value | Losses | ||||||||||||||||||
September 30, 2011 |
||||||||||||||||||||||||
U.S. Treasury |
$ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||
Federal agencies: |
||||||||||||||||||||||||
Mortgage-backed securities |
386,727 | (2,439 | ) | | | 386,727 | (2,439 | ) | ||||||||||||||||
TLGP securities |
| | | | | | ||||||||||||||||||
Other agencies |
151,404 | (67 | ) | 1,902 | (5 | ) | 153,306 | (72 | ) | |||||||||||||||
Total U.S. Government
backed securities |
538,131 | (2,506 | ) | 1,902 | (5 | ) | 540,033 | (2,511 | ) | |||||||||||||||
Municipal securities |
3,508 | (6 | ) | 3,801 | (19 | ) | 7,309 | (25 | ) | |||||||||||||||
Private-label CMO |
13,309 | (86 | ) | 53,934 | (12,168 | ) | 67,243 | (12,254 | ) | |||||||||||||||
Asset-backed securities |
92,200 | (93 | ) | 143,709 | (134,925 | ) | 235,909 | (135,018 | ) | |||||||||||||||
Covered bonds |
214,939 | (3,244 | ) | | | 214,939 | (3,244 | ) | ||||||||||||||||
Corporate debt |
394,000 | (4,593 | ) | | | 394,000 | (4,593 | ) | ||||||||||||||||
Other securities |
2,208 | (118 | ) | 2,118 | (884 | ) | 4,326 | (1,002 | ) | |||||||||||||||
Total temporarily impaired securities |
$ | 1,258,295 | $ | (10,646 | ) | $ | 205,464 | $ | (148,001 | ) | $ | 1,463,759 | $ | (158,647 | ) | |||||||||
104
Less than 12 Months | Over 12 Months | Total | ||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||
(dollar amounts in thousands) | Value | Losses | Value | Losses | Value | Losses | ||||||||||||||||||
December 31, 2010 |
||||||||||||||||||||||||
U.S. Treasury |
$ | 51,781 | $ | (644 | ) | $ | | $ | | $ | 51,781 | $ | (644 | ) | ||||||||||
Federal agencies: |
||||||||||||||||||||||||
Mortgage-backed securities |
1,424,431 | (51,328 | ) | | | 1,424,431 | (51,328 | ) | ||||||||||||||||
TLGP securities |
| | | | | | ||||||||||||||||||
Other agencies |
1,217,074 | (17,134 | ) | 4,771 | (86 | ) | 1,221,845 | (17,220 | ) | |||||||||||||||
Total U.S. Government
backed securities |
2,693,286 | (69,106 | ) | 4,771 | (86 | ) | 2,698,057 | (69,192 | ) | |||||||||||||||
Municipal securities |
201,370 | (6,363 | ) | 3,700 | (120 | ) | 205,070 | (6,483 | ) | |||||||||||||||
Private-label CMO |
| | 85,617 | (13,820 | ) | 85,617 | (13,820 | ) | ||||||||||||||||
Asset-backed securities |
214,983 | (2,129 | ) | 146,866 | (138,719 | ) | 361,849 | (140,848 | ) | |||||||||||||||
Covered bonds |
367,209 | (12,502 | ) | | | 367,209 | (12,502 | ) | ||||||||||||||||
Corporate debt |
288,660 | (6,623 | ) | | | 288,660 | (6,623 | ) | ||||||||||||||||
Other securities |
| | 41,218 | (791 | ) | 41,218 | (791 | ) | ||||||||||||||||
Total temporarily impaired securities |
$ | 3,765,508 | $ | (96,723 | ) | $ | 282,172 | $ | (153,536 | ) | $ | 4,047,680 | $ | (250,259 | ) | |||||||||
Less than 12 Months | Over 12 Months | Total | ||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||
(dollar amounts in thousands) | Value | Losses | Value | Losses | Value | Losses | ||||||||||||||||||
September 30, 2010 |
||||||||||||||||||||||||
U.S. Treasury |
$ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||
Federal agencies: |
||||||||||||||||||||||||
Mortgage-backed securities |
49,491 | (99 | ) | | | 49,491 | (99 | ) | ||||||||||||||||
TLGP securities |
| | | | | | ||||||||||||||||||
Other agencies |
249,879 | (121 | ) | 502 | (2 | ) | 250,381 | (123 | ) | |||||||||||||||
Total U.S. Government
backed securities |
299,370 | (220 | ) | 502 | (2 | ) | 299,872 | (222 | ) | |||||||||||||||
Municipal securities |
23,621 | (168 | ) | 3,814 | (6 | ) | 27,435 | (174 | ) | |||||||||||||||
Private-label CMO |
| | 172,450 | (20,596 | ) | 172,450 | (20,596 | ) | ||||||||||||||||
Asset-backed securities |
79,753 | (391 | ) | 179,729 | (151,666 | ) | 259,482 | (152,057 | ) | |||||||||||||||
Covered bonds |
25,335 | (10 | ) | | | 25,335 | (10 | ) | ||||||||||||||||
Corporate debt |
| | | | | | ||||||||||||||||||
Other securities |
39,164 | (635 | ) | 459 | (175 | ) | 39,623 | (810 | ) | |||||||||||||||
Total temporarily impaired securities |
$ | 467,243 | $ | (1,424 | ) | $ | 356,954 | $ | (172,445 | ) | $ | 824,197 | $ | (173,869 | ) | |||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(dollar amounts in thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Gross gains on sales of securities |
$ | 174 | $ | 7,930 | $ | 16,532 | $ | 22,811 | ||||||||
Gross (losses) on sales of securities |
(160 | ) | (5,509 | ) | (10,624 | ) | (10,980 | ) | ||||||||
Net gain on sales of securities |
14 | 2,421 | 5,908 | 11,831 | ||||||||||||
Other-than-temporary impairment recorded |
(1,364 | ) | (2,717 | ) | (5,711 | ) | (12,002 | ) | ||||||||
Total securities gain (loss) |
$ | (1,350 | ) | $ | (296 | ) | $ | 197 | $ | (171 | ) | |||||
105
Amortized | Average Credit Rating of Fair Value Amount | |||||||||||||||||||||||||||
Cost | Fair Value | AAA | AA +/- | A +/- | BBB +/- | <BBB- | ||||||||||||||||||||||
Private-label CMO securities |
$ | 90,409 | $ | 78,900 | $ | 1,698 | $ | | $ | 24,068 | $ | 7,758 | $ | 45,376 | ||||||||||||||
Alt-A mortgage-backed securities |
59,534 | 51,578 | | 24,446 | 9,310 | | 17,822 | |||||||||||||||||||||
Pooled-trust-preferred securities |
228,411 | 101,441 | | | 25,373 | | 76,068 | |||||||||||||||||||||
Total at September 30, 2011 |
$ | 378,354 | $ | 231,919 | $ | 1,698 | $ | 24,446 | $ | 58,751 | $ | 7,758 | $ | 139,266 | ||||||||||||||
Total at December 31, 2010 |
$ | 435,835 | $ | 284,608 | $ | 41,238 | $ | 33,880 | $ | 29,691 | $ | 15,145 | $ | 164,654 | ||||||||||||||
(1) | Credit ratings reflect the lowest current rating assigned by a nationally recognized credit rating agency. |
Actual | ||||||||||||||||||||||||||||||||
Deferrals | Expected | |||||||||||||||||||||||||||||||
and | Defaults | |||||||||||||||||||||||||||||||
# of Issuers | Defaults | as a % of | ||||||||||||||||||||||||||||||
Lowest | Currently | as a % of | Remaining | |||||||||||||||||||||||||||||
Amortized | Fair | Unrealized | Credit | Performing/ | Original | Performing | Excess | |||||||||||||||||||||||||
Deal Name | Par Value | Cost | Value | Loss | Rating (2) | Remaining (3) | Collateral | Collateral | Subordination (4) | |||||||||||||||||||||||
Alesco II (1) |
$ | 41,646 | $ | 31,540 | $ | 9,570 | $ | (21,970 | ) | C | 31/37 | 14 | % | 17 | % | | % | |||||||||||||||
Alesco IV (1) |
20,964 | 8,243 | 354 | (7,889 | ) | C | 31/42 | 17 | 27 | | ||||||||||||||||||||||
ICONS |
20,000 | 20,000 | 12,530 | (7,470 | ) | BB | 26/27 | 3 | 18 | 53 | ||||||||||||||||||||||
I-Pre TSL II |
36,657 | 36,559 | 25,373 | (11,186 | ) | A | 27/28 | 3 | 11 | 74 | ||||||||||||||||||||||
MM Comm II |
20,970 | 20,041 | 19,712 | (329 | ) | BB | 4/7 | 5 | 2 | 17 | ||||||||||||||||||||||
MM Comm III |
11,081 | 10,587 | 7,597 | (2,990 | ) | CC | 6/11 | 7 | 10 | 22 | ||||||||||||||||||||||
Pre TSL IX (1) |
5,000 | 3,955 | 1,272 | (2,683 | ) | C | 33/48 | 27 | 22 | | ||||||||||||||||||||||
Pre TSL X (1) |
17,774 | 9,915 | 3,036 | (6,879 | ) | C | 33/53 | 42 | 37 | | ||||||||||||||||||||||
Pre TSL XI (1) |
25,426 | 22,667 | 6,669 | (15,998 | ) | C | 44/64 | 27 | 21 | | ||||||||||||||||||||||
Pre TSL XIII (1) |
28,207 | 22,702 | 6,943 | (15,759 | ) | C | 44/64 | 31 | 21 | | ||||||||||||||||||||||
Reg Diversified (1) |
25,500 | 7,296 | 303 | (6,993 | ) | D | 23/44 | 46 | 28 | | ||||||||||||||||||||||
Soloso (1) |
12,500 | 3,906 | 506 | (3,400 | ) | C | 43/67 | 27 | 20 | | ||||||||||||||||||||||
Tropic III |
31,000 | 31,000 | 7,576 | (23,424 | ) | CC | 23/44 | 42 | 36 | 20 | ||||||||||||||||||||||
Total |
$ | 296,725 | $ | 228,411 | $ | 101,441 | $ | (126,970 | ) | |||||||||||||||||||||||
(1) | Security was determined to have OTTI. As such, the book value is net of recorded credit impairment. | |
(2) | For purposes of comparability, the lowest credit rating expressed is equivalent to Fitch ratings even where the lowest rating is based on another nationally recognized credit rating agency. | |
(3) | Includes both banks and/or insurance companies. | |
(4) | Excess subordination percentage represents the additional defaults in excess of both current and projected defaults that the CDO can absorb before the bond experiences credit impairment. Excess subordinated percentage is calculated by (a) determining what percentage of defaults a deal can experience before the bond has credit impairment, and (b) subtracting from this default breakage percentage both total current and expected future default percentages. |
106
107
Three Months Ended September 30, | ||||||||||||||||
Alt-A | Pooled- | Private- | ||||||||||||||
(dollar amounts in thousands) | Mortgage-backed | trust-preferred | label CMO | Total | ||||||||||||
2011 |
||||||||||||||||
Total OTTI recoveries (losses) (unrealized and
realized) |
$ | (339 | ) | $ | (4,497 | ) | $ | (890 | ) | $ | (5,726 | ) | ||||
Unrealized OTTI
(recoveries) losses
recognized in OCI |
208 | 4,293 | (139 | ) | 4,362 | |||||||||||
Net impairment losses recognized in earnings |
$ | (131 | ) | $ | (204 | ) | $ | (1,029 | ) | $ | (1,364 | ) | ||||
2010 |
||||||||||||||||
Total OTTI recoveries (losses) (unrealized and
realized) |
$ | 1,112 | $ | 18,877 | $ | 7,786 | $ | 27,775 | ||||||||
Unrealized OTTI
(recoveries) losses
recognized in OCI |
(1,472 | ) | (19,075 | ) | (9,945 | ) | (30,492 | ) | ||||||||
Net impairment losses recognized in earnings |
$ | (360 | ) | $ | (198 | ) | $ | (2,159 | ) | $ | (2,717 | ) | ||||
Nine Months Ended September 30, | ||||||||||||||||
Alt-A | Pooled- | Private- | ||||||||||||||
(dollar amounts in thousands) | Mortgage-backed | trust-preferred | label CMO | Total | ||||||||||||
2011 |
||||||||||||||||
Total OTTI (losses) recoveries (unrealized and
realized) |
$ | 597 | $ | 2,334 | $ | 2,437 | $ | 5,368 | ||||||||
Unrealized OTTI
losses (recoveries)
recognized in OCI |
(958 | ) | (5,744 | ) | (4,377 | ) | (11,079 | ) | ||||||||
Net impairment losses recognized in earnings |
$ | (361 | ) | $ | (3,410 | ) | $ | (1,940 | ) | $ | (5,711 | ) | ||||
2010 |
||||||||||||||||
Total OTTI (losses) recoveries (unrealized and
realized) |
$ | (3,065 | ) | $ | 21,229 | $ | 6,404 | $ | 24,568 | |||||||
Unrealized OTTI
losses (recoveries)
recognized in OCI |
1,503 | (24,643 | ) | (13,430 | ) | (36,570 | ) | |||||||||
Net impairment losses recognized in earnings |
$ | (1,562 | ) | $ | (3,414 | ) | $ | (7,026 | ) | $ | (12,002 | ) | ||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(dollar amounts in thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Balance, beginning of period |
$ | 85,397 | $ | 118,330 | $ | 100,838 | $ | 124,408 | ||||||||
Reductions from sales of securities with credit impairment |
| (9,223 | ) | (1,053 | ) | (9,223 | ) | |||||||||
Noncredit impairment on securities not previously
considered credit impaired |
| 675 | | 9,584 | ||||||||||||
Change due to improvement in expected cash flows |
(425 | ) | (27,997 | ) | (16,466 | ) | (45,657 | ) | ||||||||
Additional noncredit impairment on securities with
previous credit impairment |
4,787 | 6,053 | 6,440 | 8,726 | ||||||||||||
Balance, end of period |
$ | 89,759 | $ | 87,838 | $ | 89,759 | $ | 87,838 | ||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(dollar amounts in thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Balance, beginning of period |
$ | 54,402 | $ | 58,612 | $ | 54,536 | $ | 53,801 | ||||||||
Reductions from sales |
| (7,845 | ) | (4,481 | ) | (12,319 | ) | |||||||||
Credit losses not previously recognized |
26 | 99 | 26 | 1,656 | ||||||||||||
Additional credit losses |
1,338 | 2,618 | 5,685 | 10,346 | ||||||||||||
Balance, end of period |
$ | 55,766 | $ | 53,484 | $ | 55,766 | $ | 53,484 | ||||||||
108
September 30, 2011 | ||||||||
Amortized | Fair | |||||||
(dollar amounts in thousands) | Cost | Value | ||||||
Federal agencies: mortgage-backed securities: |
||||||||
Under 1 year |
$ | | $ | | ||||
1-5 years |
| | ||||||
6-10 years |
| | ||||||
Over 10 years |
658,250 | 682,897 | ||||||
Total Federal agencies: mortgage-backed securities |
658,250 | 682,897 | ||||||
Total U.S. Government backed agencies |
658,250 | 682,897 | ||||||
Total held-to-maturity securities |
$ | 658,250 | $ | 682,897 | ||||
Unrealized | ||||||||||||||||
Amortized | Gross | Gross | Fair | |||||||||||||
(dollar amounts in thousands) | Cost | Gains | Losses | Value | ||||||||||||
September 30, 2011 |
||||||||||||||||
Federal Agencies: |
||||||||||||||||
Mortgage-backed securities |
$ | 658,250 | $ | 24,647 | $ | | $ | 682,897 | ||||||||
Total U.S. Government
backed securities |
658,250 | 24,647 | | 682,897 | ||||||||||||
Total held-to-maturity securities |
$ | 658,250 | $ | 24,647 | $ | | $ | 682,897 | ||||||||
109
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(dollar amounts in thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Residential mortgage loans sold with servicing retained |
$ | 515,179 | $ | 924,494 | $ | 2,264,697 | $ | 2,463,509 | ||||||||
Pretax gains resulting from above loan sales (1) |
12,737 | 21,842 | 57,982 | 55,266 |
(1) | Recorded in other noninterest income. |
Three Months Ended | Nine Months Ended | |||||||||||||||
Fair Value Method: | September 30, | September 30, | ||||||||||||||
(dollar amounts in thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Fair value, beginning of period |
$ | 104,997 | $ | 132,405 | $ | 125,679 | $ | 176,426 | ||||||||
Change in fair value during the period due to: |
||||||||||||||||
Time decay (1) |
(1,222 | ) | (1,088 | ) | (3,987 | ) | (4,295 | ) | ||||||||
Payoffs (2) |
(4,614 | ) | (9,158 | ) | (15,013 | ) | (22,835 | ) | ||||||||
Changes in valuation inputs or assumptions (3) |
(25,337 | ) | (10,004 | ) | (32,855 | ) | (37,141 | ) | ||||||||
Fair value, end of period: |
$ | 73,824 | $ | 112,155 | $ | 73,824 | $ | 112,155 | ||||||||
(1) | Represents decrease in value due to passage of time, including the impact from both regularly scheduled loan principal payments and partial loan paydowns. | |
(2) | Represents decrease in value associated with loans that paid off during the period. | |
(3) | Represents change in value resulting primarily from market-driven changes in interest rates and prepayment spreads. |
Three Months Ended | Nine Months Ended | |||||||||||||||
Amortization Method: | September 30, | September 30, | ||||||||||||||
(dollar amounts in thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Carrying value, beginning of period |
$ | 84,742 | $ | 46,733 | $ | 70,516 | $ | 38,165 | ||||||||
New servicing assets created |
4,572 | 7,506 | 24,549 | 24,247 | ||||||||||||
Impairment charge |
(14,057 | ) | (2,043 | ) | (14,057 | ) | (6,899 | ) | ||||||||
Amortization and other |
(3,804 | ) | (2,757 | ) | (9,555 | ) | (6,074 | ) | ||||||||
Carrying value, end of period |
$ | 71,453 | $ | 49,439 | $ | 71,453 | $ | 49,439 | ||||||||
Fair value, end of period |
$ | 71,467 | $ | 50,832 | $ | 71,467 | $ | 50,832 | ||||||||
110
Decline in fair value due to | ||||||||||||
10% | 20% | |||||||||||
adverse | adverse | |||||||||||
(dollar amounts in thousands) | Actual | change | change | |||||||||
Constant prepayment rate |
18.64 | % | $ | (4,729 | ) | $ | (9,388 | ) | ||||
Spread over forward interest rate swap rates |
658 | bps | (1,741 | ) | (3,482 | ) |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(dollar amounts in thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Carrying value, beginning of period |
$ | 49 | $ | 373 | $ | 97 | $ | 12,912 | ||||||||
New servicing assets created |
16,039 | | 16,039 | | ||||||||||||
Amortization and other (1) |
(743 | ) | (228 | ) | (791 | ) | (12,767 | ) | ||||||||
Carrying value, end of period |
$ | 15,345 | $ | 145 | $ | 15,345 | $ | 145 | ||||||||
Fair value, end of period |
$ | 16,039 | $ | 387 | $ | 16,039 | $ | 387 | ||||||||
(1) | The nine months ended September 30, 2010, included a $12.4 million reduction related to the consolidation of a VIE in the 2010 first quarter. |
Retail & | Regional & | |||||||||||||||||||||||
Business | Commercial | Treasury/ | Huntington | |||||||||||||||||||||
(dollar amounts in thousands) | Banking | Banking | AFCRE | WGH | Other | Consolidated | ||||||||||||||||||
Balance, beginning of period |
$ | 286,824 | $ | 16,169 | $ | | $ | 98,951 | $ | 42,324 | $ | 444,268 | ||||||||||||
Adjustments |
| | | | | | ||||||||||||||||||
Balance, end of period |
$ | 286,824 | $ | 16,169 | $ | | $ | 98,951 | $ | 42,324 | $ | 444,268 | ||||||||||||
111
Gross | Net | |||||||||||
Carrying | Accumulated | Carrying | ||||||||||
(dollar amounts in thousands) | Amount | Amortization | Value | |||||||||
September 30, 2011 |
||||||||||||
Core deposit intangible |
$ | 376,846 | $ | (252,397 | ) | $ | 124,449 | |||||
Customer relationship |
104,574 | (40,993 | ) | 63,581 | ||||||||
Other |
25,164 | (24,717 | ) | 447 | ||||||||
Total other intangible assets |
$ | 506,584 | $ | (318,107 | ) | $ | 188,477 | |||||
December 31, 2010 |
||||||||||||
Core deposit intangible |
$ | 376,846 | $ | (219,311 | ) | $ | 157,535 | |||||
Customer relationship |
104,574 | (34,751 | ) | 69,823 | ||||||||
Other |
25,164 | (23,902 | ) | 1,262 | ||||||||
Total other intangible assets |
$ | 506,584 | $ | (277,964 | ) | $ | 228,620 | |||||
September 30, 2010 |
||||||||||||
Core deposit intangible |
$ | 376,846 | $ | (206,658 | ) | $ | 170,188 | |||||
Customer relationship |
104,574 | (32,579 | ) | 71,995 | ||||||||
Other |
25,164 | (23,681 | ) | 1,483 | ||||||||
Total other intangible assets |
$ | 506,584 | $ | (262,918 | ) | $ | 243,666 | |||||
Amortization | ||||
(dollar amounts in thousands) | Expense | |||
2011 |
$ | 13,188 | ||
2012 |
46,075 | |||
2013 |
40,511 | |||
2014 |
35,858 | |||
2015 |
19,758 | |||
2016 |
6,606 |
112
Three Months Ended | ||||||||||||
September 30, 2011 | ||||||||||||
Tax (Expense) | ||||||||||||
(dollar amounts in thousands) | Pretax | Benefit | After-tax | |||||||||
Noncredit-related impairment recoveries (losses) on debt securities not expected to be sold |
$ | (4,362 | ) | $ | 1,527 | $ | (2,835 | ) | ||||
Unrealized holding gains (losses) on available-for-sale debt securities arising during
the period |
42,832 | (15,180 | ) | 27,652 | ||||||||
Less: Reclassification adjustment for net losses (gains) included in net income |
1,350 | (473 | ) | 877 | ||||||||
Net change in unrealized holding gains (losses) on available-for-sale debt securities |
39,820 | (14,126 | ) | 25,694 | ||||||||
Net change in unrealized holding gains (losses) on available-for-sale equity securities |
(197 | ) | 69 | (128 | ) | |||||||
Unrealized gains (losses) on derivatives used in cash flow hedging relationships
arising during the period |
21,494 | (7,523 | ) | 13,971 | ||||||||
Change in pension and post-retirement benefit plan assets and liabilities |
4,003 | (1,401 | ) | 2,602 | ||||||||
Total other comprehensive income |
$ | 65,120 | $ | (22,981 | ) | $ | 42,139 | |||||
Three Months Ended | ||||||||||||
September 30, 2010 | ||||||||||||
Tax (Expense) | ||||||||||||
(dollar amounts in thousands) | Pretax | Benefit | After-tax | |||||||||
Noncredit-related impairment recoveries (losses) on debt securities not expected to be sold |
$ | 30,492 | $ | (10,672 | ) | $ | 19,820 | |||||
Unrealized holding gains (losses) on available-for-sale debt securities arising during
the period |
28,767 | (10,276 | ) | 18,491 | ||||||||
Less: Reclassification adjustment for net losses (gains) included in net income |
296 | (104 | ) | 192 | ||||||||
Net change in unrealized holding gains (losses) on available-for-sale debt securities |
59,555 | (21,052 | ) | 38,503 | ||||||||
Net change in unrealized holding gains (losses) on available-for-sale equity securities |
(53 | ) | 19 | (34 | ) | |||||||
Unrealized gains (losses) on derivatives used in cash flow hedging relationships
arising during the period |
25,180 | (8,813 | ) | 16,367 | ||||||||
Change in pension and post-retirement benefit plan assets and liabilities |
1,794 | (628 | ) | 1,166 | ||||||||
Total other comprehensive income |
$ | 86,476 | $ | (30,474 | ) | $ | 56,002 | |||||
Nine Months Ended | ||||||||||||
September 30, 2011 | ||||||||||||
Tax (expense) | ||||||||||||
(dollar amounts in thousands) | Pretax | Benefit | After-tax | |||||||||
Non credit related impairment recoveries (losses) on debt securities not expected to be sold |
$ | 11,079 | $ | (3,878 | ) | $ | 7,201 | |||||
Unrealized holding gains (losses) on available-for-sale debt securities arising during
the period |
132,575 | (46,446 | ) | 86,129 | ||||||||
Less: Reclassification adjustment for net losses (gains) included in net income |
(197 | ) | 69 | (128 | ) | |||||||
Net change in unrealized holding gains (losses) on available-for-sale debt securities |
143,457 | (50,255 | ) | 93,202 | ||||||||
Net change in unrealized holding gains (losses) on available-for-sale equity securities |
(145 | ) | 50 | (95 | ) | |||||||
Unrealized gains (losses) on derivatives used in cash flow hedging relationships
arising during the period |
24,897 | (8,714 | ) | 16,183 | ||||||||
Change in pension and post-retirement benefit plan assets and liabilities |
12,003 | (4,201 | ) | 7,802 | ||||||||
Total other comprehensive income |
$ | 180,212 | $ | (63,120 | ) | $ | 117,092 | |||||
113
Nine Months Ended | ||||||||||||
September 30, 2010 | ||||||||||||
Tax (expense) | ||||||||||||
(dollar amounts in thousands) | Pretax | Benefit | After-tax | |||||||||
Cumulative effect of change in accounting principle for consolidation of variable interest
entities |
$ | (6,365 | ) | $ | 2,116 | $ | (4,249 | ) | ||||
Non credit related impairment recoveries (losses) on debt securities not expected to be sold |
36,570 | (12,799 | ) | 23,771 | ||||||||
Unrealized holding gains (losses) on available-for-sale debt securities arising during the
period |
137,051 | (48,578 | ) | 88,473 | ||||||||
Less: Reclassification adjustment for net losses (gains) included in net income |
171 | (60 | ) | 111 | ||||||||
Net change in unrealized holding gains (losses) on available-for-sale debt securities |
173,792 | (61,437 | ) | 112,355 | ||||||||
Net change in unrealized holding gains (losses) on available-for-sale equity securities |
(241 | ) | 85 | (156 | ) | |||||||
Unrealized gains (losses) on derivatives used in cash flow hedging relationships arising
during the period |
26,371 | (9,230 | ) | 17,141 | ||||||||
Change in pension and post-retirement benefit plan assets and liabilities |
5,382 | (1,884 | ) | 3,498 | ||||||||
Total other comprehensive income |
$ | 198,939 | $ | (70,350 | ) | $ | 128,589 | |||||
Unrealized | Unrealized | |||||||||||||||||||
Unrealized | gains and | gains (losses) | ||||||||||||||||||
Unrealized | gains and | (losses) on | for pension | |||||||||||||||||
gains and | (losses) on | cash flow | and other post- | |||||||||||||||||
(losses) on debt | equity | hedging | retirement | |||||||||||||||||
(dollar amounts in thousands) | securities (1) | securities | derivatives | obligations | Total | |||||||||||||||
Balance, December 31, 2009 |
$ | (103,060 | ) | $ | (322 | ) | $ | 58,865 | $ | (112,468 | ) | $ | (156,985 | ) | ||||||
Cumulative effect of change
in accounting principle for
consolidation of variable
interest entities |
(4,249 | ) | | | | (4,249 | ) | |||||||||||||
Period change |
112,355 | (156 | ) | 17,141 | 3,498 | 132,838 | ||||||||||||||
Balance, September 30, 2010 |
$ | 5,046 | $ | (478 | ) | $ | 76,006 | $ | (108,970 | ) | $ | (28,396 | ) | |||||||
Balance, December 31, 2010 |
$ | (101,290 | ) | $ | (427 | ) | $ | 35,710 | $ | (131,489 | ) | $ | (197,496 | ) | ||||||
Period change |
93,202 | (95 | ) | 16,183 | 7,802 | 117,092 | ||||||||||||||
Balance, September 30, 2011 |
$ | (8,088 | ) | $ | (522 | ) | $ | 51,893 | $ | (123,687 | ) | $ | (80,404 | ) | ||||||
(1) | Amount at September 30, 2011 includes $0.4 million of net unrealized gains on securities transferred from the available-for-sale securities portfolio to the held-to-maturity securities portfolio. The net unrealized gains will be recognized in earnings over the remaining life of the security using the effective interest method. |
114
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(dollar amounts in thousands, except per share amounts) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Basic earnings per common share: |
||||||||||||||||
Net income |
$ | 143,391 | $ | 100,946 | $ | 415,755 | $ | 189,447 | ||||||||
Preferred stock dividends, deemed dividend and accretion of discount |
(7,703 | ) | (29,495 | ) | (23,110 | ) | (88,278 | ) | ||||||||
Net income available to common shareholders |
$ | 135,688 | $ | 71,451 | $ | 392,645 | $ | 101,169 | ||||||||
Average common shares issued and outstanding |
863,911 | 716,911 | 863,542 | 716,604 | ||||||||||||
Basic earnings per common share |
$ | 0.16 | $ | 0.10 | $ | 0.45 | $ | 0.14 | ||||||||
Diluted earnings per common share |
||||||||||||||||
Net income available to common shareholders |
$ | 135,688 | $ | 71,451 | $ | 392,645 | $ | 101,169 | ||||||||
Effect of assumed preferred stock conversion |
| | | | ||||||||||||
Net income applicable to diluted earnings per share |
$ | 135,688 | $ | 71,451 | $ | 392,645 | $ | 101,169 | ||||||||
Average common shares issued and outstanding |
863,911 | 716,911 | 863,542 | 716,604 | ||||||||||||
Dilutive potential common shares: |
||||||||||||||||
Stock options and restricted stock units and awards |
2,646 | 1,764 | 2,938 | 1,711 | ||||||||||||
Shares held in deferred compensation plans |
1,076 | 892 | 966 | 867 | ||||||||||||
Conversion of preferred stock |
| | | | ||||||||||||
Dilutive potential common shares: |
3,722 | 2,656 | 3,904 | 2,578 | ||||||||||||
Total diluted average common shares issued and
outstanding |
867,633 | 719,567 | 867,446 | 719,182 | ||||||||||||
Diluted earnings per common share |
$ | 0.16 | $ | 0.10 | $ | 0.45 | $ | 0.14 |
115
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Assumptions |
||||||||||||||||
Risk-free interest rate |
1.97 | % | 2.14 | % | 1.97 | % | 2.31 | % | ||||||||
Expected dividend yield |
2.64 | 0.63 | 2.62 | 0.67 | ||||||||||||
Expected volatility of Huntingtons common stock |
30.0 | 32.5 | 30.0 | 38.6 | ||||||||||||
Expected option term (years) |
6.0 | 6.0 | 6.0 | 6.0 | ||||||||||||
Weighted-average grant date fair value per share |
$ | 1.40 | $ | 2.05 | $ | 1.41 | $ | 2.21 |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(dollar amounts in thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Share-based compensation expense |
$ | 6,463 | $ | 4,525 | $ | 13,986 | $ | 11,413 | ||||||||
Tax benefit |
2,182 | 1,584 | 4,815 | 3,995 |
Weighted- | ||||||||||||||||
Weighted- | Average | |||||||||||||||
Average | Remaining | Aggregate | ||||||||||||||
Exercise | Contractual | Intrinsic | ||||||||||||||
(amounts in thousands, except years and per share amounts) | Options | Price | Life (Years) | Value | ||||||||||||
Outstanding at January 1, 2011 |
21,862 | $ | 15.96 | |||||||||||||
Granted |
10,625 | 6.03 | ||||||||||||||
Exercised |
(99 | ) | 4.06 | |||||||||||||
Forfeited/expired |
(4,756 | ) | 19.02 | |||||||||||||
Outstanding at September 30, 2011 |
27,632 | $ | 11.65 | 4.3 | $ | 1,614 | ||||||||||
Vested and expected to vest at September 30, 2011 (1) |
26,327 | $ | 11.94 | 4.2 | $ | 1,583 | ||||||||||
Exercisable at September 30, 2011 |
14,160 | $ | 17.15 | 2.3 | $ | 959 | ||||||||||
(1) | The number of options expected to vest includes an estimate of expected forfeitures. |
116
Weighted- | Weighted- | |||||||||||||||
Average | Average | |||||||||||||||
Restricted | Grant Date | Restricted | Grant Date | |||||||||||||
Stock | Fair Value | Stock | Fair Value | |||||||||||||
(amounts in thousands, except per share amounts) | Units | Per Share | Awards (1) | Per Share | ||||||||||||
Nonvested at January 1, 2011 |
5,511 | $ | 5.78 | 466 | $ | 5.24 | ||||||||||
Granted |
3,775 | 6.27 | | | ||||||||||||
Vested |
(963 | ) | 5.97 | (428 | ) | 5.43 | ||||||||||
Forfeited |
(258 | ) | 6.33 | (13 | ) | 3.11 | ||||||||||
Nonvested at September 30, 2011 |
8,065 | $ | 5.97 | 25 | $ | 3.11 | ||||||||||
(1) | Includes restricted stock awards granted under the Second Amended and Restated 2007 Stock and Long-Term Incentive Plan to certain executives as a portion of their annual base salary. These awards are 100% vested as of the grant date and are not subject to any requirement of future service. However, the shares are subject to restrictions regarding sale, transfer, pledge, or disposition until certain conditions are met. All awards vested in the 2011 second quarter. |
Pension Benefits | Post Retirement Benefits | |||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(dollar amounts in thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Service cost |
$ | 5,412 | $ | 5,051 | $ | | $ | | ||||||||
Interest cost |
7,518 | 7,217 | 404 | 433 | ||||||||||||
Expected return on plan assets |
(10,822 | ) | (10,528 | ) | | | ||||||||||
Amortization of transition asset |
(1 | ) | 1 | | | |||||||||||
Amortization of prior service cost |
(1,442 | ) | (1,442 | ) | (338 | ) | (339 | ) | ||||||||
Amortization of gains |
5,873 | 3,748 | (106 | ) | (174 | ) | ||||||||||
Settlements |
1,750 | 3,925 | | | ||||||||||||
Benefit expense |
$ | 8,288 | $ | 7,972 | $ | (40 | ) | $ | (80 | ) | ||||||
117
Pension Benefits | Post Retirement Benefits | |||||||||||||||
Nine Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(dollar amounts in thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Service cost |
$ | 16,238 | $ | 15,153 | $ | | $ | | ||||||||
Interest cost |
22,554 | 21,651 | 1,214 | 1,299 | ||||||||||||
Expected return on plan assets |
(32,468 | ) | (31,584 | ) | | | ||||||||||
Amortization of transition asset |
(3 | ) | 5 | | | |||||||||||
Amortization of prior service cost |
(4,326 | ) | (4,326 | ) | (1,014 | ) | (1,014 | ) | ||||||||
Amortization of gains |
17,621 | 11,242 | (318 | ) | (525 | ) | ||||||||||
Settlements |
5,250 | 7,375 | | | ||||||||||||
Benefit expense |
$ | 24,866 | $ | 19,516 | $ | (118 | ) | $ | (240 | ) | ||||||
Fair Value | ||||||||||||||||||||||||
(dollar amounts in thousands) | September 30, 2011 | December 31, 2010 | September 30, 2010 | |||||||||||||||||||||
Cash |
$ | 36 | | % | $ | | | % | $ | | | % | ||||||||||||
Cash equivalents: |
||||||||||||||||||||||||
Huntington funds money market |
55 | | 25 | | 204 | | ||||||||||||||||||
Fixed income: |
||||||||||||||||||||||||
Huntington funds fixed
income funds |
173,355 | 37 | 133,330 | 28 | 134,523 | 30 | ||||||||||||||||||
Corporate obligations |
| | | | 1,097 | | ||||||||||||||||||
U.S. Government Agencies |
| | | | 506 | | ||||||||||||||||||
Equities: |
||||||||||||||||||||||||
Huntington funds |
264,074 | 56 | 318,155 | 66 | 293,956 | 64 | ||||||||||||||||||
Other equity mutual funds |
| | | | 4,029 | 1 | ||||||||||||||||||
Huntington common stock |
35,380 | 7 | 26,969 | 6 | 22,344 | 5 | ||||||||||||||||||
Fair value of plan assets |
$ | 472,900 | 100 | % | $ | 478,479 | 100 | % | $ | 456,659 | 100 | % | ||||||||||||
118
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(dollar amounts in millions) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
SERP & SRIP |
$ | 0.7 | $ | 0.7 | $ | 2.1 | $ | 2.3 | ||||||||
Defined contribution plan |
3.8 | 3.3 | 11.3 | 5.4 | ||||||||||||
Benefit cost |
$ | 4.5 | $ | 4.0 | $ | 13.4 | $ | 7.7 | ||||||||
119
120
Fair Value Measurements at Reporting Date Using | Netting | Balance at | ||||||||||||||||||
(dollar amounts in thousands) | Level 1 | Level 2 | Level 3 | Adjustments (1) | September 30, 2011 | |||||||||||||||
Assets |
||||||||||||||||||||
Mortgage loans held for sale |
$ | | $ | 331,883 | $ | | $ | | $ | 331,883 | ||||||||||
Trading account securities: |
||||||||||||||||||||
U.S. Treasury securities |
| | | | | |||||||||||||||
Federal agencies: Mortgage-backed |
| 6,995 | | | 6,995 | |||||||||||||||
Federal agencies: Other agencies |
| | | | | |||||||||||||||
Municipal securities |
| 23,455 | | | 23,455 | |||||||||||||||
Other securities |
54,753 | 508 | | | 55,261 | |||||||||||||||
54,753 | 30,958 | | | 85,711 | ||||||||||||||||
Available-for-sale and other securities: |
||||||||||||||||||||
U.S. Treasury securities |
53,321 | | | | 53,321 | |||||||||||||||
Federal agencies: Mortgage-backed (2) |
| 4,435,246 | | | 4,435,246 | |||||||||||||||
TLGP securities |
| 105,537 | | | 105,537 | |||||||||||||||
Federal agencies: Other agencies (2) |
| 1,137,954 | | | 1,137,954 | |||||||||||||||
Municipal securities |
| 311,962 | 101,427 | | 413,389 | |||||||||||||||
Private-label CMO |
| | 78,900 | | 78,900 | |||||||||||||||
Asset-backed securities |
| 803,039 | 153,019 | | 956,058 | |||||||||||||||
Covered bonds |
| 703,630 | | | 703,630 | |||||||||||||||
Corporate debt |
| 454,852 | | | 454,852 | |||||||||||||||
Other securities |
54,236 | 10,127 | | | 64,363 | |||||||||||||||
107,557 | 7,962,347 | 333,346 | | 8,403,250 | ||||||||||||||||
Automobile loans |
| | 344,529 | | 344,529 | |||||||||||||||
MSRs |
| | 73,824 | | 73,824 | |||||||||||||||
Derivative assets |
20,581 | 526,890 | 8,963 | (103,741 | ) | 452,693 | ||||||||||||||
Liabilities |
||||||||||||||||||||
Securitization trust notes payable |
| 173,045 | | | 173,045 | |||||||||||||||
Derivative liabilities |
29,820 | 265,023 | 1,029 | | 295,872 | |||||||||||||||
Other liabilities |
2,010 | | | | 2,010 |
Fair Value Measurements at Reporting Date Using | Netting | Balance at | ||||||||||||||||||
(dollar amounts in thousands) | Level 1 | Level 2 | Level 3 | Adjustments (1) | December 31, 2010 | |||||||||||||||
Assets |
||||||||||||||||||||
Mortgage loans held for sale |
$ | | $ | 754,117 | $ | | $ | | $ | 754,117 | ||||||||||
Trading account securities: |
||||||||||||||||||||
U.S. Treasury securities |
47,430 | | | | 47,430 | |||||||||||||||
Federal agencies: Mortgage-backed |
| 10,860 | | | 10,860 | |||||||||||||||
Federal agencies: Other agencies |
| 24,853 | | | 24,853 | |||||||||||||||
Municipal securities |
| 30,205 | | | 30,205 | |||||||||||||||
Other securities |
69,017 | 3,039 | | | 72,056 | |||||||||||||||
116,447 | 68,957 | | | 185,404 | ||||||||||||||||
Available-for-sale and other securities: |
||||||||||||||||||||
U.S. Treasury securities |
51,781 | | | | 51,781 | |||||||||||||||
Federal agencies: Mortgage-backed |
| 4,754,404 | | | 4,754,404 | |||||||||||||||
TLGP securities |
| 183,467 | | | 183,467 | |||||||||||||||
Federal agencies: Other agencies (3) |
| 2,058,376 | | | 2,058,376 | |||||||||||||||
Municipal securities |
| 305,909 | 149,806 | | 455,715 | |||||||||||||||
Private-label CMO |
| | 121,925 | | 121,925 | |||||||||||||||
Asset-backed securities |
| 1,044,438 | 162,684 | | 1,207,122 | |||||||||||||||
Covered bonds |
| 367,209 | | | 367,209 | |||||||||||||||
Corporate debt |
| 323,389 | | | 323,389 | |||||||||||||||
Other securities |
53,286 | 9,848 | | | 63,134 | |||||||||||||||
105,067 | 9,047,040 | 434,415 | | 9,586,522 | ||||||||||||||||
Automobile loans |
| | 522,717 | | 522,717 | |||||||||||||||
MSRs |
| | 125,679 | | 125,679 | |||||||||||||||
Derivative assets |
23,514 | 390,361 | 2,817 | (70,559 | ) | 346,133 | ||||||||||||||
Liabilities |
||||||||||||||||||||
Securitization trust notes payable |
| 356,089 | | | 356,089 | |||||||||||||||
Derivative liabilities |
3,990 | 233,399 | 1,851 | | 239,240 | |||||||||||||||
Other liabilities |
| | | | |
121
Fair Value Measurements at Reporting Date Using | Netting | Balance at | ||||||||||||||||||
(dollar amounts in thousands) | Level 1 | Level 2 | Level 3 | Adjustments (1) | September 30, 2010 | |||||||||||||||
Assets |
||||||||||||||||||||
Mortgage loans held for sale |
$ | | $ | 699,001 | $ | | $ | | $ | 699,001 | ||||||||||
Trading account securities: |
||||||||||||||||||||
U.S. Treasury securities |
| | | | | |||||||||||||||
Federal agencies: Mortgage-backed |
| 12,731 | | | 12,731 | |||||||||||||||
Federal agencies: Other agencies |
| 24,990 | | | 24,990 | |||||||||||||||
Municipal securities |
| 33,554 | | | 33,554 | |||||||||||||||
Other securities |
63,105 | 4,297 | | | 67,402 | |||||||||||||||
63,105 | 75,572 | | | 138,677 | ||||||||||||||||
Available-for-sale and other securities: |
||||||||||||||||||||
U.S. Treasury securities |
50,334 | | | | 50,334 | |||||||||||||||
Federal agencies: Mortgage-backed |
| 4,683,540 | | | 4,683,540 | |||||||||||||||
TLGP securities |
580,914 | | | | 580,914 | |||||||||||||||
Federal agencies: Other agencies |
2,001,730 | 30,445 | | | 2,032,175 | |||||||||||||||
Municipal securities |
| 134,582 | 233,290 | | 367,872 | |||||||||||||||
Private-label CMO |
| | 276,224 | | 276,224 | |||||||||||||||
Asset-backed securities |
| 979,666 | 197,958 | | 1,177,624 | |||||||||||||||
Covered bonds |
| 151,310 | | | 151,310 | |||||||||||||||
Corporate debt |
| 30,154 | | | 30,154 | |||||||||||||||
Other securities |
54,218 | 9,051 | | | 63,269 | |||||||||||||||
2,687,196 | 6,018,748 | 707,472 | | 9,413,416 | ||||||||||||||||
Automobile loans |
401,148 | | 189,075 | | 590,223 | |||||||||||||||
MSRs |
| | 112,155 | | 112,155 | |||||||||||||||
Derivative assets |
980 | 547,784 | 11,745 | (126,221 | ) | 434,288 | ||||||||||||||
Liabilities |
||||||||||||||||||||
Securitization trust notes payable |
422,294 | | | | 422,294 | |||||||||||||||
Derivative liabilities |
9,044 | 293,741 | 4,018 | | 306,803 | |||||||||||||||
Other liabilities |
| | | | |
(1) | Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle positive and negative positions and cash collateral held or placed with the same counterparties. | |
(2) | During the 2011 second quarter, Huntington transferred $469.1 million of federal agencies: mortgage-backed securities from the available-for-sale securities portfolio to the held-to-maturity securities portfolio. These securities are valued at amortized cost and no longer classified within the fair value hierarchy. All amounts were previously classified as Level 2 in the fair value hierarchy. | |
(3) | Amounts were transferred from Level 1 to Level 2 in the 2010 fourth quarter due to lack of sufficient market activity for these securities. |
122
Level 3 Fair Value Measurements | ||||||||||||||||||||||||||||
Three Months Ended September 30, 2011 | ||||||||||||||||||||||||||||
Available-for-sale securities | ||||||||||||||||||||||||||||
Asset- | ||||||||||||||||||||||||||||
Derivative | Municipal | Private- | backed | Automobile | Equity | |||||||||||||||||||||||
(dollar amounts in thousands) | MSRs | instruments | securities | label CMO | securities | loans | investments | |||||||||||||||||||||
Balance, beginning of period |
$ | 104,997 | $ | 418 | $ | 123,800 | $ | 88,770 | $ | 165,742 | $ | 400,935 | $ | | ||||||||||||||
Total gains / losses: |
||||||||||||||||||||||||||||
Included in earnings |
(31,173 | ) | 7,557 | | (872 | ) | (354 | ) | (3,695 | ) | | |||||||||||||||||
Included in OCI |
| | | (2,543 | ) | (9,874 | ) | | | |||||||||||||||||||
Purchases |
| | | | | | | |||||||||||||||||||||
Sales |
| | | | | | | |||||||||||||||||||||
Repayments |
| | | | | (52,711 | ) | | ||||||||||||||||||||
Issuances |
| | | | | | | |||||||||||||||||||||
Settlements |
| (41 | ) | (22,373 | ) | (6,455 | ) | (2,495 | ) | | | |||||||||||||||||
Transfers in / out of Level 3 |
| | | | | | | |||||||||||||||||||||
Balance, end of period |
$ | 73,824 | $ | 7,934 | $ | 101,427 | $ | 78,900 | $ | 153,019 | $ | 344,529 | $ | | ||||||||||||||
The amount of total gains
or losses for the period
included in earnings
(or OCI) attributable
to the
change in unrealized
gains or
losses relating to
assets still
held at reporting date |
$ | (31,173 | ) | $ | 7,516 | $ | | $ | (2,543 | ) | $ | (9,874 | ) | $ | (3,695 | ) | $ | | ||||||||||
Level 3 Fair Value Measurements | ||||||||||||||||||||||||||||
Three Months Ended September 30, 2010 | ||||||||||||||||||||||||||||
Available-for-sale securities | ||||||||||||||||||||||||||||
Asset- | ||||||||||||||||||||||||||||
Derivative | Municipal | Private- | backed | Automobile | Equity | |||||||||||||||||||||||
(dollar amounts in thousands) | MSRs | instruments | securities | label CMO | securities | loans | investments | |||||||||||||||||||||
Balance, beginning of period |
$ | 132,405 | $ | 6,492 | $ | 262,128 | $ | 394,611 | $ | 218,940 | $ | 186,388 | $ | | ||||||||||||||
Total gains / losses: |
||||||||||||||||||||||||||||
Included in earnings |
(20,250 | ) | 3,872 | | (1,598 | ) | (393 | ) | 4,887 | | ||||||||||||||||||
Included in OCI |
| | | 12,674 | (5,312 | ) | | | ||||||||||||||||||||
Purchases |
| | | | | | | |||||||||||||||||||||
Sales |
| | (28,838 | ) | (109,310 | ) | (11,977 | ) | | | ||||||||||||||||||
Repayments |
| | | | | (2,200 | ) | | ||||||||||||||||||||
Issuances |
| | | | | | | |||||||||||||||||||||
Settlements |
| (1,741 | ) | | | | | | ||||||||||||||||||||
Transfers in / out of Level 3 |
| (896 | ) | | (20,153 | ) | (3,300 | ) | | | ||||||||||||||||||
Balance, end of period |
$ | 112,155 | $ | 7,727 | $ | 233,290 | $ | 276,224 | $ | 197,958 | $ | 189,075 | $ | | ||||||||||||||
The amount of total gains
or losses for the period
included in earnings
(or OCI) attributable
to the
change in unrealized
gains or
losses relating to
assets still
held at reporting date |
$ | (20,250 | ) | $ | 2,976 | $ | | $ | 3,727 | $ | (5,928 | ) | $ | 2,687 | $ | | ||||||||||||
123
Level 3 Fair Value Measurements | ||||||||||||||||||||||||||||
Nine Months Ended September 30, 2011 | ||||||||||||||||||||||||||||
Available-for-sale securities | ||||||||||||||||||||||||||||
Asset- | ||||||||||||||||||||||||||||
Derivative | Municipal | Private- | backed | Automobile | Equity | |||||||||||||||||||||||
(dollar amounts in thousands) | MSRs | instruments | securities | label CMO | securities | loans | investments | |||||||||||||||||||||
Balance, beginning of period |
$ | 125,679 | $ | 966 | $ | 149,806 | $ | 121,925 | $ | 162,684 | $ | 522,717 | $ | | ||||||||||||||
Total gains / losses: |
||||||||||||||||||||||||||||
Included in earnings |
(51,855 | ) | 7,264 | | (1,255 | ) | (3,615 | ) | (5,079 | ) | | |||||||||||||||||
Included in OCI |
| | | 1,074 | 3,716 | | | |||||||||||||||||||||
Purchases |
| | 1,760 | | | | | |||||||||||||||||||||
Sales |
| | | (20,958 | ) | | | | ||||||||||||||||||||
Repayments |
| | | | | (173,109 | ) | | ||||||||||||||||||||
Issuances |
| | | | | | | |||||||||||||||||||||
Settlements |
| (296 | ) | (50,139 | ) | (21,886 | ) | (9,766 | ) | | | |||||||||||||||||
Transfers in / out of Level 3 |
| | | | | | | |||||||||||||||||||||
Balance, end of period |
$ | 73,824 | $ | 7,934 | $ | 101,427 | $ | 78,900 | $ | 153,019 | $ | 344,529 | $ | | ||||||||||||||
The amount of total gains
or losses for the period
included in earnings
(or OCI) attributable
to the
change in unrealized
gains or
losses relating to
assets still
held at reporting date |
$ | (51,855 | ) | $ | 6,968 | $ | | $ | 769 | $ | 3,716 | $ | (5,079 | ) | $ | | ||||||||||||
Level 3 Fair Value Measurements | ||||||||||||||||||||||||||||
Nine Months Ended September 30, 2010 | ||||||||||||||||||||||||||||
Available-for-sale securities | ||||||||||||||||||||||||||||
Asset- | ||||||||||||||||||||||||||||
Derivative | Municipal | Private- | backed | Automobile | Equity | |||||||||||||||||||||||
(dollar amounts in thousands) | MSRs | instruments | securities | label CMO | securities | loans | investments | |||||||||||||||||||||
Balance, beginning of period |
$ | 176,427 | $ | (4,236 | ) | $ | 11,515 | $ | 477,319 | $ | 407,098 | $ | | $ | 25,872 | |||||||||||||
Total gains / losses: |
||||||||||||||||||||||||||||
Included in earnings |
(64,272 | ) | 12,811 | | (5,429 | ) | (4,888 | ) | 14,990 | | ||||||||||||||||||
Included in OCI |
| | | 37,640 | 3,263 | | | |||||||||||||||||||||
Purchases |
| | | | | | | |||||||||||||||||||||
Sales |
| | (28,837 | ) | (166,704 | ) | (14,608 | ) | | | ||||||||||||||||||
Repayments |
| | | | | (5,934 | ) | | ||||||||||||||||||||
Issuances |
| (1,741 | ) | | | | | | ||||||||||||||||||||
Settlements |
| 893 | (73,025 | ) | (66,602 | ) | (8,834 | ) | | | ||||||||||||||||||
Transfers in / out of Level 3 (1) |
| | 323,637 | | (184,073 | ) | 180,019 | (25,872 | ) | |||||||||||||||||||
Balance, end of period |
$ | 112,155 | $ | 7,727 | $ | 233,290 | $ | 276,224 | $ | 197,958 | $ | 189,075 | $ | | ||||||||||||||
The amount of total gains
or losses for the period
included in earnings
(or OCI) attributable
to the
change in unrealized
gains or
losses relating to
assets still
held at reporting date |
$ | (64,272 | ) | $ | 11,708 | $ | | $ | 18,613 | $ | 2,384 | $ | 9,056 | $ | | |||||||||||||
(1) | Transfers in / out of Level 3 include a transfer in of $323.6 million relating to municipal securities, due to lack of observable market data, a transfer out of $184.1 million of securities, and a transfer in of $180.0 million of loans both related to the consolidation of a 2009 automobile trust. |
124
Level 3 Fair Value Measurements | ||||||||||||||||||||||||||||
Three Months Ended September 30, 2011 | ||||||||||||||||||||||||||||
Available-for-sale securities | ||||||||||||||||||||||||||||
Asset- | ||||||||||||||||||||||||||||
Derivative | Municipal | Private- | backed | Automobile | Equity | |||||||||||||||||||||||
(dollar amounts in thousands) | MSRs | instruments | securities | label CMO | securities | loans | investments | |||||||||||||||||||||
Classification of gains and losses in earnings: |
||||||||||||||||||||||||||||
Mortgage banking income (loss) |
$ | (31,173 | ) | $ | 7,101 | $ | | $ | | $ | | $ | | $ | | |||||||||||||
Securities gains (losses) |
| | | (1,029 | ) | (335 | ) | | | |||||||||||||||||||
Interest and fee income |
| | | 157 | (19 | ) | (3,627 | ) | | |||||||||||||||||||
Noninterest income |
| 456 | | | | (68 | ) | | ||||||||||||||||||||
Total |
$ | (31,173 | ) | $ | 7,557 | $ | | $ | (872 | ) | $ | (354 | ) | $ | (3,695 | ) | $ | | ||||||||||
Level 3 Fair Value Measurements | ||||||||||||||||||||||||||||
Three Months Ended September 30, 2010 | ||||||||||||||||||||||||||||
Available-for-sale securities | ||||||||||||||||||||||||||||
Asset- | ||||||||||||||||||||||||||||
Derivative | Municipal | Private- | backed | Automobile | Equity | |||||||||||||||||||||||
(dollar amounts in thousands) | MSRs | instruments | securities | label CMO | securities | loans | investments | |||||||||||||||||||||
Classification of gains and losses in earnings: |
||||||||||||||||||||||||||||
Mortgage banking income (loss) |
$ | (20,250 | ) | $ | 3,872 | $ | | $ | | $ | | $ | | $ | | |||||||||||||
Securities gains (losses) |
| | | (2,159 | ) | (558 | ) | | | |||||||||||||||||||
Interest and fee income |
| | | 561 | 165 | (3,533 | ) | | ||||||||||||||||||||
Noninterest income |
| | | | | 8,420 | | |||||||||||||||||||||
Total |
$ | (20,250 | ) | $ | 3,872 | $ | | $ | (1,598 | ) | $ | (393 | ) | $ | 4,887 | $ | | |||||||||||
Level 3 Fair Value Measurements | ||||||||||||||||||||||||||||
Nine Months Ended September 30, 2011 | ||||||||||||||||||||||||||||
Available-for-sale securities | ||||||||||||||||||||||||||||
Asset- | ||||||||||||||||||||||||||||
Derivative | Municipal | Private- | backed | Automobile | Equity | |||||||||||||||||||||||
(dollar amounts in thousands) | MSRs | instruments | securities | label CMO | securities | loans | investments | |||||||||||||||||||||
Classification of gains and losses in earnings: |
||||||||||||||||||||||||||||
Mortgage banking income (loss) |
$ | (51,855 | ) | $ | 7,763 | $ | | $ | | $ | | $ | | $ | | |||||||||||||
Securities gains (losses) |
| | | (1,941 | ) | (3,771 | ) | | | |||||||||||||||||||
Interest and fee income |
| | | 686 | 156 | (8,852 | ) | | ||||||||||||||||||||
Noninterest income |
| (499 | ) | | | | 3,773 | | ||||||||||||||||||||
Total |
$ | (51,855 | ) | $ | 7,264 | $ | | $ | (1,255 | ) | $ | (3,615 | ) | $ | (5,079 | ) | $ | | ||||||||||
Level 3 Fair Value Measurements | ||||||||||||||||||||||||||||
Nine Months Ended September 30, 2010 | ||||||||||||||||||||||||||||
Available-for-sale securities | ||||||||||||||||||||||||||||
Asset- | ||||||||||||||||||||||||||||
Derivative | Municipal | Private- | backed | Automobile | Equity | |||||||||||||||||||||||
(dollar amounts in thousands) | MSRs | instruments | securities | label CMO | securities | loans | investments | |||||||||||||||||||||
Classification of gains and losses in earnings: |
||||||||||||||||||||||||||||
Mortgage banking income (loss) |
$ | (64,272 | ) | $ | 12,811 | $ | | $ | | $ | | $ | | $ | | |||||||||||||
Securities gains (losses) |
| | | (7,027 | ) | (4,975 | ) | | | |||||||||||||||||||
Interest and fee income |
| | | 1,598 | 87 | (7,933 | ) | | ||||||||||||||||||||
Noninterest income |
| | | | | 22,923 | | |||||||||||||||||||||
Total |
$ | (64,272 | ) | $ | 12,811 | $ | | $ | (5,429 | ) | $ | (4,888 | ) | $ | 14,990 | $ | | |||||||||||
125
September 30, | December 31, | September 30, | ||||||||||
(dollar amounts in thousands) | 2011 | 2010 | 2010 | |||||||||
Fair value |
$ | 331,883 | $ | 754,117 | $ | 699,001 | ||||||
Aggregate outstanding principal balance |
317,121 | 749,982 | 675,009 |
Net gains (losses) from fair value changes | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(dollar amounts in thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Assets |
||||||||||||||||
Mortgage loans held for sale |
$ | 5,823 | $ | 2,201 | $ | 13,725 | $ | 13,475 | ||||||||
Automobile loans |
(3,695 | ) | (1,242 | ) | (5,079 | ) | 3,055 | |||||||||
Liabilities |
||||||||||||||||
Securitization trust notes payable |
(2,485 | ) | (3,929 | ) | (6,102 | ) | (6,142 | ) |
Gains (losses) included in fair value changes | ||||||||||||||||
associated with instrument specific credit risk | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(dollar amounts in thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Assets |
||||||||||||||||
Automobile loans |
$ | 2,498 | $ | 403 | $ | 4,780 | $ | 995 |
Fair Value Measurements Using | ||||||||||||||||||||
Quoted Prices | Significant | Significant | Total | |||||||||||||||||
In Active | Other | Other | Gains/(Losses) | |||||||||||||||||
Markets for | Observable | Unobservable | For the Nine | |||||||||||||||||
Fair Value at | Identical Assets | Inputs | Inputs | Months Ended | ||||||||||||||||
(dollar amounts in millions) | September 30, 2011 | (Level 1) | (Level 2) | (Level 3) | September 30, 2011 | |||||||||||||||
Impaired loans |
$ | 91.0 | $ | | $ | | $ | 91.0 | $ | 25.5 | ||||||||||
Accrued income and other assets |
38.0 | | | 38.0 | $ | (1.8 | ) |
126
September 30, 2011 | December 31, 2010 | September 30, 2010 | ||||||||||||||||||||||
Carrying | Fair | Carrying | Fair | Carrying | Fair | |||||||||||||||||||
(dollar amounts in thousands) | Amount | Value | Amount | Value | Amount | Value | ||||||||||||||||||
Financial Assets: |
||||||||||||||||||||||||
Cash and short-term assets |
$ | 2,295,730 | $ | 2,295,730 | $ | 982,926 | $ | 982,926 | $ | 1,413,466 | $ | 1,413,466 | ||||||||||||
Trading account securities |
85,711 | 85,711 | 185,404 | 185,404 | 138,677 | 138,677 | ||||||||||||||||||
Loans held for sale |
334,606 | 334,606 | 793,285 | 793,285 | 744,439 | 744,439 | ||||||||||||||||||
Available-for-sale and
other securities |
8,713,530 | 8,713,530 | 9,895,244 | 9,895,244 | 9,723,558 | 9,723,558 | ||||||||||||||||||
Held-to-maturity securities |
658,250 | 682,897 | | | | | ||||||||||||||||||
Net loans and direct
financing leases |
37,992,184 | 36,655,676 | 36,857,499 | 35,403,910 | 36,164,235 | 34,894,220 | ||||||||||||||||||
Derivatives |
73,824 | 73,824 | 346,133 | 346,133 | 434,288 | 434,288 | ||||||||||||||||||
Financial Liabilities: |
||||||||||||||||||||||||
Deposits |
(43,219,727 | ) | (43,368,155 | ) | (41,853,898 | ) | (41,993,567 | ) | (41,072,371 | ) | (41,323,675 | ) | ||||||||||||
Short-term borrowings |
(2,224,986 | ) | (2,200,121 | ) | (2,040,732 | ) | (1,982,545 | ) | (1,859,134 | ) | (1,854,637 | ) | ||||||||||||
Federal Home Loan Bank
advances |
(14,157 | ) | (14,157 | ) | (172,519 | ) | (172,519 | ) | (23,643 | ) | (23,843 | ) | ||||||||||||
Other long-term debt |
(1,421,518 | ) | (1,426,460 | ) | (2,144,092 | ) | (2,157,358 | ) | (2,393,071 | ) | (2,400,942 | ) | ||||||||||||
Subordinated notes |
(1,537,293 | ) | (1,423,105 | ) | (1,497,216 | ) | (1,377,851 | ) | (1,202,568 | ) | (1,047,875 | ) | ||||||||||||
Derivatives |
(295,872 | ) | (295,872 | ) | (239,240 | ) | (239,240 | ) | (306,803 | ) | (306,803 | ) |
127
Fair Value | Cash Flow | |||||||||||
(dollar amounts in thousands) | Hedges | Hedges | Total | |||||||||
Instruments associated with: |
||||||||||||
Loans |
$ | | $ | 7,045,000 | $ | 7,045,000 | ||||||
Investment securities |
| 50,000 | 50,000 | |||||||||
Deposits |
988,912 | | 988,912 | |||||||||
Subordinated notes |
598,000 | | 598,000 | |||||||||
Other long-term debt |
35,000 | | 35,000 | |||||||||
Total notional value at September 30, 2011 |
$ | 1,621,912 | $ | 7,095,000 | $ | 8,716,912 | ||||||
128
Average | Weighted-Average | |||||||||||||||||||
Notional | Maturity | Fair | Rate | |||||||||||||||||
(dollar amounts in thousands) | Value | (years) | Value | Receive | Pay | |||||||||||||||
Asset conversion swaps receive fixed generic |
$ | 7,095,000 | 1.9 | $ | 80,447 | 1.49 | % | 0.59 | % | |||||||||||
Total asset conversion swaps |
7,095,000 | 1.9 | 80,447 | 1.49 | 0.59 | |||||||||||||||
Liability conversion swaps |
||||||||||||||||||||
Liability conversion swaps receive fixed generic |
1,591,912 | 3.8 | 115,090 | 2.53 | 0.36 | |||||||||||||||
Liability conversion swaps receive fixed callable |
30,000 | 9.0 | 425 | 2.98 | | |||||||||||||||
Total liability conversion swaps |
1,621,912 | 3.9 | 115,515 | 2.54 | 0.36 | |||||||||||||||
Total swap portfolio |
$ | 8,716,912 | 2.2 | $ | 195,962 | 1.68 | % | 0.55 | % | |||||||||||
September 30, | December 31, | September 30, | ||||||||||
(dollar amounts in thousands) | 2011 | 2010 | 2010 | |||||||||
Interest rate contracts designated as hedging instruments |
$ | 195,962 | $ | 127,346 | $ | 190,045 | ||||||
Interest rate contracts not designated as hedging instruments |
330,929 | 263,015 | 357,739 | |||||||||
Foreign exchange contracts not designated as hedging instruments |
20,447 | 2,845 | | |||||||||
Total contracts |
$ | 547,338 | $ | 393,206 | $ | 547,784 | ||||||
September 30, | December 31, | September 30, | ||||||||||
(dollar amounts in thousands) | 2011 | 2010 | 2010 | |||||||||
Interest rate contracts designated as hedging instruments |
$ | | $ | | $ | | ||||||
Interest rate contracts not designated as hedging instruments |
265,928 | 233,805 | 297,380 | |||||||||
Foreign exchange contracts not designated as hedging instruments |
17,977 | 3,107 | 2,440 | |||||||||
Total contracts |
$ | 283,905 | $ | 236,912 | $ | 299,820 | ||||||
129
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(dollar amounts in thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Interest rate contracts |
||||||||||||||||
Change in fair value of interest rate swaps hedging deposits (1) |
$ | 2,922 | $ | 9,083 | $ | 3,831 | $ | 14,664 | ||||||||
Change in fair value of hedged deposits (1) |
(2,870 | ) | (9,958 | ) | (3,949 | ) | (14,970 | ) | ||||||||
Change in fair value of interest rate swaps hedging
subordinated notes (2) |
41,170 | 7,817 | 46,407 | 24,178 | ||||||||||||
Change in fair value of hedged subordinated notes (2) |
(41,170 | ) | (7,817 | ) | (46,407 | ) | (24,178 | ) | ||||||||
Change in fair value of interest rate swaps hedging other
long-term debt (2) |
2,138 | 1,267 | 2,527 | 3,820 | ||||||||||||
Change in fair value of hedged other long-term debt (2) |
(2,138 | ) | (1,267 | ) | (2,527 | ) | (3,820 | ) |
(1) | Effective portion of the hedging relationship is recognized in Interest expense deposits in the Unaudited Condensed Consolidated Statements of Income. Any resulting ineffective portion of the hedging relationship is recognized in noninterest income in the Unaudited Condensed Consolidated Statements of Income. | |
(2) | Effective portion of the hedging relationship is recognized in Interest expense subordinated notes and other long-term debt in the Unaudited Condensed Consolidated Statements of Income. Any resulting ineffective portion of the hedging relationship is recognized in noninterest income in the Unaudited Condensed Consolidated Statements of Income. |
Amount of (gain) or loss | ||||||||||||||||||
Amount of gain or | reclassified from | |||||||||||||||||
(loss) recognized in | accumulated OCI into | |||||||||||||||||
OCI on derivatives | earnings (effective | |||||||||||||||||
(effective portion) | portion) | |||||||||||||||||
Derivatives in cash flow | Nine Months Ended | Nine Months Ended | ||||||||||||||||
hedging relationships | September 30, | Location of gain or (loss) reclassified from | September 30, | |||||||||||||||
(dollar amounts in thousands) | 2011 | 2010 | accumulated OCI into earnings (effective portion) | 2011 | 2010 | |||||||||||||
Interest rate contracts |
||||||||||||||||||
Loans |
$ | 12,880 | $ | 81,517 | Interest and fee income - loans and leases | $ | 3,776 | $ | (100,623 | ) | ||||||||
Investment Securities |
847 | | Interest and fee income - investment securities | | | |||||||||||||
FHLB Advances |
| | Interest expense - subordinated notes and other long-term debt | | 2,580 | |||||||||||||
Deposits |
| | Interest expense - deposits | | | |||||||||||||
Subordinated notes |
| | Interest expense - subordinated notes and other long-term debt | 20 | (1,264 | ) | ||||||||||||
Other long term debt |
| | Interest expense - subordinated notes and other long-term debt | | | |||||||||||||
Total |
$ | 13,727 | $ | 81,517 | $ | 3,796 | $ | (99,307 | ) | |||||||||
130
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(dollar amounts in thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Derivatives in cash flow hedging relationships |
||||||||||||||||
Interest rate contracts |
||||||||||||||||
Loans |
(261 | ) | 89 | (147 | ) | 663 | ||||||||||
FHLB Advances |
| | | |
September 30, | December 31, | September 30, | ||||||||||
(dollar amounts in thousands) | 2011 | 2010 | 2010 | |||||||||
Derivative assets: |
||||||||||||
Interest rate lock agreements |
$ | 8,963 | $ | 2,817 | $ | 11,745 | ||||||
Forward trades and options |
134 | 20,669 | 980 | |||||||||
Total derivative assets |
9,097 | 23,486 | 12,725 | |||||||||
Derivative liabilities: |
||||||||||||
Interest rate lock agreements |
(124 | ) | (1,445 | ) | (379 | ) | ||||||
Forward trades and options |
(11,843 | ) | (883 | ) | (6,604 | ) | ||||||
Total derivative liabilities |
(11,967 | ) | (2,328 | ) | (6,983 | ) | ||||||
Net derivative asset (liability) |
$ | (2,870 | ) | $ | 21,158 | $ | 5,742 | |||||
131
September 30, 2011 | ||||||||||||||||||||
Franklin | ||||||||||||||||||||
(dollar amounts in thousands) | 2009 Trust | 2009 Trust | 2008 Trust | 2006 Trust | Total | |||||||||||||||
Assets: |
||||||||||||||||||||
Cash |
$ | | $ | 20,095 | $ | 14,551 | $ | 56,132 | $ | 90,778 | ||||||||||
Loans and leases |
| 344,535 | 164,095 | 810,666 | 1,319,296 | |||||||||||||||
Allowance for loan
and lease losses |
| | (1,444 | ) | (7,134 | ) | (8,578 | ) | ||||||||||||
Net loans and leases |
| 344,535 | 162,651 | 803,532 | 1,310,718 | |||||||||||||||
Accrued income and
other assets |
1,753 | 1,607 | 667 | 3,145 | 7,172 | |||||||||||||||
Total assets |
$ | 1,753 | $ | 366,237 | $ | 177,869 | $ | 862,809 | $ | 1,408,668 | ||||||||||
Liabilities: |
||||||||||||||||||||
Other long-term debt |
$ | | $ | 173,000 | $ | 40,887 | $ | 450,365 | $ | 664,252 | ||||||||||
Accrued interest
and other
liabilities |
988 | 388 | 65 | 102 | 1,543 | |||||||||||||||
Total liabilities |
$ | 988 | $ | 173,388 | $ | 40,952 | $ | 450,467 | $ | 665,795 | ||||||||||
September 30, 2011 | ||||
(dollar amounts in thousands) | 2011 Trust | |||
Assets: |
||||
Cash |
$ | 34,629 | ||
Loans and leases |
994,052 | |||
Allowance for loan
and lease losses |
| |||
Net loans and leases |
994,052 | |||
Accrued income and
other assets |
2,190 | |||
Total assets |
$ | 1,030,871 | ||
Liabilities: |
||||
Other long-term debt |
$ | 1,000,000 | ||
Accrued interest and
other liabilities |
792 | |||
Total liabilities |
$ | 1,000,792 | ||
132
Principal amount of | Investment in | |||||||||||
subordinated note/ | unconsolidated | |||||||||||
(dollar amounts in thousands) | Rate | debenture issued to trust (1) | subsidiary (2) | |||||||||
Huntington Capital I |
0.95 | %(3) | $ | 138,816 | $ | 6,186 | ||||||
Huntington Capital II |
0.97 | (4) | 55,093 | 3,093 | ||||||||
Huntington Capital III |
6.69 | 114,094 | 10 | |||||||||
BancFirst Ohio Trust Preferred |
8.54 | 23,206 | 619 | |||||||||
Sky Financial Capital Trust I |
8.56 | 64,264 | 1,856 | |||||||||
Sky Financial Capital Trust II |
3.19 | (5) | 30,929 | 929 | ||||||||
Sky Financial Capital Trust III |
1.71 | (6) | 77,320 | 2,320 | ||||||||
Sky Financial Capital Trust IV |
1.64 | (6) | 77,320 | 2,320 | ||||||||
Prospect Trust I |
3.50 | (7) | 6,186 | 186 | ||||||||
Total |
$ | 587,228 | $ | 17,519 | ||||||||
(1) | Represents the principal amount of debentures issued to each trust, including unamortized original issue discount. | |
(2) | Huntingtons investment in the unconsolidated trusts represents the only risk of loss. | |
(3) | Variable effective rate at September 30, 2011, based on three month LIBOR + 0.70. | |
(4) | Variable effective rate at September 30, 2011, based on three month LIBOR + 0.625. | |
(5) | Variable effective rate at September 30, 2011, based on three month LIBOR + 2.95. | |
(6) | Variable effective rate at September 30, 2011, based on three month LIBOR + 1.40. | |
(7) | Variable effective rate at September 30, 2011, based on three month LIBOR + 3.25. |
133
September 30, | December 31, | September 30, | ||||||||||
(dollar amounts in millions) | 2011 | 2010 | 2010 | |||||||||
Contract amount represents credit risk: |
||||||||||||
Commitments to extend credit |
||||||||||||
Commercial |
$ | 7,471 | $ | 5,933 | $ | 5,854 | ||||||
Consumer |
5,828 | 5,406 | 5,264 | |||||||||
Commercial real estate |
535 | 546 | 644 | |||||||||
Standby letters of credit |
548 | 607 | 477 |
134
135
Balance Sheets | September 30, | December 31, | September 30, | |||||||||
(dollar amounts in thousands) | 2011 | 2010 | 2010 | |||||||||
Assets |
||||||||||||
Cash and cash equivalents (1) |
$ | 697,247 | $ | 615,167 | $ | 858,965 | ||||||
Due from The Huntington National Bank |
953,074 | 954,565 | 953,074 | |||||||||
Due from non-bank subsidiaries |
197,809 | 225,560 | 246,458 | |||||||||
Investment in The Huntington National Bank |
4,031,232 | 3,515,597 | 3,524,432 | |||||||||
Investment in non-bank subsidiaries |
795,518 | 790,248 | 813,788 | |||||||||
Accrued interest receivable and other assets |
126,527 | 110,181 | 167,712 | |||||||||
Total assets |
$ | 6,801,407 | $ | 6,211,318 | $ | 6,564,429 | ||||||
Liabilities and Shareholders Equity |
||||||||||||
Short-term borrowings |
$ | | $ | 100 | $ | 687 | ||||||
Long-term borrowings |
932,434 | 937,434 | 637,434 | |||||||||
Dividends payable, accrued expenses, and other liabilities |
468,494 | 293,242 | 358,905 | |||||||||
Total liabilities |
1,400,928 | 1,230,776 | 997,026 | |||||||||
Shareholders equity (2) |
5,400,479 | 4,980,542 | 5,567,403 | |||||||||
Total liabilities and shareholders equity |
$ | 6,801,407 | $ | 6,211,318 | $ | 6,564,429 | ||||||
(1) | Includes restricted cash of $125,000. | |
(2) | See Huntingtons Unaudited Condensed Consolidated Statements of Changes in Shareholders Equity. |
136
Three Months Ended | Nine Months Ended | |||||||||||||||
Statements of Income | September 30, | September 30, | ||||||||||||||
(dollar amounts in thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Income |
||||||||||||||||
Dividends from |
||||||||||||||||
The Huntington National Bank |
$ | | $ | | $ | | $ | | ||||||||
Non-bank subsidiaries |
| 15,000 | 31,000 | 33,000 | ||||||||||||
Interest from |
||||||||||||||||
The Huntington National Bank |
20,248 | 20,611 | 60,644 | 62,351 | ||||||||||||
Non-bank subsidiaries |
2,007 | 2,873 | 6,962 | 9,322 | ||||||||||||
Other |
489 | 461 | 1,529 | 2,537 | ||||||||||||
Total income |
22,744 | 38,945 | 100,135 | 107,210 | ||||||||||||
Expense |
||||||||||||||||
Personnel costs |
10,251 | 9,751 | 24,581 | 22,769 | ||||||||||||
Interest on borrowings |
8,834 | 6,028 | 26,256 | 17,303 | ||||||||||||
Other |
14,692 | 11,416 | 34,722 | 37,321 | ||||||||||||
Total expense |
33,777 | 27,195 | 85,559 | 77,393 | ||||||||||||
Income (loss) before income taxes and equity in undistributed
net income of subsidiaries |
(11,033 | ) | 11,750 | 14,576 | 29,817 | |||||||||||
Provision (benefit) for income taxes |
(8,783 | ) | (656 | ) | (9,798 | ) | 15,088 | |||||||||
Income (loss) before equity in undistributed net income of subsidiaries |
(2,250 | ) | 12,406 | 24,374 | 14,729 | |||||||||||
Increase (decrease) in undistributed net income of: |
||||||||||||||||
The Huntington National Bank |
143,140 | 95,156 | 402,040 | 196,214 | ||||||||||||
Non-bank subsidiaries |
2,501 | (6,616 | ) | (10,659 | ) | (21,496 | ) | |||||||||
Net income |
$ | 143,391 | $ | 100,946 | $ | 415,755 | $ | 189,447 | ||||||||
137
Nine Months Ended | ||||||||
Statements of Cash Flows | September 30, | |||||||
(dollar amounts in thousands) | 2011 | 2010 | ||||||
Operating activities |
||||||||
Net income |
$ | 415,755 | $ | 189,447 | ||||
Adjustments to reconcile net income to net cash provided by operating activities |
||||||||
Equity in undistributed net income of subsidiaries |
(434,018 | ) | (192,718 | ) | ||||
Depreciation and amortization |
549 | 765 | ||||||
Other, net |
134,089 | (76,881 | ) | |||||
Net cash provided by (used for) operating activities |
116,375 | (79,387 | ) | |||||
Investing activities |
||||||||
Repayments from subsidiaries |
(28,415 | ) | (384,162 | ) | ||||
Advances to subsidiaries |
99,023 | 43,572 | ||||||
Net cash provided by (used for) investing activities |
70,608 | (340,590 | ) | |||||
Financing activities |
||||||||
Payment of borrowings |
(5,100 | ) | (604 | ) | ||||
Dividends paid on preferred stock |
(23,110 | ) | (75,537 | ) | ||||
Dividends paid on common stock |
(27,042 | ) | (21,437 | ) | ||||
Redemption of Warrant to the Treasury |
(49,100 | ) | | |||||
Other, net |
(551 | ) | (19 | ) | ||||
Net cash provided by (used for) financing activities |
(104,903 | ) | (97,597 | ) | ||||
Change in cash and cash equivalents |
82,080 | (517,574 | ) | |||||
Cash and cash equivalents at beginning of period |
615,167 | 1,376,539 | ||||||
Cash and cash equivalents at end of period |
$ | 697,247 | $ | 858,965 | ||||
Supplemental disclosure: |
||||||||
Interest paid |
$ | 26,256 | $ | 17,303 |
138
139
140
Three Months Ended September 30, | ||||||||||||||||||||||||
Retail & | Regional & | |||||||||||||||||||||||
Income Statements | Business | Commercial | Treasury/ | Huntington | ||||||||||||||||||||
(dollar amounts in thousands) | Banking | Banking | AFCRE | WGH | Other | Consolidated | ||||||||||||||||||
2011 |
||||||||||||||||||||||||
Net interest income |
$ | 229,613 | 61,320 | 94,380 | 49,381 | (28,216 | ) | $ | 406,478 | |||||||||||||||
Provision for credit losses |
36,467 | 16,530 | (19,979 | ) | 10,568 | | 43,586 | |||||||||||||||||
Noninterest income |
110,756 | 34,030 | 28,362 | 54,565 | 30,846 | 258,559 | ||||||||||||||||||
Noninterest expense |
246,441 | 50,329 | 40,347 | 92,416 | 9,585 | 439,118 | ||||||||||||||||||
Income taxes |
20,111 | 9,972 | 35,831 | 337 | (27,309 | ) | 38,942 | |||||||||||||||||
Operating/reported net income |
$ | 37,350 | $ | 18,519 | $ | 66,543 | $ | 625 | $ | 20,354 | $ | 143,391 | ||||||||||||
2010 |
||||||||||||||||||||||||
Net interest income |
$ | 220,192 | $ | 53,970 | 86,105 | 43,626 | 6,069 | $ | 409,962 | |||||||||||||||
Provision for credit losses |
59,316 | 3,731 | 37,132 | 18,983 | (2 | ) | 119,160 | |||||||||||||||||
Noninterest income |
101,900 | 27,000 | 21,368 | 89,303 | 27,572 | 267,143 | ||||||||||||||||||
Noninterest expense |
232,028 | 40,711 | 40,318 | 88,623 | 25,629 | 427,309 | ||||||||||||||||||
Income taxes |
10,762 | 12,785 | 10,508 | 8,863 | (13,228 | ) | 29,690 | |||||||||||||||||
Operating/reported net income |
$ | 19,986 | $ | 23,743 | $ | 19,515 | $ | 16,460 | $ | 21,242 | $ | 100,946 | ||||||||||||
Nine Months Ended September 30, | ||||||||||||||||||||||||
Retail & | Regional & | |||||||||||||||||||||||
Income Statements | Business | Commercial | Treasury/ | Huntington | ||||||||||||||||||||
(dollar amounts in thousands ) | Banking | Banking | AFCRE | WGH | Other | Consolidated | ||||||||||||||||||
2011 |
||||||||||||||||||||||||
Net interest income |
$ | 702,666 | 178,787 | 271,510 | 145,614 | (84,432 | ) | $ | 1,214,145 | |||||||||||||||
Provision for credit losses |
94,825 | 23,957 | (30,050 | ) | 40,036 | | 128,768 | |||||||||||||||||
Noninterest income |
311,598 | 94,657 | 57,886 | 187,443 | 99,687 | 751,271 | ||||||||||||||||||
Noninterest expense |
705,216 | 142,189 | 125,649 | 265,151 | 60,021 | 1,298,226 | ||||||||||||||||||
Income taxes |
74,978 | 37,554 | 81,829 | 9,755 | (81,449 | ) | 122,667 | |||||||||||||||||
Operating/reported net income |
$ | 139,245 | $ | 69,744 | $ | 151,968 | $ | 18,115 | $ | 36,683 | $ | 415,755 | ||||||||||||
2010 |
||||||||||||||||||||||||
Net interest income |
$ | 637,863 | 155,686 | 247,319 | $ | 120,511 | $ | 42,132 | $ | 1,203,511 | ||||||||||||||
Provision for credit losses |
150,320 | 57,607 | 202,440 | 45,700 | 91,507 | 547,574 | ||||||||||||||||||
Noninterest income |
300,444 | 80,667 | 58,625 | 246,704 | 91,198 | 777,638 | ||||||||||||||||||
Noninterest expense |
670,458 | 115,457 | 114,366 | 261,876 | 77,056 | 1,239,213 | ||||||||||||||||||
Income taxes |
41,136 | 22,151 | (3,802 | ) | 20,875 | (75,445 | ) | 4,915 | ||||||||||||||||
Operating/reported net income |
$ | 76,393 | $ | 41,138 | $ | (7,060 | ) | $ | 38,764 | $ | 40,212 | $ | 189,447 | |||||||||||
Assets at | Deposits at | |||||||||||||||||||||||
September 30, | December 31, | September 30, | September 30, | December 31, | September 30, | |||||||||||||||||||
(dollar amounts in millions) | 2011 | 2010 | 2010 | 2011 | 2010 | 2010 | ||||||||||||||||||
Retail & Business Banking |
$ | 13,650 | $ | 13,088 | $ | 13,147 | $ | 28,095 | $ | 29,298 | $ | 28,735 | ||||||||||||
Regional & Commercial Banking |
9,757 | 8,720 | 8,286 | 4,173 | 3,538 | 3,217 | ||||||||||||||||||
AFCRE |
12,351 | 13,233 | 13,078 | 817 | 753 | 776 | ||||||||||||||||||
WGH |
7,132 | 6,971 | 6,756 | 9,013 | 7,449 | 7,247 | ||||||||||||||||||
Treasury / Other |
12,089 | 11,808 | 11,980 | 1,122 | 816 | 1,097 | ||||||||||||||||||
Total |
$ | 54,979 | $ | 53,820 | $ | 53,247 | $ | 43,220 | $ | 41,854 | $ | 41,072 | ||||||||||||
141
Item 3: | Quantitative and Qualitative Disclosures about Market Risk |
Item 4: | Controls and Procedures |
Item 1: | Legal Proceedings |
Item 1A: | Risk Factors |
Item 6. | Exhibits |
142
SEC File or | ||||||||||||
Exhibit | Report or Registration | Registration | Exhibit | |||||||||
Number | Document Description | Statement | Number | Reference | ||||||||
2.1 | Agreement and Plan of Merger, dated December 20, 2006 by and
among Huntington Bancshares Incorporated, Penguin Acquisition,
LLC and Sky Financial Group, Inc.
|
Current Report on Form 8-K dated December 22, 2006. | 000-02525 | 2.1 | ||||||||
3.1 | Articles of Restatement of Charter.
|
Annual Report on Form 10-K for the year ended December 31, 1993. | 000-02525 | 3 | (i) | |||||||
3.2 | Articles of Amendment to Articles of Restatement of Charter.
|
Current Report on Form 8-K dated May 31, 2007 | 000-02525 | 3.1 | ||||||||
3.3 | Articles of Amendment to Articles of Restatement of Charter.
|
Current Report on Form 8-K dated May 7, 2008 | 000-02525 | 3.1 | ||||||||
3.4 | Articles of Amendment to Articles of Restatement of Charter.
|
Current Report on Form 8-K dated April 27, 2010 | 001-34073 | 3.1 | ||||||||
3.5 | Articles Supplementary of Huntington Bancshares Incorporated, as
of April 22, 2008.
|
Current Report on Form 8-K dated April 22, 2008 | 000-02525 | 3.1 | ||||||||
3.6 | Articles Supplementary of Huntington Bancshares Incorporated, as
of April 22. 2008.
|
Current Report on Form 8-K dated April 22, 2008 | 000-02525 | 3.2 | ||||||||
3.7 | Articles Supplementary of Huntington Bancshares Incorporated, as
of November 12, 2008.
|
Current Report on Form 8-K dated November 12, 2008 | 001-34073 | 3.1 | ||||||||
3.8 | Articles Supplementary of Huntington Bancshares Incorporated, as
of December 31, 2006.
|
Annual Report on Form 10-K for the year ended December 31, 2006 | 000-02525 | 3.4 | ||||||||
3.9 | Bylaws of Huntington Bancshares Incorporated, as amended and
restated, as of April 22, 2010.
|
Current Report on Form 8-K dated April 27, 2010. | 001-34073 | 3.2 | ||||||||
4.1 | Instruments defining the Rights of Security Holders reference
is made to Articles Fifth, Eighth, and Tenth of Articles of
Restatement of Charter, as amended and supplemented. Instruments
defining the rights of holders of long-term debt will be
furnished to the Securities and Exchange Commission upon
request. |
|||||||||||
12.1 | Ratio of Earnings to Fixed Charges. |
|||||||||||
12.2 | Ratio of Earnings to Fixed Charges and Preferred Stock Dividends. |
|||||||||||
31.1 | Rule 13a-14(a) Certification Chief Executive Officer. |
|||||||||||
31.2 | Rule 13a-14(a) Certification Chief Financial Officer. |
|||||||||||
32.1 | Section 1350 Certification Chief Executive Officer. |
|||||||||||
32.2 | Section 1350 Certification Chief Financial Officer. |
|||||||||||
101 | ** | The following material from Huntingtons Form 10-Q Report for
the quarterly period ended September 30, 2011, formatted in
XBRL: (i) Unaudited Condensed Consolidated Balance Sheets, (ii)
Unaudited Condensed Consolidated Statements of Income, (iii)
Unaudited Condensed Consolidated Statement of Changes in
Shareholders Equity, (iv) Unaudited Condensed Consolidated
Statements of Cash Flows, and (v) the Notes to Unaudited
Condensed Consolidated Financial Statements. |
* | Denotes management contract or compensatory plan or arrangement. |
|
** | Furnished, not filed. |
143
Huntington Bancshares Incorporated (Registrant) |
||||
Date: October 31, 2011 | /s/ Stephen D. Steinour | |||
Stephen D. Steinour | ||||
Chairman, Chief Executive Officer and President | ||||
Date: October 31, 2011 | /s/ Donald R. Kimble | |||
Donald R. Kimble | ||||
Sr. Executive Vice President and Chief Financial Officer |
144
(Unaudited) | ||||||||||||||||||||||||||||
Nine Months Ended | ||||||||||||||||||||||||||||
September 30, | Twelve Months Ended December 31, | |||||||||||||||||||||||||||
(dollar amounts in thousands) | 2011 | 2010 | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||||
Earnings: |
||||||||||||||||||||||||||||
Income (loss) before income taxes |
$ | 538,422 | $ | 194,362 | $ | 352,311 | $ | (3,678,183 | ) | $ | (296,008 | ) | $ | 22,643 | $ | 514,061 | ||||||||||||
Add: Fixed charges, excluding
interest on deposits |
73,668 | 78,770 | 102,969 | 155,269 | 351,672 | 431,320 | 345,253 | |||||||||||||||||||||
Earnings available for fixed charges,
excluding interest
on deposits |
612,090 | 273,132 | 455,280 | (3,522,914 | ) | 55,664 | 453,963 | 859,314 | ||||||||||||||||||||
Add: Interest on deposits |
209,085 | 346,504 | 439,050 | 674,101 | 931,679 | 1,026,388 | 717,167 | |||||||||||||||||||||
Earnings available for fixed charges,
including interest
on deposits |
821,175 | 619,636 | 894,330 | (2,848,813 | ) | 987,343 | 1,480,351 | 1,576,481 | ||||||||||||||||||||
Fixed Charges: |
||||||||||||||||||||||||||||
Interest expense, excluding
interest on deposits |
61,780 | 67,086 | 87,537 | 139,754 | 334,952 | 415,063 | 334,175 | |||||||||||||||||||||
Interest factor in net rental expense |
11,888 | 11,684 | 15,432 | 15,515 | 16,720 | 16,257 | 11,078 | |||||||||||||||||||||
Total fixed charges, excluding
interest on deposits |
73,668 | 78,770 | 102,969 | 155,269 | 351,672 | 431,320 | 345,253 | |||||||||||||||||||||
Add: Interest on deposits |
209,085 | 346,504 | 439,050 | 674,101 | 931,679 | 1,026,388 | 717,167 | |||||||||||||||||||||
Total fixed charges, including
interest on deposits |
$ | 282,753 | $ | 425,274 | $ | 542,019 | $ | 829,370 | $ | 1,283,351 | $ | 1,457,708 | $ | 1,062,420 | ||||||||||||||
Ratio of Earnings to Fixed Charges |
||||||||||||||||||||||||||||
Excluding interest on deposits |
8.31 | x | 3.47 | x | 4.42 | x | (22.69 | )x | 0.16 | x | 1.05 | x | 2.49 | x | ||||||||||||||
Including interest on deposits |
2.90 | x | 1.46 | x | 1.65 | x | (3.43 | )x | 0.77 | x | 1.02 | x | 1.48 | x |
(Unaudited) | ||||||||||||||||||||||||||||
Nine Months Ended | ||||||||||||||||||||||||||||
September 30, | Twelve Months Ended December 31, | |||||||||||||||||||||||||||
(dollar amounts in thousands) | 2011 | 2010 | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||||
Earnings: |
||||||||||||||||||||||||||||
Income (loss) before income taxes |
$ | 538,422 | $ | 194,362 | $ | 352,311 | $ | (3,678,183 | ) | $ | (296,008 | ) | $ | 22,643 | $ | 514,061 | ||||||||||||
Add: Fixed charges, excluding
interest on deposits and
preferred stock dividends |
73,668 | 78,770 | 102,969 | 155,269 | 351,672 | 431,320 | 345,253 | |||||||||||||||||||||
Earnings available for fixed charges,
excluding interest on
deposits |
612,090 | 273,132 | 455,280 | (3,522,914 | ) | 55,664 | 453,963 | 859,314 | ||||||||||||||||||||
Add: Interest on deposits |
209,085 | 346,504 | 439,050 | 674,101 | 931,679 | 1,026,388 | 717,167 | |||||||||||||||||||||
Earnings available for fixed charges,
including interest on
deposits |
821,175 | 619,636 | 894,330 | (2,848,813 | ) | 987,343 | 1,480,351 | 1,576,481 | ||||||||||||||||||||
Fixed Charges: |
||||||||||||||||||||||||||||
Interest expense, excluding
interest on deposits |
61,780 | 67,086 | 87,537 | 139,754 | 334,952 | 415,063 | 334,175 | |||||||||||||||||||||
Interest factor in net rental expense |
11,888 | 11,684 | 15,432 | 15,515 | 16,720 | 16,257 | 11,078 | |||||||||||||||||||||
Preferred stock dividends |
23,110 | 88,278 | 172,032 | 174,756 | 46,400 | | | |||||||||||||||||||||
Total fixed charges, excluding
interest on deposits |
96,778 | 167,048 | 275,001 | 330,025 | 398,072 | 431,320 | 345,253 | |||||||||||||||||||||
Add: Interest on deposits |
209,085 | 346,504 | 439,050 | 674,101 | 931,679 | 1,026,388 | 717,167 | |||||||||||||||||||||
Total fixed charges, including
interest on deposits |
$ | 305,863 | $ | 513,552 | $ | 714,051 | $ | 1,004,126 | $ | 1,329,751 | $ | 1,457,708 | $ | 1,062,420 | ||||||||||||||
Ratio of Earnings to Fixed Charges and Preferred Stock Dividends |
||||||||||||||||||||||||||||
Excluding interest on deposits |
6.32 | x | 1.64 | x | 1.66 | x | (10.67 | )x | 0.14 | x | 1.05 | x | 2.49 | x | ||||||||||||||
Including interest on deposits |
2.68 | x | 1.21 | x | 1.25 | x | (2.84 | )x | 0.74 | x | 1.02 | x | 1.48 | x |
1. | I have reviewed this Quarterly Report on Form 10-Q of Huntington Bancshares
Incorporated; |
2. | Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading with
respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the financial
condition, results of operations, and cash flows of the registrant as of, and for, the
periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing
and maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrants disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrants internal
control over financial reporting that occurred during the registrants most
recent fiscal quarter (the registrants fourth fiscal quarter in the case of an
annual report) that has materially affected or is reasonably likely to materially
affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the registrants
auditors and the audit committee of the registrants board of directors (or persons
performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrants ability to record, process,
summarize, and report financial information; and |
b) | any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants internal control
over financial reporting. |
/s/ Stephen D. Steinour | ||||
Stephen D. Steinour | ||||
Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Huntington Bancshares
Incorporated; |
2. | Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading with
respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the financial
condition, results of operations, and cash flows of the registrant as of, and for, the
periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing
and maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrants disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrants internal
control over financial reporting that occurred during the registrants most
recent fiscal quarter (the registrants fourth fiscal quarter in the case of an
annual report) that has materially affected or is reasonably likely to materially
affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the registrants
auditors and the audit committee of the registrants board of directors (or persons
performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrants ability to record, process,
summarize, and report financial information; and |
b) | any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants internal control
over financial reporting. |
/s/ Donald R. Kimble | ||||
Donald R. Kimble | ||||
Chief Financial Officer |
/s/ Stephen D. Steinour | ||||
Stephen D. Steinour | ||||
October 31, 2011 | Chief Executive Officer |
/s/ Donald R. Kimble | ||||
Donald R. Kimble | ||||
October 31, 2011 | Chief Financial Officer |
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