NEWS RELEASE HUNTINGTON BANKS LOGO
FOR IMMEDIATE RELEASE
SUBMITTED: JULY 18, 2000
FOR FURTHER INFORMATION, CONTACT:
MEDIA ANALYSTS
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GAIL GESHWILM (614) 480-5413 LAURIE COUNSEL (614) 480-3878
LAURA BOWERS (614) 480-4433 CHERI GRAY (614) 480-3803
HUNTINGTON BANCSHARES REPORTS
SECOND QUARTER 2000 EARNINGS HIGHLIGHTED BY
STRONG GROWTH IN DEMAND DEPOSIT ACCOUNTS
COLUMBUS, Ohio - Huntington Bancshares Incorporated (NASDAQ: HBAN;
www.huntington.com) today reported second quarter 2000 net income of $97.5
million or $.44 per diluted common share, compared with $105.0 million and $.45
earned in the second quarter of 1999. For the six months ending June 30, 2000,
diluted earnings per share were $.90, compared with $.86 for the same period one
year ago. Return on equity (ROE) and return on assets (ROA) during the second
quarter were 17.79% and 1.37%, compared with ROE of 19.48% and ROA of 1.47% for
the same period a year ago. Year-to-date 2000, ROE was 18.39% and ROA was 1.41%
compared with ratios of 18.98% and 1.42% for the corresponding six-month period
one year ago.
Net interest income for the second quarter of 2000 totaled $232.8
million, down $28.3 million from the second quarter of last year. The net
interest margin was 3.72% for the quarter. As expected, decreases in net
interest income and the margin resulted from steps taken to strategically
reposition the company's balance sheet. Such strategic actions include the
October 1999 sale of the company's credit card portfolio, reduction of the
investment portfolio, and securitization of automobile loans. These actions,
plus other initiatives currently in place, better position the company for
long-term growth.
"We are pleased the new sales initiatives and deposit products,
introduced in the first quarter, are showing positive results. Strong growth in
demand deposits, combined with
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excellent asset quality and effective expense control, reflect our ongoing
strategy to strengthen the profitability of core lines of business," said Frank
Wobst, chairman and chief executive officer of Huntington Bancshares
Incorporated.
"Additionally, we recently completed the acquisition of Empire Banc
Corporation in Traverse City, Michigan. This acquisition of a bank with a
history of strong deposit and revenue growth increases our presence in
northwestern Michigan," Wobst said. "Also announced was the formation of e-Banc
LLC, a company that is developing an integrated customer relationship management
solution for Huntington and other financial institutions."
Loan demand remains strong. Managed total loans (reported amounts
normalized for securitization activities) for the second quarter increased at an
annualized rate of 9% from the first quarter of 2000. The consumer portfolio
grew at an annualized rate of 13%, led by automobile financing and home equity
lending at 12% and 26%, respectively.
Huntington's strong credit quality is a reflection of the company's
in-market relationship lending to established borrowers and the high caliber of
its loan portfolio. Net charge-offs for the quarter were .30% of average loans,
consistent with the .30% (excluding credit card) reported for the second quarter
1999 and near historically low levels. Coverage ratios as of June 30, 2000 were
374% of non-performing loans and 307% of non-performing assets. Non-performing
assets as a percentage of total loans plus other real estate at .46% remained
stable, and the allowance for loan losses as a percent of end of period total
loans was 1.45%.
Total core deposits grew 3% on a linked quarter annualized basis. More
importantly, demand deposit account balances were up 10% on the same basis,
indicative of the successful execution of the company's corporate deposit growth
strategy. Very favorable results have been achieved in a new line of deposit
products, the Premier checking, savings and money market accounts. The Premier
Checking account, introduced in the first quarter of this year, now represents
nearly half of new checking accounts opened, with an average opening balance
four times greater than that of a non-Premier checking account.
Non-interest income, adjusted for the impact of the credit card sale,
grew 6% from the 1999 second quarter to $115.6 million. Excluding securitization
income and mortgage banking
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revenue, the latter of which has declined significantly in the recent higher
rate environment, non-interest income increased 9%. Service charges were $40.1
million, an increase of 11% from last year's second quarter; electronic banking
fees increased 20% over the second quarter 1999. Insurance income for the
quarter increased dramatically, up 33% from the second quarter 1999, as
Huntington has accelerated its insurance sales initiatives, especially life
insurance offered across various distribution channels.
Company expenses are at their lowest level in two years due to the
ongoing focus on cost containment and efficiencies created by the company's
Operational Excellence Program. Operating expenses of $198.1 million in the
second quarter declined from $200.1 million in the first quarter 2000 and $202.1
million in the second quarter of 1999.
Huntington remains committed to maintaining healthy regulatory capital
positions, improving its average equity to average assets ratio to 7.72% in the
recent quarter from 7.52% for the same period one year ago. Huntington and its
bank subsidiary continue to exceed requirements for a "well capitalized"
institution. At June 30, 2000, Huntington's tier 1 and total risk-based capital
ratios (estimated) were 7.40% and 10.90%, respectively.
During the second quarter, Huntington's board of directors authorized
the purchase of an additional 10 million shares under the corporation's common
stock repurchase program, adding to the approximate 5 million shares remaining
under the prior authorization. In addition, the board declared a 10% stock
dividend on May 17, 2000. The ex-dividend date of this distribution was July 12,
2000. Accordingly, the share price of Huntington's common stock adjusted on that
date. The per share information included in the above paragraphs has not been
restated for this pending dividend to be paid July 31, 2000.
Huntington Bancshares Incorporated is a regional bank holding company
headquartered in Columbus, Ohio with assets of $29 billion and 134 years of
serving the financial needs of its customers.
Huntington provides innovative products and services through its more
than 600 offices in Florida, Georgia, Indiana, Kentucky, Maryland, Michigan, New
Jersey, North Carolina, Ohio, South Carolina, and West Virginia. International
banking services are made available through
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the headquarters office in Columbus and additional offices located in the Cayman
Islands and Hong Kong. Huntington also offers products and services through its
technologically advanced, 24-hour telephone bank, a network of more than 1,400
ATMs and its Web Bank at www.huntington.com.
A version of this press release that contains supplemental tables is
available via PR Newswire's Fax-on-Demand system. Please call (800) 753-0352 and
enter extension 756. For faxed copies of all other news releases, please call
(800) 758-5804 extension 423276.
FORWARD-LOOKING STATEMENT DISCLOSURE:
This press release contains certain forward-looking statements,
including certain plans, expectations, goals, and projections, which are subject
to numerous assumptions, risks, and uncertainties. Actual results could differ
materially from those contained or implied by such statements for a variety of
factors including: changes in economic conditions; movements in interest rates;
competitive pressures on product pricing and services; success and timing of
business strategies; the successful integration of acquired businesses; the
nature, extent, and timing of governmental actions and reforms; and extended
disruption of vital infrastructure.
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HUNTINGTON BANCSHARES INCORPORATED
CONSOLIDATED COMPARATIVE SUMMARY
(in thousands, except per share amounts)
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CONSOLIDATED RESULTS OF OPERATIONS
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THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
--------------------- CHANGE ----------------------- CHANGE
2000 1999 % 2000 1999 %
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Interest Income $519,496 $498,500 4.2% $1,035,053 $994,192 4.1%
Interest Expense 286,690 237,352 20.8 561,556 473,523 18.6
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Net Interest Income 232,806 261,148 (10.9) 473,497 520,669 (9.1)
Provision for Loan Losses 15,834 21,026 (24.7) 31,535 46,331 (31.9)
Securities Gains 103 2,220 (95.4) 24,866 4,530 N.M.
Non-Interest Income 115,561 115,056 0.4 216,492 222,618 (2.8)
Non-Interest Expense 198,076 202,138 (2.0) 398,182 404,244 (1.5)
Provision for Income Taxes 37,039 50,285 (26.3) 83,444 95,695 (12.8)
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NET INCOME $ 97,521 $104,975 (7.1)% $ 201,694 $201,547 0.1%
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PER COMMON SHARE AMOUNTS (1)
Net Income per Common Share
Basic $ 0.44 $ 0.45 (2.2)% $ 0.90 $ 0.87 3.4%
Diluted $ 0.44 $ 0.45 (2.2)% $ 0.90 $ 0.86 4.7%
Diluted - Cash Basis (2) $ 0.47 $ 0.48 (2.1)% $ 0.96 $ 0.93 3.2%
Cash Dividends Declared $ 0.20 $ 0.18 11.1% $ 0.40 $ 0.36 11.1%
Shareholders' Equity (period end) $ 9.92 $ 9.30 6.7% $ 9.92 $ 9.30 6.7%
AVERAGE COMMON SHARES (1)
Basic 222,577 230,976 (3.6)% 224,004 231,217 (3.1)%
Diluted 223,320 233,154 (4.2)% 224,938 233,279 (3.6)%
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KEY OPERATING RATIOS
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THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
--------------------- -----------------------
2000 1999 2000 1999
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Return On:
Average Total Assets 1.37% 1.47% 1.41% 1.42%
Average Shareholders' Equity 17.79% 19.48% 18.39% 18.98%
Efficiency Ratio 53.89% 50.93% 53.91% 51.54%
Net Interest Margin 3.72% 4.14% 3.75% 4.16%
Average Equity/Average Assets 7.72% 7.52% 7.67% 7.49%
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CONSOLIDATED STATEMENT OF CONDITION DATA
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THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------------- CHANGE -------------------------- CHANGE
2000 1999 % 2000 1999 %
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Average Total Loans $20,762,295 $20,002,262 3.8% $20,781,835 $19,783,826 5.0%
Average Total Deposits $20,590,281 $19,072,878 8.0 $19,732,583 $19,101,954 3.3
Average Total Assets $28,573,827 $28,730,679 (0.5) $28,765,005 $28,577,360 0.7
Average Shareholders' Equity $ 2,204,865 $ 2,161,275 2.0 $ 2,205,393 $ 2,141,126 3.0
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REGULATORY CAPITAL RATIOS (3) AND ASSET QUALITY
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AT AT
JUNE 30, JUNE 30,
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2000 1999 2000 1999
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Tier I Risk-Based Capital 7.40% 7.29% Non-performing loans (NPLs) $79,453 $76,764
Total non-performing assets (NPAs) $95,123 $93,603
Total Risk-Based Capital 10.90% 10.65% Allowance for loan losses/total loans 1.45% 1.46%
Allowance for loan losses/NPLs 373.67% 382.05%
Tier I Leverage 6.89% 6.45% Allowance for loan losses and other
real estate/NPAs 306.89% 311.32%
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(1) Adjusted for stock dividends and stock splits, as applicable, excluding the ten percent stock dividend
payable July 2000.
(2) Tangible or "Cash Basis" net income excludes amortization of goodwill and other intangibles, net of income
taxes.
(3) Estimated.
N.M. - Not Meaningful.
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