* Fourth Quarter $0.39 Earnings Per Share Includes a Negative $0.04 From
Significant Items
* Full Year $1.71 Earnings Per Share
* Provides 2005 GAAP Earnings Per Share Guidance of $1.78-$1.83 Per Share
COLUMBUS, Ohio, Jan. 21 /PRNewswire-FirstCall/ -- Huntington Bancshares
Incorporated (Nasdaq: HBAN) ( http://www.huntington.com ) reported 2004 fourth
quarter earnings of $91.1 million, or $0.39 per common share, including a net
negative impact of $0.04 per share related to significant items. This
compares with $93.3 million, or $0.40 per common share, in the year-ago
quarter and $93.5 million, or $0.40 per common share, in the 2004 third
quarter.
Full-year earnings for 2004 were $398.9 million, or $1.71 per common
share, up 7% and 6%, respectively, from full-year 2003 earnings of $372.4
million, or $1.61 per common share.
"Fourth quarter fundamentals were good, though net income was negatively
impacted by a net $0.04 per share for SEC-related expenses, property lease
impairment, and a one-time adjustment for a securitization structure
consolidated in a prior period," said Thomas E. Hoaglin, chairman, president,
and chief executive officer. "Loan growth was again strong. Average total
loans and leases increased at an annualized 15% rate from the third quarter
with both consumer loans and middle market commercial and industrial loans
growing at a 19% annualized rate. We were particularly encouraged to see
middle market commercial and industrial loan growth in each of the last five
months."
"Average core deposits increased at a 10% annualized rate, with both
interest bearing demand deposits, as well as non-interest bearing deposits
growing at 15% annualized rates," he noted. "These increases were supported
by continued growth in the number of consumer demand deposit households and
small business demand deposit relationships, as our sales efforts continue to
gain traction."
"We were very pleased with the improvement in the net interest margin," he
continued. "Expenses continued to be influenced by SEC-related and Unizan
conversion expenses, as well as costs associated with Sarbanes-Oxley 404
compliance."
"Overall credit quality performance remained strong," he said. "Though a
unique loan workout situation resulted in all of the quarter's OREO and NPA
increase, the properties in question are already under contract to be sold
early in 2005. Net charge-offs as an annualized percent of average total
loans and leases were 36 basis points, up from 30 basis points in the third
quarter but well within expectations."
He concluded, "2004 was a year of significant progress on a number of
fronts: loan and deposit growth, consumer and small business account growth,
and strong credit quality performance. Associates remained very focused on
growing our core businesses, improving service quality, and attracting new
customers. This momentum positions us well for 2005."
Significant 2004 fourth quarter performance highlights included:
* $6.5 million pre-tax ($0.03 earnings per share) SEC-related expenses
and accruals.
* $7.8 million pre-tax ($0.02 earnings per share) one-time property lease
impairment resulting from an annual fourth quarter property valuation
review, which impacted net occupancy expense.
* $3.7 million pre-tax ($0.01 earnings per share) one-time funding cost
adjustment for a securitization structure consolidated in a prior
period, which lowered interest expense and increased net interest
income, as well as the net interest margin.
Highlights compared with 2004 third quarter included:
* 4% (15% annualized) growth in average total loans and leases reflecting
5% (19% annualized) growth in consumer loans and 5% (19% annualized)
growth in middle market commercial and industrial loans.
* 3% (11% annualized) growth in average small business loans.
* 2% (10% annualized) growth in average total core deposits.
* 3.38% net interest margin, including a 6 basis point positive impact
from the $3.7 million funding cost adjustment for a securitization
structure consolidated in a prior period, up from 3.30%.
* 0.36% annualized net charge-offs, up from 0.30%.
* 0.46% period-end non-performing asset (NPA) ratio, including a 15 basis
point impact from other real estate owned (OREO) properties associated
with a workout of a mezzanine loan relationship, compared with 0.36% at
September 30, 2004.
* 1.15% period-end allowance for loan and lease losses (ALLL) ratio, down
from 1.25% at September 30, 2004.
* 7.87% period-end tangible common equity to risk-weighted assets ratio,
up from 7.83% at September 30, 2004.
Discussion of Performance
Fully taxable equivalent net interest income increased $14.6 million, or
6%, from the year-ago quarter, reflecting the favorable impact of an 8%
increase in average earning assets, partially offset by a 4 basis point, or an
effective 1%, decline in the net interest margin. The fully taxable
equivalent net interest margin decreased to 3.38% from 3.42% in the year-ago
quarter. The current quarter net interest margin, however, reflected the one-
time 6 basis point favorable impact from the funding cost adjustment noted
above. Excluding this 6 basis point impact, the fourth quarter net interest
margin was 3.32%. The decline from the year-ago quarter reflected the impact
of lower rates and the strategic repositioning of portfolios to reduce
automobile loans and increase the relative proportion of lower-rate, lower-
risk, residential real estate-related loans.
Compared with the 2004 third quarter, fully taxable equivalent net
interest income increased $12.0 million, or 5%, reflecting the favorable
impact of a 3% increase in average earning assets and an 8 basis point
increase in the net interest margin to 3.38% from 3.30% in the 2004 third
quarter. The 2004 fourth quarter net interest margin reflected the favorable
one-time 6 basis point impact from the funding cost adjustment noted above.
Average total loans and leases increased $1.6 billion, or 8%, from the
2003 fourth quarter due primarily to a $1.1 billion, or 9%, increase in
average consumer loans. Contributing to the consumer loan growth was a $1.2
billion, or 48%, increase in average residential mortgages and a $0.9 billion,
or 24%, increase in average home equity loans. Demand for residential
mortgages and home equity loans remained strong as interest rates remained
near historically low levels.
Average total automobile loans declined $1.6 billion, or 46%, from the
year-ago quarter reflecting the sale of $1.5 billion of automobile loans over
this 12-month period as part of a strategy of reducing automobile loan and
lease exposure to a targeted 20% of total credit exposure. Partially
offsetting the decline in automobile loans was rapid growth in direct
financing leases due to the migration from operating lease assets, which have
not been originated since April 2002. At December 31, 2004, the total exposure
to automobile financing was $5.0 billion, down from $6.2 billion at the end of
2003, and represented 21% of total credit exposure, down from 28% a year
earlier, and 33% at the end of 2002.
($ billions) 12/31/04 12/31/03 12/31/02
Total Company
Loans and leases $23.6 $21.1 $18.6
Operating lease assets 0.6 1.3 2.2
Securitized loans -- 0.0 1.1
Total credit exposure $24.1 $22.4 $21.9
Automobile Financing
Loans and leases $4.4 $4.9 $3.9
Operating lease assets 0.6 1.3 2.2
Securitized loans -- 0.0 1.1
Total auto exposure $5.0 $6.2 $7.2
% Total credit exposure 21% 28% 33%
Average total commercial loans were $10.1 billion, up $0.6 billion, or 6%,
from the year-ago quarter. This increase reflected a $0.3 billion, or 10%,
increase in middle market real estate loans and $0.2 billion, or 12%, increase
in small business loans. Middle market commercial and industrial loans were
essentially unchanged from the year-ago period.
Compared with the third quarter, average total loans and leases in the
2004 fourth quarter increased $0.8 billion, or 4%. Average total consumer
loans accounted for most of this increase as they increased $0.6 billion, or
5%, reflecting a $0.2 billion, or 6%, increase in residential mortgages and a
$0.2 billion, or 4%, increase in average home equity loans. In addition,
average automobile loans and leases increased $0.2 billion, or 5%, due to
growth in direct financing leases and, to a lesser degree, growth in
automobile loans. Automobile loan production declined 15% from the third
quarter reflecting continued aggressive competitiveness in this sector.
Average total commercial loans increased $0.3 billion, or 3%. This was led by
a $0.2 billion, or 5%, increase in middle market commercial and industrial
loans. Average small business loans increased 3% with middle market real
estate loans essentially unchanged.
Average investment securities declined $0.3 billion, or 6%, from the year-
ago quarter and declined $0.5 billion, or 10%, from the 2004 third quarter.
Average total core deposits in the fourth quarter were $16.9 billion, up
$1.4 billion, or 9%, from the year-ago quarter, reflecting a $1.2 billion, or
18%, increase in average interest bearing demand deposit accounts, and a $0.3
billion, or 9%, increase in non-interest bearing deposits. Compared with the
2004 third quarter, average total core deposits increased $0.4 billion, or 2%,
reflecting growth in interest bearing demand deposits, up $0.3 billion, or 4%,
as well as non-interest bearing deposits, up $0.1 billion, or 4%.
Non-interest income decreased $63.6 million, or 26%, from the year-ago
quarter. Comparisons with prior-period results were heavily influenced by the
decline in operating leases and related operating lease income. These
declines are expected to continue, though diminishing over time, as all
automobile leases originated since April 2002 are direct financing leases with
income reflected in net interest income, not non-interest income. Reflecting
the run-off of the operating lease portfolio, operating lease income declined
$50.2 million, or 48%, from the 2003 fourth quarter.
Excluding operating lease income, non-interest income decreased $13.4
million, or 9%, from the year-ago quarter with the primary drivers being:
* $16.3 million gain on sale of automobile loans in the year-ago quarter
with no such gain in the current quarter.
* $3.0 million, or 7%, decline in service charges on deposit accounts
primarily reflecting lower consumer NSF and overdraft service charge
income and, to a lesser degree, lower service charges on commercial
accounts related to higher commercial deposit credits that occur as
interest rates increase, as well as a decrease in check processing
activity.
* $1.5 million, or 10%, decline in brokerage and insurance income due to
lower annuity income.
Partially offset by:
* $4.5 million increase in other income reflecting investment banking and
other equity investment gains.
* $1.5 million, or 10%, increase in trust services income.
* $1.4 million, or 15%, increase in other service charges and fees due to
increased check card volume and higher interchange rates.
Compared with the 2004 third quarter, non-interest income declined $7.0
million, or 4%. This comparison was also heavily influenced by the decline in
operating lease income for the reasons noted above. Reflecting the run-off of
the operating lease portfolio, operating lease income declined $9.3 million,
or 14%, from the 2004 third quarter. Excluding operating lease income, non-
interest income increased $2.4 million, or 2%, from the 2004 third quarter
with the primary drivers being:
* $6.0 million increase in other income reflecting the benefit of
investment banking and other equity investment gains, partially offset
by higher MSR hedge-related trading losses.
* $4.4 million increase in mortgage banking income primarily reflecting a
$0.7 million MSR temporary impairment recovery in the current quarter
compared with a $4.1 million MSR temporary impairment in the third
quarter. The carrying value of MSRs as a percent of mortgages serviced
for others was 1.12% at December 31, 2004, little changed from 1.13% at
September 30, 2004.
Partially offset by:
* $5.7 million decline in investment securities gains with the current
quarter reflecting $2.1 million of such gains, compared with
$7.8 million of such gains in the 2004 third quarter.
* $2.2 million, or 5%, decline in service charges on deposit accounts
primarily reflecting lower consumer NSF and overdraft service charge
income, and to a lesser degree, lower service charges on commercial
accounts.
Non-interest expense decreased $36.5 million, or 11%, from the year-ago
quarter. Comparisons with prior-period results were influenced by the decline
in operating lease expense as the operating lease portfolio continues to run-
off (see above operating lease income discussion). Operating lease expense
declined $37.3 million, or 44%, from the 2003 fourth quarter. Excluding
operating lease expense, non-interest expense increased $0.8 million, or less
than 1%, from the year-ago quarter reflecting:
* $11.2 million increase in net occupancy expense reflecting a
$7.8 million property lease impairment, as well as a write-down on
vacated facilities as a renovated facility was re-occupied.
* $7.0 million increase in personnel costs due to higher pension-related
expenses.
Partially offset by:
* $15.3 million loss on early extinguishment of debt in the year-ago
quarter with no such loss in the current quarter.
* $1.3 million decline in marketing expense.
* $1.1 million decline in equipment expense.
Compared with the 2004 third quarter, non-interest expense increased $7.6
million, or 3%. Comparisons with prior-period results were also heavily
influenced by the decline in operating lease expense. Operating lease expense
declined $6.6 million, or 12%, from the 2004 third quarter. Excluding
operating lease expense, non-interest expense increased $14.2 million, or 6%,
from the third quarter reflecting:
* $9.2 million increase in net occupancy as the current quarter included
$7.8 million in property lease impairment and write-down on vacated
facilities as noted above.
* $1.2 million of restructuring reserve releases in the third quarter
compared with no reserve charges or releases in the current quarter.
* $1.0 million increase in personnel costs reflecting higher pension
expenses.
Partially offset by:
* $2.7 million decline in professional services.
In addition to the above-mentioned items, SEC-related expenses and
accruals, as well as Unizan related expenses related to integration planning
and systems conversions, contributed to the change in expense from the year-
ago and third quarter periods. Specifically, SEC-related expenses and
accruals totaled $6.5 million in the 2004 fourth quarter, up from $5.5 million
in the third quarter. These expenses and accruals impacted the professional
services and other expense categories. Unizan integration planning and
systems conversion expenses totaled $0.9 million and $1.8 million in the 2004
fourth and third quarters, respectively. In addition to impacting the data
processing and other services expense category, a portion of these expenses
was also spread across various other expense categories.
Credit Quality
Total net charge-offs for the 2004 fourth quarter were $20.9 million, or
an annualized 0.36% of average total loans and leases. This was a decrease
from $55.1 million, or 1.03%, in the year-ago quarter but an increase from
$16.5 million, or an annualized 0.30% of average total loans and leases in the
third quarter.
Total commercial net charge-offs in the fourth quarter were $5.2 million,
or an annualized 0.21%, down from $36.9 million, or an annualized 1.55%, in
the year-ago quarter. In the 2003 fourth quarter the credit workout group
identified an economically attractive opportunity to sell $99 million of lower
quality loans, including $43 million of non-performing assets (NPAs), which
resulted in $26.6 million in commercial and middle market commercial real
estate loan net charge-offs, or an annualized 0.50% of average total loans and
leases. Excluding this $26.6 million in net charge-offs, 2003 fourth quarter
net charge-offs were $28.6 million, or 0.53%, of average loans and leases.
Total commercial net charge-offs in the 2004 third quarter were only $2.6
million, or an annualized 0.10%.
Total consumer net charge-offs in the current quarter were $15.8 million,
or an annualized 0.49% of related loans. This compared with $18.2 million, or
0.61%, in the year-ago quarter with this decline heavily influenced by lower
automobile loan and lease net charge-offs. Total automobile loan and lease
net charge-offs in the 2004 fourth quarter were $7.5 million, or an annualized
0.70% of related loans and leases, down significantly from $13.3 million, or
an annualized 1.00%, in the year-ago quarter.
Compared with the 2004 third quarter, fourth quarter total consumer net
charge-offs increased $1.8 million, reflecting a $1.1 million increase in home
equity loan net charge-offs which were $5.3 million, or 0.48%, of related
loans. The increase in the current quarter reflected a $1.0 million
reclassification from other consumer net charge-offs applicable to prior
periods and a continuation of our conservative collateral valuations and
charge-off policies. Net charge-offs on automobile loans and leases were
essentially unchanged from third quarter performance.
Credit losses on operating lease assets are included in operating lease
expense and were $3.0 million in the current quarter, down from $8.8 million
in the year-ago quarter and $5.0 million in the third quarter. Recoveries on
operating lease assets are included in operating lease income and totaled $2.0
million, $1.9 million, and $1.2 million, for the same periods, respectively.
The ratio of operating lease asset credit losses to average operating lease
assets, net of recoveries, was an annualized 0.65% in the current quarter,
2.05% in the year-ago quarter, and 1.89% in the 2004 third quarter. As noted
in the non-interest income discussion above, the operating lease portfolio
will decline over time as no new operating lease assets have been generated
since April 2002.
NPAs were $108.6 million at December 31, 2004, and represented 0.46% of
related assets, up $21.2 million from $87.4 million, or 0.41%, at the end of
the year-ago quarter and up $28.1 million from $80.5 million, or 0.36%, at
September 30, 2004. All of the increase from both the year-ago and prior
quarters related to the workout of a troubled mezzanine financing
relationship. During the fourth quarter, OREO reflected a $35.7 million
increase for properties related to the workout of $5.9 million of non-
performing mezzanine loans as Huntington took ownership of the partnership,
which required consolidation of the partnership's assets and liabilities
including these properties. These properties are subject to $29.8 million of
non-recourse debt to another financial institution, and are in contract for
sale early in 2005.
Non-performing loans and leases (NPLs), which exclude OREO, were $64.0
million at December 31, 2004, down 15% from $75.5 million a year earlier and
down 6% from the end of the third quarter including the impact of the sale of
an $8.8 million pool of NPLs in the fourth quarter. Expressed as a percent of
total loans and leases, NPLs were 0.27% at December 31, 2004, down from 0.36%
at December 31, 2003, and 0.30% at September 30, 2004.
The over 90-day delinquent, but still accruing, ratio was 0.23% at
December 31, 2004, little changed from 0.27% a year ago, and 0.24% at
September 30, 2004.
Allowances for Credit Losses (ACL)
The company maintains two reserves, both of which are available to absorb
possible credit losses: the allowance for loan and lease losses (ALLL) and the
allowance for unfunded loan commitments (AULC). When summed together, these
reserves constitute the total allowances for credit losses (ACL).
The December 31, 2004, ALLL was $271.2 million, down from $299.7 million a
year earlier and $282.7 million at September 30, 2004. Expressed as a percent
of period-end loans and leases, the ALLL ratio at December 31, 2004, was
1.15%, down from 1.42% a year ago and 1.25% at September 30, 2004. These
declines reflected the improvement in the economic outlook, the change in the
mix of the loan portfolio to lower-risk residential mortgages and home equity
loans, and the reduction of specific reserves related to improved or resolved
individual problem commercial credits. The 27 basis point decline in the ALLL
ratio from a year ago consisted of a 10 basis point decline in the transaction
reserve component, a 9 basis point decline in the specific reserve component,
and an 8 basis point decline in the economic reserve component. The 10 basis
point decline in the ALLL ratio from September 30, 2004, consisted of a 6
basis point decline in the transaction reserve component, a 3 basis point
decline in the specific reserve component, and a 1 basis point decline in the
economic reserve. The ALLL as a percent of NPAs was 250% at December 31,
2004, which was reduced by the 122% impact from the mezzanine-related OREO.
This compared with 343% a year ago, and 351% at September 30, 2004.
The December 31, 2004, AULC was $33.2 million, down from $35.5 million at
the end of the year-ago quarter, but up from $30.0 million at September 30,
2004.
On a combined basis, the ACL as a percent of total loans and leases was
1.29% at December 31, 2004, compared with 1.59% a year earlier and 1.38% at
the end of last quarter. Similarly, the ACL as a percent of NPAs was 280% at
December 31, 2004, compared with 384% a year earlier and 389% at September 30,
2004.
The provision for loan and lease losses in the 2004 fourth quarter was
$12.7 million, a $13.7 million reduction from the year-ago quarter, but a $0.9
million increase from the 2004 third quarter. The reduction in provision
expense from the year-ago quarter reflected overall improved portfolio quality
performance and a stronger economic outlook, only partially offset by
provision expense related to loan growth. The increase in provision expense
from the third quarter primarily reflected loan growth, partially offset by
the benefit of higher recoveries.
Capital
At December 31, 2004, the tangible equity to assets ratio was 7.18%, up
from 6.79% a year ago, and 7.11% at September 30, 2004. At December 31, 2004,
the tangible equity to risk-weighted assets ratio was 7.87%, up from 7.31% at
the end of the year-ago quarter, and 7.83% at September 30, 2004. The
increase in the tangible equity to risk-weighted assets ratio reflected
primarily the positive impact resulting from reducing the overall risk profile
of earning assets throughout this period, most notably a less risky loan
portfolio mix.
2005 Outlook
When earnings guidance is given, it is the company's practice to do so on
a GAAP basis. Furthermore, such guidance excludes any impact from potential
future loan sales or other one-time items not certain at the time such
earnings guidance is provided.
"The trend and absolute level of interest rates, as well as the overall
economic environment are key in setting performance expectations," said
Hoaglin. "At this time, the outlook for these factors are favorable and
almost identical to our expectations a year-ago. Specifically, we anticipate
modest economic growth in our regions and a gradual rise in the level of
interest rates. We expect continued solid demand for home equity loans, small
business loans, and middle market commercial real estate loans. Growth in
residential mortgages is expected to be good, though less than last year.
Importantly, we expect improved demand for middle market commercial C&I loans.
Another good year in growing deposits is expected as we continue to improve
our sales performance results and build on our success in growing our retail
and commercial account bases."
"We believe our net interest margin throughout the year will remain
relatively consistent with the 2004 full-year level of 3.33%. Non-interest
income, excluding the impact of declining operating lease income, should
increase in the mid-single digit range. Improving expense efficiency will be
more of a focus, and excluding the impact of declining operating lease
expense, we expect to hold expenses flat with the 2004 level."
"The total net charge-off, NPL, and allowance for loan and lease loss
ratios are expected to hold fairly steady around fourth quarter performance
levels. However, loan loss provision expense will increase in order to
accommodate loan growth."
"Reflecting these factors, we are targeting reported, or GAAP, earnings of
$1.78-$1.83 per share in 2005. This excludes any impact from SEC-related
expenses, the implementation of FAS 123 for stock option expense accounting,
or share buybacks. To the degree such impacts are known, they will be
included in future earnings guidance," he concluded.
SEC Investigation and Banking Regulatory Agreements
As previously announced, Huntington continues to have ongoing discussions
with the staff of the Securities and Exchange Commission (SEC) regarding
resolution of its previously announced formal investigation into certain
financial accounting matters relating to fiscal years 2002 and earlier and
certain related disclosure matters. It is anticipated that a settlement of
this matter, which is subject to approval by the SEC, will involve the entry
of an order by the SEC requiring Huntington to comply with various provisions
of the Securities Exchange Act of 1934 and the Securities Act of 1933, along
with the imposition of a civil money penalty. At year end, the company had
reserves related to the expectation of the imposition of a civil money
penalty, which the company viewed as sufficient given negotiations with the
SEC. However, no assurances can be made that any assessed penalty may not
exceed this amount.
Also as previously announced, Huntington expects to enter into formal
supervisory agreements with its banking regulators, the Federal Reserve and
Office of the Comptroller of the Currency, providing for a comprehensive
action plan designed to address its financial reporting and accounting
policies, procedures and controls, and its corporate governance practices.
Huntington remains in active dialogue with banking regulators concerning these
and related matters and is working diligently to resolve them in a full and
comprehensive manner.
Conference Call / Webcast Information
Huntington's senior management will host an earnings conference call today
at 1:00 p.m. (Eastern Time). The call may be accessed via a live Internet
webcast at huntington-ir.com or through a dial-in telephone number at
866-847-7860. Slides will be available at huntington-ir.com just prior to
1:00 p.m. (Eastern Time) today for review during the call. A replay of the
webcast will be archived in the Investor Relations section of Huntington's web
site huntington-ir.com. A telephone replay will be available two hours after
the completion of the call through the end of this month at 888-266-2081;
conference ID 616966.
Forward-looking Statement
This press release contains certain forward-looking statements, including
certain plans, expectations, goals, and projections, which are subject to
numerous assumptions, risks, and uncertainties. A number of factors,
including but not limited to those set forth under the heading "Business
Risks" included in Item 1 of Huntington's Annual Report on Form 10-K for the
year ended December 31, 2003, and other factors described from time to time in
Huntington's other filings with the Securities and Exchange Commission, could
cause actual conditions, events, or results to differ significantly from those
described in the forward-looking statements. All forward-looking statements
included in this news release 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 earnings release contains GAAP financial measures and non-GAAP
financial measures where management believes it to be helpful in understanding
Huntington's 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
the Quarterly Financial Review supplement to this earnings release, which can
be found on Huntington's website at huntington-ir.com.
Annualized data
Certain returns, yields, performance ratios, or quarterly growth rates are
"annualized" in this presentation to represent an annual time period. 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 growth rates 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 earnings 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 one-time 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 company's financial performance
against published earnings per share mean estimate amounts, which typically
exclude the impact of significant one-time 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 separately
disclosed, with this then being the amount used to calculate the earnings per
share equivalent.
NM or nm
Percent changes of 100% or more are shown as "nm" or "not meaningful".
Such large percent changes typically reflect the impact of one-time items
within the measured periods. Since the primary purpose of showing a percent
change is for discerning underlying performance trends, such large percent
changes are "not meaningful" for this purpose.
About Huntington
Huntington Bancshares Incorporated is a $33 billion regional bank holding
company headquartered in Columbus, Ohio. Through its affiliated companies,
Huntington has more than 139 years of serving the financial needs of its
customers. Huntington provides innovative retail and commercial financial
products and services through more than 300 regional banking offices in
Indiana, Kentucky, Michigan, Ohio and West Virginia. Huntington also offers
retail and commercial financial services online at huntington.com; through its
technologically advanced, 24-hour telephone bank; and through its network of
approximately 700 ATMs. Selected financial service activities are also
conducted in other states including: Dealer Sales offices in Florida, Georgia,
Tennessee, Pennsylvania, and Arizona; Private Financial Group offices in
Florida; and Mortgage Banking offices in Florida, Maryland, and New Jersey.
International banking services are made available through the headquarters
office in Columbus and an office located in the Cayman Islands and an office
located in Hong Kong.
HUNTINGTON BANCSHARES INCORPORATED
Annual Key Statistics
(Unaudited)
(in thousands, except per share amounts)
Change
2004 2003 Amount Percent
Net Interest Income $911,374 $848,986 $62,388 7.3%
Provision for Credit
Losses 55,062 163,993 (108,931) (66.4)
Non-Interest Income 818,598 1,069,153 (250,555) (23.4)
Non-Interest Expense 1,122,244 1,230,159 (107,915) (8.8)
Income Before Income
Taxes 552,666 523,987 28,679 5.5
Provision for Income
Taxes 153,741 138,294 15,447 11.2
Income before
cumulative effect of
change in
accounting principle 398,925 385,693 13,232 3.4
Cumulative effect of
change in accounting
principle, net of tax --- (13,330) 13,330 N.M.
Net Income $398,925 $372,363 $26,562 7.1%
Income per common share
before cumulative
effect of change in
accounting principle
- diluted $1.71 $1.67 0.04 2.4%
Net Income per common
share - diluted 1.71 1.61 0.10 6.2
Cash dividends declared
per common share 0.750 0.670 0.08 11.9
Average common shares
- basic 229,913 229,401 512 0.2
Average common shares
- diluted 233,846 231,582 2,264 1.0
Return on average
assets 1.27% 1.33%
Return on average
shareholders' equity 16.8 17.6
Net interest margin (1) 3.33 3.49
Efficiency ratio (2) 65.0 63.9
Effective tax rate 27.8 26.4
Average loans and
leases $22,126,894 $20,023,718 $2,103,176 10.5%
Average earning assets 27,697,075 24,592,685 3,104,390 12.6
Average total assets 31,432,746 28,971,701 2,461,045 8.5
Average core
deposits (3) 16,284,727 15,437,060 847,667 5.5
Average core deposits
- excluding Retail CDs 13,867,661 12,735,282 1,132,379 8.9
Average shareholders'
equity 2,374,137 2,196,349 177,788 8.1
Net charge-offs (NCOs) 78,535 161,809 (83,274) (51.5)
NCOs as a % of average
loans and leases 0.35% 0.81%
N.M. - Not Meaningful.
(1) On a fully taxable equivalent (FTE) basis assuming a 35% tax rate.
(2) Non-interest expense less amortization of intangibles ($0.8 million
for both periods above) divided by the sum of FTE net interest income
and non-interest income excluding securities gains (losses).
(3) Includes non-interest bearing and interest bearing demand deposits,
savings deposits, retail CDs and other domestic time deposits.
HUNTINGTON BANCSHARES INCORPORATED
Quarterly Key Statistics
(Unaudited)
(in thousands, except per share amounts)
Percent Change
4Q04 3Q04 4Q03 3Q04 4Q03
Net Interest Income $239,068 $227,058 $224,315 5.3% 6.6%
Provision for Credit
Losses 12,654 11,785 26,341 7.4 (52.0)
Non-Interest Income 182,940 189,891 246,510 (3.7) (25.8)
Non-Interest Expense 281,014 273,423 317,465 2.8 (11.5)
Income Before Income
Taxes 128,340 131,741 127,019 (2.6) 1.0
Provision for Income
Taxes 37,201 38,255 33,758 (2.8) 10.2
Net Income $91,139 $93,486 $93,261 (2.5)% (2.3)%
Net Income per common
share - diluted $0.39 $0.40 $0.40 (2.5) (2.5)
Cash dividends declared
per common share 0.200 0.200 0.175 --- 14.3
Book value per common
share at end of period 10.96 10.69 9.93 2.5 10.3
Average common
shares - basic 231,147 229,848 228,902 0.6 1.0
Average common
shares - diluted 235,462 234,348 231,986 0.5 1.5
Return on average assets 1.13% 1.18% 1.22%
Return on average
shareholders' equity 14.6 15.4 16.6
Net interest margin (1) 3.38 3.30 3.42
Efficiency ratio (2) 66.4 66.3 67.1
Effective tax rate 29.0 29.0 26.6
Average loans and
leases $23,032,173 $22,194,826 $21,406,486 3.8% 7.6%
Average loans and
leases - linked
quarter annualized
growth rate 15.1% 7.9% 17.5%
Average earning
assets 28,506,464 27,736,806 26,426,249 2.8 7.9
Average core
deposits (3) 16,908,269 16,509,879 15,543,934 2.4 8.8
Average core
deposits - linked
quarter annualized
growth rate (3) 9.7% 6.9% (6.5)%
Average core
deposits - excluding
Retail CDs $14,454,571 $14,095,580 $13,052,055 2.5 10.7
Average core deposits
excl. Retail CDs -
linked quarter
annualized
growth rate 10.2% 7.7% (5.7)%
Average total assets $32,060,518 $31,458,712 $30,422,986 1.9 5.4
Average shareholders'
equity 2,481,373 2,411,746 2,228,129 2.9 11.4
Total assets at end
of period $32,565,497 $31,808,240 $30,519,326 2.4 6.7
Total shareholders'
equity at end
of period 2,537,638 2,460,917 2,275,002 3.1 11.5
Net charge-offs (NCOs) $20,913 $16,480 $55,143 26.9 (62.1)
NCOs as a % of average
loans and leases 0.36% 0.30% 1.03%
Non-performing loans
and leases (NPLs) $63,962 $67,784 $75,481 (5.6) (15.3)
Non-performing
assets (NPAs) 108,568 80,476 87,386 34.9 24.2
NPAs as a % of total
loans and leases
and other real
estate (OREO) 0.46% 0.36% 0.41%
Allowance for loan and
lease losses (ALLL) as
a % of total loans
and leases at the end
of period 1.15 1.25 1.42
ALLL plus allowance for
unfunded loan commitments
and letters of credit as
a % of total loans and
leases at the end
of period 1.29 1.38 1.59
ALLL as a % of NPLs 424 417 397
ALLL as a % of NPAs 250 351 343
Tier 1 risk-based
capital (4) 9.09 9.10 8.53
Total risk-based
capital (4) 12.38 12.53 11.95
Tier 1 leverage (4) 8.41 8.36 7.98
Average equity/assets 7.74 7.67 7.32
Tangible equity/assets (5) 7.18 7.11 6.79
N.M. - Not Meaningful.
(1) On a fully taxable equivalent (FTE) basis assuming a 35% tax rate.
(2) Non-interest expense less amortization of intangibles ($0.2 million
for all periods above) divided by the sum of FTE net interest income
and non-interest income excluding securities gains (losses).
(3) Includes non-interest bearing and interest bearing demand deposits,
savings deposits, retail CDs and other domestic time deposits.
(4) Estimated at the end of December, 2004.
(5) At end of period. Tangible equity (total equity less intangible
assets) divided by tangible assets (total assets less intangible
assets).
SOURCE Huntington Bancshares Incorporated
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Related links:
http://www.huntington.com
http://www.huntington-ir.com
CONTACT:
Analysts, Jay Gould, +1-614-480-4060, or
Susan Stuart, +1-614-480-3878, or Media, Su Lok, +1-614-480-5407,
both of Huntington Bancshares Incorporated
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