| 2011 Second Quarter Investor Handout May 11, 2011 1 |
| Table of Contents Current Topics 3Quarterly Financial Review 18 Significant items impacting comparisons 24Income Statement 25 Revenue & PTPP Growth 26 Net interest margin 29 Noninterest income 32 Noninterest expense 35Balance Sheet 37AFS and Other Securities 41Loan Portfolio Overview 47 Credit exposure composition 48 Loan & lease trends 50 Total commercial loans 52 Granularity 53 Risk grade distribution 54 Commercial & industrial 55 Commercial real estate 61 CRE core / noncore 66 Total consumer loans and leases 72 Automobile loans and leases 75 Home equity 79 Residential mortgages 82 Other consumer loans 87Credit Quality Review 89 Credit quality overview 90 Delinquencies 91 Net charge-offs 94 Nonaccrual & nonperforming assets 97 Accruing restructured loans 101 Allowance for credit losses 102Non-Franklin Reconciliations 107Deposits & Other Funding 117 Deposit trends 119Capital 123Franchise 128Business Segment Overview 134Safe Harbor Disclosures 146 2 |
| Current Topics 3 |
| OptimizeCurrentFranchiseProfitability / pricingCross-sell / share-of- walletLaunch new brandInvest in capabilities and begin hiring Our "Break Away" Strategic Plan LaytheFoundationCapital and liquidityOrganiza- tional changes Build management depthCredit and Risk management Invest in theCoreBuild out sales forces, channels, and productsContinued brand roll- outEnhance investment discipline Selective M&A - as opportunities arise 2009 Focus FutureBuild out sales forces, channels, and productsExpand winning "plays"Drive efficiency and continuous improve- ment Extend and ExpandMonetize investmentsDrive growthDrive efficiency and continuous improve- ment 2010 2011 2012 2013 4 |
| The Strategic Plan: Positioned for Profitability and Growth Retail and Business Banking Commercial Banking Auto Finance Wealth Advisors, Gov't Finance, and Home Lending Investing for the Long Term 2010 2011 2009 Credit and Risk Management Strategic Plan 24-Hour Grace (r)Added 150 Sm Bus. BankersGiant Eagle / In-Store Asterisk-Free CheckingTMHuntington Plus CheckingTM Treasury ManagementEquipment LeasingCapital Markets Expand to Pennsylvania and New England Expand Personal Trust OfficesHuntington Asset Services Foundation of Service Common Sales Process: OCR / Cross Sell Building a Powerful Brand 5 |
| " Fair Play" Leverages a Distinct Moment in Time Market share is up for grabsConsumer sentiment towards banks is negative Moebs Services forecasts large banks will lose 22% of their 45% market share by year end. Regulation is mandating fee income reductionsBanks are reacting by penalizing customers (1)Our "Fair Play" Banking Philosophy is designed to reward customers and take market share and share of wallet 6 1 2011 ABA Debit Interchange Survey in reaction to Fed's proposal to cap fees 81% will cut debit card rewards 81% will increase checking account maintenance fees 77% will impose / increase fees on other programs 66% will abolish free checking 46% will impose debit card transaction fees 41% will cut costs (closing branches, reduce services) 6 |
| "Fair Play": Builds Trust, Deepens Relationships, Drives Growth A foundation of service Accelerate new customer acquisition and increase existing customer satisfaction / retentionSell more and increase share of walletDrive growth through products that are straight forward and add differentiated customer valueAsterisk-Free Checking(tm)Huntington Plus Checking(tm) 7 Increase convenience Increase convenience 2/10 - Extended hours in Cleveland 9/10 - Giant Eagle in-store exclusive agreement Implement "Fair Play" banking philosophy Implement "Fair Play" banking philosophy 6/10 - Removed nuisance overdraft fees 9/10 - Launched 24-Hour Grace (r) 7 |
| "Fair Play" Progress Report: 1. Foundation of Service Huntington started with the highest level of customer advocacy and has continued to separate itself from peers. MSR Group Branch Survey. Advocacy = customers who will repeat and recommendPeers: CMA, FITB, FMER,JPM, KEY, NCC/PNC, RBS/Charter One, USB Advocacy Score Trends (1) 67.9 74.0 59.3 58.3 71.5 59.3 2010 APECS Customer Advocacy Award for Midwestern Region "Fair Play" - 24-Hour Grace (r) Launched 8 |
| (CHART) "Fair Play" Progress Report: 2. Accelerate New Customer Acquisition Consumer Checking Households 6.8% 9.1% (1) (1) Annualized A household starts with a checking accountConsumer accounts across all segments: Retail, WGH, and Auto. 3% in 2009 1,016 993 980 962 945 930 5.5% 7.5%(1) (000s) 9 |
| (CHART) "Fair Play" Progress Report: 3. Sell More and Increase Share of Wallet Product Penetration - 4+ Services / HH 25 potential products or services counted: checking, savings, online bill pay, mortgage, brokerage account, insurance,... (CHART) (CHART) Product Penetration - 1 Services / HH Product Penetration - 2-3 Services / HH 10 |
| (CHART) "Fair Play" Progress Report: Consumer Checking Household Revenue $249 $240 $240 $245 $229 $227 Back above pre "Fair Play" and Reg E levels ($MM) 11 |
| Making free checking better "Fair Play" Progress Report: 4. Launching Two New Consumer Checking Products Asterisk-Free CheckingTMNo hooks and adding benefitsMost Appealing Features:Free - No Monthly Maintenance FeeFree debit card usageFree ID Theft Resolution ServiceFree linked Savings AccountsNo ODP transfer fee from Savings or Money Market24-Hour Grace (r) Huntington Plus CheckingTMBest in class premium product Additional features to Asterisk-Free:Free with >$15k total core deposits, otherwise $15/monthEarns InterestRelationship based loan discountsFree anywhere ATM usage (up to 5 per month)Free Huntington style checksFree safe deposit box 12 |
| Why 80% Rated Asterisk-Free #1? - $0 Monthly Checking Fee - No Monthly Checking Fee Requirements (e.g. min balance, # of debit transactions, etc.) - 24-Hour Grace(r) (CHART) Asterisk-Free Checking(tm): A Differentiated Entry Product Asterisk-Free Checking(tm) significantly outperforms peer's products in consumer preferenceIn a recent blind study(1), nearly 8 out of 10 ranked it "most appealing" among basic checking accounts Large in footprint peers Huntington Primary research, consumers in the Midwest states that have a checking account 13 |
| (CHART) Why 53% Rated Huntington Plus #1? - Free Unlimited Checks - Interest Bearing - Free ID Theft Resolution Service - 24-Hour Grace(r) Huntington Plus Checking(tm): Best In Class Premium Product Huntington Plus Checking(tm) significantly outperforms peer's products in consumer preferenceIn a recent blind study(1), more than 5 out of 10 ranked it "most appealing" among premium checking accounts Huntington Primary research, consumers in the Midwest states that have a checking account Large in footprint peers 14 |
| "Fair Play" Next Steps: Continue to Drive Growth US Census Bureau FDIC 9.4 million households are within 5 miles of a Huntington branch1.0 million Huntington householdsOpportunities to gain new customers0.1 million (1) new household creation per year1.9 million (1) households experience a life event per year: move, marriage, divorce,..Largest 3 banks in footprint average 34% (1) market share76,000 New Households = 7.5% Growth (CHART) 1.0 MM 11% 15 |
| "Fair Play" sets Huntington apart Huntington is resonating with consumersWhy do you rate Huntington >98% in service compared to any other company: - "The 24 hour grace period is absolutely excellent. I brag about it all the time. The people who I interact with at the branch - they're just the kindest - most thoughtful people. When I go in there they say - ""Hi, how are you?" I mean they really engage you in a way that makes you feel welcomed." - "I love the hours and their twenty-four hour grace period. I think they have become heads and shoulders over all the banks. I like the fact that you can come in on Sunday as well as having extended hours." - "The free checking and 24 hour grace period if you overdraw. Everyone is really friendly - nice - and lots of times they know me by name. They are always there when we need something.""Fair Play" is driving revenue growthChecking household growing multiple times that of the marketCross sell is driving share of wallet gainsAsterisk-Free Checking(tm) and Huntington Plus Checking(tm) further sets us apartThere are other significant opportunities we plan to pursue 16 16 |
| Important Messages Executing the 2009 strategic planThis is a new HuntingtonStronger management and increased accountability Improved credit, risk and financial discipline Improving performanceOur strategic initiatives continue to gain tractionOur "Fair Play" banking philosophy is workingMaking Progress on Our Break Away Strategy 17 |
| Quarterly Financial Review 18 |
| $126.4 MM reported net income $0.14 EPSIncludes $17.0 MM or $0.01 of additions to litigation reserves$240.9 MM pre-tax, pre-provision income (1), down $19.1 MM, or 7.4%$38.0 MM, or 5.6%, decrease in fully-taxable equivalent revenue$10.7 MM, or 2.6%, decrease in fully-taxable equivalent net interest income3% annualized growth in loans3% annualized growth in core deposits9% annualized growth of consumer checking account households25% annualized decline in available-for-sale and other securities3.42% net interest margin, up from 3.37%$27.3 MM, or 10.3%, decrease in noninterest income$30.5 MM decline in mortgage banking income$3.9 MM, or 0.9%, decrease in noninterest expenseContinued significant improvement in credit quality trends18% decline in total NALs4% decrease in NCOs$49.4 MM provision for credit losses, down $37.6 MM 2011 First Quarter Highlights See Basis of Presentation for definition, as well as PTPP Income slide for reconciliation 19 |
| Strong reserves 185% ACL coverage of NALs, up from 166%3.07% period-end allowance for credit losses to total loans and leases, down from 3.39%Solid capital7.81% tangible common equity ratio, up 25 bps9.75% Tier 1 common risk-based capital ratio, up 46 bps12.07% and 14.85% Tier 1 and Total risk-based capital ratios, respectively... $2.6 B and $2.1 B above the "well-capitalized" thresholdsRepurchased TARP related warrant (23.6 MM shares) for $49.1 MM on 1/19/11 2011 First Quarter Highlights (continued) 20 |
| Quarterly Performance Highlights 1Q11 4Q10 3Q10 2Q10 1Q10 EPS $0.14 $0.05 $0.10 $0.03 $0.01 Pre-tax pre-provision income ($MM) (1) $240.9 $260.1 $265.2 $270.5 $251.8 Net interest margin 3.42% 3.37% 3.45% 3.46% 3.47% Efficiency ratio (2) 64.7% 61.4% 60.6% 59.4% 60.1% Return on average assets 0.96% 0.90% 0.76% 0.38% 0.31% Return on average tangible equity 12.69% 5.56% 10.03% 3.79% 2.69% Loan & lease growth (3) 3% 6% 1% 1% (1)% Core deposit growth (4) 3% 10% 1% 6% 5% Net charge-off ratio 1.73% 1.82% 1.98% 3.01% 2.58% Net charge-off ratio: non-Franklin (5) 1.77% 1.87% 1.98% 2.17% 2.48% Period End Ratios NPA ratio 1.80% 2.21% 2.94% 4.24% 5.17% ALLL/loans & leases 2.96% 3.28% 3.56% 3.79% 4.00% ACL/loans & leases 3.07% 3.39% 3.67% 3.90% 4.14% Tier 1 risk-based capital ratio 12.04% 11.55% 12.82% 12.51% 11.97% Total risk-based capital ratio 14.85% 14.46% 15.08% 14.79% 14.28% Tangible common equity/tangible assets 7.81% 7.56% 6.20% 6.12% 5.96% (1) See PTPP Income slide for reconciliation(2) Noninterest expense less amortization of intangibles divided by the sum of FTE net interest income and noninterest income excluding securities (losses) gains(3) Linked-quarter annualized average balance growth rate; impacted by loan sales(4) Linked-quarter annualized average balance growth rates (5) See non-Franklin credit metrics reconciliation 21 |
| 1Q11 Earnings Summary After-tax EPS (1)Net income $126.4 MM Net income applicable to common shares $118.7 MM $0.14Significant Items Favorable/(Unfavorable) Earnings (2) EPS Additions to litigation reserves (17.0) $(0.01)(1) EPS reflected on a fully diluted basis(2) Impact on pre-tax GAAP earnings 22 |
| Quarterly Earnings 23 |
| Significant Items Impacting Financial Performance Comparisons - Reconciliation 2011 - 2010 Quarterly 24 |
| Income Statement 25 |
| (CHART) Revenue and PTPP Growth (1) ($MM) (CHART) (1) Revenue is FTE; See Basis of Presentation for definition of PTPP, as well as PTPP Income reconciliation slide(2) Annualized PTPP Earnings Power (2) Revenue and PTPP Trends 26 |
| Pre-Tax, Pre-Provision Income (1) 27 |
| ROA Opportunity Sensitivity Analysis on $241MM - 1Q11 1.10%-1.35% Long-Term Goal 28 |
| (CHART) (CHART) Change 1Q11 vs. 4Q10:Deposits, Rate & Mix 12 bpsDay Count 6Swaps (6)Loans Yield & Mix (4) Other (3)Total Change 5 bps Net Interest Income & Margin (1) ($MM) (1) Fully-taxable equivalent basis Net Interest Margin (FTE) Net Interest Income (FTE) 29 |
| Net Interest Margin - Yields & Rates (CHART) (CHART) Earning Assets Total Deposits Fed Funds Net Interest Margin Loans Investment Securities Earning Asset Yields NIM - Yields & Rates 30 |
| (CHART) Managing Interest Rate Risk Estimated impact on annualized net interest income over the next 12-month period assuming a gradual change in rates over the next 12-month period above and beyond any rate change already implied in the current yield curve. Net Interest Income at Risk (1) Forward Curve +2%, +1%, & -1% Gradual Change in Rates 31 |
| Noninterest Income Trends Linked Quarter 32 |
| Noninterest Income Trends Prior-Year Quarter 33 |
| Mortgage Banking Income ($MM) 1Q11 4Q10 3Q10 2Q10 1Q10 Origination & secondary marketing $19.8 $48.2 $35.8 $19.8 $13.6 Servicing fees 12.5 11.5 12.1 12.2 12.4 Amortization of capitalized servicing (9.9) (14.0) (13.0) (10.1) (10.1) Other mortgage banking income 3.8 4.8 5.0 3.7 3.2 Sub-total 26.2 50.5 39.9 25.5 19.1 MSR recovery (impairment) 0.8 31.3 (12.0) (26.2) (5.8) Net trading gains (losses) (4.3) (28.7) 24.2 46.2 11.7 Total $22.7 $53.2 $52.0 $45.5 $25.0 Investor servicing portfolio (1) ($B) $16.5 $15.9 $15.7 $16.0 $16.0 Weighted average coupon 5.27% 5.35% 5.48% 5.55% 5.61% Originations ($B) $0.9 $1.8 $1.6 $1.2 $0.9 Mortgage servicing rights (1) $202.6 $196.2 $161.6 $179.1 $207.6 MSR % of investor servicing portfolio (1) 1.23% 1.23% 1.03% 1.12% 1.30% (1) End-of-period 34 |
| Noninterest Expense Trends Linked Quarter 35 |
| Noninterest Expense Trends Prior-Year Quarter 36 |
| Balance Sheet 37 |
| Balance Sheet - Assets 38 |
| Balance Sheet - Liabilities & Shareholders' Equity 39 |
| Earning Assets and Funding Composition (1) (CHART) (1) Average balances (2) Interest bearing liabilities + DDA noninterest bearing (CHART) Funding (2) Earning Asset Composition 40 |
| Available-For-Sale (AFS) and Other Securities 41 |
| (CHART) (CHART) AFS and Other Securities ($MM) % of Average Earning Assets Average Balance & Yield 42 |
| AFS and Other Securities Trends (1) Linked Quarter - Average Treasury/Agency debt with weighted average life of approximately 2.5 yearsAgency CMOs with weighted average life of approximately 3.9 yearsSecurity portfolio reduction due to timing of re-investment opportunitiesPurchased high rated covered bond and corporate debt securities to diversify portfolio 43 |
| AFS and Other Securities Overview (1) - 3/31/11 44 |
| Selected Securities - Assessment (1) Par Value Book Value Market Value OCIAlt-A mortgage backed $68 MM $65 MM $58 MM $(7) MM - Purchased 2006 % to Par Value 86% - 3 securities - senior tranche - 10/1 ARMs or 30 year fixed; no option ARMs - Cash flow analysis performed monthly to test for OTTI with third-party validationTrust preferred 296 229 107 (122) - Purchased 2003-2005 % to Par Value 36% - 16 pools with 410 separate issuers - Cash flow analysis performed quarterly to test for OTTI with third-party validationPrime CMOs 135 124 116 (9) - Purchased 4Q03-2Q07 % to Par Value 86% - 16 securities - Cash flow analysis performed monthly to test for OTTI with third-party validationTotal $498MM $418 MM $281 MM $(137) MM 3/31/11OCI - accumulated other comprehensive income; pre-taxOTTI - other-than-temporary impairment 45 |
| (CHART) AFS and Other Securities Mix Analysis 12/31/10$9.8 B (1)3.0 Years 12/31/08$4.0 B5.2 Years 12/31/09$8.2 B2.4 Years Excludes variable rate demand notes: $139 million at 12/31/10 and $124 million at 3/31/31 (1) 3/31/11$9.2 B (1)3.2 Years 46 |
| Loan Portfolio Overview 47 |
| ($B) 3/31/11 3/31/11 3/31/11 12/31/10 12/31/10 12/31/10 12/31/09 12/31/09 12/31/09 12/31/08 12/31/08 12/31/08 12/31/07 12/31/07 12/31/07 Amt Pct Amt Pct Amt Pct Amt Pct Amt Pct Commercial & industrial $13.3 35 % $13.1 34 % $12.9 35 % $13.5 33 % $13.1 33 % Commercial real estate 6.3 17 6.7 18 7.7 21 10.1 24 9.2 23 Total commercial 19.6 52 19.7 52 20.6 56 23.6 58 22.3 56 Automobile 5.8 15 5.6 15 3.4 11 4.7 12 4.4 11 Home equity 7.8 20 7.7 20 7.6 20 7.6 18 7.3 18 Residential real estate 4.5 12 4.5 12 4.5 12 4.8 12 5.4 14 Other consumer 0.5 1 0.6 1 0.8 2 0.7 2 0.7 2 Total consumer 18.6 48 18.4 48 16.2 44 17.5 42 17.7 44 Total loans & leases $38.2 100 % $38.1 100 % $36.8 100 % $41.3 100 % $40.1 100 % Credit Exposure Composition (1) Decline reflects a net reclass from CRE to C&I of $1.5 billion (1) 48 |
| (CHART) Total Loans and Leases Portfolio Overview ($B) $19.9 $6.1 $2.9 $1.5 $2.7 $1.5 $0.8 $2.8 EOP Outstandings - $38.2 Billion (1) (1) 3/31/11 By State 49 |
| Loan and Lease Trends Linked Quarter 50 |
| Loan and Lease Trends Prior-Year Quarter 51 |
| Total Commercial Loans 52 |
| (CHART) Total Commercial Loans - Granularity EOP Outstandings - $19.6 Billion (1) (CHART) 771 2% 35,52098% (1) 3/31/11 Loans by Dollar Size # of Loans by Size $5 MM - < $10 MM 420$10 MM - < $25 MM 297$25 MM - < $50 MM 46> $50 MM 8Total 771 53 |
| (CHART) Commercial Loans - Risk Grade Distribution PD Risk Grades (Moody's or Regulatory Definition) Percent of End of Period Balances ($B) $23.6 $20.6 10% 16% 4% 8% 15% 18% 16% 20% 17% 22% 13% 14% 10% 12% 2% 3% 13% 6% 19% 15% 18% 15% 13% 2% $19.7 15% 11% 11% 5% 19% 16% 18% 15% 14% 3% $19.6 54 |
| Commercial and Industrial Loans (C&I) 55 |
| C&I - Overview EOP Outstandings - $13.3 Billion (1)Diversified by sector and geographically within our Midwest footprintGranular7 loans >$50 million... 4% of portfolio57 loans $20-$50 million... 11% of the portfolioFocus on middle market companies with $15-$100 million in salesCredit Quality Trends (1) 3/31/11 (2) Annualized 1Q11 4Q10 3Q10 2Q10 1Q10 30+ days PD & accruing (1) 0.37% 0.33% 0.97% 0.74% 0.63% 90+ days PD & accruing (1) -- -- -- -- -- NCOs (2) 1.29% 1.85% 2.01% 1.90% 2.45% NALs (1) 1.96% 2.65% 3.21% 3.47% 4.18% ACL (1) 2.48% 2.86% 3.07% 3.67% 4.02% 56 |
| C&I - Credit Risk Management Strategies What We DoLend to defined relationship oriented clientsFollow disciplined credit policies and processesUnderstand our client's market / industry and their durable competitive advantageUnderwrite to historical cash flows with collateral as a secondary repayment sourceEmphasize risk / return structure and pricingStress testing for lower earnings / higher interest ratesMonthly review of criticized and classified loans 57 |
| (CHART) C&I Loan Portfolio Composition ($B) EOP Outstandings - $13.3 Billion (1) (1) 3/31/11 By Maturity $1.7 $5.2 $1.8 $1.4 $2.0 $1.0 $0.3 58 |
| (CHART) C&I - Trends ($MM) Change Analysis Period-End Balance ($MM) 1Q11 vs. 4Q10 1Q11 vs. 1Q10 Originations $748 $2,762 Net payments / payoffs / takedowns (506) (1,324) Net reclassifications 30 (254) Charge-offs (36) (131) Net change $236 $1,054 1.8% 8.6% 59 |
| C&I - Auto Industry (1) Outstandings (2) ($MM) 1Q11 4Q10 3Q10 2Q10 1Q10 Suppliers Domestic $ 135 $ 127 $ 135 $ 136 $ 147 Foreign 23 22 22 24 24 Total suppliers 157 149 157 160 171 Dealers Floorplan-domestic 620 599 470 411 363 Floorplan-foreign 463 457 302 292 296 Total floorplan 1083 1056 772 703 659 Other 391 373 363 360 354 Total dealers 1,474 1,429 1,135 1,063 1,012 Total auto industry $1,631 $1,578 $1,292 $1,223 $1,183 NALs Suppliers 3.90 % 5.31 % 5.82 % 6.24 % 12.75 % Dealers 0.06 0.07 0.09 0.09 0.18 Net charge-offs (3) Suppliers 0.25 % 2.54 % 1.19 % 5.13 % 1.56 % Dealers 0.0 0.0 0.0 0.37 0.0 (1) End of period (2) Companies with > 25% of their revenue from the auto industry (3) Annualized 60 |
| Commercial Real Estate Loans (CRE) 61 |
| CRE - Overview EOP Outstandings - $6.3 Billion (1)Granular portfolio with geographic and project diversification throughout our footprintConstruction lending targeted to major metro marketsCRE - Construction ($0.6 Billion)59% reduction in balances since 3/31/1067% of current balances to "Core" CRE relationshipsCentralized construction portfolio management within CRE segmentCredit Quality Trends (1) 3/31/11 (2) Annualized 1Q11 4Q10 3Q10 2Q10 1Q10 30+ days PD & accruing (1) 1.49 1.45% 1.26% 1.30% 1.36% 90+ days PD & accruing (1) -- -- -- -- -- NCOs - construction (2) 18.6% 6.19% 7.25% 14.25% 9.77% NCOs - nonconstruction (2) 2.66% 2.22% 3.01% 2.38% 3.25% NALs (1) 4.86% 5.47% 6.93% 9.23% 11.09% ACL (1) 8.25% 8.94% 9.58% 9.81% 10.12% 62 |
| (CHART) CRE - Portfolio Composition Permanent 28% Mini-perm Traditional39% Construction 9% Non Project Loans 7% (CHART) Lines / Letters of Credit2% (1) 3/31/11 Permanent Qualified9% Mini-perm Traditional - Typically 2- to 5-year term loans to allow properties to reach stabilized operating levels after construction, rehab, or repositioning.Permanent Qualified - Loans with 5 years or less term with properties that have reached a stabilized physical occupancy and exhibit an operational cash flow which would qualify for permanent financing during normalized market conditions.Permanent - Amortizing loans with terms of 10 to 25 years. EOP Outstandings - $6.3 Billion (1) By Loan Type By Property Locations 63 |
| (CHART) CRE - Trends ($MM) Change Analysis Period-End Balance ($MM) 1Q11 vs. 4Q10 1Q11 vs. 1Q10 Originations $ 93 $ 260 Takedowns 124 617 Net payments / payoffs / other (458) (1,873) Net reclassifications (36) 133 Charge-offs (76) (295) Net change $(353) $(1,158) (5.3)% (15.5)% 64 |
| CRE - Change Analysis 4Q10 Construction Commercial Total CRE September 30, 2010 $738 $6,174 $6,912 New originations 0 55 55 Net pay-offs / takedowns / other (78) (185) (263) Charge-offs (10) (43) (53) December 31, 2010 $650 $6,001 $6,651 Net change $(88) $(173) $(261) 1Q11 Construction Commercial Total CRE December 31, 2010 $650 $6,001 $6,651 New originations 0 93 93 Net pay-offs / takedowns / other (33) (337) (370) Charge-offs (30) (46) (76) March 31, 2011 $587 $5,711 $6,298 Net change $(63) $(290) $(353) 65 |
| CRE - Core Characteristics EOP Outstandings - $3.9 Billion (1)Long-term Meaningful relationships... many have been customers for 20+ years with opportunities for additional cross-sellWell-seasoned regional or institutional owners, developers, and organizationsPrimarily Midwest footprint projects generating adequate return on capitalProven CRE participants... 28+ years average CRE experience95+% of the loans have personal guaranteesThe portfolio continues to perform well with <0.80% nonaccrual loans (1) 3/31/11 66 |
| CRE - Noncore Characteristics EOP Outstandings - $2.4 Billion (1)Limited opportunity to gain overall banking relationshipIncludes numerous performing, pass-rated loans not meeting desired return on capitalIncludes most "criticized" loans from the overall CRE portfolio27% aggressive credit markUpdated values to incorporate current market conditionsLimited future funding requirements... ~$75 MM95+% have guarantors99% is secured debt92% is within our geographic footprint53% are "pass" grade or better (1) 3/31/11 67 |
| Special Assets Department (SAD) ($1.2 Billion)40% aggressive credit markActively working to exit... more aggressive terms - e.g., higher pricing, shorter amortization, sale, etc.The majority of "criticized" loans are managed within SADOther ($1.1 Billion)9% credit mark represents... 3.0X coverage of NALs30+ days past due of only $66 MM (4.83%)Includes $531 MM of small dollar Investment Real Estate loansNot a strategic focus going forwardVery granular risk assessmentActively managing within the context of an exit orientation... though may have opportunities to develop some into fuller, more profitable relationships CRE - Noncore Characteristics 68 |
| CRE - Core vs. Noncore ($MM) O/S ACL Criticized NAL's Prior Charge-offs(1) ACL Credit Mark (2) 12/31/10 Core Total $4,042 $160 $379 $16 $ 5 3.96% 4.08% Noncore SAD 1,400 329 1,033 307 379 23.53 39.81 Noncore Other 1,209 105 299 41 5 8.68 9.09 Noncore Total 2,609 434 1,332 348 384 16.65 27.34 CRE Total $6,651 $594 $1,711 $364 $389 8.93% 13.96% 3/31/11 Core Total $3,912 $140 $354 $31 $ 12 3.58% 3.88% Noncore SAD 1,249 285 819 239 353 22.78 39.79 Noncore Other 1,138 95 305 36 14 8.35 9.50 Noncore Total 2,387 380 1,124 275 367 15.90 27.12 CRE Total $6,298 $520 $1,478 $306 $379 8.25% 13.46% (1) Prior charge-offs represent activity on existing accounts as of date shown, not cumulative for the portfolio(2) Credit mark = (ACL + prior charge-offs) / (outstandings + prior charge-offs) 69 |
| CRE - Core vs. Noncore Change Analysis 4Q10 Core Noncore Total CRE September 30, 2010 $3,989 $2,923 $6,912 Originations 55 -- 55 Net payments / takedowns / other 3 (266) (263) Charge-offs (5) (48) (53) December 31, 2010 $4,042 $2,609 $6,651 Net change $53 $(314) $(261) 1Q11 Core Noncore Total CRE December 31, 2010 $4,042 $2,609 $6,651 Originations 92 1 93 Net payments / takedowns / other (213) (157) (370) Charge-offs (9) (67) (76) March 31, 2011 $3,912 $2,387 $6,298 Net change $(130) $(222) $(353) 70 |
| CRE - Maturity Schedule By Loan Type - 3/31/11 ($MM) Within 12 Mos. 1 - 2 Years 2 - 5 Years 5+ Years Total Construction $ 421 $ 108 $ 52 $ 6 $ 587 Lines / letters of credit 75 41 16 11 142 Non project loans 233 83 105 50 471 Mini-perm traditional 1,498 614 493 6 2,612 Permanent qualified 143 115 271 101 630 Permanent 458 260 652 485 1,856 Total CRE $2,829 $1,222 $1,588 $ 657 $6,298 Core $1,692 $784 $1,090 $345 $3,912 Noncore SAD 805 228 139 75 1,249 Noncore Other 331 210 358 237 1,138 71 |
| Total Consumer Loans and Leases 72 |
| Consumer Loans and Leases - 3/31/11 ($B) Amt. Pct. Automobile $5.8 31% Home equity 7.8 42 Residential RE 4.5 24 Other consumer 0.5 3 Total consumer $18.6 100% (CHART) By Loan Type 73 |
| Consumer Loan Credit Risk Management Objective Manage the Probability of DefaultFootprint Portfolio... markets we know and understandClient Selection... bias for high quality customers and relationship lending vs. third-party originationsDisciplined Underwriting... borrower ability to repay, collateral value, and stress testing when appropriate 74 |
| Automobile 75 |
| Automobile - Overview EOP Outstandings - $5.8 Billion (1)Consistency of strategy and commitment to dealersFocus on high service quality and full dealer relationshipsSince 2001 focused on super-prime customers >750 FICOsFully automated origination and booking systemCredit Quality Trends Credit quality continues to perform within expectationsLease portfolio is declining due to the strategic exit of the business in 4Q08; the declining portfolio balance creates a higher loss rate with more volatility 3/31/11 (2) Annualized 1Q11 4Q10 3Q10 2Q10 1Q10 30+ days PD & accruing (1) 0.89% 1.21% 1.17% 1.25% 1.36% 90+ days PD & accruing (1) 0.09% 0.14% 0.17% 0.15% 0.18% NCOs (2) 0.33% 0.51% 0.43% 0.47% 0.80% NALs (1) -- -- -- -- -- 76 |
| Auto Lending - Credit Risk Management Strategies Performance DriversBorrower quality - as measured at origination by:FICO score - Super Prime with consistent increasing trend FICO score distribution - consistent decline in <670 levels Custom Score - utilized to further segment FICO eligible applications - continues to enhance predictive modelingLoan to value - Significantly reduced LTV across all origination segmentsDecision type - Significantly reduced the level of underwriter overrule decisionsUsed car values - Stabilization in the Manheim Market IndexRisk Recognition 80% of losses recognized in first 24 months on booksShape of cumulative loss curves has remained steadyLoss trends are predictable Outlook Active portfolio management and policy development over the past 5 yearsOrigination quality has moderated losses even in the face of more difficult economic conditionsExpect to see continued decline in losses 77 |
| Auto Loans - Production and Credit Quality Overview Auto Loans - Production and Credit Quality Overview (1) Annualized 78 |
| Home Equity 79 |
| Home Equity - Overview EOP Outstandings - $7.8 Billion (1)Focused on geographies within our Midwest footprintFocused on high quality borrowers... >730 FICOsBegan exit of broker channel in 2005... <7% of outstandings todayConservative underwriting - manage the probability of defaultHigh risk borrower actionsUpdated collateral valuesProactive contact via servicing groupCapped linesCredit Quality TrendsCredit quality continues to perform within expectations 3/31/11; prior to 2Q10 includes Franklin loans (2) Annualized; 2Q10 including $15.9 MM Franklin-related 1Q11 4Q10 3Q10 2Q10 1Q10 30+ days PD & accruing (1) 1.21% 1.29% 1.39% 1.28% 1.41% 90+ days PD & accruing (1) 0.31% 0.30% 0.35% 0.36% 0.40% NCOs (2) 1.38% 1.51% 1.47% 2.36% 2.01% NALs (1) 0.32% 0.29% 0.28% 0.30% 0.73% 80 |
| Home Equity - Credit Risk Management Strategies Performance DriversBorrower quality - as measured at origination byCustom Score - utilized to further segment FICO eligible applications - continues to enhance predictive modeling FICO score - consistent increasing trend, with very limited under 670 productionUpdated borrower quality based on quarterly re-score is consistent Payments - 70+% of borrowers consistently make more than required paymentGeography - Footprint lender with limited investor property exposureBroker Channel - Eliminated in 2006 based on risk profileCustomer relationship orientation - not one-off transactions Risk Recognition Major focus on loss mitigation since 2008 - 70% of loan modifications continue to pay according to the modified termsWrite-down to discounted current value less selling costs at 120 days past dueNon-accrual balances represent the realizable value estimate in future periods OriginationsAverage FICO scores of 750+ with average LTVs of <85% for 2nd-liens and <75% for 1st-liens. OutlookExpect losses to be elevated compared to historical norms throughout 2011Consistent to improved borrower quality based on updated FICO scores 81 |
| Residential Mortgages 82 |
| Residential Mortgages - Overview EOP Outstandings - $4.5 Billion (1)Focused on geographies within our Midwest footprintTraditional product mix... very limited nontraditional exposure as we never originated sub-prime, payment option ARMs, or negative amortization loans$513 MM of Interest Only loans... targeted within executive relocation activities$297 MM of Alt-A mortgages... exited in 2007Credit Quality Trends (1)Credit quality continues to perform within expectations End of period; periods prior to 2Q10 include Franklin loansEnd of period; excludes GNMA loans - no additional risk as they are approved for repurchaseAnnualized; 4Q10 includes $16.4 MM related to loans sold and $4.6 MM Franklin-related recovery; 2Q10 including $64.2 MM Franklin- related 1Q11 4Q10 3Q10 2Q10 1Q10 30+ days PD & accruing (2) 4.1% 4.6% 5.24% 5.55% 5.81% 90+ days PD & accruing (2) 0.93% 1.20% 1.26% 1.08% 1.58% NCOs (3) 1.70% 2.42% 1.73% 7.19% 2.17% NALs (2) 0.99% 1.00% 1.84% 1.99% 1.76% 83 |
| Residential Mortgages - Credit Risk Management Strategies Performance DriversStandard products and borrower quality - as measured at origination by:Secondary market underwritingFICO score - consistent increasing trendFICO score distribution - consistent decline in low score levels Non-standard product structures$513 MM of Interest Only loans... targeted within executive relocation activities... continues to perform well$297 MM of Alt-A mortgages... exited in 2007... represents <7% of total residential portfolio with majority of cumulative losses likely recognized within 24 months.Decision type - Significantly reduced the level of underwriter overrule decisionsGeography - Primarily a footprint lender 84 |
| Residential Mortgages - Credit Risk Management Strategies Risk RecognitionWrite down to discounted current value less selling costs at 150 days past dueNonaccrual balances represent the realizable value estimate in future periodsContinued Focus on Borrower's Ability to Pay for New OriginationsAll loans are fully documentedUnderwritten to Secondary Market standardsLoss MitigationHome Savers program - 20% recidivismEarly identification of Loss Mitigation candidates - i.e., pre-delinquency via predictive modeling Decrease foreclosure activity in favor of Loan Modifications and short salesRewrite / modify customers with a focus on reducing principal quicklyCreate saleable structures where possibleIncome verification in all cases to maximize re-performance probabilityAccount ManagementProactive contact six months prior to ARM resets 85 |
| Residential Mortgages - LTV, FICO, Originations (1) Weighted average FICOs reflect currently updated customer credit scores(2) Only owned-portfolio originationsWeighted average at origination 1Q11 4Q10 3Q10 2Q10 1Q10 Ending balance ($B) $4.5 $4.5 $4.5 $4.4 $4.6 Average LTV 78% 77% 77% 77% 76% Average FICO (1) 723 721 719 717 716 Originations (2) ($MM) $304 $427 $485 $452 $242 Average LTV (3) 82% 81% 83% 83% 73% Average FICO (3) 759 759 758 760 764 86 |
| Other Consumer Loans 87 |
| Other Consumer loans EOP Outstandings - $0.5 Billion (1)Over collateralizedAutos, untitled vehicles, small boats, mobile homes and other miscellaneousPrimarily for existing customersPerformed within expectations over the past year, though varies by collateral type (1) 3/31/11 88 |
| Credit Quality Review 89 |
| Credit Quality Trends Overview Credit Quality Trends Overview Excludes loans guaranteed by the U.S. Government NALs divided by total loans and leases(3) NPAs divided by the sum of loans and leases, impaired loans held for sale, net other real estate and other NPAs(4) Criticized assets = commercial criticized loans + consumer loans >60 DPD + OREO; Total criticized assets divided by the sum of loans and leases, impaired loans held for sale, net other real estate and other NPAs 90 |
| Total Commercial Loan - Delinquencies (1) (CHART) (CHART) (1) Period end; delinquent but accruing as a % of related outstandings at EOP 90+ Days 30+ Days 91 |
| (CHART) Total Consumer Loan Delinquencies (1) (CHART) (1) Period end; delinquent but accruing as a % of related outstandings at EOP 90+ Days 30+ Days 92 |
| Consumer Loan Delinquencies (1) (CHART) (1) Period end; delinquent but accruing as a % of related outstandings at EOP(2) Excludes GNMA FAS 140 government guaranteed and Franklin in periods prior to 2Q10 (CHART) (2) (2) (2) (2) 90+ Days 30+ Days 93 |
| (CHART) Net Charge-offs ($MM) ($MM) Consumer Loans Commercial Loans (2) (CHART) (1) Includes $16.4 MM related to $39.8 million of residential mortgages sold and a $4.4 MM Franklin-related recovery (1) 94 |
| Net Charge-offs ($MM) 1Q11 4Q10 3Q10 2Q10 1Q10 Commercial and industrial $42.2 $59.1 $62.2 $58.1 $75.4 Commercial real estate 67.7 44.9 63.7 81.7 85.3 Total commercial 109.9 104.0 125.9 139.9 160.7 Automobile 4.7 7.0 5.6 5.4 8.5 Home equity 26.7 29.2 27.8 44.5 37.9 Residential mortgages (1) 18.9 26.8 19.0 82.8 24.3 Other 4.9 5.3 6.3 6.6 7.0 Total consumer 55.2 68.3 58.6 139.4 77.7 Total $165.1 $172.3 $184.5 $279.2 $238.5 Memo: Excluding Franklin-related NCOs (2) Memo: Excluding Franklin-related NCOs (2) Memo: Excluding Franklin-related NCOs (2) Commercial and industrial $42.2 $59.2 $66.8 $58.3 $75.8 Home equity 26.7 29.2 26.7 28.5 34.2 Residential mortgages (1) 22.0 31.2 15.6 18.6 16.2 Total 168.1 176.8 184.5 199.2 227.0 4Q10 Includes $16.4 million related to the sale of $39.8 million of residential mortgages See non-Franklin credit metrics reconciliation 95 |
| Net Charge-off Ratios (1) 1Q11 4Q10 3Q10 2Q10 1Q10 Commercial and industrial 1.29% 1.85% 2.01% 1.90% 2.45% Commercial real estate 4.15 2.64 3.60 4.44 4.44 Total commercial 2.24 2.13 2.59 2.85 3.22 Automobile 0.33 0.51 0.43 0.47 0.80 Home equity 1.38 1.51 1.47 2.36 2.01 Residential mortgages (2) 1.70 2.42 1.73 7.19 2.17 Other 3.47 3.66 3.83 3.81 3.87 Total consumer 1.20 1.50 1.32 3.19 1.83 Total 1.73% 1.82% 1.98% 3.01% 2.58% Memo: Excluding Franklin-related NCOs (3) Memo: Excluding Franklin-related NCOs (3) Memo: Excluding Franklin-related NCOs (3) Commercial and industrial 1.29% 1.86% 2.15% 1.90% 2.46% Home equity 1.38 1.51 1.41 1.53 1.83 Residential mortgages (2) 1.97 2.82 1.42 1.74 1.57 Total 1.77 1.87 1.98 2.17 2.48 Annualized4Q10 Includes $16.4 million, related to the sale of $39.8 million of residential mortgages See non-Franklin credit metrics reconciliation 96 |
| (CHART) Nonaccrual Loans & Nonperforming Assets ($MM) (CHART) ($MM) (28)% (18)% (8)% (32)% (52)% NAL Inflows NALs & NPAs - EOP (21)% 62% (18)% (19)% (15)% 97 |
| Nonaccrual Loans (NALs) and Nonperforming Assets (NPAs) 98 |
| ($MM) 1Q11 4Q10 3Q10 2Q10 1Q10 NPA beginning-of-period $844.8 $1,104.9 $1,582.7 $1,918.4 $2,058.1 Additions / increases 192.0 237.8 278.4 171.6 237.9 Franklin - net impact (3.5) (5.9) (251.4) (86.7) 15.0 Return to accruing status (70.9) (100.1) (111.2) (78.7) (80.8) Loan and lease losses (128.7) (126.1) (151.0) (173.2) (185.4) OREO gains (losses) 1.5 (5.1) (5.3) 2.5 (4.2) Payments (87.0) (191.3) (210.6) (140.9) (107.6) Sales (57.2) (69.6) (26.7) (30.2) (14.6) NPA end-of-period $690.9 $844.8 $1,104.9 $1,582.7 $1,918.4 Percent change (18)% (24)% (30)% (17)% (7)% Nonperforming Asset Flow Analysis 99 |
| ($MM) 1Q11 4Q10 3Q10 2Q10 1Q10 Criticized beginning-of-period $3,074 $3,638 $4,106 $4,608 $4,972 Additions / increases 170 290 408 280 306 Advances 62 52 75 79 91 Upgrades to "Pass" (239) (383) (391) (409) (273) Paydowns (295) (401) (409) (331) (324) Charge-offs (112) (121) (152) (121) (164) Criticized end-of-period $2,661 $3,074 $3,638 $4,106 $4,608 Percent change (13)% (15)% (11)% (11)% (7)% Total Commercial Loans - Criticized Loan Flow Analysis Period End 100 |
| Accruing Trouble Debt Restructured Loans 101 |
| (CHART) Provision, NCO, and ACL ($MM) (1) NCO % annualizedEnd of period (CHART) Allowance for Credit Losses vs.NALs (2) Loan Loss Provision vs.Net Charge-offs (1) 102 |
| (CHART) Relative Performance - LLR/Loans Ratios Source: SNL; company reports 103 |
| (CHART) Relative Performance - ALLL / NAL Coverage Source: SNL; company reports 104 |
| Rapid Improvement in Credit Quality - Nonaccrual Loans Ratio 3/31/11 Change from 3/31/10 (CHART) Source: SNL; company reports (CHART) 105 |
| Rapid Improvement in Credit Quality - Loan Loss Reserves / Nonaccrual Loans (CHART) (CHART) Source: SNL; company reports 3/31/11 Change from 3/31/10 106 |
| Non-Franklin Credit Metrics Reconciliations 107 |
| Non-Franklin Credit Metrics Reconciliation 108 |
| Non-Franklin Credit Metrics Reconciliation 109 |
| Non-Franklin Credit Metrics Reconciliation 110 |
| Quarterly Net Charge-off Reconciliation (1) (1) Annualized 111 |
| Quarterly Net Charge-off Reconciliation (1) (1) Annualized 112 |
| Quarterly Net Charge-off Reconciliation (1) (1) Annualized 113 |
| Nonaccrual Loans (NALs), Nonperforming Assets (NPA) & Accruing Restructured Loans (ARLs) 114 |
| Nonaccrual Loans (NALs), Nonperforming Assets (NPA) & Accruing Restructured Loans (ARLs) 115 |
| Nonaccrual Loans (NALs), Nonperforming Assets (NPA) & Accruing Restructured Loans (ARLs) 116 |
| Deposits and Other Funding 117 |
| (CHART) (CHART) Deposits ($B) Avg. Total Deposits - Rate / Mix CD Maturities & Avg. Rate on Maturities Rate 1.55% 1.37% 1.21% 1.06% 0.90% Estimates 118 |
| Deposit Trends Linked Quarter 119 |
| Deposit Trends Prior-Year Quarter 120 |
| Total Core Deposit Trends 121 |
| (CHART) Other Funding End of Period Balances ($B) $14.6 $11.5 13% 22% 16% 15% 8% 18% 39% 37% 17% 16% $8.8 14% 27% 2% 35% 22% $7.6 16% 22% 2% 27% 33% $9.4 16% 22% 2% 27% 33% 122 |
| Capital 123 |
| Capital (1) 1Q11 4Q10 3Q10 2Q10 1Q10 Total risk-weighted assets ($B) $43.0 $43.5 $42.7 $42.5 $42.5 Tier 1 leverage 9.80% 9.41% 10.54% 10.45% 10.05% Tier 1 risk-based capital 12.04 11.55 12.82 12.51 11.97 Total risk-based capital 14.85 14.46 15.08 14.79 14.28 Tang. common equity/ tang. assets 7.81 7.56 6.20 6.12 5.96 Tang. equity/tang. assets 8.51 8.24 9.43 9.43 9.26 Tier 1 common risk-based capital 9.75 9.29 7.39 7.06 6.53 Double leverage (2) 88 87 78 76 75 (1) Period end (2) (Parent company investments in subsidiaries + goodwill) / equity 124 |
| (CHART) Capital Ratios (1) (1) End-of-period 4Q10 - Raised $920 MM of common equity and repurchased $1.4 billion of TARP related preferred shares 125 |
| (CHART) Shareholders' Equity - Avg. (CHART) Capital Key Equity Ratios - EOP ($B) 4Q10 - Raised $920 MM of common equity and repurchased $1.4 billion of TARP related preferred shares 126 |
| (CHART) Capital Analysis - 3/31/11 (CHART) Source: SNL, Company reports. Tier 1 Common Risk-Based Tangible Common Equity TARP repaid bank 127 |
| Franchise 128 |
| Huntington Bancshares Overview Midwest financial services holding companyFounded - 1866Headquarters - Columbus, OhioTotal assets - $53 Billion Employees (1) - 11,319Franchise: Footprint 6 states: OH, MI, PA, IN, WV, KY 613 branches / 1,391 ATMs Retail and Business Banking 5 Areas - Mortgage banking + MD, NJ Commercial Banking 11 Regions Commercial Real Estate Auto Finance & Dealer Services + MA, RI, VT, NH, ME Private Financial Group + FL (1) Full-time equivalent (FTE) 129 |
| The Huntington Franchise Branches 119ATMs 240Detroit 4%Grand Rapids 10% Branches 346ATMs 744Akron 8%Canton 27%Cincinnati 4%Cleveland 5%Columbus 22%Dayton 6%Toledo 23% Youngstown 20% Branches 50ATMs 81Indianapolis 6% Branches 13ATMs 30 Branches 28ATMs 133Charleston 11% Excludes 9 PFG offices (3 in FL) and 2 ATMs in MD. Market share at 6/30/10 Branches 613ATMs 1,391 Branches 57ATMs 163Pittsburgh 3% 130 |
| A Strong Regional Presence Source: SNL Financial, company presentations and filings FDIC deposit data as of June 30, 2010 Deposits - Top 12 MSAs MSA Rank BBs Deposits ShareColumbus, OH 1 69 $9,124 22.2%Cleveland, OH 5 62 3,941 7.8Detroit, MI 8 50 3,607 4.2Toledo, OH 1 42 2,306 22.9Pittsburgh, PA 7 41 2,270 3.0Cincinnati, OH 5 40 1,999 3.5Youngstown, OH 1 36 1,877 20.4Indianapolis, IN 4 45 1,902 6.2Canton, OH 1 23 1,485 27.3Grand Rapids, MI 3 21 1,280 9.5Akron, OH 5 17 886 7.7Charleston, WV 3 8 604 10.6BBs = Banking Branches % Deposits#1 Share markets 42% #1- #3 Share markets 56% 131 |
| Leadership Team Leadership Team Business Segments Insurance, 132 |
| Senior Leadership Team (1) Includes related experience outside of banking 133 |
| Business Segment Overview 134 |
| Business Segment Loans & Deposits - 1Q11 Average Total Deposits - $41.7 B Average Total Loans - $38.1 B (CHART) (CHART) AFCRE $13.2B 35% Retail & Business Banking $11.8B 31% Treasury / Other $0.1B 0% Regional & Comm'l Banking $7.8B 21% WGH $5.2B 14% AFCRE $0.8B 2% Treasury / Other $0.7B 2% Retail & Business Banking $29.1B 70% Regional & Comm'l Banking $3.7B 9% WGH $7.4B 18% 135 |
| Total Loans and Leases - By Business Segment Total Loans and Leases - By Business Segment Avg. Outstandings - $38.1 Billion 1Q11 136 |
| Total Deposits - By Business Segment Total Deposits - By Business Segment Avg. Balances - $40.7 Billion 1Q11 137 |
| Business Segment Contribution ($MM) 1Q11 2010 2009 2008 Retail & Business Banking $54.9 $131.0 $(26.5) $257.8 Regional & Comm'l Banking 24.1 38.5 (158.7) 80.3 AFCRE 34.7 46.5 (588.2) (14.2) WGH 9.5 34.8 1.8 43.0 Treas. / Other 3.4 61.6 (251.3) (480.8) Unallocated goodwill impairment (1) -- (2,573.8) -- Total Net Income $126.4 $312.3 $3,094.2 $(113.8) (1) Represents the 2009 first quarter impairment charge, net of tax, associated with the former Regional Banking business segment. 138 |
| Business Segment Overview Commercial BankingExecutive - Jim Dunlap11 Region PresidentsMiddle Market Commercial BankingSpecialty BankingLarge CorporateHealth-careNot-for-ProfitEquipment / Technology LeasingInternational ServicesTreasury ManagementCapital MarketsDerivativesForeign ExchangeSecurities Trading Retail & Business BankingExecutive - Mary NavarroBranch Sales and Service5 Retail Banking AreasConsumer BankingBusiness BankingIn-Store BranchesDeposit Product Pricing and FeesMarketing and Customer ExperiencePayments and Channels 139 |
| 11 Commercial Banking Regions GreaterAkron/Canton Mahoning Valley Central Ohio NW Ohio S. Ohio/KY GreaterCleveland Central Indiana West Michigan East Michigan West Virginia Pittsburgh Jim Dunlap 140 |
| Regional Banking Presidents 141 |
| 5 Retail and Business Banking Areas Central Northwest West Northeast East Mary Navarro 142 |
| #1 in Ohio BranchesPlanned Rollout12% the cost of a traditional branch16 opened30 by end of 2011101 by end of 2015Cash flow breakeven in < 2 years Increase Convenience - Ohio Branch share source, SNL Financial, 6/30/2010 % of Branches % of Branches % of Branches MSA 6/10 Pro Forma (1) Pro Forma (1) Akron 7.8% 14.1% #2 Canton 18.0% 23.1% #1 Cleveland 8.8% 15.0% #1 Columbus 12.2% 15.6% #1 Youngstown 18.1% 22.9% #1 346 Branches + 101 In-Store = 447 Branches Over Time Giant Eagle / Huntington Partnership 143 143 |
| Retail & Business Banking Executives 144 |
| Business Segment Overview Wealth Advisors, Government Finance, and Home Lending Executive - Dan BenhaseWealth AdvisorsTrust / Portfolio ManagementPrivate BankingRetail BrokerageGovernment FinancePublic Funds - Treasury Services and LendingCorporate TrustNational SettlementHome LendingMortgage BankingConsumer LendingOtherRetirement Plan ServicesHuntington Asset ServicesHuntington Asset Advisors - Huntington Funds Automobile Finance and Commercial Real Estate Executive - Nick StanutzAuto Dealer Finance8 Region ManagersConsumer Indirect Auto Loans Dealer Commercial LoansCommercial Real EstateAsset Based LendingMezzanine Lending 145 |
| Safe Harbor Disclosures 146 |
| This document contains certain forward-looking statements, including certain plans, expectations, goals, projections, and statements, which are subject to numerous assumptions, risks, and uncertainties. Actual results could differ materially from those contained or implied by such statements for a variety of factors including: (1) worsening of credit quality performance due to a number of factors such as the underlying value of the collateral could prove less valuable than otherwise assumed and assumed cash flows may be worse than expected; (2) changes in economic conditions; (3) movements in interest rates; (4) competitive pressures on product pricing and services; (5) success, impact, and timing of our business strategies, including market acceptance of any new products or services introduced to implement our "Fair Play" banking philosophy; (6) changes in accounting policies and principles and the accuracy of our assumptions and estimates used to prepare our financial statements; (7) extended disruption of vital infrastructure; (8) the final outcome of significant litigation; and (9) the nature, extent, and timing of governmental actions and reforms, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as future regulations which will be adopted by the relevant regulatory agencies, including the Consumer Financial Protection Bureau (CFPB), to implement the Act's provisions. Additional factors that could cause results to differ materially from those described above can be found in Huntington's 2010 Annual Report on Form 10-K, and documents subsequently filed by Huntington with the Securities and Exchange Commission. All forward-looking statements included in this document are based on information available at the time of the release. Huntington assumes no obligation to update any forward-looking statement. Forward Looking Statements 147 |
| Use of non-GAAP financial measuresThis document may contain 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, the 2011 first quarter Quarterly Performance Discussion and Quarterly Financial Review supplements, the 2011 first quarter earnings press release, or the Form 8 K related to this document, all of which can be found on Huntington's website at www.huntington-ir.com.Pre-Tax, Pre-Provision IncomeOne non-GAAP performance metric that Management believes is useful in analyzing underlying performance trends is pre-tax, pre-provision income. This is the level of earnings adjusted to exclude the impact of:provision expense, which is excluded because its absolute level is elevated and volatile in times of economic stress;available-for-sale and other securities gains/losses, which are excluded because in times of economic stress securities market valuations may also become particularly volatile;amortization of intangibles expense, which is excluded because return on tangible common equity is a key metric used by Management to gauge performance trends; and certain items identified 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 the time to be infrequent or short-term in nature, which Management believes may distort the company's underlying performance trends.Annualized dataCertain 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. Basis of Presentation 148 |
| Significant ItemsFrom 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 writedowns, etc., reflect ordinary banking activities and are, therefore, typically excluded from consideration as a Significant Item.Management believes the disclosure of "Significant Items" in current and prior period results 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 2010 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. Basis of Presentation 149 |
| Fully-taxable equivalent interest income and net interest marginIncome 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.RoundingPlease note that columns of data in the presentation may not add due to rounding.Earnings per share equivalent dataSignificant 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 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 disclosed separately, with this then being the amount used to calculate the earnings per share equivalent. Basis of Presentation 150 |