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Loans and Leases and Allowance for Credit Losses
12 Months Ended
Dec. 31, 2011
Loans / Leases and Allowance for Credit Losses [Abstract]  
Loans / Leases AND ALLOWANCE FOR CREDIT LOSSES

3. Loans and Leases AND ALLOWANCE FOR CREDIT LOSSES

 

Loans and direct financing leases for which Huntington has the intent and ability to hold for the foreseeable future (at least 12 months), or until maturity or payoff, are classified in the Consolidated Balance Sheets as loans and leases. Except for loans which are subject to fair value requirements, loans and leases are carried at the principal amount outstanding, net of unamortized deferred loan origination fees and costs and net of unearned income. At December 31, 2011 and 2010, the aggregate amount of these net unamortized deferred loan origination fees and net unearned income was $122.5 million and $158.2 million, respectively.

 

Loan and Lease Portfolio Composition

 

The Company's primary portfolios are: C&I, CRE, automobile, residential mortgage, home equity, and other consumer loans. Classes are generally disaggregations of a portfolio. The classes within the C&I portfolio are: owner occupied and nonowner occupied. The classes within the CRE portfolio are: retail properties, multi-family, office, industrial and warehouse, and other CRE. The classes within the home equity portfolio are: first-lien loans and second-lien loans. The automobile, residential mortgage, and other consumer loan portfolios are not further segregated into classes.

 

Direct Financing Leases

 

Huntington's loan and lease portfolio includes lease financing receivables consisting of direct financing leases on equipment, which are included in C&I loans, and on automobiles. Net investments in lease financing receivables by category at December 31 were as follows:

 

   At December 31,
(dollar amounts in thousands)  2011  2010
       
Commercial and industrial:      
Lease payments receivable $ 1,001,939 $ 748,377
Estimated residual value of leased assets   201,663   94,665
Gross investment in commercial lease financing receivables   1,203,602   843,042
Net deferred origination costs   3,034   2,472
Unearned income   (109,820)   (109,962)
Total net investment in commercial lease financing receivables $ 1,096,816 $ 735,552
       
Consumer - Automobile:      
Lease payments receivable $ 2,562 $ 22,063
Estimated residual value of leased assets   10,843   47,050
Gross investment in consumer lease financing receivables   13,405   69,113
Net deferred origination fees    (18)   (95)
Unearned income   (497)   (3,788)
Total net investment in consumer lease financing receivables $ 12,890 $ 65,230

The future lease rental payments due from customers on direct financing leases at December 31, 2011, totaled $1.0 billion and were as follows: $0.4 billion in 2012; $0.2 billion in 2013; $0.2 billion in 2014; $0.1 billion in 2015; and $0.1 billion in 2016 and thereafter.

 

Loan Purchases and Sales

The following table summarizes significant portfolio loan purchase and sale activity for the years ended December 31, 2011, and 2010.

                 
   CommercialCommercial HomeResidentialOther 
 and IndustrialReal EstateAutomobileEquityMortgageConsumerTotal
 (dollar amounts in thousands)              
                 
 Portfolio loans purchased during the:              
  Year ended December 31, 2011$ ---$ ---$ 59,578(1)$ ---$ ---$ ---$ 59,578
  Year ended December 31, 2010  ---  ---  ---  ---  ---  ---  ---
                 
 Portfolio loans sold or transferred to loans held for sale during the:              
  Year ended December 31, 2011  256,313  56,123  2,250,033  ---  257,100  ---  2,819,569
  Year ended December 31, 2010 (2)  124,065  136,806  ---  48,253  816,185  ---  1,125,309
                 
 (1)Reflected the purchase of automobile loans as a result of exercising a clean-up call option related to loans previously sold under Huntington's automobile loan sale program.
 (2)Includes $323 million of Franklin-related loans.

NALs and Past Due Loans

 

Loans are considered past due when the contractual amounts due with respect to principal and interest are not received within 30 days of the contractual due date.

 

Any loan in any portfolio may be placed on nonaccrual status prior to the policies described below when collection of principal or interest is in doubt.

 

All classes within the C&I and CRE portfolios are placed on nonaccrual status at no greater than 90-days past due. First-lien and second-lien home equity portfolios are placed on nonaccrual status at 150-days past due and 120-days past due, respectively. Automobile and other consumer loans are not placed on nonaccrual status, but are generally charged-off when the loan is 120-days past due. Residential mortgage loans are placed on nonaccrual status at 150-days past due, with the exception of residential mortgages guaranteed by government agencies which continue to accrue interest at the rate guaranteed by the government agency. We are reimbursed from the government agency for reasonable expenses incurred in servicing loans. The FHA reimburses us for 66% of expenses, and the VA reimburses us at a maximum percentage of guarantee which is established for each individual loan. We have not experienced either material losses in excess of guarantee caps or significant delays or rejected claims from the related government entity.

For all classes within all loan portfolios, when a loan is placed on nonaccrual status, any accrued interest income is reversed with current year accruals charged to interest income, and prior year amounts charged-off as a credit loss.

 

For all classes within all loan portfolios, cash receipts received on NALs are applied entirely against principal until the loan or lease has been collected in full, after which time any additional cash receipts are recognized as interest income.

 

The amount of interest that would have been recorded under the original terms for total NAL loans was $38.4 million for 2011, $59.7 million for 2010, and $92.7 million for 2009. The total amount of interest recorded to interest income for these loans was $5.1 million, $5.5 million, and $7.2 million in 2011, 2010, and 2009, respectively.

 

Regarding all classes within the C&I and CRE portfolios, the determination of a borrower's ability to make the required principal and interest payments is based on an examination of the borrower's current financial statements, industry, management capabilities, and other qualitative measures. For all classes within the consumer loan portfolio, the determination of a borrower's ability to make the required principal and interest payments is based on multiple factors, including number of days past due and, in some instances, an evaluation of the borrower's financial condition. When, in Management's judgment, the borrower's ability to make required principal and interest payments resumes and collectability is no longer in doubt, the loan or lease is returned to accrual status. For these loans that have been returned to accrual status, cash receipts are applied according to the contractual terms of the loan. Regarding all classes within the C&I and CRE portfolios, the determination of a borrower's ability to make the required principal and interest payments is based on an examination of the borrower's current financial statements, industry, management capabilities, and other qualitative measures. For all classes within the consumer loan portfolio, the determination of a borrower's ability to make the required principal and interest payments is based on multiple factors, including number of days past due and, in some instances, an evaluation of the borrower's financial condition. When, in Management's judgment, the borrower's ability to make required principal and interest payments resumes and collectability is no longer in doubt, the loan or lease is returned to accrual status. For these loans that have been returned to accrual status, cash receipts are applied according to the contractual terms of the loan.

 

The following table presents NALs by loan class for the years ended December 31, 2011 and 2010:

   December 31,
(dollar amounts in thousands) 2011 2010
      
Commercial and industrial:    
 Owner occupied$ 88,415$ 138,822
 Other commercial and industrial  113,431  207,898
Total commercial and industrial  201,846  346,720
      
Commercial real estate:    
 Retail properties  58,415  96,644
 Multi family  39,921  44,819
 Office  33,202  47,950
 Industrial and warehouse  30,119  39,770
 Other commercial real estate  68,232  134,509
Total commercial real estate  229,889  363,692
      
Automobile  ---  ---
Home equity:    
 Secured by first-lien  20,012  10,658
 Secured by second-lien  20,675  11,868
Residential mortgage  68,658  45,010
Other consumer  ---  ---
Total nonaccrual loans$ 541,080$ 777,948
      

The following table presents an aging analysis of loans and leases for the years ended December 31, 2011 and 2010 (1):

 

December 31, 2011
               90 or more
(dollar amounts in thousands)Past Due   Total Loans days past due
 30-59 days60-89 days 90 or more daysTotal Currentand Leases and accruing
                  
Commercial and industrial:                
 Owner occupied$ 10,607$ 7,433$ 58,513$ 76,553 $ 3,936,203$ 4,012,756 $ ---
 Other commercial and industrial  32,962  7,579  60,833  101,374   10,585,241  10,686,615   ---
Total commercial and industrial$ 43,569$ 15,012$ 119,346$ 177,927 $ 14,521,444$ 14,699,371 $ ---
                  
Commercial real estate:                
 Retail properties$ 3,090$ 823$ 33,952$ 37,865 $ 1,547,618$ 1,585,483 $ ---
 Multi family  5,022  1,768  28,317  35,107   908,438  943,545   ---
 Office  3,134  792  30,041  33,967   990,897  1,024,864   ---
 Industrial and warehouse  2,834  115  18,203  21,152   708,390  729,542   ---
 Other commercial real estate  6,894  3,625  48,739  59,258   1,483,017  1,542,275   ---
Total commercial real estate$ 20,974$ 7,123$ 159,252$ 187,349 $ 5,638,360$ 5,825,709 $ ---
                  
Automobile$ 42,162$ 9,046$ 6,265$ 57,473 $ 4,399,973$ 4,457,446 $ 6,265
Home equity:                
 Secured by first-lien  17,260  8,822  29,259  55,341   3,760,238  3,815,579   9,247
 Secured by second-lien  32,334  18,357  31,626  82,317   4,317,517  4,399,834   10,951
Residential mortgage  134,228  45,774  204,648  384,650   4,843,626  5,228,276   141,901(2)
Other consumer  7,655  1,502  1,988  11,145   486,423  497,568   1,988
                  
December 31, 2010
               90 or more
(dollar amounts in thousands)Past Due   Total Loans days past due
 30-59 days60-89 days 90 or more daysTotal Currentand 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 loan's past due status.
(2)Includes $96,703 thousand guaranteed by the U.S. government.
(3)Includes $98,288 thousand guaranteed by the U.S. government.

Allowance for Credit Losses

 

Huntington maintains two reserves, both of which reflect Management's judgment regarding the appropriate level necessary to absorb credit losses inherent in our loan and lease portfolio: the ALLL and the AULC. Combined, these reserves comprise the total ACL. The determination of the ACL requires significant estimates, including the timing and amounts of expected future cash flows on impaired loans and leases, consideration of current economic conditions, and historical loss experience pertaining to pools of homogeneous loans and leases, all of which may be susceptible to change.

 

The appropriateness of the ACL is based on Management's current judgments about the credit quality of the loan portfolio. These judgments consider on-going evaluations of the loan and lease portfolio, including such factors as the differing economic risks associated with each loan category, the financial condition of specific borrowers, the level of delinquent loans, the value of any collateral and, where applicable, the existence of any guarantees or other documented support. Further, Management evaluates the impact of changes in interest rates and overall economic conditions on the ability of borrowers to meet their financial obligations when quantifying our exposure to credit losses and assessing the appropriateness of our ACL at each reporting date. In addition to general economic conditions and the other factors described above, additional factors also considered include: the impact of declining residential real estate values; the diversification of CRE loans; and the amount of C&I loans to businesses in areas of Ohio and Michigan that have historically experienced less economic growth compared with other footprint markets. Also, the ACL assessment includes the on-going assessment of credit quality metrics, and a comparison of certain ACL benchmarks to current performance. Management's determinations regarding the appropriateness of the ACL are reviewed and approved by the Company's board of directors.

 

The ALLL consists of two components: (1) the transaction reserve, which includes specific reserves related to loans considered to be impaired and loans involved in troubled debt restructurings, and (2) the general reserve. The transaction reserve component includes both (1) an estimate of loss based on pools of commercial and consumer loans and leases with similar characteristics and (2) an estimate of loss based on an impairment review of each impaired C&I and CRE loan greater than $1 million. For the C&I and CRE portfolios, the estimate of loss based on pools of loans and leases with similar characteristics is made by applying a PD factor and a LGD factor to each individual loan based on a continuously updated loan grade, using a standardized loan grading system. The PD factor and an LGD factor are determined for each loan grade using statistical models based on historical performance data. The PD factor considers on-going reviews of the financial performance of the specific borrower, including cash flow, debt-service coverage ratio, earnings power, debt level, and equity position, in conjunction with an assessment of the borrower's industry and future prospects. The LGD factor considers analysis of the type of collateral and the relative LTV ratio. These reserve factors are developed based on credit migration models that track historical movements of loans between loan ratings over time and a combination of long-term average loss experience of our own portfolio and external industry data using a 24-month emergence period.

 

In the case of more homogeneous portfolios, such as automobile loans, home equity loans, and residential mortgage loans, the determination of the transaction reserve also incorporates PD and LGD factors, however, the estimate of loss is based on pools of loans and leases with similar characteristics. The PD factor considers current credit scores unless the account is delinquent, in which case a higher PD factor is used. The credit score provides a basis for understanding the borrowers past and current payment performance, and this information is used to estimate expected losses over the subsequent 12-month period. The performance of first-lien loans ahead of our second-lien loans is available to use as part of our updated score process. The LGD factor considers analysis of the type of collateral and the relative LTV ratio. Credit scores, models, analyses, and other factors used to determine both the PD and LGD factors are updated frequently to capture the recent behavioral characteristics of the subject portfolios, as well as any changes in loss mitigation or credit origination strategies, and adjustments to the reserve factors are made as needed.

 

The general reserve consists of economic reserve and risk-profile reserve components. The economic reserve component considers the potential impact of changing market and economic conditions on portfolio performance. The risk-profile component considers items unique to our structure, policies, processes, and portfolio composition, as well as qualitative measurements and assessments of the loan portfolios including, but not limited to, management quality, concentrations, portfolio composition, industry comparisons, and internal review functions.

 

The estimate for the AULC is determined using the same procedures and methodologies as used for the ALLL. The loss factors used in the AULC are the same as the loss factors used in the ALLL while also considering a historical utilization of unused commitments. The AULC is reflected in accrued expenses and other liabilities in the Consolidated Balance Sheets.

 

The ACL is increased through a provision for credit losses that is charged to earnings, based on Management's quarterly evaluation of the factors previously mentioned, and is reduced by charge-offs, net of recoveries, and the ACL associated with securitized or sold loans. A summary of the transactions in the ACL and details regarding impaired loans and leases follows for the three years ended December 31, 2011, 2010, and 2009:

   Year Ended December 31,
(dollar amounts in thousands) 2011  2010  2009
          
ALLL, beginning of year$ 1,249,008 $ 1,482,479 $ 900,227
Loan charge-offs  (557,753)   (1,003,907)   (1,561,378)
Recoveries of loans previously charged-off  120,664   129,433   84,791
Net loan and lease charge-offs  (437,089)   (874,474)   (1,476,587)
Provision for loan and lease losses  167,730   641,299   2,069,931
Allowance for loans sold or transferred to loans held for sale  (14,821)   (296)   (11,092)
ALLL, end of year$ 964,828 $ 1,249,008 $ 1,482,479
          
AULC, beginning of year$ 42,127 $ 48,879 $ 44,139
(Reduction in) provision for unfunded loan commitments and letters of credit losses  6,329   (6,752)   4,740
AULC, end of year$ 48,456 $ 42,127 $ 48,879
          
Total ACL$ 1,013,284 $ 1,291,135 $ 1,531,358
          
Recorded balance of impaired loans, at end of year:        
 With specific reserves assigned to the loan and lease balances$ 890,269 $ 825,292 $ 873,215
 With no specific reserves assigned to the loan and lease balances  82,012   94,290   221,384
Total$ 972,281 $ 919,582 $ 1,094,599
          
Average balance of impaired loans for the year$ 942,235 $ 1,064,235 $ 1,010,044
ALLL on impaired loans  105,552   143,860   175,442

The following table presents ACL activity by portfolio segment for the years ended December 31, 2011 and 2010:

   CommercialCommercial HomeResidentialOther  
 and IndustrialReal EstateAutomobileEquityMortgageConsumerTotal
(dollar amounts in thousands)              
                 
Year ended December 31, 2011:              
                 
 ALLL balance, beginning of period$ 340,614$ 588,251$ 49,488$ 150,630$ 93,289$ 26,736$ 1,249,008
  Loan charge-offs  (134,385)  (182,759)  (33,593)  (109,427)  (65,069)  (32,520)  (557,753)
  Recoveries of loans previously charged-off  44,686  34,658  18,526  7,630  8,388  6,776  120,664
  Provision for loan and lease losses  24,452  (51,444)  17,042  95,040  52,226  30,414  167,730
  Allowance for loans sold or transferred to loans held for sale  ---  ---  (13,181)  ---  (1,640)  ---  (14,821)
 ALLL balance, end of period$ 275,367$ 388,706$ 38,282$ 143,873$ 87,194$ 31,406$ 964,828
                 
 AULC balance, beginning of period$ 32,726$ 6,158$ ---$ 2,348$ 1$ 894$ 42,127
  Provision for unfunded loan commitments and letters of credit  6,932  (306)  ---  (214)  ---  (83)  6,329
 AULC balance, end of period$ 39,658$ 5,852$ ---$ 2,134$ 1$ 811$ 48,456
 ACL balance, end of period$ 315,025$ 394,558$ 38,282$ 146,007$ 87,195$ 32,217$ 1,013,284

Year Ended December 31, 2010:              
                 
 ALLL balance, beginning of period$ 492,205$ 751,875$ 57,951$ 102,039$ 55,903$ 22,506$ 1,482,479
  Loan charge-offs  (316,771)  (303,995)  (46,308)  (140,831)(1)  (163,427)(2)  (32,575)  (1,003,907)
  Recoveries of loans previously charged-off  61,839  28,433  19,736  1,458  10,532  7,435  129,433
  Provision for loan and lease losses  103,341  111,938  18,109  187,964  190,577  29,370  641,299
  Allowance for loans sold or transferred to loans held for sale  ---  ---  ---  ---  (296)  ---  (296)
 ALLL balance, end of period$ 340,614$ 588,251$ 49,488$ 150,630$ 93,289$ 26,736$ 1,249,008
 AULC balance, beginning of period$ 34,555$ 12,194$ ---$ 1,179$ 2$ 949$ 48,879
  Provision for unfunded loan commitments and letters-of-credit  (1,829)  (6,036)  ---  1,169  (1)  (55)  (6,752)
 AULC balance, end of period  32,726  6,158  ---  2,348  1  894  42,127
 ACL balance, end of period$ 373,340$ 594,409$ 49,488$ 152,978$ 93,290$ 27,630$ 1,291,135
                 
(1)Reflects $21 million of Franklin-related charge-offs.
(2)Reflects $71 million of Franklin-related charge-offs.

Any loan in any portfolio may be charged-off prior to the policies described below if a loss confirming event has occurred. Loss confirming events include, but are not limited to, bankruptcy (unsecured), continued delinquency, foreclosure, or receipt of an asset valuation indicating a collateral deficiency and that asset is the sole source of repayment.

 

C&I and CRE loans are either charged-off or written down to net realizable value at 90-days past due. Automobile loans and other consumer loans are charged-off at 120-days past due. First-lien and second-lien home equity loans are charged-off to the estimated fair value of the collateral, less anticipated selling costs, at 150-days past due and 120-days past due, respectively. Residential mortgages are charged-off to the estimated fair value of the collateral at 150-days past due.

 

Credit Quality Indicators

 

To facilitate the monitoring of credit quality for C&I and CRE loans, and for purposes of determining an appropriate ACL level for these loans, Huntington utilizes the following categories of credit grades:

 

Pass = Higher quality loans that do not fit any of the other categories described below.

 

OLEM = Potentially weak loans. The credit risk may be relatively minor yet represent a risk given certain specific circumstances. If the potential weaknesses are not monitored or mitigated, the loan may weaken or inadequately protect Huntington's position in the future.

 

Substandard = Inadequately protected loans by the borrower's ability to repay, equity, and/or the collateral pledged to secure the loan. These loans have identified weaknesses that could hinder normal repayment or collection of the debt. It is likely Huntington will sustain some loss if any identified weaknesses are not mitigated.

 

Doubtful = Loans that have all of the weaknesses inherent in those loans classified as Substandard, with the added elements of the full collection of the loan is improbable and that the possibility of loss is high.

 

The categories above, which are derived from standard regulatory rating definitions, are assigned upon initial approval of the loan or lease and subsequently updated as appropriate.

 

Commercial loans categorized as OLEM, Substandard, or Doubtful are considered Criticized loans. Commercial loans categorized as Substandard or Doubtful are also considered Classified loans.

 

For all classes within all consumer loan portfolios, each loan is assigned a specific PD factor that is generally based on the borrower's most recent credit bureau score (FICO), which we update quarterly. A FICO credit bureau score is a credit score developed by Fair Isaac Corporation based on data provided by the credit bureaus. The FICO credit bureau score is widely accepted as the standard measure of consumer credit risk used by lenders, regulators, rating agencies, and consumers. The higher the FICO credit bureau score, the higher likelihood of repayment and therefore, an indicator of lower credit risk.

 

The following table presents each loan and lease class by credit quality indicator for the years ended December 31, 2011 and 2010:

 

  December 31, 2011
 Credit Risk Profile by UCS classification
(dollar amounts in thousands)PassOLEMSubstandardDoubtfulTotal
Commercial and industrial:          
 Owner occupied$ 3,624,103$ 101,897$ 285,561$ 1,195$ 4,012,756
 Other commercial and industrial  10,108,946  145,963  425,882  5,824  10,686,615
Total commercial and industrial$ 13,733,049$ 247,860$ 711,443$ 7,019$ 14,699,371
            
Commercial real estate:          
 Retail properties$ 1,191,471$ 122,337$ 271,675$ ---$ 1,585,483
 Multi family  801,717  48,094  93,449  285  943,545
 Office  896,230  67,050  61,476  108  1,024,864
 Industrial and warehouse  649,165  9,688  70,621  68  729,542
 Other commercial real estate  1,112,751  110,276  318,479  769  1,542,275
Total commercial real estate$ 4,651,334$ 357,445$ 815,700$ 1,230$ 5,825,709
            
  Credit Risk Profile by FICO score (1)
  750+650-749<650Other (2)Total
Automobile$ 2,635,082$ 2,276,990$ 707,141$ 88,233$ 5,707,446(3)
Home equity:          
 Secured by first-lien  2,196,566  1,287,444  329,670  1,899  3,815,579
 Secured by second-lien  2,119,292  1,646,117  625,298  9,127  4,399,834
Residential mortgage  2,454,401  1,752,409  723,377  298,089  5,228,276
Other consumer  185,333  206,749  83,431  22,055  497,568
            
            
            
  December 31, 2010
 Credit Risk Profile by UCS classification
(dollar amounts in thousands)PassOLEMSubstandardDoubtfulTotal
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<650Other (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.
(3)Includes $1,250,000 thousand of loans reflected as loans held for sale related to a planned automobile securitization.

Impaired Loans

For all classes within the C&I and CRE portfolios, all loans with an outstanding balance of $1 million or greater are evaluated on a quarterly basis for impairment. Generally, consumer loans within any class are not individually evaluated on a regular basis for impairment.

Once a loan has been identified for an assessment of impairment, the loan is considered impaired when, based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreement will not be collected. This determination requires significant judgment and use of estimates, and the eventual outcome may differ significantly from those estimates.

 

When a loan in any class has been determined to be impaired, the amount of the impairment is measured using the present value of expected future cash flows discounted at the loan's effective interest rate or, as a practical expedient, the observable market price of the loan, or the fair value of the collateral if the loan is collateral dependent. When the present value of expected future cash flows is used, the effective interest rate is the original contractual interest rate of the loan adjusted for any premium or discount. When the contractual interest rate is variable, the effective interest rate of the loan changes over time. A specific reserve is established as a component of the ALLL when a loan has been determined to be impaired. Subsequent to the initial measurement of impairment, if there is a significant change to the impaired loan's expected future cash flows, or if actual cash flows are significantly different from the cash flows previously estimated, Huntington recalculates the impairment and appropriately adjusts the specific reserve. Similarly, if Huntington measures impairment based on the observable market price of an impaired loan or the fair value of the collateral of an impaired collateral dependent loan, Huntington will adjust the specific reserve.

 

When a loan within any class is impaired, the accrual of interest income is discontinued unless the receipt of principal and interest is no longer in doubt. Interest income on TDRs is accrued when all principal and interest is expected to be collected under the post-modification terms. Cash receipts received on nonaccruing impaired loans within any class are generally applied entirely against principal until the loan has been collected in full, after which time any additional cash receipts are recognized as interest income. Cash receipts received on accruing impaired loans within any class are applied in the same manner as accruing loans that are not considered impaired.

 

The following tables present the balance of the ALLL attributable to loans by portfolio segment individually and collectively evaluated for impairment and the related loan and lease balance for the years ended December 31, 2011 and 2010 (1):

   CommercialCommercial  ResidentialOther 
 and IndustrialReal EstateAutomobileHome EquityMortgageConsumerTotal
                 
ALLL at December 31, 2011:              
(dollar amounts in thousands)              
                 
 Portion of ending balance:              
                 
  Attributable to loans individually evaluated for impairment$ 30,613$ 55,306$ 1,393$ 1,619$ 16,091$ 530$ 105,552
  Attributable to loans collectively evaluated for impairment  244,754  333,400  36,889  142,254  71,103  30,876  859,276
 Total ALLL balance at December 31, 2011$ 275,367$ 388,706$ 38,282$ 143,873$ 87,194$ 31,406$ 964,828
                 
 ALLL associated with portfolio loans acquired with deteriorated credit quality$ ---$ ---$ ---$ ---$ ---$ ---$ ---
                 
Loans and Leases at December 31, 2011:              
(dollar amounts in thousands)              
                 
 Portion of ending balance:              
                 
  Individually evaluated for impairment$ 153,724$ 387,402$ 36,574$ 52,593$ 335,768$ 6,220$ 972,281
  Collectively evaluated for impairment  14,545,647  5,438,307  4,420,872  8,162,820  4,892,508  491,348  37,951,502
 Total loans evaluated for impairment$ 14,699,371$ 5,825,709$ 4,457,446$ 8,215,413$ 5,228,276$ 497,568$ 38,923,783
                 
                 

 Commercial and IndustrialCommercial Real EstateAutomobile Home EquityResidential MortgageOther ConsumerTotal
                 
ALLL at December 31, 2010              
(dollar amounts in thousands)              
                 
 Portion of ending balance:              
                 
  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 ending balance:              
                 
  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
                 
                 
(1)During the years ended December 31, 2011 and 2010, no loans with deteriorated credit quality were acquired.

The following tables present by class the ending, unpaid principal balance, and the related ALLL, along with the average balance and interest income recognized only for loans and leases individually evaluated for impairment for the years ended December 31, 2011 and 2010 (1), (2):

          Year Ended
 December 31, 2011 December 31, 2011
     Unpaid     Interest
   EndingPrincipalRelated AverageIncome
(dollar amounts in thousands)BalanceBalance (5)Allowance BalanceRecognized
              
With no related allowance recorded:           
 Commercial and industrial:           
  Owner occupied$ ---$ ---$ --- $ 6,285$ 169
  Other commercial and industrial  ---  ---  ---   5,040  162
 Total commercial and industrial$ ---$ ---$ --- $ 11,325$ 331
              
 Commercial real estate:           
  Retail properties$ 43,970$ 45,192$ --- $ 26,717$ 1,082
  Multi family  6,292  6,435  ---   13,757  701
  Office  1,191  1,261  ---   1,624  9
  Industrial and warehouse  8,163  9,945  ---   3,961  131
  Other commercial real estate  22,396  38,401  ---   25,077  796
 Total commercial real estate$ 82,012$ 101,234$ --- $ 71,136$ 2,719
              
 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$ 53,613$ 77,205$ 7,377 $ 53,219$ 1,633
  Other commercial and industrial  100,111  117,469  23,236   100,635  2,952
 Total commercial and industrial$ 153,724$ 194,674$ 30,613 $ 153,854$ 4,585
              
 Commercial real estate: (4)           
  Retail properties$ 129,396$ 161,596$ 30,363 $ 102,384$ 2,897
  Multi family  38,154  45,138  4,753   28,847  829
  Office  23,568  42,287  2,832   26,589  228
  Industrial and warehouse  29,435  47,373  3,136   42,862  740
  Other commercial real estate  84,837  119,212  14,222   86,611  2,326
 Total commercial real estate$ 305,390$ 415,606$ 55,306 $ 287,293$ 7,020
              
 Automobile$ 36,574$ 36,574$ 1,393 $ 32,476$ 2,982
 Home equity:           
  Secured by first-lien  35,842  35,842  626   26,956  1,201
  Secured by second-lien  16,751  16,751  993   15,947  751
 Residential mortgage (6)  335,768  361,161  16,091   335,549  12,894
 Other consumer  6,220  6,220  530   7,699  478

(dollar amounts in thousands)       Year Ended
 December 31, 2010 December 31, 2010
     Unpaid     Interest
   EndingPrincipalRelated AverageIncome
   BalanceBalance (5)Allowance BalanceRecognized
              
With no related allowance recorded:           
 Commercial and Industrial:           
  Owner occupied$ 13,750$ 26,603$ --- $ 8,480$ ---
  Other commercial and industrial  11,127  22,688  ---   14,027  67
 Total commercial and industrial$ 24,877$ 49,291$ --- $ 22,507$ 67
              
 Commercial real estate:           
  Retail properties$ 31,972$ 67,487$ --- $ 42,960$ 65
  Multi family  5,058  5,675  ---   3,510  87
  Office  2,270  3,562  ---   6,769  ---
  Industrial and warehouse  3,305  6,912  ---   7,421  8
  Other commercial real estate  26,807  58,996  ---   38,046  236
 Total commercial real estate$ 69,412$ 142,632$ --- $ 98,706$ 396
              
 Automobile loans and leases$ ---$ ---$ --- $ ---$ ---
 Home equity loans and lines-of-credit:           
  Secured by first-lien  ---  ---  ---   ---  ---
  Secured by second-lien  ---  ---  ---   ---  ---
 Residential mortgage  ---  ---  ---   ---  ---
 Other consumer loans  ---  ---  ---   ---  ---
              
With an allowance recorded:           
 Commercial and Industrial:           
  Owner occupied$ 63,951$ 85,279$ 14,322 $ 51,568$ 58
  Other commercial and industrial  109,292  154,424  48,986   156,572  419
 Total commercial and industrial$ 173,243$ 239,703$ 63,308 $ 208,140$ 477
              
 Commercial real estate:           
  Retail properties$ 74,732$ 120,051$ 14,846 $ 114,263$ 755
  Multi family  38,758  39,299  7,760   55,350  400
  Office  26,595  31,261  9,466   30,312  4
  Industrial and warehouse  34,588  44,168  10,453   59,038  333
  Other commercial real estate  66,583  104,485  22,604   113,414  ---
 Total commercial real estate$ 241,256$ 339,264$ 65,129 $ 372,377$ 1,492
              
 Automobile loans and leases$ 29,764$ 29,764$ 1,477 $ 26,281$ 2,303
 Home equity loans and lines-of-credit:           
  Secured by first-lien  20,553  20,675  511   16,694  710
  Secured by second-lien  16,704  17,060  987   17,114  634
 Residential mortgage  334,207  347,571  11,780   293,256  12,181
 Other consumer loans  9,565  9,565  668   9,163  794
              
(1)These tables do not include loans fully charged-off.
(2)All automobile, home equity, residential mortgage, and other consumer impaired loans included in these tables are considered impaired due to their status as a TDR.
(3)At December 31, 2011, $35,854 thousand of the $153,724 thousand commercial and industrial loans with an allowance recorded were considered impaired due to their status as a TDR.
(4)At December 31, 2011, $28,355 thousand of the $305,390 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 unpaid principal balance amounts represent partial charge-offs.
(6)At December 31, 2011, $22,564 thousand of the $335,768 thousand residential mortgage loans with an allowance recorded were guaranteed by the U.S. government.

TDR Loans

 

TDRs are modified loans where a concession was provided to a borrower experiencing financial difficulties. Loan modifications are considered TDRs when the concessions provided are not available to the borrower through either normal channels or other sources. However, not all loan modifications are TDRs.

 

TDR Concession Types

 

The Company's standards relating to loan modifications consider, among other factors, minimum verified income requirements, cash flow analysis, and collateral valuations. Each potential loan modification is reviewed individually and the terms of the loan are modified to meet a borrower's specific circumstances at a point in time. Commercial loan modifications, including those classified as TDRs, are reviewed and approved by our SAD. The types of concessions provided to borrowers include:

 

  • 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:

     

  • 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 the end of the term of the loan. Principal is generally not forgiven.
  • 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.
  • 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 year ended December 31, 2011, was not significant.

 

TDRs by Loan Type

 

Following is a description of TDRs by the different loan types:

 

Commercial loan TDRs – Commercial accruing TDRs often result from loans receiving a concession with terms that are not considered a market transaction to Huntington. The TDR remains in accruing status as long as the customer is less than 90 days past due on payments per the restructured loan terms and no loss is expected.

 

Commercial nonaccrual TDRs result from either: (1) an accruing commercial TDR being placed on nonaccrual status, or (2) a workout where an existing commercial NAL is restructured and a concession was given. At times, these workouts restructure the NAL so that two or more new notes are created. The primary note is underwritten based upon our normal underwriting standards and is sized so projected cash flows are sufficient to repay contractual principal and interest. The terms on the secondary note(s) vary by situation, and may include notes that defer principal and interest payments until after the primary note is repaid. Creating two or more notes often allows the borrower to continue a project or weather a temporary economic downturn and allows Huntington to right-size a loan based upon the current expectations for a borrower's or project's performance.

 

Our strategy involving TDR borrowers includes working with these borrowers to allow them to refinance elsewhere as well as allow them time to improve their financial position and remain our customer through refinancing their notes according to market terms and conditions in the futureA refinancing or modification of a loan occurs when either the loan matures according to the terms of the TDR-modified agreement or the borrower requests a change to the loan agreements. At that time, the loan is evaluated to determine if it is creditworthy. It is subjected to the normal underwriting standards and processes for other similar credit extensions, both new and existing.

 

In accordance with ASC 310-20-35, the refinanced note is evaluated to determine if it is considered a new loan or a continuation of the prior loan.  A new loan is considered for removal of the TDR designation, whereas a continuation of the prior note requires a continuation of the TDR designation.  In order for a TDR designation to be removed, the borrower must no longer be experiencing financial difficulties and the terms of the refinanced loan must not represent a concession. 

 

 

Residential Mortgage loan TDRs – Residential mortgage TDRs represent loan modifications associated with traditional first-lien mortgage loans in which a concession has been provided to the borrower. The primary concessions given to residential mortgage borrowers are amortization or maturity date changes and interest rate reductions. Residential mortgages identified as TDRs involve borrowers unable to refinance their mortgages through the Company's normal mortgage origination channels or through other independent sources. Some, but not all, of the loans may be delinquent.

 

Other Consumer loan TDRs – Generally, these are TDRs associated with home equity borrowings and automobile loans. The Company may make similar interest rate, term, and principal concessions as with residential mortgage loan TDRs.

 

TDR Impact on Credit Quality

 

Huntington's ALLL is largely driven by updated risk ratings assigned to commercial loans, updated borrower credit scores on consumer loans, and borrower delinquency history in both the commercial and consumer portfolios. As such, the provision for credit losses is impacted primarily by changes in borrower payment performance rather than the TDR classification. TDRs can be classified as either accrual or nonaccrual loans. Nonaccrual TDRs are included in NALs whereas accruing TDRs are excluded from NALs as it is probable that all contractual principal and interest due under the restructured terms will be collected.

 

TDR concessions and classification may reduce the ALLL within certain classes, specifically the C&I and CRE portfolios. The reduction is derived from the type of concessions given to the borrowers and the resulting application of the transaction reserve calculation within the ALLL.  Generally, Huntington's concessions on TDR loans involve an increase in interest rate and extension of maturity.  The transaction reserve for non-TDR loans is calculated based upon several estimated probability factors, such as PD and LGD, both of which were previously discussed above.  Upon the occurrence of a TDR, the transaction reserve is measured based on the estimation of the probable discounted future cash flows expected to be collected on the modified loan.  The resulting TDR ALLL calculation often results in a minimal or zero ALLL amount because (1) it is probable all cash flows will be collected and, (2) due to the rate increase, the discounting of the cash flows on the modified loan, using the pre-modification interest rate, exceeds the carrying value of the loan.

 

However, TDR concessions and classification may increase the ALLL to certain loans, such as consumer loans.  The concessions made to these loans often include interest rate reductions and therefore the TDR ALLL calculation results in a greater ALLL compared with the non-TDR calculation.

 

Commercial loan TDRs – In instances where the bank substantiates that it will collect its outstanding balance in full, the note is considered for return to accrual status upon the borrower sustaining sufficient cash flows for a six-month period of time. This six-month period could extend before or after the restructure date. If a charge-off was taken as part of the restructuring, any interest or principal payments received on that note are applied to first reduce the bank's outstanding book balance and then to recoveries of charged-off principal, unpaid interest, and/or fee expenses.

 

Residential Mortgage and Other Consumer loan TDRs – Modified loans identified as TDRs are aggregated into pools for analysis. Cash flows and weighted average interest rates are used to calculate impairment at the pooled-loan level. Once the loans are aggregated into the pool, they continue to be classified as TDRs until contractually repaid or charged-off.

 

Residential mortgage loans not guaranteed by a U.S. government agency such as the FHA, VA, and the USDA, including TDR loans, are reported as accrual or nonaccrual based upon delinquency status. Nonaccrual TDRs are those that are greater than 150-days contractually past due. Loans guaranteed by U.S. government organizations continue to accrue interest upon delinquency.

 

The following table presents by class and by the reason for the modification the number of contracts, post-modification outstanding balance, and the net change in ALLL resulting from the modification for the year ended December 31, 2011:

   New Troubled Debt Restructurings During The
   Year Ended December 31, 2011
       
    Post-modificationNet change in 
(dollar amounts in thousands) Number ofOutstandingALLL resulting 
  ContractsBalance (1)from modification 
         
C&I - Owner occupied:       
         
 Interest rate reduction  40$ 19,152$ (521) 
 Amortization or maturity date change  60  22,378  (1,812) 
 Other  7  3,373  232 
Total C&I - Owner occupied  107$ 44,903$ (2,101) 
         
C&I - Other commercial and industrial:       
         
 Interest rate reduction  28$ 22,519$ 966 
 Amortization or maturity date change  73  27,822  (2,670) 
 Other  31  56,184  (6,699) 
Total C&I - Other commercial and industrial  132$ 106,525$ (8,403) 
         
CRE - Retail properties:       
         
 Interest rate reduction  9$ 47,473$ 4,242 
 Amortization or maturity date change  20  31,521  40 
 Other  7  15,672  (1,996) 
Total CRE - Retail properties  36$ 94,666$ 2,286 
         
CRE - Multi family:       
         
 Interest rate reduction  13$ 6,601$ (208) 
 Amortization or maturity date change  10  2,744  22 
 Other  3  869  120 
Total CRE - Multi family  26$ 10,214$ (66) 
         
CRE - Office:       
         
 Interest rate reduction  5$ 1,923$ 212 
 Amortization or maturity date change  2  1,238  97 
 Other  3  ---  (140) 
Total CRE - Office  10$ 3,161$ 169 
         
CRE - Industrial and warehouse:       
         
 Interest rate reduction  1$ 2,165$ (299) 
 Amortization or maturity date change  7  19,448  (5,446) 
 Other  1  2,147  (145) 
Total CRE - Industrial and Warehouse  9$ 23,760$ (5,890) 
         
CRE - Other commercial real estate:       
         
 Interest rate reduction  18$ 18,620$ (1,180) 
 Amortization or maturity date change  64  106,532  (3,868) 
 Other  5  8,199  32 
Total CRE - Other commercial real estate  87$ 133,351$ (5,016) 
         
Automobile:       
         
 Interest rate reduction  38$ 554$ 4 
 Amortization or maturity date change  2,010  17,221  (143) 
 Other  ---  ---  --- 
Total Automobile  2,048$ 17,775$ (139) 
         
Residential mortgage:       
         
 Interest rate reduction  10$ 12,637$ (567) 
 Amortization or maturity date change  655  91,979  1,988 
 Other  26  4,391  108 
Total Residential mortgage  691$ 109,007$ 1,529 
         
First-lien home equity:       
         
 Interest rate reduction  142$ 17,275$ 2,722 
 Amortization or maturity date change  89  10,636  616 
 Other  ---  ---  --- 
Total First-lien home equity  231$ 27,911$ 3,338 
         
Second-lien home equity:       
         
 Interest rate reduction  127$ 6,521$ 430 
 Amortization or maturity date change  117  4,096  39 
 Other  ---  ---  --- 
Total Second-lien home equity  244$ 10,617$ 469 
         
Other consumer:       
         
 Interest rate reduction  14$ 1,104$ 74 
 Amortization or maturity date change  63  445  (21) 
 Other  ---  ---  --- 
Total Other consumer  77$ 1,549$ 53 
         
TOTAL  3,698$ 583,439$ (13,771) 
         
(1)Post-modification balances approximate pre-modification balances. The aggregate amount of charge-offs as a result of a restructuring are not significant.  

All classes within the C&I and CRE portfolios are considered as redefaulted at 90-days past due. Automobile loans and other consumer loans are considered as redefaulted at 120-days past due. Residential mortgage loans are considered as redefaulted at 150-days past due. The first-lien and second-lien home equity portfolios are considered as redefaulted at 150-days past due and 120-days past due, respectively.

 

The following table presents TDRs modified within the previous twelve months that have subsequently redefaulted during the year ended December 31, 2011:

 

  Troubled Debt Restructurings Within The Previous Twelve Months
  That Have Subsequently Redefaulted During The
   Year ended December 31, 2011(1)
      
      
(dollar amounts in thousands) Number ofEnding
  ContractsBalance
     
      
C&I - Owner occupied:    
      
 Interest rate reduction 13$6,173
 Amortization or maturity date change 10 5,201
 Other 2 2,352
Total C&I - Owner occupied 25$13,726
      
C&I - Other commercial and industrial:    
      
 Interest rate reduction 1$98
 Amortization or maturity date change 12 10,140
 Other  ---  ---
Total C&I - Other commercial and industrial 13$10,238
      
CRE - Retail Properties:    
      
 Interest rate reduction  ---$ ---
 Amortization or maturity date change  ---  ---
 Other  ---  ---
Total CRE - Retail properties  ---$ ---
      
CRE - Multi family:    
      
 Interest rate reduction 4$1,102
 Amortization or maturity date change 2 456
 Other  ---  ---
Total CRE - Multi family 6$1,558
      
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 8 3,665
 Other  ---  ---
Total CRE - Industrial and Warehouse 8$3,665
      
CRE - Other commercial real estate:    
      
 Interest rate reduction 3$648
 Amortization or maturity date change 10 2,014
 Other  ---  ---
Total CRE - Other commercial real estate 13$2,662
      
Automobile:    
      
 Interest rate reduction 1$ ---
 Amortization or maturity date change 198  ---
 Other  ---  ---
Total Automobile 199$ ---(2)
      
Residential mortgage:    
      
 Interest rate reduction 2$148
 Amortization or maturity date change 57 6,900
 Other 4 531
Total Residential mortgage 63$7,579
      
First-lien home equity:    
      
 Interest rate reduction 2$692
 Amortization or maturity date change 7 436
 Other  ---  ---
Total First-lien home equity 9$1,128
      
Second-lien home equity:    
      
 Interest rate reduction 3$272
 Amortization or maturity date change 8 614
 Other  ---  ---
Total Second-lien home equity 11$886
      
Other consumer:    
      
 Interest rate reduction 1$ ---
 Amortization or maturity date change 11  ---
 Other  ---  ---
Total Other consumer 12$ ---(3)
      
TOTAL 359$41,442
      
(1)Subsequent redefault is defined as a payment redefault within 12 months of the restructuring date.
(2)Automobile loans are charged-off at time of subsequent redefault. During the year ended December 31, 2011, $1,477 thousand of total automobile loans were charged-off at the time of subsequent redefault.
(3)Other consumer loans are charged-off at time of subsequent redefault. During the year ended December 31, 2011, $117 thousand of total other consumer loans were charged-off at the time of subsequent redefault.

Pledged Loans and Leases

The Bank has access to the Federal Reserve's discount window and advances from the FHLB – Cincinnati. At December 31, 2011, these borrowings and advances are secured by $18.8 billion of loans.

 

Franklin Relationship

 

Franklin is a specialty consumer finance company. On March 31, 2009, Huntington entered into a transaction with Franklin in which a Huntington wholly-owned REIT subsidiary (REIT) exchanged certain noncontrolling equity interests for a 100% interest in Franklin Asset Merger Sub, LLC (Merger Sub), a wholly-owned subsidiary of Franklin. The equity interests provided to Franklin by REIT were pledged by Franklin as collateral for Franklin commercial loans.

 

In 2011, Franklin's equity interests in REIT were voluntarily surrendered in return for a reduction of a portion of defaulted commercial loans as a result of a default under the Legacy Credit Agreement. As of December 31, 2011, Franklin does not own any equity interests in REIT.