COLUMBUS, Ohio, April 24, 2018 /PRNewswire/ -- Huntington
Bancshares Incorporated (Nasdaq: HBAN; www.huntington.com) reported
net income for the 2018 first quarter of $326 million, an increase of $118 million from the year-ago quarter.
Earnings per common share for the 2018 first quarter were
$0.28, up $0.11 from the year-ago quarter. Tangible
book value per common share as of 2018 first quarter-end was
$7.12, a 9% year-over-year
increase. Return on average assets was 1.27%, and return on
average common equity was 13.0%.
"We entered 2018 with momentum, and delivered solid financial
performance and balance sheet growth during the first quarter,"
said Steve Steinour, chairman,
president and CEO. "EPS increased 65% from the year-ago
quarter, and our return on tangible common equity was 17.5%.
Average loans increased 5% year-over-year and 9% linked quarter
annualized, with disciplined growth in both commercial and consumer
loans. We also are pleased with our 57% efficiency ratio,
driven by 3% year-over-year revenue growth and expense
discipline."
"During the first quarter, we converted $363 million of high cost Series A preferred
equity into common shares, and subsequently issued $500 million of attractively priced Series E
preferred equity. These transactions, coupled with our strong
underlying earnings power and disciplined risk management, position
us well."
"With the market outlook for continued short-term interest rate
hikes and increasing deposit competition, we selectively raised
deposit pricing to maintain core relationships and locked in
fixed-rate, term deposit funding."
Last week Huntington announced that the Board declared a
quarterly cash dividend on the company's common stock of
$0.11 per share, consistent with the
prior quarter. The dividend is payable on July 2, 2018, to shareholders of record on
June 18, 2018.
Specific 2018 First Quarter
Highlights:
- $36 million, or 3%,
year-over-year increase in fully-taxable equivalent revenue,
comprised of a $34 million, or 5%,
increase in fully-taxable equivalent net interest income and a
$2 million, or 1%, increase in
noninterest income
- Net interest margin of 3.30%, unchanged from the year-ago
quarter
- $74 million, or 10%,
year-over-year decrease in noninterest expense, as the year-ago
quarter included $73 million of
acquisition-related expense
- Effective tax rate of 15.3%, down from 22.2% in the year-ago
quarter, reflecting the impact of federal tax reform
- $3.5 billion, or 5%,
year-over-year increase in average loans and leases, including a
$3.2 billion, or 10%, increase in
consumer loans
- $1.9 billion, or 3%,
year-over-year increase in average core deposits, driven by a
$2.0 billion, or 11%, increase in
money market deposits
- Net charge-offs equated to 0.21% of average loans and leases,
representing the fifteenth consecutive quarter below the long-term
target range of 0.35% to 0.55%
- Nonperforming asset ratio of 0.59%, down from 0.68% a year
ago
- Repurchase of $48 million of
common stock (3.0 million shares at an average cost of $15.83 per share), completing the $308 million buyback authorization under our 2017
CCAR plan
- Conversion of $363 million of
8.5% Series A preferred equity into common shares, and the
subsequent issuance of $500 million
of 5.7% Series E preferred equity
- Common Equity Tier 1 (CET1) risk-based capital ratio of 10.51%,
up from 9.74% a year ago and above our 9% to 10% operating
guideline
- Tangible book value per common share (TBVPS) increased
$0.57, or 9%, year-over-year to
$7.12
Table 1 –
Earnings Performance Summary (GAAP)
|
|
|
2018
|
|
2017
|
(in millions,
except per share data)
|
First
|
|
Fourth
|
|
Third
|
|
Second
|
|
First
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
Net Income
|
$
|
326
|
|
|
$
|
432
|
|
|
$
|
275
|
|
|
$
|
272
|
|
|
$
|
208
|
|
Diluted earnings per
common share
|
0.28
|
|
|
0.37
|
|
|
0.23
|
|
|
0.23
|
|
|
0.17
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
1.27
|
%
|
|
1.67
|
%
|
|
1.08
|
%
|
|
1.09
|
%
|
|
0.84
|
%
|
Return on average
common equity
|
13.0
|
|
|
17.0
|
|
|
10.5
|
|
|
10.6
|
|
|
8.2
|
|
Return on average
tangible common equity
|
17.5
|
|
|
22.7
|
|
|
14.1
|
|
|
14.4
|
|
|
11.3
|
|
Net interest
margin
|
3.30
|
|
|
3.30
|
|
|
3.29
|
|
|
3.31
|
|
|
3.30
|
|
Efficiency
ratio
|
56.8
|
|
|
54.9
|
|
|
60.5
|
|
|
62.9
|
|
|
65.7
|
|
|
|
|
|
|
|
|
|
|
|
Tangible book value
per common share
|
$
|
7.12
|
|
|
$
|
6.97
|
|
|
$
|
6.85
|
|
|
$
|
6.74
|
|
|
$
|
6.55
|
|
Cash dividends
declared per common share
|
0.11
|
|
|
0.11
|
|
|
0.08
|
|
|
0.08
|
|
|
0.08
|
|
Average diluted
shares outstanding
|
1,125
|
|
|
1,130
|
|
|
1,106
|
|
|
1,109
|
|
|
1,109
|
|
|
|
|
|
|
|
|
|
|
|
Average earning
assets
|
$
|
95,412
|
|
|
$
|
93,937
|
|
|
$
|
92,849
|
|
|
$
|
91,728
|
|
|
$
|
91,139
|
|
Average loans and
leases
|
70,484
|
|
|
68,940
|
|
|
68,276
|
|
|
67,345
|
|
|
66,981
|
|
Average core
deposits
|
73,392
|
|
|
73,946
|
|
|
73,549
|
|
|
72,291
|
|
|
71,500
|
|
|
|
|
|
|
|
|
|
|
|
Tangible common
equity / tangible assets ratio
|
7.70
|
%
|
|
7.34
|
%
|
|
7.42
|
%
|
|
7.41
|
%
|
|
7.28
|
%
|
Common equity Tier 1
risk-based capital ratio
|
10.51
|
|
|
10.01
|
|
|
9.94
|
|
|
9.88
|
|
|
9.74
|
|
|
|
|
|
|
|
|
|
|
|
NCOs as a % of
average loans and leases
|
0.21
|
%
|
|
0.24
|
%
|
|
0.25
|
%
|
|
0.21
|
%
|
|
0.24
|
%
|
NAL ratio
|
0.54
|
|
|
0.50
|
|
|
0.49
|
|
|
0.54
|
|
|
0.60
|
|
ALLL as a % of total
loans and leases
|
1.01
|
|
|
0.99
|
|
|
0.98
|
|
|
0.98
|
|
|
1.00
|
|
ACL as a % of total
loans and leases
|
1.13
|
|
|
1.11
|
|
|
1.10
|
|
|
1.11
|
|
|
1.14
|
|
Table 2 lists certain items that we believe are significant in
understanding corporate performance and trends (see Basis of
Presentation). There were no Significant Items in the 2018
first quarter.
Table 2 –
Significant Items Influencing Earnings
|
|
Three Months
Ended
|
Pre-Tax
Impact
|
|
After-Tax
Impact
|
($ in millions,
except per share)
|
Amount
|
|
Amount (1)
|
|
EPS
(2)
|
March 31, 2018 –
net income
|
|
|
$
|
326
|
|
|
$
|
0.28
|
|
•
|
|
None
|
N/A
|
|
—
|
|
|
—
|
|
December 31, 2017
– net income
|
|
|
$
|
432
|
|
|
$
|
0.37
|
|
•
|
|
Federal tax
reform-related estimated tax benefit (3)
|
N/A
|
|
123
|
|
|
0.11
|
|
September 30, 2017
– net income
|
|
|
$
|
275
|
|
|
$
|
0.23
|
|
•
|
|
Merger and
acquisition-related net expenses
|
$
|
(31)
|
|
|
(20)
|
|
|
(0.02)
|
|
June 30, 2017 –
net income
|
|
|
$
|
272
|
|
|
$
|
0.23
|
|
•
|
|
Merger and
acquisition-related net expenses
|
$
|
(50)
|
|
|
(33)
|
|
|
(0.03)
|
|
March 31, 2017 –
net income
|
|
|
$
|
208
|
|
|
$
|
0.17
|
|
•
|
|
Merger and
acquisition-related net expenses
|
$
|
(71)
|
|
|
(46)
|
|
|
(0.04)
|
|
(1)
|
Favorable
(unfavorable) impact on net income.
|
(2)
|
EPS reflected on a
fully diluted basis.
|
(3)
|
Represents the
reasonable estimated impact of tax reform as of December 31, 2017.
The estimate could be adjusted in future periods during the
measurement period ending December 22, 2018.
|
Net Interest
Income, Net Interest Margin, and Average Balance
Sheet
|
|
Table 3 – Net
Interest Income and Net Interest Margin Performance Summary – NIM
Stability as Inherent Asset Sensitivity of Balance Sheet Offsets
Declining Benefit From Purchase Accounting
Accretion
|
|
|
2018
|
|
2017
|
|
|
($ in
millions)
|
First
|
|
Fourth
|
|
Third
|
|
Second
|
|
First
|
|
Change (%)
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
LQ
|
|
YOY
|
Net interest
income
|
$
|
770
|
|
|
$
|
770
|
|
|
$
|
758
|
|
|
$
|
745
|
|
|
$
|
730
|
|
|
—
|
%
|
|
5
|
%
|
FTE
adjustment
|
7
|
|
|
12
|
|
|
13
|
|
|
12
|
|
|
13
|
|
|
(42)
|
|
|
(46)
|
|
Net interest income -
FTE
|
777
|
|
|
782
|
|
|
771
|
|
|
757
|
|
|
743
|
|
|
(1)
|
|
|
5
|
|
Noninterest
income
|
314
|
|
|
340
|
|
|
330
|
|
|
325
|
|
|
312
|
|
|
(8)
|
|
|
1
|
|
Total revenue -
FTE
|
$
|
1,091
|
|
|
$
|
1,122
|
|
|
$
|
1,101
|
|
|
$
|
1,082
|
|
|
$
|
1,055
|
|
|
(3)
|
%
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change bp
|
Yield /
Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LQ
|
|
YOY
|
Total earning
assets
|
|
3.91
|
%
|
|
|
3.83
|
%
|
|
|
3.78
|
%
|
|
|
3.75
|
%
|
|
|
3.70
|
%
|
|
8
|
|
|
21
|
|
Total loans and
leases
|
|
4.32
|
|
|
|
4.23
|
|
|
|
4.20
|
|
|
|
4.15
|
|
|
|
4.07
|
|
|
9
|
|
|
25
|
|
Total
securities
|
|
2.62
|
|
|
|
2.64
|
|
|
|
2.55
|
|
|
|
2.55
|
|
|
|
2.54
|
|
|
(2)
|
|
|
8
|
|
Total
interest-bearing liabilities
|
|
0.82
|
|
|
|
0.73
|
|
|
|
0.68
|
|
|
|
0.61
|
|
|
|
0.54
|
|
|
9
|
|
|
28
|
|
Total
interest-bearing deposits
|
|
0.43
|
|
|
|
0.37
|
|
|
|
0.35
|
|
|
|
0.31
|
|
|
|
0.26
|
|
|
6
|
|
|
17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest rate
spread
|
|
3.09
|
|
|
|
3.10
|
|
|
|
3.10
|
|
|
|
3.14
|
|
|
|
3.16
|
|
|
(1)
|
|
|
(7)
|
|
Impact of
noninterest-bearing funds on margin
|
|
0.21
|
|
|
|
0.20
|
|
|
|
0.19
|
|
|
|
0.17
|
|
|
|
0.14
|
|
|
1
|
|
|
7
|
|
Net interest
margin
|
|
3.30
|
%
|
|
|
3.30
|
%
|
|
|
3.29
|
%
|
|
|
3.31
|
%
|
|
|
3.30
|
%
|
|
—
|
|
|
—
|
|
See Pages 6-8 of
Quarterly Financial Supplement for additional
detail.
|
Fully-taxable equivalent (FTE) net interest income for the 2018
first quarter increased $34 million,
or 5%, from the 2017 first quarter. This reflected the
benefit from the $4.3 billion, or 5%,
increase in average earning assets, while the FTE net interest
margin (NIM) remained unchanged at 3.30%. Average earning
asset growth included a $3.5 billion,
or 5%, increase in average loans and leases and a $0.7 billion, or 3%, increase in average
securities. The NIM stability reflected a 21 basis point
increase in earning asset yields and a 7 basis point increase in
the benefit from noninterest-bearing funds, offset by a 28 basis
point increase in funding costs. Embedded within these yields
and costs, FTE net interest income during the 2018 first quarter
included $19 million, or
approximately 8 basis points, of purchase accounting impact
compared to $37 million, or
approximately 16 basis points, in the year-ago quarter.
Compared to the 2017 fourth quarter, FTE net interest income
decreased $5 million, or 1%,
reflecting the impact of federal tax reform on the FTE
adjustment. Average earning assets increased $1.5 billion, or 2%, sequentially, while the NIM
remained unchanged. The stable NIM reflected an 8 basis point
increase in earning asset yields and a 1 basis point increase in
the benefit from noninterest-bearing funds, offset by a 9 basis
point increase in the cost of interest-bearing liabilities.
The purchase accounting impact on the net interest margin was
approximately 8 basis points in the 2018 first quarter compared to
approximately 10 basis points in the 2017 fourth quarter.
Table 4 –
Average Earning Assets – Commercial Drives Linked-quarter Loan
Growth
|
|
|
2018
|
|
2017
|
|
|
|
|
($ in
billions)
|
First
|
|
Fourth
|
|
Third
|
|
Second
|
|
First
|
|
Change (%)
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
LQ
|
|
YOY
|
Commercial and
industrial
|
$
|
28.2
|
|
|
$
|
27.4
|
|
|
$
|
27.6
|
|
|
$
|
28.0
|
|
|
$
|
27.9
|
|
|
3
|
%
|
|
1
|
%
|
Commercial real
estate
|
7.3
|
|
|
7.2
|
|
|
7.2
|
|
|
7.1
|
|
|
7.4
|
|
|
2
|
|
|
—
|
|
Total
commercial
|
35.6
|
|
|
34.6
|
|
|
34.9
|
|
|
35.1
|
|
|
35.3
|
|
|
3
|
|
|
1
|
|
Automobile
|
12.1
|
|
|
12.0
|
|
|
11.7
|
|
|
11.3
|
|
|
11.1
|
|
|
1
|
|
|
9
|
|
Home
equity
|
10.0
|
|
|
10.0
|
|
|
10.0
|
|
|
10.0
|
|
|
10.1
|
|
|
—
|
|
|
—
|
|
Residential
mortgage
|
9.2
|
|
|
8.8
|
|
|
8.4
|
|
|
8.0
|
|
|
7.8
|
|
|
4
|
|
|
18
|
|
RV and marine
finance
|
2.5
|
|
|
2.4
|
|
|
2.3
|
|
|
2.0
|
|
|
1.9
|
|
|
3
|
|
|
32
|
|
Other
consumer
|
1.1
|
|
|
1.1
|
|
|
1.0
|
|
|
1.0
|
|
|
0.9
|
|
|
2
|
|
|
21
|
|
Total
consumer
|
34.9
|
|
|
34.3
|
|
|
33.4
|
|
|
32.3
|
|
|
31.7
|
|
|
2
|
|
|
10
|
|
Total loans and
leases
|
70.5
|
|
|
68.9
|
|
|
68.3
|
|
|
67.3
|
|
|
67.0
|
|
|
2
|
|
|
5
|
|
Total
securities
|
24.4
|
|
|
24.3
|
|
|
23.8
|
|
|
23.8
|
|
|
23.6
|
|
|
—
|
|
|
3
|
|
Held-for-sale and
other earning assets
|
0.6
|
|
|
0.7
|
|
|
0.8
|
|
|
0.6
|
|
|
0.5
|
|
|
(17)
|
|
|
10
|
|
Total earning
assets
|
$
|
95.4
|
|
|
$
|
93.9
|
|
|
$
|
92.8
|
|
|
$
|
91.7
|
|
|
$
|
91.1
|
|
|
2
|
%
|
|
5
|
%
|
See Page 6 of
Quarterly Financial Supplement for additional
detail.
|
Average earning assets for the 2018 first quarter increased
$4.3 billion, or 5%, from the
year-ago quarter, primarily reflecting a $3.5 billion, or 5%, increase in average loans
and leases. Average residential mortgage loans increased
$1.4 billion, or 18%, as we continue
to see the benefits associated with the ongoing expansion of our
home lending business. Average automobile loans increased
$1.0 billion, or 9%, driven by
$6.2 billion of new production over
the past year. Average RV and marine finance loans increased
$0.6 billion, or 32%, reflecting the
success of the well-managed expansion of the acquired business into
17 new states over the past two years. Average securities
increased $0.7 billion, or 3%, which
included a $0.3 billion increase in
direct purchase municipal instruments in our commercial banking
segment.
Compared to the 2017 fourth quarter, average earning assets
increased $1.5 billion, or 2%,
reflecting the $1.5 billion, or
2%, increase in average loans and leases. Average commercial
and industrial (C&I) loans increased $0.8 billion, or 3%, reflecting growth in
specialty, corporate, and middle market banking.
Table 5 –
Average Liabilities – Money Market and Interest-bearing Demand
Deposits Drive Year-Over-Year Core Deposit
Growth
|
|
|
2018
|
|
2017
|
|
|
|
First
|
|
Fourth
|
|
Third
|
|
Second
|
|
First
|
|
Change (%)
|
($ in
billions)
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
LQ
|
|
YOY
|
Demand deposits -
noninterest-bearing
|
$
|
20.6
|
|
|
$
|
21.7
|
|
|
$
|
21.7
|
|
|
$
|
21.6
|
|
|
$
|
21.7
|
|
|
(5)
|
%
|
|
(5)
|
%
|
Demand deposits -
interest-bearing
|
18.6
|
|
|
18.2
|
|
|
17.9
|
|
|
17.4
|
|
|
16.8
|
|
|
3
|
|
|
11
|
|
Total demand
deposits
|
39.2
|
|
|
39.9
|
|
|
39.6
|
|
|
39.0
|
|
|
38.5
|
|
|
(2)
|
|
|
2
|
|
Money market
deposits
|
20.7
|
|
|
20.7
|
|
|
20.3
|
|
|
19.2
|
|
|
18.7
|
|
|
—
|
|
|
11
|
|
Savings and other
domestic deposits
|
11.2
|
|
|
11.3
|
|
|
11.6
|
|
|
11.9
|
|
|
12.0
|
|
|
(1)
|
|
|
(6)
|
|
Core certificates of
deposit
|
2.3
|
|
|
1.9
|
|
|
2.0
|
|
|
2.1
|
|
|
2.3
|
|
|
18
|
|
|
(2)
|
|
Total core
deposits
|
73.4
|
|
|
73.9
|
|
|
73.5
|
|
|
72.2
|
|
|
71.5
|
|
|
(1)
|
|
|
3
|
|
Other domestic
deposits of $250,000 or more
|
0.2
|
|
|
0.4
|
|
|
0.4
|
|
|
0.5
|
|
|
0.5
|
|
|
(38)
|
|
|
(47)
|
|
Brokered deposits and
negotiable CDs
|
3.3
|
|
|
3.4
|
|
|
3.6
|
|
|
3.8
|
|
|
4.0
|
|
|
(2)
|
|
|
(17)
|
|
Total
deposits
|
$
|
76.9
|
|
|
$
|
77.7
|
|
|
$
|
77.5
|
|
|
$
|
76.5
|
|
|
$
|
76.0
|
|
|
(1)
|
%
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
$
|
5.2
|
|
|
$
|
2.8
|
|
|
$
|
2.4
|
|
|
$
|
2.7
|
|
|
$
|
3.8
|
|
|
84
|
%
|
|
38
|
%
|
Long-term
debt
|
9.0
|
|
|
9.2
|
|
|
8.9
|
|
|
8.7
|
|
|
8.5
|
|
|
(3)
|
|
|
5
|
|
Total debt
|
$
|
14.2
|
|
|
$
|
12.0
|
|
|
$
|
11.3
|
|
|
$
|
11.4
|
|
|
$
|
12.3
|
|
|
18
|
%
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
interest-bearing liabilities
|
$
|
70.6
|
|
|
$
|
68.1
|
|
|
$
|
67.2
|
|
|
$
|
66.4
|
|
|
$
|
66.5
|
|
|
4
|
%
|
|
6
|
%
|
See Page 6 of
Quarterly Financial Supplement for additional
detail.
|
Average total interest-bearing liabilities increased
$4.0 billion, or 6%, from the
year-ago quarter. Average total deposits for the 2018 first
quarter increased $1.0 billion, or
1%, from the year-ago quarter, while average total core deposits
increased $1.9 billion, or 3%.
Average money market deposits increased $2.0
billion, or 11%, reflecting continued new customer
acquisition and shifting customer preferences for higher yielding
deposit products. Average demand deposits increased
$0.7 billion, or 2%, comprised of a
$0.4 billion, or 2%, increase in
average commercial demand deposits and a $0.2 billion, or 2%, increase in average consumer
demand deposits. Partially offsetting these increases,
average savings deposits decreased $0.6
billion, or 5%, reflecting customer migration into higher
yielding deposit products, such as money market and certificates of
deposit (CDs).
Compared to the 2017 fourth quarter, average total core deposits
decreased $0.6 billion, or 1%,
primarily reflecting a $0.7 billion,
or 2%, decrease in average demand deposits. Average
commercial demand deposits decreased $0.9
billion, or 3%, while average consumer demand deposits
increased $0.2 billion, or 2%.
Noninterest
Income (see Basis of Presentation)
|
|
Table 6 –
Noninterest Income (GAAP) – Continued Momentum in Cards and Payment
Processing, Capital Markets, and Trust and Investment
Management
|
|
|
2018
|
|
2017
|
|
|
|
First
|
|
Fourth
|
|
Third
|
|
Second
|
|
First
|
|
Change (%)
|
($ in
millions)
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
LQ
|
|
YOY
|
Service charges on
deposit accounts
|
$
|
86
|
|
|
$
|
91
|
|
|
$
|
91
|
|
|
$
|
88
|
|
|
$
|
83
|
|
|
(5)
|
%
|
|
4
|
%
|
Cards and payment
processing income
|
53
|
|
|
53
|
|
|
54
|
|
|
52
|
|
|
47
|
|
|
—
|
|
|
13
|
|
Trust and investment
management services
|
44
|
|
|
41
|
|
|
39
|
|
|
37
|
|
|
39
|
|
|
7
|
|
|
13
|
|
Mortgage banking
income
|
26
|
|
|
33
|
|
|
34
|
|
|
32
|
|
|
32
|
|
|
(21)
|
|
|
(19)
|
|
Insurance
income
|
21
|
|
|
21
|
|
|
18
|
|
|
22
|
|
|
20
|
|
|
—
|
|
|
5
|
|
Capital markets
fees
|
19
|
|
|
23
|
|
|
22
|
|
|
17
|
|
|
14
|
|
|
(17)
|
|
|
36
|
|
Bank owned life
insurance income
|
15
|
|
|
18
|
|
|
16
|
|
|
15
|
|
|
18
|
|
|
(17)
|
|
|
(17)
|
|
Gain on sale of
loans
|
8
|
|
|
17
|
|
|
14
|
|
|
12
|
|
|
13
|
|
|
(53)
|
|
|
(38)
|
|
Securities gains
(losses)
|
0
|
|
|
(4)
|
|
|
0
|
|
|
—
|
|
|
—
|
|
|
NM
|
|
NM
|
Other
Income
|
42
|
|
|
47
|
|
|
42
|
|
|
50
|
|
|
46
|
|
|
(11)
|
|
|
(9)
|
|
Total noninterest
income
|
$
|
314
|
|
|
$
|
340
|
|
|
$
|
330
|
|
|
$
|
325
|
|
|
$
|
312
|
|
|
(8)
|
%
|
|
1
|
%
|
Table 7 -
Impact of Significant Items
|
|
|
2018
|
|
2017
|
|
First
|
|
Fourth
|
|
Third
|
|
Second
|
|
First
|
($ in
millions)
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
Service charges on
deposit accounts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cards and payment
processing income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Trust and investment
management services
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Mortgage banking
income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Insurance
income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Capital markets
fees
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Bank owned life
insurance income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Gain on sale of
loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Securities gains
(losses)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Other
Income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
Total noninterest
income
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Table 8 -
Adjusted Noninterest Income (Non-GAAP)
|
|
|
2018
|
|
2017
|
|
|
|
First
|
|
Fourth
|
|
Third
|
|
Second
|
|
First
|
|
Change (%)
|
($ in
millions)
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
LQ
|
|
YOY
|
Service charges on
deposit accounts
|
$
|
86
|
|
|
$
|
91
|
|
|
$
|
91
|
|
|
$
|
88
|
|
|
$
|
83
|
|
|
(5)
|
%
|
|
4
|
%
|
Cards and payment
processing income
|
53
|
|
|
53
|
|
|
54
|
|
|
52
|
|
|
47
|
|
|
—
|
|
|
13
|
|
Trust and investment
management services
|
44
|
|
|
41
|
|
|
39
|
|
|
37
|
|
|
39
|
|
|
7
|
|
|
13
|
|
Mortgage banking
income
|
26
|
|
|
33
|
|
|
34
|
|
|
32
|
|
|
32
|
|
|
(21)
|
|
|
(19)
|
|
Insurance
income
|
21
|
|
|
21
|
|
|
18
|
|
|
22
|
|
|
20
|
|
|
—
|
|
|
5
|
|
Capital markets
fees
|
19
|
|
|
23
|
|
|
22
|
|
|
17
|
|
|
14
|
|
|
(17)
|
|
|
36
|
|
Bank owned life
insurance income
|
15
|
|
|
18
|
|
|
16
|
|
|
15
|
|
|
18
|
|
|
(17)
|
|
|
(17)
|
|
Gain on sale of
loans
|
8
|
|
|
17
|
|
|
14
|
|
|
12
|
|
|
13
|
|
|
(53)
|
|
|
(38)
|
|
Securities gains
(losses)
|
0
|
|
|
(4)
|
|
|
0
|
|
|
—
|
|
|
—
|
|
|
NM
|
|
NM
|
Other
Income
|
42
|
|
|
47
|
|
|
42
|
|
|
50
|
|
|
44
|
|
|
(11)
|
|
|
(5)
|
|
Total noninterest
income
|
$
|
314
|
|
|
$
|
340
|
|
|
$
|
330
|
|
|
$
|
325
|
|
|
$
|
310
|
|
|
(8)
|
%
|
|
1
|
%
|
See Pages 9-10 of
Quarterly Financial Supplement for additional
detail.
|
Reported noninterest income for the 2018 first quarter increased
$2 million, or 1%, from the year-ago
quarter. Card and payment processing income increased
$6 million, or 13%, due to higher
credit and debit card related income and underlying customer
growth. Trust and investment management services increased
$5 million, or 13%, reflecting the
continued growth of managed accounts and strong equity market
performance. Capital markets fees increased $5 million, or 36%, reflecting increased foreign
exchange and interest rate derivative activity. These
increases were partially offset by a $6
million, or 19%, decrease in mortgage banking income, driven
by lower spreads on origination volume, and a $5 million, or 38%, decrease in gain on sale of
loans, primarily reflecting the sale of an equipment finance loan
in the year ago quarter.
Compared to the 2017 fourth quarter, reported noninterest income
decreased $26 million, or 8%.
Gain on sale of loans decreased $9
million, or 53%, reflecting timing of SBA loan sales.
Mortgage banking income decreased $7
million, or 21%, reflecting reduced spreads and seasonally
lower origination volume. Service charges on deposit accounts
decreased $5 million, or 5%,
primarily reflecting seasonality. Other income decreased
$5 million, or 11%, primarily
reflecting lower syndication fees and asset finance lease
sales.
Noninterest
Expense (see Basis of Presentation)
|
|
Table 9 –
Noninterest Expense (GAAP) – Realization of Acquisition-Related
Cost Savings Offsets Continued Investments in Colleagues and
Technology
|
|
|
2018
|
|
2017
|
|
|
|
First
|
|
Fourth
|
|
Third
|
|
Second
|
|
First
|
|
Change (%)
|
($ in
millions)
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
LQ
|
|
YOY
|
Personnel
costs
|
$
|
376
|
|
|
$
|
373
|
|
|
$
|
377
|
|
|
$
|
392
|
|
|
$
|
382
|
|
|
1
|
%
|
|
(2)
|
%
|
Outside data
processing and other services
|
73
|
|
|
71
|
|
|
80
|
|
|
75
|
|
|
87
|
|
|
3
|
|
|
(16)
|
|
Net
occupancy
|
41
|
|
|
36
|
|
|
55
|
|
|
53
|
|
|
68
|
|
|
14
|
|
|
(40)
|
|
Equipment
|
40
|
|
|
36
|
|
|
45
|
|
|
43
|
|
|
47
|
|
|
11
|
|
|
(15)
|
|
Deposit and other
insurance expense
|
18
|
|
|
19
|
|
|
19
|
|
|
20
|
|
|
20
|
|
|
(5)
|
|
|
(10)
|
|
Professional
services
|
11
|
|
|
18
|
|
|
15
|
|
|
18
|
|
|
18
|
|
|
(39)
|
|
|
(39)
|
|
Marketing
|
8
|
|
|
10
|
|
|
17
|
|
|
19
|
|
|
14
|
|
|
(20)
|
|
|
(43)
|
|
Amortization of
intangibles
|
14
|
|
|
14
|
|
|
14
|
|
|
14
|
|
|
14
|
|
|
—
|
|
|
—
|
|
Other
expense
|
52
|
|
|
56
|
|
|
58
|
|
|
60
|
|
|
57
|
|
|
(7)
|
|
|
(9)
|
|
Total noninterest
expense
|
$
|
633
|
|
|
$
|
633
|
|
|
$
|
680
|
|
|
$
|
694
|
|
|
$
|
707
|
|
|
—
|
%
|
|
(10)
|
%
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average full-time
equivalent employees
|
15.6
|
|
|
15.4
|
|
|
15.5
|
|
|
15.9
|
|
|
16.3
|
|
|
1
|
%
|
|
(4)
|
%
|
Table 10 -
Impacts of Significant Items
|
|
|
2018
|
|
2017
|
|
First
|
|
Fourth
|
|
Third
|
|
Second
|
|
First
|
($ in
millions)
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
Personnel
costs
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
18
|
|
|
$
|
20
|
|
Outside data
processing and other services
|
—
|
|
|
—
|
|
|
4
|
|
|
6
|
|
|
14
|
|
Net
occupancy
|
—
|
|
|
—
|
|
|
14
|
|
|
14
|
|
|
23
|
|
Equipment
|
—
|
|
|
—
|
|
|
6
|
|
|
4
|
|
|
6
|
|
Deposit and other
insurance expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Professional
services
|
—
|
|
|
—
|
|
|
2
|
|
|
4
|
|
|
4
|
|
Marketing
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Amortization of
intangibles
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Other
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
5
|
|
Total noninterest
expense
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30
|
|
|
$
|
50
|
|
|
$
|
73
|
|
Table 11 -
Adjusted Noninterest Expense (Non-GAAP)
|
|
|
2018
|
|
2017
|
|
|
|
First
|
|
Fourth
|
|
Third
|
|
Second
|
|
First
|
|
Change (%)
|
($ in
millions)
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
LQ
|
|
YOY
|
Personnel
costs
|
$
|
376
|
|
|
$
|
373
|
|
|
$
|
373
|
|
|
$
|
374
|
|
|
$
|
362
|
|
|
1
|
%
|
|
4
|
%
|
Outside data
processing and other services
|
73
|
|
|
71
|
|
|
76
|
|
|
69
|
|
|
73
|
|
|
3
|
|
|
—
|
|
Net
occupancy
|
41
|
|
|
36
|
|
|
41
|
|
|
39
|
|
|
45
|
|
|
(12)
|
|
|
(14)
|
|
Equipment
|
40
|
|
|
36
|
|
|
39
|
|
|
39
|
|
|
41
|
|
|
11
|
|
|
(2)
|
|
Deposit and other
insurance expense
|
18
|
|
|
19
|
|
|
19
|
|
|
20
|
|
|
20
|
|
|
(5)
|
|
|
(10)
|
|
Professional
services
|
11
|
|
|
18
|
|
|
13
|
|
|
14
|
|
|
14
|
|
|
(39)
|
|
|
(21)
|
|
Marketing
|
8
|
|
|
10
|
|
|
17
|
|
|
19
|
|
|
13
|
|
|
(20)
|
|
|
(38)
|
|
Amortization of
intangibles
|
14
|
|
|
14
|
|
|
14
|
|
|
14
|
|
|
14
|
|
|
—
|
|
|
—
|
|
Other
expense
|
52
|
|
|
56
|
|
|
58
|
|
|
56
|
|
|
52
|
|
|
(7)
|
|
|
—
|
|
Total noninterest
expense
|
$
|
633
|
|
|
$
|
633
|
|
|
$
|
650
|
|
|
$
|
644
|
|
|
$
|
634
|
|
|
—
|
%
|
|
—
|
%
|
See Page 9 of
Quarterly Financial Supplement for additional
detail.
|
Reported noninterest expense for the 2018 first quarter
decreased $74 million, or 10%, from
the year-ago quarter, primarily reflecting the $73 million of acquisition-related Significant
Items in the year-ago quarter. Personnel costs decreased
$6 million, or 2%, primarily
reflecting a $20 million decrease in
acquisition-related Significant Items and a 4% decrease in average
full-time equivalent employees, partially offset by $17 million of higher benefits expense and
incentive compensation. Due to timing, marketing expense
decreased $6 million, or 43%.
Reported noninterest expense remained unchanged from the 2017
fourth quarter. Professional services decreased $7 million, or 39%, reflecting lower consulting
expense. Net occupancy expense increased $5 million, or 14%, due to seasonality.
Credit
Quality
|
|
Table 12 –
Credit Quality Metrics – NCOs and NALs Remain Near Cyclical
Lows
|
|
|
2018
|
|
2017
|
($ in
millions)
|
March 31,
|
|
December
31,
|
|
September
30,
|
|
June 30,
|
|
March 31,
|
Total nonaccrual
loans and leases
|
$
|
383
|
|
|
$
|
349
|
|
|
$
|
338
|
|
|
$
|
364
|
|
|
$
|
401
|
|
Total other real
estate
|
30
|
|
|
33
|
|
|
42
|
|
|
44
|
|
|
50
|
|
Other NPAs
(1)
|
7
|
|
|
7
|
|
|
7
|
|
|
7
|
|
|
7
|
|
Total nonperforming
assets
|
420
|
|
|
389
|
|
|
387
|
|
|
415
|
|
|
458
|
|
Accruing loans and
leases past due 90 days or more
|
106
|
|
|
115
|
|
|
119
|
|
|
136
|
|
|
128
|
|
NPAs + accruing loans
and lease past due 90 days or more
|
$
|
526
|
|
|
$
|
504
|
|
|
$
|
506
|
|
|
$
|
551
|
|
|
$
|
586
|
|
NAL ratio
(2)
|
0.54
|
%
|
|
0.50
|
%
|
|
0.49
|
%
|
|
0.54
|
%
|
|
0.60
|
%
|
NPA ratio
(3)
|
0.59
|
|
|
0.55
|
|
|
0.56
|
|
|
0.61
|
|
|
0.68
|
|
(NPAs+90
days)/(Loans+OREO)
|
0.74
|
|
|
0.72
|
|
|
0.74
|
|
|
0.81
|
|
|
0.87
|
|
Provision for credit
losses
|
$
|
66
|
|
|
$
|
65
|
|
|
$
|
43
|
|
|
$
|
25
|
|
|
$
|
68
|
|
Net
charge-offs
|
38
|
|
|
41
|
|
|
43
|
|
|
36
|
|
|
39
|
|
Net charge-offs /
Average total loans
|
0.21
|
%
|
|
0.24
|
%
|
|
0.25
|
%
|
|
0.21
|
%
|
|
0.24
|
%
|
Allowance for loans
and lease losses
|
$
|
721
|
|
|
$
|
691
|
|
|
$
|
675
|
|
|
$
|
668
|
|
|
$
|
673
|
|
Allowance for
unfunded loan commitments and letters of credit
|
85
|
|
|
87
|
|
|
79
|
|
|
85
|
|
|
92
|
|
Allowance for credit
losses (ACL)
|
$
|
806
|
|
|
$
|
778
|
|
|
$
|
754
|
|
|
$
|
753
|
|
|
$
|
765
|
|
ALLL as a %
of:
|
|
|
|
|
|
|
|
|
|
Total loans and
leases
|
1.01
|
%
|
|
0.99
|
%
|
|
0.98
|
%
|
|
0.98
|
%
|
|
1.00
|
%
|
NALs
|
188
|
|
|
198
|
|
|
200
|
|
|
183
|
|
|
168
|
|
NPAs
|
172
|
|
|
178
|
|
|
175
|
|
|
161
|
|
|
147
|
|
ACL as a %
of:
|
|
|
|
|
|
|
|
|
|
Total loans and
leases
|
1.13
|
%
|
|
1.11
|
%
|
|
1.10
|
%
|
|
1.11
|
%
|
|
1.14
|
%
|
NALs
|
210
|
|
|
223
|
|
|
223
|
|
|
207
|
|
|
190
|
|
NPAs
|
192
|
|
|
200
|
|
|
195
|
|
|
181
|
|
|
167
|
|
(1) Other nonperforming assets
include certain impaired investment securities.
|
(2) Total NALs as a % of total
loans and leases.
|
(3) Total NPAs as a % of sum of
loans and leases and other real estate.
|
See Pages 11-14 of
Quarterly Financial Supplement for additional
detail.
|
Overall asset quality remained strong. The overall
consumer credit metrics continued to perform well, as
expected. The commercial portfolios have performed
consistently, with some quarter to quarter volatility as a result
of the absolute low level of problem loans.
Nonaccrual loans and leases (NALs) decreased $18 million, or 4%, from the year-ago quarter to
$383 million, or 0.54% of total loans
and leases. The year-over-year decrease was centered in the
Commercial portfolio, with slight increases in the CRE and Home
Equity portfolios. The improvement in the Commercial
portfolio was primarily associated with the improved performance of
a small number of energy sector loan relationships that were
upgraded in the 2017 second quarter. While the reserve-based
energy portfolio was a primary driver of the decrease in NALs over
the past year, that portfolio continues to represent less than 1%
of total loans outstanding. Nonperforming assets (NPAs)
decreased $38 million, or 8%, from
the year-ago quarter to $420 million,
or 0.59% of total loans and leases and OREO. In addition to
the $18 million decline in NAL
balances, OREO balances declined by $20
million, with both Commercial and Residential OREO showing a
decline. On a linked quarter basis, NALs increased
$34 million, or 10%, while NPAs
increased $31 million, or 8%.
The increases were centered in the Commercial portfolio primarily
associated with three commercial relationships in unrelated
industries.
The provision for credit losses decreased $2 million year-over-year to $66 million in the 2018 first quarter. Net
charge-offs (NCOs) decreased $1
million to $38 million.
NCOs represented an annualized 0.21% of average loans and leases in
the current quarter, down from 0.24% in both the prior and year-ago
quarters. The Indirect Auto performance in the 2018 first
quarter was particularly strong as our consistent origination
strategy continued to yield positive credit results. We
continue to be pleased with the net charge-off performance within
each portfolio and in total.
The allowance for loan and lease losses (ALLL) as a percentage
of total loans and leases remained relatively stable at 1.01%
compared to 1.00% a year ago, while the ALLL as a percentage of
period-end total NALs increased to 188% from 168% over the same
period. The allowance for credit losses (ACL) as a percentage
of total loans and leases remained relatively stable at 1.13%
compared to 1.14% a year ago, while the ACL as a percentage of
period-end total NALs increased to 210% from 190% over the same
period. We believe the level of the ACL is appropriate given
the consistent improvement in the credit quality metrics and the
current composition of the overall loan and lease portfolio.
Capital
|
|
Table 13 –
Capital Ratios – Share Repurchases Returning
Capital
|
|
|
|
2018
|
|
2017
|
($ in
billions)
|
|
March 31,
|
|
December
31,
|
|
September
30,
|
|
June 30,
|
|
March 31,
|
Tangible common
equity / tangible assets ratio
|
|
7.70
|
%
|
|
7.34
|
%
|
|
7.42
|
%
|
|
7.41
|
%
|
|
7.28
|
%
|
Common equity tier 1
risk-based capital ratio (1)
|
|
10.51
|
%
|
|
10.01
|
%
|
|
9.94
|
%
|
|
9.88
|
%
|
|
9.74
|
%
|
Regulatory Tier 1
risk-based capital ratio (1)
|
|
11.99
|
%
|
|
11.34
|
%
|
|
11.30
|
%
|
|
11.24
|
%
|
|
11.11
|
%
|
Regulatory Total
risk-based capital ratio (1)
|
|
13.98
|
%
|
|
13.39
|
%
|
|
13.39
|
%
|
|
13.33
|
%
|
|
13.26
|
%
|
Total risk-weighted
assets (1)
|
|
$
|
81.5
|
|
|
$
|
80.3
|
|
|
$
|
78.6
|
|
|
$
|
78.4
|
|
|
$
|
77.6
|
|
(1)
Figures are estimated and are presented on a Basel III
standardized approach basis.
|
See Pages 15-16 of
Quarterly Financial Supplement for additional
detail.
|
The tangible common equity to tangible assets ratio was 7.70% at
March 31, 2018, up 42 basis points from a year ago.
Common Equity Tier 1 (CET1) risk-based capital ratio was 10.51% at
March 31, 2018, up from 9.74% a year ago. The regulatory
Tier 1 risk-based capital ratio was 11.99% compared to 11.11% at
March 31, 2017.
Over the past three quarters, the Company repurchased
$308 million of common stock at an
average cost of $13.71 per share,
including $48 million at an average
cost of $15.83 during the 2018 first
quarter. In addition, during the 2018 first quarter,
$363 million of 8.5% Series A
preferred equity was converted into common equity, and subsequently
$500 million of 5.7% Series E
preferred equity was issued.
Income Taxes
The provision for income taxes was $59
million in both the 2018 first quarter and the 2017 first
quarter. The effective tax rates for the 2018 first quarter
and 2017 first quarter were 15.3% and 22.2%, respectively.
The 2018 first quarter and 2017 first quarter included $3 million of tax benefits for stock-based
compensation related to vesting of restricted shares and options
exercised.
At March 31, 2018, we had a net federal deferred tax
liability of $111 million and a net
state deferred tax asset of $27
million.
Expectations - 2018
"We are building long-term shareholder value through consistent
execution of our strategic plan. We are successfully driving
organic revenue growth, while strategically investing in our
businesses, including digital technologies and risk management,"
Steinour said. "Aided by federal tax reform enacted late last
year and continued strong local economies across our footprint, our
commercial and consumer customers continue to exhibit high levels
of confidence. Our loan pipelines remain solid. We are
encouraged by the outlook for further growth via new and expanded
customer relationships."
Full-year revenues are expected to increase approximately 4% to
6%, while full-year noninterest expense is expected to decrease
approximately 2% to 4%. The full-year NIM is expected to
remain relatively flat, as core NIM expansion offsets the
anticipated reduction in the benefit of purchase accounting.
The 2018 efficiency ratio is expected to approximate 55% to
57%.
Average loans and leases are expected to increase approximately
4% to 6% on an annual basis, while average deposits are expected to
increase approximately 3% to 5%.
Asset quality metrics are expected to remain near current levels
for the full year, although moderate quarterly volatility is
expected given the current low level of problem assets and credit
costs. We anticipate NCOs will remain below our long-term
normalized range of 35 to 55 basis points.
The effective tax rate for 2018 is expected to be in the range
of 15.5% to 16.5%.
Conference Call / Webcast Information
Huntington's senior management will host an earnings conference
call on April 24, 2018, at 9:00 a.m.
(Eastern Daylight Time). The call may be accessed via a live
Internet webcast at the Investor Relations section of Huntington's
website, www.huntington.com, or through a dial-in telephone number
at (877) 407-8029; Conference ID #13677614. Slides will
be available in the Investor Relations section of Huntington's
website about an hour prior to the call. A replay of the
webcast will be archived in the Investor Relations section of
Huntington's website. A telephone replay will be available
approximately two hours after the completion of the call through
May 4, 2018 at (877) 660-6853 or
(201) 612-7415; conference ID #13677614.
Please see the 2018 First Quarter Quarterly Financial
Supplement for additional detailed financial performance metrics.
This document can be found on the Investor Relations section of
Huntington's website, http://www.huntington.com.
Caution regarding Forward-Looking Statements
This communication contains certain forward-looking statements,
including, but not limited to, certain plans, expectations, goals,
projections, and statements, which are not historical facts and are
subject to numerous assumptions, risks, and uncertainties.
Statements that do not describe historical or current facts,
including statements about beliefs and expectations, are
forward-looking statements. 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. The forward-looking statements are intended
to be subject to the safe harbor provided by Section 27A of the
Securities Act of 1933, Section 21E of the Securities Exchange Act
of 1934, and the Private Securities Litigation Reform Act of
1995.
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:
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; movements in
interest rates; competitive pressures on product pricing and
services; success, impact, and timing of our business strategies,
including market acceptance of any new products or services
implementing our "Fair Play" banking philosophy; 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, FDIC, and CFPB;
and other factors that may affect our future results. Additional
factors that could cause results to differ materially from those
described above can be found in our Annual Report on Form 10-K for
the year ended December 31, 2017,
which is on file with the Securities and Exchange Commission (the
"SEC") and available in the "Investor Relations" section of our
website, http://www.huntington.com, under the heading "Publications
and Filings" and in other documents we file with the SEC.
All forward-looking statements speak only as of the date they
are made and are based on information available at that time. We do
not assume any obligation to update forward-looking statements to
reflect circumstances or events that occur after the date the
forward-looking statements were made or to reflect the occurrence
of unanticipated events except as required by federal securities
laws. As forward-looking statements involve significant risks and
uncertainties, caution should be exercised against placing undue
reliance on such statements.
Basis of Presentation
Use of Non-GAAP Financial Measures
This document 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 this
document, conference call slides, or the Form 8-K related to this
document, all of which can be found in the Investor Relations
section of Huntington's website, http://www.huntington.com.
Annualized Data
Certain returns, yields, performance ratios, or quarterly growth
rates are presented on an "annualized" basis. This is done for
analytical and decision-making purposes to better discern
underlying performance trends when compared to full-year or
year-over-year amounts. For example, loan and deposit growth rates,
as well as net charge-off percentages, are most often expressed in
terms of an annual rate like 8%. As such, a 2% growth rate for a
quarter would represent an annualized 8% growth rate.
Fully-Taxable Equivalent Interest Income and Net Interest
Margin
Income from tax-exempt earning assets is increased by an amount
equivalent to the taxes that would have been paid if this income
had been taxable at statutory rates. This adjustment puts all
earning assets, most notably tax-exempt municipal securities and
certain lease assets, on a common basis that facilitates comparison
of results to results of competitors.
Earnings per Share Equivalent Data
Significant income or expense items may be expressed on a per
common share basis. This is done for analytical and decision-making
purposes to better discern underlying trends in total corporate
earnings per share performance excluding the impact of such items.
Investors may also find this information helpful in their
evaluation of the company's 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 an 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.
Significant Items
From time to time, revenue, expenses, or taxes are impacted by
items judged by management to be outside of ordinary banking
activities and/or by items that, while they may be associated with
ordinary banking activities, are so unusually large that their
outsized impact is believed by management at that time to be
infrequent or short term in nature. We refer to such items as
"Significant Items". Most often, these Significant Items result
from factors originating outside the company – e.g., regulatory
actions/assessments, windfall gains, changes in accounting
principles, one-time tax assessments/refunds, litigation actions,
etc. In other cases they may result from management decisions
associated with significant corporate actions out of the ordinary
course of business – e.g., merger/restructuring charges,
recapitalization actions, goodwill impairment, etc.
Even though certain revenue and expense items are naturally
subject to more volatility than others due to changes in market and
economic environment conditions, as a general rule volatility alone
does not define a Significant Item. For example, changes in the
provision for credit losses, gains/losses from investment
activities, asset valuation write-downs, etc., reflect ordinary
banking activities and are, therefore, typically excluded from
consideration as a Significant Item.
Management believes the disclosure of "Significant Items", when
appropriate, aids analysts/investors in better understanding
corporate performance and trends so that they can ascertain which
of such items, if any, they may wish to include/exclude from their
analysis of the company's performance - i.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 Huntington's
2017 Annual Report on Form 10-K and other factors described from
time to time in Huntington's other filings with the Securities and
Exchange Commission.
About Huntington
Huntington Bancshares Incorporated is a regional bank holding
company headquartered in Columbus,
Ohio, with $104 billion of
assets and a network of 966 branches and 1,866 ATMs across eight
Midwestern states. Founded in 1866, The Huntington National Bank
and its affiliates provide consumer, small business, commercial,
treasury management, wealth management, brokerage, trust, and
insurance services. Huntington also provides auto dealer, equipment
finance, national settlement and capital market services that
extend beyond its core states. Visit huntington.com for more
information.
View original content with
multimedia:http://www.prnewswire.com/news-releases/huntington-bancshares-incorporated-reports-2018-first-quarter-earnings-300634993.html
SOURCE Huntington Bancshares Incorporated