Exhibit 99.3
HUNTINGTON BANCSHARES INCORPORATED
Quarterly Financial Review
June 2011
Table of Contents
         
Quarterly Key Statistics
     1  
 
        
Year to Date Key Statistics
     2  
 
        
Key Statistics Footnotes
     3  
 
        
Consolidated Balance Sheets
     4  
 
        
Loans and Leases Composition
     5  
 
        
Deposits Composition
     6  
 
        
Consolidated Quarterly Average Balance Sheets
     7  
 
        
Consolidated Quarterly Net Interest Margin Analysis
     8 – 9  
 
        
Selected Quarterly Income Statement Data
     10 – 11  
 
        
Quarterly Mortgage Banking Income
     12  
 
        
Quarterly Credit Reserves Analysis
     13  
 
        
Quarterly Net Charge-Off Analysis
     14  
 
        
Quarterly Nonaccrual Loans and Leases (NALs) and Nonperforming Assets (NPAs)
     15  
 
        
Quarterly Accruing Past Due Loans and Leases and Accruing Troubled Debt Restructured Loans
     16  
 
        
Quarterly Common Stock Summary, Capital, and Other Data
     17  
 
        
Consolidated Year to Date Average Balance Sheets
     18  
 
        
Consolidated Year to Date Net Interest Margin Analysis
     19 – 20  
 
        
Selected Year to Date Income Statement Data
     21 – 22  
 
        
Year to Date Mortgage Banking Income
     23  
 
        
Year to Date Credit Reserves Analysis
     24  
 
        
Year to Date Net Charge-Off Analysis
     25  
 
        
Year to Date Nonaccrual Loans and Leases (NALs) and Nonperforming Assets (NPAs)
     26  
 
        
Year to Date Accruing Past Due Loans and Leases and Accruing Troubled Debt Restructured Loans
     27  
Notes:
The preparation of financial statement data in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect amounts reported. Actual results could differ from those estimates. Certain prior period amounts have been reclassified to conform to the current period’s presentation.

 

 

HUNTINGTON BANCSHARES INCORPORATED
Quarterly Key Statistics(1)
(Unaudited)
                                         
    2011     2010     Percent Changes vs.  
(dollar amounts in thousands, except per share amounts)   Second     First     Second     1Q11     2Q10  
 
Net interest income
   $ 403,337     $ 404,330     $ 399,656       — %     1 %
Provision for credit losses
     35,797       49,385       193,406       (28 )     (81 )
Noninterest income
     255,767       236,945       269,643       8       (5 )
Noninterest expense
     428,409       430,699       413,810       (1 )     4  
 
                              
Income before income taxes
     194,898       161,191       62,083       21       214  
Provision for income taxes
     48,980       34,745       13,319       41       268  
 
                              
Net income
   $ 145,918     $ 126,446     $ 48,764       15 %     199 %
 
                              
Dividends on preferred shares
     7,704       7,703       29,426       —       (74 )
 
                              
Net income applicable to common shares
   $ 138,214     $ 118,743     $ 19,338       16 %     615 %
 
                              
 
                                        
Net income per common share — diluted
   $ 0.16     $ 0.14     $ 0.03       14 %     433 %
Cash dividends declared per common share
     0.01       0.01       0.01       —       —  
Book value per common share at end of period
     5.66       5.42       5.22       4       8  
Tangible book value per common share at end of period
     5.00       4.74       4.37       5       14  
 
                                        
Average common shares — basic
     863,358       863,359       716,580       —       20  
Average common shares — diluted(2)
     867,469       867,237       719,387       —       21  
 
                                        
Return on average assets
     1.11 %     0.96 %     0.38 %                
Return on average common shareholders’ equity
     11.6       10.3       2.1                  
Return on average common tangible shareholders’ equity(3)
     13.3       12.7       3.8                  
Net interest margin (4)
     3.40       3.42       3.46                  
Efficiency ratio(5)
     62.7       64.7       59.4                  
Effective tax rate
     25.1       21.6       21.5                  
 
                                        
Average loans and leases
   $ 38,535,019     $ 38,097,210     $ 37,088,710       1       4  
Average loans and leases — linked quarter annualized growth rate
     4.6 %     3.1 %     1.2 %                
Average earning assets
   $ 48,017,199     $ 48,344,961     $ 46,606,002       (1 )     3  
Average total assets
     52,769,511       53,368,554       51,703,334       (1 )     2  
Average core deposits (6)
     39,106,550       39,274,265       37,798,482       —       3  
Average core deposits — linked quarter annualized growth rate
     (1.7) %     3.3 %     5.7 %                
Average shareholders’ equity
   $ 5,144,771     $ 5,022,146     $ 5,397,704       2       (5 )
 
                                        
Total assets at end of period
     53,050,039       52,948,509       51,770,838       —       2  
Total shareholders’ equity at end of period
     5,252,643       5,038,599       5,438,436       4       (3 )
 
                                        
Net charge-offs (NCOs)
     97,534       165,083       279,228       (41 )     (65 )
NCOs as a % of average loans and leases
     1.01 %     1.73 %     3.01 %                
Nonaccrual loans and leases (NALs)
   $ 614,225     $ 636,257     $ 1,201,349       (3 )     (49 )
NAL ratio
     1.57 %     1.66 %     3.25 %                
Nonperforming assets (NPAs)
   $ 652,937     $ 690,886     $ 1,582,702       (5 )     (59 )
NPA ratio
     1.67 %     1.80 %     4.24 %                
Allowance for loan and lease losses (ALLL) as a % of total loans and leases at the end of period
     2.74       2.96       3.79                  
ALLL plus allowance for unfunded loan commitments and letters of credit (ACL) as a % of total loans and leases at the end of period
     2.84       3.07       3.90                  
ACL as a % of NALs
     181       185       120                  
ACL as a % of NPAs
     170       170       91                  
Tier 1 leverage ratio (7)
     10.25       9.80       10.45                  
Tier 1 common risk-based capital ratio(7)
     9.92       9.75       7.06                  
Tier 1 risk-based capital ratio (7)
     12.14       12.04       12.51                  
Total risk-based capital ratio (7)
     14.89       14.85       14.79                  
Tangible common equity / risk-weighted assets ratio(7)
     9.79       9.51       7.37                  
Tangible equity / tangible assets ratio(8)
     8.91       8.51       9.43                  
Tangible common equity / tangible assets ratio(9)
     8.22       7.81       6.12                  
See Notes to the Year to Date and Quarterly Key Statistics.

 

1

 

HUNTINGTON BANCSHARES INCORPORATED
Year to Date Key Statistics(1)
(Unaudited)
                                 
    Six Months Ended June 30,     Change  
(dollar amounts in thousands, except per share amounts)   2011     2010     Amount     Percent  
 
Net interest income
   $ 807,667     $ 793,549     $ 14,118       2 %
Provision for credit losses
     85,182       428,414       (343,232 )     (80 )
Noninterest income
     492,712       510,495       (17,783 )     (3 )
Noninterest expense
     859,108       811,903       47,205       6  
 
                        
Income before income taxes
     356,089       63,727       292,362       459  
Provision (benefit) for income taxes
     83,725       (24,774 )     108,499       N.R.  
 
                        
Net Income
   $ 272,364     $ 88,501     $ 183,863       208 %
 
                        
Dividends on preferred shares
     15,407       58,783       (43,376 )     (74 )
 
                        
Net income applicable to common shares
   $ 256,957     $ 29,718     $ 227,239       765 %
 
                        
 
                                
Net income per common share — diluted
   $ 0.30     $ 0.04     $ 0.26       650 %
Cash dividends declared per common share
     0.02       0.02       —       —  
 
                                
Average common shares — basic
     863,358       716,450       146,908       21  
Average common shares — diluted(2)
     867,353       718,990       148,363       21  
 
                                
Return on average assets
     1.03 %     0.35 %                
Return on average common shareholders’ equity
     11.0       1.6                  
Return on average tangible common shareholders’ equity(3)
     13.4       3.2                  
Net interest margin(4)
     3.41       3.47                  
Efficiency ratio(5)
     63.7       59.7                  
Effective tax rate (benefit)
     23.5       (38.9 )                
 
                                
Average loans and leases
   $ 38,317,324     $ 37,034,653     $ 1,282,670       3  
Average earning assets
     48,180,174       46,424,254       1,755,922       4  
Average total assets
     53,067,377       51,702,686       1,364,691       3  
Average core deposits(6)
     39,189,945       37,536,558       1,653,386       4  
Average shareholders’ equity
     5,083,797       5,380,805       (297,008 )     (6 )
 
                                
Net charge-offs (NCOs)
     262,617       517,709       (255,092 )     (49 )
NCOs as a % of average loans and leases
     1.37 %     2.80 %                
N.R. — Not relevant, as denominator of calculation is a loss in prior period compared with income in current period.
See Notes to the Year to Date and Quarterly Key Statistics.

 

2

 

Notes to the Year to Date and Quarterly Key Statistics
(1)   Comparisons for all presented periods are impacted by a number of factors. Refer to Significant Items.
 
(2)   For all periods presented, the impact of the convertible preferred stock issued in 2008 and the warrants issued to the U.S. Department of the Treasury in 2008 related to Huntington’s participation in the voluntary Capital Purchase Program was excluded from the diluted share calculation because the result was more than basic earnings per common share (anti-dilutive) for the periods. The convertible preferred stock and warrants were repurchased in December 2010 and January 2011, respectively.
 
(3)   Net income excluding expense for amortization of intangibles for the period divided by average tangible shareholders’ equity. Average tangible shareholders’ equity equals average total 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.
 
(4)   On a fully-taxable equivalent (FTE) basis assuming a 35% tax rate.
 
(5)   Noninterest expense less amortization of intangibles and goodwill impairment divided by the sum of FTE net interest income and noninterest income excluding securities gains (losses).
 
(6)   Includes noninterest-bearing and interest-bearing demand deposits, money market deposits, savings and other domestic deposits, and core certificates of deposit.
 
(7)   June 30, 2011, figures are estimated. Based on an interim decision by the banking agencies on December 14, 2006, Huntington has excluded the impact of adopting ASC Topic 715, “Compensation — Retirement Benefits”, from the regulatory capital calculations.
 
(8)   Tangible equity (total equity less goodwill and other intangible assets) divided by tangible assets (total assets less goodwill and other intangible assets). Other intangible assets are net of deferred tax liability, and calculated assuming a 35% tax rate.
 
(9)   Tangible common equity (total common equity less goodwill and other intangible assets) divided by tangible assets (total assets less goodwill and other intangible assets). Other intangible assets are net of deferred tax liability, and calculated assuming a 35% tax rate.

 

3

 

Huntington Bancshares Incorporated
Consolidated Balance Sheets
                                         
                            Change  
    2011     2010     June ’11 vs ’10  
(dollar amounts in thousands, except number of shares)   June 30,     December 31,     June 30,     Amount     Percent  
    (Unaudited)             (Unaudited)                  
Assets
                                        
Cash and due from banks
   $ 983,882     $ 847,888     $ 1,125,776     $ (141,894 )     (13) %
Interest-bearing deposits in banks
     116,698       135,038       289,468       (172,770 )     (60 )
Trading account securities
     98,771       185,404       106,858       (8,087 )     (8 )
Loans held for sale
     224,860       793,285       777,843       (552,983 )     (71 )
Available-for-sale and other securities
     8,099,716       9,895,244       8,803,718       (704,002 )     (8 )
Held-to-maturity securities
     670,478       —       —       670,478       —  
Loans and leases(1)
     39,126,452       38,106,507       36,969,695       2,156,757       6  
Allowance for loan and lease losses
     (1,071,126 )     (1,249,008 )     (1,402,160 )     331,034       (24 )
 
                              
Net loans and leases
     38,055,326       36,857,499       35,567,535       2,487,791       7  
 
                              
Bank owned life insurance
     1,480,203       1,458,224       1,436,433       43,770       3  
Premises and equipment
     528,590       491,602       492,859       35,731       7  
Goodwill
     444,268       444,268       444,268       —       —  
Other intangible assets
     201,864       228,620       258,811       (56,947 )     (22 )
Accrued income and other assets
     2,145,383       2,482,570       2,467,269       (321,886 )     (13 )
 
                              
Total assets
   $ 53,050,039     $ 53,819,642     $ 51,770,838     $ 1,279,201       2 %
 
                              
 
                                        
Liabilities and shareholders’ equity
                                        
Liabilities
                                        
Deposits(2)
   $ 41,402,355     $ 41,853,898     $ 39,848,507     $ 1,553,848       4 %
Short-term borrowings
     2,022,946       2,040,732       1,093,218       929,728       85  
Federal Home Loan Bank advances
     220,224       172,519       599,798       (379,574 )     (63 )
Other long-term debt
     1,635,247       2,144,092       2,569,934       (934,687 )     (36 )
Subordinated notes
     1,496,461       1,497,216       1,195,210       301,251       25  
Accrued expenses and other liabilities
     1,020,163       1,130,643       1,025,735       (5,572 )     (1 )
 
                              
Total liabilities
     47,797,396       48,839,100       46,332,402       1,464,994       3  
 
                              
 
                                        
Shareholder’s equity
                                        
 
                                        
Preferred stock — authorized 6,617,808 shares-
                                        
 
                                        
5.00% Series B Non-voting, Cumulative Preferred Stock, par value of $0.01 and liquidation value per share of $1,000
     —       —       1,333,433       (1,333,433 )     (100 )
 
                                        
8.50% Series A Non-cumulative Perpetual Convertible Preferred Stock, par value and liquidation value per share of $1,000
     362,507       362,507       362,507       —       —  
 
                                        
Common stock — Par value of $0.01
     8,643       8,642       7,175       1,468       20  
Capital surplus
     7,588,248       7,630,093       6,739,069       849,179       13  
Less treasury shares, at cost
     (9,357 )     (8,771 )     (9,235 )     (122 )     1  
Accumulated other comprehensive loss
     (122,543 )     (197,496 )     (84,398 )                
Retained earnings
     (2,574,855 )     (2,814,433 )     (2,910,115 )     335,260       (12 )
 
                              
Total shareholders’ equity
     5,252,643       4,980,542       5,438,436       (185,793 )     (3 )
 
                              
Total liabilities and shareholders’ equity
   $ 53,050,039     $ 53,819,642     $ 51,770,838     $ 1,279,201       2 %
 
                              
 
                                        
Common shares authorized (par value of $0.01)
     1,500,000,000       1,500,000,000       1,500,000,000                  
Common shares issued
     864,310,281       864,195,369       717,487,003                  
Common shares outstanding
     863,323,099       863,319,435       716,622,592                  
Treasury shares outstanding
     987,182       875,934       864,411                  
Preferred shares issued
     1,967,071       1,967,071       1,967,071                  
Preferred shares outstanding
     362,507       362,507       1,760,578                  
(1)   See page 5 for detail of loans and leases.
 
(2)   See page 6 for detail of deposits.

 

4

 

Huntington Bancshares Incorporated
Loans and Leases Composition
                                                                                 
    2011     2010  
(dollar amounts in millions)   June 30,     March 31,     December 31,     September 30,     June 30,  
    (Unaudited)     (Unaudited)                     (Unaudited)     (Unaudited)  
Ending Balances by Type:
                                                                                
Commercial:(1)
                                                                                
Commercial and industrial
   $ 13,544       35 %   $ 13,299       35 %   $ 13,063       34 %   $ 12,425       33 %   $ 12,392       34 %
Commercial real estate:
                                                                                
Construction
     591       2       587       2       650       2       738       2       1,106       3  
Commercial
     5,573       14       5,711       15       6,001       16       6,174       16       6,078       16  
 
                                                            
Commercial real estate
     6,164       16       6,298       17       6,651       18       6,912       18       7,184       19  
 
                                                            
Total commercial
     19,708       51       19,597       52       19,714       52       19,337       51       19,576       53  
 
                                                            
Consumer:
                                                                                
Automobile
     6,190       16       5,802       15       5,614       15       5,385       14       4,847       13  
Home equity
     7,952       20       7,784       20       7,713       20       7,690       21       7,510       20  
Residential mortgage
     4,751       12       4,517       12       4,500       12       4,511       12       4,354       12  
Other consumer
     525       1       546       1       566       1       578       2       683       2  
 
                                                            
Total consumer
     19,418       49       18,649       48       18,393       48       18,164       49       17,394       47  
 
                                                            
Total loans and leases
   $ 39,126       100 %   $ 38,246       100 %   $ 38,107       100 %   $ 37,501       100 %   $ 36,970       100 %
 
                                                            
 
                                                                                
Ending Balances by Business Segment:
                                                                                
Retail and Business Banking
   $ 12,019       31 %   $ 11,786       31 %   $ 11,717       31 %   $ 11,804       31 %   $ 11,772       32 %
Regional and Commercial Banking
     8,291       21       7,917       21       7,792       20       7,373       20       7,317       20  
AFCRE
     13,273       34       13,154       34       13,283       35       13,167       35       12,931       35  
WGH
     5,493       14       5,255       14       5,176       14       5,066       14       4,864       13  
Treasury / Other
     50       —       134       —       139       —       91       —       86       —  
 
                                                            
Total loans and leases
   $ 39,126       100 %   $ 38,246       100 %   $ 38,107       100 %   $ 37,501       100 %   $ 36,970       100 %
 
                                                            
                                                                                 
    2011     2010  
    Second     First     Fourth     Third     Second  
Average Balances by Business Segment:
                                                                                
Retail and Business Banking
   $ 11,948       31 %   $ 11,780       31 %   $ 11,274       30 %   $ 11,817       32 %   $ 11,809       32 %
Regional and Commercial Banking
     8,069       21       7,824       21       7,657       20       7,419       20       7,257       20  
AFCRE
     13,145       34       13,208       35       13,299       35       13,085       35       12,890       35  
WGH
     5,297       14       5,192       13       5,050       14       4,894       13       4,729       12  
Treasury / Other
     76       —       94       —       520       1       —       —       404       1  
 
                                                            
Total loans and leases
   $ 38,535       100 %   $ 38,098       100 %   $ 37,800       100 %   $ 37,215       100 %   $ 37,089       100 %
 
                                                            
(1)   There were no commercial loans outstanding that would be considered a concentration of lending to a particular industry.

 

5

 

Huntington Bancshares Incorporated
Deposits Composition
                                                                                 
    2011     2010  
(dollar amounts in millions)   June 30,     March 31,     December 31,     September 30,     June 30,  
    (Unaudited)     (Unaudited)                     (Unaudited)     (Unaudited)  
Ending Balances by Type:
                                                                                
Demand deposits — noninterest-bearing
   $ 8,210       20 %   $ 7,597       18 %   $ 7,217       17 %   $ 6,926       17 %   $ 6,463       16 %
Demand deposits — interest-bearing
     5,642       14       5,532       13       5,469       13       5,347       13       5,850       15  
Money market deposits
     12,643       31       13,105       32       13,410       32       12,679       31       11,437       29  
Savings and other domestic deposits
     4,752       11       4,762       12       4,643       11       4,613       11       4,652       12  
Core certificates of deposit
     7,936       19       8,208       20       8,525       20       8,765       21       8,974       23  
 
                                                            
Total core deposits
     39,183       95       39,204       95       39,264       93       38,330       93       37,376       95  
Other domestic deposits of $250,000 or more
     436       1       531       1       675       2       730       2       678       2  
Brokered deposits and negotiable CDs
     1,486       4       1,253       3       1,532       4       1,576       4       1,373       3  
Deposits in foreign offices
     297       —       378       1       383       1       436       1       422       —  
 
                                                            
Total deposits
   $ 41,402       100 %   $ 41,366       100 %   $ 41,854       100 %   $ 41,072       100 %   $ 39,849       100 %
 
                                                            
 
                                                                                
Total core deposits:
                                                                                
Commercial
   $ 13,541       35 %   $ 12,785       33 %   $ 12,476       32 %   $ 12,262       32 %   $ 11,515       31 %
Consumer
     25,642       65       26,419       67       26,788       68       26,068       68       25,861       69  
 
                                                            
Total core deposits
   $ 39,183       100 %   $ 39,204       100 %   $ 39,264       100 %   $ 38,330       100 %   $ 37,376       100 %
 
                                                            
 
                                                                                
Ending Balances by Business Segment:
                                                                                
Retail and Business Banking
   $ 28,325       68 %   $ 28,984       70 %   $ 29,298       70 %   $ 28,808       70 %   $ 28,542       72 %
Regional and Commercial Banking
     3,539       9       3,589       9       3,538       8       3,245       8       2,861       7  
AFCRE
     819       2       804       2       753       2       739       2       725       2  
WGH
     7,708       19       7,363       17       7,449       18       7,184       17       6,734       17  
Treasury / Other(1)
     1,011       2       626       2       816       2       1,096       3       987       2  
 
                                                            
Total deposits
   $ 41,402       100 %   $ 41,366       100 %   $ 41,854       100 %   $ 41,072       100 %   $ 39,849       100 %
 
                                                            
                                                                                 
    2011     2010  
    Second     First     Fourth     Third     Second  
Average Balances by Business Segment:
                                                                                
Retail and Business Banking
   $ 28,780       70 %   $ 29,139       70 %   $ 29,241       70 %   $ 28,874       71 %   $ 28,592       71 %
Regional and Commercial Banking
     3,484       8       3,666       9       3,471       8       3,090       8       3,001       7  
AFCRE
     784       2       763       2       752       2       714       1       672       2  
WGH
     7,467       18       7,394       17       7,333       18       6,867       17       6,994       17  
Treasury / Other (1)
     739       2       702       2       907       2       1,101       3       1,108       3  
 
                                                            
Total deposits
   $ 41,254       100 %   $ 41,664       100 %   $ 41,704       100 %   $ 40,646       100 %   $ 40,367       100 %
 
                                                            
(1)   Comprised primarily of national market deposits.

 

6

 

Huntington Bancshares Incorporated
Consolidated Quarterly Average Balance Sheets
(Unaudited)
                                                         
                                            Change  
    2011     2010     2Q11 vs 2Q10  
(dollar amounts in millions)   Second     First     Fourth     Third     Second     Amount     Percent  
Assets
                                                        
Interest-bearing deposits in banks
   $ 131     $ 130     $ 218     $ 282     $ 309     $ (178 )     (58 )%
Trading account securities
     112       144       297       110       127       (15 )     (12 )
Federal funds sold and securities purchased under resale agreements
     21       —       —       —       —       21       —  
Loans held for sale
     181       420       779       663       323       (142 )     (44 )
Available-for-sale and other securities:
                                                        
Taxable
     8,428       9,108       9,747       8,876       8,369       59       1  
Tax-exempt
     436       445       449       365       389       47       12  
 
                                          
Total available-for-sale and other securities
     8,864       9,553       10,196       9,241       8,758       106       1  
 
                                          
Held-to-maturity securities — taxable
     174       —       —       —       —       174       —  
Loans and leases:(1)
                                                        
Commercial:
                                                        
Commercial and industrial
     13,370       13,121       12,767       12,393       12,244       1,126       9  
Commercial real estate:
                                                        
Construction
     554       611       716       989       1,279       (725 )     (57 )
Commercial
     5,679       5,913       6,082       6,084       6,085       (406 )     (7 )
 
                                          
Commercial real estate
     6,233       6,524       6,798       7,073       7,364       (1,131 )     (15 )
 
                                          
Total commercial
     19,603       19,645       19,565       19,466       19,608       (5 )     (0 )
 
                                          
Consumer:
                                                        
Automobile
     5,954       5,701       5,520       5,140       4,634       1,320       28  
Home equity
     7,874       7,728       7,709       7,567       7,544       330       4  
Residential mortgage
     4,566       4,465       4,430       4,389       4,608       (42 )     (1 )
Other consumer
     538       559       576       653       695       (157 )     (23 )
 
                                          
Total consumer
     18,932       18,453       18,235       17,749       17,481       1,451       8  
 
                                          
Total loans and leases
     38,535       38,098       37,800       37,215       37,089       1,446       4  
Allowance for loan and lease losses
     (1,128 )     (1,231 )     (1,323 )     (1,384 )     (1,506 )     378       (25 )
 
                                          
Net loans and leases
     37,407       36,867       36,477       35,831       35,583       1,824       5  
 
                                          
Total earning assets
     48,018       48,345       49,290       47,511       46,606       1,412       3  
 
                                          
Cash and due from banks
     1,068       1,299       1,187       1,618       1,509       (441 )     (29 )
Intangible assets
     652       665       679       695       710       (58 )     (8 )
All other assets
     4,160       4,291       4,313       4,277       4,384       (224 )     (5 )
 
                                          
Total assets
   $ 52,770     $ 53,369     $ 54,146     $ 52,717     $ 51,703     $ 1,067       2 %
 
                                          
 
                                                        
Liabilities and shareholders’ equity
                                                        
Deposits:
                                                        
Demand deposits —
noninterest-bearing
   $ 7,806     $ 7,333     $ 7,188     $ 6,768     $ 6,849     $ 957       14 %
Demand deposits —
interest-bearing
     5,565       5,357       5,317       5,319       5,971       (406 )     (7 )
Money market deposits
     12,879       13,492       13,158       12,336       11,103       1,776       16  
Savings and other domestic deposits
     4,778       4,701       4,640       4,639       4,677       101       2  
Core certificates of deposit
     8,079       8,391       8,646       8,948       9,199       (1,120 )     (12 )
 
                                          
Total core deposits
     39,107       39,274       38,949       38,010       37,799       1,308       3  
Other domestic deposits of $250,000 or more
     467       606       737       690       661       (194 )     (29 )
Brokered deposits and negotiable CDs
     1,333       1,410       1,575       1,495       1,505       (172 )     (11 )
Deposits in foreign offices
     347       374       443       451       402       (55 )     (14 )
 
                                          
Total deposits
     41,254       41,664       41,704       40,646       40,367       887       2  
Short-term borrowings
     2,112       2,134       2,134       1,739       966       1,146       119  
Federal Home Loan Bank advances
     97       30       112       188       212       (115 )     (54 )
Subordinated notes and other long-term debt
     3,249       3,525       3,558       3,672       3,836       (587 )     (15 )
 
                                          
Total interest-bearing liabilities
     38,906       40,020       40,320       39,477       38,532       374       1  
 
                                          
All other liabilities
     913       994       993       952       924       (11 )     (1 )
Shareholders’ equity
     5,145       5,022       5,645       5,520       5,398       (253 )     (5 )
 
                                          
Total liabilities and shareholders’ equity
   $ 52,770     $ 53,369     $ 54,146     $ 52,717     $ 51,703     $ 1,067       2 %
 
                                          
(1)   Includes nonaccrual loans.

 

7

 

Huntington Bancshares Incorporated
Consolidated Quarterly Net Interest Margin — Interest Income / Expense
(Unaudited)
                                         
    2011     2010  
(dollar amounts in millions)   Second     First     Fourth     Third     Second  
Assets
                                        
Interest-bearing deposits in banks
   $ 73     $ 37     $ 343     $ 151     $ 156  
Trading account securities
     447       494       1,472       331       554  
Federal funds sold and securities purchased under resale agreements
     5       —       —       —       —  
Loans held for sale
     2,247       4,284       7,799       9,525       4,059  
Available-for-sale and other securities:
                                        
Taxable
     54,603       57,652       59,025       61,438       59,614  
Tax-exempt
     4,385       5,237       5,150       4,285       4,488  
 
                              
Total available-for-sale and other securities
     58,988       62,889       64,175       65,723       64,102  
Held-to-maturity securities — taxable
     1,287       —       —       —       —  
Loans and leases:
                                        
Commercial:
                                        
Commercial and industrial
     145,675       149,964       161,251       162,678       164,332  
Commercial real estate:
                                        
Construction
     4,718       5,138       5,608       7,157       8,443  
Commercial
     55,947       58,096       60,963       60,821       56,716  
 
                              
Commercial real estate
     60,665       63,234       66,571       67,978       65,159  
 
                              
Total commercial
     206,340       213,198       227,822       230,656       229,491  
 
                              
Consumer:
                                        
Automobile
     75,110       73,330       75,951       75,005       74,689  
Home equity
     88,358       87,659       89,516       89,669       99,135  
Residential mortgage
     52,700       53,127       53,431       54,560       54,116  
Other consumer
     10,416       10,804       11,490       11,680       11,841  
 
                              
Total consumer
     226,584       224,920       230,388       230,914       239,781  
 
                              
Total loans and leases
     432,924       438,118       458,210       461,570       469,272  
 
                              
Total earning assets
   $ 495,971     $ 505,822     $ 531,999     $ 537,300     $ 538,143  
 
                              
 
                                        
Liabilities and shareholders’ equity
                                        
Deposits:
                                        
Demand deposits — noninterest-bearing
   $ —     $ —     $ —     $ —     $ —  
Demand deposits — interest-bearing
     1,240       1,217       1,770       2,255       3,243  
Money market deposits
     12,807       16,699       25,654       26,690       25,644  
Savings and other domestic deposits
     8,870       9,410       10,527       11,585       12,516  
Core certificates of deposit
     41,041       42,815       46,076       52,044       61,353  
 
                              
Total core deposits
     63,958       70,141       84,027       92,574       102,756  
Other domestic deposits of $250,000 or more
     1,171       1,620       2,244       2,225       2,254  
Brokered deposits and negotiable CDs
     2,948       3,850       6,082       8,334       9,618  
Deposits in foreign offices
     227       185       194       247       194  
 
                              
Total deposits
     68,304       75,796       92,547       103,380       114,822  
Short-term borrowings
     856       949       1,071       945       515  
Federal Home Loan Bank advances
     215       220       272       602       1,034  
Subordinated notes and other long-term debt
     19,425       20,582       19,107       19,780       19,626  
 
                              
Total interest bearing liabilities
     88,800       97,547       112,997       124,707       135,997  
 
                              
Net interest income
   $ 407,171     $ 408,275     $ 419,002     $ 412,593     $ 402,146  
 
                              

 

8

 

Huntington Bancshares Incorporated
Consolidated Quarterly Net Interest Margin Analysis
(Unaudited)
                                         
    2011     2010  
Fully-taxable equivalent basis(1)   Second     First     Fourth     Third     Second  
Assets
                                        
Interest-bearing deposits in banks
     0.22 %     0.11 %     0.63 %     0.21 %     0.20 %
Trading account securities
     1.59       1.37       1.98       1.20       1.74  
Federal funds sold and securities purchased under resale agreements
     0.09       —       —       —       —  
Loans held for sale
     4.97       4.08       4.01       5.75       5.02  
Available-for-sale and other securities:
                                        
Taxable
     2.59       2.53       2.42       2.77       2.85  
Tax-exempt
     4.02       4.70       4.59       4.70       4.62  
 
                              
Total available-for-sale and other securities
     2.66       2.63       2.52       2.84       2.93  
Held-to-maturity securities — taxable
     2.96       —       —       —       —  
Loans and leases:(2)(3)
                                        
Commercial:
                                        
Commercial and industrial
     4.31       4.57       4.94       5.14       5.31  
Commercial real estate:
                                        
Construction
     3.37       3.36       3.07       2.83       2.61  
Commercial
     3.90       3.93       3.92       3.91       3.69  
 
                              
Commercial real estate
     3.84       3.88       3.83       3.76       3.49  
 
                              
Total commercial
     4.16       4.34       4.56       4.64       4.63  
 
                              
Consumer:
                                        
Automobile
     5.06       5.22       5.46       5.79       6.46  
Home equity
     4.49       4.54       4.64       4.74       5.26  
Residential mortgage
     4.62       4.76       4.82       4.97       4.70  
Other consumer
     7.76       7.85       7.92       7.10       6.84  
 
                              
Total consumer
     4.79       4.90       5.04       5.19       5.49  
 
                              
Total loans and leases
     4.47       4.61       4.79       4.90       5.04  
 
                              
Total earning assets
     4.14 %     4.24 %     4.29 %     4.49 %     4.63 %
 
                              
 
                                        
Liabilities and shareholders’ equity
                                        
Deposits:
                                        
Demand deposits — noninterest-bearing
     — %     — %     — %     — %     — %
Demand deposits — interest-bearing
     0.09       0.09       0.13       0.17       0.22  
Money market deposits
     0.40       0.50       0.77       0.86       0.93  
Savings and other domestic deposits
     0.74       0.81       0.90       0.99       1.07  
Core certificates of deposit
     2.04       2.07       2.11       2.31       2.68  
 
                              
Total core deposits
     0.82       0.89       1.05       1.18       1.33  
Other domestic deposits of $250,000 or more
     1.01       1.08       1.21       1.28       1.37  
Brokered deposits and negotiable CDs
     0.89       1.11       1.53       2.21       2.56  
Deposits in foreign offices
     0.26       0.20       0.17       0.22       0.19  
 
                              
Total deposits
     0.82       0.90       1.06       1.21       1.37  
Short-term borrowings
     0.16       0.18       0.20       0.22       0.21  
Federal Home Loan Bank advances
     0.88       2.98       0.95       1.25       1.93  
Subordinated notes and other long-term debt
     2.39       2.34       2.15       2.15       2.05  
 
                              
Total interest-bearing liabilities
     0.91       0.99       1.11       1.25       1.41  
 
                              
Net interest rate spread
     3.19       3.21       3.16       3.24       3.22  
Impact of noninterest-bearing funds on margin
     0.21       0.21       0.21       0.21       0.24  
 
                              
Net interest margin
     3.40 %     3.42 %     3.37 %     3.45 %     3.46 %
 
                              
Commercial Loan Derivative Impact
(Unaudited)
                                         
    2011     2010  
Fully-taxable equivalent basis(1)   Second     First     Fourth     Third     Second  
Commercial loans(2)(3)
     3.83 %     3.84 %     3.96 %     3.97 %     3.79 %
Impact of commercial loan derivatives
     0.33       0.50       0.60       0.67       0.84  
 
                              
Total commercial — as reported
     4.16 %     4.34 %     4.56 %     4.64 %     4.63 %
 
                              
 
Average 30 day LIBOR
     0.20 %     0.26 %     0.26 %     0.29 %     0.31 %
(1)   Fully-taxable equivalent (FTE) yields are calculated assuming a 35% tax rate. See page 10 for the FTE adjustment.
 
(2)   Loan, lease, and deposit average rates include impact of applicable derivatives, non-deferrable fees, and amortized fees.
 
(3)   Includes the impact of nonaccrual loans.

 

9

 

Huntington Bancshares Incorporated
Selected Quarterly Income Statement Data(1)
(Unaudited)
                                                         
(dollar amounts in thousands,   2011     2010     2Q11 vs 2Q10  
except per share amounts)   Second     First     Fourth     Third     Second     Amount     Percent  
Interest income
   $ 492,137     $ 501,877     $ 528,291     $ 534,669     $ 535,653     $ (44,803 )     (8) %
Interest expense
     88,800       97,547       112,997       124,707       135,997       (47,197 )     (35 )
 
                                          
Net interest income
     403,337       404,330       415,294       409,962       399,656       3,681       1  
Provision for credit losses
     35,797       49,385       86,973       119,160       193,406       (157,609 )     (81 )
 
                                          
Net interest income after provision for credit losses
     367,540       354,945       328,321       290,802       206,250       161,290       78  
 
                                          
Service charges on deposit accounts
     60,675       54,324       55,810       65,932       75,934       (15,259 )     (20 )
Mortgage banking income
     23,835       22,684       53,169       52,045       45,530       (21,695 )     (48 )
Trust services
     30,392       30,742       29,394       26,997       28,399       1,993       7  
Electronic banking
     31,728       28,786       28,900       28,090       28,107       3,621       13  
Insurance income
     16,399       17,945       19,678       19,801       18,074       (1,675 )     (9 )
Brokerage income
     20,819       20,511       16,953       16,575       18,425       2,394       13  
Bank owned life insurance income
     17,602       14,819       16,113       14,091       14,392       3,210       22  
Automobile operating lease income
     7,307       8,847       10,463       11,356       11,842       (4,535 )     (38 )
Securities gains (losses)
     1,507       40       (103 )     (296 )     156       1,351       866  
Other income
     45,503       38,247       33,843       32,552       28,784       16,719       58  
 
                                          
Total noninterest income
     255,767       236,945       264,220       267,143       269,643       (13,876 )     (5 )
 
                                          
Personnel costs
     218,570       219,028       212,184       208,272       194,875       23,695       12  
Outside data processing and other services
     43,889       40,282       40,943       38,553       40,670       3,219       8  
Net occupancy
     26,885       28,436       26,670       26,718       25,388       1,497       6  
Deposit and other insurance expense
     23,823       17,896       23,320       23,406       26,067       (2,244 )     (9 )
Professional services
     20,080       13,465       21,021       20,672       24,388       (4,308 )     (18 )
Equipment
     21,921       22,477       22,060       21,651       21,585       336       2  
Marketing
     20,102       16,895       16,168       20,921       17,682       2,420       14  
Amortization of intangibles
     13,386       13,370       15,046       15,145       15,141       (1,755 )     (12 )
OREO and foreclosure expense
     4,398       3,931       10,502       12,047       4,970       (572 )     (12 )
Automobile operating lease expense
     5,434       6,836       8,142       9,159       9,667       (4,233 )     (44 )
Other expense
     29,921       48,083       38,537       30,765       33,377       (3,456 )     (10 )
 
                                          
Total noninterest expense
     428,409       430,699       434,593       427,309       413,810       14,599       4  
 
                                          
Income before income taxes
     194,898       161,191       157,948       130,636       62,083       132,815       214  
Provision (benefit) for income taxes
     48,980       34,745       35,048       29,690       13,319       35,661       268  
 
                                          
Net income
   $ 145,918     $ 126,446     $ 122,900     $ 100,946     $ 48,764     $ 97,154       199 %
 
                                          
Dividends on preferred shares
     7,704       7,703       83,754       29,495       29,426       (21,722 )     (74 )
 
                                          
Net income applicable to common shares
   $ 138,214     $ 118,743     $ 39,146     $ 71,451     $ 19,338     $ 118,876       615 %
 
                                          
 
                                                        
Average common shares — basic
     863,358       863,359       757,924       716,911       716,580       146,778       20 %
Average common shares — diluted(2)
     867,469       867,237       760,582       719,567       719,387       148,082       21 %
 
                                                        
Per common share
                                                        
Net income — basic
   $ 0.16     $ 0.14     $ 0.05     $ 0.10     $ 0.03     $ 0.13       433 %
Net income — diluted
     0.16       0.14       0.05       0.10       0.03       0.13       433  
Cash dividends declared
     0.01       0.01       0.01       0.01       0.01       —       —  
 
                                                        
Return on average total assets
     1.11 %     0.96 %     0.90 %     0.76 %     0.38 %     0.73 %     192  
Return on average common shareholders’ equity
     11.6       10.3       3.8       7.4       2.1       9.5       452  
Return on average common tangible shareholders’ equity(3)
     13.3       12.7       5.6       10.0       3.8       9.5       250  
Net interest margin(4)
     3.40       3.42       3.37       3.45       3.46       (0.06 )     (2 )
Efficiency ratio(5)
     62.7       64.7       61.4       60.6       59.4       3.3       6  
Effective tax rate
     25.1       21.6       22.2       22.7       21.5       3.6       17  
 
                                                        
Revenue — fully-taxable equivalent (FTE)
                                                        
Net interest income
   $ 403,337     $ 404,330     $ 415,294     $ 409,962     $ 399,656     $ 3,681       1  
FTE adjustment
     3,834       3,945       3,708       2,631       2,490       1,344       54  
 
                                          
Net interest income(4)
     407,171       408,275       419,002       412,593       402,146       5,025       1  
Noninterest income
     255,767       236,945       264,220       267,143       269,643       (13,876 )     (5 )
 
                                          
Total revenue(4)
   $ 662,938     $ 645,220     $ 683,222     $ 679,736     $ 671,789     $ (8,851 )     (1) %
 
                                          

 

10

 

(1)   Comparisons for presented periods are impacted by a number of factors. Refer to Significant Items.
 
(2)   For all periods presented, the impact of the convertible preferred stock issued in 2008 and the warrants issued to the U.S. Department of the Treasury in 2008 related to Huntington’s participation in the voluntary Capital Purchase Program was excluded from the diluted share calculation because the result was more than basic earnings per common share (anti-dilutive) for the periods. The convertible preferred stock and warrants were repurchased in December 2010 and January 2011, respectively.
 
(3)   Net income excluding expense for amortization of intangibles for the period divided by average tangible shareholders’ equity. Average tangible shareholders’ equity equals average total 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.
 
(4)   On a fully-taxable equivalent (FTE) basis assuming a 35% tax rate.
 
(5)   Noninterest expense less amortization of intangibles and goodwill impairment divided by the sum of FTE net interest income and noninterest income excluding securities gains (losses).

 

11

 

Huntington Bancshares Incorporated
Quarterly Mortgage Banking Income
(Unaudited)
                                                         
    2011     2010     2Q11 vs 2Q10  
(dollar amounts in thousands, except as noted)   Second     First     Fourth     Third     Second     Amount     Percent  
Mortgage banking income
                                                        
Origination and secondary marketing
   $ 11,522     $ 19,799     $ 48,236     $ 35,840     $ 19,778     $ (8,256 )     (42 )%
Servicing fees
     12,417       12,546       11,474       12,053       12,178       239       2  
Amortization of capitalized servicing
     (9,052 )     (9,863 )     (13,960 )     (13,003 )     (10,137 )     1,085       (11 )
Other mortgage banking income
     4,259       3,769       4,789       4,966       3,664       595       16  
 
                                          
Subtotal
     19,146       26,251       50,539       39,856       25,483       (6,337 )     (25 )
 
MSR valuation adjustment(1)
     (8,292 )     774       31,319       (12,047 )     (26,221 )     17,929       (68 )
Net trading gains (losses) related to MSR hedging
     12,981       (4,341 )     (28,689 )     24,236       46,268       (33,287 )     (72 )
 
                                          
Total mortgage banking income
   $ 23,835     $ 22,684     $ 53,169     $ 52,045     $ 45,530     $ (21,695 )     (48 )%
 
                                          
 
                                                        
Mortgage originations (in millions)
   $ 916     $ 929     $ 1,827     $ 1,619     $ 1,161     $ (245 )     (21 )
Average trading account securities used to hedge MSRs (in millions)
     22       46       184       23       28       (6 )     (21 )%
Capitalized mortgage servicing rights(2)
     189,740       202,559       196,194       161,594       179,138       10,602       6  
Total mortgages serviced for others (in millions)(2)
     16,315       16,456       15,933       15,713       15,954       361       2  
MSR % of investor servicing portfolio(2)
     1.16 %     1.23 %     1.23 %     1.03 %     1.12 %     0.04 %     357  
 
                                          
 
                                                        
Net impact of MSR hedging
                                                        
 
MSR valuation adjustment(1)
   $ (8,292 )   $ 774     $ 31,319     $ (12,047 )   $ (26,221 )   $ 17,929       (68 )%
Net trading gains (losses) related to MSR hedging
     12,981       (4,341 )     (28,689 )     24,236       46,268       (33,287 )     (72 )
Net interest income related to MSR hedging
     84       99       713       32       58       26       45  
 
                                          
Net gain (loss) of MSR hedging
   $ 4,773     $ (3,468 )   $ 3,343     $ 12,221     $ 20,105     $ (15,332 )     (76 )%
 
                                          
(1)   The change in fair value for the period represents the MSR valuation adjustment, net of amortization of capitalized servicing.
 
(2)   At period end.

 

12

 

Huntington Bancshares Incorporated
Quarterly Credit Reserves Analysis
(Unaudited)
                                         
    2011     2010  
(dollar amounts in thousands)   Second     First     Fourth     Third     Second  
 
                                        
Allowance for loan and lease losses, beginning of period
   $ 1,133,226     $ 1,249,008     $ 1,336,352     $ 1,402,160     $ 1,477,969  
Loan and lease losses
     (128,701 )     (199,007 )     (205,587 )     (221,144 )     (312,954 )
Recoveries of loans previously charged off
     31,167       33,924       33,336       36,630       33,726  
 
                              
Net loan and lease losses
     (97,534 )     (165,083 )     (172,251 )     (184,514 )     (279,228 )
 
                              
Provision for loan and lease losses
     36,948       49,301       84,907       118,788       203,633  
Allowance of assets sold
     (1,514 )     —       —       (82 )     (214 )
 
                              
Allowance for loan and lease losses, end of period
   $ 1,071,126     $ 1,133,226     $ 1,249,008     $ 1,336,352     $ 1,402,160  
 
                              
Allowance for unfunded loan commitments and letters of credit, beginning of period
   $ 42,211     $ 42,127     $ 40,061     $ 39,689     $ 49,916  
 
                                        
Provision for (reduction in) unfunded loan commitments and letters of credit losses
     (1,151 )     84       2,066       372       (10,227 )
 
                              
Allowance for unfunded loan commitments and letters of credit, end of period
   $ 41,060     $ 42,211     $ 42,127     $ 40,061     $ 39,689  
 
                              
Total allowance for credit losses, end of period
   $ 1,112,186     $ 1,175,437     $ 1,291,135     $ 1,376,413     $ 1,441,849  
 
                              
 
                                        
Allowance for loan and lease losses (ALLL) as % of:
                                        
Total loans and leases
     2.74 %     2.96 %     3.28 %     3.56 %     3.79 %
Nonaccrual loans and leases (NALs)
     174       178       161       136       117  
Nonperforming assets (NPAs)
     164       164       148       121       89  
 
                                        
Total allowance for credit losses (ACL) as % of:
                                        
Total loans and leases
     2.84 %     3.07 %     3.39 %     3.67 %     3.90 %
Nonaccrual loans and leases
     181       185       166       140       120  
Nonperforming assets
     170       170       153       125       91  

 

13

 

Huntington Bancshares Incorporated
Quarterly Net Charge-Off Analysis
(Unaudited)
                                         
    2011     2010  
(dollar amounts in thousands)   Second     First     Fourth     Third     Second  
 
                                        
Net charge-offs by loan and lease type:
                                        
Commercial:
                                        
Commercial and industrial
   $ 18,704     $ 42,191     $ 59,124     $ 62,241     $ 58,128  
Commercial real estate:
                                        
Construction
     4,145       28,400       11,084       17,936       45,562  
Commercial
     23,450       39,283       33,787       45,725       36,169  
 
                              
Commercial real estate
     27,595       67,683       44,871       63,661       81,731  
 
                              
Total commercial
     46,299       109,874       103,995       125,902       139,859  
 
                              
Consumer:
                                        
Automobile
     2,255       4,712       7,035       5,570       5,436  
Home equity(1)
     25,441       26,715       29,175       27,827       44,470  
Residential mortgage(2)(3)
     16,455       18,932       26,775       18,961       82,848  
Other consumer
     7,084       4,850       5,271       6,254       6,615  
 
                              
Total consumer
     51,235       55,209       68,256       58,612       139,369  
 
                              
Total net charge-offs
   $ 97,534     $ 165,083     $ 172,251     $ 184,514     $ 279,228  
 
                              
 
                                        
Net charge-offs — annualized percentages:
                                        
Commercial:
                                        
Commercial and industrial
     0.56 %     1.29 %     1.85 %     2.01 %     1.90 %
Commercial real estate:
                                        
Construction
     2.99       18.59       6.19       7.25       14.25  
Commercial
     1.65       2.66       2.22       3.01       2.38  
 
                              
Commercial real estate
     1.77       4.15       2.64       3.60       4.44  
 
                              
Total commercial
     0.94       2.24       2.13       2.59       2.85  
 
                              
Consumer:
                                        
Automobile
     0.15       0.33       0.51       0.43       0.47  
Home equity(1)
     1.29       1.38       1.51       1.47       2.36  
Residential mortgage(2)(3)
     1.44       1.70       2.42       1.73       7.19  
Other consumer
     5.27       3.47       3.66       3.83       3.81  
 
                              
Total consumer
     1.08       1.20       1.50       1.32       3.19  
 
                              
Net charge-offs as a % of average loans
     1.01 %     1.73 %     1.82 %     1.98 %     3.01 %
 
                              
(1)   The 2010 second quarter included net charge-offs of $14,678 thousand associated with the transfer of Franklin-related loans to loans held for sale and $1,262 thousand of other Franklin-related net charge-offs.
 
(2)   The 2010 second quarter included net charge-offs of $60,822 thousand associated with the transfer of Franklin-related loans to loans held for sale and $3,403 thousand of other Franklin-related net charge-offs.
 
(3)   The 2010 fourth quarter included net charge-offs of $16,389 thousand related to the sale of certain underperforming residential mortgage loans.

 

14

 

Huntington Bancshares Incorporated
Quarterly Nonaccrual Loans and Leases (NALs) and Nonperforming Assets (NPAs)
(Unaudited)
                                         
    2011     2010  
(dollar amounts in thousands)   June 30,     March 31,     December 31,     September 30,     June 30,  
 
                                        
Nonaccrual loans and leases (NALs):
                                        
Commercial and industrial
   $ 229,327     $ 260,397     $ 346,720     $ 398,353     $ 429,561  
Commercial real estate
     291,500       305,793       363,692       478,754       663,103  
Residential mortgage
     59,853       44,812       45,010       82,984       86,486  
Home equity
     33,545       25,255       22,526       21,689       22,199  
 
                              
Total nonaccrual loans and leases
     614,225       636,257       777,948       981,780       1,201,349  
 
                                        
Other real estate, net:
                                        
Residential
     20,803       28,668       31,649       65,775       71,937  
Commercial
     17,909       25,961       35,155       57,309       67,189  
 
                              
Total other real estate, net
     38,712       54,629       66,804       123,084       139,126  
Impaired loans held for sale(1)
     —       —       —       —       242,227  
 
                              
Total nonperforming assets
   $ 652,937     $ 690,886     $ 844,752     $ 1,104,864     $ 1,582,702  
 
                              
 
                                        
Nonperforming Franklin assets:
                                        
Residential mortgage
   $ —     $ —     $ —     $ —     $ —  
Home Equity
     —       —       —       —       —  
OREO
     883       5,971       9,477       15,330       24,515  
Impaired loans held for sale
     —       —       —       —       242,227  
 
                              
Total nonperforming Franklin assets
   $ 883     $ 5,971     $ 9,477     $ 15,330     $ 266,742  
 
                              
 
                                        
Nonaccrual loans and leases as a % of total loans and leases
     1.57 %     1.66 %     2.04 %     2.62 %     3.25 %
 
                                        
NPA ratio(2)
     1.67       1.80       2.21       2.94       4.24  
                                         
    2011     2010  
    Second     First     Fourth     Third     Second  
 
                                        
Nonperforming assets, beginning of period
   $ 690,886     $ 844,752     $ 1,104,864     $ 1,582,702     $ 1,918,368  
New nonperforming assets
     210,255       192,044       237,802       278,388       171,595  
Franklin impact, net
     (5,088 )     (3,506 )     (5,853 )     (251,412 )     (86,715 )
Returns to accruing status
     (68,429 )     (70,886 )     (100,051 )     (111,168 )     (78,739 )
Loan and lease losses
     (74,945 )     (128,730 )     (126,047 )     (151,013 )     (173,159 )
OREO losses
     388       1,492       (5,117 )     (5,302 )     2,483  
Payments
     (73,009 )     (87,041 )     (191,296 )     (210,612 )     (140,881 )
Sales
     (27,121 )     (57,239 )     (69,550 )     (26,719 )     (30,250 )
 
                              
Nonperforming assets, end of period
   $ 652,937     $ 690,886     $ 844,752     $ 1,104,864     $ 1,582,702  
 
                              
(1)   The June 30, 2010, figure represented NALs associated with the transfer of Franklin-related residential mortgage and home equity loans to loans held for sale.
 
(2)   Nonperforming assets divided by the sum of loans and leases, impaired loans held for sale, and net other real estate owned.

 

15

 

Huntington Bancshares Incorporated
Quarterly Accruing Past Due Loans and Leases and Accruing Troubled Debt Restructured Loans
(Unaudited)
                                         
    2011     2010  
(dollar amounts in thousands)   June 30,     March 31,     December 31,     September 30,     June 30,  
 
                                        
Accruing loans and leases past due 90 days or more:
                                        
 
                                        
Commercial and industrial
   $ —     $ —     $ —     $ —     $ —  
Residential mortgage (excluding loans guaranteed by the U.S. Government)
     33,975       41,858       53,983       56,803       47,036  
Home equity
     17,451       24,130       23,497       27,160       26,797  
Other consumer
     6,227       7,578       10,177       11,423       9,533  
 
                              
Total, excl. loans guaranteed by the U.S. Government
     57,653       73,566       87,657       95,386       83,366  
Add: loans guaranteed by U.S. Government
     76,979       94,440       98,288       94,249       95,421  
 
                              
Total accruing loans and leases past due 90 days or more, including loans guaranteed by the U.S. Government
   $ 134,632     $ 168,006     $ 185,945     $ 189,635     $ 178,787  
 
                              
 
                                        
Ratios:
                                        
 
                                        
Excluding loans guaranteed by the U.S. Government, as a percent of total loans and leases
     0.15 %     0.19 %     0.23 %     0.25 %     0.23 %
 
                                        
Guaranteed by U.S. Government, as a percent of total loans and leases
     0.19 %     0.25       0.26       0.26       0.26  
 
                                        
Including loans guaranteed by the U.S. Government, as a percent of total loans and leases
     0.34 %     0.44       0.49       0.51       0.49  
 
                                        
Accruing troubled debt restructured loans:
                                        
Commercial
   $ 240,126     $ 206,462     $ 222,632     $ 157,971     $ 141,353  
Residential mortgage
     313,772       333,492       328,411       304,356       281,473  
Other consumer
     75,036       78,488       76,586       73,210       65,061  
 
                              
Total accruing troubled debt restructured loans
   $ 628,934     $ 618,442     $ 627,629     $ 535,537     $ 487,887  
 
                              

 

16

 

Huntington Bancshares Incorporated
Quarterly Common Stock Summary, Capital, and Other Data
(Unaudited)
Quarterly common stock summary
                                         
    2011     2010  
(dollar amounts in thousands, except per share amounts)   Second     First     Fourth     Third     Second  
 
                                        
Common stock price, per share
                                        
High(1)
   $ 6.920     $ 7.700     $ 7.000     $ 6.450     $ 7.400  
Low(1)
     6.000       6.380       5.430       5.040       5.260  
Close
     6.560       6.640       6.870       5.690       5.540  
Average closing price
     6.506       6.981       6.050       5.787       6.130  
 
                                        
Dividends, per share
                                        
Cash dividends declared per common share
   $ 0.01     $ 0.01     $ 0.01     $ 0.01     $ 0.01  
 
                                        
Common shares outstanding
                                        
Average — basic
     863,358       863,359       757,924       716,911       716,580  
Average — diluted(2)
     867,469       867,237       760,582       719,567       719,387  
Ending
     863,323       863,399       863,319       717,132       716,623  
 
Book value per common share
   $ 5.66     $ 5.42     $ 5.35     $ 5.39     $ 5.22  
Tangible book value per common share(3)
     5.00       4.74       4.66       4.55       4.37  
                                         
    2011     2010  
(dollar amounts in millions)   June 30,     March 31,     December 31,     September 30,     June 30,  
 
                                        
Calculation of tangible equity / asset ratio:
                                        
Total shareholders’ equity
   $ 5,253     $ 5,039     $ 4,981     $ 5,567     $ 5,438  
Less: goodwill
     (444 )     (444 )     (444 )     (444 )     (444 )
Less: other intangible assets
     (202 )     (215 )     (229 )     (244 )     (259 )
Add: related deferred tax liability(3)
     71       75       80       85       91  
 
                              
Total tangible equity
     4,678       4,455       4,388       4,964       4,826  
Less: preferred equity
     (363 )     (363 )     (363 )     (1,700 )     (1,696 )
 
                              
Total tangible common equity
   $ 4,315     $ 4,092     $ 4,025     $ 3,264     $ 3,130  
 
                              
 
                                        
Total assets
   $ 53,050     $ 52,949     $ 53,820     $ 53,247     $ 51,771  
Less: goodwill
     (444 )     (444 )     (444 )     (444 )     (444 )
Less: other intangible assets
     (202 )     (215 )     (229 )     (244 )     (259 )
Add: related deferred tax liability(3)
     71       75       80       85       91  
 
                              
Total tangible assets
   $ 52,475     $ 52,365     $ 53,227     $ 52,644     $ 51,159  
 
                              
 
                                        
Tangible equity / tangible asset ratio
     8.91 %     8.51 %     8.24 %     9.43 %     9.43 %
Tangible common equity / tangible asset ratio
     8.22       7.81       7.56       6.20       6.12  
 
                                        
Other capital data:
                                        
Total risk-weighted assets(5)
   $ 44,081     $ 43,025     $ 43,471     $ 42,759     $ 42,486  
 
                                        
Tier 1 leverage ratio(5)
     10.25 %     9.80 %     9.41 %     10.54 %     10.45 %
Tier 1 common risk-based capital ratio(5)
     9.92       9.75       9.29       7.39       7.06  
Tier 1 risk-based capital ratio(5)
     12.14       12.04       11.55       12.82       12.51  
Total risk-based capital ratio(5)
     14.89       14.85       14.46       15.08       14.79  
Tangible common equity / risk-weighted assets ratio(5)
     9.79       9.51       9.26       7.63       7.37  
 
                                        
Other data:
                                        
Number of employees (full-time equivalent)
     11,457       11,319       11,341       11,279       11,117  
Number of domestic full-service branches(4)
     643       622       620       617       617  
(1)   High and low stock prices are intra-day quotes obtained from NASDAQ.
 
(2)   For all periods presented, the impact of the convertible preferred stock issued in 2008 and the warrants issued to the U.S. Department of the Treasury in 2008 related to Huntington’s participation in the voluntary Capital Purchase Program was excluded from the diluted share calculation because the result was more than basic earnings per common share (anti-dilutive) for the periods. The convertible preferred stock and warrants were repurchased in December 2010 and January 2011, respectively.
 
(3)   Other intangible assets are net of deferred tax liability, and calculated assuming a 35% tax rate.
 
(4)   Includes 11 WGH offices.
 
(5)   June 30, 2011, figures are estimated.

 

17

 

Huntington Bancshares Incorporated
Consolidated Year to Date Average Balance Sheets
(Unaudited)
                                 
    YTD Average Balances  
    Six Months Ended June 30,     Change  
(dollar amounts in millions)   2011     2010     Amount     Percent  
Assets
                                
Interest bearing deposits in banks
   $ 130     $ 328     $ (198 )     (60 )%
Trading account securities
     128       112       16       14  
Federal funds sold and securities purchased under resale agreements
     11       —       11       —  
Loans held for sale
     300       334       (34 )     (10 )
Available-for-sale and other securities:
                                
Taxable
     8,766       8,197       569       7  
Tax-exempt
     441       418       23       6  
 
                        
Total available-for-sale and other securities
     9,207       8,615       592       7  
Held-to-maturity securities — taxable
     87       —       87       —  
Loans and leases:(1)
                                
Commercial:
                                
Commercial and industrial
     13,246       12,279       967       8  
Commercial real estate:
                                
Construction
     582       1,344       (762 )     (57 )
Commercial
     5,795       6,176       (381 )     (6 )
 
                        
Commercial real estate
     6,377       7,520       (1,143 )     (15 )
 
                        
Total commercial
     19,623       19,799       (176 )     (1 )
 
                        
Consumer:
                                
Automobile
     5,829       4,443       1,386       31  
Home equity
     7,801       7,541       260       3  
Residential mortgage
     4,516       4,543       (27 )     (1 )
Other consumer
     548       709       (161 )     (23 )
 
                        
Total consumer
     18,694       17,236       1,458       8  
 
                        
Total loans and leases
     38,317       37,035       1,282       3  
Allowance for loan and lease losses
     (1,179 )     (1,508 )     329       (22 )
 
                        
Net loans and leases
     37,138       35,527       1,611       5  
 
                        
Total earning assets
     48,180       46,424       1,756       4  
 
                        
Cash and due from banks
     1,183       1,634       (451 )     (28 )
Intangible assets
     659       717       (58 )     (8 )
All other assets
     4,224       4,436       (212 )     (5 )
 
                        
Total assets
   $ 53,067     $ 51,703     $ 1,364       3 %
 
                        
 
                                
Liabilities and shareholders’ equity
                                
Deposits:
                                
Demand deposits — noninterest-bearing
   $ 7,571     $ 6,739     $ 832       12 %
Demand deposits — interest-bearing
     5,462       5,844       (382 )     (7 )
Money market deposits
     13,184       10,723       2,461       23  
Savings and other domestic deposits
     4,740       4,645       95       2  
Core certificates of deposit
     8,234       9,586       (1,352 )     (14 )
 
                        
Total core deposits
     39,191       37,537       1,654       4  
Other domestic deposits of $250,000 or more
     536       680       (144 )     (21 )
Brokered deposits and negotiable CDs
     1,372       1,673       (301 )     (18 )
Deposits in foreign offices
     360       406       (46 )     (11 )
 
                        
Total deposits
     41,459       40,296       1,163       3  
Short-term borrowings
     2,123       947       1,176       124  
Federal Home Loan Bank advances
     63       196       (133 )     (68 )
Subordinated notes and other long-term debt
     3,386       3,948       (562 )     (14 )
 
                        
Total interest-bearing liabilities
     39,460       38,648       812       2  
 
                        
All other liabilities
     952       935       17       2  
Shareholders’ equity
     5,084       5,381       (297 )     (6 )
 
                        
Total liabilities and shareholders’ equity
   $ 53,067     $ 51,703     $ 1,364       3 %
 
                        
(1)   Includes nonaccrual loans.

 

18

 

Huntington Bancshares Incorporated
Consolidated Year to Date Net Interest Margin Analysis — Interest Income / Expense
(Unaudited)
                 
    YTD Interest Income / Expense  
    Six Months Ended June 30,  
(dollar amounts in millions)   2011     2010  
Assets
                
Interest bearing deposits in banks
   $ 110     $ 310  
Trading account securities
     941       1,073  
Federal funds sold and securities purchased under resale agreements
     5       —  
Loans held for sale
     6,531       8,364  
Available-for-sale and other securities:
                
Taxable
     112,254       118,601  
Tax-exempt
     9,622       9,332  
 
            
Total available-for-sale and other securities
     121,876       127,933  
Held-to-maturity securities — taxable
     1,287       —  
Loans and leases:
                
Commercial:
                
Commercial and industrial
     295,639       336,669  
Commercial real estate:
                
Construction
     9,856       17,830  
Commercial
     114,043       113,075  
 
            
Commercial real estate
     123,899       130,905  
 
            
Total commercial
     419,538       467,574  
 
            
Consumer:
                
Automobile
     148,440       144,246  
Home equity
     176,016       204,547  
Residential mortgage
     105,828       108,815  
Other consumer
     21,221       24,308  
 
            
Total consumer
     451,505       481,916  
 
            
Total loans and leases
     871,043       949,490  
 
            
Total earning assets
   $ 1,001,793     $ 1,087,170  
 
            
 
                
Liabilities and shareholders’ equity
                
Deposits:
                
Demand deposits — noninterest-bearing
   $ —     $ —  
Demand deposits — interest-bearing
     2,457       6,368  
Money market deposits
     29,505       51,125  
Savings and other domestic deposits
     18,279       26,090  
Core certificates of deposit
     83,855       133,475  
 
            
Total core deposits
     134,096       217,058  
Other domestic deposits of $250,000 or more
     2,792       4,738  
Brokered deposits and negotiable CDs
     6,799       20,937  
Deposits in foreign offices
     414       391  
 
            
Total deposits
     144,101       243,124  
Short-term borrowings
     1,805       991  
Federal Home Loan Bank advances
     434       2,247  
Subordinated notes and other long-term debt
     40,007       42,521  
 
            
Total interest-bearing liabilities
     186,347       288,883  
 
            
Net interest income
   $ 815,446     $ 798,287  
 
            

 

19

 

Huntington Bancshares Incorporated
Consolidated Year to Date Net Interest Margin Analysis
(Unaudited)
                 
    YTD Average Rates (2)  
    Six Months Ended June 30,  
Fully-taxable equivalent basis(1)   2011     2010  
Assets
                
Interest bearing deposits in banks
     0.17 %     0.19 %
Trading account securities
     1.47       1.92  
Federal funds sold and securities purchased under resale agreements
     0.09       —  
Loans held for sale
     4.36       5.00  
Available-for-sale and other securities:
                
Taxable
     2.56       2.89  
Tax-exempt
     4.37       4.49  
 
            
Total available-for-sale and other securities
     2.65       2.97  
Held-to-maturity securities — taxable
     2.95       —  
Loans and leases:(3)
                
Commercial:
                
Commercial and industrial
     4.44       5.45  
Commercial real estate:
                
Construction
     3.37       2.64  
Commercial
     3.91       3.64  
 
            
Commercial real estate
     3.86       3.46  
 
            
Total commercial
     4.25       4.70  
 
            
Consumer:
                
Automobile
     5.14       6.54  
Home equity
     4.51       5.42  
Residential mortgage
     4.69       4.79  
Other consumer
     7.80       6.92  
 
            
Total consumer
     4.85       5.61  
 
            
Total loans and leases
     4.54       5.12  
 
            
Total earning assets
     4.19 %     4.72 %
 
            
 
                
Liabilities and shareholders’ equity
                
Deposits:
                
Demand deposits — noninterest-bearing
     — %     — %
Demand deposits — interest-bearing
     0.09       0.22  
Money market deposits
     0.45       0.96  
Savings and other domestic deposits
     0.78       1.13  
Core certificates of deposit
     2.05       2.81  
 
            
Total core deposits
     0.86       1.42  
Other domestic deposits of $250,000 or more
     1.05       1.41  
Brokered deposits and negotiable CDs
     1.00       2.52  
Deposits in foreign offices
     0.23       0.19  
 
            
Total deposits
     0.86       1.46  
Short-term borrowings
     0.17       0.21  
Federal Home Loan Bank advances
     1.36       2.28  
Subordinated notes and other long-term debt
     2.36       2.15  
 
            
Total interest bearing liabilities
     0.95       1.51  
 
            
Net interest rate spread
     3.20       3.21  
Impact of noninterest-bearing funds on margin
     0.21       0.26  
 
            
Net interest margin
     3.41 %     3.47 %
 
            
Commercial Loan Derivative Impact
(Unaudited)
                 
    YTD Average Rates  
    Six Months Ended June 30,  
Fully-taxable equivalent basis(1)   2011     2010  
Commercial loans(2)(3)
     3.83 %     3.75 %
Impact of commercial loan derivatives
     0.42       0.95  
 
            
Total commercial — as reported
     4.25 %     4.70 %
 
            
 
                
Average 30 day LIBOR
     0.19 %     0.35 %
(1)   Fully-taxable equivalent (FTE) yields are calculated assuming a 35% tax rate. See page 21 for the FTE adjustment.
 
(2)   Loan and lease and deposit average rates include impact of applicable derivatives, non-deferrable fees, and amortized fees.
 
(3)   Includes the impact of nonaccrual loans.

 

20

 

Huntington Bancshares Incorporated
Selected Year to Date Income Statement Data(1)
(Unaudited)
                                 
    Six Months Ended June 30,     Change  
(dollar amounts in thousands, except per share amounts)   2011     2010     Amount     Percent  
Interest income
   $ 994,014     $ 1,082,432     $ (2,158 )     — %
Interest expense
     186,347       288,883       (102,536 )     (35 )
 
                        
Net interest income
     807,667       793,549       14,118       2  
Provision for credit losses
     85,182       428,414       (343,232 )     (80 )
 
                        
Net interest income after provision for credit losses
     722,485       365,135       357,350       98  
 
                        
Service charges on deposit accounts
     114,999       145,273       (30,274 )     (21 )
Mortgage banking income
     46,519       70,568       (24,049 )     (34 )
Trust services
     61,134       56,164       4,970       9  
Electronic banking
     60,514       53,244       7,270       14  
Insurance income
     34,344       36,934       (2,590 )     (7 )
Brokerage income
     41,330       35,327       6,003       17  
Bank owned life insurance income
     32,421       30,862       1,559       5  
Automobile operating lease income
     16,154       24,145       (7,991 )     (33 )
Securities gains
     1,547       125       1,422       1,138  
Other income
     83,750       57,853       25,897       45  
 
                        
Total noninterest income
     492,712       510,495       (17,783 )     (3 )
 
                        
Personnel costs
     437,598       378,517       59,081       16  
Outside data processing and other services
     84,171       79,752       4,419       6  
Net occupancy
     55,321       54,474       847       2  
Deposit and other insurance expense
     41,719       50,822       (9,103 )     (18 )
Professional services
     33,545       47,085       (13,540 )     (29 )
Equipment
     44,398       42,209       2,189       5  
Marketing
     36,997       28,835       8,162       28  
Amortization of intangibles
     26,756       30,287       (3,531 )     (12 )
OREO and foreclosure expense
     8,329       16,500       (8,171 )     (50 )
Automobile operating lease expense
     12,270       19,733       (7,463 )     (38 )
Other expense
     78,004       63,689       14,315       22  
 
                        
Total noninterest expense
     859,108       811,903       47,205       6  
 
                        
Income before income taxes
     356,089       63,727       292,362       459  
Provision (benefit) for income taxes
     83,725       (24,774 )     108,499       N.R.  
 
                        
Net income
   $ 272,364     $ 88,501     $ 183,863       208 %
 
                        
Dividends on preferred shares
     15,407       58,783       (43,376 )     (74 )
 
                        
Net income applicable to common shares
   $ 256,957     $ 29,718     $ 227,239       765 %
 
                        
 
                                
Average common shares — basic
     863,358       716,450       146,908       21 %
Average common shares — diluted(2)
     867,353       718,990       148,363       21  
 
                                
Per common share
                                
Net income — basic
   $ 0.30     $ 0.04     $ 0.26       650  
Net income — diluted
     0.30       0.04       0.26       650  
Cash dividends declared
     0.02       0.02       —       —  
 
Return on average total assets
     1.03 %     0.35 %     0.68 %     194  
Return on average common shareholders’ equity
     11.0       1.6       9.4       588  
Return on average tangible common shareholders’ equity(3)
     13.4       3.2       10.2       319  
Net interest margin(4)
     3.41       3.47       (0.06 )     (2 )
Efficiency ratio(5)
     63.7       59.7       4.0       7  
Effective tax rate (benefit)
     23.5       (38.9 )     62.4       N.R.  
 
                                
Revenue — fully taxable equivalent (FTE)
                                
Net interest income
   $ 807,667     $ 793,549     $ 14,118       2  
FTE adjustment(4)
     7,779       4,738       3,041       64  
 
                        
Net interest income
     815,446       798,287       17,159       2  
Noninterest income
     492,712       510,495       (17,783 )     (3 )
 
                        
Total revenue
   $ 1,308,158     $ 1,308,782     $ (624 )     — %
 
                        
N.R. — Not relevant, as denominator of calculation is a loss in prior period compared with income in current period.

 

21

 

(1)   Comparisons for presented periods are impacted by a number of factors. Refer to Significant Items.
 
(2)   For all periods presented, the impact of the convertible preferred stock issued in 2008 and the warrants issued to the U.S. Department of the Treasury in 2008 related to Huntington’s participation in the voluntary Capital Purchase Program was excluded from the diluted share calculation because the result was more than basic earnings per common share (anti-dilutive) for the periods. The convertible preferred stock and warrants were repurchased in December 2010 and January 2011, respectively.
 
(3)   Net income excluding expense for amortization of intangibles for the period divided by average tangible shareholders’ equity. Average tangible shareholders’ equity equals average total 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.
 
(4)   On a fully-taxable equivalent (FTE) basis assuming a 35% tax rate.
 
(5)   Noninterest expense less amortization of intangibles and goodwill impairment divided by the sum of FTE net interest income and noninterest income excluding securities gains (losses).

 

22

 

Huntington Bancshares Incorporated
Year to Date Mortgage Banking Income
(Unaudited)
                                 
    Six Months Ended June 30,     Change  
(dollar amounts in thousands, except as noted)   2011     2010     Amount     Percent  
Mortgage banking income
                                
Origination and secondary marketing
   $ 31,321     $ 33,364     $ (2,043 )     (6 )%
Servicing fees
     24,963       24,596       367       1  
Amortization of capitalized servicing
     (18,915 )     (20,202 )     1,287       (6 )
Other mortgage banking income
     8,028       6,874       1,154       17  
 
                        
Subtotal
     45,397       44,632       765       2  
 
                                
MSR valuation adjustment(1)
     (7,518 )     (31,993 )     24,475       (77 )
Net trading gains (losses) related to MSR hedging
     8,640       57,929       (49,289 )     (85 )
 
                        
Total mortgage banking income
   $ 46,519     $ 70,568     $ (24,049 )     (34 )%
 
                        
 
                                
Mortgage originations (in millions)
   $ 1,845     $ 2,030     $ (185 )     (9 )%
Average trading account securities used to hedge MSRs (in millions)
     34       23       11       48  
Capitalized mortgage servicing rights(2)
     189,740       179,138       10,602       6  
Total mortgages serviced for others (in millions)(2)
     16,315       15,954       361       2  
MSR % of investor servicing portfolio
     1.16 %     1.12 %     0.04 %     4  
 
                        
 
                                
Net impact of MSR hedging
                                
 
                                
MSR valuation adjustment(1)
   $ (7,518 )   $ (31,993 )   $ 24,475       (77 )%
Net trading gains (losses) related to MSR hedging
     8,640       57,929       (49,289 )     (85 )
Net interest income related to MSR hedging
     183       227       (44 )     (19 )
 
                        
Net gain (loss) on MSR hedging
   $ 1,305     $ 26,163     $ (24,858 )     (95 )%
 
                        
(1)   The change in fair value for the period represents the MSR valuation adjustment, net of amortization of capitalized servicing.
 
(2)   At period end.

 

23

 

Huntington Bancshares Incorporated
Year to Date Credit Reserves Analysis
(Unaudited)
                 
    Six Months Ended June 30,  
(dollar amounts in thousands)   2011     2010  
 
                
Allowance for loan and lease losses, beginning of period
   $ 1,249,008     $ 1,482,479  
Loan and lease losses
     (327,708 )     (577,176 )
Recoveries of loans previously charged off
     65,091       59,467  
 
            
Net loan and lease losses
     (262,617 )     (517,709 )
 
            
Provision for loan and lease losses
     86,249       437,604  
Allowance of assets sold
     (1,514 )     (214 )
 
            
Allowance for loan and lease losses, end of period
   $ 1,071,126     $ 1,402,160  
 
            
 
                
Allowance for unfunded loan commitments and letters of credit, beginning of period
   $ 42,127     $ 48,879  
Provision for (reduction in) unfunded loan commitments and letters of credit losses
     (1,067 )     (9,190 )
 
            
Allowance for unfunded loan commitments and letters of credit, end of period
   $ 41,060     $ 39,689  
 
            
Total allowance for credit losses
   $ 1,112,186     $ 1,441,849  
 
            
 
                
Allowance for loan and lease losses (ALLL) as % of:
                
Total loans and leases
     2.74 %     3.79 %
Nonaccrual loans and leases (NALs)
     174       117  
Nonperforming assets (NPAs)
     164       89  
 
                
Total allowance for credit losses (ACL) as % of:
                
Total loans and leases
     2.84 %     3.90 %
Nonaccrual loans and leases (NALs)
     181       120  
Nonperforming assets (NPAs)
     170       91  

 

24

 

Huntington Bancshares Incorporated
Year to Date Net Charge-Off Analysis
(Unaudited)
                 
    Six Months Ended June 30,  
(dollar amounts in thousands)   2011     2010  
 
                
Net charge-offs by loan and lease type:
                
Commercial:
                
Commercial and industrial
   $ 60,895     $ 133,567  
Commercial real estate:
                
Construction
     32,545       79,988  
Commercial
     62,733       87,042  
 
            
Commercial real estate
     95,278       167,030  
 
            
Total commercial
     156,173       300,597  
 
            
Consumer:
                
Automobile
     6,967       13,967  
Home equity(1)
     52,156       82,371  
Residential mortgage(2)
     35,387       107,159  
Other consumer
     11,934       13,615  
 
            
Total consumer
     106,444       217,112  
 
            
Total net charge-offs
   $ 262,617     $ 517,709  
 
            
 
                
Net charge-offs — annualized percentages:
                
Commercial:
                
Commercial and industrial
     0.92 %     2.18 %
Commercial real estate:
                
Construction
     11.18       11.90  
Commercial
     2.17       2.82  
 
            
Commercial real estate
     2.99       4.44  
 
            
Total commercial
     1.59       3.04  
 
            
Consumer:
                
Automobile
     0.24       0.63  
Home equity(1)
     1.34       2.18  
Residential mortgage(2)
     1.57       4.72  
Other consumer
     4.36       3.84  
 
            
Total consumer
     1.14       2.52  
 
            
Net charge-offs as a % of average loans
     1.37 %     2.80 %
 
            
(1)   2010 included net charge-offs of $14,678 thousand associated with the transfer of Franklin-related loans to loans held for sale and $4,991 thousand of other Franklin-related net charge-offs.
 
(2)   2010 included net charge-offs of $60,882 thousand associated with the transfer of Franklin-related loans to loans held for sale and $11,525 thousand of other Franklin-related net charge-offs.

 

25

 

Huntington Bancshares Incorporated
Year to Date Nonaccrual Loans and Leases (NALs) and Nonperforming Assets (NPAs)
(Unaudited)
                 
    June 30,  
(dollar amounts in thousands)   2011     2010  
 
                
Nonaccrual loans and leases (NALs):
                
Commercial and industrial
   $ 229,327     $ 429,561  
Commercial real estate
     291,500       663,103  
Residential mortgage
     59,853       86,486  
Home equity
     33,545       22,199  
 
            
Total nonaccrual loans and leases
     614,225       1,201,349  
 
                
Other real estate, net:
                
Residential
     20,803       71,937  
Commercial
     17,909       67,189  
 
            
Total other real estate, net
     38,712       139,126  
Impaired loans held for sale (1)
     —       242,227  
Other NPAs
     —       —  
 
            
Total nonperforming assets
   $ 652,937     $ 1,582,702  
 
            
 
                
Nonperforming Franklin assets:
                
Commercial
   $ —     $ —  
OREO
     883       24,515  
Impaired loans held for sale
     —       242,227  
 
            
Total nonperforming Franklin assets
   $ 883     $ 266,742  
 
            
Nonaccrual loans and leases as a % of total loans and leases
     1.57 %     3.25 %
 
                
NPA ratio (2)
     1.67       4.24  
                 
    Six Months Ended June 30,  
(dollar amounts in thousands)   2011     2010  
Nonperforming assets, beginning of period
   $ 844,752     $ 2,058,091  
New nonperforming assets
     402,299       409,509  
Franklin impact, net
     (8,594 )     (71,758 )
Returns to accruing status
     (139,315 )     (159,579 )
Loan and lease losses
     (203,675 )     (358,546 )
OREO losses
     1,880       (1,677 )
Payments
     (160,050 )     (248,521 )
Sales
     (84,360 )     (44,817 )
 
            
Nonperforming assets, end of period
   $ 652,937     $ 1,582,702  
 
            
(1)   Represents NALs associated with the transfer of Franklin-related residential mortgage and home equity loans to loans held for sale.
 
(2)   Nonperforming assets divided by the sum of loans and leases, impaired loans held for sale, net other real estate owned, and other NPAs.

 

26

 

Huntington Bancshares Incorporated
Year to Date Accruing Past Due Loans and Leases and Accruing Troubled Debt Restructured Loans
(Unaudited)
                 
    June 30,  
(dollar amounts in thousands)   2011     2010  
Accruing loans and leases past due 90 days or more:
                
Commercial and industrial
   $ —     $ —  
Commercial real estate
     —       —  
Residential mortgage (excluding loans guaranteed by the U.S. Government)
     33,975       47,036  
Home equity
     17,451       26,797  
Other consumer
     6,227       9,533  
 
            
Total, excl. loans guaranteed by the U.S. Government
     57,653       83,366  
Add: loans guaranteed by U.S. Government
     76,979       95,421  
 
            
Total accruing loans and leases past due 90 days or more, including loans guaranteed by the U.S. Government
   $ 134,632     $ 178,787  
 
            
Ratios:
                
 
                
Excluding loans guaranteed by the U.S. Government, as a percent of total loans and leases
     0.15 %     0.23 %
 
                
Guaranteed by U.S. Government, as a percent of total loans and leases
     0.19       0.26  
 
                
Including loans guaranteed by the U.S. Government, as a percent of total loans and leases
     0.34       0.49  
 
                
Accruing troubled debt restructured loans:
                
Commercial
   $ 240,126     $ 141,353  
Residential mortgages
     313,772       281,473  
Other consumer
     75,036       65,061  
 
            
Total accruing troubled debt restructured loans
   $ 628,934     $ 487,887  
 
            

 

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