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) October 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 October 18, 2012, Huntington Bancshares Incorporated (Huntington) issued a news release announcing its earnings for the quarter ended September 30, 2012. Also on October 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 October 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 29910390. 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 October 31, 2012, at (855) 859-2056 or (404) 537-3406; conference call ID 29910390.
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 implementation of the Budget Control Act of 2011 as well as 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 October 18, 2012. | ||
Exhibit 99.2 Quarterly Performance Discussion, September 2012. | ||
Exhibit 99.3 Quarterly Financial Review, September 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: October 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, October 18, 2012. | |
Exhibit 99.2 | Quarterly Performance Discussion, September 2012. | |
Exhibit 99.3 | Quarterly Financial Review, September 2012. |
Exhibit 99.1
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Date: October 18, 2012
FOR IMMEDIATE RELEASE
Contact: Investors Todd
Beekman (614) 480-3878 |
Mark Muth (614) 480-4720 |
Media Maureen Brown |
HUNTINGTON BANCSHARES INCORPORATED
REPORTS RECORD NET INCOME OF $167.8 MILLION, OR $0.19 PER COMMON
SHARE, FOR THE 2012 THIRD QUARTER, UP 10% FROM THE PRIOR QUARTER AND
UP 17% FROM THE YEAR-AGO QUARTER
DECLARES QUARTERLY DIVIDEND ON COMMON STOCK OF $0.04 PER SHARE
Other specific highlights compared with 2012 Second Quarter:
| $8.1 million, or 5% annualized, increase in total revenue |
| $7.2 million, or 3%, increase in noninterest income, including a $6.3 million increase in mortgage banking income |
| 3.38% fully taxable equivalent net interest margin, down 4 basis points |
| 3% annualized growth in end of period total loans |
| 9% annualized growth in average core deposits |
| $14.0 million, or 3%, increase in noninterest expense, including a $4.4 million increase in cost associated with early extinguishment of debt |
| $19.5 million state deferred tax valuation allowance benefit |
| $33.0 million of net charge-offs due to regulatory guidance related to Chapter 7 bankruptcy loans |
| 6% decline in nonaccrual loans to 1.11% of total loans and leases, down from 1.19% |
| 1.19% return on average assets, up from 1.10% |
| $0.22, or 16% annualized, increase in tangible book value per common share to $5.71 |
| 3.7 million shares repurchased at an average price of $6.68 per share |
COLUMBUS, Ohio Huntington Bancshares Incorporated (NASDAQ: HBAN; www.huntington.com) reported 2012 third quarter net income of $167.8 million, up $15.1 million, or 10%, from $152.7 million in the prior quarter. Earnings per common share in the current quarter were $0.19, up $0.02 from the prior quarter. Net income in the year-ago quarter was $143.4 million, or $0.16 per common share.
Huntington today also announced that the board of directors declared a quarterly cash dividend on its common stock of $0.04 per common share. The dividend is payable January 2, 2013, to shareholders of record on December 18, 2012.
Summary Performance Discussion
We are pleased with the quarters financial results which reflect steady growth in a number of key strategic areas including loans, deposits, and customer relationships. This demonstrates the continued benefits from successfully executing our strategic plan. This quarter was negatively impacted by an increase in healthcare and regulatory costs, said Stephen D. Steinour, chairman, president and chief executive officer. At the core of our strategic plan remains a differentiated approach to banking, coupled with investing in products and services that are driving growth and improvement in the stability of our long-term profitability.
Net income in the third quarter was $167.8 million, up $15.1 million, or 10%, from $152.7 million in the prior quarter. The primary drivers of the increase were a $21.0 million, or 43%, decrease in provision for income taxes and a $7.2 million, or 3%, increase in noninterest income that were partially offset by a $14.0 million, or 3%, increase in noninterest expense. The decrease in provision for income taxes reflected the only significant item for the quarter, a $19.5 million state deferred tax valuation allowance benefit.
Net interest income increased $0.8 million, or less than 1%, from the prior quarter. This reflected a $0.3 billion, or 1% (2% annualized), increase in average earning assets and a 4 basis point decrease in the fully-taxable equivalent net interest margin (NIM) to 3.38%. The linked-quarter decrease in the NIM reflected the negative impact of a 10 basis point decline of the yield on earnings assets, 6 basis points of which were related to the yield on loans. This was partially offset by the benefit of a 6 basis point reduction in total funding costs. Average noninterest bearing deposits increased $0.3 billion, or 8% annualized, and represented 27% of total deposits.
The $0.3 billion increase in average earning assets was driven by the $1.4 billion increase in average loans held for sale and a $0.2 billon, 6% annualized, increase in average commercial and industrial loans (C&I). That was partially offset by the $0.9 billion decrease in average automobile loans, reflecting the prior quarters reclassification of $1.3 billion of automobile loans into held for sale, and a $0.4 billion decrease in commercial real estate loans.
Average total core deposits increased $1.0 billion, or 9% annualized, reflecting a $1.3 billion, or 40% annualized, increase in money market deposits and a $0.3 billion, or 9% annualized, increase in noninterest bearing demand deposits. These were partially offset by the $0.5 billion, or 29% annualized, decrease in core certificates of deposit (CDs) as customers were actively transitioned from CDs into more flexible money market accounts or other investment based solutions. Through our strategic focus on growing consumer households and commercial relationships by earning their primary checking (demand deposit) accounts, we continue to improve our overall funding mix. As previously disclosed, there remains over $1.0 billion of demand deposits from several larger relationships that are considered nonpermanent in nature.
Total noninterest income increased $7.2 million, or 3%, from the prior quarter. This included a $6.3 million, or 16%, increase in mortgage banking income and a $3.8 million increase in securities gains. Gain on sale of loans increased $2.5 million, or 60%, due to the sale of $0.2 billion of automobile loans that we classified as held for sale at the end of the prior quarter. These positive impacts were partially offset by a $4.4 million, or 16%, decrease in other income as the prior quarter included a gain on the sale of affordable housing investments.
2
Commenting on revenue trends, Steinour said, The third quarter results clearly showed the continued benefit of the investment we have made over the preceding three years. Adding over 250,000 consumer households, a 27% increase, and 26,000 commercial relationships, or 21% increase, since the first quarter of 2010 has allowed Huntington to grow quarterly total revenue by more than $59 million even with the negative impacts from the low absolute level of interest rates, the flat shape of the yield curve, and the reduction of over $25 million of revenue per quarter due to the Durbin amendment and implementation of changes to Regulation E. Not only are we gaining customers, we are selling deeper with 76% of consumer checking account households and 33% of commercial relationships now with 4 or more products or services. Strategic investments have a maximum of two years to break even with many reaching that level in the first year. A portion of our strategic investments remain in the early stages, such as our strategy to build over 180 in-store full service branches. The in-store branches are on target with the estimated aggregate impact to operating income negligible next year and positive in 2014.
Noninterest expense increased $14.0 million, or 3%, from the prior quarter. This included a $4.7 million, or 2%, increase in personnel costs primarily reflecting higher healthcare costs and a $4.4 million increase in the cost associated with early extinguishment of debt including the trust preferred securities (TruPS) that were redeemed during the quarter. Noninterest expense included $4.5 million of expense related to the development of infrastructure and systems to support the Federal Reserve CCAR process.
The provision for credit losses increased $0.5 million, or 1%, from the prior quarter. This reflected a $20.9 million, or 25%, increase in net charge-offs (NCOs) to $105.1 million, or an annualized 1.05% of average total loans and leases, from $84.2 million, or an annualized 0.82%, in the prior quarter. Of this quarters NCOs, $33.0 million related to regulatory guidance requiring consumer loans discharged under Chapter 7 bankruptcy to be charged down to collateral value. Approximately 90% continue to make payments as scheduled. Partially offsetting the increase in NCOs were significant improvement in asset quality trends, resulting in lower calculated reserves. Criticized commercial loans declined by $223 million, or 11%, in the quarter, and specific reserves associated with impaired commercial loans also declined.
The period-end allowance for credit losses (ACL) as a percentage of total loans and leases decreased to 2.09% from 2.28% in the prior quarter. The ACL as a percentage of period end total nonaccrual loans (NALs) was essentially unchanged, decreasing 3 percentage points to 189%. NALs declined by $29.1 million, or 6%, to $445.0 million, or 1.11% of total loans, during the quarter despite a $63 million increase associated with the revised treatment of Chapter 7 bankruptcy consumer loans.
Capital, our Tier 1 common risk-based capital ratio at September 30, 2012, was 10.28%, up from 10.08% at June 30, 2012, and our tangible common equity ratio increased to 8.74% from 8.41% over this same period. The regulatory Tier 1 risk-based capital ratio at September 30, 2012, was 11.88%, down from 11.93%, at June 30, 2012. This decline reflected the capital actions taken throughout the quarter, which are discussed below.
Over the quarter, and consistent with planned capital actions, redemption of $150 million of trust preferred securities (TruPS) was announced and 3.7 million common shares were repurchased at an average price of $6.68 per share. The weighted average coupon of the remaining $300 million of TruPS is LIBOR + 1.02%. Commenting on capital, Steinour said, Reinvesting excess capital to grow the business organically remains our first priority. Importantly, through dividends and share repurchases, we have the flexibility, subject to market conditions, to return a meaningful amount of our earnings to the owners of the company.
3
Expectations
We continue to see positive trends within our Midwest markets relative to the broader United States. Nevertheless, broad based customer sentiment began to change late in the quarter. Customers have increased concerns, in the near term, regarding the US economy as we approach the election and scheduled impacts of the Budget Control Act of 2011. We are optimistic that once permanent solutions are in place, the strength of the Midwest and the soundness of our strategy will continue to drive growth and improved profitability, said Steinour.
For the next several quarters, average net interest income is expected to be relatively stable from the third quarters level as we anticipate an increase in total loans, excluding the impacts of any future loan securitizations. Those benefits to net interest income are expected to be mostly offset, however, by downward NIM pressure due to the anticipated competitive pressures on loan pricing, as well as lower rate securities through reinvestment, and declining positive impacts from deposit repricing. The C&I portfolio is expected to continue to show growth. Although, given the most recent trend, we are expecting near-term growth to be slower than the strong growth we experienced earlier this year. Our C&I sales pipeline remains robust with much of this reflecting the positive impact from our strategic initiatives, focused OCR sales process, and continued support of middle market and small business lending in the Midwest. We will continue to evaluate the use of automobile loan securitizations to limit total on-balance sheet exposure due to our expectation of continued strong levels of originations. On October 11, a $1.0 billion automobile loan securitization, with an approximate $17 million gain, was completed. Residential mortgages and home equity loan balances are expected to be relatively stable in response to the proposed capital rules recently released by our regulators. CRE loans likely will experience declines from current levels.
Excluding potential future automobile loan securitizations, we anticipate the increase in total loans will modestly outpace growth in total deposits. This reflects our continued focus on our overall cost of funds and the continued shift towards low- and no-cost demand deposits and money market deposit accounts.
Noninterest income, excluding the impact of any automobile loan sale or security gains and any net MSR impact, is expected to be relatively stable at current levels. Continued growth in new customers and increased contribution from higher cross-sell are expected to be offset by a slowdown in mortgage banking activity.
Noninterest expense is expected to modestly increase above the 2012 third quarter level. For the full year, we continue to anticipate positive operating leverage and modest improvement in our expense efficiency ratio. Additional regulatory costs and expenses associated with strategic actions, including the planned opening of over 80 in-store branches this year, are expected to be partially offset by our focus on improving expense efficiencies throughout the company.
Credit quality is expected to experience improvement. The level of provision for credit losses in the first three quarters of the year was at the low end of our long-term expectation, and we expect some quarterly volatility given the absolute low level of the provision for credit losses and the uncertain and uneven nature of the economic recovery.
We anticipate the effective tax rate for the 2012 fourth quarter to approximate 24% to 26%, which includes permanent tax benefits primarily related to tax-exempt income, tax-advantaged investments, and general business credits.
4
Please see the 2012 Third 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 Thursday, October 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 29910390. 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 October 31, 2012 at (855) 859-2056; Conference ID 29910390.
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 implementation of the Budget Control Act of 2011 as well as 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.
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 Third Quarter Performance Discussion and Quarterly Financial Review supplements to this document, the third 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.
5
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.
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 more than 690 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 more than 1,380 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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6
Exhibit 99.2
HUNTINGTON BANCSHARES
2012 THIRD QUARTER PERFORMANCE DISCUSSION
Date: October 18, 2012
The following provides detailed earnings performance discussion that complements the summary review contained in Huntington Bancshares Incorporateds (NASDAQ: HBAN) 2012 Third 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 | |||||||||||||||||||||||||||
Third | Second | First | Fourth | Third | Change % | |||||||||||||||||||||||
(in millions) |
Quarter | Quarter | Quarter | Quarter | Quarter | LQ | YOY | |||||||||||||||||||||
Net interest income |
$ | 430.3 | $ | 429.0 | $ | 417.2 | $ | 415.0 | $ | 406.5 | 0 | % | 6 | % | ||||||||||||||
Provision for credit losses |
37.0 | 36.5 | 34.4 | 45.3 | 43.6 | 1 | (15 | ) | ||||||||||||||||||||
Noninterest income |
261.1 | 253.8 | 285.3 | 229.4 | 258.6 | 3 | 1 | |||||||||||||||||||||
Noninterest expense |
458.3 | 444.3 | 462.7 | 430.3 | 439.1 | 3 | 4 | |||||||||||||||||||||
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Income before income taxes |
196.1 | 202.0 | 205.4 | 168.8 | 182.3 | (3 | ) | 8 | ||||||||||||||||||||
Provison for income taxes |
28.3 | 49.3 | 52.2 | 42.0 | 38.9 | (43 | ) | (27 | ) | |||||||||||||||||||
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Net income |
167.8 | 152.7 | 153.3 | 126.9 | 143.4 | 10 | 17 | |||||||||||||||||||||
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Dividends on preferred shares |
8.0 | 8.0 | 8.0 | 7.7 | 7.7 | (0 | ) | 4 | ||||||||||||||||||||
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Net income applicable to common shares |
$ | 159.8 | $ | 144.7 | $ | 145.2 | $ | 119.2 | $ | 135.7 | 10 | % | 18 | % | ||||||||||||||
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Net income per common share-diluted |
$ | 0.19 | $ | 0.17 | $ | 0.17 | $ | 0.14 | $ | 0.16 | 12 | % | 19 | % | ||||||||||||||
Revenuefully-taxable equivalent (FTE) |
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Net interest income |
$ | 430.3 | $ | 429.0 | $ | 417.2 | $ | 415.0 | $ | 406.5 | 0 | % | 6 | % | ||||||||||||||
FTE adjustment |
5.3 | 5.7 | 3.9 | 3.5 | 3.7 | (9 | ) | 44 | ||||||||||||||||||||
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Net interest incomeFTE |
435.6 | 434.7 | 421.1 | 418.5 | 410.1 | 0 | 6 | |||||||||||||||||||||
Noninterest income |
261.1 | 253.8 | 285.3 | 229.4 | 258.6 | 3 | 1 | |||||||||||||||||||||
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Total revenueFTE |
$ | 696.6 | $ | 688.5 | $ | 706.5 | $ | 647.9 | $ | 668.7 | 1 | % | 4 | % | ||||||||||||||
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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, when appropriate, 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 quarter, as there were no significant items in the 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) | ||||||
September 30, 2012 net income |
$ | 167.8 | $ | 0.19 | ||||
State deferred tax valuation allowance benefit |
19.5 | 0.02 | ||||||
June 30, 2012 net income |
$ | 152.7 | $ | 0.17 | ||||
September 30, 2011 net income |
$ | 143.4 | $ | 0.16 |
(1) | Favorable (unfavorable) impact on net income; after-tax unless otherwise noted |
(2) | After-tax; EPS reflected on a fully diluted basis |
Net Interest Income, Net Interest Margin, and Average Balance Sheet
Fully-taxable equivalent net interest income increased $0.8 million, or less than 1%, from the 2012 second quarter. This reflected the benefit of a $0.3 billion, or 1% (2% annualized), increase in average earning assets partially offset by a 4 basis point decrease in the fully-taxable equivalent net interest margin (NIM) to 3.38%. The increase in average earnings assets reflected a $1.4 billion increase in average loans held for sale and a $0.2 billon, 6% annualized, increase in average commercial and industrial loans partially offset by the $0.9 billion decrease in average automobile loans, reflecting the prior quarters reclassification of $1.3 billion of automobile loans into held for sale, and a $0.4 billion decrease in commercial real estate loans. The primary items impacting the decrease in the NIM were:
| 6 basis point negative impact from the mix and yield of loans. |
| 4 basis point negative impact from other earning assets and asset/liability management. |
Partially offset by:
| 6 basis point positive impact from the reduction in total funding costs. |
2
Table 3 Average Loans and Leases
2012 | 2011 | |||||||||||||||||||||||||||
Third | Second | First | Fourth | Third | Change % | |||||||||||||||||||||||
(in billions) |
Quarter | Quarter | Quarter | Quarter | Quarter | LQ | YOY | |||||||||||||||||||||
Average Loans and Leases |
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Commercial and industrial |
$ | 16.3 | $ | 16.1 | $ | 14.8 | $ | 14.2 | $ | 13.7 | 2 | % | 20 | % | ||||||||||||||
Commercial real estate |
5.7 | 6.1 | 5.9 | 6.0 | 6.1 | (6 | ) | (6 | ) | |||||||||||||||||||
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Total commercial |
22.1 | 22.2 | 20.7 | 20.2 | 19.8 | (0 | ) | 12 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Automobile |
4.1 | 5.0 | 4.6 | 5.6 | 6.2 | (18 | ) | (35 | ) | |||||||||||||||||||
Home equity |
8.4 | 8.3 | 8.2 | 8.1 | 8.0 | 1 | 5 | |||||||||||||||||||||
Residential mortgage |
5.2 | 5.3 | 5.2 | 5.0 | 4.8 | (1 | ) | 8 | ||||||||||||||||||||
Other consumer |
0.4 | 0.5 | 0.5 | 0.5 | 0.5 | (4 | ) | (15 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total consumer |
18.1 | 19.0 | 18.5 | 19.3 | 19.5 | (5 | ) | (8 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total loans and leases |
$ | 40.1 | $ | 41.2 | $ | 39.1 | $ | 39.5 | $ | 39.3 | (3 | )% | 2 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average total loans and leases decreased $1.1 billion, or 3% (10% annualized), from the 2012 second quarter, primarily reflecting:
| $0.9 billion, or 18% (74% annualized), decrease in average automobile loans. The decline reflected the reclassification of $1.3 billion of automobile loans to loans held for sale at the end of the prior quarter in anticipation of another securitization and sale in the second half of 2012. Automobile loan originations remained strong during the third quarter, exceeding $1.0 billion for the second consecutive quarter. |
| $0.4 billion, or 6% (23% annualized), decrease in average Commercial Real Estate (CRE) loans. This reflected continued runoff of the noncore portfolio as well as a reduction in the core portfolio due to lower levels of new loan production. |
Partially offset by:
| $0.2 billion, or 2% (6% annualized), growth in average total Commercial and Industrial (C&I) loans. This reflected the continued growth across multiple business lines including middle market and equipment finance, although there was a relative slowing of growth late in the quarter as customers expressed increased concerns, in the near term, around the US economy as we approach the election and scheduled impacts of the Budget Control Act of 2011. |
Compared to the year ago quarter, growth in average loans primarily reflected $2.6 billion of C&I loan growth, and two strategic decisions: the resumption of securitization activity and the acquisition of Fidelity Bank.
3
Table 4 Average Deposits
2012 | 2011 | |||||||||||||||||||||||||||
Third | Second | First | Fourth | Third | Change % | |||||||||||||||||||||||
(in billions) |
Quarter | Quarter | Quarter | Quarter | Quarter | LQ | YOY | |||||||||||||||||||||
Average Deposits |
||||||||||||||||||||||||||||
Demand depositsnoninterest bearing |
$ | 12.3 | $ | 12.1 | $ | 11.3 | $ | 10.7 | $ |
8.7 |
|
2 | % | 41 | % | |||||||||||||
Demand depositsinterest bearing |
5.8 | 5.9 | 5.6 | 5.6 | 5.6 | (2 | ) | 4 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total demand deposits |
18.1 | 18.0 | 16.9 | 16.3 | 14.3 | 1 | 27 | |||||||||||||||||||||
Money market deposits |
14.5 | 13.2 | 13.1 | 13.6 | 13.3 | 10 | 9 | |||||||||||||||||||||
Savings and other domestic deposits |
5.0 | 5.0 | 4.8 | 4.7 | 4.8 | (0 | ) | 5 | ||||||||||||||||||||
Core certificates of deposit |
6.1 | 6.6 | 6.5 | 6.8 | 7.6 | (7 | ) | (19 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total core deposits |
43.8 | 42.8 | 41.4 | 41.4 | 40.0 | 2 | 10 | |||||||||||||||||||||
Other domestic deposits of $ 250,000 or more |
0.3 | 0.3 | 0.3 | 0.4 | 0.4 | 1 | (22 | ) | ||||||||||||||||||||
Brokered deposits and negotiable CDs |
1.9 | 1.4 | 1.3 | 1.4 | 1.5 | 32 | 23 | |||||||||||||||||||||
Other deposits |
0.4 | 0.4 | 0.4 | 0.4 | 0.4 | (0 | ) | (11 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total deposits |
$ | 46.3 | $ | 44.9 | $ | 43.5 | $ | 43.6 | $ |
42.3 |
|
3 | % | 10 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average total core deposits increased $1.0 billion, or 2% (9% annualized), from the 2012 second quarter primarily reflecting:
| $1.3 billion, or 10% (40% annualized), increase in money market deposits. |
| $0.3 billion, or 2% (9% annualized), increase in average noninterest bearing demand deposits. |
Partially offset by:
| $0.5 billion, or 7% (29% annualized), decrease in average core certificates of deposit. |
Compared to the year ago quarter, growth in average total core deposits primarily reflected $3.6 billion of noninterest bearing deposit growth, of which $0.1 billion related to the Fidelity Bank transaction.
Non-core funding sources displayed significant mix shift due to the decision to replace maturing Federal Home Loan Bank advances with brokered deposits, reflecting the following changes from the prior quarter:
| $0.5 billion, or 32%, increase in average brokered deposits and negotiable CDs. |
| $0.5 billion, or 83%, decrease in Federal Home Loan Bank advances. |
Provision for Credit Losses
The provision for credit losses increased $0.5 million, or 1%, from the prior quarter. Net charge-offs (NCO) were $105.1 million, up 25% from $84.2 million in the prior quarter. NCOs were an annualized 1.05% of average loans and leases in the current quarter, up from 0.82% in the 2012 second quarter. Of this quarters NCOs, $33.0 million, or an annualized 33 bp of average loans and leases, relate to Chapter 7 bankruptcy consumer loans. The period end allowance for credit losses (ACL) as a percentage of total loans and leases decreased to 2.09% from 2.28%, while the ACL as a percentage of period end total nonaccrual loans (NALs) decreased slightly to 189% from 192% (see Credit Quality discussion).
4
Noninterest Income
Table 5 Noninterest Income
2012 | 2011 | |||||||||||||||||||||||||||
Third | Second | First | Fourth | Third | Change | |||||||||||||||||||||||
(in millions) |
Quarter | Quarter | Quarter | Quarter | Quarter | LQ | YOY | |||||||||||||||||||||
Noninterest Income |
||||||||||||||||||||||||||||
Service charges on deposit accounts |
$ | 67.8 | $ | 66.0 | $ | 60.3 | $ | 63.3 | $ | 65.2 | 3 | % | 4 | % | ||||||||||||||
Trust services |
29.7 | 29.9 | 30.9 | 28.8 | 29.5 | (1 | ) | 1 | ||||||||||||||||||||
Electronic banking income |
22.1 | 20.5 | 18.6 | 18.3 | 32.9 | 8 | (33 | ) | ||||||||||||||||||||
Mortgage banking income |
44.6 | 38.3 | 46.4 | 24.1 | 12.8 | 16 | 249 | |||||||||||||||||||||
Brokerage income |
16.5 | 19.0 | 19.3 | 18.7 | 20.3 | (13 | ) | (19 | ) | |||||||||||||||||||
Insurance income |
17.8 | 17.4 | 18.9 | 17.9 | 17.2 | 2 | 3 | |||||||||||||||||||||
Bank ow ned life insurance income |
14.4 | 14.0 | 13.9 | 14.3 | 15.6 | 3 | (8 | ) | ||||||||||||||||||||
Capital markets fees |
11.8 | 13.5 | 10.0 | 9.8 | 11.3 | (12 | ) | 5 | ||||||||||||||||||||
Gain on sale of loans |
6.6 | 4.1 | 26.8 | 2.9 | 19.1 | 60 | (65 | ) | ||||||||||||||||||||
Automobile operating lease income |
2.1 | 2.9 | 3.8 | 4.7 | 5.9 | (25 | ) | (64 | ) | |||||||||||||||||||
Securities (losses) gains |
4.2 | 0.4 | (0.6 | ) | (3.9 | ) | (1.4 | ) | 1091 | NR | ||||||||||||||||||
Other income |
23.4 | 27.9 | 37.1 | 30.5 | 30.1 | (16 | ) | (22 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total noninterest income |
$ | 261.1 | $ | 253.8 | $ | 285.3 | $ | 229.4 | $ | 258.6 | 3 | % | 1 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income increased $7.2 million, or 3%, from the prior quarter primarily reflecting:
| $6.3 million, or 16%, increase in mortgage banking income. This primarily reflected a $10.7 million increase in origination and secondary marketing income and a $4.5 million decline in the net trading gains (losses) related to mortgage servicing rights (MSR) hedging. |
| $3.8 million increase in securities gains. Agency debt and asset-backed securities were sold, and the proceeds were reinvested in the Held-to-Maturity (HTM) portfolio. At quarter end, $1.6 billion, or 17%, of the investment portfolio was in HTM. |
| $2.5 million, or 60%, increase in gain on sale of loans, which included a $1.9 million gain on the sale of automobile loans. |
Partially offset by:
| $4.4 million decrease in other income, as the prior quarter included a gain on the sale of affordable housing investments. |
Noninterest income increased $2.5 million, or 1%, from the year ago quarter, primarily reflecting:
| $31.8 million, or 249%, increase in mortgage banking income. This primarily reflected a $25.2 million increase in origination and secondary marketing income. Also impacting the year-over-year comparison was a $4.1 million net MSR related loss in the current quarter compared to a net MSR related loss of $9.2 million in the year-ago quarter. |
| $5.5 million increase in securities gains. |
| $2.6 million, or 4%, increase in service charges on deposits, primarily reflecting continued strong customer growth. |
5
Mostly offset by:
| $12.5 million, or 65%, decrease in gain on sale of loans, as the year ago quarter included a $15.5 million automobile loan securitization gain. |
| $10.8 million, or 33%, decline in electronic banking income related to implementing the lower debit card interchange fee structure mandated in the Durbin Amendment of the Dodd-Frank Act. |
| $6.7 million, or 22%, decrease in other income, primarily related to the reimbursement of third party costs in the year ago quarter. |
| $3.8 million, or 19%, decline in brokerage income primarily related to reduced sales of market-linked CDs given lower market interest rates. |
| $3.7 million, or 64%, decline in automobile operating lease income, reflecting the impact of a declining portfolio as a result of having exited that business in 2008. |
Noninterest Expense
Table 6 Noninterest Expense
2012 | 2011 | |||||||||||||||||||||||||||
Third | Second | First | Fourth | Third | Change % | |||||||||||||||||||||||
(in millions) |
Quarter | Quarter | Quarter | Quarter | Quarter | LQ | YOY | |||||||||||||||||||||
Noninterest Expense |
||||||||||||||||||||||||||||
Personnel costs |
$ | 247.7 | $ | 243.0 | $ | 243.5 | $ | 228.1 | $ |
226.8 |
|
2 | % | 9 | % | |||||||||||||
Outside data processing and other services |
49.9 | 48.1 | 42.1 | 53.4 | 49.6 | 4 | 1 | |||||||||||||||||||||
Net occupancy |
27.6 | 25.5 | 29.1 | 26.8 | 27.0 | 8 | 2 | |||||||||||||||||||||
Equipment |
26.0 | 24.9 | 25.5 | 25.9 | 22.3 | 4 | 17 | |||||||||||||||||||||
Deposit and other insurance expense |
15.5 | 15.7 | 20.7 | 18.5 | 17.5 | (1 | ) | (11 | ) | |||||||||||||||||||
Marketing |
20.2 | 21.4 | 16.8 | 16.4 | 22.3 | (6 | ) | (9 | ) | |||||||||||||||||||
Professional services |
18.0 | 15.5 | 11.2 | 16.8 | 20.3 | 17 | (11 | ) | ||||||||||||||||||||
Amortization of intangibles |
11.4 | 11.9 | 11.5 | 13.2 | 13.4 | (4 | ) | (15 | ) | |||||||||||||||||||
Automobile operating lease expense |
1.6 | 2.2 | 2.9 | 3.4 | 4.4 | (26 | ) | (63 | ) | |||||||||||||||||||
OREO and foreclosure expense |
5.0 | 4.1 | 5.0 | 5.0 | 4.7 | 21 | 7 | |||||||||||||||||||||
Loss (Gain) on early extinguishment of debt |
1.8 | (2.6 | ) | | (9.7 | ) | | (31 | ) | NR | ||||||||||||||||||
Other expense |
33.6 | 34.5 | 54.4 | 32.5 | 31.0 | (3 | ) | 8 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total noninterest expense |
$ | 458.3 | $ | 444.3 | $ | 462.7 | $ | 430.3 | $ |
439.1 |
|
3 | % | 4 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
(in thousands) |
||||||||||||||||||||||||||||
Number of employees (full-time equivalent) |
11.7 | 11.4 | 11.4 | 11.2 | 11.2 | 3 | % | 4 | % |
Noninterest expense increased $14.0 million, or 3%, from the prior quarter. This primarily reflected:
| $4.4 million, or 200%, increase in the costs associated with early extinguishment of debt including the trust preferred securities (TruPS) that were redeemed during the quarter. |
| $4.7 million, or 2%, increase in personnel costs, primarily reflecting higher healthcare costs. |
6
Noninterest expense included $4.5 million of expense related to the development of infrastructure and systems to support the Federal Reserve CCAR process.
Noninterest expense increased $19.2 million, or 4%, from the year ago quarter, primarily reflecting:
| $20.9 million, or 9%, increase in personnel costs reflecting an increase in the number of full-time equivalent employees as well as increased salaries and benefits. |
| $3.7 million, or 17%, increase in equipment expense reflecting the implementation of strategic initiatives including the companys in-store branch expansion. |
Partially offset by:
| $2.8 million, or 63%, decline in automobile operating lease expense as the portfolio continued its planned runoff as we exited that business in 2008. |
Income Taxes
The provision for income taxes in the 2012 third quarter was $28.3 million. This compared with a provision for income taxes of $49.3 million in the 2012 second quarter. The effective tax rates for the 2012 third and second quarter were 14.4% and 24.4%, respectively. At September 30, 2012, we had a net deferred tax asset of $201.5 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 September 30, 2012. As of September 30, 2012 and June 30, 2012, there was no disallowed deferred tax asset for regulatory capital purposes.
Credit Quality Performance Discussion
Credit quality performance in the 2012 third quarter reflected continued improvement. NALs declined 6% to $445.0 million, or 1.11% of total loans, compared to $474.2 million, or 1.19% of total loans, in the prior quarter. NALs increased due to $63 million of Chapter 7 bankruptcy consumer loans. Net charge-offs (NCOs) increased compared to the prior quarter solely as a result of the $33.0 million impact to charge-offs related to Chapter 7 bankruptcy consumer loans. NPAs declined $13.5 million, or 3%, compared to the prior quarter as the improvement in NALs was partially offset by an increase in commercial OREO.
7
Net Charge-Offs (NCOs)
Table 7 Net Charge-Offs
2012 | 2011 | |||||||||||||||||||
Third | Second | First | Fourth | Third | ||||||||||||||||
(in millions) |
Quarter | Quarter | Quarter | Quarter | Quarter | |||||||||||||||
Net Charge-offs |
||||||||||||||||||||
Commercial and industrial |
$ | 13.0 | $ | 15.7 | $ | 28.5 | $ | 10.9 | $ | 17.9 | ||||||||||
Commercial real estate |
17.4 | 29.2 | 10.5 | 28.4 | 24.4 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total commercial |
30.4 | 44.9 | 39.0 | 39.3 | 42.3 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Automobile |
4.0 | 0.4 | 3.1 | 4.2 | 3.9 | |||||||||||||||
Home equity |
46.6 | 21.0 | 23.7 | 23.4 | 26.2 | |||||||||||||||
Residential mortgage |
16.9 | 10.8 | 10.6 | 9.7 | 11.6 | |||||||||||||||
Other consumer |
7.2 | 7.1 | 6.6 | 7.2 | 6.6 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total consumer |
74.7 | 39.4 | 44.0 | 44.6 | 48.2 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total net charge-offs |
$ | 105.1 | $ | 84.2 | $ | 83.0 | $ | 83.9 | $ | 90.6 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net Charge-offsannualized percentages |
||||||||||||||||||||
Commercial and industrial |
0.32 | % | 0.39 | % | 0.77 | % | 0.31 | % | 0.52 | % | ||||||||||
Commercial real estate |
1.21 | 1.92 | 0.72 | 1.91 | 1.60 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total commercial |
0.55 | 0.81 | 0.75 | 0.78 | 0.86 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Automobile |
0.40 | 0.04 | 0.27 | 0.30 | 0.25 | |||||||||||||||
Home equity |
2.23 | 1.01 | 1.15 | 1.15 | 1.31 | |||||||||||||||
Residential mortgage |
1.30 | 0.82 | 0.82 | 0.77 | 0.97 | |||||||||||||||
Other consumer |
6.49 | 6.15 | 5.45 | 5.66 | 5.05 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total consumer |
1.65 | 0.83 | 0.95 | 0.92 | 0.99 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total net charge-offs |
1.05 | % | 0.82 | % | 0.85 | % | 0.85 | % | 0.92 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
Total NCOs for the 2012 third quarter were $105.1 million, or an annualized 1.05% of average total loans and leases. This was up $20.9 million, or 25%, from $84.2 million, or an annualized 0.82%, in the prior quarter. Of the current quarters NCOs, $33.0 million were related to Chapter 7 bankruptcy consumer loans.
Total C&I NCOs for the 2012 third quarter were $13.0 million, or an annualized 0.32%, down 17% from $15.7 million, or an annualized 0.39% of related loans, in the prior quarter.
Current quarter CRE net charge-offs were $17.4 million, or an annualized 1.21% of average CRE loans. This was down $11.8 million, or 40%, from $29.2 million, or an annualized 1.92%, in the prior quarter.
Automobile loan and lease net charge-offs were $4.0 million, or an annualized 0.40% of related average balances, up from $0.4 million, or an annualized 0.04%, in the prior quarter. Of the current quarters NCOs, $2.0 million were related to Chapter 7 bankruptcy consumer loans.
Residential mortgage net charge-offs in the third quarter were $16.9 million, up from $10.8 million in the prior quarter. On an annualized basis, residential mortgage net charge-offs represented 1.30% of related loans, up from 0.82% of related loans in the prior quarter. Of the current quarters NCOs, $8.0 million were related to Chapter 7 bankruptcy consumer loans.
Home equity net charge-offs were $46.6 million, or an annualized 2.23% of related average balances, up 121% from $21.0 million, or an annualized 1.01%, in the prior quarter. Of the current quarters NCOs, $23.1 million were related to Chapter 7 bankruptcy consumer loans.
8
Nonaccrual Loans (NALs) and Nonperforming Assets (NPAs)
Table 8 Nonaccrual Loans and Nonperforming Assets
2012 | 2011 | |||||||||||||||||||
(in millions) |
Sep. 30 | Jun. 30 | Mar. 31 | Dec. 31 | Sep. 30 | |||||||||||||||
Nonaccrual loans and leases (NALs): |
| |||||||||||||||||||
Commercial and industrial |
$ | 109.5 | $ | 133.7 | $ | 142.5 | $ | 201.8 | $ | 209.6 | ||||||||||
Commercial real estate |
149.0 | 219.4 | 205.1 | 229.9 | 257.1 | |||||||||||||||
Automobile |
11.8 | | | | | |||||||||||||||
Residential mortgage |
123.1 | 75.0 | 74.1 | 68.7 | 61.1 | |||||||||||||||
Home equity |
51.7 | 46.0 | 45.8 | 40.7 | 37.2 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total nonaccrual loans and leases (NALs) (1) |
445.0 | 474.2 | 467.6 | 541.1 | 565.0 | |||||||||||||||
Other real estate, net: |
| | | |||||||||||||||||
Residential (2) |
23.6 | 21.5 | 31.9 | 20.3 | 18.6 | |||||||||||||||
Commercial |
30.6 | 17.1 | 16.9 | 18.1 | 19.4 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total other real estate, net |
54.2 | 38.6 | 48.7 | 38.4 | 38.0 | |||||||||||||||
Other NPAs (3) |
10.5 | 10.5 | 10.8 | 10.8 | 11.0 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total nonperforming assets (NPAs) (2) |
$ | 509.7 | $ | 523.3 | $ | 527.1 | $ | 590.3 | $ | 614.0 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NAL ratio (4) |
1.11 | % | 1.19 | % | 1.15 | % | 1.39 | % | 1.45 | % | ||||||||||
NPA ratio (5) |
1.26 | 1.31 | 1.29 | 1.51 | 1.57 |
(1) | All loans acquired as part of the FDIC-assisted Fidelity Bank acquisition accrue interest as performing loans or as purchased impaired loans in accordance with ASC 310-30; therefore, none of the acquired loans were reported nonaccrual on March 31, 2012, June 30, 2012, and September 30, 2012. |
(2) | Residential real estate owned acquired in the FDIC-assisted Fidelity Bank acquisition is reflected in the above table effective March 31, 2012. |
(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 $445.0 million at September 30, 2012 and represented 1.11% of total loans and leases. This was down $29.1 million, or 6%, from $474.2 million, or 1.19% of total loans and leases, at the end of the prior quarter. Total NALs included $63.0 million of Chapter 7 bankruptcy consumer loans.
C&I NALs decreased $24.2 million, or 18%, from the end of the prior quarter, with almost half of the decline associated with loans returned to accrual status, reflecting a continuation of successful workout strategies.
CRE NALs decreased $70.4 million, or 32%, from the end of the prior quarter, reflecting continued improvement in the underlying asset quality of the portfolio.
Automobile NALs increased from zero at the end of the prior quarter to $11.8 million, solely reflecting the Chapter 7 bankruptcy consumer loans.
Residential mortgage NALs increased $48.1 million, or 64%, from the end of the prior quarter, reflecting $46.3 million of Chapter 7 bankruptcy consumer loans.
Home equity NALs increased $5.6 million, or 12%, from the end of the prior quarter, reflecting $4.9 million of Chapter 7 bankruptcy consumer loans.
Total other real estate owned increased $15.6 million, or 40%, primarily reflecting the inclusion of one commercial property.
Nonperforming assets (NPAs), which include NALs, were $509.7 million at September 30, 2012 and represented 1.26% of related assets. This was a $13.5 million, or 3%, decrease from $523.3 million, or 1.31% of related assets, at the end of the prior quarter. NPAs included $63.0 million of Chapter 7 bankruptcy consumer loans.
9
Table 9 Accruing Loans 90 Days Past Due and Troubled Debt Restructured Loans
2012 | 2011 | |||||||||||||||||||
(in millions) |
Sep. 30 | Jun. 30 | Mar. 31 | Dec. 31 | Sep. 30 | |||||||||||||||
Accruing loans and leases past due 90 days or more: |
||||||||||||||||||||
Total excluding loans guaranteed by the U.S. Government |
$ | 108.2 | $ | 95.6 | $ | 60.6 | $ | 73.6 | $ | 61.0 | ||||||||||
Loans guaranteed by the U.S. Government |
87.5 | 85.7 | 94.6 | 96.7 | 84.4 | |||||||||||||||
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Total accruing loans and leases past due 90 days or more, including loans guaranteed by the U.S. |
$ | 195.7 | $ | 181.2 | $ | 155.1 | $ | 170.4 | $ | 145.4 | ||||||||||
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Ratios (1) |
||||||||||||||||||||
Excluding loans guaranteed by the U.S. government |
0.27 | % | 0.24 | % | 0.15 | % | 0.19 | % | 0.16 | |||||||||||
Guaranteed by U.S. government |
0.22 | 0.21 | 0.23 | 0.25 | 0.21 | |||||||||||||||
Including loans guaranteed by the U.S. government |
0.49 | 0.45 | 0.38 | 0.44 | 0.37 | |||||||||||||||
Accruing troubled debt restructured loans: |
||||||||||||||||||||
Commercial and industrial |
$ | 55.8 | $ | 57.0 | $ | 53.8 | $ | 54.0 | $ | 77.5 | ||||||||||
Commercial real estate |
222.2 | 202.2 | 231.9 | 250.0 | 244.1 | |||||||||||||||
Automobile |
33.7 | 34.5 | 35.5 | 36.6 | 37.4 | |||||||||||||||
Home equity |
92.8 | 67.0 | 59.3 | 52.2 | 47.7 | |||||||||||||||
Residential mortgage |
280.9 | 299.0 | 294.8 | 309.7 | 304.4 | |||||||||||||||
Other Consumer |
2.6 | 3.0 | 4.2 | 6.1 | 4.5 | |||||||||||||||
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Total accruing troubled debt restructured loans |
$ | 688.0 | $ | 662.7 | $ | 679.6 | $ | 708.6 | $ | 715.6 | ||||||||||
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Nonaccruing troubled debt restructured loans: |
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Commercial and industrial |
28.9 | 35.5 | 26.9 | 48.6 | 27.4 | |||||||||||||||
Commercial real estate |
20.3 | 55.0 | 39.6 | 22.0 | 46.9 | |||||||||||||||
Automobile |
11.8 | | | | | |||||||||||||||
Home equity |
7.8 | 0.4 | 0.3 | 0.4 | 0.2 | |||||||||||||||
Residential mortgages |
83.2 | 28.3 | 29.5 | 26.1 | 20.9 | |||||||||||||||
Other Consumer |
0.1 | 0.1 | 0.1 | 0.1 | 0.1 | |||||||||||||||
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Total nonaccruing troubled debt restructured loans |
152.0 | 119.4 | 96.5 | 97.1 | 95.4 | |||||||||||||||
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Total troubled debt restructured loans |
$ | 840.0 | $ | 782.0 | $ | 776.1 | $ | 805.7 | $ | 811.0 | ||||||||||
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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 $108.2 million at September 30, 2012, up $12.7 million, or 13%, from the end of the prior quarter, and up $47.2 million, or 77%, from the end of the year-ago period. On this same basis, the over 90-day delinquency ratio was 0.27% at September 30, 2012, up 3 basis points from the end of the prior quarter and up 11 basis points from the end of the year-ago quarter.
Total troubled debt restructured loans were $840.0 million at September 30, 2012, up $57.9 million, or 7%, from June 30, 2012 and included $71.0 million of Chapter 7 bankruptcy consumer loans. Huntington continues to be proactive in the identification and treatment of troubled debts in both the commercial and retail portfolios.
Allowance for Credit Losses
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.
10
Table 10 Allowance for Credit Losses
2012 | 2011 | |||||||||||||||||||
(in millions) |
Sep. 30 | Jun. 30 | Mar. 31, | Dec. 31 | Sep. 30 | |||||||||||||||
Allow ance for loan and lease losses (ALLL) |
$ | 789.1 | $ | 859.6 | $ | 913.1 | $ | 964.8 | $ | 1,019.7 | ||||||||||
Allow ance for unfunded loan commitments and letters of credit |
53.6 | 51.0 | 50.9 | 48.5 | 38.8 | |||||||||||||||
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Allowance for credit losses (ACL) |
$ | 842.7 | $ | 910.6 | $ | 964.0 | $ | 1,013.3 | $ | 1,058.5 | ||||||||||
ALLL as a % of: |
||||||||||||||||||||
Total loans and leases |
1.96 | % | 2.15 | % | 2.24 | % | 2.48 | % | 2.61 | % | ||||||||||
Nonaccrual loans and leases (NALs) |
177 | 181 | 195 | 178 | 180 | |||||||||||||||
Nonperforming assets (NPAs) |
155 | 164 | 173 | 163 | 166 | |||||||||||||||
ACL as a % of: |
||||||||||||||||||||
Total loans and leases |
2.09 | % | 2.28 | % | 2.37 | % | 2.60 | % | 2.71 | % | ||||||||||
Nonaccrual loans and leases (NALs) |
189 | 192 | 206 | 187 | 187 | |||||||||||||||
Nonperforming assets (NPAs) |
165 | 174 | 183 | 172 | 172 |
At September 30, 2012, the ALLL was $789.1 million, down $70.5 million, or 8%, from $859.6 million at the end of the prior quarter. Expressed as a percent of period-end loans and leases, the ALLL ratio at September 30, 2012, was 1.96%, down from 2.15% at June 30, 2012. The ALLL as a percent of NALs decreased to 177% at September 30, 2012, from 181% at June 30, 2012.
At September 30, 2012, the AULC was $53.6 million, up $2.6 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 September 30, 2012, was 2.09%, down from 2.28% at the end of the prior quarter. The ACL at the end of the 2012 third quarter as a percent of NALs decreased to 189% from 192% at the end of the prior quarter.
Capital
Table 11 Capital Ratios
2012 | 2011 | |||||||||||||||||||
(in millions) |
Sep. 30 | Jun. 30 | Mar. 31 | Dec. 31, | Sep. 30 | |||||||||||||||
Tangible common equity / tangible assets ratio |
8.74 | % | 8.41 | % | 8.33 | % | 8.30 | % | 8.22 | % | ||||||||||
Tier 1 common risk-based capital ratio |
10.28 | % | 10.08 | % | 10.15 | % | 10.00 | % | 10.17 | % | ||||||||||
Regulatory Tier 1 risk-based capital ratio |
11.88 | % | 11.93 | % | 12.22 | % | 12.11 | % | 12.37 | % | ||||||||||
Excess over 6.0% (1) |
$ | 2,831 | $ | 2,840 | $ | 2,906 | $ | 2,804 | $ | 2,827 | ||||||||||
Regulatory Total risk-based capital ratio |
14.36 | % | 14.42 | % | 14.76 | % | 14.77 | % | 15.11 | % | ||||||||||
Excess over 10.0% (1) |
$ | 2,100 | $ | 2,117 | $ | 2,224 | $ | 2,189 | $ | 2,268 | ||||||||||
Total risk-w eighted assets |
$ | 48,154 | $ | 47,890 | $ | 46,716 | $ | 45,891 | $ | 44,376 |
(1) | Well-capitalized regulatory threshold |
The tangible common equity to tangible asset ratio at September 30, 2012 was 8.74%, up 33 basis points from the prior quarter. Our Tier 1 common risk-based capital ratio at quarter end was 10.28%, up from 10.08% at the end of the prior quarter. The regulatory Tier 1 risk-based capital ratio at September 30, 2012 was 11.88%, down from 11.93%, at June 30, 2012. This decline primarily reflected the redemption of $114.3 million in trust preferred securities and the repurchasing of 3.7 million shares.
11
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 implementation of the Budget Control Act of 2011 as well as 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.
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 third 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 company e.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 business e.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, when appropriate, 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.
12
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.
###
13
Exhibit 99.3
HUNTINGTON BANCSHARES INCORPORATED
Quarterly Financial Review
September 2012
Table of Contents
Quarterly Key Statistics |
1 | |||
Year To Date Key Statistics |
2 | |||
Key Statistics Footnotes |
3 | |||
Consolidated Balance Sheets |
4 | |||
Loans and Leases Composition |
5 | |||
Deposits Composition |
6 | |||
Consolidated Quarterly Average Balance Sheets |
7 | |||
Consolidated Quarterly Net Interest Margin Analysis |
8 - 9 | |||
Selected Quarterly Income Statement Data |
10 - 11 | |||
Quarterly Mortgage Banking Income |
12 | |||
Quarterly Credit Reserves Analysis |
13 | |||
Quarterly Net Charge-Off Analysis |
14 | |||
Quarterly Nonaccrual Loans and Leases (NALs) and Nonperforming Assets (NPAs) |
15 | |||
Quarterly Accruing Past Due Loans and Leases and Accruing Troubled Debt Restructured Loans |
16 | |||
Quarterly Common Stock Summary, Capital, and Other Data |
17 | |||
Consolidated Year To Date Average Balance Sheets |
18 | |||
Consolidated Year To Date Net Interest Margin Analysis |
19 - 20 | |||
Selected Year To Date Income Statement Data |
21 - 22 | |||
Year To Date Mortgage Banking Income |
23 | |||
Year To Date Credit Reserves Analysis |
24 | |||
Year To Date Net Charge-Off Analysis |
25 | |||
Year To Date Nonaccrual Loans and Leases (NALs) and Nonperforming Assets (NPAs) |
26 | |||
Year To Date Accruing Past Due Loans and Leases and Accruing Troubled Debt Restructured Loans |
27 |
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) |
Third | Second | Third | 2Q12 | 3Q11 | |||||||||||||||||||
Net interest income |
$ | 430,298 | $ | 428,962 | $ | 406,478 | | % | 6 | % | ||||||||||||||
Provision for credit losses |
37,004 | 36,520 | 43,586 | 1 | (15 | ) | ||||||||||||||||||
Noninterest income |
261,067 | 253,819 | 258,559 | 3 | 1 | |||||||||||||||||||
Noninterest expense |
458,303 | 444,269 | 439,118 | 3 | 4 | |||||||||||||||||||
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Income before income taxes |
196,058 | 201,992 | 182,333 | (3 | ) | 8 | ||||||||||||||||||
Provision for income taxes |
28,291 | 49,286 | 38,942 | (43 | ) | (27 | ) | |||||||||||||||||
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Net income |
$ | 167,767 | $ | 152,706 | $ | 143,391 | 10 | % | 17 | % | ||||||||||||||
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Dividends on preferred shares |
7,983 | 7,984 | 7,703 | | 4 | |||||||||||||||||||
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Net income applicable to common shares |
$ | 159,784 | $ | 144,722 | $ | 135,688 | 10 | % | 18 | % | ||||||||||||||
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Net income per common share - diluted |
$ | 0.19 | $ | 0.17 | $ | 0.16 | 12 | % | 19 | % | ||||||||||||||
Cash dividends declared per common share |
0.04 | 0.04 | 0.04 | | | |||||||||||||||||||
Book value per common share at end of period |
6.34 | 6.13 | 5.83 | 3 | 9 | |||||||||||||||||||
Tangible book value per common share at end of period |
5.71 | 5.49 | 5.17 | 4 | 10 | |||||||||||||||||||
Average common shares - basic |
857,871 | 862,261 | 863,911 | (1 | ) | (1 | ) | |||||||||||||||||
Average common shares - diluted |
863,588 | 867,551 | 867,633 | | | |||||||||||||||||||
Return on average assets |
1.19 | % | 1.10 | % | 1.05 | % | ||||||||||||||||||
Return on average common shareholders equity |
11.9 | 11.1 | 10.8 | |||||||||||||||||||||
Return on average tangible common shareholders equity(2) |
13.9 | 13.1 | 13.0 | |||||||||||||||||||||
Net interest margin(3) |
3.38 | 3.42 | 3.34 | |||||||||||||||||||||
Efficiency ratio(4) |
64.5 | 62.8 | 63.5 | |||||||||||||||||||||
Effective tax rate |
14.4 | 24.4 | 21.4 | |||||||||||||||||||||
Average loans and leases |
$ | 40,119,938 | $ | 41,178,520 | $ | 39,297,235 | (3 | ) | 2 | |||||||||||||||
Average loans and leases - linked quarter annualized growth rate |
(10.3 | )% | 20.8 | % | 7.9 | % | ||||||||||||||||||
Average earning assets |
$ | 51,330,241 | $ | 51,050,479 | $ | 48,777,430 | 1 | 5 | ||||||||||||||||
Average total assets |
56,138,175 | 55,837,396 | 54,192,913 | 1 | 4 | |||||||||||||||||||
Average core deposits(5) |
43,763,695 | 42,780,749 | 39,957,440 | 2 | 10 | |||||||||||||||||||
Average core deposits - linked quarter annualized growth rate |
9.2 | % | 13.5 | % | 8.7 | % | ||||||||||||||||||
Average shareholders equity |
$ | 5,730,951 | $ | 5,617,615 | $ | 5,332,493 | 2 | 7 | ||||||||||||||||
Total assets at end of period |
56,443,000 | 56,622,959 | 54,978,707 | | 3 | |||||||||||||||||||
Total shareholders equity at end of period |
5,807,604 | 5,649,231 | 5,400,479 | 3 | 8 | |||||||||||||||||||
Net charge-offs (NCOs) |
105,095 | 84,245 | 90,555 | 25 | 16 | |||||||||||||||||||
NCOs as a % of average loans and leases |
1.05 | % | 0.82 | % | 0.92 | % | ||||||||||||||||||
Nonaccrual loans and leases (NALs) |
$ | 445,046 | $ | 474,166 | $ | 565,003 | (6 | ) | (21 | ) | ||||||||||||||
NAL ratio |
1.11 | % | 1.19 | % | 1.45 | % | ||||||||||||||||||
Nonperforming assets (NPAs)(6) |
$ | 509,728 | $ | 523,250 | $ | 613,981 | (3 | ) | (17 | ) | ||||||||||||||
NPA ratio(6) |
1.26 | % | 1.31 | % | 1.57 | % | ||||||||||||||||||
Allowance for loan and lease losses (ALLL) as a % of total loans and leases at the end of period |
1.96 | 2.15 | 2.61 | |||||||||||||||||||||
ALLL plus allowance for unfunded loan commitments and letters of credit (ACL) as a % of total loans and leases at the end of period |
2.09 | 2.28 | 2.71 | |||||||||||||||||||||
ACL as a % of NALs |
189 | 192 | 187 | |||||||||||||||||||||
ACL as a % of NPAs |
165 | 174 | 172 | |||||||||||||||||||||
Tier 1 leverage ratio(7) |
10.29 | 10.34 | 10.24 | |||||||||||||||||||||
Tier 1 common risk-based capital ratio(7) |
10.28 | 10.08 | 10.17 | |||||||||||||||||||||
Tier 1 risk-based capital ratio(7) |
11.88 | 11.93 | 12.37 | |||||||||||||||||||||
Total risk-based capital ratio(7) |
14.36 | 14.42 | 15.11 | |||||||||||||||||||||
Tangible common equity / risk-weighted assets ratio(7) |
10.14 | 9.85 | 10.08 | |||||||||||||||||||||
Tangible equity / tangible assets ratio(8) |
9.43 | 9.10 | 8.88 | |||||||||||||||||||||
Tangible common equity / tangible assets ratio(9) |
8.74 | 8.41 | 8.22 |
See Notes to the Year to Date and Quarterly Key Statistics.
1
HUNTINGTON BANCSHARES INCORPORATED
Year to Date Key Statistics(1)
(Unaudited)
Nine Months Ended September 30, | Change | |||||||||||||||||
(dollar amounts in thousands, except per share amounts) |
2012 | 2011 | Amount | Percent | ||||||||||||||
Net interest income |
$ | 1,276,469 | $ | 1,214,145 | $ | 62,324 | 5 | % | ||||||||||
Provision for credit losses |
107,930 | 128,768 | (20,838 | ) | (16 | ) | ||||||||||||
Noninterest income |
800,206 | 751,271 | 48,935 | 7 | ||||||||||||||
Noninterest expense |
1,365,248 | 1,298,226 | 67,022 | 5 | ||||||||||||||
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Income before income taxes |
603,497 | 538,422 | 65,075 | 12 | ||||||||||||||
Provision for income taxes |
129,754 | 122,667 | 7,087 | 6 | ||||||||||||||
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Net Income |
$ | 473,743 | $ | 415,755 | $ | 57,988 | 14 | % | ||||||||||
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Dividends on preferred shares |
24,016 | 23,110 | 906 | 4 | ||||||||||||||
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Net income applicable to common shares |
$ | 449,727 | $ | 392,645 | $ | 57,082 | 15 | % | ||||||||||
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Net income per common share - diluted |
$ | 0.52 | $ | 0.45 | $ | 0.07 | 16 | % | ||||||||||
Cash dividends declared per common share |
0.12 | 0.06 | 0.06 | 100 | ||||||||||||||
Average common shares - basic |
861,543 | 863,542 | (1,999 | ) | | |||||||||||||
Average common shares - diluted |
866,768 | 867,446 | (678 | ) | | |||||||||||||
Return on average assets |
1.14 | % | 1.04 | % | ||||||||||||||
Return on average common shareholders equity |
11.5 | 10.9 | ||||||||||||||||
Return on average tangible common shareholders equity(2) |
13.5 | 13.2 | ||||||||||||||||
Net interest margin(3) |
3.40 | 3.39 | ||||||||||||||||
Efficiency ratio(4) |
63.7 | 63.6 | ||||||||||||||||
Effective tax rate |
21.5 | 22.8 | ||||||||||||||||
Average loans and leases |
$ | 40,147,614 | $ | 38,647,550 | $ | 1,500,063 | 4 | |||||||||||
Average earning assets |
50,717,991 | 48,381,447 | 2,336,544 | 5 | ||||||||||||||
Average total assets |
55,546,026 | 53,446,679 | 2,099,348 | 4 | ||||||||||||||
Average core deposits(5) |
42,647,918 | 39,448,587 | 3,199,331 | 8 | ||||||||||||||
Average shareholders equity |
5,614,026 | 5,167,607 | 446,420 | 9 | ||||||||||||||
Net charge-offs (NCOs) |
272,332 | 353,172 | (80,840 | ) | (23 | ) | ||||||||||||
NCOs as a % of average loans and leases |
0.90 | % | 1.22 | % |
See Notes to the Year to Date and Quarterly Key Statistics.
2
Notes to the Year to Date and 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) | NPAs include residential real estate owned acquired as part of the FDIC-assisted Fidelity Bank acquisition. |
(7) | September 30, 2012, figures are estimated. |
(8) | 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. |
(9) | 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. |
3
Huntington Bancshares Incorporated
Consolidated Balance Sheets
Change | ||||||||||||||||||||||||
2012 | 2011 | September 12 vs 11 | ||||||||||||||||||||||
(dollar amounts in thousands, except number of shares) |
September 30, | December 31, | September 30, | Amount | Percent | |||||||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||||||||
Assets |
||||||||||||||||||||||||
Cash and due from banks |
$ | 797,601 | $ | 1,115,968 | $ | 2,190,276 | $ | (1,392,675 | ) | (64 | )% | |||||||||||||
Interest-bearing deposits in banks |
65,635 | 90,943 | 105,454 | (39,819 | ) | (38 | ) | |||||||||||||||||
Trading account securities |
91,970 | 45,899 | 85,711 | 6,259 | 7 | |||||||||||||||||||
Loans held for sale |
1,852,919 | 1,618,391 | 334,606 | 1,518,313 | 454 | |||||||||||||||||||
Available-for-sale and other securities |
7,778,568 | 8,078,014 | 8,713,530 | (934,962 | ) | (11 | ) | |||||||||||||||||
Held-to-maturity securities |
1,582,150 | 640,551 | 658,250 | 923,900 | 140 | |||||||||||||||||||
Loans and leases(1) |
40,260,417 | 38,923,783 | 39,011,894 | 1,248,523 | 3 | |||||||||||||||||||
Allowance for loan and lease losses |
(789,142 | ) | (964,828 | ) | (1,019,710 | ) | 230,568 | (23 | ) | |||||||||||||||
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|
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|
|
|
|||||||||||||||
Net loans and leases |
39,471,275 | 37,958,955 | 37,992,184 | 1,479,091 | 4 | |||||||||||||||||||
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|
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Bank owned life insurance |
1,586,902 | 1,549,783 | 1,537,923 | 48,979 | 3 | |||||||||||||||||||
Premises and equipment |
590,750 | 564,429 | 543,324 | 47,426 | 9 | |||||||||||||||||||
Goodwill |
444,268 | 444,268 | 444,268 | | | |||||||||||||||||||
Other intangible assets |
143,804 | 175,302 | 188,477 | (44,673 | ) | (24 | ) | |||||||||||||||||
Accrued income and other assets |
2,037,158 | 2,168,149 | 2,184,704 | (147,546 | ) | (7 | ) | |||||||||||||||||
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|
|||||||||||||||
Total assets |
$ | 56,443,000 | $ | 54,450,652 | $ | 54,978,707 | $ | 1,464,293 | 3 | % | ||||||||||||||
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|||||||||||||||
Liabilities and shareholders equity |
||||||||||||||||||||||||
Liabilities |
||||||||||||||||||||||||
Deposits(2) |
$ | 46,741,286 | $ | 43,279,625 | $ | 43,219,727 | $ | 3,521,559 | 8 | % | ||||||||||||||
Short-term borrowings |
1,259,771 | 1,441,092 | 2,224,986 | (965,215 | ) | (43 | ) | |||||||||||||||||
Federal Home Loan Bank advances |
9,406 | 362,972 | 14,157 | (4,751 | ) | (34 | ) | |||||||||||||||||
Other long-term debt |
185,613 | 1,231,517 | 1,421,518 | (1,235,905 | ) | (87 | ) | |||||||||||||||||
Subordinated notes |
1,306,273 | 1,503,368 | 1,537,293 | (231,020 | ) | (15 | ) | |||||||||||||||||
Accrued expenses and other liabilities |
1,133,047 | 1,213,978 | 1,160,547 | (27,500 | ) | (2 | ) | |||||||||||||||||
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|||||||||||||||
Total liabilities |
50,635,396 | 49,032,552 | 49,578,228 | 1,057,168 | 2 | |||||||||||||||||||
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Shareholders equity |
||||||||||||||||||||||||
Preferred stock - authorized 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 | | 23,785 | 100 | |||||||||||||||||||
Common stock - Par value of $0.01 |
8,567 | 8,656 | 8,652 | (85 | ) | (1 | ) | |||||||||||||||||
Capital surplus |
7,551,509 | 7,596,809 | 7,594,090 | (42,581 | ) | (1 | ) | |||||||||||||||||
Less treasury shares, at cost |
(10,817 | ) | (10,255 | ) | (10,161 | ) | (656 | ) | 6 | |||||||||||||||
Accumulated other comprehensive loss |
(84,542 | ) | (173,763 | ) | (80,404 | ) | ||||||||||||||||||
Retained earnings |
(2,043,405 | ) | (2,389,639 | ) | (2,474,205 | ) | 430,800 | (17 | ) | |||||||||||||||
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|
|||||||||||||||
Total shareholders equity |
5,807,604 | 5,418,100 | 5,400,479 | 407,125 | 8 | |||||||||||||||||||
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|
|||||||||||||||
Total liabilities and shareholders equity |
$ | 56,443,000 | $ | 54,450,652 | $ | 54,978,707 | $ | 1,464,293 | 3 | % | ||||||||||||||
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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 |
856,748,584 | 865,584,517 | 865,204,511 | |||||||||||||||||||||
Common shares outstanding |
855,485,376 | 864,406,152 | 864,074,883 | |||||||||||||||||||||
Treasury shares outstanding |
1,263,208 | 1,178,365 | 1,129,628 | |||||||||||||||||||||
Preferred shares issued |
1,967,071 | 1,967,071 | 1,967,071 | |||||||||||||||||||||
Preferred shares outstanding |
398,007 | 398,007 | 362,507 |
(1) | See page 5 for detail of loans and leases. |
(2) | See page 6 for detail of deposits. |
4
Huntington Bancshares Incorporated
Loans and Leases Composition
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
(dollar amounts in millions) |
September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||||||||||||||||||||||
Ending Balances by Type: |
||||||||||||||||||||||||||||||||||||||||
Commercial:(1) |
||||||||||||||||||||||||||||||||||||||||
Commercial and industrial |
$ | 16,478 | 41 | % | $ | 16,322 | 41 | % | $ | 15,838 | 39 | % | $ | 14,699 | 38 | % | $ | 13,939 | 36 | % | ||||||||||||||||||||
Commercial real estate: |
||||||||||||||||||||||||||||||||||||||||
Construction |
541 | 1 | 591 | 1 | 597 | 1 | 580 | 1 | 520 | 1 | ||||||||||||||||||||||||||||||
Commercial |
4,956 | 12 | 5,317 | 13 | 5,443 | 13 | 5,246 | 13 | 5,414 | 14 | ||||||||||||||||||||||||||||||
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|
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Commercial real estate |
5,497 | 13 | 5,908 | 14 | 6,040 | 14 | 5,826 | 14 | 5,934 | 15 | ||||||||||||||||||||||||||||||
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|
|||||||||||||||||||||
Total commercial |
21,975 | 54 | 22,230 | 55 | 21,878 | 53 | 20,525 | 52 | 19,873 | 51 | ||||||||||||||||||||||||||||||
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Consumer: |
||||||||||||||||||||||||||||||||||||||||
Automobile |
4,276 | 11 | 3,808 | 10 | 4,787 | 12 | 4,458 | 11 | 5,558 | 14 | ||||||||||||||||||||||||||||||
Home equity |
8,381 | 21 | 8,344 | 21 | 8,261 | 20 | 8,215 | 21 | 8,079 | 21 | ||||||||||||||||||||||||||||||
Residential mortgage |
5,192 | 13 | 5,123 | 13 | 5,284 | 13 | 5,228 | 13 | 4,986 | 13 | ||||||||||||||||||||||||||||||
Other consumer |
436 | 1 | 454 | 1 | 469 | 2 | 498 | 3 | 516 | 1 | ||||||||||||||||||||||||||||||
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|
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Total consumer |
18,285 | 46 | 17,729 | 45 | 18,801 | 47 | 18,399 | 48 | 19,139 | 49 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Total loans and leases |
$ | 40,260 | 100 | % | $ | 39,959 | 100 | % | $ | 40,679 | 100 | % | $ | 38,924 | 100 | % | $ | 39,012 | 100 | % | ||||||||||||||||||||
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Ending Balances by Business Segment: |
||||||||||||||||||||||||||||||||||||||||
Retail and Business Banking |
$ | 12,656 | 31 | % | $ | 12,714 | 32 | % | $ | 12,432 | 31 | % | $ | 12,361 | 32 | % | $ | 12,183 | 31 | % | ||||||||||||||||||||
Regional and Commercial Banking |
10,463 | 26 | 10,420 | 26 | 9,936 | 24 | 9,134 | 23 | 8,723 | 22 | ||||||||||||||||||||||||||||||
AFCRE |
11,019 | 27 | 10,892 | 27 | 11,698 | 29 | 11,375 | 29 | 12,318 | 32 | ||||||||||||||||||||||||||||||
WGH |
6,053 | 16 | 5,904 | 15 | 5,968 | 14 | 5,952 | 16 | 5,713 | 15 | ||||||||||||||||||||||||||||||
Treasury / Other |
69 | | 29 | | 645 | 2 | 102 | | 75 | | ||||||||||||||||||||||||||||||
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Total loans and leases |
$ | 40,260 | 100 | % | $ | 39,959 | 100 | % | $ | 40,679 | 100 | % | $ | 38,924 | 100 | % | $ | 39,012 | 100 | % | ||||||||||||||||||||
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2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
Third | Second | First | Fourth | Third | ||||||||||||||||||||||||||||||||||||
Average Balances by Business Segment: |
||||||||||||||||||||||||||||||||||||||||
Retail and Business Banking |
$ | 12,703 | 32 | % | $ | 12,977 | 32 | % | $ | 12,420 | 32 | % | $ | 12,302 | 31 | % | $ | 12,126 | 31 | % | ||||||||||||||||||||
Regional and Commercial Banking |
10,427 | 26 | 10,229 | 25 | 9,250 | 24 | 8,902 | 23 | 8,495 | 22 | ||||||||||||||||||||||||||||||
AFCRE |
10,949 | 27 | 11,891 | 29 | 11,468 | 29 | 12,496 | 32 | 13,101 | 33 | ||||||||||||||||||||||||||||||
WGH |
5,993 | 15 | 6,007 | 14 | 5,920 | 15 | 5,731 | 14 | 5,522 | 14 | ||||||||||||||||||||||||||||||
Treasury / Other |
48 | | 75 | | 87 | | 87 | | 53 | | ||||||||||||||||||||||||||||||
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Total loans and leases |
$ | 40,120 | 100 | % | $ | 41,179 | 100 | % | $ | 39,145 | 100 | % | $ | 39,518 | 100 | % | $ | 39,297 | 100 | % | ||||||||||||||||||||
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(1) | As defined by regulatory guidance, there were no commercial loans outstanding that would be considered a concentration of lending to a particular industry or group of industries. |
5
Huntington Bancshares Incorporated
Deposits Composition
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
(dollar amounts in millions) |
September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||||||||||||||||||||||
Ending Balances by Type: |
||||||||||||||||||||||||||||||||||||||||
Demand deposits - noninterest-bearing |
$ | 12,680 | 27 | % | $ | 12,324 | 27 | % | $ | 11,797 | 26 | % | $ | 11,158 | 26 | % | $ | 9,502 | 22 | % | ||||||||||||||||||||
Demand deposits - interest-bearing |
5,909 | 13 | 6,060 | 13 | 6,126 | 14 | 5,722 | 13 | 5,763 | 13 | ||||||||||||||||||||||||||||||
Money market deposits |
14,926 | 32 | 13,756 | 30 | 13,169 | 29 | 13,117 | 30 | 13,759 | 32 | ||||||||||||||||||||||||||||||
Savings and other domestic deposits |
4,949 | 11 | 4,961 | 11 | 4,954 | 11 | 4,698 | 11 | 4,711 | 11 | ||||||||||||||||||||||||||||||
Core certificates of deposit |
5,817 | 12 | 6,508 | 14 | 6,920 | 15 | 6,513 | 15 | 7,084 | 16 | ||||||||||||||||||||||||||||||
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Total core deposits |
44,281 | 95 | 43,609 | 95 | 42,966 | 95 | 41,208 | 95 | 40,819 | 94 | ||||||||||||||||||||||||||||||
Other domestic deposits of $250,000 or more |
352 | 1 | 260 | 1 | 325 | 1 | 390 | 1 | 421 | 1 | ||||||||||||||||||||||||||||||
Brokered deposits and negotiable CDs |
1,795 | 4 | 1,888 | 4 | 1,276 | 3 | 1,321 | 3 | 1,535 | 4 | ||||||||||||||||||||||||||||||
Deposits in foreign offices |
313 | | 319 | | 442 | 1 | 361 | 1 | 445 | 1 | ||||||||||||||||||||||||||||||
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Total deposits |
$ | 46,741 | 100 | % | $ | 46,076 | 100 | % | $ | 45,009 | 100 | % | $ | 43,280 | 100 | % | $ | 43,220 | 100 | % | ||||||||||||||||||||
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Total core deposits: |
||||||||||||||||||||||||||||||||||||||||
Commercial |
$ | 19,207 | 43 | % | $ | 18,324 | 42 | % | $ | 17,101 | 40 | % | $ | 16,366 | 40 | % | $ | 15,526 | 38 | % | ||||||||||||||||||||
Consumer |
25,074 | 57 | 25,285 | 58 | 25,865 | 60 | 24,842 | 60 | 25,293 | 62 | ||||||||||||||||||||||||||||||
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Total core deposits |
$ | 44,281 | 100 | % | $ | 43,609 | 100 | % | $ | 42,966 | 100 | % | $ | 41,208 | 100 | % | $ | 40,819 | 100 | % | ||||||||||||||||||||
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Ending Balances by Business Segment: |
||||||||||||||||||||||||||||||||||||||||
Retail and Business Banking |
$ | 28,220 | 60 | % | $ | 28,348 | 62 | % | $ | 27,935 | 62 | % | $ | 27,536 | 64 | % | $ | 28,095 | 65 | % | ||||||||||||||||||||
Regional and Commercial Banking |
6,205 | 13 | 5,333 | 12 | 4,748 | 11 | 4,683 | 11 | 4,173 | 10 | ||||||||||||||||||||||||||||||
AFCRE |
922 | 2 | 907 | 2 | 914 | 2 | 881 | 2 | 817 | 2 | ||||||||||||||||||||||||||||||
WGH |
9,816 | 22 | 9,782 | 20 | 9,632 | 21 | 9,115 | 21 | 9,013 | 21 | ||||||||||||||||||||||||||||||
Treasury / Other(1) |
1,578 | 3 | 1,706 | 4 | 1,780 | 4 | 1,065 | 2 | 1,122 | 2 | ||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Total deposits |
$ | 46,741 | 100 | % | $ | 46,076 | 100 | % | $ | 45,009 | 100 | % | $ | 43,280 | 100 | % | $ | 43,220 | 100 | % | ||||||||||||||||||||
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|||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||||||||||||||||||||||
Third | Second | First | Fourth | Third | ||||||||||||||||||||||||||||||||||||
Average Balances by Business Segment: |
||||||||||||||||||||||||||||||||||||||||
Retail and Business Banking |
$ | 28,248 | 61 | % | $ | 28,260 | 63 | % | $ | 27,452 | 63 | % | $ | 27,835 | 64 | % | $ | 28,290 | 67 | % | ||||||||||||||||||||
Regional and Commercial Banking |
5,715 | 12 | 4,762 | 11 | 4,680 | 11 | 4,467 | 10 | 3,902 | 9 | ||||||||||||||||||||||||||||||
AFCRE |
942 | 2 | 855 | 2 | 811 | 2 | 802 | 2 | 796 | 2 | ||||||||||||||||||||||||||||||
WGH |
9,735 | 21 | 9,783 | 21 | 9,450 | 22 | 9,406 | 21 | 8,243 | 20 | ||||||||||||||||||||||||||||||
Treasury / Other(1) |
1,658 | 4 | 1,197 | 3 | 1,072 | 2 | 1,093 | 3 | 1,047 | 2 | ||||||||||||||||||||||||||||||
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Total deposits |
$ | 46,298 | 100 | % | $ | 44,857 | 100 | % | $ | 43,465 | 100 | % | $ | 43,603 | 100 | % | $ | 42,278 | 100 | % | ||||||||||||||||||||
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(1) | Comprised primarily of national market deposits. |
6
Huntington Bancshares Incorporated
Consolidated Quarterly Average Balance Sheets
(Unaudited)
Average Balances | Change 3Q12 vs 3Q11 |
|||||||||||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||||||||||||
(dollar amounts in millions) |
Third | Second | First | Fourth | Third | Amount | Percent | |||||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||||
Interest-bearing deposits in banks |
$ | 82 | $ | 124 | $ | 100 | $ | 107 | $ | 164 | $ | (82 | ) | (50 | )% | |||||||||||||||
Trading account securities |
66 | 54 | 50 | 81 | 92 | (26 | ) | (28 | ) | |||||||||||||||||||||
Loans held for sale |
1,829 | 410 | 1,265 | 316 | 237 | 1,592 | 672 | |||||||||||||||||||||||
Available-for-sale and other securities: |
||||||||||||||||||||||||||||||
Taxable |
8,014 | 8,285 | 8,171 | 8,065 | 7,902 | 112 | 1 | |||||||||||||||||||||||
Tax-exempt |
423 | 387 | 404 | 409 | 421 | 2 | | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total available-for-sale and other securities |
8,437 | 8,672 | 8,575 | 8,474 | 8,323 | 114 | 1 | |||||||||||||||||||||||
Held-to-maturity securities - taxable |
796 | 611 | 632 | 650 | 665 | 131 | 20 | |||||||||||||||||||||||
Loans and leases:(1) |
||||||||||||||||||||||||||||||
Commercial: |
||||||||||||||||||||||||||||||
Commercial and industrial |
16,343 | 16,094 | 14,824 | 14,219 | 13,664 | 2,679 | 20 | |||||||||||||||||||||||
Commercial real estate: |
||||||||||||||||||||||||||||||
Construction |
569 | 584 | 598 | 533 | 670 | (101 | ) | (15 | ) | |||||||||||||||||||||
Commercial |
5,153 | 5,491 | 5,254 | 5,425 | 5,441 | (288 | ) | (5 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Commercial real estate |
5,722 | 6,075 | 5,852 | 5,958 | 6,111 | (389 | ) | (6 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total commercial |
22,065 | 22,169 | 20,676 | 20,177 | 19,775 | 2,290 | 12 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Consumer: |
||||||||||||||||||||||||||||||
Automobile |
4,065 | 4,985 | 4,576 | 5,639 | 6,211 | (2,146 | ) | (35 | ) | |||||||||||||||||||||
Home equity |
8,369 | 8,310 | 8,234 | 8,149 | 8,002 | 367 | 5 | |||||||||||||||||||||||
Residential mortgage |
5,177 | 5,253 | 5,174 | 5,043 | 4,788 | 389 | 8 | |||||||||||||||||||||||
Other consumer |
444 | 462 | 485 | 511 | 521 | (77 | ) | (15 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total consumer |
18,055 | 19,010 | 18,469 | 19,342 | 19,522 | (1,467 | ) | (8 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total loans and leases |
40,120 | 41,179 | 39,145 | 39,519 | 39,297 | 823 | 2 | |||||||||||||||||||||||
Allowance for loan and lease losses |
(855 | ) | (908 | ) | (961 | ) | (1,014 | ) | (1,066 | ) | 211 | (20 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net loans and leases |
39,265 | 40,271 | 38,184 | 38,505 | 38,231 | 1,034 | 3 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total earning assets |
51,330 | 51,050 | 49,767 | 49,147 | 48,778 | 2,552 | 5 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Cash and due from banks |
960 | 928 | 1,012 | 1,671 | 1,700 | (740 | ) | (44 | ) | |||||||||||||||||||||
Intangible assets |
597 | 609 | 613 | 625 | 639 | (42 | ) | (7 | ) | |||||||||||||||||||||
All other assets |
4,106 | 4,158 | 4,225 | 4,221 | 4,142 | (36 | ) | (1 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total assets |
$ | 56,138 | $ | 55,837 | $ | 54,656 | $ | 54,650 | $ | 54,193 | $ | 1,945 | 4 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Liabilities and shareholders equity |
||||||||||||||||||||||||||||||
Deposits: |
||||||||||||||||||||||||||||||
Demand deposits - noninterest-bearing |
$ | 12,329 | $ | 12,064 | $ | 11,273 | $ | 10,716 | $ | 8,719 | $ | 3,610 | 41 | % | ||||||||||||||||
Demand deposits - interest-bearing |
5,814 | 5,939 | 5,646 | 5,570 | 5,573 | 241 | 4 | |||||||||||||||||||||||
Money market deposits |
14,515 | 13,182 | 13,141 | 13,594 | 13,321 | 1,194 | 9 | |||||||||||||||||||||||
Savings and other domestic deposits |
4,975 | 4,978 | 4,817 | 4,706 | 4,752 | 223 | 5 | |||||||||||||||||||||||
Core certificates of deposit |
6,131 | 6,618 | 6,510 | 6,769 | 7,592 | (1,461 | ) | (19 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total core deposits |
43,764 | 42,781 | 41,387 | 41,355 | 39,957 | 3,807 | 10 | |||||||||||||||||||||||
Other domestic deposits of $250,000 or more |
300 | 298 | 347 | 405 | 387 | (87 | ) | (22 | ) | |||||||||||||||||||||
Brokered deposits and negotiable CDs |
1,878 | 1,421 | 1,301 | 1,410 | 1,533 | 345 | 23 | |||||||||||||||||||||||
Deposits in foreign offices |
356 | 357 | 430 | 434 | 401 | (45 | ) | (11 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total deposits |
46,298 | 44,857 | 43,465 | 43,604 | 42,278 | 4,020 | 10 | |||||||||||||||||||||||
Short-term borrowings |
1,329 | 1,391 | 1,512 | 1,728 | 2,251 | (922 | ) | (41 | ) | |||||||||||||||||||||
Federal Home Loan Bank advances |
107 | 626 | 419 | 29 | 285 | (178 | ) | (62 | ) | |||||||||||||||||||||
Subordinated notes and other long-term debt |
1,638 | 2,251 | 2,652 | 2,866 | 3,030 | (1,392 | ) | (46 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total interest-bearing liabilities |
37,043 | 37,061 | 36,775 | 37,511 | 39,125 | (2,082 | ) | (5 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
All other liabilities |
1,035 | 1,094 | 1,116 | 978 | 1,017 | 18 | 2 | |||||||||||||||||||||||
Shareholders equity |
5,731 | 5,618 | 5,492 | 5,445 | 5,332 | 399 | 7 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total liabilities and shareholders equity |
$ | 56,138 | $ | 55,837 | $ | 54,656 | $ | 54,650 | $ | 54,193 | $ | 1,945 | 4 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Includes nonaccrual loans. |
7
Huntington Bancshares Incorporated
Consolidated Quarterly Net Interest Margin - Interest Income / Expense (1)
(Unaudited)
Interest Income / Expense | ||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||
(dollar amounts in thousands) |
Third | Second | First | Fourth | Third | |||||||||||||||
Assets |
||||||||||||||||||||
Interest-bearing deposits in banks |
$ | 42 | $ | 97 | $ | 12 | $ | 15 | $ | 17 | ||||||||||
Trading account securities |
178 | 223 | 207 | 197 | 325 | |||||||||||||||
Federal funds sold and securities purchased under resale agreements |
| | | | | |||||||||||||||
Loans held for sale |
14,548 | 3,541 | 12,005 | 3,124 | 2,643 | |||||||||||||||
Available-for-sale and other securities: |
||||||||||||||||||||
Taxable |
44,191 | 48,245 | 48,824 | 47,784 | 47,946 | |||||||||||||||
Tax-exempt |
4,383 | 4,099 | 4,209 | 4,313 | 4,392 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total available-for-sale and other securities |
48,574 | 52,344 | 53,033 | 52,097 | 52,338 | |||||||||||||||
Held-to-maturity securities - taxable |
7,336 | 4,539 | 4,714 | 4,867 | 5,059 | |||||||||||||||
Loans and leases: |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Commercial and industrial |
162,998 | 162,419 | 150,397 | 145,825 | 144,151 | |||||||||||||||
Commercial real estate: |
||||||||||||||||||||
Construction |
5,583 | 5,397 | 5,831 | 6,513 | 6,620 | |||||||||||||||
Commercial |
50,704 | 54,554 | 50,750 | 54,220 | 54,429 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Commercial real estate |
56,287 | 59,951 | 56,581 | 60,733 | 61,049 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total commercial |
219,285 | 222,370 | 206,978 | 206,558 | 205,200 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Consumer: |
||||||||||||||||||||
Automobile |
49,718 | 57,971 | 55,435 | 68,283 | 76,488 | |||||||||||||||
Home equity |
89,388 | 89,358 | 88,582 | 89,876 | 89,112 | |||||||||||||||
Residential mortgage |
51,981 | 54,326 | 53,914 | 54,263 | 53,521 | |||||||||||||||
Other consumer |
7,991 | 8,522 | 8,992 | 9,416 | 9,951 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total consumer |
199,078 | 210,177 | 206,923 | 221,838 | 229,072 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total loans and leases |
418,363 | 432,547 | 413,901 | 428,396 | 434,272 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total earning assets |
$ | 489,041 | $ | 493,291 | $ | 483,872 | $ | 488,696 | $ | 494,654 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities |
||||||||||||||||||||
Deposits: |
||||||||||||||||||||
Demand deposits - noninterest-bearing |
$ | | $ | | $ | | $ | | $ | | ||||||||||
Demand deposits - interest-bearing |
1,013 | 987 | 845 | 1,182 | 1,458 | |||||||||||||||
Money market deposits |
12,025 | 9,954 | 8,343 | 10,994 | 13,845 | |||||||||||||||
Savings and other domestic deposits |
4,576 | 4,858 | 5,345 | 6,213 | 8,231 | |||||||||||||||
Core certificates of deposit |
19,237 | 22,682 | 25,919 | 28,851 | 37,323 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total core deposits |
36,851 | 38,481 | 40,452 | 47,240 | 60,857 | |||||||||||||||
Other domestic deposits of $250,000 or more |
511 | 493 | 583 | 794 | 907 | |||||||||||||||
Brokered deposits and negotiable CDs |
3,356 | 2,650 | 2,547 | 2,727 | 2,963 | |||||||||||||||
Deposits in foreign offices |
164 | 165 | 197 | 206 | 258 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total deposits |
40,882 | 41,789 | 43,779 | 50,967 | 64,985 | |||||||||||||||
Short-term borrowings |
544 | 558 | 583 | 764 | 931 | |||||||||||||||
Federal Home Loan Bank advances |
135 | 333 | 222 | 156 | 233 | |||||||||||||||
Subordinated notes and other long-term debt |
11,928 | 15,902 | 18,144 | 18,305 | 18,369 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total interest bearing liabilities |
53,489 | 58,582 | 62,728 | 70,192 | 84,518 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net interest income |
$ | 435,552 | $ | 434,709 | $ | 421,144 | $ | 418,504 | $ | 410,136 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Fully-taxable equivalent (FTE) income and expense calculated assuming a 35% tax rate. See page 10 for the FTE adjustment. |
8
Huntington Bancshares Incorporated
Consolidated Quarterly Net Interest Margin Analysis
(Unaudited)
Average Rates (2) | ||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||
Fully-taxable equivalent basis(1) |
Third | Second | First | Fourth | Third | |||||||||||||||
Assets |
||||||||||||||||||||
Interest-bearing deposits in banks |
0.21 | % | 0.31 | % | 0.05 | % | 0.06 | % | 0.04 | % | ||||||||||
Trading account securities |
1.07 | 1.64 | 1.65 | 0.97 | 1.41 | |||||||||||||||
Loans held for sale |
3.18 | 3.46 | 3.80 | 3.96 | 4.46 | |||||||||||||||
Available-for-sale and other securities: |
||||||||||||||||||||
Taxable |
2.21 | 2.33 | 2.39 | 2.37 | 2.43 | |||||||||||||||
Tax-exempt |
4.15 | 4.23 | 4.17 | 4.22 | 4.17 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total available-for-sale and other securities |
2.30 | 2.41 | 2.47 | 2.46 | 2.52 | |||||||||||||||
Held-to-maturity securities - taxable |
3.69 | 2.97 | 2.98 | 2.99 | 3.04 | |||||||||||||||
Loans and leases:(2)(3) |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Commercial and industrial |
3.90 | 3.99 | 4.01 | 4.01 | 4.13 | |||||||||||||||
Commercial real estate: |
||||||||||||||||||||
Construction |
3.84 | 3.66 | 3.85 | 4.78 | 3.87 | |||||||||||||||
Commercial |
3.85 | 3.93 | 3.82 | 3.91 | 3.91 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Commercial real estate |
3.85 | 3.89 | 3.82 | 3.99 | 3.91 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total commercial |
3.89 | 3.97 | 3.96 | 4.01 | 4.06 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Consumer: |
||||||||||||||||||||
Automobile |
4.87 | 4.68 | 4.87 | 4.80 | 4.89 | |||||||||||||||
Home equity |
4.27 | 4.30 | 4.30 | 4.41 | 4.45 | |||||||||||||||
Residential mortgage |
4.02 | 4.14 | 4.17 | 4.30 | 4.47 | |||||||||||||||
Other consumer |
7.16 | 7.42 | 7.47 | 7.32 | 7.57 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total consumer |
4.40 | 4.43 | 4.49 | 4.57 | 4.68 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total loans and leases |
4.12 | 4.18 | 4.21 | 4.28 | 4.37 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total earning assets |
3.79 | % | 3.89 | % | 3.91 | % | 3.95 | % | 4.02 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities |
||||||||||||||||||||
Deposits: |
||||||||||||||||||||
Demand deposits - noninterest-bearing |
| % | | % | | % | | % | | % | ||||||||||
Demand deposits - interest-bearing |
0.07 | 0.07 | 0.06 | 0.08 | 0.10 | |||||||||||||||
Money market deposits |
0.33 | 0.30 | 0.26 | 0.32 | 0.41 | |||||||||||||||
Savings and other domestic deposits |
0.37 | 0.39 | 0.45 | 0.52 | 0.69 | |||||||||||||||
Core certificates of deposit |
1.25 | 1.38 | 1.60 | 1.69 | 1.95 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total core deposits |
0.47 | 0.50 | 0.54 | 0.61 | 0.77 | |||||||||||||||
Other domestic deposits of $250,000 or more |
0.68 | 0.66 | 0.68 | 0.78 | 0.93 | |||||||||||||||
Brokered deposits and negotiable CDs |
0.71 | 0.75 | 0.79 | 0.77 | 0.77 | |||||||||||||||
Deposits in foreign offices |
0.18 | 0.19 | 0.18 | 0.19 | 0.26 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total deposits |
0.48 | 0.51 | 0.55 | 0.61 | 0.77 | |||||||||||||||
Short-term borrowings |
0.16 | 0.16 | 0.16 | 0.18 | 0.16 | |||||||||||||||
Federal Home Loan Bank advances |
0.50 | 0.21 | 0.21 | 2.09 | 0.32 | |||||||||||||||
Subordinated notes and other long-term debt |
2.91 | 2.83 | 2.74 | 2.56 | 2.43 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total interest-bearing liabilities |
0.58 | 0.63 | 0.68 | 0.74 | 0.86 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net interest rate spread |
3.14 | 3.18 | 3.15 | 3.15 | 3.11 | |||||||||||||||
Impact of noninterest-bearing funds on margin |
0.24 | 0.25 | 0.25 | 0.23 | 0.22 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net interest margin |
3.38 | % | 3.42 | % | 3.40 | % | 3.38 | % | 3.34 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
Commercial Loan Derivative Impact
(Unaudited)
Average Rates (2) | ||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||
Fully-taxable equivalent basis(1) |
Third | Second | First | Fourth | Third | |||||||||||||||
Commercial loans(2)(3) |
3.61 | % | 3.67 | % | 3.69 | % | 3.79 | % | 3.79 | % | ||||||||||
Impact of commercial loan derivatives |
0.28 | 0.30 | 0.27 | 0.22 | 0.27 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total commercial - as reported |
3.89 | % | 3.97 | % | 3.96 | % | 4.01 | % | 4.06 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Average 30 day LIBOR |
0.24 | % | 0.24 | % | 0.26 | % | 0.26 | % | 0.21 | % |
(1) | Fully-taxable equivalent (FTE) yields are calculated assuming a 35% tax rate. See page 10 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. |
9
Huntington Bancshares Incorporated
Selected Quarterly Income Statement Data(1)
(Unaudited)
2012 | 2011 | 3Q12 vs 3Q11 | ||||||||||||||||||||||||||||
(dollar amounts in thousands, except per share amounts) |
Third | Second | First | Fourth | Third | Amount | Percent | |||||||||||||||||||||||
Interest income |
$ | 483,787 | $ | 487,544 | $ | 479,937 | $ | 485,216 | $ | 490,996 | $ | (9,487 | ) | (2 | )% | |||||||||||||||
Interest expense |
53,489 | 58,582 | 62,728 | 70,191 | 84,518 | (31,029 | ) | (37 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net interest income |
430,298 | 428,962 | 417,209 | 415,025 | 406,478 | 23,820 | 6 | |||||||||||||||||||||||
Provision for credit losses |
37,004 | 36,520 | 34,406 | 45,291 | 43,586 | (6,582 | ) | (15 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net interest income after provision for credit losses |
393,294 | 392,442 | 382,803 | 369,734 | 362,892 | 30,402 | 8 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Service charges on deposit accounts |
67,806 | 65,998 | 60,292 | 63,324 | 65,184 | 2,622 | 4 | |||||||||||||||||||||||
Trust services |
29,689 | 29,914 | 30,906 | 28,775 | 29,473 | 216 | 1 | |||||||||||||||||||||||
Electronic banking |
22,135 | 20,514 | 18,630 | 18,282 | 32,901 | (10,766 | ) | (33 | ) | |||||||||||||||||||||
Mortgage banking income |
44,614 | 38,349 | 46,418 | 24,098 | 12,791 | 31,823 | 249 | |||||||||||||||||||||||
Brokerage income |
16,526 | 19,025 | 19,260 | 18,688 | 20,349 | (3,823 | ) | (19 | ) | |||||||||||||||||||||
Insurance income |
17,792 | 17,384 | 18,875 | 17,906 | 17,220 | 572 | 3 | |||||||||||||||||||||||
Bank owned life insurance income |
14,371 | 13,967 | 13,937 | 14,271 | 15,644 | (1,273 | ) | (8 | ) | |||||||||||||||||||||
Capital markets fees |
11,805 | 13,455 | 9,982 | 9,811 | 11,256 | 549 | 5 | |||||||||||||||||||||||
Gain on sale of loans |
6,591 | 4,131 | 26,770 | 2,884 | 19,097 | (12,506 | ) | (65 | ) | |||||||||||||||||||||
Automobile operating lease income |
2,146 | 2,877 | 3,775 | 4,727 | 5,890 | (3,744 | ) | (64 | ) | |||||||||||||||||||||
Securities gains (losses) |
4,169 | 350 | (613 | ) | (3,878 | ) | (1,350 | ) | 5,519 | N.R. | ||||||||||||||||||||
Other income |
23,423 | 27,855 | 37,088 | 30,464 | 30,104 | (6,681 | ) | (22 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total noninterest income |
261,067 | 253,819 | 285,320 | 229,352 | 258,559 | 2,508 | 1 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Personnel costs |
247,709 | 243,034 | 243,498 | 228,101 | 226,835 | 20,874 | 9 | |||||||||||||||||||||||
Outside data processing and other services |
49,880 | 48,149 | 42,058 | 53,422 | 49,602 | 278 | 1 | |||||||||||||||||||||||
Net occupancy |
27,599 | 25,474 | 29,079 | 26,841 | 26,967 | 632 | 2 | |||||||||||||||||||||||
Equipment |
25,950 | 24,872 | 25,545 | 25,884 | 22,262 | 3,688 | 17 | |||||||||||||||||||||||
Deposit and other insurance expense |
15,534 | 15,731 | 20,738 | 18,481 | 17,492 | (1,958 | ) | (11 | ) | |||||||||||||||||||||
Marketing |
20,178 | 21,365 | 16,776 | 16,379 | 22,251 | (2,073 | ) | (9 | ) | |||||||||||||||||||||
Professional services |
18,024 | 15,458 | 11,230 | 16,769 | 20,281 | (2,257 | ) | (11 | ) | |||||||||||||||||||||
Amortization of intangibles |
11,431 | 11,940 | 11,531 | 13,175 | 13,387 | (1,956 | ) | (15 | ) | |||||||||||||||||||||
Automobile operating lease expense |
1,619 | 2,183 | 2,854 | 3,362 | 4,386 | (2,767 | ) | (63 | ) | |||||||||||||||||||||
OREO and foreclosure expense |
4,982 | 4,106 | 4,950 | 5,009 | 4,668 | 314 | 7 | |||||||||||||||||||||||
Loss (Gain) on early extinguishment of debt |
1,782 | (2,580 | ) | | (9,697 | ) | | 1,782 | | |||||||||||||||||||||
Other expense |
33,615 | 34,537 | 54,417 | 32,548 | 30,987 | 2,628 | 8 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total noninterest expense |
458,303 | 444,269 | 462,676 | 430,274 | 439,118 | 19,185 | 4 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Income before income taxes |
196,058 | 201,992 | 205,447 | 168,812 | 182,333 | 13,725 | 8 | |||||||||||||||||||||||
Provision for income taxes |
28,291 | 49,286 | 52,177 | 41,954 | 38,942 | (10,651 | ) | (27 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net income |
$ | 167,767 | $ | 152,706 | $ | 153,270 | $ | 126,858 | $ | 143,391 | $ | 24,376 | 17 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Dividends on preferred shares |
7,983 | 7,984 | 8,049 | 7,703 | 7,703 | 280 | 4 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net income applicable to common shares |
$ | 159,784 | $ | 144,722 | $ | 145,221 | $ | 119,155 | $ | 135,688 | $ | 24,096 | 18 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Average common shares - basic |
857,871 | 862,261 | 864,499 | 864,136 | 863,911 | (6,040 | ) | (1 | )% | |||||||||||||||||||||
Average common shares - diluted |
863,588 | 867,551 | 869,164 | 868,156 | 867,633 | (4,045 | ) | (0 | ) | |||||||||||||||||||||
Per common share |
||||||||||||||||||||||||||||||
Net income - basic |
$ | 0.19 | $ | 0.17 | $ | 0.17 | $ | 0.14 | $ | 0.16 | $ | 0.03 | 19 | % | ||||||||||||||||
Net income - diluted |
0.19 | 0.17 | 0.17 | 0.14 | 0.16 | 0.03 | 19 | |||||||||||||||||||||||
Cash dividends declared |
0.04 | 0.04 | 0.04 | 0.04 | 0.04 | | | |||||||||||||||||||||||
Return on average total assets |
1.19 | % | 1.10 | % | 1.13 | % | 0.92 | % | 1.05 | % | 0.14 | 13 | % | |||||||||||||||||
Return on average common shareholders equity |
11.9 | 11.1 | 11.4 | 9.3 | 10.8 | 1.1 | 10 | |||||||||||||||||||||||
Return on average tangible common shareholders equity(2) |
13.9 | 13.1 | 13.5 | 11.2 | 13.0 | 0.9 | 7 | |||||||||||||||||||||||
Net interest margin(3) |
3.38 | 3.42 | 3.40 | 3.38 | 3.34 | 0.04 | 1 | |||||||||||||||||||||||
Efficiency ratio(4) |
64.5 | 62.8 | 63.8 | 64.0 | 63.5 | 1.0 | 2 | |||||||||||||||||||||||
Effective tax rate |
14.4 | 24.4 | 25.4 | 24.9 | 21.4 | (7.0 | ) | (33 | ) | |||||||||||||||||||||
Revenue - fully-taxable equivalent (FTE) |
||||||||||||||||||||||||||||||
Net interest income |
$ | 430,298 | $ | 428,962 | $ | 417,209 | $ | 415,025 | $ | 406,478 | $ | 23,820 | 6 | % | ||||||||||||||||
FTE adjustment |
5,254 | 5,747 | 3,935 | 3,479 | 3,658 | 1,596 | 44 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net interest income(3) |
435,552 | 434,709 | 421,144 | 418,504 | 410,136 | 25,416 | 6 | |||||||||||||||||||||||
Noninterest income |
261,067 | 253,819 | 285,320 | 229,352 | 258,559 | 2,508 | 1 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total revenue(3) |
$ | 696,619 | $ | 688,528 | $ | 706,464 | $ | 647,856 | $ | 668,695 | $ | 27,924 | 4 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N.R. - Not relevant, as denominator of calculation is a loss in prior period compared with income in current period.
10
(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). |
11
Huntington Bancshares Incorporated
Quarterly Mortgage Banking Income
(Unaudited)
2012 | 2011 | 3Q12 vs 3Q11 | ||||||||||||||||||||||||||||||
(dollar amounts in thousands, except as noted) |
Third | Second | First | Fourth | Third | Amount | Percent | |||||||||||||||||||||||||
Mortgage banking income |
||||||||||||||||||||||||||||||||
Origination and secondary marketing |
$ | 40,860 | $ | 30,184 | $ | 31,304 | $ | 21,248 | $ | 15,648 | $ | 25,212 | 161 | % | ||||||||||||||||||
Servicing fees |
11,308 | 11,618 | 11,760 | 11,993 | 12,140 | (832 | ) | (7 | ) | |||||||||||||||||||||||
Amortization of capitalized servicing |
(8,405 | ) | (9,108 | ) | (9,279 | ) | (8,813 | ) | (9,641 | ) | 1,236 | (13 | ) | |||||||||||||||||||
Other mortgage banking income |
4,999 | 4,814 | 4,966 | 3,652 | 3,826 | 1,173 | 31 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Subtotal |
48,762 | 37,508 | 38,751 | 28,080 | 21,973 | 26,789 | 122 | |||||||||||||||||||||||||
MSR valuation adjustment(1) |
(19,543 | ) | (19,013 | ) | 9,907 | (6,985 | ) | (39,394 | ) | 19,851 | (50 | ) | ||||||||||||||||||||
Net trading gains (losses) related to MSR hedging |
15,395 | 19,854 | (2,240 | ) | 3,003 | 30,212 | (14,817 | ) | (49 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total mortgage banking income |
$ | 44,614 | $ | 38,349 | $ | 46,418 | $ | 24,098 | $ | 12,791 | $ | 31,823 | 249 | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Mortgage originations (in millions) |
$ | 1,224 | $ | 1,291 | $ | 1,157 | $ | 1,123 | $ | 953 | $ | 271 | 28 | % | ||||||||||||||||||
Average trading account securities used to hedge MSRs (in millions) |
4 | 4 | 5 | 6 | 7 | (3 | ) | (43 | ) | |||||||||||||||||||||||
Capitalized mortgage servicing rights(2) |
108,074 | 128,297 | 148,349 | 137,435 | 145,277 | (37,203 | ) | (26 | ) | |||||||||||||||||||||||
Total mortgages serviced for others (in millions)(2) |
15,571 | 15,724 | 15,902 | 15,886 | 16,061 | (490 | ) | (3 | ) | |||||||||||||||||||||||
MSR % of investor servicing portfolio(2) |
0.69 | % | 0.82 | % | 0.93 | % | 0.87 | % | 0.90 | % | (0.21 | )% | (2,333 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net impact of MSR hedging |
||||||||||||||||||||||||||||||||
MSR valuation adjustment(1) |
$ | (19,543 | ) | $ | (19,013 | ) | $ | 9,907 | $ | (6,985 | ) | $ | (39,394 | ) | $ | 19,851 | (50 | )% | ||||||||||||||
Net trading gains (losses) related to MSR hedging |
15,395 | 19,854 | (2,240 | ) | 3,003 | 30,212 | (14,817 | ) | (49 | ) | ||||||||||||||||||||||
Net interest income (loss) related to MSR hedging |
4 | (21 | ) | (9 | ) | (34 | ) | 17 | (13 | ) | (76 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net gain (loss) of MSR hedging |
$ | (4,144 | ) | $ | 820 | $ | 7,658 | $ | (4,016 | ) | $ | (9,165 | ) | $ | 5,021 | (55 | )% | |||||||||||||||
|
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|
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|
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|
|
|
|
|
|
|
|
(1) | The change in fair value for the period represents the MSR valuation adjustment, net of amortization of capitalized servicing. |
(2) | At period end. |
12
Huntington Bancshares Incorporated
Quarterly Credit Reserves Analysis
(Unaudited)
2012 | 2011 | |||||||||||||||||||
(dollar amounts in thousands) |
Third | Second | First | Fourth | Third | |||||||||||||||
Allowance for loan and lease losses, beginning of period |
$ | 859,646 | $ | 913,069 | $ | 964,828 | $ | 1,019,710 | $ | 1,071,126 | ||||||||||
Loan and lease losses |
(132,186 | ) | (108,092 | ) | (107,960 | ) | (114,146 | ) | (115,899 | ) | ||||||||||
Recoveries of loans previously charged off |
27,091 | 23,847 | 24,968 | 30,229 | 25,344 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loan and lease losses |
(105,095 | ) | (84,245 | ) | (82,992 | ) | (83,917 | ) | (90,555 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Provision for loan and lease losses |
34,419 | 36,476 | 31,928 | 35,614 | 45,867 | |||||||||||||||
Allowance of assets sold or transferred to loans held for sale |
172 | (5,654 | ) | (695 | ) | (6,579 | ) | (6,728 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Allowance for loan and lease losses, end of period |
$ | 789,142 | $ | 859,646 | $ | 913,069 | $ | 964,828 | $ | 1,019,710 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Allowance for unfunded loan commitments and letters of credit, beginning of period |
$ | 50,978 | $ | 50,934 | $ | 48,456 | $ | 38,779 | $ | 41,060 | ||||||||||
Provision for (reduction in) unfunded loan commitments and letters of credit losses |
2,585 | 44 | 2,478 | 9,677 | (2,281 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Allowance for unfunded loan commitments and letters of credit, end of period |
$ | 53,563 | $ | 50,978 | $ | 50,934 | $ | 48,456 | $ | 38,779 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total allowance for credit losses, end of period |
$ | 842,705 | $ | 910,624 | $ | 964,003 | $ | 1,013,284 | $ | 1,058,489 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Allowance for loan and lease losses (ALLL) as % of: |
||||||||||||||||||||
Total loans and leases |
1.96 | % | 2.15 | % | 2.24 | % | 2.48 | % | 2.61 | % | ||||||||||
Nonaccrual loans and leases (NALs) |
177 | 181 | 195 | 178 | 180 | |||||||||||||||
Nonperforming assets (NPAs) |
155 | 164 | 173 | 163 | 166 | |||||||||||||||
Total allowance for credit losses (ACL) as % of: |
||||||||||||||||||||
Total loans and leases |
2.09 | % | 2.28 | % | 2.37 | % | 2.60 | % | 2.71 | % | ||||||||||
Nonaccrual loans and leases |
189 | 192 | 206 | 187 | 187 | |||||||||||||||
Nonperforming assets |
165 | 174 | 183 | 172 | 172 |
13
Huntington Bancshares Incorporated
Quarterly Net Charge-Off Analysis
(Unaudited)
2012 | 2011 | |||||||||||||||||||
(dollar amounts in thousands) |
Third | Second | First | Fourth | Third | |||||||||||||||
Net charge-offs by loan and lease type: |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Commercial and industrial |
$ | 13,023 | $ | 15,678 | $ | 28,495 | $ | 10,913 | $ | 17,891 | ||||||||||
Commercial real estate: |
||||||||||||||||||||
Construction |
(280 | ) | (1,531 | ) | (1,186 | ) | (2,471 | ) | 1,450 | |||||||||||
Commercial |
17,654 | 30,709 | 11,692 | 30,854 | 22,990 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Commercial real estate |
17,374 | 29,178 | 10,506 | 28,383 | 24,440 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total commercial |
30,397 | 44,856 | 39,001 | 39,296 | 42,331 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Consumer: |
||||||||||||||||||||
Automobile |
4,019 | 449 | 3,078 | 4,237 | 3,863 | |||||||||||||||
Home equity |
46,596 | 21,045 | 23,729 | 23,419 | 26,222 | |||||||||||||||
Residential mortgage |
16,880 | 10,786 | 10,570 | 9,732 | 11,562 | |||||||||||||||
Other consumer |
7,203 | 7,109 | 6,614 | 7,233 | 6,577 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total consumer |
74,698 | 39,389 | 43,991 | 44,621 | 48,224 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total net charge-offs |
$ | 105,095 | $ | 84,245 | $ | 82,992 | $ | 83,917 | $ | 90,555 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net charge-offs - annualized percentages: |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Commercial and industrial |
0.32 | % | 0.39 | % | 0.77 | % | 0.31 | % | 0.52 | % | ||||||||||
Commercial real estate: |
||||||||||||||||||||
Construction |
(0.20 | ) | (1.05 | ) | (0.79 | ) | (1.85 | ) | 0.87 | |||||||||||
Commercial |
1.37 | 2.24 | 0.89 | 2.27 | 1.69 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Commercial real estate |
1.21 | 1.92 | 0.72 | 1.91 | 1.60 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total commercial |
0.55 | 0.81 | 0.75 | 0.78 | 0.86 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Consumer: |
||||||||||||||||||||
Automobile |
0.40 | 0.04 | 0.27 | 0.30 | 0.25 | |||||||||||||||
Home equity |
2.23 | 1.01 | 1.15 | 1.15 | 1.31 | |||||||||||||||
Residential mortgage |
1.30 | 0.82 | 0.82 | 0.77 | 0.97 | |||||||||||||||
Other consumer |
6.49 | 6.15 | 5.45 | 5.66 | 5.05 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total consumer |
1.65 | 0.83 | 0.95 | 0.92 | 0.99 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net charge-offs as a % of average loans |
1.05 | % | 0.82 | % | 0.85 | % | 0.85 | % | 0.92 | % | ||||||||||
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|
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|
|
|
|
|
14
Huntington Bancshares Incorporated
Quarterly Nonaccrual Loans and Leases (NALs) and Nonperforming Assets (NPAs)
(Unaudited)
2012 | 2011 | |||||||||||||||||||
(dollar amounts in thousands) |
September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
Nonaccrual loans and leases (NALs): |
||||||||||||||||||||
Commercial and industrial |
$ | 109,452 | $ | 133,678 | $ | 142,492 | $ | 201,846 | $ | 209,632 | ||||||||||
Commercial real estate |
148,986 | 219,417 | 205,105 | 229,889 | 257,086 | |||||||||||||||
Automobile |
11,814 | | | | | |||||||||||||||
Residential mortgage |
123,140 | 75,048 | 74,114 | 68,658 | 61,129 | |||||||||||||||
Home equity |
51,654 | 46,023 | 45,847 | 40,687 | 37,156 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total nonaccrual loans and leases |
445,046 | 474,166 | 467,558 | 541,080 | 565,003 | |||||||||||||||
Other real estate, net: |
||||||||||||||||||||
Residential(1) |
23,640 | 21,499 | 31,850 | 20,330 | 18,588 | |||||||||||||||
Commercial |
30,566 | 17,109 | 16,897 | 18,094 | 19,418 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total other real estate, net |
54,206 | 38,608 | 48,747 | 38,424 | 38,006 | |||||||||||||||
Other NPAs (2) |
10,476 | 10,476 | 10,772 | 10,772 | 10,972 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total nonperforming assets(1) |
$ | 509,728 | $ | 523,250 | $ | 527,077 | $ | 590,276 | $ | 613,981 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nonaccrual loans and leases as a % of total loans and leases |
1.11 | % | 1.19 | % | 1.15 | % | 1.39 | % | 1.45 | % | ||||||||||
NPA ratio(3) |
1.26 | 1.31 | 1.29 | 1.51 | 1.57 | |||||||||||||||
2012 | 2011 | |||||||||||||||||||
Third | Second | First | Fourth | Third | ||||||||||||||||
Nonperforming assets, beginning of period |
$ | 523,250 | $ | 527,077 | $ | 590,276 | $ | 613,981 | $ | 652,937 | ||||||||||
New nonperforming assets(1) |
210,995 | (4) | 221,010 | 134,636 | 189,138 | 153,626 | ||||||||||||||
Franklin impact, net |
| | | (534 | ) | (349 | ) | |||||||||||||
Returns to accruing status |
(45,729 | ) | (39,376 | ) | (32,056 | ) | (30,677 | ) | (25,794 | ) | ||||||||||
Loan and lease losses |
(78,308 | ) | (74,546 | ) | (75,366 | ) | (79,117 | ) | (79,992 | ) | ||||||||||
OREO losses (gains) |
73 | (459 | ) | (295 | ) | (867 | ) | (242 | ) | |||||||||||
Payments |
(90,535 | ) | (63,530 | ) | (66,609 | ) | (91,734 | ) | (76,510 | ) | ||||||||||
Sales |
(10,018 | ) | (46,926 | ) | (23,509 | ) | (9,914 | ) | (9,695 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nonperforming assets, end of period |
$ | 509,728 | $ | 523,250 | $ | 527,077 | $ | 590,276 | $ | 613,981 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Residential real estate owned properties acquired in the FDIC-assisted Fidelity Bank acquisition are reflected in the above table. |
(2) | Other nonperforming assets represent an investment security backed by a municipal bond. |
(3) | Nonperforming assets divided by the sum of loans and leases, net other real estate owned, and other NPAs. |
(4) | Includes $63.0 million related to Chapter 7 bankruptcy loans. |
15
Huntington Bancshares Incorporated
Quarterly Accruing Past Due Loans and Leases and Accruing and Nonaccruing Troubled Debt Restructured Loans
(Unaudited)
2012 | 2011 | |||||||||||||||||||
(dollar amounts in thousands) |
September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
Accruing loans and leases past due 90 days or more: |
||||||||||||||||||||
Commercial and industrial (1) |
$ | 26,117 | $ | 19,258 | $ | | $ | | $ | | ||||||||||
Commercial real estate (1) |
45,131 | 38,125 | | | | |||||||||||||||
Residential mortgage (excluding loans guaranteed by the U.S. Government) |
10,688 | 15,457 | 35,604 | 45,198 | 32,850 | |||||||||||||||
Home equity |
21,343 | 18,176 | 19,862 | 20,198 | 20,420 | |||||||||||||||
Other consumer |
4,940 | 4,539 | 5,091 | 8,253 | 7,755 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total, excl. loans guaranteed by the U.S. Government |
108,219 | 95,555 | 60,557 | 73,649 | 61,025 | |||||||||||||||
Add: loans guaranteed by U.S. Government |
87,463 | 85,678 | 94,560 | 96,703 | 84,413 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total accruing loans and leases past due 90 days or more, including loans guaranteed by the U.S. Government |
$ | 195,682 | $ | 181,233 | $ | 155,117 | $ | 170,352 | $ | 145,438 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Ratios: |
||||||||||||||||||||
Excluding loans guaranteed by the U.S. Government, as a percent of total loans and leases |
0.27 | % | 0.24 | % | 0.15 | % | 0.19 | % | 0.16 | % | ||||||||||
Guaranteed by U.S. Government, as a percent of total loans and leases |
0.22 | 0.21 | 0.23 | 0.25 | 0.21 | |||||||||||||||
Including loans guaranteed by the U.S. Government, as a percent of total loans and leases |
0.49 | 0.45 | 0.38 | 0.44 | 0.37 | |||||||||||||||
Accruing troubled debt restructured loans: (2) |
||||||||||||||||||||
Commercial and industrial |
$ | 55,809 | $ | 57,008 | $ | 53,795 | $ | 54,007 | $ | 77,509 | ||||||||||
Commercial real estate |
222,155 | 202,190 | 231,923 | 249,968 | 244,089 | |||||||||||||||
Automobile |
33,719 | 34,460 | 35,521 | 36,573 | 37,371 | |||||||||||||||
Home equity |
92,763 | 66,997 | 59,270 | 52,224 | 47,712 | |||||||||||||||
Residential mortgage |
280,890 | 298,967 | 294,836 | 309,678 | 304,365 | |||||||||||||||
Other consumer |
2,644 | 3,038 | 4,233 | 6,108 | 4,513 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total accruing troubled debt restructured loans |
$ | 687,980 | $ | 662,660 | $ | 679,578 | $ | 708,558 | $ | 715,559 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nonaccruing troubled debt restructured loans: (2) |
||||||||||||||||||||
Commercial and industrial |
$ | 28,859 | $ | 35,535 | $ | 26,886 | $ | 48,553 | $ | 27,410 | ||||||||||
Commercial real estate |
20,284 | 55,022 | 39,606 | 21,968 | 46,854 | |||||||||||||||
Automobile |
11,814 | | | | | |||||||||||||||
Home equity |
7,756 | 374 | 334 | 369 | 166 | |||||||||||||||
Residential mortgage |
83,163 | 28,332 | 29,549 | 26,089 | 20,877 | |||||||||||||||
Other consumer |
113 | 113 | 113 | 113 | 113 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total nonaccruing troubled debt restructured loans |
$ | 151,989 | $ | 119,376 | $ | 96,488 | $ | 97,092 | $ | 95,420 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | All amounts represent accruing purchased impaired loans related to the FDIC-assisted Fidelity Bank acquisition. Under the applicable accounting guidance (ASC 310-30), the loans were recorded at fair value upon acquisition and remain in accruing status. |
(2) | No loans related to the FDIC-assisted Fidelity Bank acquisition were considered troubled debt restructured loans at March 31, 2012. |
16
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) |
Third | Second | First | Fourth | Third | |||||||||||||||
Common stock price, per share |
||||||||||||||||||||
High(1) |
$ | 7.200 | $ | 6.770 | $ | 6.580 | $ | 5.650 | $ | 6.740 | ||||||||||
Low(1) |
6.160 | 5.840 | 5.490 | 4.670 | 4.460 | |||||||||||||||
Close |
6.895 | 6.400 | 6.445 | 5.490 | 4.800 | |||||||||||||||
Average closing price |
6.561 | 6.367 | 5.974 | 5.178 | 5.370 | |||||||||||||||
Dividends, per share |
||||||||||||||||||||
Cash dividends declared per common share |
$ | 0.04 | $ | 0.04 | $ | 0.04 | $ | 0.04 | $ | 0.04 | ||||||||||
Common shares outstanding |
||||||||||||||||||||
Average - basic |
857,871 | 862,261 | 864,499 | 864,136 | 863,911 | |||||||||||||||
Average - diluted |
863,588 | 867,551 | 869,164 | 868,156 | 867,633 | |||||||||||||||
Ending |
855,485 | 858,401 | 864,675 | 864,406 | 864,075 | |||||||||||||||
Book value per common share |
$ | 6.34 | $ | 6.13 | $ | 5.97 | $ | 5.82 | $ | 5.83 | ||||||||||
Tangible book value per common share(2) |
5.71 | 5.49 | 5.33 | 5.18 | 5.17 | |||||||||||||||
Common share repurchases |
||||||||||||||||||||
Number of shares repurchased |
3,742 | 6,426 | | | | |||||||||||||||
2012 | 2011 | |||||||||||||||||||
(dollar amounts in millions) |
September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
Calculation of tangible equity / asset ratio: |
||||||||||||||||||||
Total shareholders equity |
$ | 5,808 | $ | 5,649 | $ | 5,550 | $ | 5,418 | $ | 5,400 | ||||||||||
Less: goodwill |
(444 | ) | (444 | ) | (444 | ) | (444 | ) | (444 | ) | ||||||||||
Less: other intangible assets |
(144 | ) | (159 | ) | (171 | ) | (175 | ) | (188 | ) | ||||||||||
Add: related deferred tax liability(2) |
50 | 56 | 60 | 61 | 66 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total tangible equity |
5,270 | 5,102 | 4,995 | 4,860 | 4,834 | |||||||||||||||
Less: preferred equity |
(386 | ) | (386 | ) | (386 | ) | (386 | ) | (363 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total tangible common equity |
$ | 4,884 | $ | 4,716 | $ | 4,609 | $ | 4,474 | $ | 4,471 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | 56,443 | $ | 56,623 | $ | 55,877 | $ | 54,451 | $ | 54,979 | ||||||||||
Less: goodwill |
(444 | ) | (444 | ) | (444 | ) | (444 | ) | (444 | ) | ||||||||||
Less: other intangible assets |
(144 | ) | (159 | ) | (171 | ) | (175 | ) | (188 | ) | ||||||||||
Add: related deferred tax liability(2) |
50 | 56 | 60 | 61 | 66 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total tangible assets |
$ | 55,905 | $ | 56,076 | $ | 55,322 | $ | 53,893 | $ | 54,413 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Tangible equity / tangible asset ratio |
9.43 | % | 9.10 | % | 9.03 | % | 9.02 | % | 8.88 | % | ||||||||||
Tangible common equity / tangible asset ratio |
8.74 | 8.41 | 8.33 | 8.30 | 8.22 | |||||||||||||||
Tier 1 common risk-based capital ratio:(4) |
||||||||||||||||||||
Tier 1 capital |
$ | 5,720 | $ | 5,714 | $ | 5,709 | $ | 5,557 | $ | 5,488 | ||||||||||
Shareholders preferred equity |
(386 | ) | (386 | ) | (386 | ) | (386 | ) | (363 | ) | ||||||||||
Trust preferred securities |
(335 | ) | (449 | ) | (532 | ) | (532 | ) | (565 | ) | ||||||||||
REIT preferred stock |
(50 | ) | (50 | ) | (50 | ) | (50 | ) | (50 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Tier 1 common |
$ | 4,949 | $ | 4,829 | $ | 4,741 | $ | 4,589 | $ | 4,510 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total risk-weighted assets(4) |
$ | 48,154 | $ | 47,890 | $ | 46,716 | $ | 45,891 | $ | 44,376 | ||||||||||
Tier 1 common risk-based capital ratio(4) |
10.28 | % | 10.08 | % | 10.15 | % | 10.00 | % | 10.17 | % | ||||||||||
Other capital data: |
||||||||||||||||||||
Tier 1 leverage ratio(4) |
10.29 | 10.34 | 10.55 | 10.28 | 10.24 | |||||||||||||||
Tier 1 risk-based capital ratio(4) |
11.88 | 11.93 | 12.22 | 12.11 | 12.37 | |||||||||||||||
Total risk-based capital ratio(4) |
14.36 | 14.42 | 14.76 | 14.77 | 15.11 | |||||||||||||||
Tangible common equity / risk-weighted assets ratio(4) |
10.14 | 9.85 | 9.86 | 9.75 | 10.08 | |||||||||||||||
Other data: |
||||||||||||||||||||
Number of employees (full-time equivalent) |
11,731 | 11,417 | 11,166 | 11,245 | 11,473 | |||||||||||||||
Number of domestic full-service branches(3) |
699 | 682 | 669 | 668 | 650 |
(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) | September 30, 2012, figures are estimated. |
17
Huntington Bancshares Incorporated
Consolidated Year To Date Average Balance Sheets
(Unaudited)
YTD Average Balances | ||||||||||||||||
Nine Months Ended September 30, | Change | |||||||||||||||
(dollar amounts in millions) |
2012 | 2011 | Amount | Percent | ||||||||||||
Assets |
||||||||||||||||
Interest bearing deposits in banks |
$ | 102 | $ | 141 | $ | (39 | ) | (28 | )% | |||||||
Trading account securities |
57 | 116 | (59 | ) | (51 | ) | ||||||||||
Federal funds sold and securities purchased under resale agreements |
| 7 | (7 | ) | (100 | ) | ||||||||||
Loans held for sale |
1,170 | 279 | 891 | 319 | ||||||||||||
Available-for-sale and other securities: |
||||||||||||||||
Taxable |
8,156 | 8,475 | (319 | ) | (4 | ) | ||||||||||
Tax-exempt |
405 | 434 | (29 | ) | (7 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total available-for-sale and other securities |
8,561 | 8,909 | (348 | ) | (4 | ) | ||||||||||
Held-to-maturity securities - taxable |
680 | 282 | 398 | 141 | ||||||||||||
Loans and leases:(1) |
||||||||||||||||
Commercial: |
||||||||||||||||
Commercial and industrial |
15,756 | 13,387 | 2,369 | 18 | ||||||||||||
Commercial real estate: |
||||||||||||||||
Construction |
584 | 612 | (28 | ) | (5 | ) | ||||||||||
Commercial |
5,299 | 5,676 | (377 | ) | (7 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Commercial real estate |
5,883 | 6,288 | (405 | ) | (6 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total commercial |
21,639 | 19,675 | 1,964 | 10 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Consumer: |
||||||||||||||||
Automobile |
4,540 | 5,958 | (1,418 | ) | (24 | ) | ||||||||||
Home equity |
8,305 | 7,869 | 436 | 6 | ||||||||||||
Residential mortgage |
5,201 | 4,607 | 594 | 13 | ||||||||||||
Other consumer |
463 | 539 | (76 | ) | (14 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total consumer |
18,509 | 18,973 | (464 | ) | (2 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total loans and leases |
40,148 | 38,648 | 1,500 | 4 | ||||||||||||
Allowance for loan and lease losses |
(908 | ) | (1,141 | ) | 233 | (20 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loans and leases |
39,240 | 37,507 | 1,733 | 5 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total earning assets |
50,718 | 48,382 | 2,336 | 5 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash and due from banks |
967 | 1,358 | (391 | ) | (29 | ) | ||||||||||
Intangible assets |
606 | 652 | (46 | ) | (7 | ) | ||||||||||
All other assets |
4,163 | 4,196 | (33 | ) | (1 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets |
$ | 55,546 | $ | 53,447 | $ | 2,099 | 4 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities and shareholders equity |
||||||||||||||||
Deposits: |
||||||||||||||||
Demand deposits - noninterest-bearing |
$ | 11,890 | $ | 7,958 | $ | 3,932 | 49 | % | ||||||||
Demand deposits - interest-bearing |
5,800 | 5,499 | 301 | 5 | ||||||||||||
Money market deposits |
13,616 | 13,230 | 386 | 3 | ||||||||||||
Savings and other domestic deposits |
4,924 | 4,744 | 180 | 4 | ||||||||||||
Core certificates of deposit |
6,418 | 8,017 | (1,599 | ) | (20 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total core deposits |
42,648 | 39,448 | 3,200 | 8 | ||||||||||||
Other domestic deposits of $250,000 or more |
315 | 486 | (171 | ) | (35 | ) | ||||||||||
Brokered deposits and negotiable CDs |
1,535 | 1,426 | 109 | 8 | ||||||||||||
Deposits in foreign offices |
381 | 374 | 7 | 2 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total deposits |
44,879 | 41,734 | 3,145 | 8 | ||||||||||||
Short-term borrowings |
1,410 | 2,166 | (756 | ) | (35 | ) | ||||||||||
Federal Home Loan Bank advances |
383 | 138 | 245 | 178 | ||||||||||||
Subordinated notes and other long-term debt |
2,179 | 3,266 | (1,087 | ) | (33 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total interest-bearing liabilities |
36,961 | 39,346 | (2,385 | ) | (6 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
All other liabilities |
1,081 | 975 | 106 | 11 | ||||||||||||
Shareholders equity |
5,614 | 5,168 | 446 | 9 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities and shareholders equity |
$ | 55,546 | $ | 53,447 | $ | 2,099 | 4 | % | ||||||||
|
|
|
|
|
|
|
|
(1) | Includes nonaccrual loans. |
18
Huntington Bancshares Incorporated
Consolidated Year To Date Net Interest Margin Analysis - Interest Income / Expense (1)
(Unaudited)
YTD Interest Income /Expense | ||||||||
Nine Months Ended September 30, | ||||||||
(dollar amounts in thousands) |
2012 | 2011 | ||||||
Assets |
||||||||
Interest bearing deposits in banks |
$ | 151 | $ | 128 | ||||
Trading account securities |
608 | 1,265 | ||||||
Federal funds sold and securities purchased under resale agreements |
| 5 | ||||||
Loans held for sale |
30,094 | 9,174 | ||||||
Available-for-sale and other securities: |
||||||||
Taxable |
141,260 | 160,201 | ||||||
Tax-exempt |
12,691 | 14,013 | ||||||
|
|
|
|
|||||
Total available-for-sale and other securities |
153,951 | 174,214 | ||||||
Held-to-maturity securities - taxable |
16,589 | 6,346 | ||||||
Loans and leases: |
||||||||
Commercial: |
||||||||
Commercial and industrial |
475,814 | 439,790 | ||||||
Commercial real estate: |
||||||||
Construction |
16,811 | 16,476 | ||||||
Commercial |
156,008 | 168,472 | ||||||
|
|
|
|
|||||
Commercial real estate |
172,819 | 184,948 | ||||||
|
|
|
|
|||||
Total commercial |
648,633 | 624,738 | ||||||
|
|
|
|
|||||
Consumer: |
||||||||
Automobile |
163,124 | 224,928 | ||||||
Home equity |
267,328 | 265,129 | ||||||
Residential mortgage |
160,221 | 159,349 | ||||||
Other consumer |
25,505 | 31,171 | ||||||
|
|
|
|
|||||
Total consumer |
616,178 | 680,577 | ||||||
|
|
|
|
|||||
Total loans and leases |
1,264,811 | 1,305,315 | ||||||
|
|
|
|
|||||
Total earning assets |
$ | 1,466,204 | $ | 1,496,447 | ||||
|
|
|
|
|||||
Liabilities |
||||||||
Deposits: |
||||||||
Demand deposits - noninterest-bearing |
$ | | $ | | ||||
Demand deposits - interest-bearing |
2,845 | 3,915 | ||||||
Money market deposits |
30,322 | 43,350 | ||||||
Savings and other domestic deposits |
14,779 | 26,510 | ||||||
Core certificates of deposit |
67,838 | 121,179 | ||||||
|
|
|
|
|||||
Total core deposits |
115,784 | 194,954 | ||||||
Other domestic deposits of $250,000 or more |
1,587 | 3,698 | ||||||
Brokered deposits and negotiable CDs |
8,553 | 9,761 | ||||||
Deposits in foreign offices |
526 | 672 | ||||||
|
|
|
|
|||||
Total deposits |
126,450 | 209,085 | ||||||
Short-term borrowings |
1,685 | 2,737 | ||||||
Federal Home Loan Bank advances |
690 | 669 | ||||||
Subordinated notes and other long-term debt |
45,974 | 58,374 | ||||||
|
|
|
|
|||||
Total interest-bearing liabilities |
174,799 | 270,865 | ||||||
|
|
|
|
|||||
Net interest income |
$ | 1,291,405 | $ | 1,225,582 | ||||
|
|
|
|
(1) | Fully-taxable equivalent (FTE) income and expense calculated assuming a 35% tax rate. See page 21 for the FTE adjustment. |
19
Huntington Bancshares Incorporated
Consolidated Year To Date Net Interest Margin Analysis
(Unaudited)
YTD Average Rates (2) | ||||||||
Nine Months
Ended September 30, |
||||||||
2012 | 2011 | |||||||
Fully-taxable equivalent basis(1) |
||||||||
Assets |
||||||||
Interest bearing deposits in banks |
0.20 | % | 0.12 | % | ||||
Trading account securities |
1.42 | 1.46 | ||||||
Federal funds sold and securities purchased under resale agreements |
0.29 | 0.09 | ||||||
Loans held for sale |
3.43 | 4.39 | ||||||
Available-for-sale and other securities: |
||||||||
Taxable |
2.31 | 2.52 | ||||||
Tax-exempt |
4.18 | 4.30 | ||||||
|
|
|
|
|||||
Total available-for-sale and other securities |
2.40 | 2.61 | ||||||
Held-to-maturity securities - taxable |
3.25 | 3.00 | ||||||
Loans and leases:(3) |
||||||||
Commercial: |
||||||||
Commercial and industrial |
3.97 | 4.33 | ||||||
Commercial real estate: |
||||||||
Construction |
3.78 | 3.55 | ||||||
Commercial |
3.87 | 3.91 | ||||||
|
|
|
|
|||||
Commercial real estate |
3.86 | 3.88 | ||||||
|
|
|
|
|||||
Total commercial |
3.94 | 4.19 | ||||||
|
|
|
|
|||||
Consumer: |
||||||||
Automobile |
4.80 | 5.05 | ||||||
Home equity |
4.29 | 4.49 | ||||||
Residential mortgage |
4.11 | 4.61 | ||||||
Other consumer |
7.35 | 7.73 | ||||||
|
|
|
|
|||||
Total consumer |
4.44 | 4.79 | ||||||
|
|
|
|
|||||
Total loans and leases |
4.17 | 4.48 | ||||||
|
|
|
|
|||||
Total earning assets |
3.86 | % | 4.14 | % | ||||
|
|
|
|
|||||
Liabilities |
||||||||
Deposits: |
||||||||
Demand deposits - noninterest-bearing |
| % | | % | ||||
Demand deposits - interest-bearing |
0.07 | 0.10 | ||||||
Money market deposits |
0.30 | 0.44 | ||||||
Savings and other domestic deposits |
0.40 | 0.75 | ||||||
Core certificates of deposit |
1.41 | 2.02 | ||||||
|
|
|
|
|||||
Total core deposits |
0.50 | 0.83 | ||||||
Other domestic deposits of $250,000 or more |
0.67 | 1.02 | ||||||
Brokered deposits and negotiable CDs |
0.74 | 0.92 | ||||||
Deposits in foreign offices |
0.18 | 0.24 | ||||||
|
|
|
|
|||||
Total deposits |
0.51 | 0.83 | ||||||
Short-term borrowings |
0.16 | 0.17 | ||||||
Federal Home Loan Bank advances |
0.24 | 0.64 | ||||||
Subordinated notes and other long-term debt |
2.81 | 2.38 | ||||||
|
|
|
|
|||||
Total interest bearing liabilities |
0.63 | 0.92 | ||||||
|
|
|
|
|||||
Net interest rate spread |
3.16 | 3.17 | ||||||
Impact of noninterest-bearing funds on margin |
0.25 | 0.22 | ||||||
|
|
|
|
|||||
Net interest margin |
3.40 | % | 3.39 | % | ||||
|
|
|
|
Commercial Loan Derivative Impact
(Unaudited)
YTD Average Rates (2) | ||||||||
Nine Months Ended September 30, |
||||||||
2012 | 2011 | |||||||
Fully-taxable equivalent basis(1) |
||||||||
Commercial loans(2)(3) |
3.65 | % | 3.82 | % | ||||
Impact of commercial loan derivatives |
0.28 | 0.37 | ||||||
|
|
|
|
|||||
Total commercial - as reported |
3.94 | % | 4.19 | % | ||||
|
|
|
|
|||||
Average 30 day LIBOR |
0.22 | % | 0.23 | % |
(1) | Fully-taxable equivalent (FTE) yields are calculated assuming a 35% tax rate. See page 21 for the FTE adjustment. |
(2) | Loan and lease and deposit average rates include impact of applicable derivatives, non-deferrable fees, and amortized fees. |
(3) | Includes the impact of nonaccrual loans. |
20
Huntington Bancshares Incorporated
Selected Year To Date Income Statement Data(1)
(Unaudited)
Nine Months Ended September 30, | Change | |||||||||||||||||
(dollar amounts in thousands, except per share amounts) |
2012 | 2011 | Amount | Percent | ||||||||||||||
Interest income |
$ | 1,451,268 | $ | 1,485,010 | $ | (33,742 | ) | (2 | )% | |||||||||
Interest expense |
174,799 | 270,865 | (96,066 | ) | (35 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Net interest income |
1,276,469 | 1,214,145 | 62,324 | 5 | ||||||||||||||
Provision for credit losses |
107,930 | 128,768 | (20,838 | ) | (16 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Net interest income after provision for credit losses |
1,168,539 | 1,085,377 | 83,162 | 8 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Service charges on deposit accounts |
194,096 | 180,183 | 13,913 | 8 | ||||||||||||||
Trust services |
90,509 | 90,607 | (98 | ) | | |||||||||||||
Electronic banking |
61,279 | 93,415 | (32,136 | ) | (34 | ) | ||||||||||||
Mortgage banking income |
129,381 | 59,310 | 70,071 | 118 | ||||||||||||||
Brokerage income |
54,811 | 61,679 | (6,868 | ) | (11 | ) | ||||||||||||
Insurance income |
54,051 | 51,564 | 2,487 | 5 | ||||||||||||||
Bank owned life insurance income |
42,275 | 48,065 | (5,790 | ) | (12 | ) | ||||||||||||
Capital markets fees |
35,242 | 26,729 | 8,513 | 32 | ||||||||||||||
Gain on sale of loans |
37,492 | 29,060 | 8,432 | 29 | ||||||||||||||
Automobile operating lease income |
8,798 | 22,044 | (13,246 | ) | (60 | ) | ||||||||||||
Securities gains (losses) |
3,906 | 197 | 3,709 | 1,883 | ||||||||||||||
Other income |
88,366 | 88,418 | (52 | ) | | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total noninterest income |
800,206 | 751,271 | 48,935 | 7 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Personnel costs |
734,241 | 664,433 | 69,808 | 11 | ||||||||||||||
Outside data processing and other services |
140,087 | 133,773 | 6,314 | 5 | ||||||||||||||
Net occupancy |
82,152 | 82,288 | (136 | ) | | |||||||||||||
Equipment |
76,367 | 66,660 | 9,707 | 15 | ||||||||||||||
Deposit and other insurance expense |
52,003 | 59,211 | (7,208 | ) | (12 | ) | ||||||||||||
Marketing |
58,319 | 59,248 | (929 | ) | (2 | ) | ||||||||||||
Professional services |
44,712 | 53,826 | (9,114 | ) | (17 | ) | ||||||||||||
Amortization of intangibles |
34,902 | 40,143 | (5,241 | ) | (13 | ) | ||||||||||||
Automobile operating lease expense |
6,656 | 16,656 | (10,000 | ) | (60 | ) | ||||||||||||
OREO and foreclosure expense |
14,038 | 12,997 | 1,041 | 8 | ||||||||||||||
Gain on early extinguishment of debt |
(798 | ) | | (798 | ) | | ||||||||||||
Other expense |
122,569 | 108,991 | 13,578 | 12 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total noninterest expense |
1,365,248 | 1,298,226 | 67,022 | 5 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Income before income taxes |
603,497 | 538,422 | 65,075 | 12 | ||||||||||||||
Provision for income taxes |
129,754 | 122,667 | 7,087 | 6 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Net income |
$ | 473,743 | $ | 415,755 | $ | 57,988 | 14 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Dividends on preferred shares |
24,016 | 23,110 | 906 | 4 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Net income applicable to common shares |
$ | 449,727 | $ | 392,645 | $ | 57,082 | 15 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Average common shares - basic |
861,543 | 863,542 | (1,999 | ) | | % | ||||||||||||
Average common shares - diluted(2) |
866,768 | 867,446 | (678 | ) | | |||||||||||||
Per common share |
||||||||||||||||||
Net income - basic |
$ | 0.52 | $ | 0.45 | $ | 0.07 | 16 | % | ||||||||||
Net income - diluted |
0.52 | 0.45 | 0.07 | 16 | ||||||||||||||
Cash dividends declared |
0.12 | 0.06 | 0.06 | 100 | ||||||||||||||
Return on average total assets |
1.14 | % | 1.04 | % | 0.10 | 10 | % | |||||||||||
Return on average common shareholders equity |
11.5 | 10.9 | 0.6 | 6 | ||||||||||||||
Return on average tangible common shareholders equity(3) |
13.5 | 13.2 | 0.3 | 2 | ||||||||||||||
Net interest margin(4) |
3.40 | 3.39 | 0.01 | | ||||||||||||||
Efficiency ratio(5) |
63.7 | 63.6 | 0.1 | | ||||||||||||||
Effective tax rate |
21.5 | 22.8 | (1.3 | ) | (6 | ) | ||||||||||||
Revenue - fully taxable equivalent (FTE) |
||||||||||||||||||
Net interest income |
$ | 1,276,469 | $ | 1,214,145 | $ | 62,324 | 5 | % | ||||||||||
FTE adjustment(4) |
14,936 | 11,437 | 3,499 | 31 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Net interest income |
1,291,405 | 1,225,582 | 65,823 | 5 | ||||||||||||||
Noninterest income |
800,206 | 751,271 | 48,935 | 7 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total revenue |
$ | 2,091,611 | $ | 1,976,853 | $ | 114,758 | 6 | % | ||||||||||
|
|
|
|
|
|
|
|
21
(1) | Comparisons for presented periods are impacted by a number of factors. Refer to Significant Items. |
(2) | For all periods presented, the impact of the preferred stock issued in 2008 and the warrants issued to the U.S. Department of the Treasury in 2008 related to Huntingtons participation in the voluntary Capital Purchase Program was excluded from the diluted share calculation because the result was more than basic earnings per common share (anti-dilutive) for the periods. The preferred stock and warrants were repurchased in December 2010 and January 2011, respectively. |
(3) | Net income excluding expense for amortization of intangibles for the period divided by average tangible common shareholders equity. Average tangible common shareholders equity equals average total common shareholders equity less average intangible assets and goodwill. Expense for amortization of intangibles and average intangible assets are net of deferred tax liability, and calculated assuming a 35% tax rate. |
(4) | On a fully-taxable equivalent (FTE) basis assuming a 35% tax rate. |
(5) | Noninterest expense less amortization of intangibles and goodwill impairment divided by the sum of FTE net interest income and noninterest income excluding securities gains (losses). |
22
Huntington Bancshares Incorporated
Year To Date Mortgage Banking Income
(Unaudited)
Nine Months Ended September 30, | Change | |||||||||||||||||
(dollar amounts in thousands, except as noted) |
2012 | 2011 | Amount | Percent | ||||||||||||||
Mortgage banking income |
||||||||||||||||||
Origination and secondary marketing |
$ | 102,348 | $ | 46,969 | $ | 55,379 | 118 | % | ||||||||||
Servicing fees |
34,686 | 37,103 | (2,417 | ) | (7 | ) | ||||||||||||
Amortization of capitalized servicing |
(26,792 | ) | (28,556 | ) | 1,764 | (6 | ) | |||||||||||
Other mortgage banking income |
14,779 | 11,854 | 2,925 | 25 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Subtotal |
125,021 | 67,370 | 57,651 | 86 | ||||||||||||||
MSR valuation adjustment(1) |
(28,649 | ) | (46,912 | ) | 18,263 | (39 | ) | |||||||||||
Net trading gains (losses) related to MSR hedging |
33,009 | 38,852 | (5,843 | ) | (15 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total mortgage banking income |
$ | 129,381 | $ | 59,310 | $ | 70,071 | 118 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Mortgage originations (in millions) |
$ | 3,672 | $ | 2,798 | $ | 874 | 31 | % | ||||||||||
Average trading account securities used to hedge MSRs (in millions) |
4 | 25 | (21 | ) | (84 | ) | ||||||||||||
Capitalized mortgage servicing rights(2) |
108,074 | 145,277 | (37,203 | ) | (26 | ) | ||||||||||||
Total mortgages serviced for others (in millions)(2) |
15,571 | 16,061 | (490 | ) | (3 | ) | ||||||||||||
MSR % of investor servicing portfolio |
0.69 | % | 0.90 | % | (0.21 | )% | (23 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Net impact of MSR hedging |
||||||||||||||||||
MSR valuation adjustment(1) |
$ | (28,649 | ) | $ | (46,912 | ) | $ | 18,263 | (39 | )% | ||||||||
Net trading gains (losses) related to MSR hedging |
33,009 | 38,852 | (5,843 | ) | (15 | ) | ||||||||||||
Net interest income related to MSR hedging |
(26 | ) | 200 | (226 | ) | (113 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Net gain (loss) on MSR hedging |
$ | 4,334 | $ | (7,860 | ) | $ | 12,194 | (155 | )% | |||||||||
|
|
|
|
|
|
|
|
(1) | The change in fair value for the period represents the MSR valuation adjustment, net of amortization of capitalized servicing. |
(2) | At period end. |
23
Huntington Bancshares Incorporated
Year to Date Credit Reserves Analysis
(Unaudited)
Nine Months Ended September 30, | ||||||||
(dollar amounts in thousands) |
2012 | 2011 | ||||||
Allowance for loan and lease losses, beginning of period |
$ | 964,828 | $ | 1,249,008 | ||||
Loan and lease losses |
(348,238 | ) | (443,607 | ) | ||||
Recoveries of loans previously charged off |
75,906 | 90,435 | ||||||
|
|
|
|
|||||
Net loan and lease losses |
(272,332 | ) | (353,172 | ) | ||||
|
|
|
|
|||||
Provision for loan and lease losses |
102,823 | 132,116 | ||||||
Allowance of assets sold or transferred to loan held for sale |
(6,177 | ) | (8,242 | ) | ||||
|
|
|
|
|||||
Allowance for loan and lease losses, end of period |
$ | 789,142 | $ | 1,019,710 | ||||
|
|
|
|
|||||
Allowance for unfunded loan commitments and letters of credit, beginning of period |
$ | 48,456 | $ | 42,127 | ||||
Provision for (reduction in) unfunded loan commitments and letters of credit losses |
5,107 | (3,348 | ) | |||||
|
|
|
|
|||||
Allowance for unfunded loan commitments and letters of credit, end of period |
$ | 53,563 | $ | 38,779 | ||||
|
|
|
|
|||||
Total allowance for credit losses |
$ | 842,705 | $ | 1,058,489 | ||||
|
|
|
|
|||||
Allowance for loan and lease losses (ALLL) as % of: |
||||||||
Total loans and leases |
1.96 | % | 2.61 | % | ||||
Nonaccrual loans and leases (NALs) |
177 | 180 | ||||||
Nonperforming assets (NPAs) |
155 | 166 | ||||||
Total allowance for credit losses (ACL) as % of: |
||||||||
Total loans and leases |
2.09 | % | 2.71 | % | ||||
Nonaccrual loans and leases (NALs) |
189 | 187 | ||||||
Nonperforming assets (NPAs) |
165 | 172 |
24
Huntington Bancshares Incorporated
Year to Date Net Charge-Off Analysis
(Unaudited)
Nine Months Ended September 30, | ||||||||
(dollar amounts in thousands) |
2012 | 2011 | ||||||
Net charge-offs by loan and lease type: |
||||||||
Commercial: |
||||||||
Commercial and industrial |
$ | 57,196 | $ | 78,786 | ||||
Commercial real estate: |
||||||||
Construction |
(2,997 | ) | 33,995 | |||||
Commercial |
60,055 | 85,723 | ||||||
|
|
|
|
|||||
Commercial real estate |
57,058 | 119,718 | ||||||
|
|
|
|
|||||
Total commercial |
114,254 | 198,504 | ||||||
|
|
|
|
|||||
Consumer: |
||||||||
Automobile |
7,546 | 10,830 | ||||||
Home equity |
91,370 | 78,378 | ||||||
Residential mortgage |
38,236 | 46,949 | ||||||
Other consumer |
20,926 | 18,511 | ||||||
|
|
|
|
|||||
Total consumer |
158,078 | 154,668 | ||||||
|
|
|
|
|||||
Total net charge-offs |
$ | 272,332 | $ | 353,172 | ||||
|
|
|
|
|||||
Net charge-offs - annualized percentages: |
||||||||
Commercial: |
||||||||
Commercial and industrial |
0.48 | % | 0.78 | % | ||||
Commercial real estate: |
||||||||
Construction |
(0.68 | ) | 7.41 | |||||
Commercial |
1.51 | 2.01 | ||||||
|
|
|
|
|||||
Commercial real estate |
1.29 | 2.54 | ||||||
|
|
|
|
|||||
Total commercial |
0.70 | 1.35 | ||||||
|
|
|
|
|||||
Consumer: |
||||||||
Automobile |
0.22 | 0.24 | ||||||
Home equity |
1.47 | 1.33 | ||||||
Residential mortgage |
0.98 | 1.36 | ||||||
Other consumer |
6.03 | 4.58 | ||||||
|
|
|
|
|||||
Total consumer |
1.14 | 1.09 | ||||||
|
|
|
|
|||||
Net charge-offs as a % of average loans |
0.90 | % | 1.22 | % | ||||
|
|
|
|
25
Huntington Bancshares Incorporated
Year to Date Nonaccrual Loans and Leases (NALs) and Nonperforming Assets (NPAs)
(Unaudited)
September 30, | ||||||||
(dollar amounts in thousands) |
2012 | 2011 | ||||||
Nonaccrual loans and leases (NALs): |
||||||||
Commercial and industrial |
$ | 109,452 | $ | 209,632 | ||||
Commercial real estate |
148,986 | 257,086 | ||||||
Automobile |
11,814 | | ||||||
Residential mortgage |
123,140 | 61,129 | ||||||
Home equity |
51,654 | 37,156 | ||||||
|
|
|
|
|||||
Total nonaccrual loans and leases |
445,046 | 565,003 | ||||||
Other real estate, net: |
||||||||
Residential (1) |
23,640 | 18,588 | ||||||
Commercial |
30,566 | 19,418 | ||||||
|
|
|
|
|||||
Total other real estate, net |
54,206 | 38,006 | ||||||
Other NPAs (2) |
10,476 | 10,972 | ||||||
|
|
|
|
|||||
Total nonperforming assets (1) |
$ | 509,728 | $ | 613,981 | ||||
|
|
|
|
|||||
Nonaccrual loans and leases as a % of total loans and leases |
1.11 | % | 1.45 | % | ||||
NPA ratio (3) |
1.26 | 1.57 | ||||||
Nine Months Ended September 30, | ||||||||
(dollar amounts in thousands) |
2012 | 2011 | ||||||
Nonperforming assets, beginning of period |
$ | 590,276 | $ | 844,752 | ||||
New nonperforming assets (1) |
566,641 | (4) | 555,925 | |||||
Franklin impact, net |
| (8,943 | ) | |||||
Returns to accruing status |
(117,161 | ) | (165,109 | ) | ||||
Loan and lease losses |
(228,220 | ) | (283,667 | ) | ||||
OREO losses (gains) |
(681 | ) | 1,638 | |||||
Payments |
(220,674 | ) | (236,560 | ) | ||||
Sales |
(80,453 | ) | (94,055 | ) | ||||
|
|
|
|
|||||
Nonperforming assets, end of period |
$ | 509,728 | $ | 613,981 | ||||
|
|
|
|
(1) | Residential real estate owned properties acquired in the FDIC-assisted Fidelity Bank acquisition are reflected in the above table. |
(2) | Other nonperforming assets represent an investment security backed by a municipal bond. |
(3) | Nonperforming assets divided by the sum of loans and leases, net other real estate owned, and other NPAs. |
(4) | Includes $63.0 million related to Chapter 7 bankruptcy loans. |
26
Huntington Bancshares Incorporated
Year to Date Accruing Past Due Loans and Leases and Accruing and Nonaccruing Troubled Debt Restructured Loans
(Unaudited)
September 30, | ||||||||
(dollar amounts in thousands) |
2012 | 2011 | ||||||
Accruing loans and leases past due 90 days or more: |
||||||||
Commercial and industrial (1) |
$ | 26,117 | $ | | ||||
Commercial real estate (1) |
45,131 | | ||||||
Residential mortgage (excluding loans guaranteed by the U.S. Government) |
10,688 | 32,850 | ||||||
Home equity |
21,343 | 20,420 | ||||||
Other consumer |
4,940 | 7,755 | ||||||
|
|
|
|
|||||
Total, excl. loans guaranteed by the U.S. Government |
108,219 | 61,025 | ||||||
Add: loans guaranteed by U.S. Government |
87,463 | 84,413 | ||||||
|
|
|
|
|||||
Total accruing loans and leases past due 90 days or more, including loans guaranteed by the U.S. Government |
$ | 195,682 | $ | 145,438 | ||||
|
|
|
|
|||||
Ratios: |
||||||||
Excluding loans guaranteed by the U.S. Government, as a percent of total loans and leases |
0.27 | % | 0.16 | % | ||||
Guaranteed by U.S. Government, as a percent of total loans and leases |
0.22 | % | 0.21 | % | ||||
Including loans guaranteed by the U.S. Government, as a percent of total loans and leases |
0.49 | % | 0.37 | % | ||||
Accruing troubled debt restructured loans: (2) |
||||||||
Commercial and industrial |
$ | 55,809 | $ | 77,509 | ||||
Commercial real estate |
222,155 | 244,089 | ||||||
Automobile |
33,719 | 37,371 | ||||||
Home equity |
92,763 | 47,712 | ||||||
Residential mortgage |
280,890 | 304,365 | ||||||
Other consumer |
2,644 | 4,513 | ||||||
|
|
|
|
|||||
Total accruing troubled debt restructured loans |
$ | 687,980 | $ | 715,559 | ||||
|
|
|
|
|||||
Nonaccruing troubled debt restructured loans: (2) |
||||||||
Commercial and industrial |
$ | 28,859 | $ | 27,410 | ||||
Commercial real estate |
20,284 | 46,854 | ||||||
Automobile |
11,814 | | ||||||
Home equity |
7,756 | 166 | ||||||
Residential mortgage |
83,163 | 20,877 | ||||||
Other consumer |
113 | 113 | ||||||
|
|
|
|
|||||
Total nonaccruing troubled debt restructured loans |
$ | 151,989 | $ | 95,420 | ||||
|
|
|
|
(1) | All amounts represent accruing purchased impaired loans related to the FDIC-assisted Fidelity Bank acquisition. Under the applicable accounting guidance (ASC 310-30), the loans were recorded at fair value upon acquisition and remain in accruing status. |
(2) | No loans related to the FDIC-assisted Fidelity Bank acquisition were considered troubled debt restructured loans at March 31, 2012. |
27
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