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 17, 2013
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 17, 2013, Huntington Bancshares Incorporated (Huntington) issued a news release announcing its earnings for the quarter ended September 30, 2013. Also on October 17, 2013, Huntington made a Quarterly Financial Supplement available on its web site, www.huntington-ir.com.
Huntingtons senior management will host an earnings conference call October 17, 2013, 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 51293395. 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-ir.com. A telephone replay will be available two hours after the completion of the call through October 31, 2013, at (855) 859-2056 or (404) 537-3406; conference call ID 51293395.
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, the American Taxpayer Relief Act of 2012, the Consolidated and Further Continuing Appropriations Act of 2013, 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 implementing 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, regulations, and interpretations, including those related to the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Basel III regulatory capital reforms, as well as those involving the OCC, Federal Reserve, and CFPB; 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 2012 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 17, 2013. |
Exhibit 99.2 Quarterly Financial Supplement, September 2013. |
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 17, 2013 | By: | /s/ David S. Anderson | ||||
David S. Anderson | ||||||
Interim Chief Financial Officer |
EXHIBIT INDEX
Exhibit No. | Description | |
Exhibit 99.1 | News release of Huntington Bancshares Incorporated, October 17, 2013. | |
Exhibit 99.2 | Quarterly Financial Supplement, September 2013. |
Exhibit 99.1
FOR IMMEDIATE RELEASE
Oct. 17, 2013
Analysts: Todd Beekman (todd.beekman@huntington.com), 614.480.3878
Mark Muth (mark.muth@huntington.com), 614.480.4720
Media: Maureen Brown (maureen.brown@huntington.com), 614.480.5512
HUNTINGTON BANCSHARES INCORPORATED
REPORTS NET INCOME OF $178 MILLION, OR $0.20 PER COMMON SHARE, FOR THE
2013 THIRD QUARTER, UP 6% FROM THE YEAR-AGO QUARTER AND UP 18% FROM
THE PRIOR QUARTER
Specific highlights compared with 2012 Third Quarter:
| $0.39, or 7%, increase in tangible book value per common share to $6.10 |
| 1.27% return on average assets, up from 1.19% |
| $682 million of fully-taxable equivalent revenue, a 2% decrease reflecting: |
| $4 million, or 1%, decrease in fully-taxable equivalent net interest income, reflecting a 3.34% fully-taxable equivalent net interest margin (NIM), down 4 basis points, and 5% average loan growth |
| $11 million, or 4%, decrease in noninterest income |
| $35 million, or 8%, decrease in noninterest expense due to reductions in all categories except net occupancy and equipment. The quarter included: |
| A previously announced, $34 million one-time, non-cash gain related to pension curtailment, and |
| $17 million of charges related to branch consolidations, severance, and facility optimization |
| 25% decline in nonaccrual loans to 0.78% of total loans and leases, down from 1.11% |
| Tier 1 Common Ratio of 10.85%, up from 10.28% |
Specific highlights compared with 2013 Second Quarter:
| $2 million, or less than 1%, increase in fully-taxable equivalent revenue, reflecting: |
| 7% annualized growth in average total loans and leases offset by 4 basis point reduction in NIM resulted in unchanged net interest income |
| $2 million increase in noninterest income as broad fee income growth was partially offset by the $10 million, or 30%, decrease in mortgage banking income |
| $23 million, or 5%, decrease in noninterest expense included $17 million of Significant Items |
| NCOs increased to 0.53% of average total loans and leases from 0.34%, and remained in our long-term expected range |
| 2.0 million shares repurchased at an average price of $8.18 per share |
COLUMBUS, Ohio Huntington Bancshares Incorporated (NASDAQ: HBAN; www.huntington.com) reported 2013 third quarter net income of $178 million, an increase of $11 million, or 6%, from the 2012 third quarter and an increase of $28 million, or 18%, from the 2013 second quarter. Earnings per common share were $0.20, an increase of $0.01 and $0.03 from the year-ago and prior quarters, respectively.
The board of directors declared a quarterly cash dividend on its common stock of $0.05 per common share. The dividend is payable January 2, 2014, to shareholders of record on December 19, 2013.
Strategies Continue to Drive Business Performance
Huntingtons third-quarter results continue to demonstrate that our uniquely positioned products and services are driving robust organic customer acquisition across our commercial and consumer customer base while delivering stable returns to shareholders, said Stephen D. Steinour, chairman, president and CEO of Huntington Bank. Through our disciplined investments in fee-income businesses in conjunction with prudent expense management, we have been able to deliver modest positive operating leverage for the first nine months of the year.
There is much to recognize in the quarter, not the least of which was our successful consumer credit card launch. The third quarter was a time of continuing household growth, particularly within our in-store branches, and marked a return to stability of our commercial real estate loan portfolio, said Steinour. Our performance has benefited from ongoing improvement within our core Midwestern economies. We also made progress in managing expenses, including one-time savings attributable to pension curtailment, rightsizing of some investments, and the consolidation of 22 branch locations. Overall, it was a solid quarter positioning Huntington for a good finish for 2013.
Table 1 Earnings Performance Summary
2013 | 2012 | |||||||||||||||||||
($ in millions, except per share data) |
Third Quarter |
Second Quarter |
First Quarter |
Fourth Quarter |
Third Quarter |
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Net Income |
$ | 178.5 | $ | 150.7 | $ | 151.8 | $ | 167.3 | $ | 167.8 | ||||||||||
Diluted earnings per common share |
0.20 | 0.17 | 0.17 | 0.19 | 0.19 | |||||||||||||||
Return on average assets |
1.27 | % | 1.08 | % | 1.10 | % | 1.19 | % | 1.19 | % | ||||||||||
Return on average common equity |
12.3 | 10.4 | 10.7 | 11.6 | 11.9 | |||||||||||||||
Return on average tangible common equity |
14.1 | 12.0 | 12.4 | 13.5 | 13.9 | |||||||||||||||
Net interest margin |
3.34 | 3.38 | 3.42 | 3.45 | 3.38 | |||||||||||||||
Efficiency ratio |
60.6 | 64.0 | 63.3 | 62.3 | 64.5 | |||||||||||||||
Tangible book value per common share |
$ | 6.10 | $ | 5.88 | $ | 5.91 | $ | 5.78 | $ | 5.71 | ||||||||||
Cash dividends declared per common share |
0.05 | 0.05 | 0.04 | 0.04 | 0.04 | |||||||||||||||
Average diluted shares outstanding (000s) |
841,015 | 843,840 | 848,708 | 853,306 | 863,588 | |||||||||||||||
Average earning assets |
$ | 51,247 | $ | 51,156 | $ | 50,960 | $ | 50,682 | $ | 51,330 | ||||||||||
Average loans |
41,994 | 41,280 | 40,864 | 40,397 | 40,120 | |||||||||||||||
Average core deposits |
43,773 | 43,768 | 43,616 | 44,310 | 43,764 | |||||||||||||||
Tangible common equity / tangible assets ratio |
9.02 | % | 8.78 | % | 8.92 | % | 8.76 | % | 8.74 | % | ||||||||||
Tier 1 common risk-based capital ratio |
10.85 | 10.71 | 10.62 | 10.48 | 10.28 | |||||||||||||||
NCOs as a % of average loans and leases |
0.53 | % | 0.34 | % | 0.51 | % | 0.69 | % | 1.05 | % | ||||||||||
NAL ratio |
0.78 | 0.87 | 0.92 | 1.00 | 1.11 | |||||||||||||||
ACL as a % of total loans and leases |
1.72 | 1.86 | 1.91 | 1.99 | 2.09 |
2
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 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 prior five quarters. This quarter contained two significant items relating to the pension curtailment and expense related to consolidation of 22 branches, severance, and facilities optimization.
Table 2 Significant Items Influencing Earnings Performance Comparisons
Three Months Ended | Pre-Tax Impact | After-Tax Impact | ||||||||||
(in millions, except per share) | Amount | Amount (1) | EPS (2) | |||||||||
September 30, 2013 net income |
$ | 178 | $ | 0.20 | ||||||||
Pension curtailment gain |
$ | 34 | 22 | 0.03 | ||||||||
Franchise repositioning related expense |
(17 | ) | (11 | ) | (0.01 | ) | ||||||
June 30, 2013 net income |
$ | 151 | $ | 0.17 | ||||||||
March 31, 2013 net income |
$ | 152 | $ | 0.17 | ||||||||
December 31, 2012 net income |
$ | 167 | $ | 0.19 | ||||||||
September 30, 2012 net income |
$ | 168 | $ | 0.19 | ||||||||
State deferred tax valuation allowance adjustment |
N.A. | 20 | 0.02 |
(1) | Favorable (unfavorable) impact on net income; 35% tax rate |
(2) | EPS reflected on a fully diluted basis |
N.A. = Not applicable
Net Interest Income, Net Interest Margin, and Average Balance Sheet
Table 3 Net Interest Income and Net Interest Margin Performance Summary
2013 | 2012 | |||||||||||||||||||||||||||
Third | Second | First | Fourth | Third | Change (%) | |||||||||||||||||||||||
($ in millions) |
Quarter | Quarter | Quarter | Quarter | Quarter | LQ | YOY | |||||||||||||||||||||
Net interest income |
$ | 424.9 | $ | 424.9 | $ | 424.2 | $ | 434.1 | $ | 430.3 | (0 | )% | (1 | )% | ||||||||||||||
FTE adjustment |
6.6 | 6.6 | 5.9 | 5.5 | 5.3 | 1 | 26 | |||||||||||||||||||||
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Net interest incomeFTE |
431.5 | 431.5 | 430.1 | 439.5 | 435.6 | (0 | ) | (1 | ) | |||||||||||||||||||
Noninterest income |
250.5 | 248.7 | 252.2 | 297.7 | 261.1 | 1 | (4 | ) | ||||||||||||||||||||
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Total revenueFTE |
$ | 682.0 | $ | 680.2 | $ | 682.3 | $ | 737.2 | $ | 696.6 | 0 | % | (2 | )% | ||||||||||||||
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Change bps | ||||||||||||||||||||||||||||
Yield / Cost |
LQ | YOY | ||||||||||||||||||||||||||
Total earning assets |
3.64 | % | 3.68 | % | 3.75 | % | 3.80 | % | 3.79 | % | (4 | ) | (16 | ) | ||||||||||||||
Total loans and leases |
3.87 | 3.95 | 4.03 | 4.13 | 4.12 | (7 | ) | (25 | ) | |||||||||||||||||||
Total securities |
2.41 | 2.38 | 2.39 | 2.38 | 2.41 | 3 | 0 | |||||||||||||||||||||
Total interest-bearing liabilities |
0.42 | 0.42 | 0.45 | 0.50 | 0.58 | 0 | (15 | ) | ||||||||||||||||||||
Total interest-bearing deposits |
0.33 | 0.36 | 0.38 | 0.42 | 0.48 | (2 | ) | (15 | ) | |||||||||||||||||||
Net interest rate spread |
3.20 | 3.26 | 3.30 | 3.30 | 3.21 | (6 | ) | (1 | ) | |||||||||||||||||||
Impact of noninterest-bearing funds on margin |
0.14 | 0.12 | 0.12 | 0.15 | 0.17 | 2 | (3 | ) | ||||||||||||||||||||
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Net interest margin |
3.34 | % | 3.38 | % | 3.42 | % | 3.45 | % | 3.38 | % | (4 | ) | (4 | ) | ||||||||||||||
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See Page 9 of Quarterly Financial Supplement for additional rate detail.
3
Fully-taxable equivalent net interest income decreased $4 million, or 1%, from the 2012 third quarter. This reflected the impact of a 4 basis point decrease in the fully-taxable equivalent net interest margin (NIM) to 3.34%, as average earning assets were essentially unchanged with 5% loan growth offset by the planned reduction in investment securities. The primary items impacting the decrease in the NIM were:
| 16 basis point negative impact from the mix and yield of earning assets primarily reflecting a decrease in consumer loan yields. |
Partially offset by:
| 15 basis point positive impact from the mix and yield of deposits reflecting the strategic focus on changing the funding sources from higher rate time deposits to no-cost demand deposits and low cost money market deposits. |
Compared to the 2013 second quarter, fully-taxable equivalent net interest income was unchanged, reflecting a $0.1 billion increase in average earnings assets as well as an additional day in the quarter, primarily offset by a 4 basis point decrease in NIM. The primary items affecting the NIM were a 4 basis point negative impact from the mix and yield of earning assets and the 3 basis point negative impact of the $750 million of debt issued during the quarter, partially offset by the 3 basis point benefit from lower cost deposits and increased equity.
Table 4 Average Earning Assets Automobile and C&I Continue To Drive Growth
2013 | 2012 | |||||||||||||||||||||||||||
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 |
$ | 17.0 | $ | 17.0 | $ | 17.0 | $ | 16.5 | $ | 16.3 | (0 | )% | 4 | % | ||||||||||||||
Commercial real estate |
4.9 | 5.0 | 5.3 | 5.5 | 5.7 | (2 | ) | (14 | ) | |||||||||||||||||||
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Total commercial |
21.9 | 22.0 | 22.2 | 22.0 | 22.1 | (0 | ) | (1 | ) | |||||||||||||||||||
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Automobile |
6.1 | 5.3 | 4.8 | 4.5 | 4.1 | 15 | 49 | |||||||||||||||||||||
Home equity |
8.3 | 8.3 | 8.4 | 8.3 | 8.4 | 1 | (0 | ) | ||||||||||||||||||||
Residential mortgage |
5.3 | 5.2 | 5.0 | 5.2 | 5.2 | 1 | 2 | |||||||||||||||||||||
Other consumer |
0.4 | 0.5 | 0.4 | 0.4 | 0.4 | (18 | ) | (14 | ) | |||||||||||||||||||
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Total consumer |
20.1 | 19.2 | 18.6 | 18.4 | 18.1 | 4 | 11 | |||||||||||||||||||||
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Total loans and leases |
42.0 | 41.3 | 40.9 | 40.4 | 40.1 | 2 | 5 | |||||||||||||||||||||
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Total securities |
8.8 | 9.1 | 9.3 | 9.4 | 9.3 | (3 | ) | (5 | ) | |||||||||||||||||||
Held-for-sale and other earning assets |
0.4 | 0.8 | 0.8 | 0.9 | 1.9 | (43 | ) | (77 | ) | |||||||||||||||||||
Total earning assets |
$ | 51.2 | $ | 51.2 | $ | 51.0 | $ | 50.7 | $ | 51.3 | 0 | % | (0 | )% | ||||||||||||||
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See Page 7 of Quarterly Financial Supplement for additional detail.
Average earning assets decreased $0.1 billion, or less than 1%, from the year-ago quarter, driven by:
| $1.5 billion, or 77%, decrease in Held-for-sale and other earning assets reflecting the impact of the Automobile loan securitization completed in 2012 fourth quarter. |
| $0.8 billion, or 14%, decrease in average Commercial Real Estate (CRE) loans. This decrease reflected continued runoff of the noncore portfolio and a slight reduction of the core portfolio, as acceptable returns for new core originations were balanced against internal concentration limits and increased competition for projects sponsored by high quality developers. |
4
Partially offset by:
| $2.0 billion, or 49%, increase in average on balance sheet Automobile loans, as originations, while below industry levels, remained strong and our investments in the Northeast and upper Midwest continued to grow as planned. |
| $0.7 billion, or 4%, increase in average Commercial and Industrial (C&I) loans and leases. This reflected the continued growth within the middle market healthcare vertical, equipment finance, and dealer floorplan. |
Compared to the 2013 second quarter, the $0.1 billion, or less than 1%, increase in average earning assets reflected a $0.8 billion, or 15%, increase in automobile loans partially offset by a $0.3 billion decrease in both loans held for sale and total securities.
Table 5 Average Liabilities Noninterest Bearing Deposit Growth Continues and Customers Move from CDs to Money Market Deposits
2013 | 2012 | |||||||||||||||||||||||||||
Third | Second | First | Fourth | Third | Change (%) | |||||||||||||||||||||||
(in billions) |
Quarter | Quarter | Quarter | Quarter | Quarter | LQ | YOY | |||||||||||||||||||||
Average Deposits |
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Demand depositsnoninterest bearing |
$ | 13.1 | $ | 12.9 | $ | 12.2 | $ | 13.1 | $ | 12.3 | 2 | % | 6 | % | ||||||||||||||
Demand depositsinterest bearing |
5.8 | 5.9 | 6.0 | 5.8 | 5.8 | (3 | ) | (1 | ) | |||||||||||||||||||
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Total demand deposits |
18.9 | 18.8 | 18.1 | 19.0 | 18.1 | 0 | 4 | |||||||||||||||||||||
Money market deposits |
15.7 | 15.1 | 15.0 | 14.7 | 14.5 | 4 | 8 | |||||||||||||||||||||
Savings and other domestic deposits |
5.0 | 5.1 | 5.1 | 5.0 | 5.0 | (2 | ) | 1 | ||||||||||||||||||||
Core certificates of deposit |
4.2 | 4.8 | 5.3 | 5.6 | 6.1 | (13 | ) | (32 | ) | |||||||||||||||||||
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Total core deposits |
43.8 | 43.8 | 43.6 | 44.3 | 43.8 | 0 | 0 | |||||||||||||||||||||
Other domestic deposits of $250,000 or more |
0.3 | 0.3 | 0.4 | 0.4 | 0.3 | (17 | ) | (11 | ) | |||||||||||||||||||
Brokered deposits and negotiable CDs |
1.6 | 1.8 | 1.7 | 1.8 | 1.9 | (13 | ) | (17 | ) | |||||||||||||||||||
Other deposits |
0.4 | 0.3 | 0.3 | 0.3 | 0.4 | 19 | 6 | |||||||||||||||||||||
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Total deposits |
46.0 | 46.2 | 46.0 | 46.8 | 46.3 | (0 | ) | (1 | ) | |||||||||||||||||||
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Short and long-term borrowings |
3.0 | 2.8 | 2.8 | 2.4 | 3.1 | 10 | (2 | ) | ||||||||||||||||||||
Total Interest-bearing liabilities |
$ | 35.9 | $ | 36.1 | $ | 36.6 | $ | 36.1 | $ | 37.0 | (0 | )% | (3 | )% | ||||||||||||||
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See Page 7 of Quarterly Financial Supplement for additional detail.
Average noninterest bearing deposits increased $0.8 billion, or 6%, while average interest-bearing liabilities decreased $1.1 billion, or 3%, from the 2012 third quarter, primarily reflecting:
| $2.0 billion, or 32%, decrease in average core certificates of deposit due to the strategic focus on changing the funding sources to no-cost demand deposits and low cost money market deposits. |
Partially offset by:
| $1.2 billion, or 8%, increase in money market deposits reflecting the strategic focus on customer growth, increased share of wallet and the customers, both consumer and commercial, preference for increased liquidity. |
Compared to the 2013 second quarter, average interest-bearing liabilities declined $0.2 billion, or less than 1%. Average total core deposits were relatively unchanged as the $0.7 billion, or 4%, increase in money market deposits was nearly offset by the $0.6 billion, or 13%, decrease in core certificates of deposit.
5
Noninterest Income
Table 6 Noninterest Income Broad-Based Growth Offsets More than Half of the Decline in Mortgage Banking Income
2013 | 2012 | |||||||||||||||||||||||||||
Third | Second | First | Fourth | Third | Change (%) | |||||||||||||||||||||||
(in millions) |
Quarter | Quarter | Quarter | Quarter | Quarter | LQ | YOY | |||||||||||||||||||||
Noninterest Income |
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Service charges on deposit accounts |
$ | 72.9 | $ | 68.0 | $ | 60.9 | $ | 68.1 | $ | 67.8 | 7 | % | 8 | % | ||||||||||||||
Mortgage banking income |
23.6 | 33.7 | 45.2 | 61.7 | 44.6 | (30 | ) | (47 | ) | |||||||||||||||||||
Trust services |
30.5 | 30.7 | 31.2 | 31.4 | 29.7 | (1 | ) | 3 | ||||||||||||||||||||
Electronic Banking |
24.3 | 23.3 | 20.7 | 21.0 | 22.1 | 4 | 10 | |||||||||||||||||||||
Brokerage income |
16.5 | 19.5 | 18.0 | 17.4 | 16.5 | (15 | ) | 0 | ||||||||||||||||||||
Insurance income |
17.3 | 17.2 | 19.3 | 17.3 | 17.8 | 0 | (3 | ) | ||||||||||||||||||||
Gain on sale of loans |
5.1 | 3.3 | 2.6 | 20.7 | 6.6 | 51 | (23 | ) | ||||||||||||||||||||
Bank owned life insurance income |
13.7 | 15.4 | 13.4 | 13.8 | 14.4 | (11 | ) | (4 | ) | |||||||||||||||||||
Capital markets fees |
12.8 | 12.2 | 7.8 | 12.7 | 11.6 | 5 | 11 | |||||||||||||||||||||
Securities (losses) gains |
0.1 | (0.4 | ) | (0.5 | ) | 0.9 | 4.2 | (124 | ) | (98 | ) | |||||||||||||||||
Other income |
33.7 | 25.7 | 33.6 | 32.8 | 25.8 | 31 | 31 | |||||||||||||||||||||
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Total noninterest income |
$ | 250.5 | $ | 248.7 | $ | 252.2 | $ | 297.7 | $ | 261.1 | 1 | % | (4 | )% | ||||||||||||||
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In the 2013 third quarter, noninterest income decreased $11 million, or 4%, from the year-ago quarter, primarily reflecting:
| $21 million, or 47%, decrease in mortgage banking income primarily driven by a lower gain on sale margin and a higher percentage of originations held on balance sheet. |
| $4 million, or 98%, decrease in security gains as the year-ago quarter had certain securities designated as available-for-sale that were sold and the proceeds from those sales were reinvested into the held-to-maturity portfolio. |
Partially offset by:
| $8 million, or 31%, increase in other noninterest income primarily related to fees associated with commercial loan activity. |
| $5 million, or 8%, increase in service charges on deposit accounts reflecting 9% consumer household and 7% commercial relationship growth and changing customer usage patterns. |
Compared to the 2013 second quarter, noninterest income increased $2 million, or 1%, reflecting similar activity within other noninterest income and service charges on deposit accounts, which increased $8 million and $5 million, respectively. These were partially offset by the $10 million, or 30%, decrease in mortgage banking income on 5% lower origination volume with a tighter gain on sale margin and a $3 million, or 15%, decrease in brokerage income due to typical seasonal trends.
6
Noninterest Expense
Table 7 Noninterest Expense Decreases Even When Considering Significant Items
2013 | 2012 | |||||||||||||||||||||||||||
Third | Second | First | Fourth | Third | Change % | |||||||||||||||||||||||
(in millions) |
Quarter | Quarter | Quarter | Quarter | Quarter | LQ | YOY | |||||||||||||||||||||
Noninterest Expense |
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Personnel costs |
$ | 229.3 | $ | 263.9 | $ | 258.9 | $ | 254.0 | $ | 247.7 | (13 | )% | (7 | )% | ||||||||||||||
Outside data processing and other services |
49.3 | 49.9 | 49.3 | 48.7 | 50.4 | (1 | ) | (2 | ) | |||||||||||||||||||
Net occupancy |
35.6 | 27.7 | 30.1 | 29.0 | 27.6 | 29 | 29 | |||||||||||||||||||||
Equipment |
28.2 | 24.9 | 24.9 | 26.6 | 26.0 | 13 | 9 | |||||||||||||||||||||
Deposit and other insurance expense |
11.2 | 13.5 | 15.5 | 16.3 | 15.5 | (17 | ) | (28 | ) | |||||||||||||||||||
Professional services |
12.5 | 9.3 | 7.2 | 22.5 | 17.5 | 34 | (29 | ) | ||||||||||||||||||||
Marketing |
12.3 | 14.2 | 11.0 | 16.5 | 16.8 | (14 | ) | (27 | ) | |||||||||||||||||||
Amortization of intangibles |
10.4 | 10.4 | 10.3 | 11.6 | 11.4 | 0 | (9 | ) | ||||||||||||||||||||
OREO and foreclosure expense |
2.1 | (0.3 | ) | 2.7 | 4.2 | 5.0 | 658 | (59 | ) | |||||||||||||||||||
Loss (Gain) on early extinguishment of debt |
| | | | 1.8 | NR | (100 | ) | ||||||||||||||||||||
Other expense |
32.6 | 32.4 | 33.0 | 41.2 | 38.6 | 1 | (16 | ) | ||||||||||||||||||||
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Total noninterest expense |
$ | 423.3 | $ | 445.9 | $ | 442.8 | $ | 470.6 | $ | 458.3 | (5 | )% | (8 | )% | ||||||||||||||
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(in thousands) |
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Number of employees (full-time equivalent) |
12.0 | 12.2 | 12.1 | 11.8 | 11.7 | (2 | )% | 2 | % |
NR-Not relevant
In the 2013 third quarter, noninterest expense decreased $35 million, or 8%, from the year-ago quarter. When adjusting for the $17 million of Significant Items, noninterest expense decreased $18 million. The decrease in the reported noninterest expenses primarily reflects:
| $18 million, or 7%, decrease in personnel costs primarily reflecting the $34 million one-time, non-cash gain related to the pension curtailment. This was partially offset by $7 million of branch consolidation and severance expenses and an $8 million increase in salaries due to a 2% increase in the number of full-time equivalent employees as external information technology contractors were transitioned to full-time employees. |
| $6 million, or 16%, decline in other expense, reflecting lower representations and warranties related expenses and lower operating lease expense. |
| $5 million, or 29%, decrease in professional services, reflecting a decrease in legal and outside consultant expenses. |
| $5 million, or 27%, decrease in marketing, primarily reflecting the refinement of targeted marketing programs and reduced promotional offers. |
| $4 million, or 28%, decrease in deposit and other insurance expense due to lower insurance premiums. |
| $3 million, or 59%, decrease in OREO and foreclosure expense as OREO properties have declined 46%. |
Partially offset by:
| $8 million, or 29%, increase in net occupancy reflecting $8 million related to branch consolidation and facilities optimization. |
7
Noninterest expense decreased $23 million, or 5%, from the prior quarter. When adjusting for the $17 million of Significant Items, noninterest expense decreased $5 million. Personnel costs decreased $35 million, or 13%, as it included $27 million of net benefit from the aforementioned Significant Items. Net occupancy and equipment increased $8 million and $3 million, respectively, and included $8 million and $2 million, respectively, of branch consolidation and facilities optimization related expenses.
Credit Quality
Table 8 Summary Credit Quality Metrics Nonaccrual Loans Continue Their Steady Decline
2013 | 2012 | |||||||||||||||||||
($ in thousands) |
Sep. 30 | Jun. 30 | Mar. 31 | Dec. 31 | Sep. 30 | |||||||||||||||
Total nonaccrual loans and leases |
$ | 333,106 | $ | 363,546 | $ | 380,311 | $ | 407,633 | $ | 445,046 | ||||||||||
Total other real estate, net |
29,154 | 21,066 | 25,139 | 28,097 | 54,206 | |||||||||||||||
Other NPAs (1) |
12,000 | 12,087 | 10,045 | 10,045 | 10,476 | |||||||||||||||
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Total nonperforming assets (2) |
$ | 374,260 | $ | 396,699 | $ | 415,495 | $ | 445,775 | $ | 509,728 | ||||||||||
Accruing loans and leases past due 90 days or more |
94,966 | 94,123 | 108,423 | 110,316 | 108,219 | |||||||||||||||
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NPAs + accruing loans and lease past due 90 days or more |
$ | 469,226 | $ | 490,822 | $ | 523,918 | $ | 556,091 | $ | 617,947 | ||||||||||
NAL ratio (3) |
0.78 | % | 0.87 | % | 0.92 | % | 1.00 | % | 1.11 | % | ||||||||||
NPA ratio (2) (4) |
0.88 | 0.95 | 1.01 | 1.09 | 1.26 | |||||||||||||||
(NPAs+90 days)/(Loans+OREO) (5) |
0.93 | 1.38 | 1.48 | 1.59 | 1.75 | |||||||||||||||
Provision for credit losses |
$ | 11,400 | $ | 24,722 | $ | 29,592 | $ | 39,458 | $ | 37,004 | ||||||||||
Net charge-offs |
55,742 | 34,790 | 51,687 | 70,130 | 105,095 | |||||||||||||||
Net charge-offs / Average total loans |
0.53 | % | 0.34 | % | 0.51 | % | 0.69 | % | 1.05 | % | ||||||||||
Allowance for loans and lease losses |
$ | 666,030 | $ | 733,076 | $ | 746,769 | $ | 769,075 | $ | 789,142 | ||||||||||
Allowance for unfunded loan commitments and letters of credit |
66,857 | 44,223 | 40,855 | 40,651 | 53,563 | |||||||||||||||
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Allowance for credit losses (ACL) |
$ | 732,887 | $ | 777,299 | $ | 787,624 | $ | 809,726 | $ | 842,705 | ||||||||||
ACL as a % of: |
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Total loans and leases |
1.72 | % | 1.86 | % | 1.91 | % | 1.99 | % | 2.09 | % | ||||||||||
NALs |
220 | 214 | 207 | 199 | 189 | |||||||||||||||
NPAs |
196 | 196 | 190 | 182 | 165 |
(1) | Other nonperforming assets includes certain impaired investment securities. |
(2) | NPAs related to Chapter 7 bankruptcy: 3Q13 - $57.9 MM, 2Q13 - $59.6 MM, 1Q13- $59.9 MM, 4Q12 - $60.1 MM, and 3Q12 - $63.0 MM |
(3) | Total NALs as a % of total loans and leases |
(4) | Total NPAs as a % of sum of loans and leases, impaired loans held for sale, and net other real estate. |
(5) | The sum of nonperforming assets and total accruing loans and leases past due 90 days or more divided by the sum of loans and leases and other real estate. |
See Pages 12 through 15 of Quarterly Financial Supplement for additional detail.
Most credit quality related metrics in the 2013 third quarter reflected continued improvement. Nonaccrual loans and leases (NALs) declined $112 million, or 25%, from the 2012 third quarter and $30 million, or 8%, from the 2013 second quarter to $333 million, or 0.78% of total loans and leases. Nonperforming assets (NPAs) declined $135 million, or 27%, compared to the year-ago quarter and $22 million, or 6%, from the 2013 second quarter to $374 million, or 0.88% of total loans and leases, OREO, and other NPAs. The decreases primarily reflected meaningful improvement in both C&I and CRE NALs.
The provision for credit losses decreased $26 million, or 69%, from the 2012 third quarter due to the continued decline in classified, criticized, and nonaccrual loans and included the implementation of enhancements to our allowance for loan and lease losses (ALLL) model. Net charge-offs (NCOs) decreased $49 million from the year-ago quarter to $56 million as the year-ago quarter included $33 million of Chapter 7 bankruptcy related loans. As part of a review of our consumer portfolio, the current quarter includes $13 million of Chapter 7 home equity related charge-offs that were not identified in the 2012 third quarter implementation of the OCCs regulatory guidance. NCOs were an annualized 0.53% of average loans and leases in the current quarter compared to 0.34% in the 2013 second quarter and 1.05% in the year-ago quarter.
8
The period-end allowance for credit losses (ACL) as a percentage of total loans and leases decreased to 1.72% from 2.09% a year ago, while the ACL as a percentage of period-end total NALs increased to 220% from 189%.
Capital
Table 9 Capital Ratios Tier 1 Common Continues to Increase
2013 | 2012 | |||||||||||||||||||
(in millions) |
Sep. 30 | Jun. 30 | Mar. 31 | Dec. 31, | Sep. 30 | |||||||||||||||
Tangible common equity / tangible assets ratio |
9.02 | % | 8.78 | % | 8.92 | % | 8.76 | % | 8.74 | % | ||||||||||
Tier 1 common risk-based capital ratio |
10.85 | % | 10.71 | % | 10.62 | % | 10.48 | % | 10.28 | % | ||||||||||
Regulatory Tier 1 risk-based capital ratio |
12.36 | % | 12.24 | % | 12.16 | % | 12.02 | % | 11.88 | % | ||||||||||
Excess over 6.0% (1) |
$ | 3,096 | $ | 3,000 | $ | 2,953 | $ | 2,876 | $ | 2,831 | ||||||||||
Regulatory Total risk-based capital ratio |
14.67 | % | 14.57 | % | 14.55 | % | 14.50 | % | 14.36 | % | ||||||||||
Excess over 10.0% (1) |
$ | 2,274 | $ | 2,197 | $ | 2,181 | $ | 2,150 | $ | 2,099 | ||||||||||
Total risk-weighted assets |
$ | 48,687 | $ | 48,080 | $ | 47,937 | $ | 47,773 | $ | 48,147 |
(1) | Well-capitalized regulatory threshold |
See Page 16 of Quarterly Financial Supplement for additional detail.
The tangible common equity to tangible assets ratio at September 30, 2013, was 9.02%, up 28 basis points from the year-ago quarter. Our Tier 1 common risk-based capital ratio at quarter end was 10.85%, up from 10.28% at the end of the 2012 third quarter.
The regulatory Tier 1 risk-based capital ratio at September 30, 2013, was 12.36%, up from 11.88% at September 30, 2012. The increase in the regulatory Tier 1 risk-based capital ratio reflected the increase in retained earnings, partially offset by redemption of $36 million of qualifying trust preferred securities since September 30, 2012. All capital ratios were impacted by the repurchase of 29.9 million common shares over the last four quarters, of which 2.0 million were repurchased in the 2013 third quarter at an average price per share of $8.18. Although Huntington has the ability to repurchase up to $136 million additional shares of common stock through the first quarter of 2014, we intend to continue disciplined repurchase activity consistent with our annual capital plan, our capital return objectives, and market conditions especially as those conditions impact the trading price of our common stock. We do not anticipate that the pending transaction with Camco will materially impact our repurchase activities except during the relatively limited time we will be required to be out of the market under the SECs Regulation M.
Income Taxes
The provision for income taxes in the 2013 third quarter was $62 million, $52 million in the 2013 second quarter, and $28 million in the 2012 third quarter. The effective tax rates for the 2013 third quarter, 2013 second quarter, and 2012 third quarter were 25.8%, 25.8%, and 14.4%, respectively. At September 30, 2013, the net federal deferred tax asset was $152 million, and the net state deferred tax asset was $37 million. Based on both positive and negative evidence and the level of forecasted future taxable income, there was no impairment to the net federal and net state deferred tax assets at September 30, 2013. As of September 30, 2013 and June 30, 2013, there was no disallowed deferred tax asset for regulatory capital purposes.
9
Expectations
While we are optimistic about continuing indicators of economic improvement supporting Huntingtons performance for the next several quarters, we must face the headwinds related to the yield curve, regulatory environment, and ongoing uncertainty in Washington, said Steinour. We look to our federal elected officials to take the appropriate steps to support economic stability and continue to advocate for sound and sustainable fiscal policies.
Net interest income is expected to modestly grow over the next several quarters. We anticipate an increase in earning assets as total loans modestly grow and investment securities increase in preparation for the new liquidity rules. However, those benefits to net interest income are expected to be mostly offset by continued modest downward pressure on NIM until the short end of the yield curve begins to move higher. Full-year 2013 NIM is not expected to fall below the mid 3.30%s. While we are maintaining a disciplined approach to loan pricing, asset yields remain under pressure, and that is partially offset by the continued opportunity of deposit repricing and mix shift.
The C&I portfolio is expected to see growth consistent with the anticipated increase in customer activity. Our C&I loan pipeline remains robust with much of this reflecting the positive impact from our investments in specialized commercial verticals, focused OCR sales process, and continued support of middle market and small business lending. Automobile loan originations remain strong, and we currently do not anticipate any automobile securitizations in the near future. Residential mortgages, home equity, and CRE loan balances are expected to increase modestly.
We anticipate the increase in total loans will outpace growth in total deposits. This reflects our continued focus on the overall cost of funds, as well as the continued shift towards low- and no-cost demand deposits and money market deposit accounts.
Noninterest income, when compared to recent levels, is expected to be relatively flat, excluding the impact of any automobile loan sales, any net MSR activity, and typical first quarter seasonality.
Expenses, excluding the $17 million of Significant Items, are expected to modestly increase due to higher depreciation, personnel, occupancy, and equipment expense related to our continued modest pace of investments. We continue to evaluate additional cost saving opportunities, and an additional $6 million of branch consolidation expense is expected in the 2013 fourth quarter from previously announced actions. We remain committed to posting positive operating leverage for the 2013 full year.
NPAs are expected to show continued improvement. This quarter, NCOs were at the high end of our expected normalized range of 35 to 55 basis points. The level of provision for credit losses was below our long-term expectation, and we continue to expect moderate quarterly volatility.
The effective tax rate for 2013 is expected to be in the range of 25% to 27%, primarily reflecting the impacts of tax-exempt income, tax-advantaged investments, and general business credits.
Given its relative small size and structure, the acquisition of Camco Financial, which was announced on October 10, is not expected to have a meaningful impact on current expectations.
10
Conference Call / Webcast Information
Huntingtons senior management will host an earnings conference call on Thursday, October 17, 2013, 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# 51293395. 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 approximately two hours after the completion of the call through October 31, 2013 at (855) 859-2056 or (404) 537-3406; conference ID# 51293395.
Please see the 2013 Third Quarter Quarterly Financial Supplement for additional detailed financial performance metrics. This document can be found at: http://www.huntington-ir.com
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 general economic, political, or industry conditions; uncertainty in U.S. fiscal and monetary policy, including the interest rate policies of the Federal Reserve Board; volatility and disruptions in global capital and credit markets; (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 implementing 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, regulations, and interpretations, including those related to the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Basel III regulatory capital reforms, as well as those involving the OCC, Federal Reserve, and CFPB; 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 2012 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.
11
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 2012 Annual Report on Form 10-K and other factors described from time to time in Huntingtons other filings with the Securities and Exchange Commission.
Annualized data
Certain returns, yields, performance ratios, or quarterly growth rates are presented on an annualized basis. This is done for analytical and decision-making purposes to better discern underlying performance trends when compared to full year or year-over-year amounts. For example, loan and deposit growth rates, as well as net charge-off percentages, are most often expressed in terms of an annual rate like 8%. As such, a 2% growth rate for a quarter would represent an annualized 8% growth rate.
Fully-taxable equivalent interest income and net interest margin
Income from tax-exempt earning assets is increased by an amount equivalent to the taxes that would have been paid if this income had been taxable at statutory rates. This adjustment puts all earning assets, most notably tax-exempt municipal securities and certain lease assets, on a common basis that facilitates comparison of results to results of competitors.
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 $57 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 retail banking franchise: Ohio, Michigan, Pennsylvania, Indiana, West Virginia, and Kentucky. The primary distribution channels include a banking network of more than 700 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 1,500 ATMs. Through automotive dealership relationships within its six-state retail 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.
###
12
Exhibit 99.2
HUNTINGTON BANCSHARES INCORPORATED
Quarterly Financial Supplement
September 2013
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 - Interest Income / Expense |
8 | |||
Consolidated Quarterly Net Interest Margin - Yield |
9 | |||
Selected Quarterly Income Statement Data |
10 | |||
Quarterly Mortgage Banking Income |
11 | |||
Quarterly Credit Reserves Analysis |
12 | |||
Quarterly Net Charge-Off Analysis |
13 | |||
Quarterly Nonaccrual Loans and Leases (NALs) and Nonperforming Assets (NPAs) |
14 | |||
Quarterly Accruing Past Due Loans and Leases and Accruing Troubled Debt Restructured Loans |
15 | |||
Quarterly Common Stock Summary, Capital, and Other Data |
16 | |||
Consolidated Year To Date Average Balance Sheets |
17 | |||
Consolidated Year To Date Net Interest Margin - Interest Income / Expense |
18 | |||
Consolidated Year To Date Net Interest Margin - Yield |
19 | |||
Selected Year To Date Income Statement Data |
20 | |||
Year To Date Mortgage Banking Income |
21 | |||
Year To Date Credit Reserves Analysis |
22 | |||
Year To Date Net Charge-Off Analysis |
23 | |||
Year To Date Nonaccrual Loans and Leases (NALs) and Nonperforming Assets (NPAs) |
24 | |||
Year To Date Accruing Past Due Loans and Leases and Accruing and Nonaccruing Troubled Debt Restructured Loans |
25 |
Notes:
The preparation of financial statement data in conformity with accounting principles generally accepted in the United States (GAAP) 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 and Basel III definitions, 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 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 the related press release in their entirety, and not to rely on any single financial measure. Basel III Tier 1 common capital ratio estimates are based on managements current interpretation, expectations, and understanding of the final U.S. Basel III rules adopted by the Federal Reserve Board and released on July 2, 2012.
Huntington Bancshares Incorporated
Quarterly Key Statistics(1)
(Unaudited)
2013 | 2012 | Percent Changes vs. | ||||||||||||||||||
(dollar amounts in thousands, except per share amounts) |
Third | Second | Third | 2Q13 | 3Q12 | |||||||||||||||
Net interest income |
$ | 424,852 | $ | 424,937 | $ | 430,298 | | % | (1 | )% | ||||||||||
Provision for credit losses |
11,400 | 24,722 | 37,004 | (54 | ) | (69 | ) | |||||||||||||
Noninterest income |
250,503 | 248,655 | 261,067 | 1 | (4 | ) | ||||||||||||||
Noninterest expense |
423,336 | 445,865 | 458,303 | (5 | ) | (8 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Income before income taxes |
240,619 | 203,005 | 196,058 | 19 | 23 | |||||||||||||||
Provision for income taxes |
62,132 | 52,354 | 28,291 | 19 | 120 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income |
$ | 178,487 | $ | 150,651 | $ | 167,767 | 18 | % | 6 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Dividends on preferred shares |
7,967 | 7,967 | 7,983 | | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income applicable to common shares |
$ | 170,520 | $ | 142,684 | $ | 159,784 | 20 | % | 7 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income per common sharediluted |
$ | 0.20 | $ | 0.17 | $ | 0.19 | 18 | % | 5 | % | ||||||||||
Cash dividends declared per common share |
0.05 | 0.05 | 0.04 | | 25 | |||||||||||||||
Book value per common share at end of period |
6.72 | 6.51 | 6.34 | 3 | 6 | |||||||||||||||
Tangible book value per common share at end of period |
6.10 | 5.88 | 5.71 | 4 | 7 | |||||||||||||||
Average common sharesbasic |
830,398 | 834,730 | 857,871 | (1 | ) | (3 | ) | |||||||||||||
Average common sharesdiluted |
841,015 | 843,840 | 863,588 | | (3 | ) | ||||||||||||||
Return on average assets |
1.27 | % | 1.08 | % | 1.19 | % | ||||||||||||||
Return on average common shareholders equity |
12.3 | 10.4 | 11.9 | |||||||||||||||||
Return on average tangible common shareholders equity(2) |
14.1 | 12.0 | 13.9 | |||||||||||||||||
Net interest margin(3) |
3.34 | 3.38 | 3.38 | |||||||||||||||||
Efficiency ratio(4) |
60.6 | 64.0 | 64.5 | |||||||||||||||||
Noninterest Income/Total Revenue |
36.7 | 36.6 | 37.5 | |||||||||||||||||
Effective tax rate |
25.8 | 25.8 | 14.4 | |||||||||||||||||
Average loans and leases |
$ | 41,994,204 | $ | 41,280,065 | $ | 40,119,938 | 2 | 5 | ||||||||||||
Average loans and leaseslinked quarter annualized growth rate |
6.9 | % | 4.1 | % | (10.3 | )% | ||||||||||||||
Average earning assets |
$ | 51,247,215 | $ | 51,156,168 | $ | 51,330,241 | | | ||||||||||||
Average total assets |
55,914,791 | 55,889,271 | 56,138,175 | | | |||||||||||||||
Average core deposits(5) |
43,773,153 | 43,768,948 | 43,763,695 | | | |||||||||||||||
Average core depositslinked quarter annualized growth rate |
| % | 1.4 | % | 9.2 | % | ||||||||||||||
Average shareholders equity |
$ | 5,879,479 | $ | 5,888,206 | $ | 5,730,951 | | 3 | ||||||||||||
Total assets at end of period |
56,648,251 | 56,113,687 | 56,443,000 | 1 | | |||||||||||||||
Total shareholders equity at end of period |
5,961,579 | 5,783,515 | 5,807,604 | 3 | 3 | |||||||||||||||
Net charge-offs (NCOs) |
55,742 | 34,790 | 105,095 | 60 | (47 | ) | ||||||||||||||
NCOs as a % of average loans and leases |
0.53 | % | 0.34 | % | 1.05 | % | ||||||||||||||
Nonaccrual loans and leases (NALs) |
$ | 333,106 | $ | 363,546 | $ | 445,046 | (8 | ) | (25 | ) | ||||||||||
NAL ratio |
0.78 | % | 0.87 | % | 1.11 | % | ||||||||||||||
Nonperforming assets (NPAs)(6) |
$ | 374,260 | $ | 396,699 | $ | 509,728 | (6 | ) | (27 | ) | ||||||||||
NPA ratio(6) |
0.88 | % | 0.95 | % | 1.26 | % | ||||||||||||||
Allowance for loan and lease losses (ALLL) as a % of total loans and leases at the end of period |
1.57 | 1.76 | 1.96 | |||||||||||||||||
ALLL plus allowance for unfunded loan commitments and letters of credit (ACL) as a % of total loans and leases at the end of period |
1.72 | 1.86 | 2.09 | |||||||||||||||||
ACL as a % of NALs |
220 | 214 | 189 | |||||||||||||||||
ACL as a % of NPAs |
196 | 196 | 165 | |||||||||||||||||
Tier 1 leverage ratio(7) |
10.85 | 10.64 | 10.29 | |||||||||||||||||
Tier 1 common risk-based capital ratio(7) |
10.85 | 10.71 | 10.28 | |||||||||||||||||
Tier 1 risk-based capital ratio(7) |
12.36 | 12.24 | 11.88 | |||||||||||||||||
Total risk-based capital ratio(7) |
14.67 | 14.57 | 14.36 | |||||||||||||||||
Tangible common equity / tangible assets ratio(8) |
9.02 | 8.78 | 8.74 |
See Notes to the 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) |
2013 | 2012 | Amount | Percent | ||||||||||||
Net interest income |
$ | 1,273,959 | $ | 1,276,469 | $ | (2,510 | ) | | % | |||||||
Provision for credit losses |
65,714 | 107,930 | (42,216 | ) | (39 | ) | ||||||||||
Noninterest income |
751,367 | 800,206 | (48,839 | ) | (6 | ) | ||||||||||
Noninterest expense |
1,311,994 | 1,365,248 | (53,254 | ) | (4 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income before income taxes |
647,618 | 603,497 | 44,121 | 7 | ||||||||||||
Provision for income taxes |
166,700 | 129,754 | 36,946 | 28 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net Income |
$ | 480,918 | $ | 473,743 | $ | 7,175 | 2 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Dividends on preferred shares |
23,904 | 24,016 | (112 | ) | | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income applicable to common shares |
$ | 457,014 | $ | 449,727 | $ | 7,287 | 2 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income per common sharediluted |
$ | 0.54 | $ | 0.52 | $ | 0 | 4 | % | ||||||||
Cash dividends declared per common share |
0.14 | 0.12 | 0.02 | 17 | ||||||||||||
Average common sharesbasic |
835,410 | 861,543 | (26,133 | ) | (3 | ) | ||||||||||
Average common sharesdiluted |
844,521 | 866,768 | (22,247 | ) | (3 | ) | ||||||||||
Return on average assets |
1.15 | % | 1.14 | % | ||||||||||||
Return on average common shareholders equity |
11.1 | 11.5 | ||||||||||||||
Return on average tangible common shareholders equity(2) |
12.9 | 13.5 | ||||||||||||||
Net interest margin(3) |
3.38 | 3.40 | ||||||||||||||
Efficiency ratio(4) |
62.6 | 63.7 | ||||||||||||||
Noninterest Income/Total Revenue |
36.8 | 38.3 | ||||||||||||||
Effective tax rate |
25.7 | 21.5 | ||||||||||||||
Average loans and leases |
$ | 41,383,537 | $ | 40,147,614 | $ | 1,235,923 | 3 | |||||||||
Average earning assets |
51,122,168 | 50,717,991 | 404,177 | 1 | ||||||||||||
Average total assets |
55,844,746 | 55,546,026 | 298,720 | 1 | ||||||||||||
Average core deposits(5) |
43,719,823 | 42,647,918 | 1,071,905 | 3 | ||||||||||||
Average shareholders equity |
5,867,457 | 5,614,026 | 253,431 | 5 | ||||||||||||
Net charge-offs (NCOs) |
142,219 | 272,332 | (130,113 | ) | (48 | )% | ||||||||||
NCOs as a % of average loans and leases |
0.46 | % | 0.90 | % |
See Notes to the Annual and Quarterly Key Statistics.
2
Key Statistics Footnotes
(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 other real estate owned. |
(7) | September 30, 2013, figures are estimated. |
(8) | 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
2013 | 2012 | Percent Changes vs. | ||||||||||||||||||
September 30, | December 31, | September 30, | 4Q12 | 3Q12 | ||||||||||||||||
(dollar amounts in thousands, except number of shares) |
(Unaudited) | (Unaudited) | ||||||||||||||||||
Assets |
||||||||||||||||||||
Cash and due from banks |
$ | 1,107,658 | $ | 1,262,806 | $ | 797,601 | (12 | )% | 39 | % | ||||||||||
Interest-bearing deposits in banks |
63,100 | 70,921 | 65,635 | (11 | ) | (4 | ) | |||||||||||||
Trading account securities |
74,167 | 91,205 | 91,970 | (19 | ) | (19 | ) | |||||||||||||
Loans held for sale |
345,621 | 764,309 | 1,852,919 | (55 | ) | (81 | ) | |||||||||||||
Available-for-sale and other securities |
6,446,681 | 7,566,175 | 7,778,568 | (15 | ) | (17 | ) | |||||||||||||
Held-to-maturity securities |
2,236,121 | 1,743,876 | 1,582,150 | 28 | 41 | |||||||||||||||
Loans and leases(1) |
42,555,833 | 40,728,425 | 40,260,417 | 4 | 6 | |||||||||||||||
Allowance for loan and lease losses |
(666,030 | ) | (769,075 | ) | (789,142 | ) | (13 | ) | (16 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loans and leases |
41,889,803 | 39,959,350 | 39,471,275 | 5 | 6 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Bank owned life insurance |
1,633,247 | 1,596,056 | 1,586,902 | 2 | 3 | |||||||||||||||
Premises and equipment |
639,632 | 617,257 | 590,750 | 4 | 8 | |||||||||||||||
Goodwill |
444,268 | 444,268 | 444,268 | | | |||||||||||||||
Other intangible assets |
103,512 | 132,157 | 143,804 | (22 | ) | (28 | ) | |||||||||||||
Accrued income and other assets |
1,664,441 | 1,904,805 | 2,037,158 | (13 | ) | (18 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | 56,648,251 | $ | 56,153,185 | $ | 56,443,000 | 1 | % | | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities and shareholders equity |
||||||||||||||||||||
Liabilities |
||||||||||||||||||||
Deposits(2) |
$ | 46,564,046 | $ | 46,252,683 | $ | 46,741,286 | 1 | % | | % | ||||||||||
Short-term borrowings |
660,932 | 589,814 | 1,259,771 | 12 | (48 | ) | ||||||||||||||
Federal Home Loan Bank advances |
333,352 | 1,008,959 | 9,406 | (67 | ) | 3,444 | ||||||||||||||
Other long-term debt |
904,668 | 158,784 | 185,613 | 470 | 387 | |||||||||||||||
Subordinated notes |
1,111,598 | 1,197,091 | 1,306,273 | (7 | ) | (15 | ) | |||||||||||||
Accrued expenses and other liabilities |
1,112,076 | 1,155,643 | 1,133,047 | (4 | ) | (2 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
50,686,672 | 50,362,974 | 50,635,396 | 1 | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Shareholders equity |
||||||||||||||||||||
Preferred stockauthorized 6,617,808 shares-Series A, 8.50% fixed rate, non-cumulative perpetual convertible preferred stock, par value of $0.01, and liquidation value per share of $1,000 |
362,507 | 362,507 | 362,507 | | | |||||||||||||||
Series B, floating rate, non-voting, non-cumulative perpetual preferred stock, par value of $0.01, and liquidation value per share of $1,000 |
23,785 | 23,785 | 23,785 | | | |||||||||||||||
Common stockPar value of $0.01 |
8,315 | 8,441 | 8,567 | (1 | ) | (3 | ) | |||||||||||||
Capital surplus |
7,387,033 | 7,475,149 | 7,551,509 | (1 | ) | (2 | ) | |||||||||||||
Less treasury shares, at cost |
(10,893 | ) | (10,921 | ) | (10,817 | ) | | 1 | ||||||||||||
Accumulated other comprehensive loss |
(230,767 | ) | (150,817 | ) | (84,542 | ) | 53 | 173 | ||||||||||||
Retained earnings |
(1,578,401 | ) | (1,917,933 | ) | (2,043,405 | ) | (18 | ) | (23 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total shareholders equity |
5,961,579 | 5,790,211 | 5,807,604 | 3 | 3 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities and shareholders equity |
$ | 56,648,251 | $ | 56,153,185 | $ | 56,443,000 | 1 | % | | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Common shares authorized (par value of $0.01) |
1,500,000,000 | 1,500,000,000 | 1,500,000,000 | |||||||||||||||||
Common shares issued |
831,516,546 | 844,105,349 | 856,748,584 | |||||||||||||||||
Common shares outstanding |
830,144,646 | 842,812,709 | 855,485,376 | |||||||||||||||||
Treasury shares outstanding |
1,371,900 | 1,292,640 | 1,263,208 | |||||||||||||||||
Preferred shares issued |
1,967,071 | 1,967,071 | 1,967,071 | |||||||||||||||||
Preferred shares outstanding |
398,007 | 398,007 | 398,007 |
(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
2013 | 2012 | |||||||||||||||||||||||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||||||||||||||||||
(dollar amounts in millions) |
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||||||||||||||||
Ending Balances by Type: |
||||||||||||||||||||||||||||||||||||||||
Commercial:(1) |
||||||||||||||||||||||||||||||||||||||||
Commercial and industrial |
$ | 17,335 | 41 | % | $ | 17,113 | 41 | % | $ | 17,267 | 42 | % | $ | 16,971 | 42 | % | $ | 16,478 | 41 | % | ||||||||||||||||||||
Commercial real estate: |
||||||||||||||||||||||||||||||||||||||||
Construction |
544 | 1 | 607 | 1 | 574 | 1 | 648 | 2 | 541 | 1 | ||||||||||||||||||||||||||||||
Commercial |
4,328 | 10 | 4,286 | 10 | 4,485 | 11 | 4,751 | 12 | 4,956 | 12 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Commercial real estate |
4,872 | 11 | 4,893 | 11 | 5,059 | 12 | 5,399 | 14 | 5,497 | 13 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total commercial |
22,207 | 52 | 22,006 | 52 | 22,326 | 54 | 22,370 | 56 | 21,975 | 54 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Consumer: |
||||||||||||||||||||||||||||||||||||||||
Automobile |
6,317 | 15 | 5,810 | 14 | 5,036 | 12 | 4,634 | 11 | 4,276 | 11 | ||||||||||||||||||||||||||||||
Home equity |
8,347 | 20 | 8,369 | 20 | 8,474 | 21 | 8,335 | 20 | 8,381 | 21 | ||||||||||||||||||||||||||||||
Residential mortgage |
5,307 | 12 | 5,168 | 12 | 5,051 | 12 | 4,970 | 12 | 5,192 | 13 | ||||||||||||||||||||||||||||||
Other consumer |
378 | 1 | 387 | 2 | 397 | 1 | 419 | 1 | 436 | 1 | ||||||||||||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total consumer |
20,349 | 48 | 19,734 | 48 | 18,958 | 46 | 18,358 | 44 | 18,285 | 46 | ||||||||||||||||||||||||||||||
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total loans and leases |
$ | 42,556 | 100 | % | $ | 41,740 | 100 | % | $ | 41,284 | 100 | % | $ | 40,728 | 100 | % | $ | 40,260 | 100 | % | ||||||||||||||||||||
|
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|
|||||||||||||||||||||
Ending Balances by Business Segment: |
||||||||||||||||||||||||||||||||||||||||
Retail and Business Banking |
$ | 12,673 | 30 | % | $ | 12,642 | 30 | % | $ | 12,749 | 31 | % | $ | 12,644 | 31 | % | $ | 12,656 | 31 | % | ||||||||||||||||||||
Regional and Commercial Banking |
11,397 | 27 | 11,119 | 27 | 11,166 | 27 | 10,679 | 26 | 10,463 | 26 | ||||||||||||||||||||||||||||||
AFCRE |
12,484 | 29 | 12,119 | 29 | 11,526 | 28 | 11,396 | 28 | 11,019 | 27 | ||||||||||||||||||||||||||||||
WGH |
5,961 | 14 | 5,868 | 14 | 5,767 | 14 | 5,887 | 15 | 6,053 | 16 | ||||||||||||||||||||||||||||||
Treasury / Other |
41 | | (8 | ) | | 76 | | 122 | | 69 | | |||||||||||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total loans and leases |
$ | 42,556 | 100 | % | $ | 41,740 | 100 | % | $ | 41,284 | 100 | % | $ | 40,728 | 100 | % | $ | 40,260 | 100 | % | ||||||||||||||||||||
|
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|
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|
|||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||||||||||||
Third | Second | First | Fourth | Third | ||||||||||||||||||||||||||||||||||||
Average Balances by Business Segment: |
||||||||||||||||||||||||||||||||||||||||
Retail and Business Banking |
$ | 12,633 | 30 | % | $ | 12,688 | 31 | % | $ | 12,693 | 31 | % | $ | 12,677 | 31 | % | $ | 12,703 | 32 | % | ||||||||||||||||||||
Regional and Commercial Banking |
11,150 | 27 | 11,058 | 27 | 10,987 | 27 | 10,390 | 26 | 10,427 | 26 | ||||||||||||||||||||||||||||||
AFCRE |
12,239 | 29 | 11,683 | 28 | 11,454 | 28 | 11,221 | 28 | 10,949 | 27 | ||||||||||||||||||||||||||||||
WGH |
5,923 | 14 | 5,837 | 14 | 5,711 | 14 | 6,054 | 15 | 5,993 | 15 | ||||||||||||||||||||||||||||||
Treasury / Other |
49 | | 14 | | 19 | | 55 | | 48 | | ||||||||||||||||||||||||||||||
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|
|
|
|
|
|
|||||||||||||||||||||
Total loans and leases |
$ | 41,994 | 100 | % | $ | 41,280 | 100 | % | $ | 40,864 | 100 | % | $ | 40,397 | 100 | % | $ | 40,120 | 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
2013 | 2012 | |||||||||||||||||||||||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||||||||||||||||||
(dollar amounts in millions) |
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||||||||||||||||
Ending Balances by Type: |
||||||||||||||||||||||||||||||||||||||||
Demand depositsnoninterest-bearing |
$ | 13,421 | 29 | % | $ | 13,491 | 29 | % | $ | 12,757 | 27 | % | $ | 12,600 | 27 | % | $ | 12,680 | 27 | % | ||||||||||||||||||||
Demand depositsinterest-bearing |
5,856 | 13 | 5,977 | 13 | 6,135 | 13 | 6,218 | 13 | 5,909 | 13 | ||||||||||||||||||||||||||||||
Money market deposits |
16,212 | 34 | 15,131 | 33 | 15,165 | 32 | 14,691 | 32 | 14,926 | 32 | ||||||||||||||||||||||||||||||
Savings and other domestic deposits |
4,946 | 11 | 5,054 | 11 | 5,174 | 11 | 5,002 | 11 | 4,949 | 11 | ||||||||||||||||||||||||||||||
Core certificates of deposit |
4,108 | 9 | 4,353 | 9 | 5,170 | 11 | 5,516 | 12 | 5,817 | 12 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total core deposits |
44,543 | 96 | 44,006 | 95 | 44,401 | 94 | 44,027 | 95 | 44,281 | 95 | ||||||||||||||||||||||||||||||
Other domestic deposits of $250,000 or more |
268 | 1 | 283 | 1 | 355 | 1 | 354 | 1 | 352 | 1 | ||||||||||||||||||||||||||||||
Brokered deposits and negotiable CDs |
1,366 | 3 | 1,695 | 4 | 1,807 | 4 | 1,594 | 3 | 1,795 | 4 | ||||||||||||||||||||||||||||||
Deposits in foreign offices |
387 | | 347 | | 304 | 1 | 278 | 1 | 313 | | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total deposits |
$ | 46,564 | 100 | % | $ | 46,331 | 100 | % | $ | 46,867 | 100 | % | $ | 46,253 | 100 | % | $ | 46,741 | 100 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total core deposits: |
||||||||||||||||||||||||||||||||||||||||
Commercial |
$ | 19,526 | 44 | % | $ | 18,922 | 43 | % | $ | 18,502 | 42 | % | $ | 18,358 | 42 | % | $ | 19,207 | 43 | % | ||||||||||||||||||||
Consumer |
25,017 | 56 | 25,084 | 57 | 25,899 | 58 | 25,669 | 58 | 25,074 | 57 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total core deposits |
$ | 44,543 | 100 | % | $ | 44,006 | 100 | % | $ | 44,401 | 100 | % | $ | 44,027 | 100 | % | $ | 44,281 | 100 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Ending Balances by Business Segment: |
||||||||||||||||||||||||||||||||||||||||
Retail and Business Banking |
$ | 28,200 | 61 | % | $ | 28,209 | 61 | % | $ | 28,719 | 61 | % | $ | 28,367 | 61 | % | $ | 28,220 | 60 | % | ||||||||||||||||||||
Regional and Commercial Banking |
6,191 | 13 | 5,639 | 12 | 5,627 | 12 | 5,863 | 13 | 6,205 | 13 | ||||||||||||||||||||||||||||||
AFCRE |
1,084 | 2 | 1,021 | 2 | 970 | 2 | 995 | 2 | 922 | 2 | ||||||||||||||||||||||||||||||
WGH |
9,935 | 22 | 10,069 | 22 | 10,015 | 22 | 9,508 | 21 | 9,816 | 22 | ||||||||||||||||||||||||||||||
Treasury / Other(1) |
1,154 | 2 | 1,393 | 3 | 1,536 | 3 | 1,520 | 3 | 1,578 | 3 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total deposits |
$ | 46,564 | 100 | % | $ | 46,331 | 100 | % | $ | 46,867 | 100 | % | $ | 46,253 | 100 | % | $ | 46,741 | 100 | % | ||||||||||||||||||||
|
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|
|
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|
|
|
|||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||||||||||||
Third | Second | First | Fourth | Third | ||||||||||||||||||||||||||||||||||||
Average Balances by Business Segment: |
||||||||||||||||||||||||||||||||||||||||
Retail and Business Banking |
$ | 28,172 | 61 | % | $ | 28,345 | 61 | % | $ | 28,331 | 62 | % | $ | 28,301 | 61 | % | $ | 28,248 | 61 | % | ||||||||||||||||||||
Regional and Commercial Banking |
5,912 | 13 | 5,506 | 12 | 5,668 | 12 | 6,120 | 13 | 5,715 | 12 | ||||||||||||||||||||||||||||||
AFCRE |
1,018 | 2 | 954 | 2 | 922 | 2 | 949 | 2 | 942 | 2 | ||||||||||||||||||||||||||||||
WGH |
9,593 | 21 | 9,919 | 22 | 9,623 | 21 | 9,873 | 21 | 9,735 | 21 | ||||||||||||||||||||||||||||||
Treasury / Other(1) |
1,275 | 3 | 1,463 | 3 | 1,469 | 3 | 1,524 | 3 | 1,658 | 4 | ||||||||||||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total deposits |
$ | 45,970 | 100 | % | $ | 46,187 | 100 | % | $ | 46,013 | 100 | % | $ | 46,767 | 100 | % | $ | 46,298 | 100 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Comprised primarily of national market deposits. |
6
Huntington Bancshares Incorporated
Consolidated Quarterly Average Balance Sheets
(Unaudited)
Average Balances | ||||||||||||||||||||||||||||
2013 | 2012 | Percent Changes vs. | ||||||||||||||||||||||||||
(dollar amounts in millions) |
Third | Second | First | Fourth | Third | 2Q13 | 3Q12 | |||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||
Interest-bearing deposits in banks |
$ | 54 | $ | 84 | $ | 72 | $ | 73 | $ | 82 | (36 | )% | (34 | )% | ||||||||||||||
Loans held for sale |
379 | 678 | 709 | 840 | 1,829 | (44 | ) | (79 | ) | |||||||||||||||||||
Securities: |
||||||||||||||||||||||||||||
Available-for-sale and other securities: |
||||||||||||||||||||||||||||
Taxable |
6,040 | 6,728 | 6,964 | 7,131 | 8,014 | (10 | ) | (25 | ) | |||||||||||||||||||
Tax-exempt |
565 | 591 | 549 | 492 | 423 | (4 | ) | 34 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total available-for-sale and other securities |
6,605 | 7,319 | 7,513 | 7,623 | 8,437 | (10 | ) | (22 | ) | |||||||||||||||||||
Trading account securities |
76 | 84 | 85 | 97 | 66 | (10 | ) | 15 | ||||||||||||||||||||
Held-to-maturity securitiestaxable |
2,139 | 1,711 | 1,717 | 1,652 | 796 | 25 | 169 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Securities |
8,820 | 9,114 | 9,315 | 9,372 | 9,299 | (3 | ) | (5 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Loans and leases:(1) |
||||||||||||||||||||||||||||
Commercial: |
||||||||||||||||||||||||||||
Commercial and industrial |
17,032 | 17,033 | 16,954 | 16,507 | 16,343 | | 4 | |||||||||||||||||||||
Commercial real estate: |
||||||||||||||||||||||||||||
Construction |
565 | 586 | 598 | 576 | 569 | (4 | ) | (1 | ) | |||||||||||||||||||
Commercial |
4,345 | 4,429 | 4,694 | 4,897 | 5,153 | (2 | ) | (16 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Commercial real estate |
4,910 | 5,015 | 5,292 | 5,473 | 5,722 | (2 | ) | (14 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total commercial |
21,942 | 22,048 | 22,246 | 21,980 | 22,065 | | (1 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Consumer: |
||||||||||||||||||||||||||||
Automobile |
6,075 | 5,283 | 4,833 | 4,486 | 4,065 | 15 | 49 | |||||||||||||||||||||
Home equity |
8,341 | 8,263 | 8,395 | 8,345 | 8,369 | 1 | | |||||||||||||||||||||
Residential mortgage |
5,256 | 5,225 | 4,978 | 5,155 | 5,177 | 1 | 2 | |||||||||||||||||||||
Other consumer |
380 | 461 | 412 | 431 | 444 | (18 | ) | (14 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total consumer |
20,052 | 19,232 | 18,618 | 18,417 | 18,055 | 4 | 11 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total loans and leases |
41,994 | 41,280 | 40,864 | 40,397 | 40,120 | 2 | 5 | |||||||||||||||||||||
Allowance for loan and lease losses |
(717 | ) | (746 | ) | (772 | ) | (783 | ) | (855 | ) | (4 | ) | (16 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net loans and leases |
41,277 | 40,534 | 40,092 | 39,614 | 39,265 | 2 | 5 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total earning assets |
51,247 | 51,156 | 50,960 | 50,682 | 51,330 | | | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Cash and due from banks |
944 | 940 | 904 | 1,459 | 960 | | (2 | ) | ||||||||||||||||||||
Intangible assets |
552 | 563 | 571 | 581 | 597 | (2 | ) | (8 | ) | |||||||||||||||||||
All other assets |
3,889 | 3,976 | 4,065 | 4,115 | 4,106 | (2 | ) | (5 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total assets |
$ | 55,915 | $ | 55,889 | $ | 55,728 | $ | 56,054 | $ | 56,138 | | % | | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Liabilities and shareholders equity |
||||||||||||||||||||||||||||
Deposits: |
||||||||||||||||||||||||||||
Demand depositsnoninterest-bearing |
$ | 13,088 | $ | 12,879 | $ | 12,165 | $ | 13,121 | $ | 12,329 | 2 | % | 6 | % | ||||||||||||||
Demand depositsinterest-bearing |
5,763 | 5,927 | 5,977 | 5,843 | 5,814 | (3 | ) | (1 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total demand deposits |
18,851 | 18,806 | 18,142 | 18,964 | 18,143 | | 4 | |||||||||||||||||||||
Money market deposits |
15,739 | 15,069 | 15,045 | 14,749 | 14,515 | 4 | 8 | |||||||||||||||||||||
Savings and other domestic deposits |
5,007 | 5,115 | 5,083 | 4,960 | 4,975 | (2 | ) | 1 | ||||||||||||||||||||
Core certificates of deposit |
4,176 | 4,778 | 5,346 | 5,637 | 6,131 | (13 | ) | (32 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total core deposits |
43,773 | 43,768 | 43,616 | 44,310 | 43,764 | | | |||||||||||||||||||||
Other domestic deposits of $250,000 or more |
268 | 324 | 360 | 359 | 300 | (17 | ) | (11 | ) | |||||||||||||||||||
Brokered deposits and negotiable CDs |
1,553 | 1,779 | 1,697 | 1,756 | 1,878 | (13 | ) | (17 | ) | |||||||||||||||||||
Deposits in foreign offices |
376 | 316 | 340 | 342 | 356 | 19 | 6 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total deposits |
45,970 | 46,187 | 46,013 | 46,767 | 46,298 | | (1 | ) | ||||||||||||||||||||
Short-term borrowings |
710 | 701 | 762 | 1,012 | 1,329 | 1 | (47 | ) | ||||||||||||||||||||
Federal Home Loan Bank advances |
549 | 757 | 686 | 42 | 107 | (27 | ) | 413 | ||||||||||||||||||||
Subordinated notes and other long-term debt |
1,753 | 1,292 | 1,348 | 1,374 | 1,638 | 36 | 7 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total interest-bearing liabilities |
35,894 | 36,058 | 36,644 | 36,074 | 37,043 | | (3 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
All other liabilities |
1,054 | 1,064 | 1,085 | 1,017 | 1,035 | (1 | ) | 2 | ||||||||||||||||||||
Shareholders equity |
5,879 | 5,888 | 5,834 | 5,842 | 5,731 | | 3 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total liabilities and shareholders equity |
$ | 55,915 | $ | 55,889 | $ | 55,728 | $ | 56,054 | $ | 56,138 | | % | | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Includes nonaccrual loans. |
7
Huntington Bancshares Incorporated
Consolidated Quarterly Net Interest MarginInterest Income / Expense (1)
(Unaudited)
Interest Income / Expense | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
(dollar amounts in thousands) |
Third | Second | First | Fourth | Third | |||||||||||||||
Assets |
||||||||||||||||||||
Interest-bearing deposits in banks |
$ | 9 | $ | 57 | $ | 29 | $ | 51 | $ | 42 | ||||||||||
Loans held for sale |
3,699 | 5,739 | 5,702 | 6,675 | 14,548 | |||||||||||||||
Securities: |
||||||||||||||||||||
Available-for-sale and other securities: |
||||||||||||||||||||
Taxable |
35,280 | 38,538 | 40,185 | 41,335 | 45,936 | |||||||||||||||
Tax-exempt |
5,700 | 5,829 | 5,438 | 4,968 | 4,383 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total available-for-sale and other securities |
40,980 | 44,367 | 45,623 | 46,303 | 50,319 | |||||||||||||||
Trading account securities |
43 | 126 | 106 | 245 | 178 | |||||||||||||||
Held-to-maturity securitiestaxable |
12,220 | 9,778 | 9,838 | 9,244 | 5,591 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total securities |
53,243 | 54,272 | 55,567 | 55,792 | 56,088 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loans and leases: |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Commercial and industrial |
160,285 | 161,543 | 162,396 | 163,644 | 162,998 | |||||||||||||||
Commercial real estate: |
||||||||||||||||||||
Construction |
5,650 | 5,829 | 6,045 | 6,075 | 5,583 | |||||||||||||||
Commercial |
45,525 | 46,214 | 46,978 | 52,543 | 50,704 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Commercial real estate |
51,175 | 52,043 | 53,023 | 58,618 | 56,287 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total commercial |
211,460 | 213,586 | 215,419 | 222,262 | 219,285 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Consumer: |
||||||||||||||||||||
Automobile |
58,216 | 52,159 | 51,013 | 50,930 | 49,718 | |||||||||||||||
Home equity |
86,131 | 85,796 | 86,991 | 88,541 | 89,388 | |||||||||||||||
Residential mortgage |
50,111 | 49,912 | 49,353 | 52,440 | 51,981 | |||||||||||||||
Other consumer |
6,677 | 7,650 | 7,169 | 7,775 | 7,991 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total consumer |
201,135 | 195,517 | 194,526 | 199,686 | 199,078 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total loans and leases |
412,595 | 409,103 | 409,945 | 421,948 | 418,363 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total earning assets |
$ | 469,546 | $ | 469,170 | $ | 471,243 | $ | 484,466 | $ | 489,041 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities |
||||||||||||||||||||
Deposits: |
||||||||||||||||||||
Demand depositsnoninterest-bearing |
$ | | $ | | $ | | $ | | $ | | ||||||||||
Demand depositsinterest-bearing |
636 | 617 | 642 | 734 | 1,013 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total demand deposits |
636 | 617 | 642 | 734 | 1,013 | |||||||||||||||
Money market deposits |
10,211 | 8,886 | 8,438 | 9,843 | 12,025 | |||||||||||||||
Savings and other domestic deposits |
3,134 | 3,416 | 3,818 | 4,150 | 4,576 | |||||||||||||||
Core certificates of deposit |
11,094 | 13,410 | 15,710 | 17,144 | 19,237 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total core deposits |
25,075 | 26,329 | 28,608 | 31,871 | 36,851 | |||||||||||||||
Other domestic deposits of $250,000 or more |
300 | 406 | 465 | 553 | 511 | |||||||||||||||
Brokered deposits and negotiable CDs |
2,145 | 2,746 | 2,823 | 3,141 | 3,356 | |||||||||||||||
Deposits in foreign offices |
136 | 110 | 140 | 152 | 164 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total deposits |
27,656 | 29,591 | 32,036 | 35,717 | 40,882 | |||||||||||||||
Short-term borrowings |
158 | 179 | 234 | 363 | 544 | |||||||||||||||
Federal Home Loan Bank advances |
197 | 272 | 301 | 129 | 135 | |||||||||||||||
Subordinated notes and other long-term debt |
10,049 | 7,603 | 8,578 | 8,731 | 11,928 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total interest bearing liabilities |
38,060 | 37,645 | 41,149 | 44,940 | 53,489 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net interest income |
$ | 431,486 | $ | 431,525 | $ | 430,094 | $ | 439,526 | $ | 435,552 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(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 MarginYield
(Unaudited)
Average Rates (2) | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Fully-taxable equivalent basis(1) |
Third | Second | First | Fourth | Third | |||||||||||||||
Assets |
||||||||||||||||||||
Interest-bearing deposits in banks |
0.07 | % | 0.27 | % | 0.16 | % | 0.28 | % | 0.21 | % | ||||||||||
Loans held for sale |
3.89 | 3.39 | 3.22 | 3.18 | 3.18 | |||||||||||||||
Securities: |
||||||||||||||||||||
Available-for-sale and other securities: |
||||||||||||||||||||
Taxable |
2.34 | 2.29 | 2.31 | 2.32 | 2.29 | |||||||||||||||
Tax-exempt |
4.04 | 3.94 | 3.96 | 4.03 | 4.15 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total available-for-sale and other securities |
2.48 | 2.42 | 2.43 | 2.43 | 2.39 | |||||||||||||||
Trading account securities |
0.23 | 0.60 | 0.50 | 1.01 | 1.07 | |||||||||||||||
Held-to-maturity securitiestaxable |
2.29 | 2.29 | 2.29 | 2.24 | 2.81 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total securities |
2.41 | 2.38 | 2.39 | 2.38 | 2.41 | |||||||||||||||
Loans and leases:(2)(3) |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Commercial and industrial |
3.68 | 3.75 | 3.83 | 3.88 | 3.90 | |||||||||||||||
Commercial real estate: |
||||||||||||||||||||
Construction |
3.91 | 3.93 | 4.05 | 4.13 | 3.84 | |||||||||||||||
Commercial |
4.10 | 4.13 | 4.00 | 4.20 | 3.85 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Commercial real estate |
4.08 | 4.09 | 4.01 | 4.19 | 3.85 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total commercial |
3.77 | 3.83 | 3.87 | 3.96 | 3.89 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Consumer: |
||||||||||||||||||||
Automobile |
3.80 | 3.96 | 4.28 | 4.52 | 4.87 | |||||||||||||||
Home equity |
4.10 | 4.16 | 4.20 | 4.24 | 4.27 | |||||||||||||||
Residential mortgage |
3.81 | 3.82 | 3.97 | 4.07 | 4.02 | |||||||||||||||
Other consumer |
6.98 | 6.66 | 7.05 | 7.16 | 7.16 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total consumer |
3.99 | 4.07 | 4.22 | 4.33 | 4.40 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total loans and leases |
3.87 | 3.95 | 4.03 | 4.13 | 4.12 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total earning assets |
3.64 | % | 3.68 | % | 3.75 | % | 3.80 | % | 3.79 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities |
||||||||||||||||||||
Deposits: |
||||||||||||||||||||
Demand depositsnoninterest-bearing |
| % | | % | | % | | % | | % | ||||||||||
Demand depositsinterest-bearing |
0.04 | 0.04 | 0.04 | 0.05 | 0.07 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total demand deposits |
0.01 | 0.01 | 0.01 | 0.02 | 0.02 | |||||||||||||||
Money market deposits |
0.26 | 0.24 | 0.23 | 0.27 | 0.33 | |||||||||||||||
Savings and other domestic deposits |
0.25 | 0.27 | 0.30 | 0.33 | 0.37 | |||||||||||||||
Core certificates of deposit |
1.05 | 1.13 | 1.19 | 1.21 | 1.25 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total core deposits |
0.32 | 0.34 | 0.37 | 0.41 | 0.47 | |||||||||||||||
Other domestic deposits of $250,000 or more |
0.44 | 0.50 | 0.52 | 0.61 | 0.68 | |||||||||||||||
Brokered deposits and negotiable CDs |
0.55 | 0.62 | 0.67 | 0.71 | 0.71 | |||||||||||||||
Deposits in foreign offices |
0.14 | 0.14 | 0.17 | 0.18 | 0.18 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total deposits |
0.33 | 0.36 | 0.38 | 0.42 | 0.48 | |||||||||||||||
Short-term borrowings |
0.09 | 0.10 | 0.12 | 0.14 | 0.16 | |||||||||||||||
Federal Home Loan Bank advances |
0.14 | 0.14 | 0.18 | 1.20 | 0.50 | |||||||||||||||
Subordinated notes and other long-term debt |
2.29 | 2.35 | 2.54 | 2.55 | 2.91 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total interest-bearing liabilities |
0.42 | 0.42 | 0.45 | 0.50 | 0.58 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net interest rate spread |
3.20 | 3.26 | 3.30 | 3.30 | 3.21 | |||||||||||||||
Impact of noninterest-bearing funds on margin |
0.14 | 0.12 | 0.12 | 0.15 | 0.17 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net interest margin |
3.34 | % | 3.38 | % | 3.42 | % | 3.45 | % | 3.38 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
Commercial Loan Derivative Impact
(Unaudited)
Average Rates (2) | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Fully-taxable equivalent basis(1) |
Third | Second | First | Fourth | Third | |||||||||||||||
Commercial loans(2)(3) |
3.58 | % | 3.57 | % | 3.58 | % | 3.72 | % | 3.61 | % | ||||||||||
Impact of commercial loan derivatives |
0.19 | 0.26 | 0.29 | 0.24 | 0.28 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total commercialas reported |
3.77 | % | 3.83 | % | 3.87 | % | 3.96 | % | 3.89 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Average 30 day LIBOR |
0.19 | % | 0.20 | % | 0.20 | % | 0.21 | % | 0.24 | % |
(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)
2013 | 2012 | Percent Changes vs. | ||||||||||||||||||||||||||
(dollar amounts in thousands, except per share amounts) |
Third | Second | First | Fourth | Third | 2Q13 | 3Q12 | |||||||||||||||||||||
Interest income |
$ | 462,912 | $ | 462,582 | $ | 465,319 | $ | 478,995 | $ | 483,787 | 0 | % | (4 | )% | ||||||||||||||
Interest expense |
38,060 | 37,645 | 41,149 | 44,940 | 53,489 | 1 | (29 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net interest income |
424,852 | 424,937 | 424,170 | 434,055 | 430,298 | (0 | ) | (1 | ) | |||||||||||||||||||
Provision for credit losses |
11,400 | 24,722 | 29,592 | 39,458 | 37,004 | (54 | ) | (69 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net interest income after provision for credit losses |
413,452 | 400,215 | 394,578 | 394,597 | 393,294 | 3 | 5 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Service charges on deposit accounts |
72,918 | 68,009 | 60,883 | 68,083 | 67,806 | 7 | 8 | |||||||||||||||||||||
Mortgage banking income |
23,621 | 33,659 | 45,248 | 61,711 | 44,614 | (30 | ) | (47 | ) | |||||||||||||||||||
Trust services |
30,470 | 30,666 | 31,160 | 31,388 | 29,689 | (1 | ) | 3 | ||||||||||||||||||||
Electronic banking |
24,282 | 23,345 | 20,713 | 21,011 | 22,135 | 4 | 10 | |||||||||||||||||||||
Brokerage income |
16,532 | 19,546 | 17,995 | 17,415 | 16,526 | (15 | ) | 0 | ||||||||||||||||||||
Insurance income |
17,269 | 17,187 | 19,252 | 17,268 | 17,792 | 0 | (3 | ) | ||||||||||||||||||||
Gain on sale of loans |
5,063 | 3,348 | 2,616 | 20,690 | 6,591 | 51 | (23 | ) | ||||||||||||||||||||
Bank owned life insurance income |
13,740 | 15,421 | 13,442 | 13,767 | 14,371 | (11 | ) | (4 | ) | |||||||||||||||||||
Capital markets fees |
12,825 | 12,229 | 7,834 | 12,694 | 11,596 | 5 | 11 | |||||||||||||||||||||
Securities gains (losses) |
98 | (410 | ) | (509 | ) | 863 | 4,169 | (124 | ) | N.R. | ||||||||||||||||||
Other income |
33,685 | 25,655 | 33,575 | 32,761 | 25,778 | 31 | 31 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total noninterest income |
250,503 | 248,655 | 252,209 | 297,651 | 261,067 | 1 | (4 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Personnel costs |
229,326 | 263,862 | 258,895 | 253,952 | 247,709 | (13 | ) | (7 | ) | |||||||||||||||||||
Outside data processing and other services |
49,313 | 49,898 | 49,265 | 48,699 | 50,396 | (1 | ) | (2 | ) | |||||||||||||||||||
Net occupancy |
35,591 | 27,656 | 30,114 | 29,008 | 27,599 | 29 | 29 | |||||||||||||||||||||
Equipment |
28,191 | 24,947 | 24,880 | 26,580 | 25,950 | 13 | 9 | |||||||||||||||||||||
Deposit and other insurance expense |
11,155 | 13,460 | 15,490 | 16,327 | 15,534 | (17 | ) | (28 | ) | |||||||||||||||||||
Professional services |
12,487 | 9,341 | 7,192 | 22,514 | 17,510 | 34 | (29 | ) | ||||||||||||||||||||
Marketing |
12,271 | 14,239 | 10,971 | 16,456 | 16,842 | (14 | ) | (27 | ) | |||||||||||||||||||
Amortization of intangibles |
10,362 | 10,362 | 10,320 | 11,647 | 11,431 | | (9 | ) | ||||||||||||||||||||
OREO and foreclosure expense |
2,053 | (271 | ) | 2,666 | 4,233 | 4,982 | (858 | ) | (59 | ) | ||||||||||||||||||
Loss (Gain) on early extinguishment of debt |
| | | | 1,782 | | (100 | ) | ||||||||||||||||||||
Other expense |
32,587 | 32,371 | 33,000 | 41,212 | 38,568 | 1 | (16 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total noninterest expense |
423,336 | 445,865 | 442,793 | 470,628 | 458,303 | (5 | ) | (8 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Income before income taxes |
240,619 | 203,005 | 203,994 | 221,620 | 196,058 | 19 | 23 | |||||||||||||||||||||
Provision for income taxes |
62,132 | 52,354 | 52,214 | 54,341 | 28,291 | 19 | 120 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income |
$ | 178,487 | $ | 150,651 | $ | 151,780 | $ | 167,279 | $ | 167,767 | 18 | % | 6 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Dividends on preferred shares |
7,967 | 7,967 | 7,970 | 7,973 | 7,983 | | (0 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income applicable to common shares |
$ | 170,520 | $ | 142,684 | $ | 143,810 | $ | 159,306 | $ | 159,784 | | 7 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Average common sharesbasic |
830,398 | 834,730 | 841,103 | 847,220 | 857,871 | | (3 | )% | ||||||||||||||||||||
Average common sharesdiluted |
841,015 | 843,840 | 848,708 | 853,306 | 863,588 | (0 | )% | (3 | ) | |||||||||||||||||||
Per common share |
||||||||||||||||||||||||||||
Net incomebasic |
$ | 0.21 | $ | 0.17 | $ | 0.17 | $ | 0.19 | $ | 0.19 | 24 | % | 11 | % | ||||||||||||||
Net incomediluted |
0.20 | 0.17 | 0.17 | 0.19 | 0.19 | 18 | 5 | |||||||||||||||||||||
Cash dividends declared |
0.05 | 0.05 | 0.04 | 0.04 | 0.04 | | 25 | |||||||||||||||||||||
Revenuefully-taxable equivalent (FTE) |
||||||||||||||||||||||||||||
Net interest income |
$ | 424,852 | $ | 424,937 | $ | 424,170 | $ | 434,055 | $ | 430,298 | (0 | ) | (1 | )% | ||||||||||||||
FTE adjustment |
6,634 | 6,587 | 5,923 | 5,470 | 5,254 | 1 | 26 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net interest income(2) |
431,486 | 431,524 | 430,093 | 439,525 | 435,552 | (0 | ) | (1 | ) | |||||||||||||||||||
Noninterest income |
250,503 | 248,655 | 252,209 | 297,651 | 261,067 | 1 | (4 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total revenue(2) |
$ | 681,989 | $ | 680,179 | $ | 682,302 | $ | 737,176 | $ | 696,619 | 0 | % | (2 | )% | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Comparisons for presented periods are impacted by a number of factors. Refer to Significant Items. |
(2) | On a fully-taxable equivalent (FTE) basis assuming a 35% tax rate. |
10
Huntington Bancshares Incorporated
Quarterly Mortgage Banking Income
(Unaudited)
2013 | 2012 | Percent Changes vs. | ||||||||||||||||||||||||||
(dollar amounts in thousands, except as noted) |
Third | Second | First | Fourth | Third | 2Q13 | 3Q12 | |||||||||||||||||||||
Mortgage banking income |
||||||||||||||||||||||||||||
Origination and secondary marketing |
$ | 15,568 | $ | 27,915 | $ | 27,330 | $ | 44,497 | $ | 40,860 | (44 | )% | (62 | )% | ||||||||||||||
Servicing fees |
10,868 | 10,898 | 11,241 | 11,491 | 11,308 | | (4 | ) | ||||||||||||||||||||
Amortization of capitalized servicing |
(6,783 | ) | (7,998 | ) | (7,903 | ) | (9,116 | ) | (8,405 | ) | (15 | ) | (19 | ) | ||||||||||||||
Other mortgage banking income |
3,685 | 4,470 | 4,654 | 4,828 | 5,000 | (18 | ) | (26 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Subtotal |
23,338 | 35,285 | 35,322 | 51,700 | 48,763 | (34 | ) | (52 | ) | |||||||||||||||||||
MSR valuation adjustment(1) |
173 | 14,128 | 17,798 | 11,747 | (19,543 | ) | (99 | ) | (101 | ) | ||||||||||||||||||
Net trading gains (losses) related to MSR hedging |
110 | (15,755 | ) | (7,872 | ) | (1,736 | ) | 15,395 | (101 | ) | (99 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total mortgage banking income |
$ | 23,621 | $ | 33,658 | $ | 45,248 | $ | 61,711 | $ | 44,615 | (30 | )% | (47 | )% | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Mortgage originations (in millions) |
$ | 1,176 | $ | 1,282 | $ | 1,119 | $ | 1,161 | $ | 1,224 | (8 | )% | (4 | )% | ||||||||||||||
Average trading account securities used to hedge MSRs (in millions) |
| | | 1 | 4 | | (100 | ) | ||||||||||||||||||||
Capitalized mortgage servicing rights(2) |
158,776 | 155,522 | 139,927 | 120,747 | 108,074 | 2 | 47 | |||||||||||||||||||||
Total mortgages serviced for others (in millions)(2) |
15,231 | 15,213 | 15,367 | 15,623 | 15,571 | | (2 | ) | ||||||||||||||||||||
MSR % of investor servicing portfolio(2) |
1.04 | % | 1.02 | % | 0.91 | % | 0.77 | % | 0.69 | % | 2 | 5,072 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net impact of MSR hedging |
| |||||||||||||||||||||||||||
MSR valuation adjustment(1) |
$ | 173 | $ | 14,128 | $ | 17,798 | $ | 11,747 | $ | (19,543 | ) | (99 | )% | (101 | )% | |||||||||||||
Net trading gains (losses) related to MSR hedging |
110 | (15,755 | ) | (7,872 | ) | (1,736 | ) | 15,395 | (101 | ) | (99 | ) | ||||||||||||||||
Net interest income (loss) related to MSR hedging |
| | | | 4 | | (100 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net gain (loss) of MSR hedging |
$ | 283 | $ | (1,627 | ) | $ | 9,926 | $ | 10,011 | $ | (4,144 | ) | (117 | )% | (107 | )% | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | The change in fair value for the period represents the MSR valuation adjustment, net of amortization of capitalized servicing. |
(2) | At period end. |
11
Huntington Bancshares Incorporated
Quarterly Credit Reserves Analysis
(Unaudited)
2013 | 2012 | |||||||||||||||||||
(dollar amounts in thousands) |
Third | Second | First | Fourth | Third | |||||||||||||||
Allowance for loan and lease losses, beginning of period |
$ | 733,076 | $ | 746,769 | $ | 769,075 | $ | 789,142 | $ | 859,646 | ||||||||||
Loan and lease losses |
(85,252 | ) | (63,238 | ) | (84,142 | ) | (106,962 | ) | (132,186 | ) | ||||||||||
Recoveries of loans previously charged off |
29,510 | 28,448 | 32,455 | 36,832 | 27,091 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loan and lease losses |
(55,742 | ) | (34,790 | ) | (51,687 | ) | (70,130 | ) | (105,095 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Provision for loan and lease losses |
(11,234 | ) | 21,354 | 29,388 | 52,370 | 34,419 | ||||||||||||||
Allowance of assets sold or transferred to loans held for sale |
(70 | ) | (257 | ) | (7 | ) | (2,307 | ) | 172 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Allowance for loan and lease losses, end of period |
$ | 666,030 | $ | 733,076 | $ | 746,769 | $ | 769,075 | $ | 789,142 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Allowance for unfunded loan commitments and letters of credit, beginning of period |
$ | 44,223 | $ | 40,855 | $ | 40,651 | $ | 53,563 | $ | 50,978 | ||||||||||
Provision for (reduction in) unfunded loan commitments and letters of credit losses |
22,634 | 3,368 | 204 | (12,912 | ) | 2,585 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Allowance for unfunded loan commitments and letters of credit, end of period |
$ | 66,857 | $ | 44,223 | $ | 40,855 | $ | 40,651 | $ | 53,563 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total allowance for credit losses, end of period |
$ | 732,887 | $ | 777,299 | $ | 787,624 | $ | 809,726 | $ | 842,705 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Allowance for loan and lease losses (ALLL) as % of: |
||||||||||||||||||||
Total loans and leases |
1.57 | % | 1.76 | % | 1.81 | % | 1.89 | % | 1.96 | % | ||||||||||
Nonaccrual loans and leases (NALs) |
200 | 202 | 196 | 189 | 177 | |||||||||||||||
Nonperforming assets (NPAs) |
178 | 185 | 180 | 173 | 155 | |||||||||||||||
Total allowance for credit losses (ACL) as % of: |
||||||||||||||||||||
Total loans and leases |
1.72 | % | 1.86 | % | 1.91 | % | 1.99 | % | 2.09 | % | ||||||||||
Nonaccrual loans and leases |
220 | 214 | 207 | 199 | 189 | |||||||||||||||
Nonperforming assets |
196 | 196 | 190 | 182 | 165 |
12
Huntington Bancshares Incorporated
Quarterly Net Charge-Off Analysis
(Unaudited)
2013 | 2012 | |||||||||||||||||||
(dollar amounts in thousands) |
Third | Second | First | Fourth | Third | |||||||||||||||
Net charge-offs by loan and lease type: |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Commercial and industrial |
$ | 1,661 | $ | 1,586 | $ | 3,317 | $ | 7,052 | $ | 13,023 | ||||||||||
Commercial real estate: |
||||||||||||||||||||
Construction |
6,165 | 1,079 | (798 | ) | 11,038 | (280 | ) | |||||||||||||
Commercial |
6,398 | 1,305 | 13,575 | 10,333 | 17,654 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Commercial real estate |
12,563 | 2,384 | 12,777 | 21,371 | 17,374 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total commercial |
14,224 | 3,970 | 16,094 | 28,423 | 30,397 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Consumer: |
||||||||||||||||||||
Automobile |
2,721 | 1,463 | 2,594 | 1,896 | 4,019 | |||||||||||||||
Home equity |
27,175 | 14,654 | 19,983 | 25,013 | 46,592 | |||||||||||||||
Residential mortgage |
4,789 | 8,620 | 6,148 | 9,687 | 16,880 | |||||||||||||||
Other consumer |
6,833 | 6,083 | 6,868 | 5,111 | 7,207 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total consumer |
41,518 | 30,820 | 35,593 | 41,707 | 74,698 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total net charge-offs |
$ | 55,742 | $ | 34,790 | $ | 51,687 | $ | 70,130 | $ | 105,095 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net charge-offsannualized percentages: |
||||||||||||||||||||
Commercial: |
||||||||||||||||||||
Commercial and industrial |
0.04 | % | 0.04 | % | 0.08 | % | 0.17 | % | 0.32 | % | ||||||||||
Commercial real estate: |
||||||||||||||||||||
Construction |
4.36 | 0.74 | (0.53 | ) | 7.67 | (0.20 | ) | |||||||||||||
Commercial |
0.59 | 0.12 | 1.16 | 0.84 | 1.37 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Commercial real estate |
1.02 | 0.19 | 0.97 | 1.56 | 1.21 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total commercial |
0.26 | 0.07 | 0.29 | 0.52 | 0.55 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Consumer: |
||||||||||||||||||||
Automobile |
0.18 | 0.11 | 0.21 | 0.17 | 0.40 | |||||||||||||||
Home equity |
1.30 | 0.71 | 0.95 | 1.20 | 2.23 | |||||||||||||||
Residential mortgage |
0.36 | 0.66 | 0.49 | 0.75 | 1.30 | |||||||||||||||
Other consumer |
7.19 | 5.28 | 6.67 | 4.74 | 6.49 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total consumer |
0.83 | 0.64 | 0.76 | 0.91 | 1.65 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net charge-offs as a % of average loans |
0.53 | % | 0.34 | % | 0.51 | % | 0.69 | % | 1.05 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
13
Huntington Bancshares Incorporated
Quarterly Nonaccrual Loans and Leases (NALs) and Nonperforming Assets (NPAs)
(Unaudited)
2013 | 2012 | |||||||||||||||||||
(dollar amounts in thousands) |
September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
Nonaccrual loans and leases (NALs): |
||||||||||||||||||||
Commercial and industrial |
$ | 68,034 | $ | 80,037 | $ | 80,928 | $ | 90,705 | $ | 109,452 | ||||||||||
Commercial real estate |
80,295 | 93,643 | 110,803 | 127,128 | 148,986 | |||||||||||||||
Automobile |
5,972 | 7,743 | 6,770 | 7,823 | 11,814 | |||||||||||||||
Residential mortgage |
116,260 | 122,040 | 118,405 | 122,452 | 123,140 | |||||||||||||||
Home equity |
62,545 | 60,083 | 63,405 | 59,525 | 51,654 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total nonaccrual loans and leases |
333,106 | 363,546 | 380,311 | 407,633 | 445,046 | |||||||||||||||
Other real estate, net: |
||||||||||||||||||||
Residential |
16,610 | 17,353 | 19,538 | 21,378 | 23,640 | |||||||||||||||
Commercial |
12,544 | 3,713 | 5,601 | 6,719 | 30,566 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total other real estate, net |
29,154 | 21,066 | 25,139 | 28,097 | 54,206 | |||||||||||||||
Other NPAs(1) |
12,000 | 12,087 | 10,045 | 10,045 | 10,476 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total nonperforming assets(4) |
$ | 374,260 | $ | 396,699 | $ | 415,495 | $ | 445,775 | $ | 509,728 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nonaccrual loans and leases as a % of total loans and leases |
0.78 | % | 0.87 | % | 0.92 | % | 1.00 | % | 1.11 | % | ||||||||||
NPA ratio(2) |
0.88 | 0.95 | 1.01 | 1.09 | 1.26 | |||||||||||||||
(NPA+90days)/(Loan+OREO)(3) |
0.93 | 1.38 | 1.48 | 1.59 | 1.75 | |||||||||||||||
2013 | 2012 | |||||||||||||||||||
Third | Second | First | Fourth | Third | ||||||||||||||||
Nonperforming assets, beginning of period |
$ | 396,699 | $ | 415,495 | $ | 445,775 | $ | 509,728 | $ | 523,250 | ||||||||||
New nonperforming assets(4) |
139,767 | 101,840 | 115,061 | 175,083 | 210,995 | |||||||||||||||
Returns to accruing status |
(31,293 | ) | (18,915 | ) | (19,537 | ) | (23,553 | ) | (45,729 | ) | ||||||||||
Loan and lease losses |
(65,823 | ) | (40,546 | ) | (51,019 | ) | (82,759 | ) | (78,308 | ) | ||||||||||
OREO (losses) gains |
1,053 | 1,874 | 840 | 283 | 73 | |||||||||||||||
Payments |
(61,116 | ) | (54,242 | ) | (64,045 | ) | (81,940 | ) | (90,535 | ) | ||||||||||
Sales |
(5,027 | ) | (8,807 | ) | (11,580 | ) | (51,067 | ) | (10,018 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nonperforming assets, end of period |
$ | 374,260 | $ | 396,699 | $ | 415,495 | $ | 445,775 | $ | 509,728 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Other nonperforming assets includes certain impaired investment securities. |
(2) | Nonperforming assets divided by the sum of loans and leases, net other real estate owned, and other NPAs. |
(3) | The sum of nonperforming assets and total accruing loans and leases past due 90 days or more divided by the sum of loans and leases and other real estate. |
(4) | Includes $57.9 at September 30, 2013; $59.6 million at June 30, 2013; $59.9 million at March 31, 2013; $60.1 million at December 31, 2012; $63.0 million at September 30, 2012; related to Chapter 7 bankruptcy loans. |
14
Huntington Bancshares Incorporated
Quarterly Accruing Past Due Loans and Leases and Accruing and Nonaccruing Troubled Debt Restructured Loans
(Unaudited)
2013 | 2012 | |||||||||||||||||||
(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 |
$ | 19,217 | $ | 24,851 | $ | 26,547 | $ | 26,648 | $ | 26,117 | ||||||||||
Commercial real estate |
44,026 | 45,051 | 56,007 | 56,660 | 45,131 | |||||||||||||||
Automobile |
3,599 | 3,392 | 3,531 | 4,418 | 3,857 | |||||||||||||||
Residential mortgage (excluding loans guaranteed by the U.S. Government) |
13,978 | 5,217 | 6,187 | 2,718 | 10,687 | |||||||||||||||
Home equity |
13,044 | 14,245 | 15,044 | 18,200 | 21,343 | |||||||||||||||
Other consumer |
1,102 | 1,367 | 1,107 | 1,672 | 1,084 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total, excl. loans guaranteed by the U.S. Government |
94,966 | 94,123 | 108,423 | 110,316 | 108,219 | |||||||||||||||
Add: loans guaranteed by U.S. Government |
81,770 | 87,135 | 88,596 | 90,816 | 87,463 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total accruing loans and leases past due 90 days or more, including loans guaranteed by the U.S. Government |
$ | 176,736 | $ | 181,258 | $ | 197,019 | $ | 201,132 | $ | 195,682 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Ratios: |
||||||||||||||||||||
Excluding loans guaranteed by the U.S. Government, as a percent of total loans and leases |
0.22 | % | 0.23 | % | 0.26 | % | 0.27 | % | 0.27 | % | ||||||||||
Guaranteed by U.S. Government, as a percent of total loans and leases |
0.20 | 0.21 | 0.21 | 0.22 | 0.22 | |||||||||||||||
Including loans guaranteed by the U.S. Government, as a percent of total loans and leases |
0.42 | 0.43 | 0.48 | 0.49 | 0.49 | |||||||||||||||
Accruing troubled debt restructured loans: |
||||||||||||||||||||
Commercial and industrial |
$ | 85,687 | $ | 94,583 | $ | 90,642 | $ | 76,586 | $ | 55,809 | ||||||||||
Commercial real estate |
204,597 | 184,372 | 192,167 | 208,901 | 222,155 | |||||||||||||||
Automobile |
30,981 | 32,768 | 34,379 | 35,784 | 33,719 | |||||||||||||||
Home equity (1) |
153,591 | 135,759 | 162,087 | 110,581 | 92,763 | |||||||||||||||
Residential mortgage |
300,809 | 293,933 | 288,041 | 290,011 | 280,890 | |||||||||||||||
Other consumer |
959 | 3,383 | 2,514 | 2,544 | 2,644 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total accruing troubled debt restructured loans |
$ | 776,624 | $ | 744,798 | $ | 769,830 | $ | 724,407 | $ | 687,980 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nonaccruing troubled debt restructured loans: |
||||||||||||||||||||
Commercial and industrial |
$ | 8,643 | $ | 14,541 | $ | 14,970 | $ | 19,268 | $ | 28,859 | ||||||||||
Commercial real estate |
22,695 | 26,118 | 26,588 | 32,548 | 20,284 | |||||||||||||||
Automobile |
5,972 | 7,743 | 6,770 | 7,823 | 11,814 | |||||||||||||||
Home equity |
11,434 | 10,227 | 11,235 | 6,951 | 7,756 | |||||||||||||||
Residential mortgage |
77,525 | 80,563 | 84,317 | 84,515 | 83,163 | |||||||||||||||
Other consumer |
| | | 113 | 113 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total nonaccruing troubled debt restructured loans |
$ | 126,269 | $ | 139,192 | $ | 143,880 | $ | 151,218 | $ | 151,989 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | The 2013 second quarter includes a $43.1 million reduction of home equity TDRs incorrectly reflected as new TDRs in the 2013 first quarter. |
15
Huntington Bancshares Incorporated
Quarterly Common Stock Summary, Capital, and Other Data
(Unaudited)
Quarterly common stock summary
2013 | 2012 | |||||||||||||||||||
(dollar amounts in thousands, except per share amounts) |
Third | Second | First | Fourth | Third | |||||||||||||||
Common stock price, per share |
||||||||||||||||||||
High(1) |
$ | 8.780 | $ | 7.960 | $ | 7.550 | $ | 7.200 | $ | 7.200 | ||||||||||
Low(1) |
7.900 | 6.820 | 6.480 | 5.900 | 6.160 | |||||||||||||||
Close |
8.260 | 7.870 | 7.370 | 6.390 | 6.895 | |||||||||||||||
Average closing price |
8.445 | 7.457 | 7.073 | 6.416 | 6.561 | |||||||||||||||
Dividends, per share |
||||||||||||||||||||
Cash dividends declared per common share |
$ | 0.05 | $ | 0.05 | $ | 0.04 | $ | 0.04 | $ | 0.04 | ||||||||||
Common shares outstanding |
||||||||||||||||||||
Averagebasic |
830,398 | 834,730 | 841,103 | 847,220 | 857,871 | |||||||||||||||
Averagediluted |
841,015 | 843,840 | 848,708 | 853,306 | 863,588 | |||||||||||||||
Ending |
830,145 | 829,675 | 838,758 | 842,813 | 855,485 | |||||||||||||||
Book value per common share |
$ | 6.72 | $ | 6.51 | $ | 6.53 | $ | 6.41 | $ | 6.34 | ||||||||||
Tangible book value per common share(2) |
6.10 | 5.88 | 5.91 | 5.78 | 5.71 | |||||||||||||||
Common share repurchases |
||||||||||||||||||||
Number of shares repurchased |
1,974 | 9,996 | 4,738 | 13,160 | 3,742 | |||||||||||||||
2013 | 2012 | |||||||||||||||||||
(dollar amounts in millions) |
September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
Calculation of tangible equity / asset ratio: |
||||||||||||||||||||
Total shareholders equity |
$ | 5,962 | $ | 5,784 | $ | 5,867 | $ | 5,790 | $ | 5,808 | ||||||||||
Less: goodwill |
(444 | ) | (444 | ) | (444 | ) | (444 | ) | (444 | ) | ||||||||||
Less: other intangible assets |
(104 | ) | (114 | ) | (124 | ) | (132 | ) | (144 | ) | ||||||||||
Add: related deferred tax liability(2) |
36 | 40 | 43 | 46 | 50 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total tangible equity |
5,450 | 5,266 | 5,342 | 5,260 | 5,270 | |||||||||||||||
Less: preferred equity |
(386 | ) | (386 | ) | (386 | ) | (386 | ) | (386 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total tangible common equity |
$ | 5,064 | $ | 4,880 | $ | 4,956 | $ | 4,874 | $ | 4,884 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | 56,648 | $ | 56,114 | $ | 56,055 | $ | 56,153 | $ | 56,443 | ||||||||||
Less: goodwill |
(444 | ) | (444 | ) | (444 | ) | (444 | ) | (444 | ) | ||||||||||
Less: other intangible assets |
(104 | ) | (114 | ) | (124 | ) | (132 | ) | (144 | ) | ||||||||||
Add: related deferred tax liability(2) |
36 | 40 | 43 | 46 | 50 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total tangible assets |
$ | 56,136 | $ | 55,596 | $ | 55,530 | $ | 55,623 | $ | 55,905 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Tangible equity / tangible asset ratio |
9.71 | % | 9.47 | % | 9.62 | % | 9.46 | % | 9.43 | % | ||||||||||
Tangible common equity / tangible asset ratio |
9.02 | 8.78 | 8.92 | 8.76 | 8.74 | |||||||||||||||
Tier 1 common risk-based capital ratio:(4) |
||||||||||||||||||||
Tier 1 capital |
$ | 6,018 | $ | 5,885 | $ | 5,829 | $ | 5,741 | $ | 5,720 | ||||||||||
Shareholders preferred equity |
(386 | ) | (386 | ) | (386 | ) | (386 | ) | (386 | ) | ||||||||||
Trust preferred securities |
(299 | ) | (299 | ) | (299 | ) | (299 | ) | (335 | ) | ||||||||||
REIT preferred stock |
(50 | ) | (50 | ) | (50 | ) | (50 | ) | (50 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Tier 1 common |
$ | 5,283 | $ | 5,150 | $ | 5,094 | $ | 5,006 | $ | 4,949 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total risk-weighted assets(4) |
$ | 48,687 | $ | 48,080 | $ | 47,937 | $ | 47,773 | $ | 48,147 | ||||||||||
Tier 1 common risk-based capital ratio(4) |
10.85 | % | 10.71 | % | 10.62 | % | 10.48 | % | 10.28 | % | ||||||||||
Other capital data: |
||||||||||||||||||||
Tier 1 leverage ratio(4) |
10.85 | 10.64 | 10.57 | 10.36 | 10.29 | |||||||||||||||
Tier 1 risk-based capital ratio(4) |
12.36 | 12.24 | 12.16 | 12.02 | 11.88 | |||||||||||||||
Total risk-based capital ratio(4) |
14.67 | 14.57 | 14.55 | 14.50 | 14.36 | |||||||||||||||
Tangible common equity / risk-weighted assets ratio(4) |
10.40 | 10.15 | 10.34 | 10.20 | 10.14 | |||||||||||||||
Other data: |
||||||||||||||||||||
Number of employees (full-time equivalent) |
11,956 | 12,155 | 12,052 | 11,806 | 11,731 | |||||||||||||||
Number of domestic full-service branches(3) |
731 | 727 | 717 | 705 | 699 |
(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, 2013, figures are estimated and are presented on a basel 1 basis. |
16
Huntington Bancshares Incorporated
Consolidated Year To Date Average Balance Sheets
(Unaudited)
YTD Average Balances | ||||||||||||||||
Nine Months Ended September 30, | Change | |||||||||||||||
(dollar amounts in millions) |
2013 | 2012 | Amount | Percent | ||||||||||||
Assets |
||||||||||||||||
Interest bearing deposits in banks |
$ | 70 | $ | 102 | $ | (32 | ) | (31 | )% | |||||||
Loans held for sale |
588 | 1,170 | (582 | ) | (50 | ) | ||||||||||
Securities: |
||||||||||||||||
Available-for-sale and other securities: |
||||||||||||||||
Taxable |
6,574 | 8,156 | (1,582 | ) | (19 | ) | ||||||||||
Tax-exempt |
568 | 405 | 163 | 40 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total available-for-sale and other securities |
7,142 | 8,561 | (1,419 | ) | (17 | ) | ||||||||||
Trading account securities |
82 | 57 | 25 | 44 | ||||||||||||
Held-to-maturity securitiestaxable |
1,857 | 680 | 1,177 | 173 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Securities |
9,081 | 9,298 | (217 | ) | (2 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loans and leases:(1) |
||||||||||||||||
Commercial: |
||||||||||||||||
Commercial and industrial |
17,007 | 15,756 | 1,251 | 8 | ||||||||||||
Commercial real estate: |
||||||||||||||||
Construction |
583 | 584 | (1 | ) | | |||||||||||
Commercial |
4,488 | 5,299 | (811 | ) | (15 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Commercial real estate |
5,071 | 5,883 | (812 | ) | (14 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total commercial |
22,078 | 21,639 | 439 | 2 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Consumer: |
||||||||||||||||
Automobile |
5,402 | 4,540 | 862 | 19 | ||||||||||||
Home equity |
8,299 | 8,305 | (6 | ) | | |||||||||||
Residential mortgage |
5,154 | 5,201 | (47 | ) | (1 | ) | ||||||||||
Other consumer |
451 | 463 | (12 | ) | (3 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total consumer |
19,306 | 18,509 | 797 | 4 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total loans and leases |
41,384 | 40,148 | 1,236 | 3 | ||||||||||||
Allowance for loan and lease losses |
(745 | ) | (908 | ) | 163 | (18 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loans and leases |
40,639 | 39,240 | 1,399 | 4 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total earning assets |
51,123 | 50,718 | 405 | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash and due from banks |
930 | 967 | (37 | ) | (4 | ) | ||||||||||
Intangible assets |
562 | 606 | (44 | ) | (7 | ) | ||||||||||
All other assets |
3,974 | 4,163 | (189 | ) | (5 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets |
$ | 55,844 | $ | 55,546 | $ | 298 | 1 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities and shareholders equity |
||||||||||||||||
Deposits: |
||||||||||||||||
Demand depositsnoninterest-bearing |
$ | 12,714 | $ | 11,890 | $ | 824 | 7 | % | ||||||||
Demand depositsinterest-bearing |
5,888 | 5,800 | 88 | 2 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total demand deposits |
18,602 | 17,690 | 912 | 5 | ||||||||||||
Money market deposits |
15,287 | 13,616 | 1,671 | 12 | ||||||||||||
Savings and other domestic deposits |
5,068 | 4,924 | 144 | 3 | ||||||||||||
Core certificates of deposit |
4,761 | 6,419 | (1,658 | ) | (26 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total core deposits |
43,718 | 42,649 | 1,069 | 3 | ||||||||||||
Other domestic deposits of $250,000 or more |
317 | 315 | 2 | 1 | ||||||||||||
Brokered deposits and negotiable CDs |
1,676 | 1,535 | 141 | 9 | ||||||||||||
Deposits in foreign offices |
344 | 381 | (37 | ) | (10 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total deposits |
46,055 | 44,880 | 1,175 | 3 | ||||||||||||
Short-term borrowings |
724 | 1,410 | (686 | ) | (49 | ) | ||||||||||
Federal Home Loan Bank advances |
663 | 383 | 280 | 73 | ||||||||||||
Subordinated notes and other long-term debt |
1,467 | 2,178 | (711 | ) | (33 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total interest-bearing liabilities |
36,195 | 36,961 | (766 | ) | (2 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
All other liabilities |
1,068 | 1,081 | (13 | ) | (1 | ) | ||||||||||
Shareholders equity |
5,867 | 5,614 | 253 | 5 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities and shareholders equity |
$ | 55,844 | $ | 55,546 | $ | 298 | 1 | % | ||||||||
|
|
|
|
|
|
|
|
(1) | Includes nonaccrual loans. |
17
Huntington Bancshares Incorporated
Consolidated Year To Date Net Interest MarginInterest Income / Expense (1)
(Unaudited)
YTD Interest Income / Expense | ||||||||
Nine Months Ended September 30, | ||||||||
(dollar amounts in thousands) |
2013 | 2012 | ||||||
Assets |
||||||||
Interest bearing deposits in banks |
$ | 94 | $ | 151 | ||||
Loans held for sale |
15,319 | 30,094 | ||||||
Securities: |
||||||||
Available-for-sale and other securities: |
||||||||
Taxable |
114,004 | 143,005 | ||||||
Tax-exempt |
16,967 | 12,691 | ||||||
|
|
|
|
|||||
Total available-for-sale and other securities |
130,971 | 155,696 | ||||||
Trading account securities |
275 | 608 | ||||||
Held-to-maturity securitiestaxable |
31,835 | 14,844 | ||||||
|
|
|
|
|||||
Total Securities |
163,081 | 171,148 | ||||||
Loans and leases: |
||||||||
Commercial: |
||||||||
Commercial and industrial |
484,045 | 475,814 | ||||||
Commercial real estate: |
||||||||
Construction |
17,524 | 16,811 | ||||||
Commercial |
138,717 | 156,008 | ||||||
|
|
|
|
|||||
Commercial real estate |
156,241 | 172,819 | ||||||
|
|
|
|
|||||
Total commercial |
640,286 | 648,633 | ||||||
|
|
|
|
|||||
Consumer: |
||||||||
Automobile |
161,389 | 163,124 | ||||||
Home equity |
257,375 | 267,328 | ||||||
Residential mortgage |
149,376 | 160,221 | ||||||
Other consumer |
23,037 | 25,505 | ||||||
|
|
|
|
|||||
Total consumer |
591,177 | 616,178 | ||||||
|
|
|
|
|||||
Total loans and leases |
1,231,463 | 1,264,811 | ||||||
|
|
|
|
|||||
Total earning assets |
$ | 1,409,957 | $ | 1,466,204 | ||||
|
|
|
|
|||||
Liabilities |
||||||||
Deposits: |
||||||||
Demand depositsnoninterest-bearing |
$ | | $ | | ||||
Demand depositsinterest-bearing |
1,894 | 2,845 | ||||||
|
|
|
|
|||||
Total demand deposits |
1,894 | 2,845 | ||||||
Money market deposits |
27,534 | 30,322 | ||||||
Savings and other domestic deposits |
10,367 | 14,779 | ||||||
Core certificates of deposit |
40,214 | 67,838 | ||||||
|
|
|
|
|||||
Total core deposits |
80,009 | 115,784 | ||||||
Other domestic deposits of $250,000 or more |
1,171 | 1,587 | ||||||
Brokered deposits and negotiable CDs |
7,715 | 8,553 | ||||||
Deposits in foreign offices |
386 | 526 | ||||||
|
|
|
|
|||||
Total deposits |
89,281 | 126,450 | ||||||
Short-term borrowings |
571 | 1,685 | ||||||
Federal Home Loan Bank advances |
771 | 690 | ||||||
Subordinated notes and other long-term debt |
26,231 | 45,974 | ||||||
|
|
|
|
|||||
Total interest-bearing liabilities |
116,854 | 174,799 | ||||||
|
|
|
|
|||||
Net interest income |
$ | 1,293,103 | $ | 1,291,405 | ||||
|
|
|
|
(1) | Fully-taxable equivalent (FTE) income and expense calculated assuming a 35% tax rate. See page 20 for the FTE adjustment. |
18
Huntington Bancshares Incorporated
Consolidated Year To Date Net Interest MarginYield
(Unaudited)
YTD Average Rates (2) | ||||||||
Nine Months Ended September 30, | ||||||||
Fully-taxable equivalent basis(1) |
2013 | 2012 | ||||||
Assets |
||||||||
Interest bearing deposits in banks |
0.18 | % | 0.20 | % | ||||
Loans held for sale |
3.47 | 3.43 | ||||||
Securities: |
||||||||
Available-for-sale and other securities: |
||||||||
Taxable |
2.31 | 2.34 | ||||||
Tax-exempt |
3.98 | 4.18 | ||||||
|
|
|
|
|||||
Total available-for-sale and other securities |
2.45 | 2.42 | ||||||
Trading account securities |
0.45 | 1.42 | ||||||
Held-to-maturity securitiestaxable |
2.29 | 2.91 | ||||||
|
|
|
|
|||||
Total Securities |
2.39 | 2.45 | ||||||
|
|
|
|
|||||
Loans and leases:(3) |
||||||||
Commercial: |
||||||||
Commercial and industrial |
3.75 | 3.97 | ||||||
Commercial real estate: |
||||||||
Construction |
3.96 | 3.78 | ||||||
Commercial |
4.08 | 3.87 | ||||||
|
|
|
|
|||||
Commercial real estate |
4.06 | 3.86 | ||||||
|
|
|
|
|||||
Total commercial |
3.82 | 3.94 | ||||||
|
|
|
|
|||||
Consumer: |
||||||||
Automobile |
3.99 | 4.80 | ||||||
Home equity |
4.15 | 4.29 | ||||||
Residential mortgage |
3.86 | 4.11 | ||||||
Other consumer |
6.82 | 7.35 | ||||||
|
|
|
|
|||||
Total consumer |
4.09 | 4.44 | ||||||
|
|
|
|
|||||
Total loans and leases |
3.95 | 4.17 | ||||||
|
|
|
|
|||||
Total earning assets |
3.69 | % | 3.86 | % | ||||
|
|
|
|
|||||
Liabilities |
||||||||
Deposits: |
||||||||
Demand depositsnoninterest-bearing |
| % | | % | ||||
Demand depositsinterest-bearing |
0.04 | 0.07 | ||||||
|
|
|
|
|||||
Total demand deposit |
0.01 | 0.02 | ||||||
Money market deposits |
0.24 | 0.30 | ||||||
Savings and other domestic deposits |
0.27 | 0.40 | ||||||
Core certificates of deposit |
1.13 | 1.41 | ||||||
|
|
|
|
|||||
Total core deposits |
0.35 | 0.50 | ||||||
Other domestic deposits of $250,000 or more |
0.49 | 0.67 | ||||||
Brokered deposits and negotiable CDs |
0.62 | 0.74 | ||||||
Deposits in foreign offices |
0.15 | 0.18 | ||||||
|
|
|
|
|||||
Total deposits |
0.36 | 0.51 | ||||||
Short-term borrowings |
0.11 | 0.16 | ||||||
Federal Home Loan Bank advances |
0.15 | 0.24 | ||||||
Subordinated notes and other long-term debt |
2.39 | 2.81 | ||||||
|
|
|
|
|||||
Total interest bearing liabilities |
0.43 | 0.63 | ||||||
|
|
|
|
|||||
Net interest rate spread |
3.26 | 3.23 | ||||||
Impact of noninterest-bearing funds on margin |
0.12 | 0.17 | ||||||
|
|
|
|
|||||
Net interest margin |
3.38 | % | 3.40 | % | ||||
|
|
|
|
Commercial Loan Derivative Impact
(Unaudited)
YTD Average Rates (2) | ||||||||
Nine Months Ended September 30, | ||||||||
Fully-taxable equivalent basis(1) |
2013 | 2012 | ||||||
Commercial loans(2)(3) |
3.57 | % | 3.65 | % | ||||
Impact of commercial loan derivatives |
0.25 | 0.29 | ||||||
|
|
|
|
|||||
Total commercialas reported |
3.82 | % | 3.94 | % | ||||
|
|
|
|
|||||
Average 30 day LIBOR |
0.20 | % | 0.22 | % |
(1) | Fully-taxable equivalent (FTE) yields are calculated assuming a 35% tax rate. See page 20 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. |
19
Huntington Bancshares Incorporated
Selected Year To Date Income Statement Data
(Unaudited)
Nine Months Ended September 30, | Change | |||||||||||||||
(dollar amounts in thousands, except per share amounts) |
2013 | 2012 | Amount | Percent | ||||||||||||
Interest income |
$ | 1,390,813 | $ | 1,451,268 | $ | (60,455 | ) | (4 | )% | |||||||
Interest expense |
116,854 | 174,799 | (57,945 | ) | (33 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net interest income |
1,273,959 | 1,276,469 | (2,510 | ) | | |||||||||||
Provision for credit losses |
65,714 | 107,930 | (42,216 | ) | (39 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net interest income after provision for credit losses |
1,208,245 | 1,168,539 | 39,706 | 3 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Service charges on deposit accounts |
201,810 | 194,096 | 7,714 | 4 | ||||||||||||
Mortgage banking income |
102,528 | 129,381 | (26,853 | ) | (21 | ) | ||||||||||
Trust services |
92,296 | 90,509 | 1,787 | 2 | ||||||||||||
Electronic banking |
68,340 | 61,279 | 7,061 | 12 | ||||||||||||
Brokerage income |
54,073 | 54,811 | (738 | ) | (1 | ) | ||||||||||
Insurance income |
53,708 | 54,051 | (343 | ) | (1 | ) | ||||||||||
Gain on sale of loans |
11,027 | 37,492 | (26,465 | ) | (71 | ) | ||||||||||
Bank owned life insurance income |
42,603 | 42,275 | 328 | 1 | ||||||||||||
Capital markets fees |
32,888 | 34,652 | (1,764 | ) | (5 | ) | ||||||||||
Securities gains (losses) |
(821 | ) | 3,906 | (4,727 | ) | (121 | ) | |||||||||
Other income |
92,915 | 97,754 | (4,839 | ) | (5 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total noninterest income |
751,367 | 800,206 | (48,839 | ) | (6 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Personnel costs |
752,083 | 734,241 | 17,842 | 2 | ||||||||||||
Outside data processing and other services |
148,476 | 141,556 | 6,920 | 5 | ||||||||||||
Net occupancy |
93,361 | 82,152 | 11,209 | 14 | ||||||||||||
Equipment |
78,018 | 76,367 | 1,651 | 2 | ||||||||||||
Deposit and other insurance expense |
40,105 | 52,003 | (11,898 | ) | (23 | ) | ||||||||||
Professional services |
29,020 | 43,244 | (14,224 | ) | (33 | ) | ||||||||||
Marketing |
37,481 | 47,807 | (10,326 | ) | (22 | ) | ||||||||||
Amortization of intangibles |
31,044 | 34,902 | (3,858 | ) | (11 | ) | ||||||||||
OREO and foreclosure expense |
4,448 | 14,038 | (9,590 | ) | (68 | ) | ||||||||||
Gain on early extinguishment of debt |
| (798 | ) | 798 | (100 | ) | ||||||||||
Other expense |
97,958 | 139,736 | (41,778 | ) | (30 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total noninterest expense |
1,311,994 | 1,365,248 | (53,254 | ) | (4 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income before income taxes |
647,618 | 603,497 | 44,121 | 7 | ||||||||||||
Provision for income taxes |
166,700 | 129,754 | 36,946 | 28 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income |
$ | 480,918 | $ | 473,743 | $ | 7,175 | 2 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Dividends on preferred shares |
23,904 | 24,016 | (112 | ) | | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income applicable to common shares |
$ | 457,014 | $ | 449,727 | $ | 7,287 | 2 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Average common sharesbasic |
835,410 | 861,543 | (26,133 | ) | (3 | )% | ||||||||||
Average common sharesdiluted |
844,521 | 866,768 | (22,247 | ) | (3 | ) | ||||||||||
Per common share |
||||||||||||||||
Net incomebasic |
$ | 0.55 | $ | 0.52 | $ | 0.03 | 6 | % | ||||||||
Net incomediluted |
0.54 | 0.52 | 0.02 | 4 | ||||||||||||
Cash dividends declared |
0.14 | 0.12 | 0.02 | 17 | ||||||||||||
Revenuefully taxable equivalent (FTE) |
||||||||||||||||
Net interest income |
$ | 1,273,959 | $ | 1,276,469 | $ | (2,510 | ) | | % | |||||||
FTE adjustment(2) |
19,144 | 14,936 | 4,208 | 28 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net interest income |
1,293,103 | 1,291,405 | 1,698 | | ||||||||||||
Noninterest income |
751,367 | 800,206 | (48,839 | ) | (6 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue |
$ | 2,044,470 | $ | 2,091,611 | $ | (47,141 | ) | (2 | )% | |||||||
|
|
|
|
|
|
|
|
Comparisons for presented periods are impacted by a number of factors. Refer to Significant Items.
On a fully-taxable equivalent (FTE) basis assuming a 35% tax rate.
20
Huntington Bancshares Incorporated
Year To Date Mortgage Banking Income
(Unaudited)
Nine Months Ended September 30, | Change | |||||||||||||||
(dollar amounts in thousands, except as noted) |
2013 | 2012 | Amount | Percent | ||||||||||||
Mortgage banking income |
||||||||||||||||
Origination and secondary marketing |
$ | 70,815 | $ | 102,348 | $ | (31,533 | ) | (31 | )% | |||||||
Servicing fees |
33,007 | 34,686 | (1,679 | ) | (5 | ) | ||||||||||
Amortization of capitalized servicing |
(22,684 | ) | (26,792 | ) | 4,108 | (15 | ) | |||||||||
Other mortgage banking income |
12,809 | 14,779 | (1,970 | ) | (13 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Subtotal |
93,947 | 125,021 | (31,074 | ) | (25 | ) | ||||||||||
MSR valuation adjustment(1) |
32,098 | (28,649 | ) | 60,747 | (212 | ) | ||||||||||
Net trading gains (losses) related to MSR hedging |
(23,517 | ) | 33,009 | (56,526 | ) | (171 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total mortgage banking income |
$ | 102,528 | $ | 129,381 | $ | (26,853 | ) | (21 | )% | |||||||
|
|
|
|
|
|
|
|
|||||||||
Mortgage originations (in millions) |
$ | 3,577 | $ | 3,672 | $ | (95 | ) | (3 | )% | |||||||
Average trading account securities used to hedge MSRs (in millions) |
| 4 | (4 | ) | (100 | ) | ||||||||||
Capitalized mortgage servicing rights(2) |
158,776 | 108,074 | 50,702 | 47 | ||||||||||||
Total mortgages serviced for others (in millions)(2) |
15,231 | 15,571 | (340 | ) | (2 | ) | ||||||||||
MSR % of investor servicing portfolio |
1.04 | % | 0.69 | % | 0.35 | % | 51 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net impact of MSR hedging |
||||||||||||||||
MSR valuation adjustment(1) |
$ | 32,098 | $ | (28,649 | ) | $ | 60,747 | (212 | )% | |||||||
Net trading gains (losses) related to MSR hedging |
(23,517 | ) | 33,009 | (56,526 | ) | (171 | ) | |||||||||
Net interest income related to MSR hedging |
| (26 | ) | 26 | (100 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net gain (loss) on MSR hedging |
$ | 8,581 | $ | 4,334 | $ | 4,247 | 98 | % | ||||||||
|
|
|
|
|
|
|
|
(1) | The change in fair value for the period represents the MSR valuation adjustment, net of amortization of capitalized servicing. |
(2) | At period end. |
21
Huntington Bancshares Incorporated
Year To Date Credit Reserves Analysis
(Unaudited)
Nine Months Ended September 30, | ||||||||
(dollar amounts in thousands) |
2013 | 2012 | ||||||
Allowance for loan and lease losses, beginning of period |
$ | 769,075 | $ | 964,828 | ||||
Loan and lease losses |
(232,632 | ) | (348,238 | ) | ||||
Recoveries of loans previously charged off |
90,413 | 75,906 | ||||||
|
|
|
|
|||||
Net loan and lease losses |
(142,219 | ) | (272,332 | ) | ||||
|
|
|
|
|||||
Provision for loan and lease losses |
39,508 | 102,823 | ||||||
Allowance of assets sold or transferred to loans held for sale |
(334 | ) | (6,177 | ) | ||||
|
|
|
|
|||||
Allowance for loan and lease losses, end of period |
$ | 666,030 | $ | 789,142 | ||||
|
|
|
|
|||||
Allowance for unfunded loan commitments and letters of credit, beginning of period |
$ | 40,651 | $ | 48,456 | ||||
Provision for (reduction in) unfunded loan commitments and letters of credit losses |
26,206 | 5,107 | ||||||
|
|
|
|
|||||
Allowance for unfunded loan commitments and letters of credit, end of period |
$ | 66,857 | $ | 53,563 | ||||
|
|
|
|
|||||
Total allowance for credit losses |
$ | 732,887 | $ | 842,705 | ||||
|
|
|
|
|||||
Allowance for loan and lease losses (ALLL) as % of: |
||||||||
Total loans and leases |
1.57 | % | 1.96 | % | ||||
Nonaccrual loans and leases (NALs) |
200 | 177 | ||||||
Nonperforming assets (NPAs) |
178 | 155 | ||||||
Total allowance for credit losses (ACL) as % of: |
||||||||
Total loans and leases |
1.72 | % | 2.09 | % | ||||
Nonaccrual loans and leases (NALs) |
220 | 189 | ||||||
Nonperforming assets (NPAs) |
196 | 165 |
22
Huntington Bancshares Incorporated
Year To Date Net Charge-Off Analysis
(Unaudited)
Nine Months Ended September 30, | ||||||||
(dollar amounts in thousands) |
2013 | 2012 | ||||||
Net charge-offs by loan and lease type: |
||||||||
Commercial: |
||||||||
Commercial and industrial |
$ | 6,564 | $ | 57,196 | ||||
Commercial real estate: |
||||||||
Construction |
6,446 | (2,997 | ) | |||||
Commercial |
21,278 | 60,055 | ||||||
|
|
|
|
|||||
Commercial real estate |
27,724 | 57,058 | ||||||
|
|
|
|
|||||
Total commercial |
34,288 | 114,254 | ||||||
|
|
|
|
|||||
Consumer: |
||||||||
Automobile |
6,778 | 7,546 | ||||||
Home equity |
61,812 | 91,370 | ||||||
Residential mortgage |
19,557 | 38,236 | ||||||
Other consumer |
19,784 | 20,926 | ||||||
|
|
|
|
|||||
Total consumer |
107,931 | 158,078 | ||||||
|
|
|
|
|||||
Total net charge-offs |
$ | 142,219 | $ | 272,332 | ||||
|
|
|
|
|||||
Net charge-offsannualized percentages: |
||||||||
Commercial: |
||||||||
Commercial and industrial |
0.05 | % | 0.48 | % | ||||
Commercial real estate: |
||||||||
Construction |
1.47 | (0.68 | ) | |||||
Commercial |
0.63 | 1.51 | ||||||
|
|
|
|
|||||
Commercial real estate |
0.73 | 1.29 | ||||||
|
|
|
|
|||||
Total commercial |
0.21 | 0.70 | ||||||
|
|
|
|
|||||
Consumer: |
||||||||
Automobile |
0.17 | 0.22 | ||||||
Home equity |
0.99 | 1.47 | ||||||
Residential mortgage |
0.51 | 0.98 | ||||||
Other consumer |
5.85 | 6.03 | ||||||
|
|
|
|
|||||
Total consumer |
0.75 | 1.14 | ||||||
|
|
|
|
|||||
Net charge-offs as a % of average loans |
0.46 | % | 0.90 | % | ||||
|
|
|
|
23
Huntington Bancshares Incorporated
Year To Date Nonaccrual Loans and Leases (NALs) and Nonperforming Assets (NPAs)
(Unaudited)
September 30, | ||||||||
(dollar amounts in thousands) |
2013 | 2012 | ||||||
Nonaccrual loans and leases (NALs): |
||||||||
Commercial and industrial |
$ | 68,034 | $ | 109,452 | ||||
Commercial real estate |
80,295 | 148,986 | ||||||
Automobile |
5,972 | 11,814 | ||||||
Residential mortgage |
116,260 | 123,140 | ||||||
Home equity |
62,545 | 51,654 | ||||||
|
|
|
|
|||||
Total nonaccrual loans and leases |
333,106 | 445,046 | ||||||
Other real estate, net: |
||||||||
Residential |
16,610 | 23,640 | ||||||
Commercial |
12,544 | 30,566 | ||||||
|
|
|
|
|||||
Total other real estate, net |
29,154 | 54,206 | ||||||
Other NPAs (1) |
12,000 | 10,476 | ||||||
|
|
|
|
|||||
Total nonperforming assets (3) |
$ | 374,260 | $ | 509,728 | ||||
|
|
|
|
|||||
Nonaccrual loans and leases as a % of total loans and leases |
0.78 | % | 1.11 | % | ||||
NPA ratio (2) |
0.88 | 1.26 | ||||||
Nine Months Ended September 30, | ||||||||
(dollar amounts in thousands) |
2013 | 2012 | ||||||
Nonperforming assets, beginning of period |
$ | 445,775 | $ | 590,276 | ||||
New nonperforming assets |
356,668 | (4) | 566,641 | |||||
Returns to accruing status |
(69,745 | ) | (117,161 | ) | ||||
Loan and lease losses |
(157,388 | ) | (228,220 | ) | ||||
OREO losses (gains) |
3,767 | (681 | ) | |||||
Payments |
(179,403 | ) | (220,674 | ) | ||||
Sales |
(25,414 | ) | (80,453 | ) | ||||
|
|
|
|
|||||
Nonperforming assets, end of period |
$ | 374,260 | $ | 509,728 | ||||
|
|
|
|
(1) | Other nonperforming assets represent an investment security backed by a municipal bond. |
(2) | Nonperforming assets divided by the sum of loans and leases, net other real estate owned, and other NPAs. |
(3) | Includes $57.9 million at September 30, 2013 and $63.0 million at September 30, 2012, related to chapter 7 bankruptcy loans. |
24
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) |
2013 | 2012 | ||||||
Accruing loans and leases past due 90 days or more: |
||||||||
Commercial and industrial |
$ | 19,217 | $ | 26,117 | ||||
Commercial real estate |
44,026 | 45,131 | ||||||
Automobile |
3,599 | 3,857 | ||||||
Residential mortgage (excluding loans guaranteed by the U.S. Government) |
13,978 | 10,687 | ||||||
Home equity |
13,044 | 21,343 | ||||||
Other consumer |
1,102 | 1,084 | ||||||
|
|
|
|
|||||
Total, excl. loans guaranteed by the U.S. Government |
94,966 | 108,219 | ||||||
Add: loans guaranteed by U.S. Government |
81,770 | 87,463 | ||||||
|
|
|
|
|||||
Total accruing loans and leases past due 90 days or more, including loans guaranteed by the U.S. Government |
$ | 176,736 | $ | 195,682 | ||||
|
|
|
|
|||||
Ratios: |
||||||||
Excluding loans guaranteed by the U.S. Government, as a percent of total loans and leases |
0.22 | % | 0.27 | % | ||||
Guaranteed by U.S. Government, as a percent of total loans and leases |
0.20 | % | 0.22 | % | ||||
Including loans guaranteed by the U.S. Government, as a percent of total loans and leases |
0.42 | % | 0.49 | % | ||||
Accruing troubled debt restructured loans: |
||||||||
Commercial and industrial |
$ | 85,687 | $ | 55,809 | ||||
Commercial real estate |
204,597 | 222,155 | ||||||
Automobile |
30,981 | 33,719 | ||||||
Home equity |
153,591 | 92,763 | ||||||
Residential mortgage |
300,809 | 280,890 | ||||||
Other consumer |
959 | 2,644 | ||||||
|
|
|
|
|||||
Total accruing troubled debt restructured loans |
$ | 776,624 | $ | 687,980 | ||||
|
|
|
|
|||||
Nonaccruing troubled debt restructured loans: |
||||||||
Commercial and industrial |
$ | 8,643 | $ | 28,859 | ||||
Commercial real estate |
22,695 | 20,284 | ||||||
Automobile |
5,972 | 11,814 | ||||||
Home equity |
11,434 | 7,756 | ||||||
Residential mortgage |
77,525 | 83,163 | ||||||
Other consumer |
| 113 | ||||||
|
|
|
|
|||||
Total nonaccruing troubled debt restructured loans |
$ | 126,269 | $ | 151,989 | ||||
|
|
|
|
25
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