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Huntington Bancshares Reports CONTACT:
"We are pleased with our solid second
quarter financial performance. Our earnings momentum gives
us comfort that full-year 2005 earnings per share will
be $1.78-$1.81," said Thomas E. Hoaglin, chairman,
president, and chief executive officer. "Operating
leverage was good as the rate of revenue growth exceeded
that of non-interest expense when both are adjusted for
operating lease accounting and significant non-run rate
items. Net interest income expanded, reflecting strong
growth in loans and leases and a higher net interest margin.
Also, as expected, a number of key fee income categories
rebounded from the first quarter, and expenses and credit
costs remained well controlled. Average consumer core
deposits increased, but commercial core deposits declined
as we took advantage of lower relative rates on national
market deposits to meet our funding needs. While this
quarter again reflected the benefit of a low effective
tax rate, this had no net meaningful impact on earnings,
as we incurred some non-run rate severance and consolidation
expenses, and wrote-off an equity investment." "Average loan and lease growth was strong across
all regions. Middle market commercial and industrial loans
increased at a 16% annualized growth rate, as we continue
to grow our customer base and the economy in our region
gradually improves," he continued. "Annualized
growth in residential mortgages of 16% led the increase
in consumer loans. Both home equity loans and auto loans
and leases grew at an annualized rate of 6%." "Growth in both consumer and small business demand
deposit relationships continued, thus confirming the progress
we are making on improving our sales culture," he
said. "Nevertheless, we were disappointed that average
core deposits declined slightly. This decline reflected
very aggressive price competition, especially in money
market rates. We allowed some commercial money market
account balances to run-off as the cost of retaining these
balances substantially exceeded national market rates
for brokered deposits. Average total consumer core deposits
increased an annualized 2% driven by growth in certificates
of deposits. Overall, deposit growth has become more difficult
and we expect it will remain so during the rest of this
year. "The expansion of our net interest margin was in
line with expectations which, when coupled with the growth
in earnings assets, resulted in a 3% linked-quarter increase
in fully taxable equivalent net interest income. Our expectation
is that the net interest margin will come under some pressure
for the rest of the year and will likely decline from
the current level because of aggressive price competition,
the negative effects of the anticipated continued flattening
of the yield curve, and the full impact of funding share
repurchases. However, we anticipate continued linked-quarter
growth in net interest income as any negative impact from
margin pressure is expected to be more than offset by
the positive impact of continued good loan growth. "The linked-quarter growth in some of our key fee income categories was also encouraging," he said. "As expected, service charges on deposit accounts increased 5% from the first quarter, and we saw growth in other service charges (up 11%), trust services (up 5%), and brokerage and insurance income (up 4%). This was the seventh consecutive linked-quarter increase in trust fees." "Credit quality performance remained good,"
he noted. "Annualized net charge-offs were only 27
basis points and in line with our expectations. Non- performing
assets increased, in part reflecting weakness in the domestic
automobile supplier sector, and represented 40 basis points
of period-end total loans and leases and other real estate
owned. The allowance for loan and lease losses ratio declined
from the end of last quarter, with the majority of the
decrease reflecting a methodology refinement that transferred
a portion of this allowance to the allowance for unfunded
loan commitments. The rest of the decline in the allowance
for loan and lease losses reserve ratio primarily reflected
improved economic indicators. Even with the decline in
our allowance for loan and lease losses, our period end
non-performing loan coverage ratio was a healthy 304%.
Though our provision for credit losses was less than net
charge-offs, this reflected overall credit quality improvement,
as we always begin our provision calculation by giving
full consideration for net charge-offs and loan growth." "Capital at quarter end remained strong with our tangible common equity to assets ratio at 7.36%," he concluded. "This was down from 7.42% at the end of the prior quarter reflecting the repurchase of 1.8 million common shares in the second quarter." Highlights compared with 2005 first quarter included:
Significant items impacting 2005 second quarter performance included (see table below):
Significant Items Impacting Earnings Performance Comparisons (1)
Three Months Ended Impact (2)
(In millions, except per share) Amount(3) EPS
June 30, 2005 - GAAP earnings $106.4(4) $0.45
- Federal tax loss carry back 6.6(4) 0.03
- MSR temporary impairment net of
hedge-related trading gains (4.0) (0.01)
- Severance and consolidation expenses (3.6) (0.01)
- Write-off of equity investment (2.1) (0.01)
March 31, 2005 - GAAP earnings $96.5(4) $0.41
- Federal tax loss carry back 6.4(4) 0.03
- Single C&I charge-off impact, net
of allocated reserves (6.4) (0.02)
- SEC and regulatory-related expenses (2.0) (0.01)
June 30, 2004 - GAAP earnings $110.1(4) $0.47
- Gain on sale of auto loans 4.9 0.01
- Mortgage servicing right (MSR) temporary
impairment recovery net of investment
securities losses 1.2 --
- Single C&I recovery 9.7 0.03
(1) Includes significant items with $0.01 EPS impact or greater
(2) Favorable (unfavorable) impact on GAAP earnings
(3) Pre-tax unless otherwise noted
(4) After-tax
Discussion of Performance Net Interest Income, Net Interest Margin, Loans
and Leases, and Investment Securities Fully taxable equivalent net interest income increased
$19.4 million, or 9%, from the year-ago quarter, reflecting
the favorable impact of a $1.7 billion, or 6%, increase
in average earning assets, and a 7 basis point, or an
effective 2%, increase in the net interest margin. The
fully taxable equivalent net interest margin increased
to 3.36% from 3.29% in the year-ago quarter. The increase
in the net interest margin from the year-ago quarter reflected
a shift from lower-yielding investments to higher-yielding
loans as a result of decreasing the level of excess liquidity,
redirecting part of the proceeds of securities sales to
fund loan growth, and higher yields on mezzanine-related
loans. In addition, both the proportion and the contribution
of net free funds on the balance sheet increased. Average total loans and leases increased $2.7 billion,
or 12%, from the 2004 second quarter, reflecting growth
in consumer loans, and to a lesser degree, growth in commercial
loans. Total average consumer loans increased $1.7 billion,
or 15%, from the year-ago quarter primarily due to a $1.1
billion, or 37%, increase in average residential mortgages
as mortgage loan rates remained near historically low
levels. Average home equity loans increased $0.5 billion,
or 13%, though annualized linked-quarter growth rates
for the first two quarters of 2005 have been at rates
roughly half that, at 6% and 7%, for the first and second
quarters, respectively. Average total automobile loans decreased $0.3 billion,
or 11%, from the year-ago quarter reflecting the sale
of automobile loans over this 12-month period as part
of a strategy of reducing automobile loan and lease exposure
as a percent of total credit exposure. Partially offsetting
the decline in automobile loans was growth in direct financing
leases due to the continued migration from operating lease
assets, which have not been originated since April 2002.
Average direct financing leases increased $0.3 billion,
or 15%, from the year-ago quarter. Total automobile loan
and lease production was 22% below the year-ago quarter,
reflecting continued aggressive competition in this sector. Average total commercial loans increased $1.0 billion,
or 10%, from the year-ago quarter. This increase reflected
a $0.4 billion, or 12%, increase in middle market commercial
real estate (CRE) loans, a $0.3 billion, or 8%, increase
in middle market commercial and industrial (C&I) loans,
and a $0.2 billion, or 11%, increase in average small
business C&I and CRE loans. Average total investment securities declined $1.3 billion,
or 24%, from the year-ago quarter. This decline reflected
a combination of factors including lowering the level
of excess liquidity, a decision to sell selected lower
yielding securities, and partially funding loan growth
with the proceeds from the sale of securities. Compared with the 2005 first quarter, fully taxable equivalent
net interest income increased $6.8 million, or 3%, reflecting
a 5 basis point, or an effective 2%, increase in the net
interest margin to 3.36% from 3.31% in the 2005 first
quarter, and a slight increase in average earning assets.
The increase in the net interest margin from the first
quarter reflected the reduction in excess liquidity positions,
a mix change in our earning assets from investment securities
to loans, and higher yields on mezzanine-related loans. Average total loans and leases increased $0.6 billion,
or 3%, from the 2005 first quarter with growth in average
commercial loans and consumer loans contributing equally
to the increase. Total average commercial loans increased $0.3 billion,
or 3%, from the first quarter primarily due to a $0.2
billion, or 4%, increase in average C&I loans. Average
CRE loans increased 2%. As expected, this was a bit slower
than in the prior quarter. The growth in C&I and CRE
loans was more weighted toward loans to new, rather than
existing customers. For commercial loans of $1 million
or more made during the quarter, 61% represented loans
to new borrowers with the dollar amount of growth led
by the Central Ohio, Southern Ohio/Kentucky, Indiana,
and East Michigan regions. On the same basis, those regions
contributing most to the dollar amount of loan growth
to existing customers were Northeast Ohio, Central Ohio,
West Michigan, and East Michigan. Growth in average small
business C&I and CRE loans was also 2% and was comparable
to the growth rate in the 2005 first quarter. Compared with the 2005 first quarter, average total consumer
loans increased $0.3 billion, or 2%, reflecting a $0.2
billion, or 4%, increase in residential mortgages and
a $0.1 billion, or 1%, increase in average home equity
loans. Growth rates in residential mortgages and home
equity loans remained strong, though they have slowed
in each of the last two linked quarters. Average automobile
loans and leases increased $0.1 billion, or 2%, due to
growth in automobile loans and, to a much lesser degree,
growth in direct financing leases. This growth was in
spite of a 2% decline in total automobile loan and lease
production from the 2005 first quarter. Average investment securities declined $0.3 billion,
or 8%, from the 2005 first quarter reflecting a combination
of factors including the release of excess liquidity,
the lack of attractive investment options due to the current
flat yield curve environment, and a strategy of partially
funding strong loan growth with proceeds from investment
securities sales. Deposits Average total core deposits in the 2005 second quarter
were $17.0 billion, up $0.7 billion, or 5%, from the year-ago
quarter, reflecting a $0.5 billion, or 7%, increase in
average interest bearing demand deposit accounts, primarily
money market accounts, a $0.3 billion, or 13%, increase
in retail certificates of deposit, and a $0.1 billion,
or 4%, increase in non-interest bearing deposits. These
increases were partially offset by a $0.2 billion, or
6%, decline in savings and other domestic time deposits. Compared with the 2005 first quarter, average total core
deposits declined slightly. Average interest bearing demand
deposit accounts declined $0.2 billion, or 3%, from the
prior quarter, which was mostly offset by a $0.2 billion,
or 9%, increase in retail certificates of deposits. The
decline in interest bearing demand deposits reflected
aggressive money market deposit rate pricing, especially
for commercial accounts, compared with lower relative
pricing for national market brokered deposits. Therefore,
commercial money market accounts declined in favor of
growth in national market brokered deposits. Reflecting
these factors, average total commercial core deposits
declined 3% from the first quarter, with average brokered
deposits and negotiable certificates of deposit increasing.
Consumer core deposits pricing also reflected the impact
of aggressive rate competition. Nevertheless, average
total consumer core deposits increased slightly from the
first quarter, reflecting growth in households, as well
as consumer certificates of deposits commensurate with
consumer preference for higher fixed-rate deposits. Non-Interest Income Non-interest income decreased $62.0 million, or 28%, from the year-ago quarter with $40.6 million of the decline reflecting the run-off of the operating lease portfolio. Of the remaining $21.3 million decline from the year-ago quarter, the primary drivers were:
Partially offset by:
Compared with the 2005 first quarter, non-interest income decreased $11.9 million, or 7%, with $8.6 million of the decline reflecting the run-off of the operating lease portfolio. Of the remaining $3.2 million decline from the 2005 first quarter, the primary drivers were:
Partially offset by:
Non-Interest Expense Non-interest expense decreased $34.0 million, or 12%, from the year-ago quarter with $33.7 million of the decline reflecting the run-off of the operating lease portfolio. Of the remaining $0.3 million decline from the year-ago quarter, the primary drivers were:
Partially offset by:
Compared with the 2005 first quarter, non-interest expense decreased $10.1 million with $9.1 million reflecting the run-off of the operating lease portfolio. Of the remaining $1.1 million decrease from the prior quarter, the primary drivers were:
Partially offset by:
Severance and Consolidation Expenses The 2005 second quarter results included $3.6 million
of severance and other expenses associated with the consolidation
of certain operations functions, including the closing
of an item-processing center in Michigan, which influences
comparisons with both the year-ago quarter, as well as
prior quarter. These expenses included $2.0 in severance-related
personnel costs, $0.8 million in net occupancy, $0.5 million
in equipment expense, and $0.3 million in other expense.
Income Taxes The company's effective tax rate was 22.3% in the 2005
second quarter, down from 28.3% in the year-ago quarter,
but comparable to 22.8% in the 2005 first quarter. As
noted last quarter, for 2005, the effective tax rate includes
the positive impact on net income due to a federal tax
loss carry back, tax exempt income, bank owned life insurance,
asset securitization activities, and general business
credits from investment in low income housing and historic
property partnerships. In 2006, the effective tax rate
is anticipated to increase to a more typical rate slightly
below 30%. Credit Quality Total net charge-offs for the 2005 second quarter were
$16.3 million, or an annualized 0.27% of average total
loans and leases. This was up from $12.5 million, or 0.23%,
in the year-ago quarter, which included a $9.7 million
one- time recovery on a previously charged-off commercial
loan, but represented a decrease from $28.3 million, or
an annualized 0.47%, of average total loans and leases
in the 2005 first quarter. The prior quarter included
a single $14.2 million middle market commercial charge-off
related to a commercial leasing company with significant
exposure to a service provider that declared bankruptcy.
The 0.47% net charge-off ratio for average total loans
and leases in the 2005 first quarter included 24 basis
points related to this single credit. Total commercial net charge-offs in the second quarter
were $5.6 million, or an annualized 0.21%, up from $0.1
million, or an annualized 0.01%, in the year-ago quarter
as that quarter included the $9.7 million one-time recovery.
Current period total commercial net charge-offs were down
from $16.2 million, or an annualized 0.62%, in the prior
quarter. As noted above, the 2005 first quarter included
a $14.2 million middle market commercial charge-off, which
represented 54 basis points of the 0.62% total commercial
net charge-off ratio. Total consumer net charge-offs in the current quarter
were $10.7 million, or an annualized 0.31% of related
loans. This compared with $12.4 million, or 0.41%, in
the year-ago quarter with the decline from the year-ago
quarter primarily reflecting lower automobile loan and
lease net charge-offs partially offset by higher home
equity net charge-offs. Total automobile loan and lease
net charge-offs in the 2005 second quarter were $3.8 million,
or an annualized 0.33% of related loans and leases, down
significantly from $7.8 million, or an annualized 0.69%,
in the year-ago quarter. Home equity net charge-offs in
the current quarter were $5.1 million, or an annualized
0.44% of related loans, up from $2.6 million, or 0.25%,
in the year-ago quarter. Compared with the 2005 first
quarter, total consumer net charge-offs decreased $1.4
million, primarily reflecting a $2.4 million decrease
automobile loan and lease net charge-offs, partially offset
by a $1.1 million increase in home equity loan net charge-offs. NPAs were $97.4 million at June 30, 2005, and represented
0.40% of related assets, up $22.7 million from $74.7 million,
or 0.34%, at the end of the year- ago quarter and up $24.1
million from $73.3 million, or 0.30%, at March 31, 2005.
The increase from the prior quarter was impacted, in part,
by credits associated with the automobile supplier sector.
Non-performing loans and leases (NPLs), which exclude
OREO, were $83.9 million at June 30, 2005, up $22.1 million
from the year-earlier period and $24.0 million from the
end of the first quarter. Expressed as a percent of total
loans and leases, NPLs were 0.34% at June 30, 2005, up
from 0.28% a year earlier and from 0.25% at March 31,
2005. The over 90-day delinquent, but still accruing, ratio
was 0.22% at June 30, 2005, down from 0.24% at the end
of the year-ago quarter, and little changed from 0.21%
at March 31, 2005. Allowances for Credit Losses (ACL) and Loan Loss
Provision Since the 2004 first quarter, 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 June 30, 2005, ALLL was $254.8 million, down from
$286.9 million a year earlier and $264.4 million at March
31, 2005. Expressed as a percent of period-end loans and
leases, the ALLL ratio at June 30, 2005, was 1.04%, down
from 1.32% a year ago reflecting the improvement in economic
indicators, 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
decline from 1.09% at March 31, 2005, reflected a 4 basis
point decrease in the transaction reserve component; 3
basis points related to the transfer of $6.3 million from
the economic reserve component of the ALLL to the AULC
due to a refinement in methodology; a 2 basis point decline
in the economic reserve component as economic indicators
strengthened; and a 4 basis point increase in the specific
reserve component consistent with the current quarter's
increase in NPLs. The table below shows the change in
the ALLL ratio and each reserve component from the 2004
second quarter and 2005 first quarter.
2Q05 change from
2Q05 1Q05 2Q04 1Q05 2Q04
Transaction reserve 0.77% 0.81% 0.86% (0.04)% (0.09)%
Economic reserve 0.22 0.27 0.36 (0.05) (0.14)
Specific reserve 0.05 0.01 0.10 0.04 (0.05)
Total ALLL 1.04% 1.09% 1.32% (0.05)% (0.28)%
At June 30, 2005, the AULC was $37.5 million, up from $31.2 million
at the end of the year-ago quarter and from $31.6 million
at March 31, 2005 reflecting the transfer of $6.3 million
from the economic reserve component of the ALLL. On a combined basis, the ACL as a percent of total loans and leases
was 1.19% at June 30, 2005, down from 1.46% a year earlier
and 1.22% at the end of last quarter. The ACL as a percent
of NPAs was 300% at June 30, 2005, down from 426% a year
earlier and 404% at March 31, 2005. The provision for credit losses in the 2005 second quarter was $12.9
million, a $7.9 million increase from the year-ago quarter,
but a $7.0 million decrease from the 2005 first quarter.
The increase in provision expense from the year-ago quarter
reflected the benefit in the year-ago quarter of a $9.7
million commercial loan recovery. The decline in provision
expense from the 2005 first quarter primarily reflected
the positive impact of lower net charge-offs and improved
economic indicators, partially offset by an increase in
specific reserves, as NPLs increased. Capital At June 30, 2005, the tangible equity to assets ratio was 7.36%, up
from 6.95% a year ago, but down from 7.42% at March 31,
2005. At June 30, 2005, the tangible equity to risk-weighted
assets ratio was 8.04%, up from 7.64% at the end of the
year-ago quarter, and from 7.84% at March 31, 2005. The
increases in these ratios primarily reflect the positive
impact of earnings growth, with the improvement in the
risk-weighted ratio also reflecting the reduced overall
risk profile of earning assets, most notably a less risky
loan portfolio mix. In June 2005, the current 7.5 million share repurchase authorization
was reactivated as previously announced, with 1.8 million
shares repurchased before quarter end. Of the current
share repurchase authorization, 5.7 million shares remain
authorized for purchase. The company expects to repurchase
remaining shares from time-to-time in the open market
or through privately negotiated transactions depending
on market conditions. When earnings guidance is given, it is the company's
practice to do so on a GAAP basis, unless otherwise noted.
Such guidance includes the expected results of all significant
forecasted activities. However, guidance typically excludes
unusual or one-time items, as well as selected items where
the timing and financial impact is uncertain, until such
time as the impact can be reasonably forecasted. "Given the underlying trends of the current quarter we are providing
full- year earnings per share guidance of $1.78-$1.81,"
Hoaglin said. "As we look out into the second half
of the year, we anticipate continuing to see good operating
leverage with the growth rate in underlying revenue exceeding
that of expenses. Specifically, net interest income is
expected to increase reflecting continued good loan growth,
which will more than offset the negative impact of any
pressure on the net interest margin from a continued highly
competitive deposit pricing environment, anticipated further
yield curve flattening, as well as the full impact of
funding costs associated with the shares we repurchased
in the second quarter. The aggressive competition for
deposits is expected to keep growth in core deposits low.
Growth in selected fee income categories from second quarter
levels is expected, including service charges on deposit
accounts. Non-interest expenses should be flat with the
second quarter level exclusive of operating lease expenses.
Credit quality is expected to remain strong with full-year
net charge-offs in the 32-36 basis point range, with the
non-performing assets and allowance for loan loss ratios
consistent with June 30, 2005, levels." The company noted that this guidance excludes any impact of future
share repurchases. In addition, in 2005 the company has
departed slightly from providing this guidance on a strictly
GAAP basis solely to exclude the estimated $0.06 per common
share benefit for the second half of the year related
to any future benefit from the federal tax loss carry
back discussed above. This is excluded as it impacts only
2005 performance, and because offsetting impacts may occur
later in the year from possible balance sheet restructurings
and/or expense initiatives currently under review. 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 866-253-6505. 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 approximately two hours
after the completion of the call through July 31, 2005
at 888-266-2081; conference ID 728190. 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, 2004, 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 and/or 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 and/or 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 800 ATMs. Selected financial service
activities are also conducted in other states including:
Dealer Sales offices in Florida, Georgia, Tennessee, Pennsylvania,
and Arizona; Private Financial and Capital Markets 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
Quarterly Key Statistics
(Unaudited)
(in thousands of
dollars, except
per share amounts)
2005 2004 Percent Change
Second First Second 1Q05 2Q04
Net interest
income $241,900 $235,198 $222,563 2.8% 8.7%
Provision for
credit
losses 12,895 19,874 5,027 (35.1) N.M.
Non-interest
income 156,170 168,050 218,128 (7.1) (28.4)
Non-interest
expense 248,136 258,277 282,153 (3.9) (12.1)
Income before
income taxes 137,039 125,097 153,511 9.5 (10.7)
Provision for
income taxes 30,614 28,578 43,384 7.1 (29.4)
Net Income $106,425 $96,519 $110,127 10.3% (3.4)%
Net income
per common
share -
diluted $0.45 $0.41 $0.47 9.8% (4.3)%
Cash
dividends
declared per
common share 0.215 0.200 0.175 7.5 22.9
Book value
per common
share at end
of period 11.40 11.15 10.40 2.2 9.6
Average
common
shares -
basic 232,217 231,824 229,429 0.2 1.2
Average
common
shares -
diluted 235,671 235,053 232,659 0.3 1.3
Return on
average
assets 1.31% 1.20% 1.41%
Return on
average
shareholders'
equity 16.3 15.5 19.1
Net interest
margin (1) 3.36 3.31 3.29
Efficiency
ratio (2) 61.8 63.7 62.3
Effective tax
rate 22.3 22.8 28.3
Average loans
and leases $24,457,747 $23,856,482 $21,767,492 2.5% 12.4%
Average loans
and leases -
linked
quarter
annualized
growth rate 10.1% 14.3% 4.9%
Average
earning
assets $29,248,535 $29,128,027 $27,556,828 0.4 6.1
Average core
deposits (3) 16,979,208 17,043,436 16,230,324 (0.4) 4.6
Average core
deposits -
linked
quarter
annualized
growth rate
(3) (1.5)% 3.2% 19.4%
Average total
assets $32,619,845 $32,581,040 $31,313,357 0.1 4.2
Average
shareholders'
equity 2,618,579 2,527,168 2,323,437 3.6 12.7
Total assets
at end of
period $32,988,974 $32,182,599 $31,421,206 2.5 5.0
Total
shareholders'
equity at
end of
period 2,630,775 2,589,773 2,386,369 1.6 10.2
Net charge-
offs (NCOs) $16,264 $28,272 $12,515 (42.5) 30.0
NCOs as a %
of average
loans and
leases 0.27% 0.47% 0.23%
Non-performing
loans and
leases
(NPLs) $83,860 $59,893 $61,778 40.0 35.7
Non-performing
assets
(NPAs) 97,418 73,303 74,696 32.9 30.4
NPAs as a %
of total
loans and
leases and
other
real estate
(OREO) 0.40% 0.30% 0.34%
Allowance for
loan and
lease losses
(ALLL) as a %
of total
loans and
leases at
the end of
period 1.04 1.09 1.32
ALLL plus
allowance
for unfunded
loan commitments
and letters
of credit as
a % of total
loans and
leases at the
end of period 1.19 1.22 1.46
ALLL as a %
of NPLs 304 441 464
ALLL as a %
of NPAs 262 361 384
Tier 1 risk-
based
capital
ratio (4) 9.20 9.04 8.98
Total risk-
based
capital
ratio (4) 12.41 12.33 12.56
Tier 1
leverage
ratio (4) 8.52 8.45 8.20
Average
equity /
assets 8.03 7.76 7.42
Tangible
equity /
assets (5) 7.36 7.42 6.95
N.M., not a meaningful value.
(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 and other domestic time deposits, and retail CDs.
(4) Estimated at June 30, 2005.
(5) At end of period. Tangible equity (total equity less intangible
assets) divided by tangible assets (total assets less intangible
assets).
HUNTINGTON BANCSHARES INCORPORATED
Year To Date Key Statistics
(Unaudited)
(in thousands of dollars, Six months Ended June 30, Change
except per share amounts) 2005 2004 Amount Percent
Net interest income $477,098 $445,248 $31,850 7.2%
Provision for credit
losses 32,769 30,623 2,146 7.0
Non-interest income 324,220 445,767 (121,547) (27.3)
Non-interest expense 506,413 567,807 (61,394) (10.8)
Income before income
taxes 262,136 292,585 (30,449) (10.4)
Provision for income
taxes 59,192 78,285 (19,093) (24.4)
Net Income $202,944 $214,300 $(11,356) (5.3)%
Net Income per common
share - diluted $0.86 $0.92 $(0.06) (6.5)%
Cash dividends declared
per common share 0.415 0.350 0.065 18.6
Average common shares -
basic 232,021 229,328 2,693 1.2
Average common shares -
diluted 235,362 232,787 2,575 1.1
Return on average
assets 1.26% 1.39%
Return on average
shareholders' equity 15.9 18.7
Net interest margin (1) 3.34 3.32
Efficiency ratio (2) 62.7 63.7
Effective tax rate 22.6 26.8
Average loans and
leases $24,158,775 $21,634,941 $2,523,834 11.7%
Average earning assets 29,188,614 27,267,850 1,920,765 7.0
Average total assets 32,600,549 31,074,364 1,526,185 4.9
Average core deposits
(3) 17,007,468 15,855,716 1,151,751 7.3
Average core deposits -
excluding Retail CDs 14,398,790 13,455,769 943,021 7.0
Average shareholders'
equity 2,573,126 2,300,920 272,206 11.8
Net charge-offs (NCOs) 44,536 41,142 3,394 8.2
NCOs as a % of average
loans and leases 0.37% 0.38%
(1) On a fully taxable equivalent (FTE) basis assuming a 35% tax rate.
(2) Non-interest expense less amortization of intangibles ($0.4 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 and other domestic time deposits, and retail CDs.
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Equal Housing Lender.
®, Huntington®, and A bank invested in people®
are federally registered service marks of Huntington Bancshares Incorporated. © Huntington Bancshares Incorporated
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