UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 18, 2012
HUNTINGTON BANCSHARES INCORPORATED
(Exact name of registrant as specified in its charter)
Maryland | 1-34073 | 31-0724920 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
Huntington Center 41 South High Street Columbus, Ohio |
43287 | |||
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code (614) 480-8300
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
On April 18, 2012, Huntington Bancshares Incorporated (Huntington) issued a news release announcing its earnings for the quarter ended March 31, 2012. Also on April 18, 2012, Huntington made a Quarterly Performance Discussion and Financial Review available on its web site, www.huntington-ir.com.
Huntingtons senior management will host an earnings conference call April 18, 2012, at 10:00 a.m. (Eastern Time). The call may be accessed via a live Internet webcast at www.huntington-ir.com or through a dial-in telephone number at 877-684-3807, conference ID 63194598. Slides will be available at www.huntington-ir.com just prior to the call. A replay of the web cast will be archived in the Investor Relations section of Huntingtons web site at www.huntington.com. A telephone replay will be available two hours after the completion of the call through April 30, 2012, at (855) 859-2056 or (404) 537-3406; conference call ID 63194598.
The information contained or incorporated by reference in this Current Report on Form 8-K contains certain forward-looking statements, including certain plans, expectations, goals, projections, and statements, which are subject to numerous assumptions, risks, and uncertainties. Forward-looking statements may be identified by words such as expect, anticipate, believe, intend, estimate, plan, target, goal, or similar expressions, or future or conditional verbs such as will, may, might, should, would, could, or similar variations.
While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors which could cause actual results to differ materially from those contained or implied in the forward-looking statements: (1) worsening of credit quality performance due to a number of factors such as the underlying value of collateral that could prove less valuable than otherwise assumed and assumed cash flows may be worse than expected; (2) changes in economic conditions, including impacts from the continuing economic uncertainty in the US, the European Union, and other areas; (3) movements in interest rates; (4) competitive pressures on product pricing and services; (5) success, impact, and timing of our business strategies, including market acceptance of any new products or services introduced to implement our Fair Play banking philosophy; (6) changes in accounting policies and principles and the accuracy of our assumptions and estimates used to prepare our financial statements; (7) extended disruption of vital infrastructure; (8) the final outcome of significant litigation; (9) the nature, extent, timing and results of governmental actions, examinations, reviews, reforms, and regulations including those related to the Dodd-Frank Wall Street Reform and Consumer Protection Act; and (10) the outcome of judicial and regulatory decisions regarding practices in the residential mortgage industry, including among other things the processes followed for foreclosing residential mortgages. Additional factors that could cause results to differ materially from those described above can be found in Huntingtons 2011 Annual Report on Form 10-K, and documents subsequently filed by Huntington with the Securities and Exchange Commission. All forward-looking statements included in this document are based on information available at the time of the release. Huntington assumes no obligation to update any forward-looking statement.
The information contained or incorporated by reference in Item 2.02 of this Form 8-K shall be treated as furnished for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
Item 9.01. Financial Statements and Exhibits.
The exhibits referenced below shall be treated as furnished for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
(d) Exhibits.
Exhibit 99.1 News release of Huntington Bancshares Incorporated, dated April 18, 2012.
Exhibit 99.2 Quarterly Performance Discussion, March 2012.
Exhibit 99.3 Quarterly Financial Review, March 2012.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
HUNTINGTON BANCSHARES INCORPORATED | ||||||
Date: April 18, 2012 | By: | /s/ Donald R. Kimble | ||||
Donald R. Kimble | ||||||
Senior Executive Vice President and Chief Financial Officer |
EXHIBIT INDEX
Exhibit No. | Description | |
Exhibit 99.1 | News release of Huntington Bancshares Incorporated, April 18, 2012. | |
Exhibit 99.2 | Quarterly Performance Discussion, March 2012. | |
Exhibit 99.3 | Quarterly Financial Review, March 2012. |
Exhibit 99.1
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Date: April 18, 2012
FOR IMMEDIATE RELEASE
Contact: | ||
Investors | Media | |
Todd Beekman | Maureen Brown | |
Todd.Beekman@huntington.com | Maureen.Brown@Huntington.com | |
(614) 480-3878 | (614) 480-5512 |
Jay Gould
Jay.Gould@huntington.com
(614) 205-1197
HUNTINGTON BANCSHARES INCORPORATED
REPORTS $153.3 MILLION OF NET INCOME, OR $0.17 PER COMMON SHARE,
FOR THE 2012 FIRST QUARTER, UP 21% FROM BOTH THE PRIOR AND YEAR-AGO QUARTERS
DECLARES QUARTERLY DIVIDEND ON COMMON STOCK OF $0.04 PER SHARE
Other specific highlights compared with 2011 Fourth Quarter:
| 1.13% return on average assets, up from 0.92% |
| 11.6% annualized growth in tangible book value per share |
| 3.40% net interest margin, up 2 basis points |
| 17% annualized growth in average commercial and industrial loans |
| 16% annualized growth in average total demand deposits |
| $56.0 million noninterest income increase including: |
| $23.0 million related to the $1.3 billion automobile loan securitization and sale |
| $22.3 million increase in mortgage banking income |
| $11.4 million related to the bargain purchase gain associated with the FDIC-assisted Fidelity Bank acquisition |
| $32.4 million noninterest expense increase reflected $23.5 million related to an addition to litigation reserves and the prior quarters $9.7 million gain on the early extinguishment of debt |
| 14% decline in nonaccrual loans to 1.15% of total loans and leases, down from 1.39% |
| 10.15% Tier 1 common risk-based capital ratio, up from 10.00% |
COLUMBUS, Ohio Huntington Bancshares Incorporated (NASDAQ: HBAN; www.huntington.com) reported 2012 first quarter net income of $153.3 million, up $26.4 million, or 21%, from $126.9 million in the prior quarter. Earnings per common share in the current quarter were $0.17, up $0.03 from the prior quarter. Net income in the year-ago quarter was $126.4 million, or $0.14 per common share.
Huntington today also announced that the board of directors has declared a quarterly cash dividend on its common stock of $0.04 per common share. The dividend is payable July 2, 2012, to shareholders of record on June 18, 2012.
Summary Performance Discussion Compared with 2011 Fourth Quarter
We are very pleased with the quarter. By staying focused on executing our strategic plan, we are making steady progress in improving long-term profitability and adding to our earnings growth opportunities, said Stephen D. Steinour, chairman, president and chief executive officer. This quarters financial results contained two significant items. The first was a gain relating to our recently announced FDIC-assisted purchase of Fidelity Bank in Dearborn, Michigan. The other was an addition to our litigation reserves. When looking at the performance adjusted for those significant items, revenue is meaningfully higher with noninterest expense, after considering seasonal FICA and other payroll taxes, basically unchanged.
Steinour continued, Mortgage banking and our best-in-class indirect automobile businesses are performing as expected and taking full advantage of the current market conditions. Our focus on growing consumer households and commercial relationships and improving product cross-sell continued to positively impact financial performance and demonstrates our ability to grow revenue and protect the net interest margin despite the low interest rate environment.
Net income in the first quarter was $153.3 million, an increase of $26.4 million, or 21%, over the prior quarter. The primary drivers of the increase were a $56.0 million, or 24%, increase in noninterest income and a $10.9 million, or 24%, decrease in provision for credit losses, partially offset by a $32.4 million, or 8%, increase in noninterest expense.
Net interest income increased $2.2 million, or 1%, from the prior quarter. This reflected a $0.6 billion, or 1% (5% annualized), increase in average earning assets and a 2 basis point increase in the fully-taxable equivalent net interest margin to 3.40%. The 2 basis points linked-quarter increase in the net interest margin reflected the benefits from the 7 basis point reduction in the cost of deposit pricing and an increase in low cost funding. However, there was a 5 basis point negative impact from the mix and yield of earning assets and other items.
The increase in average earning assets was driven by organic growth across several categories of loans. Average commercial and industrial loans (C&I) growth was strong at $0.6 billion, or 4% (17% annualized). Automobile loan origination levels remained strong throughout the quarter. However, average automobile loan balances declined 19%, reflecting the impact of the 2011 fourth quarter reclassification of automobile loans into held for sale. Another automobile loan securitization for $1.3 billion was completed on March 8, 2012. The March 30 FDIC-assisted purchase of Fidelity Bank (see table 1 for additional details) and the March 21 purchase of a $0.4 billion portfolio of high quality municipal equipment leases had minimal impact on average balances, although combined, add $0.9 billion to end of period balances.
Average total core deposits were stable at $41.4 billion with the mix continuing to shift from higher cost core certificates of deposit, which declined $0.3 billion, or 4% (15% annualized), to lower cost total demand deposits, which grew $0.6 billion, or 4% (16% annualized). Average commercial noninterest bearing demand deposits increased $0.4 billion, or 4% (16% annualized), to $9.7 billion and, as we highlighted in second half 2011, included approximately $1.0 billion of deposits from several large relationships that are short term in nature.
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Net interest income increased as a result of not only strong loan originations but also a higher net interest margin. This reflected our continued focus on fundamentally changing our deposit mix to drive down the overall cost of funds. Loan growth continued to reflect the positive results of our strategic actions, Steinour noted. C&I loans have been growing for eight consecutive quarters. This quarter, C&I growth saw the added benefit of the economic tailwinds we are beginning to experience across much of our Midwest footprint. While utilization rates were unchanged, commercial relationships grew at an 13.3% annualized rate and have grown 16.0% since the 2010 first quarter.
Total noninterest income increased $56.0 million, or 24%. This included a $23.9 million increase in gain on loan sales as the current quarter included a $23.0 million gain associated with the automobile loan securitization. In addition, the first quarter was positively impacted by a $22.3 million increase in mortgage banking income. This was driven by an $11.6 million net mortgage servicing rights (MSR) improvement and a $10.1 million increase in origination and secondary marketing income. Other income included an $11.4 million bargain purchase gain associated with the FDIC-assisted acquisition of Dearborn, Michigan-based Fidelity Bank.
Commenting on noninterest income trends, Steinour said, The first quarter is typically our seasonally lowest quarter for several noninterest income items. The completion of our second automobile loan securitization in the last six months and the low absolute level of interest rates and shape of the yield curve, which enabled many homeowners to refinance their mortgages at near record low rates, positively impacted results.
Consumer checking account households grew at a 14.2% annualized rate during the quarter and were up 11.7% compared to a year ago. The percent of consumer checking account households with four or more products or services was 1.6 percentage points higher, up from 73.5% last quarter to 75.1%. The percent of commercial relationships with four or more products or services at the end of quarter was 32.7%, up from 31.4% in the prior quarter. These growth and cross-sell rates are why service charges on deposits increased 11% from a year ago and why electronic banking is only down $10.2 million over a similar timeframe. We have already made up 20% of the electronic banking revenue lost due to the Durbin amendment. These financial results point to the competitive advantage we are building through our Fair Play consumer strategy that is built on simply doing the right thing for our customers.
Noninterest expense increased $32.4 million, or 8%. This reflected a $23.5 million addition to litigation reserves in other expense and the prior quarters inclusion of a $9.7 million gain on the early extinguishment of debt (trust preferred securities). Personnel costs increased $15.4 million, or 7%, most notably impacted by approximately $9 million of costs related to the annual payroll taxes resets and other benefit expense. Additionally, commissions and incentive compensation expense increased due to improved performance metrics and results. These negative impacts were partially offset by an $11.4 million decrease in outside data processing and other services, as the fourth quarter contained $5.0 million of expenses associated with the conversion to a new debit card processor.
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Steinour said, Noninterest expense continued to run at levels above our long-term expectations relative to revenue. Some of our more recent strategic actions have yet to season while other recent actions have resulted in clear cost reductions. For example, this quarters sizable decline in outside data processing and other services was primarily due to the completion of the conversion to our new debit card processor.
The provision for credit losses decreased $10.9 million, or 24%, from the prior quarter. This reflected a larger reduction of the allowance for credit losses (ACL) than in the prior quarter due to the continued improvement in credit quality as we gradually migrate toward normal levels. The period end ACL as a percentage of total loans and leases decreased to 2.37%, from 2.60%. However, the ACL as a percentage of period end total nonaccrual loans (NALs) increased 9 percentage points to 206% as NALs declined 14% to $467.6 million, or 1.15% of total loans. Total net charge-offs (NCO) for the 2012 first quarter were $83.0 million, or an annualized 0.85% of average total loans and leases. This was down $0.9 million, or 1%, from $83.9 million, or an annualized 0.85%, in the prior quarter.
Commenting on credit quality trends, Steinour said, The continued improvement in credit quality performance reflected the positive results of the actions taken over the last three years to address credit-related issues in our loan portfolio. Many of our credit quality performance metrics remain elevated compared with long-term historical levels and we expect continued improvement.
Capital levels continued to be strong. Our Tier 1 common risk-based capital ratio at March 31, 2012, was 10.15%, up from 10.00% at December 31, 2011, with our tangible common equity ratio increasing to 9.86% from 9.75% over this same period. The regulatory Tier 1 risk-based capital ratio at March 31, 2012, was 12.22% up from 12.11%, at year end, while our Total risk based capital ratio declined slightly to 14.76% from 14.77%. This decline reflected an increase in risk-weighted assets due to balance sheet growth.
As announced March 14, we are pleased that the Federal Reserve completed its review of our January capital plan submission and did not object to our proposed capital actions, said Steinour. This allows us to maintain our common dividend through the first quarter of 2013. It also gives us the potential to repurchase up to $182 million of common stock. Reinvesting excess capital to grow the business organically remains our first priority. Importantly, through dividends and now share repurchases, we have the flexibility, subject to market conditions, to return a meaningful amount of our earnings to the owners of the company.
Table 1 FDIC-Assisted Fidelity Bank Acquisition
The following table summarizes the 2012 first quarter balance sheet impact of the FDIC-assisted acquisition of Fidelity Bank completed on March 30, 2012. Assets acquired and liabilities assumed were recorded at fair value on the date of acquisition. All acquired loans accrue interest as performing loans or as purchased impaired loans; therefore, none of the acquired loans were reported as nonaccrual.
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(in millions) |
||||
Cash and Deposits in Banks |
$ | 98.9 | ||
Loans |
520.6 | |||
Other real estate ow ned (OREO) |
8.0 | |||
Other assets, including FDIC receivable |
143.9 | |||
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|
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Total assets |
$ | 771.4 | ||
|
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Deposits |
$ | 712.5 | ||
Other liabilities |
47.5 | |||
|
|
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Total liabilities |
$ | 760.0 | ||
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Expectations
Some of the encouraging signs seen late last year continued to build throughout the quarter and drove modest economic growth. Parts of the Midwest region are recovering faster than the broader United States with lower levels of unemployment, resurgence in manufacturing, and budget surpluses for several states for the first time in years. While our footprint has clearly benefitted from this recovery, the US and global economies continue to experience elevated levels of volatility and uncertainty. This requires that we remain cautious, said Steinour.
As we have done since early 2010, we will continue to execute our core strategy, making selective investments in initiatives to grow long-term profitability. We will remain disciplined in our growth, including the pricing of loans and deposits, and we are encouraged by the net interest margin expansion this quarter. We continue to expect credit quality improvement. We will stay focused on increasing customer cross-sell and work to improve operating efficiency. We also have 18,000 new Fidelity Bank customers, giving us a great opportunity to introduce them to our products and services.
For the remainder of 2012, net interest income is expected to be modestly higher than the first quarter level. The momentum we are seeing in total loan and low-cost deposit growth is expected to continue. Those benefits to net interest income growth are expected to be mostly offset, however, by downward pressure on the net interest margin later in the year due to the anticipated continued mix shift to lower-rate, higher quality loans and lower securities reinvestment rates given the low absolute level of interest rates and shape of the yield curve. The C&I portfolio is expected to continue to show meaningful growth as our sales pipeline remains robust with much of this reflecting the positive impact from strategic initiatives to expand our commercial lending expertise into areas like specialty banking, asset based lending, and equipment financing. It also reflects our long-standing continued support of middle market and small business lending. For automobile loans, we will continue to evaluate another automobile loan securitization in the second half of the year. Such securitizations allow us to continue to expand this business while generating strong levels of originations that would otherwise limit on-balance sheet automobile loan concentration. Residential mortgages and home equity loans are expected to show modest growth. CRE loans will likely continue to experience low levels of declines from current levels as the runoff in the noncore portion of the portfolio is partially offset by new core originations.
Excluding potential future automobile loan securitizations, we anticipate the increase in total loans to modestly outpace growth in total deposits. This reflects our heightened focus on our overall cost of funding and the continued shift towards low- and no-cost demand deposits and money market deposit accounts.
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Noninterest income is expected to show a modest increase from the 2012 first quarter level after excluding the impacts of the automobile loan securitization gain, the Fidelity Bank related bargain purchase gain, and any net MSR impact. This growth is expected to primarily reflect anticipated growth in new customers and increased contribution from key fee income activities including capital markets, treasury management services, and brokerage, as well as the continued positive impact of our cross-sell and product penetration initiatives throughout the company.
For the full year, we anticipate positive operating leverage and modest improvement in our expense efficiency ratio. This will likely reflect the benefit of revenue growth as we expect expenses could increase slightly. While we will continue our focus on improving expense efficiencies throughout the company, additional regulatory costs and expenses associated with strategic actions, including the planned opening of over 40 in-store branches and integration of Fidelity Bank, may offset such improvements.
Credit quality is expected to experience continued improvement. The level of provision for credit losses is currently at the low end of our long-term expectation, and we expect some quarterly volatility given the absolute low level and the uncertain and uneven nature of the economic recovery.
We anticipate the effective tax rate for 2012 to approximate 24%-26%, which includes permanent tax differences primarily related to tax-exempt income, tax-advantaged investments, and general business credits.
Please see the 2012 First Quarter Performance Discussion for an additional detailed review of this quarters performance. This document can be found at: http://www.investquest.com/iq/h/hban/ne/news/index.htm
Conference Call / Webcast Information
Huntingtons senior management will host an earnings conference call on Wednesday, April 18, 2012, at 10:00 a.m. (Eastern Time). The call may be accessed via a live Internet webcast at www.huntington-ir.com or through a dial-in telephone number at (877) 684-3807; Conference ID 63194598. Slides will be available at www.huntington-ir.com about an hour prior to the call. A replay of the webcast will be archived in the Investor Relations section of Huntingtons web site, www.huntington.com. A telephone replay will be available two hours after the completion of the call through April 30, 2012 at (855) 859-2056; Conference ID 63194598.
Forward-looking Statement
This document contains certain forward-looking statements, including certain plans, expectations, goals, projections, and statements, which are subject to numerous assumptions, risks, and uncertainties. Forward-looking statements may be identified by words such as expect, anticipate, believe, intend, estimate, plan, target, goal, or similar expressions, or future or conditional verbs such as will, may, might, should, would, could, or similar variations.
While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors which could cause actual results to differ materially from those contained or implied in the forward-looking statements: (1) worsening of credit quality performance due to a number of factors such as the underlying value of collateral that could prove less valuable than otherwise assumed and assumed cash flows may be worse than expected; (2) changes in economic conditions, including impacts from the continuing economic uncertainty in the US, the European Union, and other areas; (3) movements in interest rates; (4) competitive pressures on product pricing and services; (5) success, impact, and timing of our business strategies, including market acceptance of any new products or services introduced to implement our Fair Play banking philosophy; (6) changes in accounting policies and principles and the accuracy of our assumptions and estimates used to prepare our financial statements; (7) extended disruption of vital infrastructure; (8) the final outcome of significant litigation; (9) the nature, extent, timing and results of governmental actions, examinations, reviews, reforms, and regulations including those related to the Dodd-Frank Wall Street Reform and Consumer Protection Act; and (10) the outcome of judicial and regulatory decisions regarding practices in the residential mortgage industry, including among other things the processes followed for foreclosing residential mortgages. Additional factors that could cause results to differ materially from those described above can be found in Huntingtons 2011 Annual Report on Form 10-K, and documents subsequently filed by Huntington with the Securities and Exchange Commission. All forward-looking statements included in this document are based on information available at the time of the release. Huntington assumes no obligation to update any forward-looking statement.
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Basis of Presentation
Use of Non-GAAP Financial Measures
This document may contain GAAP financial measures and non-GAAP financial measures where management believes it to be helpful in understanding Huntingtons results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this document, the 2012 First Quarter Performance Discussion and Quarterly Financial Review supplements to this document, the fourth quarter earnings conference call slides, or the Form 8-K related to this document, all of which can be found on Huntingtons website at www.huntington-ir.com.
Annualized data
Certain returns, yields, performance ratios, or quarterly growth rates are presented on an annualized basis. This is done for analytical and decision-making purposes to better discern underlying performance trends when compared to full year or year-over-year amounts. For example, loan and deposit growth rates, as well as net charge-off percentages, are most often expressed in terms of an annual rate like 8%. As such, a 2% growth rate for a quarter would represent an annualized 8% growth rate.
Fully-taxable equivalent interest income and net interest margin
Income from tax-exempt earning assets is increased by an amount equivalent to the taxes that would have been paid if this income had been taxable at statutory rates. This adjustment puts all earning assets, most notably tax-exempt municipal securities and certain lease assets, on a common basis that facilitates comparison of results to results of competitors.
Earnings per share equivalent data
Significant income or expense items may be expressed on a per common share basis. This is done for analytical and decision-making purposes to better discern underlying trends in total corporate earnings per share performance excluding the impact of such items. Investors may also find this information helpful in their evaluation of the companys financial performance against published earnings per share mean estimate amounts, which typically exclude the impact of Significant Items. Earnings per share equivalents are usually calculated by applying a 35% effective tax rate to a pre-tax amount to derive an after-tax amount, which is divided by the average shares outstanding during the respective reporting period. Occasionally, when the item involves special tax treatment, the after-tax amount is disclosed separately, with this then being the amount used to calculate the earnings per share equivalent.
Rounding
Please note that columns of data in this document may not add due to rounding.
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About Huntington
Huntington Bancshares Incorporated is a $56 billion regional bank holding company headquartered in Columbus, Ohio. The Huntington National Bank, founded in 1866, provides full-service commercial, small business, and consumer banking services; mortgage banking services; treasury management and foreign exchange services; equipment leasing; wealth and investment management services; trust services; brokerage services; customized insurance brokerage and service programs; and other financial products and services. The principal markets for these services are Huntingtons six-state banking franchise: Ohio, Michigan, Pennsylvania, Indiana, West Virginia, and Kentucky. The primary distribution channels include a banking network of over 660 traditional branches and convenience branches located in grocery stores and retirement centers, and through an array of alternative distribution channels including internet and mobile banking, telephone banking, and over 1,300 ATMs. Through automotive dealership relationships within its six-state banking franchise area and selected other Midwest and New England states, Huntington also provides commercial banking services to the automotive dealers and retail automobile financing for dealer customers.
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Exhibit 99.2
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HUNTINGTON BANCSHARES
2012 FIRST QUARTER PERFORMANCE
DISCUSSION
Date: April 18, 2012
The following provides detailed earnings performance discussion that complements the summary review contained in Huntington Bancshares Incorporateds (NASDAQ: HBAN) 2012 First Quarter Earnings Press Release, which can be found at:
http://www.investquest.com/iq/h/hban/ne/news/
Table 1 Earnings Performance Summary
2012 | 2011 | |||||||||||||||
First | Fourth | Change | ||||||||||||||
(in millions) |
Quarter | Quarter | Amount | % | ||||||||||||
Net interest income |
$ | 417.2 | $ | 415.0 | $ | 2.2 | 1 | % | ||||||||
Provision for credit losses |
34.4 | 45.3 | (10.9 | ) | (24 | ) | ||||||||||
Noninterest income |
285.3 | 229.4 | 56.0 | 24 | ||||||||||||
Noninterest expense |
462.7 | 430.3 | 32.4 | 8 | ||||||||||||
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Income before income taxes |
205.4 | 168.8 | 36.6 | 22 | ||||||||||||
Provison for income taxes |
52.2 | 42.0 | 10.2 | 24 | ||||||||||||
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Net income |
153.3 | 126.9 | 26.4 | 21 | ||||||||||||
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Dividends on preferred shares |
8.0 | 7.7 | 0.3 | 4 | ||||||||||||
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Net income applicable to common shares |
$ | 145.2 | $ | 119.2 | $ | 26.1 | 22 | % | ||||||||
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Net income per common share-diluted |
$ | 0.17 | $ | 0.14 | $ | 0.03 | 21 | % | ||||||||
Revenuefully-taxable equivalent (FTE) |
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Net interest income |
$ | 417.2 | $ | 415.0 | $ | 2.2 | 1 | % | ||||||||
FTE adjustment |
3.9 | 3.5 | 0.5 | 13 | ||||||||||||
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Net interest incomeFTE |
421.1 | 418.5 | 2.6 | 1 | ||||||||||||
Noninterest income |
285.3 | 229.4 | 56.0 | 24 | ||||||||||||
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Total revenueFTE |
$ | 706.5 | $ | 647.9 | $ | 58.6 | 9 | % | ||||||||
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Significant Items Influencing Financial Performance Comparisons
From time-to-time, revenue, expenses, or taxes are impacted by items we judge to be outside of ordinary banking activities and/or by items that, while they may be associated with ordinary banking activities, are so unusually large that we believe their outsized impact at that time to be infrequent or short term in nature. We believe the disclosure of such Significant Items in current and prior period results aids analysts/investors in better understanding corporate performance trends. (See Significant Items under the Basis of Presentation for a full discussion.)
Table 2 highlights the Significant Items impacting reported results for the current, prior, and year-ago quarters:
Table 2 Significant Items Influencing Earnings Performance Comparisons
Three Months Ended | Impact | |||||||
(in millions, except per share) | Amount (1) | EPS (2) | ||||||
March 31, 2012GAAP income |
$ | 153.3 | $ | 0.17 | ||||
Bargain purchase gain, FDIC-assisted Fidelity Bank acquisition |
11.4 | 0.01 | ||||||
Addition to litigation reserves |
(23.5 | ) | (0.02 | ) | ||||
December 31, 2011GAAP income |
$ | 126.9 | $ | 0.14 | ||||
Gain on early extinguishment of debt |
9.7 | 0.01 | ||||||
Visa® related derivative loss |
(6.4 | ) | (0.00 | ) | ||||
March 31, 2011GAAP income |
$ | 126.4 | $ | 0.14 | ||||
Additions to litigation reserves |
(17.0 | ) | (0.01 | ) |
(1) | Favorable (unfavorable) impact on GAAP income; pre-tax unless otherwise noted |
(2) | After-tax; EPS reflected on a fully diluted basis |
Net Interest Income, Net Interest Margin, and Average Balance Sheet
2012 First Quarter versus 2011 Fourth Quarter
Fully-taxable equivalent net interest income increased $2.6 million, or 1%, from the 2011 fourth quarter. This reflected the combined benefits of a $0.6 billion, or 1% (5% annualized), increase in average earning assets and 2 basis point increase in the fully-taxable equivalent net interest margin to 3.40%. While average earnings assets increased, average total loans and leases declined $0.4 billion, or 1% (4% annualized), reflecting the reclassification of automobile loans to loans held for sale related to the securitization and sale of $1.3 billion of auto loans in the 2012 first quarter. The primary item impacting the increase in the fully-taxable equivalent net interest margin was:
| 7 basis point positive impact from improved deposit pricing and an increase in low cost funding. |
Partially offset by:
| 4 basis point negative impact from lower earning asset yields and a shift to lower-yield, higher quality credits. |
| 1 basis point negative impact from other activities. |
2
Table 3 Loans and Leases 1Q12 vs. 4Q11
2012 | 2011 | |||||||||||||||
First | Fourth | Change | ||||||||||||||
(in billions) |
Quarter | Quarter | Amount | % | ||||||||||||
Average Loans and Leases |
||||||||||||||||
Commercial and industrial |
$ | 14.8 | $ | 14.2 | $ | 0.6 | 4 | % | ||||||||
Commercial real estate |
5.9 | 6.0 | (0.1 | ) | (2 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total commercial |
20.7 | 20.2 | 0.5 | 2 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Automobile |
4.6 | 5.6 | (1.1 | ) | (19 | ) | ||||||||||
Home equity |
8.2 | 8.1 | 0.1 | 1 | ||||||||||||
Residential mortgage |
5.2 | 5.0 | 0.1 | 3 | ||||||||||||
Other consumer |
0.5 | 0.5 | (0.0 | ) | (5 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total consumer |
18.5 | 19.3 | (0.9 | ) | (5 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total loans and leases |
$ | 39.1 | $ | 39.5 | $ | (0.4 | ) | (1 | )% | |||||||
|
|
|
|
|
|
|
|
Average total loans and leases decreased $0.4 billion, or 1% (4% annualized), from the 2011 fourth quarter, primarily reflecting:
| $1.1 billion, or 19% (75% annualized), decline in average automobile loans. Automobile loan origination levels remained strong throughout the quarter. The decline in first quarter average balances reflected the reclassified $1.3 billion of auto loans to loans held for sale at the end of the prior quarter, which were subsequently sold in a transaction completed on March 8, 2012. |
Partially offset by:
| $0.6 billion, or 4% (17% annualized), growth in average commercial and industrial (C&I) loans, reflecting increased activity from multiple business lines including large corporate, dealer floorplan, and equipment finance. |
Table 4 Deposits 1Q12 vs. 4Q11
2012 | 2011 | |||||||||||||||
First | Fourth | Change | ||||||||||||||
(in billions) |
Quarter | Quarter | Amount | % | ||||||||||||
Average Deposits |
||||||||||||||||
Demand depositsnoninterest bearing |
$ | 11.3 | $ | 10.7 | $ | 0.6 | 5 | % | ||||||||
Demand depositsinterest bearing |
5.6 | 5.6 | 0.1 | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total demand deposits |
16.9 | 16.3 | 0.6 | 4 | ||||||||||||
Money market deposits |
13.1 | 13.6 | (0.5 | ) | (3 | ) | ||||||||||
Savings and other domestic deposits |
4.8 | 4.7 | 0.1 | 2 | ||||||||||||
Core certificates of deposit |
6.5 | 6.8 | (0.3 | ) | (4 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total core deposits |
41.4 | 41.4 | 0.0 | 0 | ||||||||||||
Other domestic deposits of $250,000 or more |
0.3 | 0.4 | (0.1 | ) | (14 | ) | ||||||||||
Brokered deposits and negotiable CDs |
1.3 | 1.4 | (0.1 | ) | (8 | ) | ||||||||||
Other deposits |
0.4 | 0.4 | (0.0 | ) | (1 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total deposits |
$ | 43.5 | $ | 43.6 | $ | (0.1 | ) | (0 | )% | |||||||
|
|
|
|
|
|
|
|
3
Average total deposits decreased $0.1 billion, or less than 1% (1% annualized), from the 2011 fourth quarter primarily reflecting:
| $0.5 billion, or 3% (13% annualized), decrease in average money market deposits. |
| $0.3 billion, or 4% (15% annualized), decrease in core certificates of deposits. |
Partially offset by:
| $0.6 billion, or 4% (16% annualized), increase in total demand deposits. This was driven primarily by growth in commercial and consumer noninterest-bearing demand deposits. As we highlighted in second half 2011, commercial noninterest bearing demand deposits included approximately $1.0 billion of deposits from several large relationships that are short term in nature. |
2012 First Quarter versus 2011 First Quarter
Fully-taxable equivalent net interest income increased $12.9 million, or 3%, from the year-ago quarter. This reflected a $1.4 billion, or 3%, increase in average total earning assets, partially offset by a 2 basis point decrease in the fully-taxable equivalent net interest margin. The increase in average earning assets reflected a combination of factors including:
| $1.0 billion, or 3%, increase in average total loans and leases. |
| $0.8 billion, or 201%, increase in average loans held for sale. |
| $0.6 billion in average held-to-maturity securities compared with none in the year-ago quarter. |
Partially offset by:
| $1.0 billion, or 10%, decrease in average total available-for-sale and other securities. |
The 2 basis point decrease in the fully-taxable equivalent net interest margin reflected the reduction in derivatives income, lower loan yields, and lower securities yields, partially offset by the positive impact of increases in low cost deposits and lower deposit pricing.
4
Table 5 Loans and Leases 1Q12 vs. 1Q11
First Quarter | Change | |||||||||||||||
(in billions) |
2012 | 2011 | Amount | % | ||||||||||||
Average Loans and Leases |
||||||||||||||||
Commercial and industrial |
$ | 14.8 | $ | 13.1 | $ | 1.7 | 13 | % | ||||||||
Commercial real estate |
5.9 | 6.5 | (0.7 | ) | (10 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total commercial |
20.7 | 19.6 | 1.0 | 5 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Automobile |
4.6 | 5.7 | (1.1 | ) | (20 | ) | ||||||||||
Home equity |
8.2 | 7.7 | 0.5 | 7 | ||||||||||||
Residential mortgage |
5.2 | 4.5 | 0.7 | 16 | ||||||||||||
Other consumer |
0.5 | 0.6 | (0.1 | ) | (13 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total consumer |
18.5 | 18.5 | 0.0 | 0 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total loans and leases |
$ | 39.1 | $ | 38.1 | $ | 1.0 | 3 | % | ||||||||
|
|
|
|
|
|
|
|
Average total loans and leases increased $1.0 billion, or 3%, from the year-ago quarter primarily reflecting:
| $1.7 billion, or 13%, increase in average C&I loans, reflecting a combination of factors, including the benefits from our strategic initiatives focusing on large corporate and equipment finance. In addition, we continued to see growth in more traditional middle-market and business banking loans. This growth was evident despite line utilization rates that remained well below historical norms. |
| $0.7 billion, or 16%, increase in average residential mortgages that were predominantly 15-year fixed rate loans. |
| $0.5 billion, or 7%, increase in average home equity loans reflecting increased customer preference with over 70% of new originations in a first lien position. |
Partially offset by:
| $1.1 billion, or 20%, decline in average automobile loans. This reflected the securitization and sale of $1.0 billion of such loans in the 2011 third quarter and the reclassification of automobile loans to loans held for sale related to the securitization and sale of $1.3 billion of auto loans in the 2012 first quarter. |
| $0.7 billion, or 10%, decrease in average CRE loans, reflecting the continued execution of our plan to reduce this exposure, primarily in the noncore CRE segment. This reduction is expected to continue at a slower pace. |
5
Table 6 Deposits 1Q12 vs. 1Q11
First Quarter | Change | |||||||||||||||
(in billions) |
2012 | 2011 | Amount | % | ||||||||||||
Average Deposits |
||||||||||||||||
Demand depositsnoninterest bearing |
$ | 11.3 | $ | 7.3 | $ | 3.9 | 54 | % | ||||||||
Demand depositsinterest bearing |
5.6 | 5.4 | 0.3 | 5 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total demand deposits |
16.9 | 12.7 | 4.2 | 33 | ||||||||||||
Money market deposits |
13.1 | 13.5 | (0.4 | ) | (3 | ) | ||||||||||
Savings and other domestic deposits |
4.8 | 4.7 | 0.1 | 2 | ||||||||||||
Core certificates of deposit |
6.5 | 8.4 | (1.9 | ) | (22 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total core deposits |
41.4 | 39.3 | 2.1 | 5 | ||||||||||||
Other domestic deposits of $250,000 or more |
0.3 | 0.6 | (0.3 | ) | (43 | ) | ||||||||||
Brokered deposits and negotiable CDs |
1.3 | 1.4 | (0.1 | ) | (8 | ) | ||||||||||
Other deposits |
0.4 | 0.4 | 0.1 | 15 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total deposits |
$ | 43.5 | $ | 41.7 | $ | 1.8 | 4 | % | ||||||||
|
|
|
|
|
|
|
|
Average total deposits increased $1.8 billion, or 4%, from the year-ago quarter primarily reflecting:
| $2.1 billion, or 5%, growth in average total core deposits. The drivers of this change were a $4.2 billion, or 33%, growth in average total demand deposits, partially offset by $1.9 billion, or 22%, decline in average core certificates of deposit, and $0.4 billion, or 3%, decline in average money market deposits. |
Partially offset by:
| $0.3 billion, or 43%, decline in average other domestic deposits of $250,000 or more, reflecting a strategy to reduce such noncore funding. |
Provision for Credit Losses
The provision for credit losses decreased $10.9 million, or 24%, from the prior quarter, reflecting the lower provision for unfunded commitments and a lower level of net charge-offs (NCO). The period end ACL as a percentage of total loans and leases decreased to 2.37% from 2.60%. However, the ACL as a percentage of period end total nonaccrual loans (NALs) increased to 206% from 187%. NCOs were $83.0 million, down 1% from $83.9 million in the prior quarter. NCOs were an annualized 0.85% in both the current and 2011 fourth quarters (see Credit Quality discussion).
6
Noninterest Income
2012 First Quarter versus 2011 Fourth Quarter
Table 7 Noninterest Income 1Q12 vs. 4Q11
2012 | 2011 | |||||||||||||||
First | Fourth | Change | ||||||||||||||
(in millions) |
Quarter | Quarter | Amount | % | ||||||||||||
Noninterest Income |
||||||||||||||||
Service charges on deposit accounts |
$60.3 | $63.3 | $(3.0 | ) | (5 | )% | ||||||||||
Trust services |
30.9 | 28.8 | 2.1 | 7 | ||||||||||||
Electronic banking income |
18.6 | 18.3 | 0.3 | 2 | ||||||||||||
Mortgage banking income |
46.4 | 24.1 | 22.3 | 93 | ||||||||||||
Brokerage income |
19.3 | 18.7 | 0.6 | 3 | ||||||||||||
Insurance income |
18.9 | 17.9 | 1.0 | 5 | ||||||||||||
Bank ow ned life insurance income |
13.9 | 14.3 | (0.3 | ) | (2 | ) | ||||||||||
Capital markets fees |
10.0 | 9.8 | 0.2 | 2 | ||||||||||||
Gain on sale of loans |
26.8 | 2.9 | 23.9 | 828 | ||||||||||||
Automobile operating lease income |
3.8 | 4.7 | (1.0 | ) | (20 | ) | ||||||||||
Securities (losses) gains |
(0.6 | ) | (3.9 | ) | 3.3 | 84 | ||||||||||
Other income |
37.1 | 30.5 | 6.6 | 22 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total noninterest income |
$285.3 | $229.4 | $56.0 | 24% | ||||||||||||
|
|
|
|
|
|
|
|
Noninterest income increased $56.0 million, or 24%, from the prior quarter primarily reflecting:
| $23.9 million, or 828%, increase in gain on sale of loans, as the current quarter included a $23.0 million automobile loan securitization gain. |
| $22.3 million, or 93%, increase in mortgage banking income. This reflected a $10.1 million increase in origination and secondary marketing income, and a $7.7 million net mortgage servicing rights (MSR) gain in the current quarter compared with a $4.0 million net MSR loss in the prior quarter. |
| $6.6 million, or 2%, increase in other income, reflecting the $11.4 million bargain purchase gain associated with the FDIC-assisted Fidelity Bank acquisition and the $6.4 million negative impact in the previous quarter related to an increase in the liability associated with the sale of our Visa® Class B shares in 2009, partially offset by a $7.2 million reduction in mezzanine gains. |
7
2012 First Quarter versus 2011 First Quarter
Table 8 Noninterest Income 1Q12 vs. 1Q11
First Quarter | Change | |||||||||||||||
(in millions) |
2012 | 2011 | Amount | % | ||||||||||||
Noninterest Income |
||||||||||||||||
Service charges on deposit accounts |
$ | 60.3 | $ | 54.3 | $ | 6.0 | 11 | % | ||||||||
Trust services |
30.9 | 30.7 | 0.2 | 1 | ||||||||||||
Electronic banking income |
18.6 | 28.8 | (10.2 | ) | (35 | ) | ||||||||||
Mortgage banking income |
46.4 | 22.7 | 23.7 | 105 | ||||||||||||
Brokerage income |
19.3 | 20.5 | (1.3 | ) | (6 | ) | ||||||||||
Insurance income |
18.9 | 17.9 | 0.9 | 5 | ||||||||||||
Bank ow ned life insurance income |
13.9 | 14.8 | (0.9 | ) | (6 | ) | ||||||||||
Capital markets fees |
10.0 | 6.9 | 3.0 | 44 | ||||||||||||
Gain on sale of loans |
26.8 | 7.2 | 19.6 | 271 | ||||||||||||
Automobile operating lease income |
3.8 | 8.8 | (5.1 | ) | (57 | ) | ||||||||||
Securities (losses) gains |
(0.6 | ) | 0.0 | (0.7 | ) | (1633 | ) | |||||||||
Other income |
37.1 | 24.1 | 13.0 | 54 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total noninterest income |
$ | 285.3 | $ | 236.9 | $ | 48.4 | 20 | % | ||||||||
|
|
|
|
|
|
|
|
Noninterest income increased $48.4 million, or 20%, from the year-ago quarter primarily reflecting:
| $23.7 million, or 105%, increase in mortgage banking income. This primarily reflected an $11.5 million increase in origination and secondary marketing income. Also impacting the year-over-year comparison was a $7.7 million net MSR hedging gain in the current quarter compared to a net MSR hedging loss of $3.6 million in the year-ago quarter. |
| $19.6 million, or 271%, increase in gain on sale of loans, as the current quarter included a $23.0 million automobile loan securitization gain. |
| $13.0 million, or 54%, increase in other income, reflecting the $11.4 million bargain purchase gain associated with the FDIC-assisted Fidelity Bank acquisition. |
| $6.0 million, or 11%, increase in service charges on deposits, primarily reflecting continued strong customer growth. |
Partially offset by:
| $10.2 million, or 35%, decrease in electronic banking income, related to implementing the lower debit card interchange fee structure mandated in the Durbin Amendment of the Dodd-Frank Act. |
| $5.1 million, or 57%, decline in automobile operating lease income, reflecting the impact of a declining portfolio as a result of having exited that business in 2008. |
8
Noninterest Expense
2012 First Quarter versus 2011 Fourth Quarter
Table 9 Noninterest Expense 1Q12 vs. 4Q11
2012 | 2011 | |||||||||||||||
First | Fourth | Change | ||||||||||||||
(in millions) |
Quarter | Quarter | Amount | % | ||||||||||||
Noninterest Expense |
||||||||||||||||
Personnel costs |
$ | 243.5 | $ | 228.1 | $ | 15.4 | 7 | % | ||||||||
Outside data processing and other services |
42.1 | 53.4 | (11.4 | ) | (21 | ) | ||||||||||
Net occupancy |
29.1 | 26.8 | 2.2 | 8 | ||||||||||||
Equipment |
25.5 | 25.9 | (0.3 | ) | (1 | ) | ||||||||||
Deposit and other insurance expense |
20.7 | 18.5 | 2.3 | 12 | ||||||||||||
Marketing |
16.8 | 16.4 | 0.4 | 2 | ||||||||||||
Professional services |
11.2 | 16.8 | (5.5 | ) | (33 | ) | ||||||||||
Amortization of intangibles |
11.5 | 13.2 | (1.6 | ) | (12 | ) | ||||||||||
Automobile operating lease expense |
2.9 | 3.4 | (0.5 | ) | (15 | ) | ||||||||||
OREO and foreclosure expense |
5.0 | 5.0 | (0.1 | ) | (1 | ) | ||||||||||
Gain on early extinguishment of debt |
| (9.7 | ) | 9.7 | NR | |||||||||||
Other expense |
54.4 | 32.5 | 21.9 | 67 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total noninterest expense |
$ | 462.7 | $ | 430.3 | $ | 32.4 | 8 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
(in thousands) |
||||||||||||||||
Number of employees (full-time equivalent) |
11.2 | 11.2 | (0.1 | ) | (1 | )% | ||||||||||
NR-Not relevant |
Noninterest expense increased $32.4 million, or 8%, from the prior quarter. This primarily reflected:
| $21.9 million, or 67%, increase in other expense, reflecting the $23.5 million addition to litigation reserves. |
| $15.4 million, or 7%, increase in personnel costs, which was most notably impacted by approximately $9 million of costs related to the annual payroll tax resets, other benefit expense, and an increase in commissions and incentive compensation expense due to improved performance metrics and results. |
| $9.7 million gain on the early extinguishment of debt related to the exchange of certain trust preferred securities in the prior quarter. |
Partially offset by:
| $11.4 million, or 21%, decrease in outside data processing and other services, reflecting the fourth quarter 2011 completion of the conversion to a new debit card processor. |
| $5.5 million, or 33%, decline in professional services, reflecting lower legal and consulting related expenses. |
9
2012 First Quarter versus 2011 First Quarter
Table 10 Noninterest Expense 1Q12 vs. 1Q11
First Quarter | Change | |||||||||||||||
(in millions) |
2012 | 2011 | Amount | % | ||||||||||||
Noninterest Expense |
||||||||||||||||
Personnel costs |
$ | 243.5 | $ | 219.0 | $ | 24.5 | 11 | % | ||||||||
Outside data processing and other services |
42.1 | 40.3 | 1.8 | 4 | ||||||||||||
Net occupancy |
29.1 | 28.4 | 0.6 | 2 | ||||||||||||
Equipment |
25.5 | 22.5 | 3.1 | 14 | ||||||||||||
Deposit and other insurance expense |
20.7 | 17.9 | 2.8 | 16 | ||||||||||||
Marketing |
16.8 | 16.9 | (0.1 | ) | (1 | ) | ||||||||||
Professional services |
11.2 | 13.5 | (2.2 | ) | (17 | ) | ||||||||||
Amortization of intangibles |
11.5 | 13.4 | (1.8 | ) | (14 | ) | ||||||||||
Automobile operating lease expense |
2.9 | 6.8 | (4.0 | ) | (58 | ) | ||||||||||
OREO and foreclosure expense |
5.0 | 3.9 | 1.0 | 26 | ||||||||||||
Other expense |
54.4 | 48.1 | 6.3 | 13 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total noninterest expense |
$ | 462.7 | $ | 430.7 | $ | 32.0 | 7 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
(in thousands) |
||||||||||||||||
Number of employees (full-time equivalent) |
11.2 | 11.3 | (0.2 | ) | (1 | )% |
Noninterest expense increased $32.0 million, or 7%, from the year-ago quarter primarily reflecting:
| $24.5 million, or 11%, increase in personnel costs, primarily reflecting increased salaries and benefits, including an increase in commissions and incentive compensation expense due to improved performance metrics and results. |
| $6.3 million, or 13%, increase in other expense, reflecting a $5.5 million increase in addition to litigation reserves. |
Income Taxes
The provision for income taxes in the 2012 first quarter was $52.2 million, compared to $42.0 million in the prior quarter. The effective tax rate for the 2012 first quarter was 25.4%. At March 31, 2012, we had a net deferred tax asset of $302.4 million. Based on both positive and negative evidence and our level of forecasted future taxable income, there was no impairment to the deferred tax asset at March 31, 2012. As of March 31, 2012, there was no disallowed deferred tax asset for regulatory capital purposes, compared to $39.1 million at December 31, 2011.
We anticipate the effective tax rate for 2012 to approximate 24%-26% which includes permanent tax differences primarily related to tax-exempt income, tax-advantaged investments, and general business credits.
10
Credit Quality Performance Discussion
Credit quality performance in the 2012 first quarter reflected continued improvement in the overall loan portfolio relating to net charge-off activity, as well as in key credit quality metrics, including an 11% decline in nonperforming assets and an 8% decline in the level of Criticized commercial loans, excluding Fidelity Bank related loans compared to the prior quarter.
Net Charge-Offs (NCOs)
Table 11 Net Charge-Offs
2012 | 2011 | |||||||||||||||||||
First | Fourth | Third | Second | First | ||||||||||||||||
(in thousands) |
Quarter | Quarter | Quarter | Quarter | Quarter | |||||||||||||||
Net Charge-offs |
||||||||||||||||||||
Commercial and industrial |
$ | 28.5 | $ | 10.9 | $ | 17.9 | $ | 18.7 | $ | 42.2 | ||||||||||
Commercial real estate |
10.5 | 28.4 | 24.4 | 27.6 | 67.7 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total commercial |
39.0 | 39.3 | 42.3 | 46.3 | 109.9 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Automobile |
3.1 | 4.2 | 3.9 | 2.3 | 4.7 | |||||||||||||||
Home equity |
23.7 | 23.4 | 26.2 | 25.4 | 26.7 | |||||||||||||||
Residential mortgage |
10.6 | 9.7 | 11.6 | 16.5 | 18.9 | |||||||||||||||
Other consumer |
6.6 | 7.2 | 6.6 | 7.1 | 4.9 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total consumer |
44.0 | 44.6 | 48.2 | 51.2 | 55.2 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total net charge-offs |
$ | 83.0 | $ | 83.9 | $ | 90.6 | $ | 97.5 | $ | 165.1 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net Charge-offsannualized percentages |
||||||||||||||||||||
Commercial and industrial |
0.77 | % | 0.31 | % | 0.52 | % | 0.56 | % | 1.29 | % | ||||||||||
Commercial real estate |
0.72 | 1.91 | 1.60 | 1.77 | 4.15 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total commercial |
0.75 | 0.78 | 0.86 | 0.94 | 2.24 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Automobile |
0.27 | 0.30 | 0.25 | 0.15 | 0.33 | |||||||||||||||
Home equity |
1.15 | 1.15 | 1.31 | 1.29 | 1.38 | |||||||||||||||
Residential mortgage |
0.82 | 0.77 | 0.97 | 1.44 | 1.70 | |||||||||||||||
Other consumer |
5.45 | 5.66 | 5.05 | 5.27 | 3.47 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total consumer |
0.95 | 0.92 | 0.99 | 1.08 | 1.20 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total net charge-offs |
0.85 | % | 0.85 | % | 0.92 | % | 1.01 | % | 1.73 | % | ||||||||||
|
|
|
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|
Total net charge-offs (NCO) for the 2012 first quarter were $83.0 million, or an annualized 0.85% of average total loans and leases. This was down $0.9 million, or 1%, from $83.9 million, or an annualized 0.85%, in the prior quarter.
Total C&I NCOs for the 2012 first quarter were $28.5 million, or an annualized 0.77%, up 161% from last quarters historically low level of $10.9 million, or an annualized 0.31% of related loans. This quarters NCOs were generally associated with smaller relationships.
Current quarter CRE net charge-offs were $10.5 million, or an annualized 0.72% of average CRE loans. This was down $17.9 million, or 63%, from $28.4 million, or an annualized 1.91%, in the prior quarter. There was no concentration in either geography or project type, and the charge-offs were generally associated with small relationships.
Automobile loan and lease net charge-offs were $3.1 million, or an annualized 0.27% of related average balances, down 27% from $4.2 million, or an annualized 0.30%. These relatively low levels of net charge-offs reflected the continued high credit quality of originations and a strong resale market for used vehicles.
11
Residential mortgage net charge-offs in the first quarter were $10.6 million, or an annualized 0.82% of related loans, up 9% from $9.7 million, or an annualized 0.77%, in the prior quarter, reflecting the continued stress in the residential real estate market.
Home equity net charge-offs were $23.7 million, or an annualized 1.15% of related average balances, up less than 1% from $23.4 million, or an annualized 1.15%, in the prior quarter.
Nonaccrual Loans (NALs) and Nonperforming Assets (NPAs)
Table 12 Nonaccrual Loans and Nonperforming Assets
2012 | 2011 | |||||||||||||||||||
(in thousands) |
Mar. 31 | Dec. 31 | Sep. 30 | Jun. 30 | Mar. 31 | |||||||||||||||
Nonaccrual loans and leases (NALs): |
||||||||||||||||||||
Commercial and industrial |
$ | 142.5 | $ | 201.8 | $ | 209.6 | $ | 229.3 | $ | 260.4 | ||||||||||
Commercial real estate |
205.1 | 229.9 | 257.1 | 291.5 | 305.8 | |||||||||||||||
Residential mortgage |
74.1 | 68.7 | 61.1 | 59.9 | 44.8 | |||||||||||||||
Home equity |
45.8 | 40.7 | 37.2 | 33.5 | 25.3 | |||||||||||||||
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Total nonaccrual loans and leases (NALs) (1) |
467.6 | 541.1 | 565.0 | 614.2 | 636.3 | |||||||||||||||
Other real estate, net: |
||||||||||||||||||||
Residential (2) |
31.9 | 20.3 | 18.6 | 20.8 | 28.7 | |||||||||||||||
Commercial |
16.9 | 18.1 | 19.4 | 17.9 | 26.0 | |||||||||||||||
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Total other real estate, net |
48.7 | 38.4 | 38.0 | 38.7 | 54.6 | |||||||||||||||
Other NPAs (3) |
10.8 | 10.8 | 11.0 | | | |||||||||||||||
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Total nonperforming assets (NPAs) (2) |
$ | 527.1 | $ | 590.3 | $ | 614.0 | $ | 652.9 | $ | 690.9 | ||||||||||
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NAL ratio (4) |
1.15 | % | 1.39 | % | 1.45 | % | 1.57 | % | 1.66 | |||||||||||
NPA ratio (5) |
1.29 | 1.51 | 1.57 | 1.67 | 1.80 |
(1) | All loans acquired as part of the FDIC-assisted Fidelity Bank transaction accrue interest as performing loans or as purchased impaired loans under ASC 310-30, therefore none of the acquired loans were reported as nonaccrual as of March 31, 2012. |
(2) | NPAs include $8.0 million of residential real estate owned acquired as part of the FDIC-assisted Fidelity Bank transaction. |
(3) | Other nonperforming assets represent an investment security backed by a municipal bond |
(4) | Total NALs as a % of total loans and leases |
(5) | Total NPAs as a % of sum of loans and leases, impaired loans held for sale, and net other real estate |
Total nonaccrual loans and leases (NALs) were $467.6 million at March 31, 2012 and represented 1.15% of total loans and leases. This was down $73.5 million, or 14%, from $541.1 million, or 1.39%, of total loans and leases, at the end of the prior quarter.
C&I NALs decreased $59.4 million, or 29%, from the end of the prior quarter, reflecting both NCO activity and problem credit resolutions, including payoffs. The decline was associated with loans throughout our footprint, with no specific industry concentration.
CRE NALs decreased $24.8 million, or 11%, from the end of the prior quarter, reflecting both NCO activity and problem credit resolutions, including borrower payments and payoffs. This activity represents the continuation of an improving trend evident over the past several quarters. We continue to focus on early recognition of risks and targeted actions through our on-going portfolio management processes.
In contrast, residential mortgage NALs increased $5.5 million, or 8%. This increase reflected the current economic conditions and the decline of residential real estate property values. The NAL balances have been written down to net realizable value, less anticipated selling costs, which substantially limits any significant future risk of additional loss on these loans
12
Home equity NALs increased $5.2 million, or 13%, from the end of the prior quarter, reflecting our implementation of regulatory guidance issued in the 2012 first quarter. This quarter, we began reporting performing junior liens that are subordinate to nonaccrual senior liens as nonaccrual loans. The impact in 2012 first quarter was an increase of $8.7 million.
Total other real estate owned increased $10.3 million, or 27%, to $48.7 million and included $8.0 million related to the FDIC-assisted acquisition of Fidelity Bank completed on March 30, 2012.
Nonperforming assets (NPAs), which include NALs, were $527.1 million at March 31, 2012, and represented 1.29% of related assets. This was down $63.2 million, or 11%, from $590.3 million, or 1.51%, of related assets at the end of the prior quarter.
Table 13 Accruing Loans 90 Days Past Due and Troubled Debt Restructured Loans
2012 | 2011 | |||||||||||||||||||
(in thousands) |
Mar. 31 | Dec. 31 | Sep. 30 | Jun. 30 | Mar. 31 | |||||||||||||||
Accruing loans and leases past due 90 days or more: |
||||||||||||||||||||
Total excluding loans guaranteed by the U.S. Government |
$ | 60.6 | $ | 73.6 | $ | 61.0 | $ | 57.7 | $ | 73.6 | ||||||||||
Loans guaranteed by the U.S. Government |
94.6 | 96.7 | 84.4 | 77.0 | 94.4 | |||||||||||||||
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Total accruing loans and leases past due 90 days or more, including loans guaranteed by the U.S. government |
$ | 155.1 | $ | 170.4 | $ | 145.4 | $ | 134.6 | $ | 168.0 | ||||||||||
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Ratios (1) |
||||||||||||||||||||
Excluding loans guaranteed by the U.S. government |
0.15 | % | 0.19 | % | 0.16 | % | 0.15 | % | 0.19 | % | ||||||||||
Guaranteed by U.S. government |
0.23 | 0.25 | 0.21 | 0.19 | 0.25 | |||||||||||||||
Including loans guaranteed by the U.S. government |
0.38 | 0.44 | 0.37 | 0.34 | 0.44 | |||||||||||||||
Accruing troubled debt restructured loans: |
||||||||||||||||||||
Commercial and industrial |
$ | 53.8 | $ | 54.0 | $ | 77.5 | $ | 62.3 | $ | 65.2 | ||||||||||
Commercial real estate |
231.9 | 250.0 | 244.1 | 177.9 | 141.3 | |||||||||||||||
Automobile |
35.5 | 36.6 | 37.4 | 29.1 | 29.6 | |||||||||||||||
Home equity |
59.3 | 52.2 | 47.7 | 37.1 | 39.7 | |||||||||||||||
Residential mortgage |
294.8 | 309.7 | 304.4 | 313.8 | 333.5 | |||||||||||||||
Other consumer |
4.2 | 6.1 | 4.5 | 8.9 | 9.2 | |||||||||||||||
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Total accruing troubled debt restructured loans |
$ | 679.6 | $ | 708.6 | $ | 715.6 | $ | 628.9 | $ | 618.4 | ||||||||||
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Nonaccruing troubled debt restructured loans: |
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Commercial and industrial |
26.9 | 48.6 | 27.4 | 29.1 | 19.5 | |||||||||||||||
Commercial real estate |
39.6 | 22.0 | 46.9 | 48.7 | 18.3 | |||||||||||||||
Home equity |
0.3 | 0.4 | 0.2 | 0.0 | 0.0 | |||||||||||||||
Residential mortgage |
29.5 | 26.1 | 20.9 | 14.4 | 8.5 | |||||||||||||||
Other consumer |
0.1 | 0.1 | 0.1 | 0.1 | | |||||||||||||||
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Total nonaccruing troubled debt restructured loans |
96.5 | 97.1 | 95.4 | 92.3 | 46.4 | |||||||||||||||
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Total troubled debt restructured loans |
$ | 776.1 | $ | 805.7 | $ | 811.0 | $ | 721.2 | $ | 664.8 | ||||||||||
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(1) | Percent of related loans and leases |
Total accruing loans and leases over 90 days past due, excluding loans guaranteed by the U.S. Government, were $60.6 million at March 31, 2012, down $13.1 million, or 18%, from the end of the prior quarter, and down $13.0 million, or 18%, from the end of the year-ago period. On this same basis, the over 90-day delinquency ratio was 0.15% at March 31, 2012, down 0.04% at the end of the prior quarter, and down 0.04% from a year earlier.
13
Allowance for Credit Losses (ACL)
We maintain two reserves, both of which are available to absorb inherent credit losses: the allowance for loan and lease losses (ALLL) and the allowance for unfunded loan commitments and letters of credit (AULC). When summed together, these reserves constitute the total ACL.
Table 14 Allowance for Credit Losses (ACL)
2012 | 2011 | |||||||||||||||||||
(in thousands) |
Mar. 31 | Dec. 31, | Sep. 30 | Jun. 30 | Mar. 31 | |||||||||||||||
Allowance for loan and lease losses (ALLL) |
$ | 913,069 | $ | 964,828 | $ | 1,019,710 | $ | 1,071,126 | $ | 1,133,226 | ||||||||||
Allow ance for unfunded loan commitments and letters of credit |
50,934 | 48,456 | 38,779 | 41,060 | 42,211 | |||||||||||||||
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Allowance for credit losses (ACL) |
$ | 964,003 | $ | 1,013,284 | $ | 1,058,489 | $ | 1,112,186 | $ | 1,175,437 | ||||||||||
ALLL as a % of: |
||||||||||||||||||||
Total loans and leases |
2.24 | % | 2.48 | % | 2.61 | % | 2.74 | % | 2.96 | % | ||||||||||
Nonaccrual loans and leases (NALs) |
195 | 178 | 180 | 174 | 178 | |||||||||||||||
Nonperforming assets (NPAs) |
173 | 163 | 166 | 164 | 164 | |||||||||||||||
ACL as a % of: |
||||||||||||||||||||
Total loans and leases |
2.37 | % | 2.60 | % | 2.71 | % | 2.84 | % | 3.07 | % | ||||||||||
Nonaccrual loans and leases (NALs) |
206 | 187 | 187 | 181 | 185 | |||||||||||||||
Nonperforming assets (NPAs) |
183 | 172 | 172 | 170 | 170 |
At March 31, 2012, the ALLL was $913.1 million, down $51.8 million, or 5%, from $964.8 million at the end of the prior quarter. Expressed as a percent of period-end loans and leases, the ALLL ratio at March 31, 2012, was 2.24%, down from 2.48% at December 31, 2011. The ALLL as a percent of NALs increased to 195% at March 31, 2012, from 178% at December 31, 2011.
At March 31, 2012, the AULC was $50.9 million, up $2.5 million, or 5%, from the end of the prior quarter.
On a combined basis, the ACL as a percent of total loans and leases at March 31, 2012, was 2.37%, down from 2.60% at the end of the prior quarter. Huntington increased the ACL allocated to the residential secured portfolios in the quarter. The increase was consistent with the regulatory guidance issued in the 2012 first quarter and our belief that credit losses for the residential secured portfolios will remain at elevated levels in the near future. The ACL at the end of the 2012 first quarter as a percent of NALs increased to 206% from 187% at the end of last year.
14
Capital
Table 15 Capital Ratios
2012 | 2011 | |||||||||||||||||||
(in millions) |
Mar. 31 | Dec. 31, | Sep. 30 | Jun. 30 | Mar. 31 | |||||||||||||||
Tangible common equity / tangible assets ratio |
8.33 | % | 8.30 | % | 8.22 | % | 8.22 | % | 7.81 | % | ||||||||||
Tier 1 common risk-based capital ratio |
10.15 | % | 10.00 | % | 10.17 | % | 9.92 | % | 9.75 | % | ||||||||||
Regulatory Tier 1 risk-based capital ratio |
12.22 | % | 12.11 | % | 12.37 | % | 12.14 | % | 12.04 | % | ||||||||||
Excess over 6.0% (1) |
$ | 2,906 | $ | 2,804 | $ | 2,827 | $ | 2,707 | $ | 2,599 | ||||||||||
Regulatory Total risk-based capital ratio |
14.76 | % | 14.77 | % | 15.11 | % | 14.89 | % | 14.85 | % | ||||||||||
Excess over 10.0% (1) |
$ | 2,224 | $ | 2,189 | $ | 2,268 | $ | 2,156 | $ | 2,087 | ||||||||||
Total risk-weighted assets |
$ | 46,716 | $ | 45,891 | $ | 44,376 | $ | 44,080 | $ | 43,024 |
The tangible common equity to asset ratio at March 31, 2011 was 8.33%, up 3 basis points from the prior quarter. Our Tier 1 common risk-based capital ratio at quarter end was 10.15%, up from 10.00% at the end of the prior quarter. In addition, our regulatory Tier 1 capital ratio was 12.22%, up from 12.11% at the end of the prior quarter, while our Total risk-based capital ratio was 14.76%, down slightly from 14.77% at the end of last year.
Forward-looking Statement
This document contains certain forward-looking statements, including certain plans, expectations, goals, projections, and statements, which are subject to numerous assumptions, risks, and uncertainties. Forward-looking statements may be identified by words such as expect, anticipate, believe, intend, estimate, plan, target, goal, or similar expressions, or future or conditional verbs such as will, may, might, should, would, could, or similar variations.
While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors which could cause actual results to differ materially from those contained or implied in the forward-looking statements: (1) worsening of credit quality performance due to a number of factors such as the underlying value of collateral that could prove less valuable than otherwise assumed and assumed cash flows may be worse than expected; (2) changes in economic conditions, including impacts from the continuing economic uncertainty in the US, the European Union, and other areas; (3) movements in interest rates; (4) competitive pressures on product pricing and services; (5) success, impact, and timing of our business strategies, including market acceptance of any new products or services introduced to implement our Fair Play banking philosophy; (6) changes in accounting policies and principles and the accuracy of our assumptions and estimates used to prepare our financial statements; (7) extended disruption of vital infrastructure; (8) the final outcome of significant litigation; (9) the nature, extent, timing and results of governmental actions, examinations, reviews, reforms, and regulations including those related to the Dodd-Frank Wall Street Reform and Consumer Protection Act; and (10) the outcome of judicial and regulatory decisions regarding practices in the residential mortgage industry, including among other things the processes followed for foreclosing residential mortgages. Additional factors that could cause results to differ materially from those described above can be found in Huntingtons 2011 Annual Report on Form 10-K, and documents subsequently filed by Huntington with the Securities and Exchange Commission. All forward-looking statements included in this document are based on information available at the time of the release. Huntington assumes no obligation to update any forward-looking statement.
15
Basis of Presentation
Use of Non-GAAP Financial Measures
This document may contain GAAP financial measures and non-GAAP financial measures where management believes it to be helpful in understanding Huntingtons results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this document, the 2012 First Quarter Earnings Press Release and Quarterly Financial Review, the 2012 first quarter earnings conference call slides, or the Form 8-K related to this document, all of which can be found on Huntingtons website at www.huntington-ir.com.
Significant Items
From time to time, revenue, expenses, or taxes are impacted by items judged by Management to be outside of ordinary banking activities and/or by items that, while they may be associated with ordinary banking activities, are so unusually large that their outsized impact is believed by Management at that time to be infrequent or short term in nature. We refer to such items as Significant Items. Most often, these Significant Items result from factors originating outside the companye.g., regulatory actions/assessments, windfall gains, changes in accounting principles, one-time tax assessments/refunds, litigation actions, etc. In other cases they may result from Management decisions associated with significant corporate actions out of the ordinary course of businesse.g., merger/restructuring charges, recapitalization actions, goodwill impairment, etc.
Even though certain revenue and expense items are naturally subject to more volatility than others due to changes in market and economic environment conditions, as a general rule volatility alone does not define a Significant Item. For example, changes in the provision for credit losses, gains/losses from investment activities, asset valuation write-downs, etc., reflect ordinary banking activities and are, therefore, typically excluded from consideration as a Significant Item.
Management believes the disclosure of Significant Items in current and prior period results aids analysts/investors in better understanding corporate performance and trends so that they can ascertain which of such items, if any, they may wish to include/exclude from their analysis of the companys performancei.e., within the context of determining how that performance differed from their expectations, as well as how, if at all, to adjust their estimates of future performance accordingly. To this end, Management has adopted a practice of listing Significant Items in its external disclosure documents (e.g., earnings press releases, quarterly performance discussions, investor presentations, Forms 10-Q and 10-K).
Significant Items for any particular period are not intended to be a complete list of items that may materially impact current or future period performance. A number of items could materially impact these periods, including those described in Huntingtons 2011 Annual Report on Form 10-K and other factors described from time to time in Huntingtons other filings with the Securities and Exchange Commission.
Annualized data
Certain returns, yields, performance ratios, or quarterly growth rates are presented on an annualized basis. This is done for analytical and decision-making purposes to better discern underlying performance trends when compared to full year or year-over-year amounts. For example, loan and deposit growth rates, as well as net charge-off percentages, are most often expressed in terms of an annual rate like 8%. As such, a 2% growth rate for a quarter would represent an annualized 8% growth rate.
Fully-taxable equivalent interest income and net interest margin
Income from tax-exempt earning assets is increased by an amount equivalent to the taxes that would have been paid if this income had been taxable at statutory rates. This adjustment puts all earning assets, most notably tax-exempt municipal securities and certain lease assets, on a common basis that facilitates comparison of results to results of competitors.
16
Earnings per share equivalent data
Significant income or expense items may be expressed on a per common share basis. This is done for analytical and decision-making purposes to better discern underlying trends in total corporate earnings per share performance excluding the impact of such items. Investors may also find this information helpful in their evaluation of the companys financial performance against published earnings per share mean estimate amounts, which typically exclude the impact of Significant Items. Earnings per share equivalents are usually calculated by applying a 35% effective tax rate to a pre-tax amount to derive an after-tax amount, which is divided by the average shares outstanding during the respective reporting period. Occasionally, when the item involves special tax treatment, the after-tax amount is disclosed separately, with this then being the amount used to calculate the earnings per share equivalent.
Rounding
Please note that columns of data in this document may not add due to rounding.
###
17
Exhibit 99.3
HUNTINGTON BANCSHARES INCORPORATED
Quarterly Financial Review
March 2012
Table of Contents
Quarterly Key Statistics |
1 | |||
Key Statistics Footnotes |
2 | |||
Consolidated Balance Sheets |
3 | |||
Loans and Leases Composition |
4 | |||
Deposits Composition |
5 | |||
Consolidated Quarterly Average Balance Sheets |
6 | |||
Consolidated Quarterly Net Interest Margin Analysis |
7 - 8 | |||
Selected Quarterly Income Statement Data |
9 - 10 | |||
Quarterly Mortgage Banking Income |
11 | |||
Quarterly Credit Reserves Analysis |
12 | |||
Quarterly Net Charge-Off Analysis |
13 | |||
Quarterly Nonaccrual Loans and Leases (NALs) and Nonperforming Assets (NPAs) |
14 | |||
Quarterly Accruing Past Due Loans and Leases and Accruing Troubled Debt Restructured Loans |
15 | |||
Quarterly Common Stock Summary, Capital, and Other Data |
16 |
Notes:
The preparation of financial statement data in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect amounts reported. Actual results could differ from those estimates. Certain prior period amounts have been reclassified to conform to the current periods presentation.
Non-Regulatory Capital Ratios
In addition to capital ratios defined by banking regulators, the Company considers various other measures when evaluating capital utilization and adequacy, including:
| Tangible common equity to tangible assets, |
| Tier 1 common equity to risk-weighted assets using Basel I definition, and |
| Tangible common equity to risk-weighted assets using Basel I definition. |
These non-regulatory capital ratios are viewed by management as useful additional methods of reflecting the level of capital available to withstand unexpected market conditions. Additionally, presentation of these ratios allows readers to compare the Companys capitalization to other financial services companies. These ratios differ from capital ratios defined by banking regulators principally in that the numerator excludes preferred securities, the nature and extent of which varies among different financial services companies. These ratios are not defined in Generally Accepted Accounting Principles (GAAP) or federal banking regulations. As a result, these non-regulatory capital ratios disclosed by the Company may be considered non-GAAP financial measures.
Because there are no standardized definitions for these non-regulatory capital ratios, the Companys calculation methods may differ from those used by other financial services companies. Also, there may be limits in the usefulness of these measures to investors. As a result, the Company encourages readers to consider the consolidated financial statements and other financial information contained in this press release in their entirety, and not to rely on any single financial measure.
HUNTINGTON BANCSHARES INCORPORATED
Quarterly Key Statistics(1)
(Unaudited)
2012 | 2011 | Percent Changes vs. | ||||||||||||||||||
(dollar amounts in thousands, except per share amounts) |
First | Fourth | First | 4Q11 | 1Q11 | |||||||||||||||
Net interest income |
$ | 417,209 | $ | 415,025 | $ | 404,330 | 1 | % | 3 | % | ||||||||||
Provision for credit losses |
34,406 | 45,291 | 49,385 | (24 | ) | (30 | ) | |||||||||||||
Noninterest income |
285,320 | 229,352 | 236,945 | 24 | 20 | |||||||||||||||
Noninterest expense |
462,676 | 430,274 | 430,699 | 8 | 7 | |||||||||||||||
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Income before income taxes |
205,447 | 168,812 | 161,191 | 22 | 27 | |||||||||||||||
Provision for income taxes |
52,177 | 41,954 | 34,745 | 24 | 50 | |||||||||||||||
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Net income |
$ | 153,270 | $ | 126,858 | $ | 126,446 | 21 | % | 21 | % | ||||||||||
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Dividends on preferred shares |
8,049 | 7,703 | 7,703 | 4 | 4 | |||||||||||||||
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Net income applicable to common shares |
$ | 145,221 | $ | 119,155 | $ | 118,743 | 22 | % | 22 | % | ||||||||||
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Net income per common sharediluted |
$ | 0.17 | $ | 0.14 | $ | 0.14 | 21 | % | 21 | % | ||||||||||
Cash dividends declared per common share |
0.04 | 0.04 | 0.01 | | 300 | |||||||||||||||
Book value per common share at end of period |
5.97 | 5.82 | 5.42 | 3 | 10 | |||||||||||||||
Tangible book value per common share at end of period |
5.33 | 5.18 | 4.74 | 3 | 12 | |||||||||||||||
Average common sharesbasic |
864,499 | 864,136 | 863,359 | | | |||||||||||||||
Average common sharesdiluted |
869,164 | 868,156 | 867,237 | | | |||||||||||||||
Return on average assets |
1.13 | % | 0.92 | % | 0.96 | % | ||||||||||||||
Return on average common shareholders equity |
11.4 | 9.3 | 10.3 | |||||||||||||||||
Return on average tangible common shareholders equity(2) |
13.5 | 11.2 | 12.7 | |||||||||||||||||
Net interest margin(3) |
3.40 | 3.38 | 3.42 | |||||||||||||||||
Efficiency ratio(4) |
63.8 | 64.0 | 64.7 | |||||||||||||||||
Effective tax rate |
25.4 | 24.9 | 21.6 | |||||||||||||||||
Average loans and leases |
$ | 39,144,688 | $ | 39,519,184 | $ | 38,097,210 | (1 | ) | 3 | |||||||||||
Average loans and leaseslinked quarter annualized growth rate |
(3.8 | )% | 2.3 | % | 3.1 | % | ||||||||||||||
Average earning assets |
$ | 49,766,526 | $ | 49,146,561 | $ | 48,344,961 | 1 | 3 | ||||||||||||
Average total assets |
54,656,001 | 54,650,287 | 53,368,554 | | 2 | |||||||||||||||
Average core deposits(5) |
41,387,049 | 41,354,956 | 39,274,265 | | 5 | |||||||||||||||
Average core depositslinked quarter annualized growth rate |
0.3 | % | 14.0 | % | 3.3 | % | ||||||||||||||
Average shareholders equity |
$ | 5,492,228 | $ | 5,445,064 | $ | 5,022,146 | 1 | 9 | ||||||||||||
Total assets at end of period |
55,876,654 | 54,450,652 | 52,948,509 | 3 | 6 | |||||||||||||||
Total shareholders equity at end of period |
5,549,828 | 5,418,100 | 5,038,599 | 2 | 10 | |||||||||||||||
Net charge-offs (NCOs) |
82,992 | 83,917 | 165,083 | (1 | ) | (50 | ) | |||||||||||||
NCOs as a % of average loans and leases |
0.85 | % | 0.85 | % | 1.73 | % | ||||||||||||||
Nonaccrual loans and leases (NALs)(6) |
$ | 467,558 | $ | 541,080 | $ | 636,257 | (14 | ) | (27 | ) | ||||||||||
NAL ratio(6) |
1.15 | % | 1.39 | % | 1.66 | % | ||||||||||||||
Nonperforming assets (NPAs)(7) |
$ | 527,077 | $ | 590,276 | $ | 690,886 | (11 | ) | (24 | ) | ||||||||||
NPA ratio(7) |
1.29 | % | 1.51 | % | 1.80 | % | ||||||||||||||
Allowance for loan and lease losses (ALLL) as a % of total loans and leases at the end of period |
2.24 | 2.48 | 2.96 | |||||||||||||||||
ALLL plus allowance for unfunded loan commitments and letters of credit (ACL) as a % of total loans and leases at the end of period |
2.37 | 2.60 | 3.07 | |||||||||||||||||
ACL as a % of NALs |
206 | 187 | 185 | |||||||||||||||||
ACL as a % of NPAs |
183 | 172 | 170 | |||||||||||||||||
Tier 1 leverage ratio (8) |
10.55 | 10.28 | 9.80 | |||||||||||||||||
Tier 1 common risk-based capital ratio(8) |
10.15 | 10.00 | 9.75 | |||||||||||||||||
Tier 1 risk-based capital ratio (8) |
12.22 | 12.11 | 12.04 | |||||||||||||||||
Total risk-based capital ratio (8) |
14.76 | 14.77 | 14.85 | |||||||||||||||||
Tangible common equity / risk-weighted assets ratio (8) |
9.86 | 9.75 | 9.51 | |||||||||||||||||
Tangible equity / tangible assets ratio(9) |
9.03 | 9.02 | 8.51 | |||||||||||||||||
Tangible common equity / tangible assets ratio(10) |
8.33 | 8.30 | 7.81 |
See Notes to the Quarterly Key Statistics.
1
Notes to the Quarterly Key Statistics
(1) | Comparisons for all presented periods are impacted by a number of factors. Refer to Significant Items. |
(2) | Net income excluding expense for amortization of intangibles for the period divided by average tangible common shareholders equity. Average tangible common shareholders equity equals average total common shareholders equity less average intangible assets and goodwill. Expense for amortization of intangibles and average intangible assets are net of deferred tax liability, and calculated assuming a 35% tax rate. |
(3) | On a fully-taxable equivalent (FTE) basis assuming a 35% tax rate. |
(4) | Noninterest expense less amortization of intangibles and goodwill impairment divided by the sum of FTE net interest income and noninterest income excluding securities gains (losses). |
(5) | Includes noninterest-bearing and interest-bearing demand deposits, money market deposits, savings and other domestic deposits, and core certificates of deposit. |
(6) | All loans acquired as part of the FDIC-assisted Fidelity Bank acquisition accrue interest as performing loans or as purchased impaired loans under ASC 310-30, therefore none of the acquired loans were reported as nonaccrual as of March 31, 2012. |
(7) | NPAs include $7,986 thousand of residential real estate owned acquired as part of the FDIC-assisted Fidelity Bank acquisition. |
(8) | March 31, 2012, figures are estimated. |
(9) | Tangible equity (total equity less goodwill and other intangible assets) divided by tangible assets (total assets less goodwill and other intangible assets). Other intangible assets are net of deferred tax liability, and calculated assuming a 35% tax rate. |
(10) | Tangible common equity (total common equity less goodwill and other intangible assets) divided by tangible assets (total assets less goodwill and other intangible assets). Other intangible assets are net of deferred tax liability, and calculated assuming a 35% tax rate. |
2
Huntington Bancshares Incorporated
Consolidated Balance Sheets
Change | ||||||||||||||||||||
2012 | 2011 | March 12 vs 11 | ||||||||||||||||||
(dollar amounts in thousands, except number of shares) |
March 31, | December 31, | March 31, | Amount | Percent | |||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||||
Assets |
||||||||||||||||||||
Cash and due from banks |
$ | 1,111,165 | $ | 1,115,968 | $ | 1,208,820 | $ | (97,655 | ) | (8 | )% | |||||||||
Federal funds sold and securities purchased under resale agreements |
52 | | | 52 | | |||||||||||||||
Interest-bearing deposits in banks |
151,973 | 90,943 | 129,999 | 21,974 | 17 | |||||||||||||||
Trading account securities |
59,663 | 45,899 | 164,489 | (104,826 | ) | (64 | ) | |||||||||||||
Loans held for sale |
310,383 | 1,618,391 | 164,282 | 100 | (100 | ) | ||||||||||||||
Available-for-sale and other securities |
8,909,733 | 8,078,014 | 9,322,434 | (412,701 | ) | (4 | ) | |||||||||||||
Held-to-maturity securities |
621,798 | 640,551 | | 621,798 | | |||||||||||||||
Loans and leases(1) |
40,678,542 | 38,923,783 | 38,245,836 | 2,432,706 | 6 | |||||||||||||||
Allowance for loan and lease losses |
(913,069 | ) | (964,828 | ) | (1,133,226 | ) | 220,157 | (19 | ) | |||||||||||
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|
|
|||||||||||
Net loans and leases |
39,765,473 | 37,958,955 | 37,112,610 | 2,652,863 | 7 | |||||||||||||||
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Bank owned life insurance |
1,562,449 | 1,549,783 | 1,513,892 | 48,557 | 3 | |||||||||||||||
Premises and equipment |
577,538 | 564,429 | 500,736 | 76,802 | 15 | |||||||||||||||
Goodwill |
444,268 | 444,268 | 444,268 | | | |||||||||||||||
Other intangible assets |
171,135 | 175,302 | 215,251 | (44,116 | ) | (20 | ) | |||||||||||||
Accrued income and other assets |
2,191,024 | 2,168,149 | 2,171,728 | 19,296 | 1 | |||||||||||||||
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|
|||||||||||
Total assets |
$ | 55,876,654 | $ | 54,450,652 | $ | 52,948,509 | $ | 2,928,145 | 6 | % | ||||||||||
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|
|||||||||||
Liabilities and shareholders equity |
||||||||||||||||||||
Liabilities |
||||||||||||||||||||
Deposits(2) |
$ | 45,008,964 | $ | 43,279,625 | $ | 41,366,487 | $ | 3,642,477 | 9 | % | ||||||||||
Short-term borrowings |
1,504,086 | 1,441,092 | 2,051,258 | (547,172 | ) | (27 | ) | |||||||||||||
Federal Home Loan Bank advances |
56,938 | 362,972 | 21,379 | 35,559 | 166 | |||||||||||||||
Other long-term debt |
1,058,167 | 1,231,517 | 1,900,555 | (842,388 | ) | (44 | ) | |||||||||||||
Subordinated notes |
1,494,263 | 1,503,368 | 1,487,566 | 6,697 | | |||||||||||||||
Accrued expenses and other liabilities |
1,204,408 | 1,213,978 | 1,082,665 | 121,743 | 11 | |||||||||||||||
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|
|||||||||||
Total liabilities |
50,326,826 | 49,032,552 | 47,909,910 | 2,416,916 | 5 | |||||||||||||||
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|
|||||||||||
Shareholders equity |
||||||||||||||||||||
Preferred stockauthorized 6,617,808 shares- |
||||||||||||||||||||
Series A, 8.50% fixed rate, non-cumulative perpetual convertible preferred stock, par value of $0.01, and liquidation value per share of $1,000 |
362,507 | 362,507 | 362,507 | | | |||||||||||||||
Series B, floating rate, non-voting, non-cumulative perpetual preferred stock, par value of $0.01, and liquidation value per share of $1,000 |
23,785 | 23,785 | | |||||||||||||||||
Common stockPar value of $0.01 |
8,659 | 8,656 | 8,643 | 16 | | |||||||||||||||
Capital surplus |
7,602,064 | 7,596,809 | 7,584,367 | 17,697 | | |||||||||||||||
Less treasury shares, at cost |
(10,234 | ) | (10,255 | ) | (8,647 | ) | (1,587 | ) | 18 | |||||||||||
Accumulated other comprehensive loss |
(157,816 | ) | (173,763 | ) | (203,921 | ) | ||||||||||||||
Retained earnings |
(2,279,137 | ) | (2,389,639 | ) | (2,704,350 | ) | 425,213 | (16 | ) | |||||||||||
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|
|
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|
|
|
|||||||||||
Total shareholders equity |
5,549,828 | 5,418,100 | 5,038,599 | 511,229 | 10 | |||||||||||||||
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|
|
|
|
|
|
|
|||||||||||
Total liabilities and shareholders equity |
$ | 55,876,654 | $ | 54,450,652 | $ | 52,948,509 | $ | 2,928,145 | 6 | % | ||||||||||
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|||||||||||
Common shares authorized (par value of $0.01) |
1,500,000,000 | 1,500,000,000 | 1,500,000,000 | |||||||||||||||||
Common shares issued |
865,873,499 | 865,584,517 | 864,279,984 | |||||||||||||||||
Common shares outstanding |
864,674,530 | 864,406,152 | 863,398,578 | |||||||||||||||||
Treasury shares outstanding |
1,198,969 | 1,178,365 | 881,406 | |||||||||||||||||
Preferred shares issued |
1,967,071 | 1,967,071 | 1,967,071 | |||||||||||||||||
Preferred shares outstanding |
398,007 | 398,007 | 362,507 | |||||||||||||||||
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(1) | See page 4 for detail of loans and leases. |
(2) | See page 5 for detail of deposits. |
3
Huntington Bancshares Incorporated
Loans and Leases Composition
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
(dollar amounts in millions) |
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||||||||||||||||||||||
Ending Balances by Type: |
||||||||||||||||||||||||||||||||||||||||
Commercial:(1) |
||||||||||||||||||||||||||||||||||||||||
Commercial and industrial |
$ | 15,838 | 39 | % | $ | 14,699 | 38 | % | $ | 13,939 | 36 | % | $ | 13,544 | 35 | % | $ | 13,299 | 35 | % | ||||||||||||||||||||
Commercial real estate: |
||||||||||||||||||||||||||||||||||||||||
Construction |
597 | 1 | 580 | 1 | 520 | 1 | 591 | 2 | 587 | 2 | ||||||||||||||||||||||||||||||
Commercial |
5,443 | 13 | 5,246 | 13 | 5,414 | 14 | 5,573 | 14 | 5,711 | 15 | ||||||||||||||||||||||||||||||
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Commercial real estate |
6,040 | 14 | 5,826 | 14 | 5,934 | 15 | 6,164 | 16 | 6,298 | 17 | ||||||||||||||||||||||||||||||
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|
|||||||||||||||||||||
Total commercial |
21,878 | 53 | 20,525 | 52 | 19,873 | 51 | 19,708 | 51 | 19,597 | 52 | ||||||||||||||||||||||||||||||
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Consumer: |
||||||||||||||||||||||||||||||||||||||||
Automobile |
4,787 | 12 | 4,458 | 11 | 5,558 | 14 | 6,190 | 16 | 5,802 | 15 | ||||||||||||||||||||||||||||||
Home equity |
8,261 | 20 | 8,215 | 21 | 8,079 | 21 | 7,952 | 20 | 7,784 | 20 | ||||||||||||||||||||||||||||||
Residential mortgage |
5,284 | 13 | 5,228 | 13 | 4,986 | 13 | 4,751 | 12 | 4,517 | 12 | ||||||||||||||||||||||||||||||
Other consumer |
469 | 2 | 498 | 3 | 516 | 1 | 525 | 1 | 546 | 1 | ||||||||||||||||||||||||||||||
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Total consumer |
18,801 | 47 | 18,399 | 48 | 19,139 | 49 | 19,418 | 49 | 18,649 | 48 | ||||||||||||||||||||||||||||||
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Total loans and leases |
$ | 40,679 | 100 | % | $ | 38,924 | 100 | % | $ | 39,012 | 100 | % | $ | 39,126 | 100 | % | $ | 38,246 | 100 | % | ||||||||||||||||||||
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Ending Balances by Business Segment: |
||||||||||||||||||||||||||||||||||||||||
Retail and Business Banking |
$ | 12,432 | 31 | % | $ | 12,361 | 32 | % | $ | 12,183 | 31 | % | $ | 12,019 | 31 | % | $ | 11,786 | 31 | % | ||||||||||||||||||||
Regional and Commercial Banking |
9,936 | 24 | 9,134 | 23 | 8,723 | 22 | 8,291 | 21 | 7,917 | 21 | ||||||||||||||||||||||||||||||
AFCRE |
11,698 | 29 | 11,375 | 29 | 12,318 | 32 | 13,273 | 34 | 13,154 | 34 | ||||||||||||||||||||||||||||||
WGH |
5,968 | 14 | 5,952 | 16 | 5,713 | 15 | 5,493 | 14 | 5,255 | 14 | ||||||||||||||||||||||||||||||
Treasury / Other |
645 | 2 | 102 | | 75 | | 50 | | 134 | | ||||||||||||||||||||||||||||||
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Total loans and leases |
$ | 40,679 | 100 | % | $ | 38,924 | 100 | % | $ | 39,012 | 100 | % | $ | 39,126 | 100 | % | $ | 38,246 | 100 | % | ||||||||||||||||||||
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2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
First | Fourth | Third | Second | First | ||||||||||||||||||||||||||||||||||||
Average Balances by Business Segment: |
||||||||||||||||||||||||||||||||||||||||
Retail and Business Banking |
$ | 12,420 | 32 | % | $ | 12,302 | 31 | % | $ | 12,126 | 31 | % | $ | 11,948 | 31 | % | $ | 11,780 | 31 | % | ||||||||||||||||||||
Regional and Commercial Banking |
9,250 | 24 | 8,902 | 23 | 8,495 | 22 | 8,069 | 21 | 7,824 | 21 | ||||||||||||||||||||||||||||||
AFCRE |
11,468 | 29 | 12,496 | 32 | 13,101 | 33 | 13,145 | 34 | 13,208 | 35 | ||||||||||||||||||||||||||||||
WGH |
5,920 | 15 | 5,731 | 14 | 5,522 | 14 | 5,297 | 14 | 5,192 | 13 | ||||||||||||||||||||||||||||||
Treasury / Other |
87 | | 87 | | 53 | | 76 | | 94 | | ||||||||||||||||||||||||||||||
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Total loans and leases |
$ | 39,145 | 100 | % | $ | 39,518 | 100 | % | $ | 39,297 | 100 | % | $ | 38,535 | 100 | % | $ | 38,098 | 100 | % | ||||||||||||||||||||
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(1) | There were no commercial loans outstanding that would be considered a concentration of lending to a particular industry. |
4
Huntington Bancshares Incorporated
Deposits Composition
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
(dollar amounts in millions) |
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||||||||||||||||||||||
Ending Balances by Type: |
||||||||||||||||||||||||||||||||||||||||
Demand depositsnoninterest-bearing |
$ | 11,797 | 26 | % | $ | 11,158 | 26 | % | $ | 9,502 | 22 | % | $ | 8,210 | 20 | % | $ | 7,597 | 18 | % | ||||||||||||||||||||
Demand depositsinterest-bearing |
6,126 | 14 | 5,722 | 13 | 5,763 | 13 | 5,642 | 14 | 5,532 | 13 | ||||||||||||||||||||||||||||||
Money market deposits |
13,169 | 29 | 13,117 | 30 | 13,759 | 32 | 12,643 | 31 | 13,105 | 32 | ||||||||||||||||||||||||||||||
Savings and other domestic deposits |
4,954 | 11 | 4,698 | 11 | 4,711 | 11 | 4,752 | 11 | 4,762 | 12 | ||||||||||||||||||||||||||||||
Core certificates of deposit |
6,920 | 15 | 6,513 | 15 | 7,084 | 16 | 7,936 | 19 | 8,208 | 20 | ||||||||||||||||||||||||||||||
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Total core deposits |
42,966 | 95 | 41,208 | 95 | 40,819 | 94 | 39,183 | 95 | 39,204 | 95 | ||||||||||||||||||||||||||||||
Other domestic deposits of $250,000 or more |
325 | 1 | 390 | 1 | 421 | 1 | 436 | 1 | 531 | 1 | ||||||||||||||||||||||||||||||
Brokered deposits and negotiable CDs |
1,276 | 3 | 1,321 | 3 | 1,535 | 4 | 1,486 | 4 | 1,253 | 3 | ||||||||||||||||||||||||||||||
Deposits in foreign offices |
442 | 1 | 361 | 1 | 445 | 1 | 297 | | 378 | 1 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Total deposits |
$ | 45,009 | 100 | % | $ | 43,280 | 100 | % | $ | 43,220 | 100 | % | $ | 41,402 | 100 | % | $ | 41,366 | 100 | % | ||||||||||||||||||||
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Total core deposits: |
||||||||||||||||||||||||||||||||||||||||
Commercial |
$ | 17,101 | 40 | % | $ | 16,366 | 40 | % | $ | 15,526 | 38 | % | $ | 13,541 | 35 | % | $ | 12,785 | 33 | % | ||||||||||||||||||||
Consumer |
25,865 | 60 | 24,842 | 60 | 25,293 | 62 | 25,642 | 65 | 26,419 | 67 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Total core deposits |
$ | 42,966 | 100 | % | $ | 41,208 | 100 | % | $ | 40,819 | 100 | % | $ | 39,183 | 100 | % | $ | 39,204 | 100 | % | ||||||||||||||||||||
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Ending Balances by Business Segment: |
||||||||||||||||||||||||||||||||||||||||
Retail and Business Banking |
$ | 27,935 | 62 | % | $ | 27,536 | 64 | % | $ | 28,095 | 65 | % | $ | 28,325 | 68 | % | $ | 28,984 | 70 | % | ||||||||||||||||||||
Regional and Commercial Banking |
4,748 | 11 | 4,683 | 11 | 4,173 | 10 | 3,539 | 9 | 3,589 | 9 | ||||||||||||||||||||||||||||||
AFCRE |
914 | 2 | 881 | 2 | 817 | 2 | 819 | 2 | 804 | 2 | ||||||||||||||||||||||||||||||
WGH |
9,632 | 21 | 9,115 | 21 | 9,013 | 21 | 7,708 | 19 | 7,363 | 17 | ||||||||||||||||||||||||||||||
Treasury / Other(1) |
1,780 | 4 | 1,065 | 2 | 1,122 | 2 | 1,011 | 2 | 626 | 2 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Total deposits |
$ | 45,009 | 100 | % | $ | 43,280 | 100 | % | $ | 43,220 | 100 | % | $ | 41,402 | 100 | % | $ | 41,366 | 100 | % | ||||||||||||||||||||
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|||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
First | Fourth | Third | Second | First | ||||||||||||||||||||||||||||||||||||
Average Balances by Business Segment: |
||||||||||||||||||||||||||||||||||||||||
Retail and Business Banking |
$ | 27,452 | 63 | % | $ | 27,835 | 64 | % | $ | 28,290 | 67 | % | $ | 28,780 | 70 | % | $ | 29,139 | 70 | % | ||||||||||||||||||||
Regional and Commercial Banking |
4,680 | 11 | 4,467 | 10 | 3,902 | 9 | 3,484 | 8 | 3,666 | 9 | ||||||||||||||||||||||||||||||
AFCRE |
811 | 2 | 802 | 2 | 796 | 2 | 784 | 2 | 763 | 2 | ||||||||||||||||||||||||||||||
WGH |
9,450 | 22 | 9,406 | 21 | 8,243 | 20 | 7,467 | 18 | 7,394 | 17 | ||||||||||||||||||||||||||||||
Treasury / Other(1) |
1,072 | 2 | 1,093 | 3 | 1,047 | 2 | 739 | 2 | 702 | 2 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Total deposits |
$ | 43,465 | 100 | % | $ | 43,603 | 100 | % | $ | 42,278 | 100 | % | $ | 41,254 | 100 | % | $ | 41,664 | 100 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Comprised primarily of national market deposits. |
5
Huntington Bancshares Incorporated
Consolidated Quarterly Average Balance Sheets
(Unaudited)
Average Balances | Change | |||||||||||||||||||||||||||
2012 | 2011 | 1Q12 vs 1Q11 | ||||||||||||||||||||||||||
(dollar amounts in millions) |
First | Fourth | Third | Second | First | Amount | Percent | |||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||
Interest-bearing deposits in banks |
$ | 100 | $ | 107 | $ | 164 | $ | 131 | $ | 130 | $ | (30 | ) | (23 | )% | |||||||||||||
Trading account securities |
50 | 81 | 92 | 112 | 144 | (94 | ) | (65 | ) | |||||||||||||||||||
Federal funds sold and securities purchased under resale agreements |
| | | 21 | | | | |||||||||||||||||||||
Loans held for sale |
1,265 | 316 | 237 | 181 | 420 | 845 | 201 | |||||||||||||||||||||
Available-for-sale and other securities: |
||||||||||||||||||||||||||||
Taxable |
8,171 | 8,065 | 7,902 | 8,428 | 9,108 | (937 | ) | (10 | ) | |||||||||||||||||||
Tax-exempt |
404 | 409 | 421 | 436 | 445 | (41 | ) | (9 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total available-for-sale and other securities |
8,575 | 8,474 | 8,323 | 8,864 | 9,553 | (978 | ) | (10 | ) | |||||||||||||||||||
Held-to-maturity securitiestaxable |
632 | 650 | 665 | 174 | | 632 | | |||||||||||||||||||||
Loans and leases:(1) |
||||||||||||||||||||||||||||
Commercial: |
||||||||||||||||||||||||||||
Commercial and industrial |
14,824 | 14,219 | 13,664 | 13,370 | 13,121 | 1,703 | 13 | |||||||||||||||||||||
Commercial real estate: |
||||||||||||||||||||||||||||
Construction |
598 | 533 | 670 | 554 | 611 | (13 | ) | (2 | ) | |||||||||||||||||||
Commercial |
5,254 | 5,425 | 5,441 | 5,679 | 5,913 | (659 | ) | (11 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Commercial real estate |
5,852 | 5,958 | 6,111 | 6,233 | 6,524 | (672 | ) | (10 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total commercial |
20,676 | 20,177 | 19,775 | 19,603 | 19,645 | 1,031 | 5 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Consumer: |
||||||||||||||||||||||||||||
Automobile |
4,576 | 5,639 | 6,211 | 5,954 | 5,701 | (1,125 | ) | (20 | ) | |||||||||||||||||||
Home equity |
8,234 | 8,149 | 8,002 | 7,874 | 7,728 | 506 | 7 | |||||||||||||||||||||
Residential mortgage |
5,174 | 5,043 | 4,788 | 4,566 | 4,465 | 709 | 16 | |||||||||||||||||||||
Other consumer |
485 | 511 | 521 | 538 | 559 | (74 | ) | (13 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total consumer |
18,469 | 19,342 | 19,522 | 18,932 | 18,453 | 16 | | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total loans and leases |
39,145 | 39,519 | 39,297 | 38,535 | 38,098 | 1,047 | 3 | |||||||||||||||||||||
Allowance for loan and lease losses |
(961 | ) | (1,014 | ) | (1,066 | ) | (1,128 | ) | (1,231 | ) | 270 | (22 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net loans and leases |
38,184 | 38,505 | 38,231 | 37,407 | 36,867 | 1,317 | 4 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total earning assets |
49,767 | 49,147 | 48,778 | 48,018 | 48,345 | 1,422 | 3 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Cash and due from banks |
1,012 | 1,671 | 1,700 | 1,068 | 1,299 | (287 | ) | (22 | ) | |||||||||||||||||||
Intangible assets |
613 | 625 | 639 | 652 | 665 | (52 | ) | (8 | ) | |||||||||||||||||||
All other assets |
4,225 | 4,221 | 4,142 | 4,160 | 4,291 | (66 | ) | (2 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total assets |
$ | 54,656 | $ | 54,650 | $ | 54,193 | $ | 52,770 | $ | 53,369 | $ | 1,287 | 2 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Liabilities and shareholders equity |
||||||||||||||||||||||||||||
Deposits: |
||||||||||||||||||||||||||||
Demand depositsnoninterest-bearing |
$ | 11,273 | $ | 10,716 | $ | 8,719 | $ | 7,806 | $ | 7,333 | $ | 3,940 | 54 | % | ||||||||||||||
Demand depositsinterest-bearing |
5,646 | 5,570 | 5,573 | 5,565 | 5,357 | 289 | 5 | |||||||||||||||||||||
Money market deposits |
13,141 | 13,594 | 13,321 | 12,879 | 13,492 | (351 | ) | (3 | ) | |||||||||||||||||||
Savings and other domestic deposits |
4,817 | 4,706 | 4,752 | 4,778 | 4,701 | 116 | 2 | |||||||||||||||||||||
Core certificates of deposit |
6,510 | 6,769 | 7,592 | 8,079 | 8,391 | (1,881 | ) | (22 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total core deposits |
41,387 | 41,355 | 39,957 | 39,107 | 39,274 | 2,113 | 5 | |||||||||||||||||||||
Other domestic deposits of $250,000 or more |
347 | 405 | 387 | 467 | 606 | (259 | ) | (43 | ) | |||||||||||||||||||
Brokered deposits and negotiable CDs |
1,301 | 1,410 | 1,533 | 1,333 | 1,410 | (109 | ) | (8 | ) | |||||||||||||||||||
Deposits in foreign offices |
430 | 434 | 401 | 347 | 374 | 56 | 15 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total deposits |
43,465 | 43,604 | 42,278 | 41,254 | 41,664 | 1,801 | 4 | |||||||||||||||||||||
Short-term borrowings |
1,512 | 1,728 | 2,251 | 2,112 | 2,134 | (622 | ) | (29 | ) | |||||||||||||||||||
Federal Home Loan Bank advances |
419 | 29 | 285 | 97 | 30 | 389 | 1,297 | |||||||||||||||||||||
Subordinated notes and other long-term debt |
2,652 | 2,866 | 3,030 | 3,249 | 3,525 | (873 | ) | (25 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total interest-bearing liabilities |
36,775 | 37,511 | 39,125 | 38,906 | 40,020 | (3,245 | ) | (8 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
All other liabilities |
1,116 | 978 | 1,017 | 913 | 994 | 122 | 12 | |||||||||||||||||||||
Shareholders equity |
5,492 | 5,445 | 5,332 | 5,145 | 5,022 | 470 | 9 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total liabilities and shareholders equity |
$ | 54,656 | $ | 54,650 | $ | 54,193 | $ | 52,770 | $ | 53,369 | $ | 1,287 | 2 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Includes nonaccrual loans. |
6
Huntington Bancshares Incorporated
Consolidated Quarterly Net Interest MarginInterest Income / Expense (1)
(Unaudited)
Interest Income / Expense | ||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||
(dollar amounts in thousands) |
First | Fourth | Third | Second | First | |||||||||||||||
Assets |
||||||||||||||||||||
Interest-bearing deposits in banks |
$ | 12 | $ | 15 | $ | 17 | $ | 73 | $ | 37 | ||||||||||
Trading account securities |
207 | 197 | 325 | 447 | 494 | |||||||||||||||
Federal funds sold and securities purchased under resale agreements |
| | | 5 | | |||||||||||||||
Loans held for sale |
12,005 | 3,124 | 2,643 | 2,247 | 4,284 | |||||||||||||||
Available-for-sale and other securities: |
||||||||||||||||||||
Taxable |
48,824 | 47,784 | 47,946 | 54,603 | 57,652 | |||||||||||||||
Tax-exempt |
4,209 | 4,313 | 4,392 | 4,385 | 5,237 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total available-for-sale and other securities |
53,033 | 52,097 | 52,338 | 58,988 | 62,889 | |||||||||||||||
Held-to-maturity securitiestaxable |
4,714 | 4,867 | 5,059 | 1,287 | | |||||||||||||||
Loans and leases: |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Commercial and industrial |
150,397 | 145,825 | 144,151 | 145,675 | 149,964 | |||||||||||||||
Commercial real estate: |
||||||||||||||||||||
Construction |
5,831 | 6,513 | 6,620 | 4,718 | 5,138 | |||||||||||||||
Commercial |
50,750 | 54,220 | 54,429 | 55,947 | 58,096 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Commercial real estate |
56,581 | 60,733 | 61,049 | 60,665 | 63,234 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total commercial |
206,978 | 206,558 | 205,200 | 206,340 | 213,198 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Consumer: |
||||||||||||||||||||
Automobile |
55,435 | 68,283 | 76,488 | 75,110 | 73,330 | |||||||||||||||
Home equity |
88,582 | 89,876 | 89,112 | 88,358 | 87,659 | |||||||||||||||
Residential mortgage |
53,914 | 54,263 | 53,521 | 52,700 | 53,127 | |||||||||||||||
Other consumer |
8,992 | 9,416 | 9,951 | 10,416 | 10,804 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total consumer |
206,923 | 221,838 | 229,072 | 226,584 | 224,920 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total loans and leases |
413,901 | 428,396 | 434,272 | 432,924 | 438,118 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total earning assets |
$ | 483,872 | $ | 488,696 | $ | 494,654 | $ | 495,971 | $ | 505,822 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities |
||||||||||||||||||||
Deposits: |
||||||||||||||||||||
Demand depositsnoninterest-bearing |
$ | | $ | | $ | | $ | | $ | | ||||||||||
Demand depositsinterest-bearing |
845 | 1,182 | 1,458 | 1,240 | 1,217 | |||||||||||||||
Money market deposits |
8,343 | 10,994 | 13,845 | 12,807 | 16,699 | |||||||||||||||
Savings and other domestic deposits |
5,345 | 6,213 | 8,231 | 8,870 | 9,410 | |||||||||||||||
Core certificates of deposit |
25,919 | 28,851 | 37,323 | 41,041 | 42,815 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total core deposits |
40,452 | 47,240 | 60,857 | 63,958 | 70,141 | |||||||||||||||
Other domestic deposits of $250,000 or more |
583 | 794 | 907 | 1,171 | 1,620 | |||||||||||||||
Brokered deposits and negotiable CDs |
2,547 | 2,727 | 2,963 | 2,948 | 3,850 | |||||||||||||||
Deposits in foreign offices |
197 | 206 | 258 | 227 | 185 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total deposits |
43,779 | 50,967 | 64,985 | 68,304 | 75,796 | |||||||||||||||
Short-term borrowings |
583 | 764 | 931 | 856 | 949 | |||||||||||||||
Federal Home Loan Bank advances |
222 | 156 | 233 | 215 | 220 | |||||||||||||||
Subordinated notes and other long-term debt |
18,144 | 18,305 | 18,369 | 19,425 | 20,582 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total interest bearing liabilities |
62,728 | 70,192 | 84,518 | 88,800 | 97,547 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net interest income |
$ | 421,144 | $ | 418,504 | $ | 410,136 | $ | 407,171 | $ | 408,275 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Fully-taxable equivalent (FTE) income and expense calculated assuming a 35% tax rate. See page 9 for the FTE adjustment. |
7
Huntington Bancshares Incorporated
Consolidated Quarterly Net Interest Margin Analysis
(Unaudited)
Average Rates (2) | ||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||
Fully-taxable equivalent basis(1) |
First | Fourth | Third | Second | First | |||||||||||||||
Assets |
||||||||||||||||||||
Interest-bearing deposits in banks |
0.05 | % | 0.06 | % | 0.04 | % | 0.22 | % | 0.11 | % | ||||||||||
Trading account securities |
1.65 | 0.97 | 1.41 | 1.59 | 1.37 | |||||||||||||||
Federal funds sold and securities purchased under resale agreements |
| | | 0.09 | | |||||||||||||||
Loans held for sale |
3.80 | 3.96 | 4.46 | 4.97 | 4.08 | |||||||||||||||
Available-for-sale and other securities: |
||||||||||||||||||||
Taxable |
2.39 | 2.37 | 2.43 | 2.59 | 2.53 | |||||||||||||||
Tax-exempt |
4.17 | 4.22 | 4.17 | 4.02 | 4.70 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total available-for-sale and other securities |
2.47 | 2.46 | 2.52 | 2.66 | 2.63 | |||||||||||||||
Held-to-maturity securitiestaxable |
2.98 | 2.99 | 3.04 | 2.96 | | |||||||||||||||
Loans and leases:(2)(3) |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Commercial and industrial |
4.01 | 4.01 | 4.13 | 4.31 | 4.57 | |||||||||||||||
Commercial real estate: |
||||||||||||||||||||
Construction |
3.85 | 4.78 | 3.87 | 3.37 | 3.36 | |||||||||||||||
Commercial |
3.82 | 3.91 | 3.91 | 3.90 | 3.93 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Commercial real estate |
3.82 | 3.99 | 3.91 | 3.84 | 3.88 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total commercial |
3.96 | 4.01 | 4.06 | 4.16 | 4.34 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Consumer: |
||||||||||||||||||||
Automobile |
4.87 | 4.80 | 4.89 | 5.06 | 5.22 | |||||||||||||||
Home equity |
4.30 | 4.41 | 4.45 | 4.49 | 4.54 | |||||||||||||||
Residential mortgage |
4.17 | 4.30 | 4.47 | 4.62 | 4.76 | |||||||||||||||
Other consumer |
7.47 | 7.32 | 7.57 | 7.76 | 7.85 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total consumer |
4.49 | 4.57 | 4.68 | 4.79 | 4.90 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total loans and leases |
4.21 | 4.28 | 4.37 | 4.47 | 4.61 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total earning assets |
3.91 | % | 3.95 | % | 4.02 | % | 4.14 | % | 4.24 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities |
||||||||||||||||||||
Deposits: |
||||||||||||||||||||
Demand depositsnoninterest-bearing |
| % | | % | | % | | % | | % | ||||||||||
Demand depositsinterest-bearing |
0.06 | 0.08 | 0.10 | 0.09 | 0.09 | |||||||||||||||
Money market deposits |
0.26 | 0.32 | 0.41 | 0.40 | 0.50 | |||||||||||||||
Savings and other domestic deposits |
0.45 | 0.52 | 0.69 | 0.74 | 0.81 | |||||||||||||||
Core certificates of deposit |
1.60 | 1.69 | 1.95 | 2.04 | 2.07 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total core deposits |
0.54 | 0.61 | 0.77 | 0.82 | 0.89 | |||||||||||||||
Other domestic deposits of $250,000 or more |
0.68 | 0.78 | 0.93 | 1.01 | 1.08 | |||||||||||||||
Brokered deposits and negotiable CDs |
0.79 | 0.77 | 0.77 | 0.89 | 1.11 | |||||||||||||||
Deposits in foreign offices |
0.18 | 0.19 | 0.26 | 0.26 | 0.20 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total deposits |
0.55 | 0.61 | 0.77 | 0.82 | 0.90 | |||||||||||||||
Short-term borrowings |
0.16 | 0.18 | 0.16 | 0.16 | 0.18 | |||||||||||||||
Federal Home Loan Bank advances |
0.21 | 2.09 | 0.32 | 0.88 | 2.98 | |||||||||||||||
Subordinated notes and other long-term debt |
2.74 | 2.56 | 2.43 | 2.39 | 2.34 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total interest-bearing liabilities |
0.68 | 0.74 | 0.86 | 0.91 | 0.99 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net interest rate spread |
3.15 | 3.15 | 3.11 | 3.19 | 3.21 | |||||||||||||||
Impact of noninterest-bearing funds on margin |
0.25 | 0.23 | 0.22 | 0.21 | 0.22 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net interest margin |
3.40 | % | 3.38 | % | 3.34 | % | 3.40 | % | 3.42 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Commercial Loan Derivative Impact | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Average Rates (2) | ||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||
Fully-taxable equivalent basis(1) |
First | Fourth | Third | Second | First | |||||||||||||||
Commercial loans(2)(3) |
3.69 | % | 3.79 | % | 3.79 | % | 3.83 | % | 3.84 | % | ||||||||||
Impact of commercial loan derivatives |
0.27 | 0.22 | 0.27 | 0.34 | 0.50 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total commercialas reported |
3.96 | % | 4.01 | % | 4.06 | % | 4.16 | % | 4.34 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Average 30 day LIBOR |
0.26 | % | 0.26 | % | 0.21 | % | 0.20 | % | 0.26 | % |
(1) | Fully-taxable equivalent (FTE) yields are calculated assuming a 35% tax rate. See page 9 for the FTE adjustment. |
(2) | Loan, lease, and deposit average rates include impact of applicable derivatives, non-deferrable fees, and amortized fees. |
(3) | Includes the impact of nonaccrual loans. |
8
Huntington Bancshares Incorporated
Selected Quarterly Income Statement Data(1)
(Unaudited)
2012 | 2011 | 1Q12 vs 1Q11 | ||||||||||||||||||||||||||
(dollar amounts in thousands, except per share amounts) |
First | Fourth | Third | Second | First | Amount | Percent | |||||||||||||||||||||
Interest income |
$ | 479,937 | $ | 485,216 | $ | 490,996 | $ | 492,137 | $ | 501,877 | $ | (26,654 | ) | (5 | )% | |||||||||||||
Interest expense |
62,728 | 70,191 | 84,518 | 88,800 | 97,547 | (34,819 | ) | (36 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net interest income |
417,209 | 415,025 | 406,478 | 403,337 | 404,330 | 12,879 | 3 | |||||||||||||||||||||
Provision for credit losses |
34,406 | 45,291 | 43,586 | 35,797 | 49,385 | (14,979 | ) | (30 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net interest income after provision for credit losses |
382,803 | 369,734 | 362,892 | 367,540 | 354,945 | 27,858 | 8 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Service charges on deposit accounts |
60,292 | 63,324 | 65,184 | 60,675 | 54,324 | 5,968 | 11 | |||||||||||||||||||||
Trust services |
30,906 | 28,775 | 29,473 | 30,392 | 30,742 | 164 | 1 | |||||||||||||||||||||
Electronic banking |
18,630 | 18,282 | 32,901 | 31,728 | 28,786 | (10,156 | ) | (35 | ) | |||||||||||||||||||
Mortgage banking income |
46,418 | 24,098 | 12,791 | 23,835 | 22,684 | 23,734 | 105 | |||||||||||||||||||||
Brokerage income |
19,260 | 18,688 | 20,349 | 20,819 | 20,511 | (1,251 | ) | (6 | ) | |||||||||||||||||||
Insurance income |
18,875 | 17,906 | 17,220 | 16,399 | 17,945 | 930 | 5 | |||||||||||||||||||||
Bank owned life insurance income |
13,937 | 14,271 | 15,644 | 17,602 | 14,819 | (882 | ) | (6 | ) | |||||||||||||||||||
Capital markets fees |
9,982 | 9,811 | 11,256 | 8,537 | 6,936 | 3,046 | 44 | |||||||||||||||||||||
Gain on sale of loans |
26,770 | 2,884 | 19,097 | 2,756 | 7,207 | 19,563 | 271 | |||||||||||||||||||||
Automobile operating lease income |
3,775 | 4,727 | 5,890 | 7,307 | 8,847 | (5,072 | ) | (57 | ) | |||||||||||||||||||
Securities gains (losses) |
(613 | ) | (3,878 | ) | (1,350 | ) | 1,507 | 40 | (653 | ) | (1,633 | ) | ||||||||||||||||
Other income |
37,088 | 30,464 | 30,104 | 34,210 | 24,104 | 12,984 | 54 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total noninterest income |
285,320 | 229,352 | 258,559 | 255,767 | 236,945 | 48,375 | 20 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Personnel costs |
243,498 | 228,101 | 226,835 | 218,570 | 219,028 | 24,470 | 11 | |||||||||||||||||||||
Outside data processing and other services |
42,058 | 53,422 | 49,602 | 43,889 | 40,282 | 1,776 | 4 | |||||||||||||||||||||
Net occupancy |
29,079 | 26,841 | 26,967 | 26,885 | 28,436 | 643 | 2 | |||||||||||||||||||||
Equipment |
25,545 | 25,884 | 22,262 | 21,921 | 22,477 | 3,068 | 14 | |||||||||||||||||||||
Deposit and other insurance expense |
20,738 | 18,481 | 17,492 | 23,823 | 17,896 | 2,842 | 16 | |||||||||||||||||||||
Marketing |
16,776 | 16,379 | 22,251 | 20,102 | 16,895 | (119 | ) | (1 | ) | |||||||||||||||||||
Professional services |
11,230 | 16,769 | 20,281 | 20,080 | 13,465 | (2,235 | ) | (17 | ) | |||||||||||||||||||
Amortization of intangibles |
11,531 | 13,175 | 13,387 | 13,386 | 13,370 | (1,839 | ) | (14 | ) | |||||||||||||||||||
Automobile operating lease expense |
2,854 | 3,362 | 4,386 | 5,434 | 6,836 | (3,982 | ) | (58 | ) | |||||||||||||||||||
OREO and foreclosure expense |
4,950 | 5,009 | 4,668 | 4,398 | 3,931 | 1,019 | 26 | |||||||||||||||||||||
Gain on early extinguishment of debt |
| (9,697 | ) | | | | | | ||||||||||||||||||||
Other expense |
54,417 | 32,548 | 30,987 | 29,921 | 48,083 | 6,334 | 13 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total noninterest expense |
462,676 | 430,274 | 439,118 | 428,409 | 430,699 | 31,977 | 7 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Income before income taxes |
205,447 | 168,812 | 182,333 | 194,898 | 161,191 | 44,256 | 27 | |||||||||||||||||||||
Provision for income taxes |
52,177 | 41,954 | 38,942 | 48,980 | 34,745 | 17,432 | 50 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income |
$ | 153,270 | $ | 126,858 | $ | 143,391 | $ | 145,918 | $ | 126,446 | $ | 26,824 | 21 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Dividends on preferred shares |
8,049 | 7,703 | 7,703 | 7,704 | 7,703 | 346 | 4 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income applicable to common shares |
$ | 145,221 | $ | 119,155 | $ | 135,688 | $ | 138,214 | $ | 118,743 | $ | 26,478 | 22 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Average common sharesbasic |
864,499 | 864,136 | 863,911 | 863,358 | 863,359 | 1,140 | | % | ||||||||||||||||||||
Average common sharesdiluted |
869,164 | 868,156 | 867,633 | 867,469 | 867,237 | 1,927 | | |||||||||||||||||||||
Per common share |
||||||||||||||||||||||||||||
Net incomebasic |
$ | 0.17 | $ | 0.14 | $ | 0.16 | $ | 0.16 | $ | 0.14 | $ | 0.03 | 21 | % | ||||||||||||||
Net incomediluted |
0.17 | 0.14 | 0.16 | 0.16 | 0.14 | 0.03 | 21 | |||||||||||||||||||||
Cash dividends declared |
0.04 | 0.04 | 0.04 | 0.01 | 0.01 | 0.03 | 300 | |||||||||||||||||||||
Return on average total assets |
1.13 | % | 0.92 | % | 1.05 | % | 1.11 | % | 0.96 | % | 0.17 | % | 18 | |||||||||||||||
Return on average common shareholders equity |
11.4 | 9.3 | 10.8 | 11.6 | 10.3 | 1.1 | 11 | |||||||||||||||||||||
Return on average tangible common shareholders equity(2) |
13.5 | 11.2 | 13.0 | 13.3 | 12.7 | 0.8 | 6 | |||||||||||||||||||||
Net interest margin(3) |
3.40 | 3.38 | 3.34 | 3.40 | 3.42 | (0.02 | ) | (1 | ) | |||||||||||||||||||
Efficiency ratio(4) |
63.8 | 64.0 | 63.5 | 62.7 | 64.7 | (0.9 | ) | (1 | ) | |||||||||||||||||||
Effective tax rate |
25.4 | 24.9 | 21.4 | 25.1 | 21.6 | 3.8 | 18 | |||||||||||||||||||||
Revenuefully-taxable equivalent (FTE) |
||||||||||||||||||||||||||||
Net interest income |
$ | 417,209 | $ | 415,025 | $ | 406,478 | $ | 403,337 | $ | 404,330 | $ | 12,879 | 3 | |||||||||||||||
FTE adjustment |
3,935 | 3,479 | 3,658 | 3,834 | 3,945 | (10 | ) | | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net interest income(3) |
421,144 | 418,504 | 410,136 | 407,171 | 408,275 | 12,869 | 3 | |||||||||||||||||||||
Noninterest income |
285,320 | 229,352 | 258,559 | 255,767 | 236,945 | 48,375 | 20 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total revenue(3) |
$ | 706,464 | $ | 647,856 | $ | 668,695 | $ | 662,938 | $ | 645,220 | $ | 61,244 | 9 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9
(1) | Comparisons for presented periods are impacted by a number of factors. Refer to Significant Items. |
(2) | Net income excluding expense for amortization of intangibles for the period divided by average tangible common shareholders equity. Average tangible common shareholders equity equals average total common shareholders equity less average intangible assets and goodwill. Expense for amortization of intangibles and average intangible assets are net of deferred tax liability, and calculated assuming a 35% tax rate. |
(3) | On a fully-taxable equivalent (FTE) basis assuming a 35% tax rate. |
(4) | Noninterest expense less amortization of intangibles and goodwill impairment divided by the sum of FTE net interest income and noninterest income excluding securities gains (losses). |
10
Huntington Bancshares Incorporated
Quarterly Mortgage Banking Income
(Unaudited)
2012 | 2011 | 1Q12 vs 1Q11 | ||||||||||||||||||||||||||
(dollar amounts in thousands, except as noted) |
First | Fourth | Third | Second | First | Amount | Percent | |||||||||||||||||||||
Mortgage banking income |
||||||||||||||||||||||||||||
Origination and secondary marketing |
$ | 31,304 | $ | 21,248 | $ | 15,648 | $ | 11,522 | $ | 19,799 | $ | 11,505 | 58 | % | ||||||||||||||
Servicing fees |
11,760 | 11,993 | 12,140 | 12,417 | 12,546 | (786 | ) | (6 | ) | |||||||||||||||||||
Amortization of capitalized servicing |
(9,279 | ) | (8,813 | ) | (9,641 | ) | (9,052 | ) | (9,863 | ) | 584 | (6 | ) | |||||||||||||||
Other mortgage banking income |
4,966 | 3,652 | 3,826 | 4,259 | 3,769 | 1,197 | 32 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Subtotal |
38,751 | 28,080 | 21,973 | 19,146 | 26,251 | 12,500 | 48 | |||||||||||||||||||||
MSR valuation adjustment(1) |
9,907 | (6,985 | ) | (39,394 | ) | (8,292 | ) | 774 | 9,133 | 1,180 | ||||||||||||||||||
Net trading gains (losses) related to MSR hedging |
(2,240 | ) | 3,003 | 30,212 | 12,981 | (4,341 | ) | 2,101 | (48 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total mortgage banking income |
$ | 46,418 | $ | 24,098 | $ | 12,791 | $ | 23,835 | $ | 22,684 | $ | 23,734 | 105 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Mortgage originations (in millions) |
$ | 1,157 | $ | 1,123 | $ | 953 | $ | 916 | $ | 929 | $ | 228 | 25 | % | ||||||||||||||
Average trading account securities used to hedge MSRs |
||||||||||||||||||||||||||||
(in millions) |
5 | 6 | 7 | 22 | 46 | (41 | ) | (89 | ) | |||||||||||||||||||
Capitalized mortgage servicing rights(2) |
148,349 | 137,435 | 145,277 | 189,740 | 202,559 | (54,210 | ) | (27 | ) | |||||||||||||||||||
Total mortgages serviced for others (in millions)(2) |
15,902 | 15,886 | 16,061 | 16,315 | 16,456 | (554 | ) | (3 | ) | |||||||||||||||||||
MSR % of investor servicing portfolio(2) |
0.93 | % | 0.87 | % | 0.90 | % | 1.16 | % | 1.23 | % | (0.30 | )% | (24 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net impact of MSR hedging |
||||||||||||||||||||||||||||
MSR valuation adjustment(1) |
$ | 9,907 | $ | (6,985 | ) | $ | (39,394 | ) | $ | (8,292 | ) | $ | 774 | $ | 9,133 | 1,180 | % | |||||||||||
Net trading gains (losses) related to MSR hedging |
(2,240 | ) | 3,003 | 30,212 | 12,981 | (4,341 | ) | 2,101 | (48 | ) | ||||||||||||||||||
Net interest income (loss) related to MSR hedging |
(9 | ) | (34 | ) | 17 | 84 | 99 | (108 | ) | (109 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net gain (loss) of MSR hedging |
$ | 7,658 | $ | (4,016 | ) | $ | (9,165 | ) | $ | 4,773 | $ | (3,468 | ) | $ | 11,126 | N.R. | % | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N.R.Not relevant, as denominator of calculation is a loss in prior period compared with income in current period.
(1) | The change in fair value for the period represents the MSR valuation adjustment, net of amortization of capitalized servicing. |
(2) | At period end. |
11
Huntington Bancshares Incorporated
Quarterly Credit Reserves Analysis
(Unaudited)
2012 | 2011 | |||||||||||||||||||
(dollar amounts in thousands) |
First | Fourth | Third | Second | First | |||||||||||||||
Allowance for loan and lease losses, beginning of period |
$ | 964,828 | $ | 1,019,710 | $ | 1,071,126 | $ | 1,133,226 | $ | 1,249,008 | ||||||||||
Loan and lease losses |
(107,960 | ) | (114,146 | ) | (115,899 | ) | (128,701 | ) | (199,007 | ) | ||||||||||
Recoveries of loans previously charged off |
24,968 | 30,229 | 25,344 | 31,167 | 33,924 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loan and lease losses |
(82,992 | ) | (83,917 | ) | (90,555 | ) | (97,534 | ) | (165,083 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Provision for loan and lease losses |
31,928 | 35,614 | 45,867 | 36,948 | 49,301 | |||||||||||||||
Allowance of assets sold or transferred to loans held for sale |
(695 | ) | (6,579 | ) | (6,728 | ) | (1,514 | ) | | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Allowance for loan and lease losses, end of period |
$ | 913,069 | $ | 964,828 | $ | 1,019,710 | $ | 1,071,126 | $ | 1,133,226 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Allowance for unfunded loan commitments and letters of credit, beginning of period |
$ | 48,456 | $ | 38,779 | $ | 41,060 | $ | 42,211 | $ | 42,127 | ||||||||||
Provision for (reduction in) unfunded loan commitments and letters of credit losses |
2,478 | 9,677 | (2,281 | ) | (1,151 | ) | 84 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Allowance for unfunded loan commitments and letters of credit, end of period |
$ | 50,934 | $ | 48,456 | $ | 38,779 | $ | 41,060 | $ | 42,211 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total allowance for credit losses, end of period |
$ | 964,003 | $ | 1,013,284 | $ | 1,058,489 | $ | 1,112,186 | $ | 1,175,437 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Allowance for loan and lease losses (ALLL) as % of: |
||||||||||||||||||||
Total loans and leases |
2.24 | % | 2.48 | % | 2.61 | % | 2.74 | % | 2.96 | % | ||||||||||
Nonaccrual loans and leases (NALs) |
195 | 178 | 180 | 174 | 178 | |||||||||||||||
Nonperforming assets (NPAs) |
173 | 163 | 166 | 164 | 164 | |||||||||||||||
Total allowance for credit losses (ACL) as % of: |
||||||||||||||||||||
Total loans and leases |
2.37 | % | 2.60 | % | 2.71 | % | 2.84 | % | 3.07 | % | ||||||||||
Nonaccrual loans and leases |
206 | 187 | 187 | 181 | 185 | |||||||||||||||
Nonperforming assets |
183 | 172 | 172 | 170 | 170 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
12
Huntington Bancshares Incorporated
Quarterly Net Charge-Off Analysis
(Unaudited)
2012 | 2011 | |||||||||||||||||||
(dollar amounts in thousands) |
First | Fourth | Third | Second | First | |||||||||||||||
Net charge-offs by loan and lease type: |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Commercial and industrial |
$ | 28,495 | $ | 10,913 | $ | 17,891 | $ | 18,704 | $ | 42,191 | ||||||||||
Commercial real estate: |
||||||||||||||||||||
Construction |
(1,186 | ) | (2,471 | ) | 1,450 | 4,145 | 28,400 | |||||||||||||
Commercial |
11,692 | 30,854 | 22,990 | 23,450 | 39,283 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Commercial real estate |
10,506 | 28,383 | 24,440 | 27,595 | 67,683 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total commercial |
39,001 | 39,296 | 42,331 | 46,299 | 109,874 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Consumer: |
||||||||||||||||||||
Automobile |
3,078 | 4,237 | 3,863 | 2,255 | 4,712 | |||||||||||||||
Home equity |
23,729 | 23,419 | 26,222 | 25,441 | 26,715 | |||||||||||||||
Residential mortgage |
10,570 | 9,732 | 11,562 | 16,455 | 18,932 | |||||||||||||||
Other consumer |
6,614 | 7,233 | 6,577 | 7,084 | 4,850 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total consumer |
43,991 | 44,621 | 48,224 | 51,235 | 55,209 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total net charge-offs |
$ | 82,992 | $ | 83,917 | $ | 90,555 | $ | 97,534 | $ | 165,083 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net charge-offsannualized percentages: |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Commercial and industrial |
0.77 | % | 0.31 | % | 0.52 | % | 0.56 | % | 1.29 | % | ||||||||||
Commercial real estate: |
||||||||||||||||||||
Construction |
(0.79 | ) | (1.85 | ) | 0.87 | 2.99 | 18.59 | |||||||||||||
Commercial |
0.89 | 2.27 | 1.69 | 1.65 | 2.66 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Commercial real estate |
0.72 | 1.91 | 1.60 | 1.77 | 4.15 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total commercial |
0.75 | 0.78 | 0.86 | 0.94 | 2.24 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Consumer: |
||||||||||||||||||||
Automobile |
0.27 | 0.30 | 0.25 | 0.15 | 0.33 | |||||||||||||||
Home equity |
1.15 | 1.15 | 1.31 | 1.29 | 1.38 | |||||||||||||||
Residential mortgage |
0.82 | 0.77 | 0.97 | 1.44 | 1.70 | |||||||||||||||
Other consumer |
5.45 | 5.66 | 5.05 | 5.27 | 3.47 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total consumer |
0.95 | 0.92 | 0.99 | 1.08 | 1.20 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net charge-offs as a % of average loans |
0.85 | % | 0.85 | % | 0.92 | % | 1.01 | % | 1.73 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
13
Huntington Bancshares Incorporated
Quarterly Nonaccrual Loans and Leases (NALs) and Nonperforming Assets (NPAs)
(Unaudited)
2012 | 2011 | |||||||||||||||||||
(dollar amounts in thousands) |
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
Nonaccrual loans and leases (NALs): |
||||||||||||||||||||
Commercial and industrial |
$ | 142,492 | $ | 201,846 | $ | 209,632 | $ | 229,327 | $ | 260,397 | ||||||||||
Commercial real estate |
205,105 | 229,889 | 257,086 | 291,500 | 305,793 | |||||||||||||||
Residential mortgage |
74,114 | 68,658 | 61,129 | 59,853 | 44,812 | |||||||||||||||
Home equity |
45,847 | 40,687 | 37,156 | 33,545 | 25,255 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total nonaccrual loans and leases (1) |
467,558 | 541,080 | 565,003 | 614,225 | 636,257 | |||||||||||||||
Other real estate, net: |
||||||||||||||||||||
Residential(2) |
31,850 | 20,330 | 18,588 | 20,803 | 28,668 | |||||||||||||||
Commercial |
16,897 | 18,094 | 19,418 | 17,909 | 25,961 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total other real estate, net |
48,747 | 38,424 | 38,006 | 38,712 | 54,629 | |||||||||||||||
Other NPAs (3) |
10,772 | 10,772 | 10,972 | | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total nonperforming assets(2) |
$ | 527,077 | $ | 590,276 | $ | 613,981 | $ | 652,937 | $ | 690,886 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nonaccrual loans and leases as a % of total loans and leases |
1.15 | % | 1.39 | % | 1.45 | % | 1.57 | % | 1.66 | % | ||||||||||
NPA ratio(4) |
1.29 | 1.51 | 1.57 | 1.67 | 1.80 |
2012 | 2011 | |||||||||||||||||||
First | Fourth | Third | Second | First | ||||||||||||||||
Nonperforming assets, beginning of period |
$ | 590,276 | $ | 613,981 | $ | 652,937 | $ | 690,886 | $ | 844,752 | ||||||||||
New nonperforming assets(2) |
134,636 | 189,138 | 153,626 | 210,255 | 192,044 | |||||||||||||||
Franklin impact, net |
| (534 | ) | (349 | ) | (5,088 | ) | (3,506 | ) | |||||||||||
Returns to accruing status |
(32,056 | ) | (30,677 | ) | (25,794 | ) | (68,429 | ) | (70,886 | ) | ||||||||||
Loan and lease losses |
(75,366 | ) | (79,117 | ) | (79,992 | ) | (74,945 | ) | (128,730 | ) | ||||||||||
OREO losses (gains) |
(295 | ) | (867 | ) | (242 | ) | 388 | 1,492 | ||||||||||||
Payments |
(66,609 | ) | (91,734 | ) | (76,510 | ) | (73,009 | ) | (87,041 | ) | ||||||||||
Sales |
(23,509 | ) | (9,914 | ) | (9,695 | ) | (27,121 | ) | (57,239 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nonperforming assets, end of period |
$ | 527,077 | $ | 590,276 | $ | 613,981 | $ | 652,937 | $ | 690,886 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | All loans acquired as part of the FDIC-assisted Fidelity Bank acquisition accrue interest as performing loans or as purchased impaired loans under ASC 310-30, therefore none of the acquired loans were reported as nonaccrual as of March 31, 2012. |
(2) | NPAs include $7,986 thousand of residential real estate owned acquired as part of the FDIC-assisted Fidelity Bank acquisition. |
(3) | Other nonperforming assets represent an investment security backed by a municipal bond. |
(4) | Nonperforming assets divided by the sum of loans and leases, net other real estate owned, and other NPAs. |
14
Huntington Bancshares Incorporated
Quarterly Accruing Past Due Loans and Leases and Accruing and Nonaccruing Troubled Debt Restructured Loans (1)
(Unaudited)
2012 | 2011 | |||||||||||||||||||
(dollar amounts in thousands) |
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
Accruing loans and leases past due 90 days or more: |
||||||||||||||||||||
Commercial and industrial |
$ | | $ | | $ | | $ | | $ | | ||||||||||
Residential mortgage (excluding loans guaranteed by the U.S. Government) |
35,604 | 45,198 | 32,850 | 33,975 | 41,858 | |||||||||||||||
Home equity |
19,862 | 20,198 | 20,420 | 17,451 | 24,130 | |||||||||||||||
Other consumer |
5,091 | 8,253 | 7,755 | 6,227 | 7,578 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total, excl. loans guaranteed by the U.S. Government |
60,557 | 73,649 | 61,025 | 57,653 | 73,566 | |||||||||||||||
Add: loans guaranteed by U.S. Government |
94,560 | 96,703 | 84,413 | 76,979 | 94,440 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total accruing loans and leases past due 90 days or more,including loans guaranteed by the U.S. Government |
$ | 155,117 | $ | 170,352 | $ | 145,438 | $ | 134,632 | $ | 168,006 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Ratios: |
||||||||||||||||||||
Excluding loans guaranteed by the U.S. Government, as a percent of total loans and leases |
0.15 | % | 0.19 | % | 0.16 | % | 0.15 | % | 0.19 | % | ||||||||||
Guaranteed by U.S. Government, as a percent of total loans and leases |
0.23 | 0.25 | 0.21 | 0.19 | 0.25 | |||||||||||||||
Including loans guaranteed by the U.S. Government, as a percent of total loans and leases |
0.38 | 0.44 | 0.37 | 0.34 | 0.44 | |||||||||||||||
Accruing troubled debt restructured loans: |
||||||||||||||||||||
Commercial and industrial |
$ | 53,795 | $ | 54,007 | $ | 77,509 | $ | 62,272 | $ | 65,190 | ||||||||||
Commercial real estate |
231,923 | 249,968 | 244,089 | 177,854 | 141,272 | |||||||||||||||
Automobile |
35,521 | 36,573 | 37,371 | 29,059 | 29,611 | |||||||||||||||
Home equity |
59,270 | 52,224 | 47,712 | 37,067 | 39,704 | |||||||||||||||
Residential mortgage |
294,836 | 309,678 | 304,365 | 313,772 | 333,492 | |||||||||||||||
Other consumer |
4,233 | 6,108 | 4,513 | 8,910 | 9,173 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total accruing troubled debt restructured loans |
$ | 679,578 | $ | 708,558 | $ | 715,559 | $ | 628,934 | $ | 618,442 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nonaccruing troubled debt restructured loans: |
||||||||||||||||||||
Commercial and industrial |
$ | 26,886 | $ | 48,553 | $ | 27,410 | $ | 29,069 | $ | 19,531 | ||||||||||
Commercial real estate |
39,606 | 21,968 | 46,854 | 48,676 | 18,327 | |||||||||||||||
Home equity |
334 | 369 | 166 | 28 | 14 | |||||||||||||||
Residential mortgage |
29,549 | 26,089 | 20,877 | 14,378 | 8,523 | |||||||||||||||
Other consumer |
113 | 113 | 113 | 112 | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total nonaccruing troubled debt restructured loans |
$ | 96,488 | $ | 97,092 | $ | 95,420 | $ | 92,263 | $ | 46,395 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | No loans related to the FDIC-assisted Fidelity Bank acquisition were considered troubled debt restructured. |
15
Huntington Bancshares Incorporated
Quarterly Common Stock Summary, Capital, and Other Data
(Unaudited)
Quarterly common stock summary
2012 | 2011 | |||||||||||||||||||
(dollar amounts in thousands, except per share amounts) |
First | Fourth | Third | Second | First | |||||||||||||||
Common stock price, per share |
||||||||||||||||||||
High(1) |
$ | 6.580 | $ | 5.650 | $ | 6.740 | $ | 6.920 | $ | 7.700 | ||||||||||
Low(1) |
5.490 | 4.670 | 4.460 | 6.000 | 6.380 | |||||||||||||||
Close |
6.445 | 5.490 | 4.800 | 6.560 | 6.640 | |||||||||||||||
Average closing price |
5.974 | 5.178 | 5.370 | 6.506 | 6.981 | |||||||||||||||
Dividends, per share |
||||||||||||||||||||
Cash dividends declared per common share |
$ | 0.04 | $ | 0.04 | $ | 0.04 | $ | 0.01 | $ | 0.01 | ||||||||||
Common shares outstanding |
||||||||||||||||||||
Averagebasic |
864,499 | 864,136 | 863,911 | 863,358 | 863,359 | |||||||||||||||
Averagediluted |
869,164 | 868,156 | 867,633 | 867,469 | 867,237 | |||||||||||||||
Ending |
864,675 | 864,406 | 864,075 | 863,323 | 863,399 | |||||||||||||||
Book value per common share |
$ | 5.97 | $ | 5.82 | $ | 5.83 | $ | 5.66 | $ | 5.42 | ||||||||||
Tangible book value per common share(2) |
5.33 | 5.18 | 5.17 | 5.00 | 4.74 | |||||||||||||||
2012 | 2011 | |||||||||||||||||||
(dollar amounts in millions) |
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
Calculation of tangible equity / asset ratio: |
||||||||||||||||||||
Total shareholders equity |
$ | 5,550 | $ | 5,418 | $ | 5,400 | $ | 5,253 | $ | 5,039 | ||||||||||
Less: goodwill |
(444 | ) | (444 | ) | (444 | ) | (444 | ) | (444 | ) | ||||||||||
Less: other intangible assets |
(171 | ) | (175 | ) | (188 | ) | (202 | ) | (215 | ) | ||||||||||
Add: related deferred tax liability(2) |
60 | 61 | 66 | 71 | 75 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total tangible equity |
4,995 | 4,860 | 4,834 | 4,678 | 4,455 | |||||||||||||||
Less: preferred equity |
(386 | ) | (386 | ) | (363 | ) | (363 | ) | (363 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total tangible common equity |
$ | 4,609 | $ | 4,474 | $ | 4,471 | $ | 4,315 | $ | 4,092 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | 55,877 | $ | 54,451 | $ | 54,979 | $ | 53,050 | $ | 52,949 | ||||||||||
Less: goodwill |
(444 | ) | (444 | ) | (444 | ) | (444 | ) | (444 | ) | ||||||||||
Less: other intangible assets |
(171 | ) | (175 | ) | (188 | ) | (202 | ) | (215 | ) | ||||||||||
Add: related deferred tax liability(2) |
60 | 61 | 66 | 71 | 75 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total tangible assets |
$ | 55,322 | $ | 53,893 | $ | 54,413 | $ | 52,475 | $ | 52,365 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Tangible equity / tangible asset ratio |
9.03 | % | 9.02 | % | 8.88 | % | 8.91 | % | 8.51 | % | ||||||||||
Tangible common equity / tangible asset ratio |
8.33 | 8.30 | 8.22 | 8.22 | 7.81 | |||||||||||||||
Tier 1 common risk-based capital ratio:(4) |
||||||||||||||||||||
Tier 1 capital |
$ | 5,709 | $ | 5,557 | $ | 5,488 | $ | 5,353 | $ | 5,179 | ||||||||||
Shareholders preferred equity |
(386 | ) | (386 | ) | (363 | ) | (363 | ) | (363 | ) | ||||||||||
Trust preferred securities |
(532 | ) | (532 | ) | (565 | ) | (565 | ) | (570 | ) | ||||||||||
REIT preferred stock |
(50 | ) | (50 | ) | (50 | ) | (50 | ) | (50 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Tier 1 common |
$ | 4,741 | $ | 4,589 | $ | 4,510 | $ | 4,375 | $ | 4,196 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total risk-weighted assets(4) |
$ | 46,716 | $ | 45,891 | $ | 44,376 | $ | 44,080 | $ | 43,024 | ||||||||||
Tier 1 common risk-based capital ratio(4) |
10.15 | 10.00 | 10.17 | 9.92 | 9.75 | |||||||||||||||
Other capital data: |
||||||||||||||||||||
Tier 1 leverage ratio(4) |
10.55 | % | 10.28 | % | 10.24 | % | 10.25 | % | 9.80 | % | ||||||||||
Tier 1 risk-based capital ratio(4) |
12.22 | 12.11 | 12.37 | 12.14 | 12.04 | |||||||||||||||
Total risk-based capital ratio(4) |
14.76 | 14.77 | 15.11 | 14.89 | 14.85 | |||||||||||||||
Tangible common equity / risk-weighted assets ratio(4) |
9.86 | 9.75 | 10.08 | 9.79 | 9.51 | |||||||||||||||
Other data: |
||||||||||||||||||||
Number of employees (full-time equivalent) |
11,166 | 11,245 | 11,473 | 11,457 | 11,319 | |||||||||||||||
Number of domestic full-service branches(3) |
669 | 668 | 650 | 643 | 622 |
(1) | High and low stock prices are intra-day quotes obtained from NASDAQ. |
(2) | Other intangible assets are net of deferred tax liability, and calculated assuming a 35% tax rate. |
(3) | Includes WGH offices. |
(4) | March 31, 2012, figures are estimated. |
16
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