EXHIBIT 99.1
FOR IMMEDIATE RELEASE
OCTOBER 16, 2001
CONTACTS:
Investors Media
Jay Gould (614) 480-4060 Jeri Grier (614) 480-5413
Laurie Counsel (614) 480-3878
Cheri Gray (614) 480-3803
HUNTINGTON BANCSHARES REPORTS THIRD QUARTER
OPERATING EARNINGS OF $0.30 PER SHARE EXCLUDING CHARGES
COLUMBUS, Ohio - Huntington Bancshares Incorporated (NASDAQ: HBAN;
www.huntington.com) today reported third quarter operating earnings of $75.7
million, or $0.30 per common share, excluding restructuring and other charges
associated with the company's previously announced strategic refocusing. This
compares with $74.5 million, or $0.30 per common share, in the second quarter,
and $83.0 million, or $0.33 per common share, in the year-ago quarter, also
adjusted to exclude restructuring and other charges.
Reported third quarter results included $50.8 million pretax ($33.0 million
after tax) of restructuring and other charges associated with the strategic
refocusing announced July 12, 2001. Third quarter reported earnings were $42.6
million, or $0.17 per common share. This compares with reported earnings of $2.4
million, or $0.01 per common share, in the second quarter and $50.5 million, or
$0.20 per common share, a year ago.
Total charges related to the restructuring are expected to be $215 million
pretax ($140 million after tax). Through the third quarter, such charges totaled
$161.8 million pretax ($105.2 million after tax).
Operating earnings for the nine months ending September 30, 2001, were
$218.0 million, or $0.87 per common share, compared with $284.7 million, or
$1.14 per common share, a year
1
ago. On a reported basis, nine-month earnings were $112.9 million, or $0.45 per
common share, compared with $252.2 million, or $1.01 per common share, a year
ago.
Third quarter results included:
- 7% annualized increase in average managed loans from second quarter levels.
- 11% annualized increase in average core deposits from second quarter
levels.
- 17% increase in non-interest income from a year ago.
- $4.4 million decline in non-interest expense from the second quarter with
an improvement in the efficiency ratio to 57.5% from 58.6%.
- 27% increase in non-performing assets from June 30, 2001.
- Net charge-offs of 0.74%, including 13 basis points associated with the
strategic refocusing effort.
"We have made great progress on a number of fronts in implementing our
strategic refocusing plan," said Thomas Hoaglin, chairman, president and chief
executive officer. "This included reaching an agreement to sell our Florida
banking operations, one of the plan's key components. We are delighted with this
quarter's growth of core deposits, the strongest quarterly increase in recent
history. Moreover, our renewed emphasis on improving operating margins gained
momentum as evidenced by the expansion in the net interest margin, strong
year-over-year growth in fee income, and the decline from last quarter in
non-interest expense.
"While we have been making progress on a number of fronts, economic
conditions are continuing to worsen and the outlook is more negative today than
it was 90 days ago," he continued. "As such, we will be watching credit trends
very carefully and will take necessary actions to ensure the continued strength
of our balance sheet and credit loss reserves."
Results discussed below are on an operating basis and exclude the impact of
restructuring and other charges in all periods.
2
Net interest income increased $1.8 million from the second quarter
reflecting the positive impact of a 7 basis point expansion in the net interest
margin, partially offset by a slight decline in average earning assets. The
expansion in the net interest margin to 4.04% primarily reflected the continued
reduction in lower-margin assets and a slightly liability-sensitive balance
sheet.
Average managed loans increased 7% on an annualized basis in the quarter,
up from the 5% increase in the second quarter. This reflected increases in
commercial and consumer loans of 3% and 10%, respectively. The growth in
consumer loans reflected seasonally strong growth in auto loans/leases. Compared
with the year-ago quarter, average managed loans increased 7%, with commercial
up 5% and consumer up 9%.
Average core deposits increased 11% on an annualized basis from the second
quarter, after many quarters of essentially flat performance. This primarily
reflected increased emphasis on attracting retail deposits. Average core
deposits were up slightly from the year-ago quarter.
Non-interest income, excluding securities gains, decreased $1.3 million
from the second quarter. This decrease was driven by a $4.1 million, or 22%,
decline in mortgage banking revenue, reflecting the second quarter's strong
mortgage banking activity. All other major categories of fee revenue increased
from the second quarter. Compared with the year-ago quarter, non-interest income
increased $19.1 million, or 17%, primarily reflecting strong increases in
mortgage banking, brokerage and insurance, trust services, and capital markets
revenue.
Non-interest expense declined $4.4 million, or 2%, from the second quarter
reflecting management's increased focus on cost containment. The efficiency
ratio improved to 57.5%, down from 58.6% in the second quarter, and from a peak
of 62.0% in the 2001 first quarter. Compared with the year-ago quarter,
non-interest expense was up $15.3 million, or 7%.
Loan loss provision expense in the third quarter was $49.6 million, up $3.8
million, or 8%, from the second quarter. Net charge-offs as a percent of average
loans were 0.61% in the third quarter, down from 0.73% in the second quarter.
Non-performing assets at September 30,
3
2001, were $210.1 million, up $44.1 million, or 27%, from June 30 and
represented 0.97% of loans and other real estate, up from 0.79%. This increase
occurred across a number of industries, reflecting the weakened financial
condition of borrowers caused by deterioration in the economy. The allowance for
loan losses as a percent of period-end loans was unchanged at 1.67% from June
30, and up significantly from 1.45% a year ago.
At September 30, 2001, the tangible equity to assets ratio was 5.96%,
essentially unchanged from June 30. Following the completion early next year of
the sale of the Florida banking operations, this ratio will be improved to a
minimum of 6.5%.
WEBCAST INFORMATION
A conference call to discuss third quarter results will be held today at
2:00 p.m. Eastern and will be available via a live Internet Webcast at
www.streetevents.com. A replay of the Webcast will be archived at that same
address until midnight October 30, 2001. The supplemental financial tables as
well as the slides for the conference call are available at
www.huntington-ir.com and will be filed, along with management's comments, with
the Securities and Exchange Commission on Form 8-K.
ABOUT HUNTINGTON
Huntington Bancshares Incorporated is a $28 billion regional bank holding
company headquartered in Columbus, Ohio. Through its affiliated companies,
Huntington has more than 135 years of serving the financial needs of its
customers. Huntington provides innovative products and services through more
than 500 offices in Florida, Indiana, Kentucky, Maryland, Michigan, New Jersey,
Ohio and West Virginia. International banking services are made available
through the headquarters office in Columbus and additional offices located in
the Cayman Islands and Hong Kong. Huntington also offers products and services
online at www.huntington.com; through its technologically advanced, 24-hour
telephone bank, and through its network of more than 1,400 ATMs.
###
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. All forward-looking statements included in
this news release are based on information available at the time of the release.
Huntington assumes no obligation to update any forward-looking statement.
4
HUNTINGTON BANCSHARES INCORPORATED
CONSOLIDATED RESULTS OF OPERATIONS
(in thousands, except per share amounts)
--------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED SEPTEMBER 30, 2001
----------------------------------------------------------------------
RESTRUCTURING
AND
REPORTED OTHER OPERATING
EARNINGS CHARGES EARNINGS
--------------------- ------------------- --------------------
Interest Income $478,834 $ -- $478,834
Interest Expense 229,047 -- 229,047
-------- -------- --------
Net Interest Income 249,787 -- 249,787
Provision for Loan Losses 49,559 -- 49,559
Securities Gains 1,059 -- 1,059
Non-Interest Income 129,397 -- 129,397
Non-Interest Expense 228,890 -- 228,890
Special Charge 50,817 50,817 --
-------- -------- --------
Income Before Income Taxes 50,977 (50,817) 101,794
Provision for Income Taxes 8,348 (17,786) 26,134
-------- -------- --------
NET INCOME $ 42,629 $(33,031) $ 75,660
======== ======== ========
NET INCOME PER COMMON
SHARE -- DILUTED (1) $0.17 ($0.13) $0.30
======== ======== ========
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Three Months Ended September 30, 2000
----------------------------------------------------------------------
Restructuring
and
Reported Other Operating
Earnings Charges Earnings
-------------------- ------------------- ----------------------
Interest Income $535,791 $ -- $535,791
Interest Expense 299,922 -- 299,922
-------- -------- --------
Net Interest Income 235,869 -- 235,869
Provision for Loan Losses 26,396 -- 26,396
Securities Gains 11,379 -- 11,379
Non-Interest Income 110,273 -- 110,273
Non-Interest Expense 213,585 -- 213,585
Special Charge 50,000 50,000 --
-------- -------- --------
Income Before Income Taxes 67,540 (50,000) 117,540
Provision for Income Taxes 17,010 (17,500) 34,510
-------- -------- --------
NET INCOME $ 50,530 $(32,500) $ 83,030
======== ======== ========
NET INCOME PER COMMON
SHARE -- DILUTED (1) $0.20 ($0.13) $0.33
======== ======== ========
-------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
NINE MONTHS ENDED SEPTEMBER 30, 2001
----------------------------------------------------------------------
RESTRUCTURING
AND
REPORTED OTHER OPERATING
EARNINGS CHARGES EARNINGS
--------------------- ------------------- --------------------
Interest Income $1,495,768 $ -- $1,495,768
Interest Expense 754,824 -- 754,824
---------- ---------- ----------
Net Interest Income 740,944 -- 740,944
Provision for Loan Losses 200,518 71,718 128,800
Securities Gains 634 (5,250) 5,884
Non-Interest Income 375,749 -- 375,749
Non-Interest Expense 696,276 -- 696,276
Special Charge 84,814 84,814 --
---------- ---------- ----------
Income Before Income Taxes 135,719 (161,782) 297,501
Provision for Income Taxes 22,847 (56,624) 79,471
---------- ---------- ----------
NET INCOME $ 112,872 $ (105,158) $ 218,030
========== ========== ==========
NET INCOME PER COMMON
SHARE -- DILUTED (1) $0.45 ($0.42) $0.87
========== ========== ==========
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
Nine Months Ended September 30, 2000
----------------------------------------------------------------------
Restructuring
and
Reported Other Operating
Earnings Charges Earnings
-------------------- ------------------- ----------------------
Interest Income $1,570,844 $ -- $1,570,844
Interest Expense 861,478 -- 861,478
---------- ---------- ----------
Net Interest Income 709,366 -- 709,366
Provision for Loan Losses 57,931 -- 57,931
Securities Gains 36,256 -- 36,256
Non-Interest Income 326,754 -- 326,754
Non-Interest Expense 611,767 -- 611,767
Special Charge 50,000 50,000 --
---------- ---------- ----------
Income Before Income Taxes 352,678 (50,000) 402,678
Provision for Income Taxes 100,454 (17,500) 117,954
---------- ---------- ----------
NET INCOME $ 252,224 $ (32,500) $ 284,724
========== ========== ==========
NET INCOME PER COMMON
SHARE -- DILUTED (1) $1.01 ($0.13) $1.14
========== ========== ==========
---------------------------------------------------------------------------------------------------------
(1) Adjusted for stock splits and stock dividends, as applicable.
HUNTINGTON BANCSHARES INCORPORATED
CONSOLIDATED COMPARATIVE SUMMARY
(in thousands, except per share amounts)
-----------------------------------------------------------------------------------------------------------------
CONSOLIDATED RESULTS OF OPERATIONS (OPERATING BASIS) (1)
-----------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED
SEPTEMBER 30,
------------------------------------------------ CHANGE
2001 2000 %
---------------------- --------------------- -----------------
Interest Income $478,834 $535,791 (10.6)%
Interest Expense 229,047 299,922 (23.6)
-------- --------
Net Interest Income 249,787 235,869 5.9
Provision for Loan Losses 49,559 26,396 87.8
Securities Gains 1,059 11,379 N.M.
Non-Interest Income 129,397 110,273 17.3
Non-Interest Expense 228,890 213,585 7.2
Income Before Income Taxes 101,794 117,540 (13.4)
Provision for Income Taxes 26,134 34,510 (24.3)
-------- --------
NET INCOME $ 75,660 $ 83,030 (8.9)%
======== ========
NET INCOME PER COMMON SHARE (2)
Basic $0.30 $0.33 (9.1)%
Diluted $0.30 $0.33 (9.1)%
Diluted--Cash Basis (3) $0.33 $0.36 (8.3)%
Cash Dividends Declared $0.16 $0.20 (20.0)%
Shareholders' Equity (period end) $9.57 $9.10 5.2 %
AVERAGE COMMON SHARES (2)
Basic 251,148 251,114 --- %
Diluted 252,203 252,033 0.1 %
-----------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
CONSOLIDATED RESULTS OF OPERATIONS (OPERATING BASIS) (1)
---------------------------------------------------------------------------------------------------------------
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------------------------------ CHANGE
2001 2000 %
---------------------- ---------------------- ------------------
Interest Income $1,495,768 $1,570,844 (4.8)%
Interest Expense 754,824 861,478 (12.4)
---------- ----------
Net Interest Income 740,944 709,366 4.5
Provision for Loan Losses 128,800 57,931 122.3
Securities Gains 5,884 36,256 N.M.
Non-Interest Income 375,749 326,754 15.0
Non-Interest Expense 696,276 611,767 13.8
Income Before Income Taxes 297,501 402,678 (26.1)
Provision for Income Taxes 79,471 117,954 (32.6)
---------- ----------
NET INCOME $ 218,030 $ 284,724 (23.4)%
========== ==========
NET INCOME PER COMMON SHARE (2)
Basic $0.87 $1.15 (24.3)%
Diluted $0.87 $1.14 (23.7)%
Diluted--Cash Basis (3) $0.96 $1.23 (22.0)%
Cash Dividends Declared $0.56 $0.56 --- %
Shareholders' Equity (period end) $9.57 $9.10 5.2 %
AVERAGE COMMON SHARES (2)
BASIC 251,039 247,984 1.2 %
Diluted 251,537 248,909 1.1 %
---------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
KEY PERFORMANCE RATIOS (OPERATING BASIS) (1)
--------------------------------------------------------------------------------------------
THREE MONTHS ENDED
SEPTEMBER 30,
-----------------------------------------------
2001 2000
---------------------- --------------------
Return On:
Average Total Assets 1.07% 1.15%
Average Shareholders' Equity 12.64% 14.04%
Efficiency Ratio 57.48% 58.38%
Net Interest Margin 4.04% 3.74%
--------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
KEY PERFORMANCE RATIOS (OPERATING BASIS) (1)
-------------------------------------------------------------------------------------------
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------------------------------
2001 2000
---------------------- ----------------------
Return On:
Average Total Assets 1.03% 1.32%
Average Shareholders' Equity 12.20% 16.87%
Efficiency Ratio 59.30% 55.39%
Net Interest Margin 3.99% 3.74%
-------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CONDITION DATA (AVERAGE)
------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED
SEPTEMBER 30,
------------------------------------------------ CHANGE
2001 2000 %
---------------------- --------------------- -----------------
Total Loans - Reported $21,347,885 $20,623,133 3.5 %
Total Loans - Managed 22,625,693 21,644,025 4.5
Total Deposits 19,486,937 19,782,512 (1.5)
Total Assets - Reported 27,988,386 28,697,506 (2.5)
Shareholders' Equity 2,375,358 2,351,914 1.0
------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CONDITION DATA (AVERAGE)
----------------------------------------------------------------------------------------------------------
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------------------------------ CHANGE
2001 2000 %
---------------------- ---------------------- ------------------
Total Loans - Reported $21,026,596 $20,728,548 1.4 %
Total Loans - Managed 22,343,222 21,225,140 5.3
Total Deposits 19,221,163 19,749,348 (2.7)
Total Assets - Reported 28,191,133 28,742,341 (1.9)
Shareholders' Equity 2,388,764 2,254,590 6.0
----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
CAPITAL RATIOS AND ASSET QUALITY
-----------------------------------------------------------------------------------------------------------
SEPTEMBER 30,
------------------------------------------------
2001 2000
---------------------- ---------------------
Tier I Risk-Based Capital (4) 6.97% 7.20%
Total Risk-Based Capital (4) 10.13% 10.64%
Tier I Leverage (4) 7.10% 6.80%
Tangible Equity/Assets -- Period End 5.96% 5.73%
Average Equity/Assets -- Quarterly 8.49% 8.20%
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
CAPITAL RATIOS AND ASSET QUALITY
-----------------------------------------------------------------------------------------------------------
SEPTEMBER 30,
----------------------------------
2001 2000
------------ ------------
Non-performing loans (NPLs) $202,011 $76,512
Total non-performing assets (NPAs) $210,061 $88,494
Allowance for loan losses/total loans 1.67% 1.45%
Allowance for loan losses/NPLs 178.43% 385.15%
Allowance for loan losses and other
real estate/NPAs 171.08% 326.77%
-----------------------------------------------------------------------------------------------------------
(1) Income component excludes after-tax impact of Restructuring and Other
Charges ($33,031 in 3Q '01; $72,127 in 2Q '01; $32,500 in 3Q '00).
(2) Adjusted for stock splits and stock dividends, as applicable.
(3) Tangible or "Cash Basis" net income excludes amortization of goodwill, net
of income taxes.
(4) Estimated. N.M. - Not Meaningful.