EX-99.3 5 l92345aex99-3.txt EXHIBIT 99.3 Exhibit 99.3 [LOGO] Huntington Fourth Quarter and Full Year 2001 Earnings Review January 18, 2002 1 [LOGO] MEETING PARTICIPANTS Tom Hoaglin - Chairman, President and Chief Executive Officer Mike McMennamin - Vice Chairman and Chief Financial Officer Jay Gould - Sr. Vice President - Investor Relations 2 [LOGO] FOURTH QUARTER OVERVIEW - Met earnings expectation - Strengthened the loan loss reserve - Grew revenue - Improved operating efficiency 3 [LOGO] FOURTH QUARTER PERFORMANCE HIGHLIGHTS - VS. 3Q01 (1) OPERATING BASIS (1) - Earnings per share $0.30 - Core deposit growth 7 % annualized - Revenue growth 2 % - Net interest margin up 7 basis points 4.11 % - Efficiency ratio down 1.7 percentage points 55.8 % - Net charge-offs up 30 basis points 1.04 % - NPAs up $17 million or 8% $227.5 MM - Loan loss reserve up 23 basis points 1.90 % ONE-TIME ITEMS - $32 million after tax benefit to tax expense related to issuance of REIT preferred stock - $50 million pretax addition to allowance for loan losses (1) Excluding after tax impact of restructuring and other charges, as well as 4Q01 one-time items 4 [LOGO] FOURTH QUARTER 2001 EARNINGS ($MM) Reported Charges Operating ----- -------- ------- --------- Net interest income $255.2 $255.2 Provision (108.3) $(50.0) (58.3) Non-interest income 133.0 133.0 Security gains 0.1 0.1 Non-interest expense (242.4) (15.1) (227.3) ------- ------- ------- Pretax income 37.6 (65.1) 102.7 ------- ------- ------- Net income $65.6 $(9.8) $75.5 ======= ======= ======= EPS $0.26 $(0.04) $0.30 5 [LOGO] RESTRUCTURING AND OTHER CHARGES ($MM) Original Estimate 2Q01 3Q01 4Q01 To Date -------- ---- ---- ---- ------- Restructuring $ 64 --- $ 33 $ 4 $ 37 ------------- Branches/ATMs/ops Retention/transition Corporate overhead Facilities e-Commerce Impairment 45 37 --- --- 43 ---------- I/O strip PG & E Auto residuals Other Credit 72 72 --- --- 72 ------ 120 day delinquencies Exited Tier II Exited truck & equipment Other 34 2 18 11 25 ----- ----- ----- ---- ---- ---- Total pretax charge $ 215 $ 111 $ 51 $ 15 $177 6 [LOGO] PERFORMANCE HIGHLIGHTS (1) 4Q01 3Q01 4Q00 ---- ---- ---- EPS - operating $0.30 $0.30 $0.30 EPS - cash basis (2) 0.33 0.33 0.33 ROA 1.07 % 1.07 % 1.06 % ROE 12.7 12.6 12.9 Efficiency ratio 55.8 57.5 58.5 NIM 4.11 4.04 3.70 Tangible equity/assets (3) 6.04 5.96 5.87 (1) Excluding after tax impact of restructuring and other charges of $9.8 MM in 4Q01 and $33.0 MM in 3Q01 (2) Cash basis ratios are based on operating earnings excluding goodwill amortization of $7.7 MM in 4Q01, $7.8 MM in 3Q01, and $7.8 MM in 4Q00, net of tax (3) Period end 7 [LOGO] INCOME STATEMENT (1) ($MM) 4Q01 3Q01 4Q00 ----- ---- ---- ---- Net interest income $255.2 $249.8 $233.1 Provision (58.3) (49.6) (32.5) Non-interest income 133.0 129.4 129.7 Security gains 0.1 1.1 0.8 Non-interest expense (227.3) (228.9) (223.9) ------- ------- ------- Pretax income 102.7 101.8 107.2 ------- ------- ------- Net income $75.5 $75.7 $76.2 ======= ======= ======= (1) Excluding after tax impact of restructuring and other charges of $9.8 MM in 4Q01 and $33.0 MM in 3Q01 8 [LOGO] NET INTEREST MARGIN [GRAPH] Net Interest Income Margin 1Q00 $240.7 3.78% 2Q00 $232.8 3.72% 3Q00 $235.9 3.74% 4Q00 $233.1 3.70% 1Q01 $243.1 3.93% 2Q01 $248.0 3.97% 3Q01 $249.8 4.04% 4Q01 $255.2 4.11% 9 [LOGO] MANAGED LOAN GROWTH Average ($B) Annualized Growth ------- ----------------- 4Q01 vs. 3Q01 vs. 4Q01 vs. 4Q01 3Q01 2Q01 4Q00 Commercial $ 6.5 (11) % (4) % (1) % Commercial real estate 3.9 18 16 10 ------ ------ ----- ----- Total commercial/CRE 10.4 --- 3 3 ------ ------ ----- ----- Auto loan/lease 7.3 2 13 5 Installment 1.6 (10) (4) (4) Home equity lines 2.5 21 19 18 Residential real estate 0.9 9 --- 7 ------ ------ ----- ----- Total consumer 12.3 5 10 6 ------ ------ ----- ----- Managed loans $22.7 2 % 7 % 5 % ====== Note: Growth percentages normalized for acquisitions, portfolio sales and securitizations 10 [LOGO] CORE DEPOSIT TRENDS Average ($B) Annualized Growth ------- ----------------- 4Q01 vs. 3Q01 vs. 4Q01 vs. 4Q01 3Q01 2Q01 4Q00 ---- ---- ---- ---- Demand $ 3.4 8 % 12 % 3 % Interest bearing 5.5 38 27 23 Savings 3.4 (9) (8) (3) CD's 7.1 (4) 11 (5) ------ ------ ------ ------ Total $19.4 7 % 11 % 3 % ====== 11 [LOGO] NON-INTEREST INCOME (1) ($MM) Better or (Worse) vs. --------------------- 4Q01 3Q01 3Q01(2) 4Q00 ---- ---- ------- ---- Deposit service charges $ 42.8 $1.0 2 % 9 % Brokerage/insurance 21.0 1.1 5 23 Trust income 15.3 (0.2) (1) 6 Other service charges 12.6 0.2 2 9 Mortgage banking 15.8 1.2 8 32 Other 25.5 0.3 1 (28) ------ ---- ------- ---- Total $133.0 $3.6 3 % 3 % ====== (1) Excludes security gains (2) Linked quarter percentage growth is not annualized 12 [LOGO] NON-INTEREST EXPENSE (1) ($MM) Better or (Worse) vs. --------------------- 4Q01 3Q01 3Q01(2) 4Q00 ---- ---- ------- ---- Personnel costs $118.1 $2.6 2 % (12) % Occupancy & equipment 40.5 (1.1) (3) (3) Outside services 18.0 (0.6) (4) (11) Amortization of intangibles 10.1 --- --- 4 Marketing 6.3 0.6 8 40 Other 34.3 --- --- 17 ------ ----- ----- ------- Total $227.3 $1.5 1 % (2) % ====== (1) Excludes pre tax impact of restructuring and other charges of $15.1 MM in 4Q01 and $50.8 MM in 3Q01 (2) Linked quarter percentage growth is not annualized 13 [LOGO] CREDIT QUALITY OVERVIEW 4Q01 3Q01 4Q00 ---- ---- ---- NPAs/total loans + OREO 1.05 % 0.97 % 0.51 % Net charge-offs - Reported 1.04 0.74 0.50 - Adjusted (1) 0.98 0.61 0.50 90+ days past due 0.42 0.43 0.39 Consumer 0.61 0.55 0.62 Commercial/CRE 0.22 0.30 0.15 Reserve/total loans 1.90 1.67 1.45 Reserve/NPAs 180 171 279 (1) Excludes impact of net charge-offs on exited portfolios for which reserves were previously established 14 [LOGO] Non-performing Asset Composition [GRAPH] Commercial Comm. RE Residential RE OREO NPA/Loans + OREO 1Q00 40.6 24.5 10.9 16.3 0.45% 2Q00 45.1 22.8 11.6 15.7 0.46% 3Q00 44.9 23.0 8.6 12.0 0.44% 4Q00 55.8 28.0 10.2 11.4 0.51% 1Q01 62.7 36.2 12.0 14.0 0.60% 2Q01 116.0 28.2 11.9 9.9 0.79% 3Q01 148.2 42.2 11.7 8.1 0.97% 4Q01 160.9 48.4 11.8 6.4 1.05% 15 [LOGO] NET CHARGE-OFFS - ADJUSTED (1) 4Q01 3Q01 4Q00 ---- ---- ---- Commercial 1.39 % 0.56 % 0.29 % Commercial real estate 0.08 --- 0.01 Consumer Auto loans - indirect 1.46 1.05 1.46 Auto lease 1.55 1.27 0.86 ---- ---- ---- Indirect 1.51 1.17 1.14 Installment 0.86 0.88 0.62 Home equity lines 0.38 0.34 0.28 Residential real estate 0.17 0.05 0.15 ---- ---- ---- Total consumer 1.05 0.85 0.79 ---- ---- ---- Total 0.98 % 0.61 % 0.50 % (1) Excludes impact of net charge-offs on exited portfolios for which reserves were previously established. Reported total consumer net charge-offs were 1.17% in 4Q01, 1.07% in 3Q01 and 0.79% in 4Q00. Reported total net charge-offs were 1.04% in 4Q01, 0.74% in 3Q01 and 0.50% in 4Q00. 16 [LOGO] FULL-YEAR PERFORMANCE HIGHLIGHTS (1) 2001 2000 ---- ---- EPS - operating $1.17 $1.45 EPS - cash basis (2) 1.29 1.55 ROA 1.04 % 1.26 % ROE 12.3 15.8 Efficiency ratio 58.4 56.2 NIM 4.02 3.73 (1) Excluding after tax impact of restructuring and other charges of $115.0 MM in 2001 and $32.5 MM in 2000 (2) Cash basis ratios are based on operating earnings excluding goodwill amortization of $31.0 MM in 2001 and $28.3 MM in 2000, net of tax 17 [LOGO] 2002 OUTLOOK 18 [LOGO] 2002 ECONOMIC ENVIRONMENT ASSUMPTIONS - First half of the year - Weak economy continues - Credit quality trends remain negative - Second half of the year - Modest economic recovery begins - Credit quality trends modestly improve - Interest rates - Modest increases throughout the year - Flattening of the yield curve 19 [LOGO] 2002 PERFORMANCE ASSUMPTIONS - Operating earnings of $1.32 - $1.36 per share - Continued high levels of charge-offs and NPAs - Modest growth in loans - Continued growth in core deposits - Expansion of the net interest margin - Modest expense growth - Continued improvement in the efficiency ratio - A $300 - $400 million share repurchase program 20 [LOGO] 2001 & 2002 SUMMARY 21 [LOGO] 2001 Accomplishments Summary - Completed strategic review and initiated restructuring - Strengthened management team - Established regional management structure - Decreased the common stock dividend - Initiated sales management process - Focused on Midwest franchise - Agreement to sell Florida operations at attractive price - Exited unprofitable e-businesses - Consolidated 38 banking offices - Improved efficiency ratio throughout the year - Increased loan loss reserve POSITIONED FOR STEADY PROGRESS 22 [LOGO] 2002 Outlook Summary - Economic environment / credit quality a challenge - Improve cross-sell performance - Improve financial reporting / accountability - Improve customer service EXECUTE THE GAME PLAN 23 [LOGO] PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 FORWARD LOOKING STATEMENT DISCLOSURE This presentation and discussion, including related questions and answers, may contain forward-looking statements, including certain plans, expectations, goals, and projections which are subject to numerous assumptions, risks, and uncertainties. Actual results could differ materially from those contained or implied by such statements for a variety of factors including: - Changes in economic conditions - The successful integration of acquired - Movements in interest rates businesses - Competitive pressures on product - The nature, extent and timing of pricing and services governmental actions and reforms - Success and timing of business - Extended disruption of vital strategies infrastructure All forward-looking statements included in this discussion, including related questions and answers, are based on information available at the time of the discussion. Huntington assumes no obligation to update any forward-looking statement. 24 [LOGO] Huntington 25 HUNTINGTON BANCSHARES INCORPORATED Quarterly Financial Review December 2001 TABLE OF CONTENTS Consolidated Financial Highlights ........................................ 1 Consolidated Balance Sheets .............................................. 2 Consolidated Statements of Income ........................................ 3 Loan Portfolio and Deposit Composition ................................... 4 Analysis of Non-Interest Income and Expense For the Three and Twelve Months Ended December 31, 2001 and 2000 ...... 5 Net Interest Margin Analysis (Quarterly) ................................. 6-7 Selected Quarterly Income Statement Data ................................. 8 Key Ratios and Statistics (Quarterly) .................................... 9 Loan Loss Experience, Non-Performing Assets and Past Due Loans (Quarterly) 10 Selected Annual Income Statement Data .................................... 11 Net Interest Margin Analysis (Annual) .................................... 12-14 Loan Loss Experience, Non-Performing Assets and Past Due Loans (Annual) .. 15 Huntington Bancshares Incorporated Consolidated Financial Highlights Operating Basis (1) (in thousands of dollars, except per share amounts)
Three Months Ended December 31, 2001 2000 % Change ---------------------------------------------- --------- ------- -------- Net Income ................................... $ 75,492 $76,222 (1.0)% Per Common Share Amounts (2) Net income -- Diluted ................... $0.30 $0.30 -- Cash dividends declared ................. $0.16 $0.20 (20.0) Average Common Shares Outstanding--Diluted (2) 251,858 251,401 0.2 Key Ratios Return on: Average total assets .................... 1.07% 1.06% 0.9 Average shareholders' equity ............ 12.68% 12.89% (1.6) Efficiency ratio ............................. 55.77% 58.48% (4.6) Average equity/average assets ................ 8.44% 8.21% 2.8 Net interest margin .......................... 4.11% 3.70% 11.1 Tangible or "Cash Basis" Results (3) Net income per share -- Diluted (2) .......... $0.33 $0.33 -- Return on: Average total assets .................... 1.21% 1.19% 1.7 Average shareholders' equity ............ 13.99% 14.20% (1.5)% Twelve Months Ended December 31, 2001 2000 % Change ---------------------------------------------- --------- -------- -------- Net Income ................................... $ 293,522 $360,946 (18.7)% Per Common Share Amounts (2) Net income -- Diluted ................... $1.17 $ 1.45 (19.3) Cash dividends declared ................. $ 0.72 $ 0.76 (5.3) Average Common Shares Outstanding--Diluted (2) 251,716 249,570 0.9 Key Ratios Return on: Average total assets .................... 1.04% 1.26% (17.5) Average shareholders' equity ............ 12.32% 15.84% (22.2) Efficiency ratio ............................. 58.39% 56.19% 3.9 Average equity/average assets ................ 8.47% 7.94% 6.7 Net interest margin .......................... 4.02% 3.73% 7.8 Tangible or "Cash Basis" Results (3) Net income per share -- Diluted (2) .......... $ 1.29 $1.55 (16.7) Return on: Average total assets .................... 1.18% 1.39% (15.1) Average shareholders' equity ............ 13.63% 17.08% (20.2)%
(1) Income component excludes after-tax impact of restructuring and other charges ($9,843 in 4Q '01 and $115,001 for year 2001; $32,500 for year 2000). (2) Adjusted for stock splits and stock dividends, as applicable. (3) Tangible or "Cash Basis" net income excludes amortization of goodwill. Related asset amounts are also excluded from total assets. Page 1 Huntington Bancshares Incorporated Consolidated Balance Sheets (in thousands of dollars)
December 31, December 31, 2001 2000 -------------------- -------------------- Assets Cash and due from banks......................................................... $ 1,138,366 $ 1,322,700 Interest bearing deposits in banks.............................................. 21,205 4,970 Trading account securities...................................................... 13,392 4,723 Federal funds sold and securities purchased under resale agreements............. 83,275 133,183 Mortgages held for sale......................................................... 629,386 155,104 Securities available for sale - at fair value................................... 2,849,579 4,090,525 Investment securities - fair value $12,499 and $16,414, respectively............ 12,322 16,336 Total loans (1)................................................................. 21,601,873 20,610,191 Less allowance for loan losses............................................. 410,572 297,880 -------------------- -------------------- Net loans....................................................................... 21,191,301 20,312,311 -------------------- -------------------- Bank owned life insurance....................................................... 843,183 804,941 Goodwill and other intangibles, net of accumulated amortization................. 716,054 755,270 Premises and equipment.......................................................... 452,036 454,844 Customers' acceptance liability................................................. 13,670 17,366 Accrued income and other assets................................................. 536,390 527,104 -------------------- -------------------- Total Assets.................................................................... $28,500,159 $28,599,377 ==================== ==================== Liabilities and Shareholders' Equity Total deposits (1).............................................................. $20,187,304 $19,777,245 Short-term borrowings........................................................... 1,955,926 1,987,759 Bank acceptances outstanding.................................................... 13,670 17,366 Medium-term notes............................................................... 1,795,002 2,467,150 Subordinated notes and other long-term debt..................................... 944,330 870,976 Company obligated mandatorily redeemable preferred capital securities of subsidiary trusts holding solely the junior subordinated debentures of the parent company................................ 300,000 300,000 Accrued expenses and other liabilities.......................................... 887,487 812,834 -------------------- -------------------- Total Liabilities.......................................................... 26,083,719 26,233,330 -------------------- -------------------- Shareholders' equity Preferred stock - authorized 6,617,808 shares; none issued or outstanding....................................................... --- --- Common stock - without par value; authorized 500,000,000 shares; issued 257,866,255 and 257,866,255 shares, respectively; outstanding 251,193,814 and 250,859,470 shares, respectively.................................................. 2,490,724 2,493,645 Less 6,672,441 and 7,006,785 treasury shares, respectively................. (123,849) (129,432) Accumulated other comprehensive income (loss).............................. 25,488 (24,520) Retained earnings.......................................................... 24,077 26,354 -------------------- -------------------- Total Shareholders' Equity................................................. 2,416,440 2,366,047 -------------------- -------------------- Total Liabilities and Shareholders' Equity...................................... $28,500,159 $28,599,377 ==================== ====================
(1) See page 4 for detail of total loans and total deposits. Page 2 Huntington Bancshares Incorporated Consolidated Statements of Income (in thousands of dollars, except per share amounts)
Three Months Ended Twelve Months Ended December 31, December 31, ------------------------------ ----------------------------- Operating Basis (1) 2001 2000 2001 2000 ------------------------------------------------------------ ---------- ---------- ---------- ----------- Interest and fee income Loans.................................................. $ 389,492 $ 460,151 $1,692,311 $ 1,808,254 Securities............................................. 46,452 73,292 216,215 284,719 Other.................................................. 7,807 4,218 30,993 15,532 -------------- ---------------- -------------- -------------- Total Interest Income........................ 443,751 537,661 1,939,519 2,108,505 -------------- ---------------- -------------- -------------- Interest expense Deposits............................................... 139,541 204,555 657,892 782,076 Short-term borrowings.................................. 12,725 32,156 95,859 113,134 Medium-term notes...................................... 21,451 45,822 121,701 189,311 Subordinated notes and other long-term debt............ 14,796 22,062 67,885 81,552 -------------- ---------------- -------------- -------------- Total Interest Expense....................... 188,513 304,595 943,337 1,166,073 -------------- ---------------- -------------- -------------- Net Interest Income.......................... 255,238 233,066 996,182 942,432 Provision for loan losses................................... 58,275 32,548 187,075 90,479 -------------- ---------------- -------------- -------------- Net Interest Income After Provision for Loan Losses......... 196,963 200,518 809,107 851,953 -------------- ---------------- -------------- -------------- Total non-interest income (2)............................... 133,097 130,549 514,730 493,559 Total non-interest expense (2).............................. 227,354 223,850 923,630 835,617 -------------- ---------------- -------------- -------------- Income Before Income Taxes................... 102,706 107,217 400,207 509,895 Income taxes................................................ 27,214 30,995 106,685 148,949 -------------- ---------------- -------------- -------------- Net Income................................... $ 75,492 $ 76,222 $ 293,522 $ 360,946 ============== ================ ============== ============== Per Common Share (3) Net income Basic............................................. $0.30 $0.30 $1.17 $1.45 Diluted........................................... $0.30 $0.30 $1.17 $1.45 Cash dividends declared................................ $0.16 $0.20 $0.72 $0.76 Average Common Shares (3) Basic............................................. 251,193,384 250,854,082 251,078,025 248,708,965 Diluted........................................... 251,857,805 251,401,460 251,715,849 249,570,098
(1) Income component excludes the after-tax impact of restructuring and other charges ($9,843 in 4Q '01 and $115,001 for year 2001; $32,500 for year 2000). (2) See page 5 for detail of non-interest income and non-interest expense. (3) Adjusted for stock splits and stock dividends, as applicable. Page 3 Huntington Bancshares Incorporated Loans and Deposits (in thousands of dollars) Loan Portfolio Composition --------------------------------------------------------------------------------
December 31, December 31, 2001 2000 ------------------------------ ---------------------------- Balance % Balance % ------------------- -------- --------------- ----------- Commercial (unearned income $2,859 and $1,538)....................... $ 6,439,372 29.8 $ 6,633,985 32.2 Commercial Real Estate............................................... 3,975,562 18.4 3,572,376 17.3 ------------------- --------------- Total Commercial and Commercial Real Estate.................. 10,414,934 48.2 10,206,361 49.5 ------------------- --------------- Consumer Auto Leases (unearned income $500,430 and $519,519)............. 3,207,514 14.8 3,105,689 15.1 Auto Loans - Indirect (unearned income $19 and $35)............. 2,883,279 13.3 2,507,454 12.2 Home Equity Lines............................................... 2,535,885 11.7 2,167,865 10.5 Residential Mortgage............................................ 970,704 4.5 946,584 4.6 Other Loans (unearned income $24 and $41)....................... 1,589,557 7.4 1,676,238 8.1 ------------------- --------------- Total Consumer............................................... 11,186,939 51.8 10,403,830 50.5 ------------------- --------------- Total Loans.................................................. $ 21,601,873 100.0 $20,610,191 100.0 =================== ===============
Deposit Composition -------------------------------------------------------------------------------
December 31, December 31, 2001 2000 ------------------------------ ---------------------------- Balance % Balance % ------------------- -------- --------------- ----------- Demand deposits Non-interest bearing............................................ $ 3,635,173 18.0 $ 3,480,876 17.6 Interest bearing................................................ 5,723,160 28.4 4,645,127 23.5 Savings deposits..................................................... 3,466,305 17.2 3,527,796 17.8 Certificates of deposit Less than $100,000.............................................. 5,774,191 28.6 5,938,486 30.0 $100,000 or more................................................ 1,224,823 6.1 1,520,547 7.7 ------------------- --------------- Total Core Deposits.......................................... 19,823,652 98.2 19,112,832 96.6 ------------------- --------------- Other domestic time deposits......................................... 137,915 0.7 256,106 1.3 Foreign time deposits................................................ 225,737 1.1 408,307 2.1 ------------------- --------------- Total Deposits............................................... $20,187,304 100.0 $19,777,245 100.0 =================== ===============
Page 4 Huntington Bancshares Incorporated Non-Interest Income and Non-Interest Expense (in thousands of dollars) Analysis of Non-Interest Income --------------------------------------------------------------------------------
Three Months Ended Twelve Months Ended December 31, December 31, ---------------------------- Percent ----------------------------- Percent Operating Basis (1) 2001 2000 Change 2001 2000 Change ----------------------------------------- ------------ -------------- ----------- ------------ -------------- ---------- Service charges on deposit accounts........... $ 42,753 $ 39,248 8.9 % $ 164,052 $ 160,727 2.1 % Brokerage and insurance income................ 20,966 17,078 22.8 79,034 61,871 27.7 Mortgage banking.............................. 15,768 11,976 31.7 59,148 38,025 55.6 Trust services................................ 15,321 14,404 6.4 60,298 53,613 12.5 Other service charges and fees................ 12,552 11,546 8.7 48,217 43,883 9.9 Bank Owned Life Insurance income.............. 9,560 11,086 (13.8) 38,241 39,544 (3.3) Other......................................... 16,088 24,366 (34.0) 59,767 58,795 1.7 ------------ ------------ ------------ ------------- Total Non-Interest income before securities gains........................... 133,008 129,704 2.5 508,757 456,458 11.5 Securities gains.............................. 89 845 N.M. 5,973 37,101 N.M. ------------ ------------ ------------ ------------- Total Non-Interest Income .................... $ 133,097 $ 130,549 2.0 % $ 514,730 $ 493,559 4.3 % ============ ============ ============ =============
Analysis of Non-Interest Expense ----------------------------------------------
Three Months Ended Twelve Months Ended December 31, December 31, ---------------------------- Percent ----------------------------- Percent Operating Basis (1) 2001 2000 Change 2001 2000 Change ----------------------------------------- ------------ -------------- ----------- ------------ -------------- ---------- Personnel costs............................... $118,143 $ 105,810 11.7 % $478,640 $ 421,750 13.5 % Equipment..................................... 20,593 20,811 (1.0) 80,560 78,069 3.2 Net occupancy ................................ 19,950 18,614 7.2 77,184 75,882 1.7 Outside data processing and other services.... 17,992 16,142 11.5 69,692 62,011 12.4 Amortization of intangible assets............. 10,100 10,494 (3.8) 41,225 39,207 5.1 Telecommunications............................ 6,793 6,524 4.1 27,984 26,225 6.7 Marketing..................................... 6,345 10,592 (40.1) 31,057 34,884 (11.0) Professional services......................... 6,235 6,785 (8.1) 23,879 20,819 14.7 Printing and supplies......................... 4,293 5,212 (17.6) 18,367 19,634 (6.5) Franchise and other taxes..................... 2,893 3,163 (8.5) 9,729 11,077 (12.2) Other......................................... 14,017 19,703 (28.9) 65,313 46,059 41.8 ------------ ------------ ------------ --------------- Total Non-Interest Expense ................... $ 227,354 $ 223,850 1.6 % $923,630 $ 835,617 10.5 % ============ ============ ============ ===============
(1) Excludes the impact of restructuring and other charges. N.M. - Not Meaningful Page 5 Huntington Bancshares Incorporated -------------------------------------------------------------------------------- Net Interest Margin Analysis (Quarterly Data)
Average Balance (in millions of dollars) ----------------------------------------------------------------------------------- 2001 2000 ---------------------------------------- ----------------------------------------- Fully Tax Equivalent Basis (1) Fourth Third Second First Fourth Third Second First -------------------------------------------- -------- -------- --------- ---------- ---------- --------- --------- --------- Assets Interest bearing deposits in banks.......... $ 14 $ 5 $ 5 $ 5 $ 5 $ 5 $ 6 $ 6 Trading account securities.................. 8 8 39 48 17 11 18 14 Federal funds sold and securities purchased under resale agreements.................. 86 86 93 164 85 136 105 23 Mortgages held for sale..................... 433 344 420 240 129 99 99 109 Securities: Taxable............................... 2,720 2,896 3,368 3,606 4,410 4,273 4,067 4,515 Tax exempt............................ 108 140 201 248 264 270 276 282 --------- --------- ---------- ---------- ---------- --------- --------- --------- Total Securities................. 2,828 3,036 3,569 3,854 4,674 4,543 4,343 4,797 --------- --------- ---------- ---------- ---------- --------- --------- --------- Loans: Commercial............................. 6,491 6,681 6,741 6,678 6,543 6,454 6,439 6,345 Commercial Real Estate................. 3,889 3,734 3,597 3,587 3,533 3,476 3,426 3,394 Consumer Auto Leases...................... 3,229 3,243 3,222 3,117 3,088 3,018 2,942 2,826 Auto Loans - Indirect............ 2,903 2,806 2,575 2,499 2,601 2,719 3,082 3,532 Home Equity Lines................ 2,489 2,372 2,271 2,189 2,119 2,009 1,861 1,748 Residential Mortgage............. 892 854 942 960 940 1,325 1,473 1,449 Other Loans...................... 1,619 1,658 1,673 1,674 1,666 1,622 1,540 1,504 --------- --------- ---------- ---------- ---------- --------- --------- --------- Total Consumer................... 11,132 10,933 10,683 10,439 10,414 10,693 10,898 11,059 --------- --------- ---------- ---------- ---------- --------- --------- --------- Total Loans................................. 21,512 21,348 21,021 20,704 20,490 20,623 20,763 20,798 --------- --------- ---------- ---------- ---------- --------- --------- --------- Allowance for loan losses/loan fees......... 393 358 316 307 302 302 302 306 --------- --------- ---------- ---------- ---------- --------- --------- --------- Net loans (2).............................. 21,119 20,990 20,705 20,397 20,188 20,321 20,461 20,492 --------- --------- ---------- ---------- ---------- --------- --------- --------- Total earning assets........................ 24,881 24,827 25,147 25,015 25,400 25,417 25,334 25,747 --------- --------- ---------- ---------- ---------- --------- --------- --------- Cash and due from banks..................... 876 910 910 952 960 968 1,046 1,058 All other assets............................ 2,613 2,609 2,608 2,579 2,597 2,615 2,496 2,457 --------- --------- ---------- ---------- ---------- --------- --------- --------- Total Assets................................ $27,977 $27,988 $ 28,349 $ 28,239 $ 28,655 $ 28,698 $ 28,574 $ 28,956 ========= ========= ========== ========== ========== ========= ========= ========= Liabilities and Shareholders' Equity Core deposits Non-interest bearing deposits.......... $ 3,406 $.3,341 $.3,252 $ 3,213 $ 3,308 $ 3,425 $ 3,485 $ 3,466 Interest bearing demand deposits....... 5,519 5,096 4,799 4,597 4,496 4,385 4,228 4,053 Savings deposits....................... 3,388 3,472 3,547 3,505 3,498 3,528 3,583 3,645 Certificates of deposit................ 7,122 7,202 7,012 7,318 7,522 7,450 7,247 7,271 --------- --------- ---------- ---------- ---------- --------- --------- --------- Total core deposits............... 19,435 19,111 18,610 18,633 18,824 18,788 18,543 18,435 --------- --------- ---------- ---------- ---------- --------- --------- --------- Other domestic time deposits................ 109 120 118 167 365 433 506 707 Foreign time deposits....................... 230 257 377 267 322 561 626 649 --------- --------- ---------- ---------- ---------- --------- --------- --------- Total deposits......................... 19,774 19,488 19,105 19,067 19,511 19,782 19,675 19,791 --------- --------- ---------- ---------- ---------- --------- --------- --------- Short-term borrowings....................... 1,924 2,157 2,759 2,504 2,133 2,014 1,761 1,954 Medium-term notes........................... 1,863 1,990 2,005 2,240 2,665 2,592 3,042 3,283 Subordinated notes and other long-term debt, including capital securities....... 1,166 1,167 1,180 1,171 1,171 1,171 1,148 1,004 --------- --------- ---------- ---------- ---------- --------- --------- --------- Interest bearing liabilities........... 21,321 21,461 21,797 21,769 22,172 22,134 22,141 22,566 --------- --------- ---------- ---------- ---------- --------- --------- --------- All other liabilities....................... 889 811 897 869 822 787 743 718 Shareholders' equity........................ 2,361 2,375 2,403 2,388 2,353 2,352 2,205 2,206 --------- --------- ---------- ---------- ---------- --------- --------- --------- Total Liabilities and Shareholder's Equity.. $27,977 $27,988 $ 28,349 $28,239 $ 28,655 $ 28,698 $ 28,574 $ 28,956 ========= ========= ========== ========== ========== ========= ========= ========= Net interest rate spread.................... Impact of non-interest bearing funds on margin Net Interest Margin.........................
(1) Fully tax equivalent yields are calculated assuming a 35% tax rate. (2) Net loan rate includes loan fees, whereas individual loan components above are shown exclusive of fees. Page 6 Huntington Bancshares Incorporated -------------------------------------------------------------------------------- Net Interest Margin Analysis (Quarterly Data) - Continued
Average Rate ------------------------------------------------------------------------------ 2001 2000 -------------------------------------- --------------------------------------- Fully Tax Equivalent Basis (1) Fourth Third Second First Fourth Third Second First ----------------------------------------------- ------ ------ ------ ------ ------ ------ ------ ------ Assets Interest bearing deposits in banks............. 2.09 % 3.75 % 5.09 % 5.24 % 5.50 % 6.13 % 5.13 % 3.69 % Trading account securities..................... 3.59 3.83 5.15 5.52 6.56 6.54 8.67 6.26 Federal funds sold and securities purchased under resale agreements..................... 2.18 3.20 4.21 5.78 6.53 6.43 6.10 6.11 Mortgages held for sale........................ 6.64 7.18 6.96 7.19 7.74 8.51 8.11 7.59 Securities: Taxable.................................. 6.62 6.71 6.26 6.72 6.31 6.33 6.20 6.14 Tax exempt............................... 7.81 7.38 7.26 7.55 7.53 7.57 7.63 7.68 Total Securities.................... 6.66 6.75 6.32 6.77 6.38 6.40 6.29 6.23 Loans: Commercial................................ 5.86 6.92 7.44 8.19 8.65 8.74 8.65 8.31 Commercial Real Estate.................... 6.33 7.20 7.74 8.37 8.73 8.71 8.59 8.36 Consumer Auto Leases......................... 6.58 6.67 6.71 6.90 6.92 6.79 6.72 6.65 Auto Loans - Indirect............... 8.24 8.45 8.70 8.83 8.69 8.76 8.23 8.21 Home Equity Lines................... 6.22 7.00 8.04 8.93 9.05 8.78 8.21 7.93 Residential Mortgage................ 7.17 7.54 7.72 7.91 7.94 7.64 7.62 7.54 Other Loans......................... 9.09 9.19 9.13 9.19 9.09 9.02 8.93 8.92 Total Consumer...................... 7.34 7.65 7.94 8.25 8.24 8.11 7.83 7.78 Total Loans.................................... 7.22 7.34 7.75 8.25 8.45 8.41 8.21 8.04 Allowance for loan losses/loan fees............ Net loans (2)................................. 7.22 7.87 8.31 8.74 8.96 8.90 8.69 8.52 Total earning assets........................... 7.12 % 7.70 % 7.98 % 8.39 % 8.47 % 8.43 % 8.27 % 8.08 % Cash and due from banks........................ All other assets............................... Total Assets................................... Liabilities and Shareholders' Equity Core deposits Non-interest bearing deposits............. Interest bearing demand deposits.......... 2.00 % 2.74 % 2.87 % 3.29 % 3.62 % 3.47 % 3.32 % 2.97 % Savings deposits.......................... 2.11 3.00 3.42 3.85 4.28 4.14 4.21 3.80 Certificates of deposit................... 5.10 5.40 5.74 6.01 6.07 5.94 5.64 5.44 Total core deposits.................. 2.81 3.31 3.55 3.89 4.96 4.82 4.65 4.37 Other domestic time deposits................... 3.55 4.42 5.57 6.37 6.68 6.55 6.28 6.10 Foreign time deposits.......................... 1.99 3.39 4.11 5.45 6.37 6.63 6.66 5.65 Total deposits............................ 2.80 3.32 3.58 3.94 5.02 4.93 4.78 4.50 Short-term borrowings.......................... 2.65 3.69 4.37 5.37 6.00 6.12 5.77 5.10 Medium-term notes.............................. 4.58 6.12 6.59 6.64 6.85 6.81 6.46 6.18 Subordinated notes and other long-term debt, including capital securities.......... 4.96 5.19 5.96 6.81 7.42 7.39 7.08 6.82 Interest bearing liabilities.............. 3.51 % 4.23 % 4.62 % 5.12 % 5.46 % 5.39 % 5.21 % 4.90 % All other liabilities.......................... Shareholders' equity........................... Total Liabilities and Shareholder's Equity..... Net interest rate spread....................... 3.61 % 3.47 % 3.36 % 3.27 % 3.01 % 3.04 % 3.06 % 3.18 % Impact of non-interest bearing funds on margin. 0.50 % 0.57 % 0.61 % 0.66 % 0.69 % 0.70 % 0.66 % 0.60 % Net Interest Margin............................ 4.11 % 4.04 % 3.97 % 3.93 % 3.70 % 3.74 % 3.72 % 3.78 %
(1) Fully tax equivalent yields are calculated assuming a 35% tax rate. (2) Net loan rate includes loan fees, whereas individual loan components above are shown exclusive of fees. Page 7 Huntington Bancshares Incorporated Selected Quarterly Income Statement Data (in thousands of dollars, except per share amounts)
2001 2000 ---------------------------------------------- ---------------------------------------------- Operating Basis (1) Fourth Third Second First Fourth Third Second First ----------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Total Interest Income.............. $443,751 $ 478,834 $498,959 $ 517,975 $ 537,661 $ 535,791 $ 519,496 $ 515,557 Total Interest Expense............. 188,513 229,047 250,926 274,851 304,595 299,922 286,690 274,866 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net Interest Income................ 255,238 249,787 248,033 243,124 233,066 235,869 232,806 240,691 Provision for loan losses.......... 58,275 49,559 45,777 33,464 32,548 26,396 15,834 15,701 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net Interest Income After Provision for Loan Losses........ 196,963 200,228 202,256 209,660 200,518 209,473 216,972 224,990 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Service charges on deposit accounts 42,753 41,719 40,673 38,907 39,248 39,722 40,097 41,660 Brokerage and insurance income..... 20,966 19,912 19,388 18,768 17,078 15,564 13,945 15,284 Mortgage banking .................. 15,768 14,616 18,733 10,031 11,976 9,412 8,122 8,515 Trust services .................... 15,321 15,485 15,178 14,314 14,404 13,181 13,165 12,863 Other service charges and fees..... 12,552 12,350 12,217 11,098 11,546 11,238 11,250 9,849 Bank Owned Life Insurance income... 9,560 9,560 9,561 9,560 11,086 9,786 9,486 9,186 Other.............................. 16,088 15,755 14,956 12,968 24,366 11,370 19,485 3,574 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Total Non-Interest income before securities gains................ 133,008 129,397 130,706 115,646 129,704 110,273 115,550 100,931 Securities gains................... 89 1,059 2,747 2,078 845 11,379 114 24,763 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Total Non-Interest Income ......... 133,097 130,456 133,453 117,724 130,549 121,652 115,664 125,694 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Personnel costs.................... 118,143 120,767 122,068 117,662 105,810 109,463 104,133 102,344 Equipment ......................... 20,593 20,151 19,844 19,972 20,811 18,983 18,863 19,412 Net occupancy ..................... 19,950 19,266 18,188 19,780 18,614 19,520 18,613 19,135 Outside data processing and other services......................... 17,992 17,375 17,671 16,654 16,142 15,531 15,336 15,002 Amortization of intangible assets.. 10,100 10,114 10,435 10,576 10,494 10,311 9,206 9,196 Telecommunications................. 6,793 6,859 7,207 7,125 6,524 6,480 6,472 6,749 Marketing.......................... 6,345 6,921 7,852 9,939 10,592 8,557 7,742 7,993 Professional services.............. 6,235 5,912 6,763 4,969 6,785 4,719 4,815 4,500 Printing and supplies.............. 4,293 4,450 4,565 5,059 5,212 4,849 4,956 4,617 Franchise and other taxes.......... 2,893 2,470 2,246 2,120 3,163 2,841 2,635 2,438 Other.............................. 14,017 14,605 16,457 20,234 19,703 12,331 5,305 8,720 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Total Non-Interest Expense ........ 227,354 228,890 233,296 234,090 223,850 213,585 198,076 200,106 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Income Before Income Taxes ........ 102,706 101,794 102,413 93,294 107,217 117,540 134,560 150,578 Income taxes ...................... 27,214 26,134 27,909 25,428 30,995 34,510 37,039 46,405 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net Income ........................ $ 75,492 $ 75,660 $ 74,504 $ 67,866 $ 76,222 $ 83,030 $ 97,521 $ 104,173 ========== ========== ========== ========== ========== ========== ========== ========== Per Common Share (2) Net income Diluted....................... 0.30 .30 .30 .27 .30 .33 .40 .42 Diluted - Cash Basis.......... 0.33 .33 .33 .30 .33 .36 .42 .44 Cash Dividends Declared........... 0.16 .16 .20 .20 .20 .20 .18 .18 Fully Tax Equivalent Margin: Net Interest Income ............... $ 255,238 $ 249,787 $ 248,033 $ 243,124 $233,066 $235,869 $232,806 $ 240,691 Tax Equivalent Adjustment (3) ..... 1,292 1,442 1,616 2,002 2,057 2,022 2,074 2,157 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Tax Equivalent Net Interest Income $ 256,530 $251,229 $ 249,649 $245,126 $ 235,123 $ 237,891 $234,880 $242,848 ========== ========== ========== ========== ========== ========== ========== ==========
(1) Excludes the after-tax impact of restructuring and other charges ($9,843 in 4Q '01; $33,031 in 3Q '01; $72,127 in 2Q '01; $32,500 in 3Q '00). (2) Adjusted for stock splits and stock dividends, as applicable. (3) Calculated assuming a 35% tax rate. Page 8 Huntington Bancshares Incorporated Stock Summary, Key Ratios and Statistics Quarterly Common Stock Summary (1) ----------------------------------
2001 2000 -------------------------------------------------------------------------------- Fourth Third Second First Fourth Third Second First ------------------ ------------------ ------------------ --------------------- High ........................ $ 17.490 $ 19.280 $ 17.000 $ 18.000 $ 16.375 $ 18.813 $ 21.307 $ 21.818 Low ......................... 14.510 15.150 13.875 12.625 12.516 14.375 14.091 16.136 Close ....................... 17.190 17.310 16.375 14.250 16.188 14.688 14.375 20.341 Cash dividends declared...... $ 0.16 $ 0.16 $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.18 $ 0.18 -------- ------- ------- ------- ------- ------- ------- -------
Note: Stock price quotations were obtained from NASDAQ. Quarterly Key Ratios and Statistics -----------------------------------
2001 2000 -------------------------------------------------------------------------------- Fourth Third Second First Fourth Third Second First ------------------ ------------------ ------------------ --------------------- Margin Analysis - As a % of Average Earning Assets (2) ----------------------------- Interest Income ............. 7.12% 7.70% 7.98% 8.39% 8.47% 8.43% 8.27% 8.08% Interest Expense ............ 3.01% 3.66% 4.01% 4.46% 4.77% 4.69% 4.55% 4.30% ---- ---- ---- ---- ---- ---- ---- ---- Net Interest Margin .... 4.11% 4.04% 3.97% 3.93% 3.70% 3.74% 3.72% 3.78% ==== ==== ==== ==== ==== ==== ==== ==== Return on (3) ----------------------------- Average total assets ...... 1.07% 1.07% 1.05% 0.97% 1.06% 1.15% 1.37% 1.45% Average total assets - cash basis .... 1.21% 1.21% 1.19% 1.11% 1.19% 1.29% 1.49% 1.57% Average shareholders' equity ................. 12.68% 12.64% 12.43% 11.53% 12.89% 14.04% 17.79% 18.99% Average shareholders' equity - cash basis .... 13.99% 13.93% 13.72% 12.86% 14.20% 15.33% 18.97% 20.17% Efficiency ratio (3) ........ 55.77% 57.48% 58.59% 61.95% 58.48% 58.38% 53.90% 53.93% Effective tax rate (3) ...... 26.50% 25.67% 27.25% 27.26% 28.91% 29.36% 27.53% 30.82% Quarterly Capital Data (in millions of dollars) ----------------------------- Total Risk-Adjusted Assets... $ 27,781 $27,757 $27,375 $27,230 $26,880 $26,370 $25,900 $25,251 Tier 1 Risk-Based Capital Ratio .................. 7.27% 6.97% 7.01% 7.19% 7.19% 7.20% 7.40% 7.23% Total Risk-Based Capital Ratio .................. 10.33% 10.13% 10.20% 10.31% 10.46% 10.64% 10.90% 10.90% Tier 1 Leverage Ratio ....... 7.41% 7.10% 6.96% 7.12% 6.93% 6.80% 6.89% 6.45% Tangible Equity/Asset Ratio .................. 6.04% 5.96% 5.97% 6.01% 5.87% 5.73% 5.78% 5.49%
------------------------------------- (1) Adjusted for stock splits and stock dividends, as applicable. (2) Presented on a fully tax equivalent basis assuming a 35% tax rate. (3) Income component excludes the impact of restructuring and other charges. (4) Estimated. Page 9 Huntington Bancshares Incorporated Loan Loss Reserves and Asset Quality (in thousands of dollars)
Quarterly Loan Loss Experience ------------------------------ 2001 2000 ----------------------------------------------------------------------------------------- Fourth Third Second First Fourth Third Second ----------------------------------------------------------------------------------------- Allowance for loan losses, beginning of period ................ $ 360,446 $ 352,243 $ 301,777 $ 297,880 $ 294,686 $ 296,891 $ 296,743 Allowance of assets acquired/other .... -- -- -- -- -- -- 7,900 Loan losses ........................... (66,808) (49,386) (75,472) (35,649) (32,929) (29,499) (22,810) Recoveries of loans previously charged off ........................ 10,662 9,643 10,007 7,556 7,431 5,705 7,280 Allowance of securitized loans ........ (2,003) (1,613) (1,564) (1,474) (3,856) (4,807) (8,056) Provision for loan losses (1) ......... 108,275 49,559 117,495 33,464 32,548 26,396 15,834 --------- --------- --------- --------- --------- --------- --------- Allowance for loan losses, end of period ...................... $ 410,572 $ 360,446 $ 352,243 $ 301,777 $ 297,880 $ 294,686 $ 296,891 ========= ========= ========= ========= ========= ========= ========= As a % of average total loans Net loan losses--annualized ......... 1.04 % 0.74 % 1.25 % 0.55 % 0.50 % 0.46 % 0.30 % Net loan losses--annualized excluding restructuring and other charges ................... 0.98 % 0.61 % 0.73 % 0.55 % 0.50 % 0.46 % 0.30 % Allowance for loan losses as a % of total loans ..................... 1.90 % 1.67 % 1.67 % 1.45 % 1.45 % 1.45 % 1.45 % Net loan loss coverage (2) ............ 2.87 x 3.81 x 3.89 x 4.51 x 5.48 x 6.05 x 9.68 x
Quarterly Loan Loss Experience ------------------------------ 2000 ---------- First ---------- Allowance for loan losses, beginning of period ................ $ 299,309 Allowance of assets acquired/other .... -- Loan losses ........................... (25,607) Recoveries of loans previously charged off ........................ 7,340 Allowance of securitized loans ........ -- Provision for loan losses (1) ......... 15,701 --------- Allowance for loan losses, end of period ...................... $ 296,743 ========= As a % of average total loans Net loan losses--annualized ......... 0.35 % Net loan losses--annualized excluding restructuring and other charges ................... 0.35 % Allowance for loan losses as a % of total loans ..................... 1.45 % Net loan loss coverage (2) ............ 9.10 x
(1) Includes the impact of restructuring and other charges. (2) Income before taxes (excluding restructuring and other charges) and the provision for loan losses to net loan losses.
Quarterly Non-Performing Assets and Past Due Loans -------------------------------------------------- 2001 2000 ---------------------------------------------------------------------------------------- Fourth Third Second First Fourth Third Second ---------------------------------------------------------------------------------------- Non-accrual loans: Commercial ......................... $159,637 $148,177 $116,044 $ 62,716 $ 55,804 $ 44,918 $ 45,138 Commercial Real Estate ............. 48,360 40,882 26,870 34,893 26,702 21,695 21,450 Residential Mortgage ............... 11,836 11,666 11,868 11,949 10,174 8,588 11,548 -------- -------- -------- -------- -------- -------- -------- Total Nonaccrual Loans ................ 219,833 200,725 154,782 109,558 92,680 75,201 78,136 Renegotiated loans .................... 1,276 1,286 1,290 1,297 1,304 1,311 1,317 -------- -------- -------- -------- -------- -------- -------- Total Non-Performing Loans ............ 221,109 202,011 156,072 110,855 93,984 76,512 79,453 Other real estate, net ................ 6,384 8,050 9,913 14,031 11,413 11,982 15,670 -------- -------- -------- -------- -------- -------- -------- Total Non-Performing Assets ........... $227,493 $210,061 $165,985 $124,886 $105,397 $ 88,494 $ 95,123 ======== ======== ======== ======== ======== ======== ======== Non-performing loans as a % of total loans .................... 1.02 % 0.94 % 0.74 % 0.53 % 0.46 % 0.38 % 0.39 % Non-performing assets as a % of total loans and other real estate ... 1.05 % 0.97 % 0.79 % 0.60 % 0.51 % 0.44 % 0.46 % Allowance for loan losses as a % of non-performing loans ................ 185.69 % 178.43 % 225.69 % 272.23 % 316.95 % 385.15 % 373.67 % Allowance for loan losses and other real estate as a % of non-performing assets ............... 180.13 % 171.08 % 211.20 % 239.42 % 279.16 % 326.77 % 306.89 % Accruing loans past due 90 days or more ........................ $ 91,635 $ 92,791 $ 67,077 $102,658 $ 80,306 $ 80,290 $ 62,775 ======== ======== ======== ======== ======== ======== ========
2000 --------- First --------- Non-accrual loans: Commercial ......................... $ 44,404 Commercial Real Estate ............. 21,687 Residential Mortgage ............... 10,892 -------- Total Nonaccrual Loans ................ 76,983 Renegotiated loans .................... 1,324 -------- Total Non-Performing Loans ............ 78,307 Other real estate, net ................ 13,904 -------- Total Non-Performing Assets ........... $ 92,211 ======== Non-performing loans as a % of total loans .................... 0.38 % Non-performing assets as a % of total loans and other real estate ... 0.45 % Allowance for loan losses as a % of non-performing loans ................ 378.95 % Allowance for loan losses and other real estate as a % of non-performing assets ............... 316.30 % Accruing loans past due 90 days or more ........................ $ 60,156 ========
Page 10 Huntington Bancshares Incorporated Selected Annual Income Statement Data (in thousands of dollars, except per share amounts)
Operating Basis(1) 2001 2000 1999 1998 1997 1996 ------------------- ----------- ---------- ---------- ---------- ---------- ---------- Total Interest Income .................... $1,939,519 $2,108,505 $2,026,002 $1,999,364 $1,981,473 $1,775,734 Total Interest Expense ................... 943,337 1,166,073 984,240 978,271 954,243 880,648 ---------- ---------- ---------- ---------- ---------- ---------- Net Interest Income ...................... 996,182 942,432 1,041,762 1,021,093 1,027,230 895,086 Provision for loan losses ................ 187,075 90,479 88,447 105,242 107,797 76,371 ---------- ---------- ---------- ---------- ---------- ---------- Net Interest Income After Provision for Loan Losses .............. 809,107 851,953 953,315 915,851 919,433 818,715 ---------- ---------- ---------- ---------- ---------- ---------- Service charges on deposit accounts ...... 164,052 160,727 156,315 126,403 117,852 107,669 Brokerage and insurance income ........... 79,034 61,871 52,076 36,710 27,084 20,856 Trust services ........................... 60,298 53,613 52,030 50,754 48,102 42,237 Mortgage banking ......................... 59,148 38,025 56,890 60,006 55,715 43,942 Other service charges and fees ........... 48,217 43,883 37,301 29,202 22,705 12,013 Bank Owned Life Insurance income ......... 38,241 39,544 37,560 28,712 -- -- Other .................................... 59,767 58,795 59,901 76,620 63,403 69,726 ---------- ---------- ---------- ---------- ---------- ---------- Total Non-Interest income before securities gains ...................... 508,757 456,458 452,073 408,407 334,861 296,443 ---------- ---------- ---------- ---------- ---------- ---------- Securities gains ......................... 5,973 37,101 12,972 29,793 7,978 17,620 ---------- ---------- ---------- ---------- ---------- ---------- Total Non-Interest Income ................ 514,730 493,559 465,045 438,200 342,839 314,063 ---------- ---------- ---------- ---------- ---------- ---------- Personnel costs .......................... 478,640 421,750 419,901 428,539 392,793 360,865 Equipment ................................ 80,560 78,069 66,666 62,040 57,867 50,887 Net occupancy ............................ 77,184 75,882 62,169 54,123 49,509 49,676 Outside data processing and other services 69,692 62,011 62,886 74,795 66,683 58,367 Amortization of intangible assets ........ 41,225 39,207 37,297 25,689 13,019 10,220 Marketing ................................ 31,057 34,884 32,506 32,260 32,782 20,331 Telecommunications ....................... 27,984 26,225 28,519 29,429 21,527 16,567 Professional services .................... 23,879 20,819 21,169 25,160 24,931 20,313 Printing and supplies .................... 18,367 19,634 20,227 23,673 21,584 19,602 Franchise and other taxes ................ 9,729 11,077 14,674 22,103 19,836 20,359 Other .................................... 65,313 46,059 49,314 46,118 51,414 48,323 ---------- ---------- ---------- ---------- ---------- ---------- Total Non-Interest Expense ............... 923,630 835,617 815,328 823,929 751,945 675,510 ---------- ---------- ---------- ---------- ---------- ---------- Income Before Income Taxes ............... 400,207 509,895 603,032 530,122 510,327 457,268 Income taxes ............................. 106,685 148,949 188,588 168,054 171,430 152,999 ---------- ---------- ---------- ---------- ---------- ---------- Net Income ............................... $ 293,522 $ 360,946 $ 414,444 $ 362,068 $ 338,897 $ 304,269 ========== ========== ========== ========== ========== ========== Per Common Share(2) Net income Basic ............................... $ 1.17 $ 1.45 $ 1.63 $ 1.42 $ 1.33 $ 1.19 Diluted ............................. $ 1.17 $ 1.45 $ 1.62 $ 1.40 $ 1.32 $ 1.18 Cash Dividends Declared ................. $ 0.72 $ 0.76 $ 0.68 $ 0.62 $ 0.56 $ 0.51 Fully Tax Equivalent Margin: Net Interest Income ...................... $ 996,182 $ 942,432 $1,041,762 $1,021,093 $1,027,230 $ 895,086 Tax Equivalent Adjustment(3) ............. 6,352 8,310 9,423 10,307 11,864 12,363 ---------- ---------- ---------- ---------- ---------- ---------- Tax Equivalent Net Interest Income ....... $1,002,534 $ 950,742 $1,051,185 $1,031,400 $1,039,094 $ 907,449 ========== ========== ========== ========== ========== ==========
(1) Excludes the after-tax impact of restructuring and other charges ($115,001 in 2001; $32,500 in 2000; $62,914 in 1999; $60,300 in 1998; and $46,234 in 1997) and $108,530 gain from sale of credit card portfolio in 1999. (2) Adjusted for stock splits and stock dividends, as applicable. (3) Calculated assuming a 35% tax rate. Page 11 Huntington Bancshares Incorporated -------------------------------------------------------------------------------- Net Interest Margin Analysis (Annual Data)
Average Balance (in millions of dollars) --------------------------------------------------------------------------- Fully Tax Equivalent Basis(1) 2001 2000 1999 1998 1997 1996 ----------------------------- ------- -------- -------- -------- -------- -------- Assets Interest bearing deposits in banks ................ $ 7 $ 6 $ 9 $ 10 $ 9 $ 14 Trading account securities ........................ 25 15 13 11 10 16 Federal funds sold and securities purchased under resale agreements ........................ 107 87 22 229 44 67 Mortgages held for sale ........................... 360 109 232 289 131 113 Securities: Taxable ..................................... 3,144 4,316 4,885 4,896 5,351 5,194 Tax exempt .................................. 174 273 297 247 264 291 ------- ------- ------- ------- ------- ------- Total Securities ....................... 3,318 4,589 5,182 5,143 5,615 5,485 ------- ------- ------- ------- ------- ------- Loans: Commercial ................................... 6,647 6,446 6,128 5,629 5,302 4,955 Commercial Real Estate ....................... 3,702 3,457 3,299 3,133 3,064 2,709 Consumer Auto Leases ............................ 3,204 2,969 2,361 1,769 1,488 1,018 Auto Loans - Indirect .................. 2,697 2,982 3,432 3,249 3,081 3,065 Home Equity Lines ...................... 2,331 1,935 1,542 1,336 1,190 1,040 Residential Mortgage ................... 911 1,296 1,425 1,300 1,510 1,485 Other Loans ............................ 1,657 1,584 1,902 2,018 1,946 1,707 ------- ------- ------- ------- ------- ------- Total Consumer ......................... 10,800 10,766 10,662 9,672 9,215 8,315 ------- ------- ------- ------- ------- ------- Total Loans ....................................... 21,149 20,669 20,089 18,434 17,581 15,979 ------- ------- ------- ------- ------- ------- Allowance for loan losses/loan fees ............... 344 303 301 280 252 231 ------- ------- ------- ------- ------- ------- Net loans (2) .................................... 20,805 20,366 19,788 18,154 17,329 15,748 ------- ------- ------- ------- ------- ------- Total earning assets .............................. 24,966 25,475 25,547 24,116 23,390 21,674 ------- ------- ------- ------- ------- ------- Cash and due from banks ........................... 912 1,008 1,039 975 910 901 All other assets .................................. 2,603 2,541 2,454 2,081 1,103 1,031 ------- ------- ------- ------- ------- ------- Total Assets ...................................... $28,137 $28,721 $28,739 $26,892 $25,151 $23,375 ======= ======= ======= ======= ======= ======= Liabilities and Shareholders' Equity Core deposits Non-interest bearing deposits ................ $ 3,304 $ 3,421 $ 3,497 $ 3,287 $ 2,774 $ 2,664 Interest bearing demand deposits ............. 5,005 4,291 4,097 3,585 3,204 3,068 Savings deposits ............................. 3,478 3,563 3,740 3,277 3,056 2,836 Certificates of deposit ...................... 7,163 7,374 7,272 7,979 7,414 6,959 ------- ------- ------- ------- ------- ------- Total core deposits ..................... 18,950 18,649 18,606 18,128 16,448 15,527 ------- ------- ------- ------- ------- ------- Other domestic time deposits ...................... 128 502 238 182 365 28 Foreign time deposits ............................. 283 539 363 103 382 305 ------- ------- ------- ------- ------- ------- Total deposits ............................... 19,361 19,690 19,207 18,413 17,195 15,860 ------- ------- ------- ------- ------- ------- Short-term borrowings ............................. 2,325 1,966 2,549 2,084 2,826 2,883 Medium-term notes ................................. 2,024 2,894 3,122 2,903 1,983 1,835 Subordinated notes and other long-term debt, including capital securities ................... 1,180 1,124 1,003 876 739 516 ------- ------- ------- ------- ------- ------- Total interest bearing liabilities ........... 21,586 22,253 22,384 20,989 19,969 18,430 ------- ------- ------- ------- ------- ------- All other liabilities ............................. 865 768 711 552 514 505 Shareholders' equity .............................. 2,382 2,279 2,147 2,064 1,894 1,776 ------- ------- ------- ------- ------- ------- Total Liabilities and Shareholders' Equity ........ $28,137 $28,721 $28,739 $26,892 $25,151 $23,375 ======= ======= ======= ======= ======= =======
Net interest rate spread.......................... Impact of non-interest bearing funds on margin.... Net Interest Margin............................... (1) Fully tax equivalent yields are calculated assuming a 35% tax rate. (2) Net loan rate includes loan fees, whereas individual loan components above are shown exclusive of fees. Page 12 Huntington Bancshares Incorporated -------------------------------------------------------------------------------- Net Interest Margin Analysis (Annual Data) - Continued
Interest Income / Expense (in millions of dollars) ------------------------------------------------------------------- Fully Tax Equivalent Basis (1) 2001 2000 1999 1998 1997 1996 ------------------------------ --------- -------- -------- -------- -------- ----------- Assets Interest bearing deposits in banks ........... $ 0.2 $ 0.3 $ 0.4 $ 1.0 $ 0.5 $ 0.8 Trading account securities ................... 1.3 1.1 0.8 0.6 0.6 0.9 Federal funds sold and securities purchased under resale agreements ................... 4.4 5.5 1.2 12.9 2.4 3.8 Mortgages held for sale ...................... 25.0 8.7 16.3 20.2 10.1 8.7 Securities: Taxable ................................ 206.9 269.5 297.0 308.8 339.8 333.7 Tax exempt ............................. 13.0 20.8 23.5 21.9 25.3 27.9 -------- ------- ------- ------- ------- ------- Total Securities .................. 219.9 290.3 320.5 330.7 365.1 361.6 -------- ------- ------- ------- ------- ------- Loans: Commercial .............................. 472.1 553.2 483.4 469.0 456.6 396.9 Commercial Real Estate .................. 272.3 296.4 267.7 271.3 274.4 240.0 Consumer Auto Leases ....................... 215.0 201.1 159.2 126.1 113.0 79.9 Auto Loans - Indirect ............. 230.3 251.9 271.2 269.4 259.6 245.9 Home Equity Lines ................. 174.7 164.9 119.7 116.8 107.4 97.7 Residential Mortgage .............. 69.0 99.6 107.0 104.6 126.3 123.0 Other Loans ....................... 151.6 142.4 180.1 201.7 201.5 179.7 -------- ------- ------- ------- ------- ------- Total Consumer .................... 840.6 859.9 837.2 818.6 807.8 726.2 -------- ------- ------- ------- ------- ------- Total Loans .................................. 1,585.0 1,709.5 1,588.3 1,558.9 1,538.8 1,363.1 -------- ------- ------- ------- ------- ------- Allowance for loan losses/loan fees .......... 110.1 101.4 107.9 85.4 75.8 49.2 -------- ------- ------- ------- ------- ------- Net loans (2) ............................... 1,695.1 1,810.9 1,696.2 1,644.3 1,614.6 1,412.3 -------- ------- ------- ------- ------- ------- Total earning assets ......................... 1,945.9 2,116.8 2,035.4 2,009.7 1,993.3 1,788.1 -------- ------- ------- ------- ------- ------- Cash and due from banks All other assets Total Assets Liabilities and Shareholders' Equity Core deposits Non-interest bearing deposits Interest bearing demand deposits ........ 134.6 144.0 106.5 96.4 84.4 80.2 Savings deposits ........................ 107.7 146.4 126.0 114.0 100.4 86.3 Certificates of deposit ................. 398.2 425.8 375.7 445.6 417.3 394.3 -------- ------- ------- ------- ------- ------- Total core deposits ................ 640.5 716.2 608.2 656.0 602.1 560.8 -------- ------- ------- ------- ------- ------- Other domestic time deposits ................. 6.6 31.9 12.8 10.5 21.8 1.5 Foreign time deposits ........................ 10.8 34.0 18.6 5.9 22.2 18.4 -------- ------- ------- ------- ------- ------- Total deposits .......................... 657.9 782.1 639.6 672.4 646.1 580.7 -------- ------- ------- ------- ------- ------- Short-term borrowings ........................ 95.9 113.1 114.3 97.7 146.4 149.1 Medium-term notes ............................ 121.7 189.3 170.0 164.6 116.2 120.2 Subordinated notes and other long-term debt, including capital securities .............. 67.9 81.6 60.3 43.6 45.5 30.7 -------- ------- ------- ------- ------- ------- Total interest bearing liabilities ...... 943.4 1,166.1 984.2 978.3 954.2 880.7 -------- ------- ------- ------- ------- ------- All other liabilities Shareholders' equity Total Liabilities and Shareholders' Equity Net interest rate spread Impact of non-interest bearing funds on margin Net Interest Margin .......................... $ 1,002.5 $ 950.7 $1,051.2 $1,031.4 $1,039.1 $ 907.4 ========== ======== ======== ======== ======== ========
(1) Fully tax equivalent yields are calculated assuming a 35% tax rate. (2) Net loan rate includes loan fees, whereas individual loan components above are shown exclusive of fees. Page 13 Huntington Bancshares Incorporated -------------------------------------------------------------------------------- Net Interest Margin Analysis (Annual Data) - Continued
Average Rate ----------------------------------------------------------------------------- Fully Tax Equivalent Basis (1) 2001 2000 1999 1998 1997 1996 ------------------------------ Assets Interest bearing deposits in banks ........... 3.43 % 5.03 % 4.04 % 5.22 % 5.47 % 5.85 % Trading account securities ................... 5.13 7.11 5.89 5.71 5.70 5.66 Federal funds sold and securities purchased under resale agreements ................... 4.19 6.33 5.58 5.64 5.50 6.03 Mortgages held for sale ...................... 6.95 7.96 7.03 6.99 7.75 7.74 Securities: Taxable ................................ 6.58 6.24 6.08 6.31 6.35 6.42 Tax exempt ............................. 7.49 7.61 7.90 8.83 9.55 9.59 Total Securities .................. 6.63 6.33 6.18 6.43 6.50 6.59 Loans: Commercial .............................. 7.10 8.58 7.89 8.33 8.61 8.01 Commercial Real Estate .................. 7.36 8.57 8.12 8.66 8.89 8.86 Consumer Auto Leases ....................... 6.71 6.76 6.74 7.13 7.60 7.84 Auto Loans - Indirect ............. 8.54 8.45 7.90 8.29 8.43 8.02 Home Equity Lines ................. 7.50 8.52 7.76 8.75 9.02 9.40 Residential Mortgage .............. 7.58 7.69 7.51 8.04 8.36 8.28 Other Loans ....................... 9.15 9.01 9.47 9.99 10.35 10.52 Total Consumer .................... 7.78 7.99 7.85 8.46 8.77 8.73 Total Loans .................................. 7.49 8.27 7.91 8.46 8.75 8.53 Allowance for loan losses/loan fees Net loans (2) ............................... 8.01 8.76 8.44 8.92 9.18 8.84 Total earning assets ......................... 7.79 % 8.31 % 7.97 % 8.33 % 8.52 % 8.26 % Cash and due from banks All other assets Total Assets Liabilities and Shareholders' Equity Core deposits Non-interest bearing deposits Interest bearing demand deposits ........ 2.69 % 3.36 % 2.60 % 2.69 % 2.64 % 2.61 % Savings deposits ........................ 3.10 4.11 3.37 3.48 3.28 3.04 Certificates of deposit ................. 5.56 5.78 5.17 5.58 5.63 5.67 Total core deposits ................ 3.38 4.70 4.03 4.42 4.40 4.36 Other domestic time deposits ................. 5.12 6.35 5.40 5.82 5.97 5.36 Foreign time deposits ........................ 3.82 6.31 5.14 5.66 5.81 6.03 Total deposits .......................... 3.40 4.81 4.07 4.44 4.48 4.40 Short-term borrowings ........................ 4.12 5.75 4.48 4.69 5.18 5.17 Medium-term notes ............................ 6.01 6.54 5.45 5.67 5.86 6.55 Subordinated notes and other long-term debt, including capital securities .............. 5.75 7.26 6.01 4.98 6.16 5.96 Total interest bearing liabilities ...... 4.37 % 5.24 % 4.40 % 4.66 % 4.78 % 4.78 % All other liabilities Shareholders' equity Total Liabilities and Shareholders' Equity Net interest rate spread ..................... 3.42 % 3.07 % 3.57 % 3.67 % 3.74 % 3.48 % Impact of non-interest bearing funds on margin 0.60 % 0.66 % 0.54 % 0.61 % 0.70 % 0.71 % Net Interest Margin .......................... 4.02 % 3.73 % 4.11 % 4.28 % 4.44 % 4.19 %
(1) Fully tax equivalent yields are calculated assuming a 35% tax rate. (2) Net loan rate includes loan fees, whereas individual loan components above are shown exclusive of fees. Page 14 Huntington Bancshares Incorporated Loan Loss Reserves and Asset Quality (in thousands of dollars) Allowance for Loan Losses and Selected Statistics -------------------------------------------------
2001 2000 1999 1998 1997 1996 --------- --------- --------- --------- --------- --------- Allowance for loan losses, beginning of year ....... $ 297,880 $ 299,309 $ 290,948 $ 258,171 $ 230,778 $ 222,487 Loan losses, net of recoveries Commercial ................................... (59,568) (13,812) (10,900) (19,966) (18,903) (19,020) Commercial Real Estate ....................... (3,729) (1,327) (1,585) 46 (677) 204 Consumer Auto Leases ............................. (43,178) (21,442) (10,557) (12,124) (8,768) (3,777) Auto Loans - Indirect ................... (55,071) (32,280) (28,582) (24,128) (26,208) (24,936) Home Equity Lines ....................... (8,025) (5,069) (4,711) (4,507) (1,016) (623) Residential Mortgage .................... (785) (1,007) (1,136) (876) (1,631) (1,014) Other Loans ............................. (19,091) (8,152) (22,615) (32,952) (30,978) (20,821) --------- --------- --------- --------- --------- --------- Total Consumer ............................... (126,150) (67,950) (67,601) (74,587) (68,601) (51,171) --------- --------- --------- --------- --------- --------- Net Loan Losses .................................... (189,447) (83,089) (80,086) (94,507) (88,181) (69,987) --------- --------- --------- --------- --------- --------- Allowance of securitized loans ..................... (6,654) (16,719) -- -- -- -- Provision for loan losses (1) ...................... 308,793 90,479 88,447 105,242 107,797 76,371 Allowance of assets acquired and other ............. -- 7,900 -- 22,042 7,777 1,907 --------- --------- --------- --------- --------- --------- Allowance for loan losses, end of year ............. $ 410,572 $ 297,880 $ 299,309 $ 290,948 $ 258,171 $ 230,778 ========= ========= ========= ========= ========= ========= As a % of average total loans Net loan losses ................................. 0.90 % 0.40 % 0.40 % 0.51 % 0.50 % 0.44 % Net loan losses - excluding restructuring and other charges ............... 0.72 % 0.40 % 0.40 % 0.51 % 0.50 % 0.44 % Recoveries as a % of loan losses ................... 16.58 % 25.04 % 28.68 % 25.20 % 20.36 % 23.10 % Allowance for loan losses as a % of total loans .... 1.90 % 1.45 % 1.45 % 1.50 % 1.46 % 1.38 % Net loan loss coverage (2) ......................... 3.62 x 7.23 x 8.63 x 6.72 x 7.01 x 7.62 x
(1) Includes the impact of restructuring and other charges. (2) Income before taxes (excluding the impact of restructuring and other charges and 1999 gain from sale of credit card portfolio) and the provision for loan losses to net loan losses. Non-Performing Assets and Past Due Loans ----------------------------------------
2001 2000 1999 1998 1997 1996 --------- --------- --------- --------- --------- --------- Non-accrual loans: Commercial ................................... $159,637 $ 55,804 $ 42,958 $ 34,586 $ 36,459 $ 25,621 Commercial Real Estate ....................... 48,360 26,702 26,916 23,424 16,128 16,584 Residential Mortgage ......................... 11,836 10,174 11,866 14,419 13,394 12,835 -------- -------- -------- -------- -------- -------- Total Nonaccrual Loans ............................. 219,833 92,680 81,740 72,429 65,981 55,040 Renegotiated loans ................................. 1,276 1,304 1,330 4,706 5,822 4,422 -------- -------- -------- -------- -------- -------- Total Non-Performing Loans ......................... 221,109 93,984 83,070 77,135 71,803 59,462 -------- -------- -------- -------- -------- -------- Other real estate, net ............................. 6,384 11,413 15,171 18,964 15,343 17,208 -------- -------- -------- -------- -------- -------- Total Non-Performing Assets ........................ $227,493 $105,397 $ 98,241 $ 96,099 $ 87,146 $ 76,670 ======== ======== ======== ======== ======== ======== Non-performing loans as a % of total loans ................................. 1.02 % 0.46 % 0.40 % 0.40 % 0.40 % 0.35 % Non-performing assets as a % of total loans and other real estate........................................... 1.05 % 0.51 % 0.47 % 0.49 % 0.49 % 0.46 % Allowance for loan losses as a % of non-performing loans ............................. 185.69 % 316.95 % 360.31 % 377.19 % 359.55 % 388.11 % Allowance for loan losses and other real estate as a % of non-performing assets............................................ 180.13 % 279.16 % 299.85 % 301.00 % 294.32 % 297.12 % Accruing loans past due 90 days or more........................................... $ 91,635 $ 80,306 $ 61,287 $ 51,037 $ 49,608 $ 39,267 ======== ======== ======== ======== ======== ======== Accruing loans past due 90 days or more as a % of total loans ....................... 0.42 % 0.39 % 0.30 % 0.26 % 0.28 % 0.23 % ======== ======== ======== ======== ======== ========
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