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| Huntington Bancshares Incorporated |
* Reports 2003 Fourth Quarter And Full Year Results
* Fourth Quarter $0.40 Earnings Per Share
* Full Year $1.61 Earnings Per Share
* Provides 2004 Earnings Outlook Of $1.62-$1.66 Per Share
2003 Fourth Quarter Earnings
COLUMBUS, Ohio, Jan. 16 /PRNewswire-FirstCall/ -- Huntington Bancshares
Incorporated (Nasdaq: HBAN); ( http://www.huntington.com ) reported 2003 fourth
quarter earnings of $93.3 million, or $0.40 per common share, up from
$90.9 million, or $0.39 per common share, in the third quarter. The third
quarter results included a negative $13.3 million cumulative effect of a
change in accounting principle as a result of adopting FASB Interpretation No.
46, Consolidation of Variable Interest Entities (FIN 46) effective July 1,
2003. Before the cumulative effect, 2003 third quarter earnings were
$104.2 million, or $0.45 per common share. Compared with the year-ago
results, fourth quarter earnings were up $24.0 million, or 35%, from
$69.3 million, and up $0.11, or 38%, from $0.29 per common share.
Full-year 2003 earnings were $372.4 million, or $1.61 per common share, up
15% and 21%, respectively, and included a negative $13.3 million cumulative
effect of FIN 46. Before the cumulative effect, 2003 full-year earnings were
$385.7 million, or $1.67 per common share, up $62.0 million, or 19%, from
$323.7 million, or $1.33 per share, for the prior year.
"Fourth quarter results were slightly better than our expectations and
demonstrate the progress being made in building earnings momentum," said
Thomas Hoaglin, chairman, president, and chief executive officer. "Net
interest income grew 2% from the third quarter as we saw strong average loan
growth, led by a 7% increase in consumer loans, primarily residential
mortgages and home equity loans, partially offset by a 4 basis point decline
in the net interest margin."
"We also strengthened our balance sheet and improved our funding position
by three actions," he continued. "These included selling $1.0 billion of auto
loans, extinguishing $250 million of high-cost, long-term debt, and selling
$99 million of lower quality commercial loans including $43 million of non-
performing assets."
"The sale of $1.0 billion of auto loans resulted in a pre-tax gain of
$16.3 million and was consistent with our strategy to lower overall exposure
to the auto-financing sector. For the year, we sold $2.1 billion of auto
loans, which lowered our exposure to 28% of loans, leases, and securitized
loans, from 33% at the end of 2002."
"We also extinguished $250 million of high cost, long-term debt at a cost
of $15.3 million pre-tax. Eliminating this high cost debt will help lower
funding costs over the next two years."
"The sale of $99 million of commercial loans, including $43 million of
non-performing loans, helped to lower our non-performing asset ratio to only
41 basis points, the lowest level in many years. There was no earnings impact
from this sale as loan loss reserves attributed to these loans were sufficient
to absorb the $27 million of related losses. Though our loan loss reserve
ratio declined to 1.59% at the end December from 1.75% at the end of
September, our non-performing asset coverage ratio increased to 384% from 270%
at the end of the third quarter."
"In summary, we made very significant progress in improving Huntington's
financial performance during 2003, and enter 2004 a much stronger company with
earnings momentum and strong reserves and capital," he concluded.
Discussion of Results
Fourth quarter results compared with sequential third quarter performance
reflected:
* $0.9 billion, or 4%, increase in average loans and leases.
* 13% decline in average operating lease assets.
* $0.3 billion, or 2%, decrease in average core deposits.
* 3.42% net interest margin, down from 3.46%.
* $16.3 million pretax ($10.6 million after-tax or $0.05 per share)
gain on sale of $1.0 billion of automobile loans.
* $15.3 million pretax ($9.9 million after-tax or $0.04 per share) loss
associated with extinguishing $250 million of long-term debt.
* $3.5 million pretax ($2.3 million after-tax or $0.01 per share)
mortgage servicing rights (MSR) impairment recovery, compared with a
$17.8 million pretax ($11.6 million after-tax or $0.05 per share)
impairment recovery in the third quarter.
* $99 million sale of lower quality loans, including $43 million of non-
performing assets (NPAs)
* 0.41% period-end NPA ratio, down from 0.65%.
* 1.03% annualized net charge-offs, up from 0.64%, including 50 basis
points associated with the loan sale.
* 1.59% period end loan loss reserve ratio, down from 1.75%.
* 384% period end NPA coverage ratio, up from 270%.
Fully taxable equivalent net interest income increased $4.2 million, or
2%, from the third quarter, primarily reflecting the favorable impact of a 3%
growth in average earning assets, partially offset by a 4 basis point, or an
effective 1%, decrease in the net interest margin. The fully taxable
equivalent net interest margin decreased to 3.42% from 3.46%. This decline
primarily reflected lower non-deferrable loan fees. During the fourth
quarter, $250 million of high cost, long-term repurchase agreements were
extinguished. This debt extinguishment will reduce funding costs in future
quarters, but resulted in a one-time non-interest expense loss of
$15.3 million.
Compared with the year-ago quarter, fully taxable equivalent net interest
income increased $26.2 million, or 13%, reflecting a $4.3 billion, or 20%,
increase in average earning assets, partially offset by a 20 basis point, or
an effective 6%, decline in the fully taxable equivalent net interest margin
to 3.42% from 3.62%.
Average loans and leases increased $0.9 billion, or 4%, from the third
quarter almost entirely due to higher average consumer loans. Contributing to
the consumer loan growth was a $0.4 billion, or 21%, increase in average
residential mortgages, a $0.2 billion, or 5%, increase in average home equity
loans and lines, and a $0.1 billion, or 3%, increase in average automobile
loans and leases. Average commercial real estate loans (CRE) increased $0.1
billion, or 3%. Commercial and industrial (C&I) loans were essentially
unchanged reflecting a slight decline in middle-market C&I loans, offset by a
9%, increase in small business loans.
During the first week of December, $1.0 billion in automobile loans were
sold resulting in a $16.3 million pretax gain on sale, and bringing total
automobile loans sold for the year to $2.1 billion. The current quarter sale
represented a continuation of a strategy to lower exposure to automobile
financing. Total automobile financing exposure is the sum of auto loans and
leases, operating automobile lease assets, and securitized auto loans,
compared to the sum of total loans, operating lease assets, and securitized
loans (see table below). At December 31, 2003, this exposure was
$6.2 billion, representing a 28% exposure, down from $7.2 billion, or a
33% exposure a year earlier.
($ billions) 12/31/03 12/31/02
Total Company
Loans and leases $21.1 $18.6
Operating lease assets 1.3 2.2
Securitized loans 0.0 1.1
Total company $22.3 $21.9
Automobile Financing
Loans and leases $4.9 $3.9
Operating lease assets 1.3 2.2
Securitized loans 0.0 1.1
Total auto exposure $6.2 $7.2
% Total company 28% 33%
Average total loans and leases in the fourth quarter increased
$3.2 billion, or 18%, from the year-ago quarter. Average automobile loans and
leases increased $1.6 billion, or 44%, with $1.0 billion due to the 2003 third
quarter adoption of FIN 46. Average residential mortgages increased
$0.8 billion, or 48%, reflecting strong growth in adjustable rate mortgages.
Average home equity loans and lines increased $0.5 billion, or 16%. Total
average C&I and CRE loans were up $0.3 billion, or 3%, from a year ago,
reflecting 11% growth in middle-market CRE and 10% growth in small business
loans, partially offset by a 4% decline in middle-market C&I loans.
Average investment securities increased $0.5 billion, or 12%, from the
third quarter, and were up $1.2 billion, or 38%, from the year-ago quarter
primarily reflecting the investment of a portion of the proceeds from the sale
of automobile loans. Average mortgages held for sale decreased $0.6 billion,
or 67%, from the third quarter, and were down $0.2 billion, or 37%, from the
year-ago quarter due to sale of a portion of mortgage production to agencies.
Total average core deposits in the fourth quarter decreased $0.3 billion,
or 2%, from the third quarter reflecting decreases in all deposit categories
with the exception of savings deposits which remained essentially unchanged.
These deposit net outflows appear to reflect migrations to equity markets, as
well as the impact of lower rates offered on deposit accounts. Compared with
the year-ago quarter, average core deposits increased $0.5 billion, or 4%, and
reflected a $1.2 billion, or 22%, increase in interest bearing demand
deposits, primarily money market accounts. This increase was partially offset
by a $0.8 billion, or 25%, decline in retail CDs reflecting the reduced
emphasis on this relatively higher cost source of deposits. Average non-
interest bearing deposits were up $0.2 billion, or 6%, from the year-ago
quarter.
Non-interest income decreased $26.3 million, or 10%, from the third
quarter. Comparisons with prior-period results are heavily influenced by the
decline in operating leases and the related decline in operating lease income.
These trends are expected to continue as all leases originated since April
2002 are direct financing leases where the income is reflected in net interest
income, not non-interest income. Reflecting the run-off of the operating
lease portfolio, operating lease income declined $12.3 million, or 10%, from
the third quarter. Excluding operating lease income, non-interest income
decreased $13.9 million, or 9%, from the third quarter. The primary drivers
of the $13.9 million reduction were:
* $20.5 million, or 68%, decline in mortgage banking income.
Contributing to this decline was a $14.3 million decline in MSR
impairment recoveries ($3.5 million in the fourth quarter vs.
$17.8 million in the third quarter). The MSR valuation reserve at
December 31, 2002 was $6.1 million. Excluding the MSR valuation change
between quarters, mortgage banking income decreased $6.2 million, or
50%, reflecting lower origination fees and net marketing income due to
a decline in current-quarter originations from the prior quarter. At
December 31, 2003, MSRs as a percent of serviced mortgages were 1.11%,
up from 1.07% at September 30, 2003.
* No gains on the sale of branch offices compared with a $13.1 million
third quarter gain associated with the sale of four West Virginia
branch offices.
* $4.1 million, or 18%, decrease in other income reflecting lower
investment banking income and trading fees.
Partially offset by:
* $16.3 million gain on sale of automobile loans compared with no such
gains in the third quarter.
* $5.4 million increase in investment securities gains reflecting
$1.3 million of gains in the fourth quarter vs. $4.1 million of losses
in the third quarter.
* $2.5 million, or 6%, increase in service charges on deposit accounts.
Compared with the year-ago quarter, non-interest income declined
$25.3 million, or 9%. Comparisons with prior-period results are 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 $44.0 million, or 29%, from the year-ago quarter.
Excluding operating lease income, non-interest income increased $18.6 million,
or 15%, from the year-ago quarter. The primary drivers of the $18.6 million
increase were:
* $16.3 million gain on the sale of automobile loans in the current
quarter vs. none in the year-ago quarter.
* $4.1 million increase in mortgage banking income, including the benefit
of the $3.5 million MSR impairment recovery in the current quarter vs.
a $6.2 million MSR impairment charge a year ago, partially offset by
lower origination fee income and net marketing income.
* $3.3 million, or 8%, increase in service charges on deposit accounts.
Partially offset by:
* $3.0 million, or 13%, decline in other income primarily reflecting
lower investment banking income.
* $1.7 million, or 15%, decline in other service charges and fees
reflecting lower merchant service revenue due to the lower fee
structure resulting from the VISA settlement, as well as lower ATM
surcharge and interchange fees.
Non-interest expense increased $17.3 million, or 6%, from the third
quarter. Fourth quarter expenses included $1.8 million of costs associated
with the on-going SEC investigation. Comparisons with prior-period results
are also influenced by the decline in operating lease expense as the operating
lease portfolio continues to run-off (see above discussion). Operating lease
expense declined $7.5 million, or 8%, from the third quarter. Excluding
operating lease expense, non-interest expense increased $24.8 million, or 12%,
from the third quarter. The primary drivers of the $24.8 million increase
were:
* $15.3 million pretax loss associated with extinguishing $250 million of
high cost, long-term repurchase agreement debt.
* $7.1 million, or 39%, increase in other expense reflecting higher
residual insurance costs, seasonal charitable contribution expense, and
other miscellaneous expense.
* $2.6 million, or 2%, increase in personnel costs related to higher
incentive costs and lowered deferred loan origination costs, partially
offset by lower mortgage-related sales commissions and benefit expense.
Compared with the year-ago quarter, non-interest expense declined
$11.8 million, or 4%. Comparisons with prior-period results are also heavily
influenced by the decline in operating lease expense. Operating lease expense
declined $35.1 million, or 29%, from the year-ago quarter. Excluding
operating lease expense, non-interest expense increased $23.3 million, or 11%
from the year-ago quarter. The primary drivers of the $23.3 million increase
were:
* $15.3 million of expense associated with extinguishing the high cost
long-term repurchase agreement debt in the current quarter.
* $5.5 million, or 5%, increase in personnel costs reflecting the same
factors as those impacting comparisons with the third quarter.
* $6.9 million less benefit from restructuring reserve releases which
totaled $0.4 million in the current quarter vs. $7.2 million in the
year-ago quarter.
* $3.1 million, or 34%, increase in professional services, including
$6.9 million of expenses associated with the SEC formal investigation.
Partially offset by:
* $6.9 million, or 21%, decrease in other expense, as the year-ago
quarter included a $3.9 million impairment of an investment in an
unconsolidated subsidiary, as well as higher operating losses and other
miscellaneous expenses.
2003 Fourth Quarter Credit Actions
In the 2003 fourth quarter, the credit workout group, whose mission is the
early identification and aggressive resolution of problem credits, identified
an economically attractive opportunity to sell $99 million of lower quality
loans, including $43 million of NPAs. Previously established reserves for
these loans were sufficient to absorb the $26.6 million of related charge-
offs, including the $17.1 million associated with the sold NPAs. NPAs at
December 31, 2003 were $87.4 million and represented 0.41% period-end loans
and leases, down from $137.1 million, or 0.65%, at September 30, 2003, and
$136.7 million, or 0.74%, at the end of the year-ago quarter. This was the
lowest level in many years.
Credit Quality
Net charge-offs for the 2003 fourth quarter were $55.1 million, or an
annualized 1.03% of average loans and leases, up from $32.8 million, or 0.64%,
in the third quarter and down from $83.2 million, or 1.83%, in the year-ago
quarter. Included in the 2003 fourth quarter was $26.6 million in commercial
and commercial real estate loan net charge-offs associated with the fourth
quarter credit actions, or an annualized 0.50% of average total loans and
leases (see discussion above). Excluding this $26.6 million in net charge-
offs, 2003 fourth quarter net charge-offs would have been $28.6 million, or
0.53% of average loans and leases, down from $32.8 million, or 0.64%, in the
third quarter.
The total of C&I and CRE net charge-offs were $36.9 million, or an
annualized 1.55% of related average loans, in the 2003 fourth quarter.
Excluding net charge-offs associated with the fourth quarter credit actions,
total C&I and CRE net charge-offs were $10.4 million, or an annualized 0.44%.
This compares with 2003 third quarter net charge-offs of $15.8 million, or
0.68%.
Total consumer net charge-offs were an annualized 0.61% in the fourth
quarter, unchanged from the third quarter. Net charge-offs on automobile
loans and leases were an annualized 1.00% in the fourth quarter, up from 0.94%
in the third quarter. This reflected a combination of factors including the
typical fourth quarter seasonal increase, as well as the adverse impact of the
sold automobile loan portfolio, consisting of loans having no delinquencies.
Credit losses on operating lease assets are included in operating lease
expense and were $8.8 million, down from $10.0 million in the third quarter
and $14.3 million in the year-ago quarter. Recoveries on operating lease
assets are included in operating lease income and totaled $1.9 million,
$2.6 million, and $2.6 million for the same periods, respectively. The ratio
of operating lease asset credit losses, net of recoveries, was an annualized
2.05% in the current quarter, 1.90% in the third quarter, and 2.02% in the
year-ago quarter. As noted in the non-interest income discussion above, the
operating lease portfolio will decrease over time as no new operating lease
assets have been generated since April 2002. As a result, while the absolute
level of operating lease credit losses is expected to decline over time, the
ratio of credit losses expressed as a percent of declining average operating
lease assets is generally expected to increase over time.
The over 90-day delinquent, but still accruing, loans as a percent of
total loans and leases declined to 0.27% at December 31, 2003, from 0.31% at
September 30, 2003. The 30-day delinquency ratio decreased to 1.23% at
December 31, 2003, from 1.25% at the end of the third quarter, and was down
significantly from 1.54% at the end of the year-ago quarter. This reflected
improvement in the total C&I and CRE 30-day delinquency ratio to 0.62% at
quarter end, down from 0.67% at the end of the third quarter and 1.00% a year
earlier. Total consumer 30-day delinquencies were 1.72% at quarter end,
unchanged from September 30, 2003, but down from 2.08% a year ago.
The provision for loan and lease losses in the fourth quarter was
$26.3 million, compared with $51.6 million in the third quarter. Compared
with the year-ago quarter, loan and lease loss provision expense was down
$24.9 million, or 49%, as the year-ago quarter included special credit actions
consisting of the sale of $77 million of NPAs, including $51.3 million of
related net-charge-offs.
The December 31, 2003, allowance for loan and lease losses was
$335.3 million, down $34.9 million from September 30, 2003. This decline
primarily reflected a $26.6 million reduction due to charge-offs associated
with the fourth quarter credit actions. Expressed as a percent of period-end
loans and leases, the allowance for loan and lease losses at December 31,
2003, was 1.59%, down from 1.75% at September 30, 2003, and down from 1.81% at
the end of the year-ago quarter. The allowance for loan and lease losses as a
percent of non-performing assets increased to 384% at December 31, 2002, from
270% at September 30, 2003, and was well above the year-ago level of 246%.
Capital
At December 31, 2003, the tangible equity to assets ratio was 6.80%, up
from 6.78% at September 30, 2003, but down from 7.22% at December 31, 2002.
The decline from the year-ago period reflected the impact of the 2003 third
quarter adoption of FIN 46, which consolidated $1.0 billion of previously
securitized automobile loans, as well as share repurchases in the 2003 first
quarter.
2004 Outlook
"The economic environment and level of interest rates are always key
factors in determining performance expectations," said Hoaglin. "At present,
we are anticipating a strengthening economy with rates remaining at absolute
low levels, though increasing in the second half of the year. Demand for
middle-market C&I loans is expected to begin showing signs of growth, and we
believe the very good growth trends we have been seeing in small business
loans will continue. While mortgage originations are expected to decline,
given record refinancings in 2003, we nevertheless anticipate good growth in
consumer loans, both residential mortgages and home equity loans and lines.
In addition, another year of strong nationwide auto loan sales is forecast,
which should result in strong demand for auto credit."
"Exclusive of operating lease income, non-interest income growth is
expected to be modest driven by a pick-up in securities-market related fee
income, as well as growth in deposit service charges. However, growth will be
mitigated by an expected decline in mortgage banking income reflecting lower
refinance activity."
"Expense growth, excluding operating lease expense, will be modest. We
expect a substantial increase in pension costs, and to a lesser degree benefit
expenses. Nevertheless, we expect revenue growth rates will continue to
exceed that of expenses. As such, we expect continued progress in improving
our efficiency ratio."
"Net charge-offs should continue to decline reflecting the benefits of our
improved and higher underwriting standards of the last couple of years, a more
risk adverse mix of loans and leases, as well as a stronger economic
environment."
"Reflecting these factors, we are targeting reported, or GAAP, earnings of
$1.62-$1.66 per share in 2004. This excludes any gains associated with future
automobile loan sales to the extent such sales occur. As noted last quarter,
to the degree such gains or other one-time items impacting anticipated
performance are known, their impact will be included in our earnings
guidance," he concluded.
Conference Call/Webcast Information
Huntington's senior management will host an earnings conference call today
at 1:00 p.m. EST. The call may be accessed via a live Internet webcast
at http://www.huntington-ir.com or through a dial-in telephone number at
888-806-9459. Slides will be available at http://www.huntington-ir.com just prior to
1:00 p.m. EST on January 16, 2004 for review during the call. A replay of the
webcast will be archived in the Investor Relations section of Huntington's web
site http://www.huntington.com . A telephone replay will be available two hours
after the completion of the call through January 31, 2004 at 800-615-3210;
conference ID 349210.
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/A for the
year ended December 31, 2002, filed November 14, 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.
Information Regarding Non-GAAP Financial Measures
This 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 Fourth Quarter 2003 Earnings
Press Release, which can be found on Huntington's website
at http://www.huntington-ir.com .
Annualized data
Certain returns, yields, performance ratios, or growth rates for a quarter
are "annualized" in this presentation to represent an annual time period.
This is done for analytical purposes to better discern for decision-making
purposes 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 purposes to better discern
underlying trends in total corporate earnings per share performance excluding
the impact of such items. Management does this for performance analysis and
decision-making. Investors also find this information helpful in their
evaluation of the company's financial performance against published earnings
per share consensus 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 $30 billion regional bank holding
company headquartered in Columbus, Ohio. Through its affiliated companies,
Huntington has more than 137 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 http://www.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 additional offices located in the Cayman Islands and
Hong Kong.
HUNTINGTON BANCSHARES INCORPORATED
Quarterly Key Statistics
(in thousands, except per
share amounts) 4Q03 3Q03 4Q02
Net Interest Income $224,315 $220,471 $199,179
Provision for Loan and Lease
Losses 26,341 51,615 51,236
Securities Gains (Losses) 1,280 (4,107) 2,339
Gain on Sale of Branch Offices --- 13,112 ---
Gain on Sales of Automobile Loans 16,288 --- ---
Non-Interest Income 228,942 263,763 269,516
Non-Interest Expense 317,816 300,182 336,520
Restructuring Charges (Releases) (351) --- (7,211)
Income Before Income Taxes 127,019 141,442 90,489
Income Taxes 33,758 37,230 21,226
Income before cumulative
effect of change in accounting
principle 93,261 104,212 69,263
Cumulative effect of change in
accounting principle, net of tax --- (13,330) ---
Net Income $93,261 $90,882 $69,263
Income before cumulative
effect of change in accounting
principle - diluted $0.40 $0.45 $0.29
Net Income per common share -
diluted $0.40 $0.39 $0.29
Cash dividends declared per
common share $0.175 $0.175 $0.16
Book value per common share at
end of period $9.93 $9.79 $9.40
Average common shares - basic 228,902 228,715 233,581
Average common shares - diluted 231,986 230,966 235,083
Return on average assets (a) 1.22 % 1.39 % 1.02 %
Return on average shareholders'
equity (a) 16.6 % 18.5 % 12.7 %
Net interest margin (b) 3.42 % 3.46 % 3.62 %
Efficiency ratio (c) 67.1 % 60.0 % 69.9 %
Average loans and leases $21,406,486 $20,511,312 $18,183,905
Average earning assets $26,363,248 $25,564,291 $22,040,631
Average core deposits (d) $15,543,934 $15,801,133 $15,013,108
Average core deposits - linked
quarter annualized growth
rate (d) (6.5)% 9.8 % (1.5)%
Average core deposits -
excluding Retail CDs $13,052,055 $13,240,345 $11,708,820
Average core deposits excl.
Retail CDs - linked quarter
annualized growth rate (5.6)% 19.4 % 3.1 %
Average total assets -
reported $30,389,249 $29,849,827 $26,861,355
Average shareholders' equity $2,228,129 $2,239,486 $2,163,044
Total assets at end of period $30,483,804 $30,095,186 $27,527,932
Total shareholders' equity at
end of period $2,275,002 $2,241,456 $2,189,793
Net charge-offs (NCOs) $55,143 $32,774 $83,158
NCOs as a % of average loans
and leases 1.03 % 0.64 % 1.83 %
Non-performing loans and
leases (NPLs) $75,481 $121,881 $128,069
Non-performing assets (NPAs) $87,386 $137,077 $136,723
NPAs as a % of total loans and
leases and other
real estate (OREO) 0.41 % 0.65 % 0.74 %
Allowance for loan and lease
losses (ALL) as a % of total
loans and leases at the end
of period 1.59 % 1.75 % 1.81 %
ALL as a % of NPLs 444 % 304 % 263 %
ALL as a % of NPAs 384 % 270 % 246 %
Tier 1 risk-based capital (e)(f) 8.51 % 8.40 % 8.34 %
Total risk-based capital (e)(f) 11.93 % 11.19 % 11.25 %
Tier 1 leverage (e) 7.99 % 7.94 % 8.51 %
Average equity / assets 7.33 % 7.50 % 8.05 %
Tangible equity / assets (f) 6.80 % 6.78 % 7.22 %
(a) Based on income before cumulative effect of change in accounting
principle, net of tax.
(b) On a fully taxable equivalent basis assuming a 35% tax rate.
(c) Non-interest expense less amortization of intangible assets
($0.2 million for all periods above) divided by the sum of fully
taxable equivalent net interest income and non-interest income
excluding securities gains (losses).
(d) Includes non-interest bearing and interest bearing demand deposits,
savings deposits, retail CDs and other domestic time deposits.
(e) Estimated at the end of December, 2003.
(f) At end of period. Tangible equity (total equity less intangible
assets) divided by tangible assets (total assets less intangible
assets).
N.M. - Not Meaningful.
HUNTINGTON BANCSHARES INCORPORATED
Quarterly Key Statistics
Percent Change vs.
(in thousands, except per share amounts) 3Q03 4Q02
Net Interest Income 1.7 % 12.6 %
Provision for Loan and Lease Losses (49.0) (48.6)
Securities Gains (Losses) N.M. (45.3)
Gain on Sale of Branch Offices (100.0) ---
Gain on Sales of Automobile Loans --- ---
Non-Interest Income (13.2) (15.1)
Non-Interest Expense 5.9 (5.6)
Restructuring Charges (Releases) --- (95.1)
Income Before Income Taxes (10.2) 40.4
Income Taxes (9.3) 59.0
Income before cumulative effect of
change in accounting principle (10.5) 34.6
Cumulative effect of change in
accounting principle, net of tax (100.0) ---
Net Income 2.6 % 34.6 %
Income before cumulative effect of
change in accounting principle - diluted (11.1)% 37.9 %
Net Income per common share - diluted 2.6 % 37.9 %
Cash dividends declared per common share --- % 9.4 %
Book value per common share at end of period 1.4 % 5.6 %
Average common shares - basic 0.1 % (2.0)%
Average common shares - diluted 0.4 % (1.3)%
Return on average assets (a)
Return on average shareholders' equity (a)
Net interest margin (b)
Efficiency ratio (c)
Average loans and leases 4.4 % 17.7 %
Average earning assets 3.1 % 19.6 %
Average core deposits (d) (1.6)% 3.5 %
Average core deposits - linked quarter
annualized growth rate (d)
Average core deposits - excluding Retail CDs (1.4)% 11.5 %
Average core deposits excl. Retail CDs
- linked quarter annualized growth rate
Average total assets - reported 1.8 % 13.1 %
Average shareholders' equity (0.5)% 3.0 %
Total assets at end of period 1.3 % 10.7 %
Total shareholders' equity at end of period 1.5 % 3.9 %
Net charge-offs (NCOs) 68.3 % (33.7)%
NCOs as a % of average loans and leases
Non-performing loans and leases (NPLs) (38.1)% (41.1)%
Non-performing assets (NPAs) (36.3)% (36.1)%
NPAs as a % of total loans and leases
and other real estate (OREO)
Allowance for loan and lease losses
(ALL) as a % of total loans and leases
at the end of period
ALL as a % of NPLs
ALL as a % of NPAs
Tier 1 risk-based capital (e)(f)
Total risk-based capital (e)(f)
Tier 1 leverage (e)
Average equity / assets
Tangible equity / assets (f)
(a) Based on income before cumulative effect of change in accounting
principle, net of tax.
(b) On a fully taxable equivalent basis assuming a 35% tax rate.
(c) Non-interest expense less amortization of intangible assets
($0.2 million for all periods above) divided by the sum of fully
taxable equivalent net interest income and non-interest income
excluding securities gains (losses).
(d) Includes non-interest bearing and interest bearing demand deposits,
savings deposits, retail CDs and other domestic time deposits.
(e) Estimated at the end of December, 2003.
(f) At end of period. Tangible equity (total equity less intangible
assets) divided by tangible assets (total assets less intangible
assets).
N.M. - Not Meaningful.
HUNTINGTON BANCSHARES INCORPORATED
Annual Key Statistics
(in thousands, except per share amounts)
Percent
2003 2002 Change
Net Interest Income $848,986 $749,574 13.3 %
Provision for Loan and Lease Losses 163,993 194,426 (15.7)
Securities Gains 5,258 4,902 7.3
Gain on Sales of Automobile Loans 40,039 --- ---
Gain on Sale of Branch Offices 13,112 --- ---
Gain on sale of Florida Operations --- 182,470 (100.0)
Merchant Services Gain --- 24,550 (100.0)
Non-Interest Income 1,010,744 1,129,782 (10.5)
Non-Interest Expense 1,236,825 1,325,174 (6.7)
Restructuring (Releases) Charges (6,666) 48,973 N.M.
Income Before Income Taxes 523,987 522,705 0.2
Income Taxes 138,294 198,974 (30.5)
Income before cumulative effect of
change in accounting principle 385,693 323,731 19.1
Cumulative effect of change in
accounting principle, net of tax (13,330) --- ---
Net Income $372,363 $323,731 15.0 %
Income before cumulative effect of
change in accounting
principle - diluted $1.67 $1.33 25.6 %
Net Income per common share - diluted $1.61 $1.33 21.1 %
Cash dividends declared per
common share $0.67 $0.64 4.7 %
Average common shares - basic 229,401 242,279 (5.3)%
Average common shares - diluted 231,582 244,012 (5.1)%
Return on average assets (a) 1.33 % 1.24 %
Return on average shareholders'
equity (a) 17.6 % 14.5 %
Net interest margin (b) 3.49 % 3.62 %
Efficiency ratio (c) 63.9 % 65.6 %
Average loans and leases $20,023,718 $17,417,455 15.0 %
Average earning assets $24,592,810 $20,846,137 18.0 %
Average total assets $28,942,770 $26,033,243 11.2 %
Average core deposits (d) $15,437,060 $15,268,487 1.1 %
Average core deposits - excluding
Retail CDs $12,735,282 $11,649,577 9.3 %
Average shareholders' equity $2,196,348 $2,238,761 (1.9)%
Total assets at end of period $30,483,804 $27,527,932 10.7 %
Total shareholders' equity at end
of period $2,275,002 $2,189,793 3.9 %
Net charge-offs (NCOs) $161,809 $196,912 (17.8)%
NCOs as a % of average loans and
leases 0.81 % 1.13 %
Non-performing loans and leases
(NPLs) $75,481 $128,069 (41.1)%
Non-performing assets (NPAs) $87,386 $136,723 (36.1)%
NPAs as a % of total loans and
leases and other real estate (OREO) 0.41 % 0.74 %
Allowance for loan and lease
losses (ALL) as a % of total loans
and leases at the end of period 1.59 % 1.81 %
ALL as a % of NPLs 444 % 263 %
ALL as a % of NPAs 384 % 246 %
Tier 1 risk-based capital (e)(f) 8.51 % 8.34 %
Total risk-based capital (e)(f) 11.93 % 11.25 %
Tier 1 leverage (e) 7.99 % 8.51 %
Average equity / assets 7.59 % 8.60 %
Tangible equity / assets (f) 6.80 % 7.22 %
(a) Based on income before cumulative effect of change in accounting
principle, net of tax.
(b) On a fully taxable equivalent basis assuming a 35% tax rate.
(c) Non-interest expense less amortization of intangible assets
($0.8 million and $2.0 million, respectively)
divided by the sum of fully taxable equivalent net interest income
and non-interest income excluding securities gains.
(d) Includes non-interest bearing and interest bearing demand deposits,
savings deposits, retail CDs and other domestic time deposits
(e) Estimated for the end of December, 2003.
(f) At end of period. Tangible equity (total equity less intangible
assets) divided by tangible assets (total assets less intangible
assets).
N.M. - Not Meaningful.
SOURCE Huntington Bancshares Incorporated
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CONTACT:
Analysts, Jay Gould, +1-614-480-4060, or
Susan Stuart, +1-614-480-3878, or Media, Jeri Grier,
+1-614-480-5413, or Trasee Carr, +1-614-480-5407, all of
Huntington Bancshares Incorporated
