Maryland | 31-0724920 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer | x | Accelerated filer | ¨ |
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
ABL | Asset Based Lending | |
ABS | Asset-Backed Securities | |
ACL | Allowance for Credit Losses | |
AFCRE | Automobile Finance and Commercial Real Estate | |
AFS | Available-for-Sale | |
ALCO | Asset-Liability Management Committee | |
ALLL | Allowance for Loan and Lease Losses | |
ARM | Adjustable Rate Mortgage | |
ASC | Accounting Standards Codification | |
ASU | Accounting Standards Update | |
ATM | Automated Teller Machine | |
AULC | Allowance for Unfunded Loan Commitments | |
Basel III | Refers to the final rule issued by the FRB and OCC and published in the Federal Register on October 11, 2013 | |
C&I | Commercial and Industrial | |
Camco Financial | Camco Financial Corp. | |
CCAR | Comprehensive Capital Analysis and Review | |
CDI | Core Deposit Intangible | |
CDO | Collateralized Debt Obligations | |
CDs | Certificate of Deposit | |
CET1 | Common equity tier 1 on a transitional Basel III basis | |
CFPB | Bureau of Consumer Financial Protection | |
CFTC | Commodity Futures Trading Commission | |
CMO | Collateralized Mortgage Obligations | |
CRE | Commercial Real Estate | |
Dodd-Frank Act | Dodd-Frank Wall Street Reform and Consumer Protection Act | |
DTA/DTL | Deferred Tax Asset/Deferred Tax Liability | |
E&P | Exploration and Production | |
EFT | Electronic Fund Transfer | |
EPS | Earnings Per Share | |
EVE | Economic Value of Equity | |
Fannie Mae | (see FNMA) | |
FASB | Financial Accounting Standards Board | |
FDIC | Federal Deposit Insurance Corporation | |
FDICIA | Federal Deposit Insurance Corporation Improvement Act of 1991 | |
FHA | Federal Housing Administration | |
FHLB | Federal Home Loan Bank | |
FHLMC | Federal Home Loan Mortgage Corporation | |
FICO | Fair Isaac Corporation | |
FirstMerit | FirstMerit Corporation | |
FNMA | Federal National Mortgage Association | |
FRB | Federal Reserve Bank | |
Freddie Mac | (see FHLMC) | |
FTE | Fully-Taxable Equivalent | |
FTP | Funds Transfer Pricing | |
GAAP | Generally Accepted Accounting Principles in the United States of America | |
GNMA | Government National Mortgage Association, or Ginnie Mae | |
HAA | Huntington Asset Advisors, Inc. | |
HAMP | Home Affordable Modification Program | |
HARP | Home Affordable Refinance Program | |
HASI | Huntington Asset Services, Inc. | |
HIP | Huntington Investment and Tax Savings Plan | |
HQLA | High Quality Liquid Asset | |
HTM | Held-to-Maturity | |
IRS | Internal Revenue Service | |
LCR | Liquidity Coverage Ratio | |
LGD | Loss-Given-Default | |
LIBOR | London Interbank Offered Rate | |
LIHTC | Low Income Housing Tax Credit | |
LTD | Long-Term Debt | |
LTV | Loan to Value | |
Macquarie | Macquarie Equipment Finance, Inc. (U.S. operations) | |
MBS | Mortgage-Backed Securities | |
MD&A | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
MSA | Metropolitan Statistical Area | |
MSR | Mortgage Servicing Rights | |
NAICS | North American Industry Classification System | |
NALs | Nonaccrual Loans | |
NCO | Net Charge-off | |
NII | Net Interest Income | |
NIM | Net Interest Margin | |
NPA | Nonperforming Asset | |
N.R. | Not relevant. Denominator of calculation is a gain in the current period compared with a loss in the prior period, or vice-versa | |
OCC | Office of the Comptroller of the Currency | |
OCI | Other Comprehensive Income (Loss) | |
OCR | Optimal Customer Relationship | |
OLEM | Other Loans Especially Mentioned | |
OREO | Other Real Estate Owned | |
OTTI | Other-Than-Temporary Impairment | |
PD | Probability-Of-Default | |
Plan | Huntington Bancshares Retirement Plan | |
Problem Loans | Includes nonaccrual loans and leases (Table 14), troubled debt restructured loans (Table 16), accruing loans and leases past due 90 days or more (aging analysis section of Footnote 4), and Criticized commercial loans (credit quality indicators section of Footnote 4). | |
RBHPCG | Regional Banking and The Huntington Private Client Group | |
RCSA | Risk and Control Self-Assessments | |
REIT | Real Estate Investment Trust | |
ROC | Risk Oversight Committee | |
RWA | Risk-Weighted Assets | |
SAD | Special Assets Division | |
SBA | Small Business Administration | |
SEC | Securities and Exchange Commission | |
SERP | Supplemental Executive Retirement Plan | |
SRIP | Supplemental Retirement Income Plan | |
SSFA | Simplified Supervisory Formula Approach | |
TCE | Tangible Common Equity | |
TDR | Troubled Debt Restructured Loan | |
TRUPS | Trust Preferred Securities | |
U.S. Treasury | U.S. Department of the Treasury | |
UCS | Uniform Classification System | |
UDAP | Unfair or Deceptive Acts or Practices | |
Unified | Unified Financial Securities, Inc. | |
UPB | Unpaid Principal Balance | |
USDA | U.S. Department of Agriculture | |
VIE | Variable Interest Entity | |
XBRL | eXtensible Business Reporting Language | |
• | Executive Overview - Provides a summary of our current financial performance and business overview, including our thoughts on the impact of the economy, legislative and regulatory initiatives, and recent industry developments. This section also provides our outlook regarding our expectations for the next several quarters. |
• | Discussion of Results of Operations - Reviews financial performance from a consolidated Company perspective. It also includes a Significant Items section that summarizes key issues helpful for understanding performance trends. Key consolidated average balance sheet and income statement trends are also discussed in this section. |
• | Risk Management and Capital - Discusses credit, market, liquidity, operational, and compliance risks, including how these are managed, as well as performance trends. It also includes a discussion of liquidity policies, how we obtain funding, and related performance. In addition, there is a discussion of guarantees and/or commitments made for items such as standby letters of credit and commitments to sell loans, and a discussion that reviews the adequacy of capital, including regulatory capital requirements. |
• | Business Segment Discussion - Provides an overview of financial performance for each of our major business segments and provides additional discussion of trends underlying consolidated financial performance. |
• | Additional Disclosures - Provides comments on important matters including forward-looking statements, critical accounting policies and use of significant estimates, and recent accounting pronouncements and developments. |
Table 1 - Selected Quarterly Income Statement Data (1) | |||||||||||||||||||
(dollar amounts in thousands, except per share amounts) | |||||||||||||||||||
Three months ended | |||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | |||||||||||||||
Interest income | $ | 694,346 | $ | 565,658 | $ | 557,251 | $ | 544,153 | $ | 538,477 | |||||||||
Interest expense | 68,956 | 59,777 | 54,185 | 47,242 | 43,022 | ||||||||||||||
Net interest income | 625,390 | 505,881 | 503,066 | 496,911 | 495,455 | ||||||||||||||
Provision for credit losses | 63,805 | 24,509 | 27,582 | 36,468 | 22,476 | ||||||||||||||
Net interest income after provision for credit losses | 561,585 | 481,372 | 475,484 | 460,443 | 472,979 | ||||||||||||||
Service charges on deposit accounts | 86,847 | 75,613 | 70,262 | 72,854 | 75,157 | ||||||||||||||
Cards and payment processing income | 44,320 | 39,184 | 36,447 | 37,594 | 36,664 | ||||||||||||||
Mortgage banking income | 40,603 | 31,591 | 18,543 | 31,418 | 18,956 | ||||||||||||||
Trust services | 28,923 | 22,497 | 22,838 | 25,272 | 24,972 | ||||||||||||||
Insurance income | 15,865 | 15,947 | 16,225 | 15,528 | 16,204 | ||||||||||||||
Brokerage income | 14,719 | 14,599 | 15,502 | 14,462 | 15,059 | ||||||||||||||
Capital markets fees | 14,750 | 13,037 | 13,010 | 13,778 | 12,741 | ||||||||||||||
Bank owned life insurance income | 14,452 | 12,536 | 13,513 | 13,441 | 12,719 | ||||||||||||||
Gain on sale of loans | 7,506 | 9,265 | 5,395 | 10,122 | 5,873 | ||||||||||||||
Securities gains | 1,031 | 656 | — | 474 | 188 | ||||||||||||||
Other income | 33,399 | 36,187 | 30,132 | 37,272 | 34,586 | ||||||||||||||
Total noninterest income | 302,415 | 271,112 | 241,867 | 272,215 | 253,119 | ||||||||||||||
Personnel costs | 405,024 | 298,949 | 285,397 | 288,861 | 286,270 | ||||||||||||||
Outside data processing and other services | 91,133 | 63,037 | 61,878 | 63,775 | 58,535 | ||||||||||||||
Equipment | 40,792 | 31,805 | 32,576 | 31,711 | 31,303 | ||||||||||||||
Net occupancy | 41,460 | 30,704 | 31,476 | 32,939 | 29,061 | ||||||||||||||
Marketing | 14,438 | 14,773 | 12,268 | 12,035 | 12,179 | ||||||||||||||
Professional services | 47,075 | 21,488 | 13,538 | 13,010 | 11,961 | ||||||||||||||
Deposit and other insurance expense | 14,940 | 12,187 | 11,208 | 11,105 | 11,550 | ||||||||||||||
Amortization of intangibles | 9,046 | 3,600 | 3,712 | 3,788 | 3,913 | ||||||||||||||
Other expense | 48,339 | 47,118 | 39,027 | 41,542 | 81,736 | ||||||||||||||
Total noninterest expense | 712,247 | 523,661 | 491,080 | 498,766 | 526,508 | ||||||||||||||
Income before income taxes | 151,753 | 228,823 | 226,271 | 233,892 | 199,590 | ||||||||||||||
Provision for income taxes | 24,749 | 54,283 | 54,957 | 55,583 | 47,002 | ||||||||||||||
Net income | 127,004 | 174,540 | 171,314 | 178,309 | 152,588 | ||||||||||||||
Dividends on preferred shares | 18,537 | 19,874 | 7,998 | 7,972 | 7,968 | ||||||||||||||
Net income applicable to common shares | $ | 108,467 | $ | 154,666 | $ | 163,316 | $ | 170,337 | $ | 144,620 | |||||||||
Average common shares—basic | 938,578 | 798,167 | 795,755 | 796,095 | 800,883 | ||||||||||||||
Average common shares—diluted | 952,081 | 810,371 | 808,349 | 810,143 | 814,326 | ||||||||||||||
Net income per common share—basic | $ | 0.12 | $ | 0.19 | $ | 0.21 | $ | 0.21 | $ | 0.18 | |||||||||
Net income per common share—diluted | 0.11 | 0.19 | 0.20 | 0.21 | 0.18 | ||||||||||||||
Cash dividends declared per common share | 0.07 | 0.07 | 0.07 | 0.07 | 0.06 | ||||||||||||||
Return on average total assets | 0.58 | % | 0.96 | % | 0.96 | % | 1.00 | % | 0.87 | % | |||||||||
Return on average common shareholders’ equity | 5.4 | 9.6 | 10.4 | 10.8 | 9.3 | ||||||||||||||
Return on average tangible common shareholders’ equity (2) | 7.0 | 11.0 | 11.9 | 12.4 | 10.7 | ||||||||||||||
Net interest margin (3) | 3.18 | 3.06 | 3.11 | 3.09 | 3.16 | ||||||||||||||
Efficiency ratio (4) | 75.0 | 66.1 | 64.6 | 63.7 | 69.1 | ||||||||||||||
Effective tax rate | 16.3 | 23.7 | 24.3 | 23.8 | 23.5 | ||||||||||||||
Revenue—FTE | |||||||||||||||||||
Net interest income | $ | 625,390 | $ | 505,881 | $ | 503,066 | $ | 496,911 | $ | 495,455 | |||||||||
FTE adjustment | 10,598 | 10,091 | 9,159 | 8,425 | 8,168 | ||||||||||||||
Net interest income (3) | 635,988 | 515,972 | 512,225 | 505,336 | 503,623 | ||||||||||||||
Noninterest income | 302,415 | 271,112 | 241,867 | 272,215 | 253,119 | ||||||||||||||
Total revenue (3) | $ | 938,403 | $ | 787,084 | $ | 754,092 | $ | 777,551 | $ | 756,742 |
(1) | Comparisons for presented periods are impacted by a number of factors. Refer to the “Significant Items” for additional discussion regarding these key factors. |
(2) | Net income excluding expense for amortization of intangibles for the period divided by average tangible common shareholders’ equity. Average tangible common shareholders’ equity equals average total common shareholders’ equity less average intangible assets and goodwill. Expense for amortization of intangibles and average intangible assets are net of deferred tax liability, and calculated assuming a 35% tax rate. |
(3) | On a fully-taxable equivalent (FTE) basis assuming a 35% tax rate. |
(4) | Noninterest expense less amortization of intangibles and goodwill impairment divided by the sum of FTE net interest income and noninterest income excluding securities gains. |
Table 2 - Selected Year to Date Income Statement Data (1) | ||||||||||||||
(dollar amounts in thousands, except per share amounts) | ||||||||||||||
Nine months ended September 30, | Change | |||||||||||||
2016 | 2015 | Amount | Percent | |||||||||||
Interest income | $ | 1,817,255 | $ | 1,570,368 | $ | 246,887 | 16 | % | ||||||
Interest expense | 182,918 | 116,542 | 66,376 | 57 | ||||||||||
Net interest income | 1,634,337 | 1,453,826 | 180,511 | 12 | ||||||||||
Provision for credit losses | 115,896 | 63,486 | 52,410 | 83 | ||||||||||
Net interest income after provision for credit losses | 1,518,441 | 1,390,340 | 128,101 | 9 | ||||||||||
Service charges on deposit accounts | 232,722 | 207,495 | 25,227 | 12 | ||||||||||
Cards and payment processing income | 119,951 | 105,121 | 14,830 | 14 | ||||||||||
Mortgage banking income | 90,737 | 80,435 | 10,302 | 13 | ||||||||||
Trust services | 74,258 | 80,561 | (6,303 | ) | (8 | ) | ||||||||
Insurance income | 48,037 | 49,736 | (1,699 | ) | (3 | ) | ||||||||
Brokerage income | 44,819 | 45,743 | (924 | ) | (2 | ) | ||||||||
Capital markets fees | 40,797 | 39,838 | 959 | 2 | ||||||||||
Bank owned life insurance income | 40,500 | 38,959 | 1,541 | 4 | ||||||||||
Gain on sale of loans | 22,166 | 22,915 | (749 | ) | (3 | ) | ||||||||
Securities gains | 1,687 | 270 | 1,417 | 525 | ||||||||||
Other income | 99,720 | 95,442 | 4,278 | 4 | ||||||||||
Total noninterest income | 815,394 | 766,515 | 48,879 | 6 | ||||||||||
Personnel costs | 989,369 | 833,321 | 156,048 | 19 | ||||||||||
Outside data processing and other services | 216,047 | 167,578 | 48,469 | 29 | ||||||||||
Equipment | 105,173 | 93,246 | 11,927 | 13 | ||||||||||
Net occupancy | 103,640 | 88,942 | 14,698 | 17 | ||||||||||
Marketing | 41,479 | 40,178 | 1,301 | 3 | ||||||||||
Professional services | 82,101 | 37,281 | 44,820 | 120 | ||||||||||
Deposit and other insurance expense | 38,335 | 33,504 | 4,831 | 14 | ||||||||||
Amortization of intangibles | 16,357 | 24,079 | (7,722 | ) | (32 | ) | ||||||||
Other expense | 134,487 | 159,013 | (24,526 | ) | (15 | ) | ||||||||
Total noninterest expense | 1,726,988 | 1,477,142 | 249,846 | 17 | ||||||||||
Income before income taxes | 606,847 | 679,713 | (72,866 | ) | (11 | ) | ||||||||
Provision for income taxes | 133,989 | 165,065 | (31,076 | ) | (19 | ) | ||||||||
Net income | 472,858 | 514,648 | (41,790 | ) | (8 | ) | ||||||||
Dividends declared on preferred shares | 46,409 | 23,901 | 22,508 | 94 | ||||||||||
Net income applicable to common shares | $ | 426,449 | $ | 490,747 | $ | (64,298 | ) | (13 | )% | |||||
Average common shares—basic | 844,167 | 805,851 | 38,316 | 5 | % | |||||||||
Average common shares—diluted | 856,934 | 819,458 | 37,476 | 5 | ||||||||||
Net income per common share—basic | $ | 0.51 | $ | 0.61 | $ | (0.10 | ) | (16 | ) | |||||
Net income per common share—diluted | 0.50 | 0.60 | (0.10 | ) | (17 | ) | ||||||||
Cash dividends declared per common share | 0.21 | 0.18 | 0.03 | 17 | ||||||||||
Revenue—FTE | ||||||||||||||
Net interest income | $ | 1,634,337 | $ | 1,453,826 | $ | 180,511 | 12 | % | ||||||
FTE adjustment | 29,848 | 23,690 | 6,158 | 26 | ||||||||||
Net interest income (2) | 1,664,185 | 1,477,516 | 186,669 | 13 | ||||||||||
Noninterest income | 815,394 | 766,515 | 48,879 | 6 | ||||||||||
Total revenue (2) | $ | 2,479,579 | $ | 2,244,031 | $ | 235,548 | 10 | % |
(1) | Comparisons for presented periods are impacted by a number of factors. Refer to the “Significant Items” for additional discussion regarding these key factors. |
(2) | On a fully taxable equivalent (FTE) basis assuming a 35% tax rate. |
• | The 2016 third, second, and first quarters included $159 million, $21 million, and $6 million, respectively, of noninterest expense related to the acquisition of FirstMerit. |
• | During the 2015 third quarter, $5 million of noninterest expense was recorded related to the acquisition of Huntington Technology Finance, the transition of the Huntington Funds and the sale of Huntington Asset Advisors, which were completed during the 2015 fourth quarter. |
• | The 2015 second quarter and first quarter included $2 million and $3 million, respectively, of Huntington Technology Finance merger-related noninterest expense that was not originally reported as a Significant Item. As a result of 2015 third quarter activity, merger related expense was identified as a Significant Item for the 2015 full year and, as such, these amounts are now included as Significant Items. |
Table 3 - Significant Items Influencing Earnings Performance Comparison | |||||||||||||||||||||||
(dollar amounts in thousands, except per share amounts) | |||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||
September 30, 2016 | June 30, 2016 | September 30, 2015 | |||||||||||||||||||||
After-tax | EPS (2)(3) | After-tax | EPS (2)(3) | After-tax | EPS (2)(3) | ||||||||||||||||||
Net income | $ | 127,004 | $ | 174,540 | $ | 152,588 | |||||||||||||||||
Earnings per share, after-tax | $ | 0.11 | $ | 0.19 | $ | 0.18 | |||||||||||||||||
Significant Items—favorable (unfavorable) impact: | Earnings | EPS | Earnings | EPS | Earnings | EPS | |||||||||||||||||
Mergers and acquisitions: | |||||||||||||||||||||||
Mergers and acquisitions (1) | $ | (158,749 | ) | $ | (20,789 | ) | $ | (4,839 | ) | ||||||||||||||
Tax impact | 52,033 | 7,213 | 1,694 | ||||||||||||||||||||
Mergers and acquisitions, after tax (2)(3) | $ | (106,716 | ) | $ | (0.11 | ) | $ | (13,576 | ) | $ | (0.02 | ) | $ | (3,145 | ) | $ | — | ||||||
Litigation reserves: | |||||||||||||||||||||||
Litigation reserves (1) | $ | — | $ | — | $ | (38,186 | ) | ||||||||||||||||
Tax impact | — | — | 13,365 | ||||||||||||||||||||
Litigation reserves, after tax (2)(3) | $ | — | $ | — | $ | — | $ | — | $ | (24,821 | ) | $ | (0.03 | ) |
(1) | Pretax unless otherwise noted. |
(2) | Based on average outstanding diluted common shares. |
(3) | After-tax. |
Nine Months Ended | |||||||||||||||
September 30, 2016 | September 30, 2015 | ||||||||||||||
After-tax | EPS (2)(3) | After-tax | EPS (2)(3) | ||||||||||||
Net income | $ | 472,858 | $ | 514,648 | |||||||||||
Earnings per share, after-tax | $ | 0.50 | $ | 0.60 | |||||||||||
Significant Items—favorable (unfavorable) impact: | Earnings | EPS | Earnings | EPS | |||||||||||
Mergers and acquisitions: | |||||||||||||||
Mergers and acquisitions (1) | $ | (185,944 | ) | $ | (9,691 | ) | |||||||||
Tax impact | 61,252 | 3,392 | |||||||||||||
Mergers and acquisitions, net of tax (2)(3) | $ | (124,692 | ) | $ | (0.14 | ) | $ | (6,299 | ) | $ | (0.01 | ) | |||
Litigation reserves: | |||||||||||||||
Litigation reserves (1) | $ | — | $ | (38,186 | ) | ||||||||||
Tax impact | — | 13,365 | |||||||||||||
Litigation reserves, net of tax (2)(3) | $ | — | $ | — | $ | (24,821 | ) | $ | (0.03 | ) |
(1) | Pretax unless otherwise noted. |
(2) | Based on average outstanding diluted common shares. |
(3) | After-tax. |
Table 4 - Consolidated Average Balance Sheet and Net Interest Margin Analysis (3) | ||||||||||||||||||||||||||
(dollar amounts in millions) | ||||||||||||||||||||||||||
Average Balances | ||||||||||||||||||||||||||
Three Months Ended | Change | |||||||||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | 3Q16 vs. 3Q15 | |||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | Amount | Percent | ||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Interest-bearing deposits in banks | $ | 95 | $ | 99 | $ | 98 | $ | 89 | $ | 89 | $ | 6 | 7 | % | ||||||||||||
Loans held for sale | 695 | 571 | 433 | 502 | 464 | 231 | 50 | |||||||||||||||||||
Securities: | ||||||||||||||||||||||||||
Available-for-sale and other securities: | ||||||||||||||||||||||||||
Taxable | 9,785 | 6,904 | 6,633 | 8,099 | 8,310 | 1,475 | 18 | |||||||||||||||||||
Tax-exempt | 2,854 | 2,510 | 2,358 | 2,257 | 2,136 | 718 | 34 | |||||||||||||||||||
Total available-for-sale and other securities | 12,639 | 9,414 | 8,991 | 10,356 | 10,446 | 2,193 | 21 | |||||||||||||||||||
Trading account securities | 49 | 41 | 40 | 39 | 52 | (3 | ) | (6 | ) | |||||||||||||||||
Held-to-maturity securities—taxable | 5,487 | 5,806 | 6,054 | 4,148 | 3,226 | 2,261 | 70 | |||||||||||||||||||
Total securities | 18,175 | 15,261 | 15,085 | 14,543 | 13,724 | 4,451 | 32 | |||||||||||||||||||
Loans and leases: (2) | ||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||
Commercial and industrial | 24,957 | 21,344 | 20,649 | 20,186 | 19,802 | 5,155 | 26 | |||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||
Construction | 1,132 | 881 | 923 | 1,108 | 1,101 | 31 | 3 | |||||||||||||||||||
Commercial | 5,227 | 4,345 | 4,283 | 4,158 | 4,193 | 1,034 | 25 | |||||||||||||||||||
Commercial real estate | 6,359 | 5,226 | 5,206 | 5,266 | 5,294 | 1,065 | 20 | |||||||||||||||||||
Total commercial | 31,316 | 26,570 | 25,855 | 25,452 | 25,096 | 6,220 | 25 | |||||||||||||||||||
Consumer: | ||||||||||||||||||||||||||
Automobile | 11,402 | 10,146 | 9,730 | 9,286 | 8,879 | 2,523 | 28 | |||||||||||||||||||
Home equity | 9,260 | 8,416 | 8,441 | 8,463 | 8,526 | 734 | 9 | |||||||||||||||||||
Residential mortgage | 7,008 | 6,187 | 6,018 | 6,079 | 6,048 | 960 | 16 |
RV and marine finance | 915 | — | — | — | — | N.R. | N.R. | |||||||||||||||||||
Other consumer | 821 | 613 | 574 | 547 | 497 | 324 | 65 | |||||||||||||||||||
Total consumer | 29,406 | 25,362 | 24,763 | 24,375 | 23,950 | 5,456 | 23 | |||||||||||||||||||
Total loans and leases | 60,722 | 51,932 | 50,618 | 49,827 | 49,046 | 11,676 | 24 | |||||||||||||||||||
Allowance for loan and lease losses | (623 | ) | (616 | ) | (604 | ) | (595 | ) | (609 | ) | (14 | ) | 2 | |||||||||||||
Net loans and leases | 60,099 | 51,316 | 50,014 | 49,232 | 48,437 | 11,662 | 24 | |||||||||||||||||||
Total earning assets | 79,687 | 67,863 | 66,234 | 64,961 | 63,323 | 16,364 | 26 | |||||||||||||||||||
Cash and due from banks | 1,325 | 1,001 | 1,013 | 1,468 | 1,555 | (230 | ) | (15 | ) | |||||||||||||||||
Intangible assets | 1,547 | 726 | 730 | 734 | 739 | 808 | 109 | |||||||||||||||||||
All other assets | 4,962 | 4,149 | 4,223 | 4,233 | 4,273 | 689 | 16 | |||||||||||||||||||
Total assets | $ | 86,898 | $ | 73,123 | $ | 71,596 | $ | 70,801 | $ | 69,281 | $ | 17,617 | 25 | % | ||||||||||||
Liabilities and Shareholders’ Equity: | ||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||
Demand deposits—noninterest-bearing | $ | 20,033 | $ | 16,507 | $ | 16,334 | $ | 17,174 | $ | 17,017 | $ | 3,016 | 18 | % | ||||||||||||
Demand deposits—interest-bearing | 12,362 | 8,445 | 7,776 | 6,923 | 6,604 | 5,758 | 87 | |||||||||||||||||||
Total demand deposits | 32,395 | 24,952 | 24,110 | 24,097 | 23,621 | 8,774 | 37 | |||||||||||||||||||
Money market deposits | 18,453 | 19,534 | 19,682 | 19,843 | 19,512 | (1,059 | ) | (5 | ) | |||||||||||||||||
Savings and other domestic deposits | 8,889 | 5,402 | 5,306 | 5,215 | 5,224 | 3,665 | 70 | |||||||||||||||||||
Core certificates of deposit | 2,285 | 2,007 | 2,265 | 2,430 | 2,534 | (249 | ) | (10 | ) | |||||||||||||||||
Total core deposits | 62,022 | 51,895 | 51,363 | 51,585 | 50,891 | 11,131 | 22 | |||||||||||||||||||
Other domestic time deposits of $250,000 or more | 382 | 402 | 455 | 426 | 217 | 165 | 76 | |||||||||||||||||||
Brokered deposits and negotiable CDs | 3,904 | 2,909 | 2,897 | 2,929 | 2,779 | 1,125 | 40 | |||||||||||||||||||
Deposits in foreign offices | 194 | 208 | 264 | 398 | 492 | (298 | ) | (61 | ) | |||||||||||||||||
Total deposits | 66,502 | 55,414 | 54,979 | 55,338 | 54,379 | 12,123 | 22 | |||||||||||||||||||
Short-term borrowings | 1,306 | 1,032 | 1,145 | 524 | 844 | 462 | 55 | |||||||||||||||||||
Long-term debt | 8,488 | 7,899 | 7,202 | 6,788 | 6,043 | 2,445 | 40 | |||||||||||||||||||
Total interest-bearing liabilities | 56,263 | 47,838 | 46,992 | 45,476 | 44,249 | 12,014 | 27 | |||||||||||||||||||
All other liabilities | 1,608 | 1,416 | 1,515 | 1,515 | 1,442 | 166 | 12 | |||||||||||||||||||
Shareholders’ equity | 8,994 | 7,362 | 6,755 | 6,636 | 6,573 | 2,421 | 37 | |||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 86,898 | $ | 73,123 | $ | 71,596 | $ | 70,801 | $ | 69,281 | $ | 17,617 | 25 | % |
Table 4 - Consolidated Average Balance Sheet and Net Interest Margin Analysis (Continued) (3) | ||||||||||||||
Average Yield Rates (2) | ||||||||||||||
Three Months Ended | ||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||
Fully-taxable equivalent basis (1) | 2016 | 2016 | 2016 | 2015 | 2015 | |||||||||
Assets: | ||||||||||||||
Interest-bearing deposits in banks | 0.64 | % | 0.25 | % | 0.21 | % | 0.08 | % | 0.06 | % | ||||
Loans held for sale | 3.53 | 3.89 | 3.99 | 4.24 | 3.81 | |||||||||
Securities: | ||||||||||||||
Available-for-sale and other securities: | ||||||||||||||
Taxable | 2.35 | 2.37 | 2.39 | 2.50 | 2.51 | |||||||||
Tax-exempt | 3.01 | 3.38 | 3.40 | 3.15 | 3.12 | |||||||||
Total available-for-sale and other securities | 2.50 | 2.64 | 2.65 | 2.64 | 2.63 | |||||||||
Trading account securities | 0.58 | 0.98 | 0.50 | 1.09 | 0.97 | |||||||||
Held-to-maturity securities—taxable | 2.41 | 2.44 | 2.43 | 2.45 | 2.46 | |||||||||
Total securities | 2.47 | 2.56 | 2.56 | 2.58 | 2.59 | |||||||||
Loans and leases: (3) | ||||||||||||||
Commercial: | ||||||||||||||
Commercial and industrial | 3.68 | 3.49 | 3.52 | 3.47 | 3.58 | |||||||||
Commercial real estate: | ||||||||||||||
Construction | 3.76 | 3.70 | 3.51 | 3.45 | 3.52 | |||||||||
Commercial | 3.54 | 3.35 | 3.59 | 3.31 | 3.43 | |||||||||
Commercial real estate | 3.58 | 3.41 | 3.57 | 3.34 | 3.45 | |||||||||
Total commercial | 3.66 | 3.47 | 3.53 | 3.45 | 3.55 | |||||||||
Consumer: | ||||||||||||||
Automobile | 3.37 | 3.15 | 3.17 | 3.22 | 3.23 | |||||||||
Home equity | 4.21 | 4.17 | 4.20 | 4.01 | 4.01 | |||||||||
Residential mortgage | 3.61 | 3.65 | 3.69 | 3.67 | 3.71 | |||||||||
RV and marine finance | 5.70 | — | — | — | — | |||||||||
Other consumer | 10.89 | 10.28 | 10.02 | 9.17 | 8.88 | |||||||||
Total consumer | 3.97 | 3.79 | 3.81 | 3.74 | 3.75 | |||||||||
Total loans and leases | 3.81 | 3.63 | 3.67 | 3.59 | 3.65 | |||||||||
Total earning assets | 3.52 | 3.41 | 3.44 | 3.37 | 3.42 | |||||||||
Liabilities: | ||||||||||||||
Deposits: | ||||||||||||||
Demand deposits—noninterest-bearing | — | — | — | — | — | |||||||||
Demand deposits—interest-bearing | 0.11 | 0.09 | 0.09 | 0.08 | 0.07 | |||||||||
Total demand deposits | 0.04 | 0.03 | 0.03 | 0.02 | 0.02 | |||||||||
Money market deposits | 0.24 | 0.24 | 0.24 | 0.23 | 0.23 | |||||||||
Savings and other domestic deposits | 0.21 | 0.11 | 0.13 | 0.14 | 0.14 | |||||||||
Core certificates of deposit | 0.43 | 0.79 | 0.82 | 0.83 | 0.80 | |||||||||
Total core deposits | 0.20 | 0.22 | 0.23 | 0.23 | 0.23 | |||||||||
Other domestic time deposits of $250,000 or more | 0.40 | 0.40 | 0.41 | 0.40 | 0.43 | |||||||||
Brokered deposits and negotiable CDs | 0.44 | 0.40 | 0.38 | 0.19 | 0.17 | |||||||||
Deposits in foreign offices | 0.13 | 0.13 | 0.13 | 0.13 | 0.13 | |||||||||
Total deposits | 0.22 | 0.23 | 0.24 | 0.23 | 0.22 | |||||||||
Short-term borrowings | 0.29 | 0.36 | 0.32 | 0.09 | 0.09 | |||||||||
Long-term debt | 1.97 | 1.85 | 1.68 | 1.49 | 1.45 | |||||||||
Total interest-bearing liabilities | 0.49 | 0.50 | 0.46 | 0.41 | 0.39 | |||||||||
Net interest rate spread | 3.03 | 2.91 | 2.98 | 2.96 | 3.03 | |||||||||
Impact of noninterest-bearing funds on margin | 0.15 | 0.15 | 0.13 | 0.13 | 0.13 | |||||||||
Net interest margin | 3.18 | % | 3.06 | % | 3.11 | % | 3.09 | % | 3.16 | % |
(1) | FTE yields are calculated assuming a 35% tax rate. |
(2) | Loan and lease, and deposit average rates include impact of applicable derivatives, non-deferrable fees, and amortized fees. |
(3) | For purposes of this analysis, NALs are reflected in the average balances of loans. |
• | $5.2 billion, or 26%, increase in average C&I loans and leases, impacted by the mid-quarter FirstMerit acquisition. This increase also reflects organic growth in equipment finance leases, automobile dealer floorplan lending, and corporate banking. |
• | $4.4 billion, or 32%, increase in average securities, impacted by the mid-quarter FirstMerit acquisition, the reinvestment of cash flows and additional investment in Liquidity Coverage Ratio (LCR) Level 1 qualifying securities, and a $0.8 billion increase in direct purchase municipal instruments in our Commercial Banking segment, offset by sales of certain securities following the closing of the FirstMerit acquisition. |
• | $2.5 billion, or 28%, increase in average automobile loans, impacted by the mid-quarter FirstMerit acquisition. The 2016 third quarter represented the eleventh consecutive quarter of greater than $1.0 billion in automobile loan originations, while maintaining our underwriting consistency and discipline. |
• | $1.1 billion, or 20%, increase in average CRE loans, impacted by the mid-quarter FirstMerit acquisition. |
• | $1.0 billion, or 16%, increase in average residential mortgage loans, impacted by the mid-quarter FirstMerit acquisition as well as increased demand for residential mortgage loans across our footprint. |
• | $0.9 billion increase in RV and marine finance loans, reflecting the acquisition of the product offering in the FirstMerit acquisition. |
• | $0.7 billion, or 9%, increase in average home equity loans, impacted by the mid-quarter FirstMerit acquisition. |
• | $8.8 billion, or 37%, increase in average demand deposits, impacted by the mid-quarter FirstMerit acquisition. Average interest-bearing demand deposits increased $5.8 billion, or 87%, and average noninterest-bearing demand deposits increased $3.0 billion, or 18%. The increase in average total demand deposits was comprised of a $6.1 billion, or 39%, increase in average commercial demand deposits and a $2.7 billion, or 33%, increase in average consumer demand deposits. |
• | $3.7 billion, or 70%, increase in savings and other domestic deposits, impacted by the mid-quarter FirstMerit acquisition. |
• | $2.9 billion, or 42%, increase in average total debt, primarily reflecting the issuance of $3.3 billion of senior debt over the past five quarters. |
• | $1.1 billion, or 40%, increase in brokered deposits and negotiable CDs, impacted by the mid-quarter FirstMerit acquisition. |
• | $1.1 billion, or 5%, decrease in average money market deposits. During the 2016 third quarter, changes to commercial accounts resulted in the reclassification of $2.8 billion of deposits from money market into interest-bearing demand deposits. This decrease was partially offset by the impact of the mid-quarter FirstMerit acquisition. |