Exhibit 99.1
FOR IMMEDIATE RELEASE
JANUARY 18, 2002
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 ANNOUNCES FOURTH QUARTER OPERATING
EARNINGS OF $0.30 PER SHARE, EXCLUDING CHARGES AND ONE-TIME ITEMS
PROVIDES 2002 OPERATING EARNINGS GUIDANCE OF $1.32 - $1.36 PER SHARE
COLUMBUS, Ohio - Huntington Bancshares Incorporated (NASDAQ: HBAN;
www.huntington.com) today announced fourth quarter operating earnings of $75.5
million, or $0.30 per common share. Operating earnings exclude restructuring and
other charges associated with the company's strategic refocusing announced last
July and other one-time items announced last December. This compares with $75.7
million, or $0.30 per common share, on the same basis in the third quarter, and
$76.2 million, or $0.30 per common share, in the year-ago quarter.
Fourth quarter operating results exclude the impact of the following:
- - Restructuring and other charges of $15.1 million pretax ($9.8 million after
tax) associated with the strategic refocusing.
- - One-time items as announced December 18, 2001 consisting of:
- A $32 million after tax reduction of tax expense, and
- A $50 million pretax addition to the allowance for loan losses.
Reported fourth quarter earnings were $65.6 million, or $0.26 per
common share. This compares with reported earnings of $42.6 million, or $0.17
per common share, in the third quarter and $76.2 million, or $0.30 per common
share, in the year-ago quarter.
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Full-year 2001 operating earnings were $293.5 million, or $1.17 per
common share, compared with $360.9 million, or $1.45 per share in 2000.
Operating earnings for 2001 exclude $115.0 million after tax of restructuring
and other charges associated with the strategic refocusing, as well as the
fourth quarter one-time items. For 2000, operating earnings exclude $32.5
million after tax related to the write-down of auto lease residuals.
Full-year reported earnings were $178.5 million, or $0.71 per share,
compared with $328.4 million, or $1.32 per share in 2000.
"We are pleased that fourth quarter operating results were in line with
expectations despite a more difficult credit environment," said Thomas Hoaglin,
chairman, president and chief executive officer. "Importantly, fourth quarter
results demonstrated continued improvement in several key areas of focus
including deposit growth, margin expansion, increased fee income, and an
improved efficiency ratio. At the same time, we continued to make progress on
the strategic plan initiatives outlined last July, including the sale of our
Florida banking operations, which we expect to complete next month."
Hoaglin added, "As announced last month, credit quality continued to
deteriorate reflecting the weak economy. Recognizing this trend, we further
strengthened our loan loss reserve. As a result, our loan loss reserve ratio at
year end was 1.90%, considerably higher than 1.45% a year ago."
Results discussed below are on an operating basis and exclude the
impact of restructuring and other charges in all periods, as well as the 2001
fourth quarter one-time items. (Refer to the attached reconciliation of
operating versus reported earnings for both the fourth quarter and full-year
periods).
Fourth quarter operating results compared with third quarter performance
reflected:
- - 7% annualized increase in average core deposits,
- - $9.1 million, or 2%, increase in revenue, excluding securities gains, with
the full-year up $106.0 million, or 8%,
2
- - 7 basis point increase in the net interest margin to 4.11%,
- - $1.5 million decline in non-interest expense with an improvement in the
efficiency ratio to 55.8%,
- - $17.4 million, or 8%, increase in non-performing assets, and
- - A 30 basis point increase in net charge-offs to 1.04% of average loans.
Net interest income increased $5.5 million from the third quarter
reflecting the positive impact of a 7 basis point expansion in the net interest
margin as earning assets were essentially flat. The expansion in the net
interest margin to 4.11% primarily reflected lower wholesale funding costs.
Average managed loans increased 2% on an annualized basis in the
quarter, down from the 7% pace in the third quarter. Home equity lines and
commercial real estate loans increased at annualized rates of 21% and 18%,
respectively, whereas, commercial and consumer installment loans declined 11%
and 10%, respectively. Compared with the year-ago quarter, average managed loans
increased 5%, with home equity and commercial real estate up 18% and 10%,
respectively, and auto loans and leases up 5%.
Average core deposits increased 7% on an annualized basis from the
third quarter, following an 11% increase in the third quarter. This was driven
by increases in interest bearing and demand deposits, only partially offset by
declines in savings and certificates of deposits. Average core deposits were up
3% from the year-ago quarter.
Non-interest income, excluding securities gains, increased $3.6
million, or 3%, from the third quarter. This was driven by increases in mortgage
banking revenue, brokerage and insurance fees, and service charges on deposit
accounts. Compared with the year-ago quarter, non-interest income increased $3.3
million, or 3%. Excluding securitization-related income, which was particularly
strong in the year-ago quarter, non-interest income was up 9%. This reflected a
record year in mortgage banking revenue, significant growth in brokerage and
insurance fees, as well as an increase in service charges on deposit accounts.
3
Non-interest expense declined $1.5 million from the third quarter
following a $4.4 million decrease in that quarter. The efficiency ratio improved
to 55.8%, down from 57.5% in the third quarter. This was the third consecutive
quarterly improvement from a peak of 62.0% in the 2001 first quarter. Compared
with the year-ago quarter, non-interest expense was up $3.5 million, or 2%.
Net charge-offs were $56.1 million in the fourth quarter. This
represented 1.04% of average loans, up from 0.74% in the third quarter.
Non-performing assets at December 31, 2001, were $227.5 million, up
$17.4 million, or 8%, from September 30, and represented 1.05% of total loans
and other real estate, up from 0.97%. This increase was spread across a number
of credits with some concentration in the manufacturing and services sectors
reflecting the weakened economy.
Loan loss provision expense in the fourth quarter, excluding the
one-time $50.0 million addition, was $58.3 million, up $8.7 million, from the
third quarter. Provision expense covered net charge-offs and provided for
increases in loan balances. The allowance for loan losses as a percent of
period-end loans was 1.90% at December 31, up from 1.67% at September 30, and up
significantly from 1.45% a year ago.
At December 31, 2001, the tangible equity to assets ratio was 6.04%, up
from 5.96% at September 30. Following the completion of the sale of the Florida
banking operations, this ratio will be significantly higher.
2002 OUTLOOK
"We anticipate 2002 operating earnings will be in the $1.32 - $1.36 per
share range, excluding the planned first quarter restructuring charges and gain
associated with the anticipated February close of the Florida banking operations
sale. It also reflects the benefit of the share repurchase program which we said
last July would begin once the Florida transaction is
4
completed," Hoaglin said. "This earnings per share range is consistent with the
current analyst consensus of $1.34 per share. Although we expect the economic
environment to continue to be difficult, we will continue with our plans for
improving revenue growth and removing unnecessary spending."
CONFERENCE CALL / WEBCAST INFORMATION
Huntington's senior management will host an earnings conference call
today at 12:00 p.m. (noon) EST, via a live Internet webcast at
www.streetevents.com or through a dial-in phone number at (800) 760-1355. Slides
to be reviewed during the conference call will be available for viewing at
www.huntington-ir.com on January 18, 2002 just prior to 12:00 p.m. EST.
A replay of the webcast will be archived at the same Internet address
with a phone dial-in replay available at (800) 642-1687; conference ID 2843856.
Both replay options will be available until midnight January 31, 2002.
The supplemental financial tables as well as the slides for the
conference call 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 $29 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.
5
HUNTINGTON BANCSHARES INCORPORATED
CONSOLIDATED RESULTS OF OPERATIONS
(in thousands of dollars, except per share amounts)
- --------------------------------------------------------------------------------
Three Months Ended
---------------------------------------------------------------------------------------
December 31, 2001 December 31, 2000
--------------------------------------- -------------------------------------------
Restructuring Restructuring
and and
Reported Other Operating Reported Other Operating
Earnings Charges (1) Earnings Earnings Charges Earnings
---------- ------------ ----------- ---------- --------- -------------
Interest Income $ 443,751 $ -- $ 443,751 $ 537,661 $ -- $ 537,661
Interest Expense 188,513 -- 188,513 304,595 -- 304,595
--------- --------- --------- --------- ------ -----------
Net Interest Income 255,238 -- 255,238 233,066 -- 233,066
Provision for Loan Losses 108,275 50,000 58,275 32,548 -- 32,548
Securities Gains 89 -- 89 845 -- 845
Non-Interest Income 133,008 -- 133,008 129,704 -- 129,704
Non-Interest Expense 227,354 -- 227,354 223,850 -- 223,850
Special Charges 15,143 15,143 -- -- -- --
--------- --------- --------- --------- ------ -----------
Income Before Income Taxes 37,563 (65,143) 102,706 107,217 -- 107,217
Income Taxes (28,086) (55,300) 27,214 30,995 -- 30,995
--------- --------- --------- --------- ------ -----------
Net Income $ 65,649 $ (9,843) $ 75,492 $ 76,222 $ -- $ 76,222
========= ========= ========= ========= ====== ===========
Net Income per Common
Share -- Diluted (3) $ 0.26 ($ 0.04) $ 0.30 $ 0.30 $ 0.00 $ 0.30
- ------------------------------------------------------------------------------------------------------------------------------
Twelve Months Ended
---------------------------------------------------------------------------------------
December 31, 2001 December 31, 2000
--------------------------------------- -------------------------------------------
Restructuring Restructuring
and and
Reported Other Operating Reported Other Operating
Earnings Charges (2) Earnings Earnings Charges (2) Earnings
---------- ------------ ----------- ---------- ----------- -------------
Interest Income $ 1,939,519 $ -- $ 1,939,519 $ 2,108,505 $ -- $ 2,108,505
Interest Expense 943,337 -- 943,337 1,166,073 -- 1,166,073
----------- ----------- ----------- ----------- ----------- -----------
Net Interest Income 996,182 -- 996,182 942,432 -- 942,432
Provision for Loan Losses 308,793 121,718 187,075 90,479 -- 90,479
Securities Gains 723 (5,250) 5,973 37,101 -- 37,101
Non-Interest Income 508,757 -- 508,757 456,458 -- 456,458
Non-Interest Expense 923,630 -- 923,630 835,617 -- 835,617
Special Charges 99,957 99,957 -- 50,000 50,000 --
----------- ----------- ----------- ----------- ----------- -----------
Income Before Income Taxes 173,282 (226,925) 400,207 459,895 (50,000) 509,895
Income Taxes (5,239) (111,924) 106,685 131,449 (17,500) 148,949
----------- ----------- ----------- ----------- ----------- -----------
Net Income $ 178,521 $ (115,001) $ 293,522 $ 328,446 $ (32,500) $ 360,946
=========== =========== =========== =========== =========== ===========
Net Income per Common
Share -- Diluted (3) $ 0.71 ($ 0.46) $ 1.17 $ 1.32 ($ 0.13) $ 1.45
- ------------------------------------------------------------------------------------------------------------------------------
(1) Includes $15.1 million of pretax restructuring and other charges. Also
includes $50.0 million of pretax addition to the allowance for loan losses
offset by $32.5 million of benefits derived from federal tax strategies.
(2) Includes $176.9 million of pretax restructuring and other charges. Also
includes $50.0 million of pretax addition to the allowance for loan losses
offset by $32.5 million of benefits derived from federal tax strategies.
The year 2000 includes $50.0 million of pretax charges related to the
write-down of lease residual values.
(3) Adjusted for stock splits and stock dividends, as applicable.
HUNTINGTON BANCSHARES INCORPORATED
CONSOLIDATED COMPARATIVE SUMMARY - Operating Basis (1)
(in thousands of dollars, except per share amounts)
CONSOLIDATED RESULTS OF OPERATIONS
- -------------------------------------------------------------------------------
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------------- Change ---------------------------------- Change
2001 2000 % 2001 2000 %
---------------------------- --------- --------------- --------------- ------------
Interest Income $ 443,751 $ 537,661 (17.5)% $ 1,939,519 $2,108,505 (8.0)%
Interest Expense 188,513 304,595 (38.1) 943,337 1,166,073 (19.1)
------------ -------------- --------------- ---------------
Net Interest Income 255,238 233,066 9.5 996,182 942,432 5.7
Provision for Loan Losses 58,275 32,548 79.0 187,075 90,479 106.8
Securities Gains 89 845 N.M. 5,973 37,101 N.M.
Non-Interest Income 133,008 129,704 2.5 508,757 456,458 11.5
Non-Interest Expense 227,354 223,850 1.6 923,630 835,617 10.5
------------ -------------- --------------- ---------------
Income before Income Taxes 102,706 107,217 (4.2) 400,207 509,895 (21.5)
Income Taxes 27,214 30,995 (12.2) 106,685 148,949 (28.4)
------------ -------------- --------------- ---------------
Net Income $ 75,492 $ 76,222 (1.0)% $ 293,522 $ 360,946 (18.7)%
============ ============== =============== ===============
Net Income per Common Share (2)
Basic $0.30 $0.30 --- % $1.17 $1.45 (19.3)%
Diluted $0.30 $0.30 --- % $1.17 $1.45 (19.3)%
Diluted--Cash Basis (3) $0.33 $0.33 --- % $1.29 $1.55 (16.7)%
Cash Dividends Declared $0.16 $0.20 (20.0)% $0.72 $0.76 (5.3)%
Shareholders' Equity (period end) $9.62 $9.43 2.0 % $9.62 $9.43 2.0 %
Average Common Shares (2)
Basic 251,193 250,854 0.1 % 251,078 248,709 1.0 %
Diluted 251,858 251,401 0.2 % 251,716 249,570 0.9 %
KEY PERFORMANCE RATIOS
- --------------------------------------------------------------------------------
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------------------------ -------------------------------------
2001 2000 2001 2000
--------------- ---------------- --------------- ------------------
Return On:
Average Total Assets 1.07 % 1.06 % 1.04 % 1.26 %
Average Shareholders' Equity 12.68 % 12.89 % 12.32 % 15.84 %
Efficiency Ratio 55.77 % 58.48 % 58.39 % 56.19 %
Net Interest Margin 4.11 % 3.70 % 4.02 % 3.73 %
Consolidated Statement of Condition Data
- --------------------------------------------------------------------------------
Three Months Ended Twelve Months Ended
December 31, December 31,
--------------------------------- Change ---------------------------------- Change
2001 2000 % 2001 2000 %
--------------------------------- --------- --------------- --------------- ----------
Average Total Loans:
Reported $ 21,512,582 $20,489,983 5.0 % $ 21,149,091 $20,668,581 2.3 %
Managed $ 22,747,539 $21,785,984 4.4 $ 22,445,132 $21,366,117 5.1
Average Total Deposits $ 19,774,348 $19,511,274 1.3 $ 19,360,596 $19,689,504 (1.7)
Average Total Assets $ 27,977,049 $28,655,484 (2.4) $ 28,137,172 $28,720,508 (2.0)
Average Shareholders' Equity $ 2,361,214 $2,352,612 0.4 $2,381,820 $2,279,230 4.5
REGULATORY CAPITAL RATIOS (4) AND ASSET QUALITY
- --------------------------------------------------------------------------------
At At
December 31, December 31,
------------------------- ---------------------------
2001 2000 2001 2000
-------------- --------- -------------- -----------
Tier I Risk-Based Capital 7.27% 7.19% Non-performing loans (NPLs) $221,109 $93,984
Total Risk-Based Capital 10.33% 10.46% Total non-performing assets (NPAs) $227,493 $105,397
Tier I Leverage 7.41% 6.93% Allowance for loan losses/total loans 1.90 % 1.45 %
Tangible Equity/Assets -- Period End 6.04% 5.87% Allowance for loan losses/NPLs 185.69 % 316.95 %
Average Equity/Average Assets -- Quarterly 8.44% 8.21% Allowance for loan losses and other
real estate/NPAs 180.13 % 279.16 %
- --------------------------------------------------------------------------------
(1) Income component excludes after-tax impact of restructuring and other
charges ($9,843 in 4Q '01 and $115,001 for year 2001;
$32,500 for year 2000).
(2) Adjusted for stock splits and stock dividends, as applicable.
(3) Tangible or "Cash Basis" net income excludes amortization of goodwill and
other intangibles, net of income taxes.
(4) Estimated.
N.M. - Not Meaningful