EXHIBIT 99.3
[HUNTINGTON LOGO]
FIRST QUARTER EARNINGS REVIEW
APRIL 18, 2002
1
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MEETING PARTICIPANTS
Tom Hoaglin
- - Chairman, President and Chief Executive Officer
Mike McMennamin
- - Vice Chairman and Chief Financial Officer
Jay Gould
- - Sr. Vice President - Investor Relations
2
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FIRST QUARTER HIGHLIGHTS
Solid Financial Performance
- ---------------------------
- - Operating EPS of $0.31 met expectations
- - 5% annualized growth in loans
- - 6% annualized growth in deposits
- - Mixed credit quality trends
- - 2.00% loan loss reserve ratio
- - Significantly stronger capital position
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FIRST QUARTER HIGHLIGHTS
Key Accomplishments
- -------------------
- - Completed Florida transaction
- Last quarter with charges
- - Commenced share repurchases
- - Upgraded Internet banking capability
- - Investing in Retail Banking office technology
- - Sales / service initiative getting traction
- - Acquired Haberer Registered Investment Advisor
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FINANCIAL PERFORMANCE
5
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FIRST QUARTER 2002 PERFORMANCE HIGHLIGHTS (1)
($MM) Operating Excluding FL
----- --------- ------------
- - Net income $77.5 $79.5
- - Earnings per share $0.31 $0.32
- - Loan growth 5 % annualized
- - Core deposit growth 6 % annualized
- - Net interest margin 4.14 % 4.21 %
- - Efficiency ratio (2) 55.7 % 54.1 %
- - Net charge-offs - adjusted (3) 1.04 % 1.00 %
- - NPAs $225.5
- - Loan loss reserve 2.00 %
- - Tangible common equity ratio 9.03 %
ONE-TIME ITEMS
- - $56.8 million after tax gain from the sale of Florida banking
operations
- - $36.5 million after tax impact of restructuring charges
(1) Operating basis - Excluding after tax impact of restructuring and other
charges of $36.5 MM in 1Q02, $9.8 MM in 4Q01 and the after tax gain on the
sale of Florida operations of $56.8 MM in 1Q02
(2) Operating basis excluding intangible amortization of $1.4 MM. The Excluding
Florida basis excludes intangible amortization of $0.3 MM.
(3) Excludes impact of net charge-offs on exited portfolios for which reserves
were previously established
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FIRST QUARTER 2002 EARNINGS
One-time &
($MM) Reported Charges Operating
----- -------- ------- ---------
Net interest income $ 242.8 $ 242.8
Provision (55.8) (55.8)
Non-interest income 125.6 125.6
Florida gain 175.4 $ 175.4 ---
Security gains 0.5 0.5
Non-interest expense (263.6) (56.2) (207.4)
--------- --------- --------
Pretax income 224.9 119.2 105.7
--------- --------- --------
Net income $ 97.7 $ 20.3 $ 77.5
========= ========= ========
EPS $ 0.39 $ 0.08 $ 0.31
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RESTRUCTURING AND OTHER CHARGES
($MM) Original
Estimate 2Q01 3Q01 4Q01 1Q02 To Date
-------- ---- ---- ---- ---- --------
RESTRUCTURING $ 64 --- $ 33 $ 4 $ 43 $ 80
Branches/ATMs/ops
Retention/transition
Corporate overhead
Facilities
e-Commerce
IMPAIRMENT 45 37 --- --- 8 45
I/O strip
PG & E
Auto residuals
Other
CREDIT 72 72 --- --- --- 72
120 day delinquencies
Exited Tier II
Exited truck & equipment
OTHER 34 2 18 11 5 36
----- ----- ---- ---- ---- ----
Total pretax charge $ 215 $ 111 $ 51 $ 15 $ 56 $233
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PERFORMANCE HIGHLIGHTS (1)
1Q02 4Q01 1Q01
---- ---- ----
EPS - operating $0.31 $0.30 $0.27
EPS - cash basis (2) 0.31 0.33 0.30
ROA 1.18 % 1.07 % 0.97 %
ROE 13.3 12.7 11.5
Efficiency ratio (2) 55.7 55.8 62.0
NIM 4.14 4.11 3.93
Tangible common equity/assets (3) 9.03 6.04 6.01
(1) Operating basis - Excluding after tax impact of restructuring and other
charges of $36.5 MM in 1Q02, $9.8 MM in 4Q01 and the after tax gain on the
sale of Florida operations of $56.8 MM in 1Q02
(2) Based on operating earnings excluding intangible amortization of $1.4 MM in
1Q02, $10.1 MM in 4Q01 and $10.6 MM in 1Q01
(3) Period end
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INCOME STATEMENT (1)
($MM) 1Q02 4Q01 1Q01
---- ---- ----
Net interest income $242.8 $255.2 $243.1
Provision (55.8) (58.3) (33.5)
Non-interest income 125.6 133.0 115.6
Security gains 0.5 0.1 2.1
Non-interest expense (207.4) (227.3) (234.0)
----- ----- -----
Pretax income 105.7 102.7 93.3
----- ----- -----
Net income $77.5 $75.5 $67.9
===== ===== =====
EPS $0.31 $0.30 $0.27
(1) Operating basis - Excluding after tax impact of restructuring and other
charges of $36.5 MM in 1Q02, $9.8 MM in 4Q01 and the after tax gain on the
sale of Florida operations of $56.8 MM in 1Q02
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FIRST QUARTER 2002 EARNINGS - EXCLUDING FLORIDA (1)
1Q02 Change
-----------------------------
($MM) Operating Florida Op. X FL 4Q01 B (W)
--------- ------- -------- ---- -----
Net interest income $242.8 $ 9.7 $233.1 $236.6 $(3.5)
Provision (55.8) (5.2) (50.6) (54.3) 3.7
Non-interest income 125.6 10.6 115.0 114.3 0.7
Security gains 0.5 -- 0.5 0.1 0.4
Non-interest expense (207.4) (18.3) (189.1) (187.4) (1.6)
------ ----- ------ ------ ----
Pretax income 105.7 (3.2) 108.9 109.3 (0.4)
------ ----- ------ ------ ----
Net income $ 77.5 $ (2.0) $ 79.5 $ 80.3 $(0.8)
====== ====== ====== ====== =====
EPS $ 0.31 $(0.01) $ 0.32 $ 0.32 $ ---
(1) Operating basis - Excluding after tax impact of restructuring and other
charges of $36.5 MM and the after tax gain on the sale of Florida operations
of $56.8 MM.
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[HUNTINGTON LOGO]
Performance Trends (1)
Earnings Per Share
------------------
2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 1Q02XFL
- ---- ---- ---- ---- ---- ---- ---- ---- -------
$0.40 $0.33 $0.30 $0.27 $0.30 $0.30 $0.30 $0.31 $0.32 XFL
Pretax Income Before LLP and
----------------------------
Securities Gains
----------------
($MM)
2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 1Q02XFL
- ---- ---- ---- ---- ---- ---- ---- ---- -------
$150 $133 $139 $125 $145 $150 $161 $161 $159 XFL
(1) Operating basis - Excludes after tax impact of restructuring and other
charges of $115.0 MM in 2001, $32.5 MM in 2000, and $36.5 MM in 1Q02, and
after tax gain on the sale of Florida operations of $56.8 MM in 1Q02.
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[HUNTINGTON LOGO]
PERFORMANCE TRENDS
Net Interest Income & Margin (FTE)
- ----------------------------------
2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 1Q02XFL
- ---- ---- ---- ---- ---- ---- ---- ---- -------
3.72% 3.74% 3.70% 3.93% 3.97% 4.04% 4.11% 4.14% 4.21%
Earning Asset Mix (Avg)
- -----------------------
2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02
---- ---- ---- ---- ---- ---- ---- ----
Loans 82% 81% 81% 83% 84% 86% 86% 86%
Securities 17% 18% 18% 15% 14% 12% 12% 12%
Other EA 1% 1% 1% 2% 2% 2% 2% 2%
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[HUNTINGTON LOGO]
MANAGED LOAN GROWTH (1)
Average ($B) Annualized Growth
- ------- -----------------
1Q02 vs. 4Q01 vs. 1Q02 vs.
1Q02 4Q01 3Q01 1Q01
---- ---- ---- ----
Commercial $ 6.1 (6) % (13) % (4) %
Commercial real estate 3.8 16 20 13
------ ------ ------ ------
Total commercial/CRE 9.9 3 --- 3
------ ------ ------ ------
Auto loan/lease 7.1 (1) (1) 4
Installment 1.3 (17) (16) (14)
Home equity lines 2.4 13 16 13
Residential real estate 1.0 70 15 20
------ ------ ------ ------
Total consumer 11.8 7 2 6
------ ------ ------ ------
Managed loans $21.7 5 % --- % 4 %
======
(1) Growth percentages normalized for acquisitions, portfolio sales,
securitizations and sale of Florida
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[HUNTINGTON LOGO]
CORE DEPOSIT TRENDS (1)
Average ($B)
- ------- Annualized Growth
-----------------
vs. 1Q02 vs. 4Q01 vs. 1Q02 vs.
1Q02 4Q01 3Q01 1Q01
---- ---- ---- ----
Demand $ 3.0 (12) % 10 % 4 %
Interest bearing 5.2 39 40 32
Savings 3.1 (5) (8) (4)
CD's 5.0 (2) (1) ---
------ ------ ------ ------
Total $16.3 6 % 10 % 8 %
======
(1) Growth percentages normalized for acquisitions, portfolio sales,
securitizations and sale of Florida
15
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NON-INTEREST INCOME - EXCLUDING FLORIDA (1)
($MM) Better or (Worse) vs.
----- ---------------------
1Q02 4Q01 4Q01(2) 1Q01
---- ---- ------- ----
Deposit service charges $ 34.3 $(0.9) (3) % 10 %
Mortgage banking 19.6 4.6 31 113
Brokerage / insurance 14.6 (0.5) (3) 19
Trust income 15.1 0.4 3 10
Bank Owned Life Ins. 11.7 2.1 22 22
Other service charges 9.1 (0.5) (5) 8
Other 10.6 (4.5) (30) (14)
------
Total $115.0 $ 0.7 1 % 19 %
------
(1) Excludes security gains and gain on sale of the Florida banking operations
(2) Linked quarter percentage growth is not annualized
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[HUNTINGTON LOGO]
NON-INTEREST EXPENSE - EXCLUDING FLORIDA (1)
($MM) Better or (Worse) vs.
----- ---------------------
1Q02 4Q01 4Q01(2) 1Q01
---- ---- ------- ----
Personnel costs $104.3 $(4.2) (4) % (5) %
Occupancy & equipment 30.4 3.0 9 8
Outside services 17.1 (1.7) (11) (21)
Marketing 7.2 (1.9) (35) 19
Amortization of intangibles 0.3 2.3 90 92
Other 29.8 0.8 3 16
Total $189.1 $ (1.6) (1) % 2 %
------
(1) Excludes pretax impact of restructuring charges and other charges of $56.2
MM in 1Q02 and $15.1 MM in 4Q01
(2) Linked quarter percentage growth is not annualized
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[HUNTINGTON LOGO]
EFFICIENCY RATIO (1)
1Q02
2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 XFL
- ---- ---- ---- ---- ---- ---- ---- ---- ---
53.9% 58.4% 58.5% 62.0% 58.6% 57.5% 55.8% 55.7% 54.1%
(1) FTE Revenue excludes securities gains and gain on sale of Florida
operations/non-interest expense excludes intangible amortization and
restructuring and other charges
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CREDIT REVIEW
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CREDIT QUALITY OVERVIEW
1Q02 4Q01 1Q01
---- ---- ----
NPAs / total loans + OREO 1.17 % 1.05 % 0.60 %
Net charge-offs
- - Reported 1.11 1.04 0.55
- - Adjusted (1) 1.04 0.98 0.55
- - Adjusted Xcld. Florida 1.00 1.04 0.57
90+ days past due 0.32 0.42 0.49
Consumer 0.44 0.61 0.69
Commercial/CRE 0.19 0.22 0.29
Reserve/total loans 2.00 1.90 1.45
Reserve/NPAs 171 180 239
(1) Excludes impact of net charge-offs on exited portfolios for which reserves
were previously established
20
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NON-PERFORMING ASSET FLOW ANALYSIS
PERIOD END ($MM)
1Q02 4Q01 3Q01 2Q01 1Q01
---- ---- ---- ---- ----
NPA beginning of period $227.5 $210.1 $166.0 $124.9 $105.4
New NPAs 74.4 86.0 95.0 95.0 53.9
Loan losses (26.1) (34.6) (12.5) (13.2) (7.2)
Payments (37.7) (28.3) (34.2) (19.3) (25.0)
Sales (1) (8.9) (4.1) (3.3) (21.3) (1.9)
Other (3.7) (1.6) (0.9) (0.1) (0.3)
---- ---- ---- ---- ----
NPA end of period $225.5 $227.5 $210.1 $166.0 $124.9
% of loans and OREO 1.17% 1.05% 0.97% 0.79% 0.60%
(1) 1Q02 includes $6.5 MM related to the sale of Florida banking operations and
2Q01 includes $14.9 MM related to PG & E.
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[HUNTINGTON LOGO]
NON-PERFORMING ASSETS - BY SECTOR
$225 mm @ 3/31/02
Services 35% Manufacturing 26%
F.I.R.E 10% Retail Trade 5%
Construction 7% Wholesale Trade 3%
Trans./Comm 2% Agriculture 3%
Energy 0% Other 9%
% OF $101 MM CHANGE VS 3/31/01
Services 48% Manufacturing 48%
F.I.R.E 7% Retail Trade 7%
Construction 1% Wholesale Trade -4%
Trans./Comm -1% Agriculture 2%
Energy 0% Other -8%
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[HUNTINGTON LOGO]
NET CHARGE-OFFS - ADJUSTED (1)
($MM)
2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02
- ---- ---- ---- ---- ---- ---- ---- ----
$16 $24 $25 $29 $37 $33 $53 $52
0.30% 0.46% 0.50% 0.55% 0.73% 0.61% 0.98% 1.04%
1Q02 4Q01 1Q01
---- ---- ----
Commercial 1.31 % 1.39 % 0.41 %
Commercial real estate 0.42 0.08 0.15
Consumer
Auto loans - indirect 1.59 1.46 1.43
Auto lease 1.64 1.55 0.89
----- ----- -----
Indirect 1.62 1.51 1.13
Installment 1.01 0.86 0.61
Home equity lines 0.36 0.38 0.34
Residential real estate 0.05 0.17 0.03
----- ----- -----
Total consumer 1.10 1.05 0.78
----- ----- -----
Total 1.04 % 0.98 % 0.55 %
Total - Excluding Florida 1.00 % 1.04 % 0.57 %
(1) Excludes impact of net charge-offs on exited portfolios for which
reserves were previously established. Reported total consumer net
charge-offs were 1.23% in 1Q02, 1.17% in 4Q01, and 0.78% in 1Q01.
Reported total net charge-offs were 1.11% in 1Q02, 1.04% in 4Q01, and
0.55% in 1Q01.
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[HUNTINGTON LOGO]
VINTAGE PERFORMANCE
Auto Loans - Indirect
- ---------------------
% of Portfolio @
------------------
12/00 12/01 3/02
----- ----- ----
Pre - 4Q98 22% 8% 4%
4Q98 - 3Q99 24% 12% 11%
4Q99 - 3Q00 42% 25% 24%
4Q00 - 1Q02 12% 55% 61%
--- --- ---
100% 100% 100%
Auto Loans - Indirect - Cumulative Charge-Off Rate
# Quarters After Origination 4Q98-3Q99 4Q99-3Q00 4Q00-1Q02
1 0.00% 0.00% 0.00%
2 0.04% 0.08% 0.05%
3 0.22% 0.42% 0.30%
4 0.48% 0.87% 0.65%
5 0.65% 1.35% 1.00%
6 0.85% 1.89% 1.25%
7 1.00% 2.15%
8 1.20% 2.40%
9 1.41% 2.45%
10 1.58%
11 1.69%
12 1.85%
Auto Leases
-----------
% of Portfolio @ 24
------------------
12/00 12/01 3/02
----- ----- ----
Pre - 4Q98 16% 6% 4%
4Q98 - 3Q99 33% 22% 19%
4Q99 - 3Q00 42% 31% 30%
4Q00 - 1Q02 9% 41% 47%
--- --- ---
100% 100% 100%
Auto Leases - Cumulative Charge-Off Rate
# Quarters After Origination 4Q98-3Q99 4Q99-3Q00 4Q00-1Q02
1 0.00% 0.01% 0.01%
2 0.04% 0.05% 0.06%
3 0.15% 0.33% 0.30%
4 0.27% 0.72% 0.67%
5 0.38% 1.30% 1.00%
6 0.55% 1.85% 1.22%
7 0.75% 2.05%
8 0.95% 2.40%
9 1.21% 2.45%
10 1.39%
11 1.60%
12 1.76%
[HUNTINGTON LOGO]
DELINQUENCY TRENDS - 30+ DAYS (1)
Total Loans Consumer Loans
- ------------- ---------------
1Q01 2.15% 1Q01 2.67%
2Q01 2.31% 2Q01 2.75%
3Q01 2.33% 3Q01 2.97%
4Q01 2.31% 4Q01 3.21%
1Q02 1.89% 1Q02 2.36%
(1) % of related outstandings at EOP. Data before 1Q02 includes Florida.
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LOAN LOSS RESERVE ($MM)
2Q00 $297 1.45%
3Q00 $295 1.45%
4Q00 $298 1.45%
1Q01 $302 1.45%
2Q01 $352 1.67%
3Q01 $360 1.67%
4Q01 $411 1.90%
1Q02 $386 2.00%
Loan Loss Reserve Flow Analysis
- -------------------------------
($MM) 1Q02 4Q01 3Q01
---- ---- ----
LLR- beginning $410.6 $360.4 $352.2
Charge-offs (67.5) (66.8) (49.4)
Recoveries 11.7 10.7 9.6
------ ------ ------
Net charge-offs (55.8) (56.1) (39.8)
Provision exp. 55.8 58.3 49.6
Provision exp.-other --- 50.0 ---
Assets sold (22.3) --- ---
Loans securitized (2.2) (2.0) (1.6)
------ ------ ------
LLR-ending $386.1 $410.6 $360.4
26
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CAPITAL REVIEW
27
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SALE OF FLORIDA OPERATIONS - GAIN
February 15 closing
- -------------------
($MM)
$4.7 B deposits @ 15% $712
Costs (32)
----
Net premium 680
Less intangibles (505)
----
Pretax gain 175
Tax (118)
----
After tax gain $ 57
----
28
[HUNTINGTON LOGO]
EXCESS CAPITAL GENERATED @ 2/15/02 -
POST FLORIDA SALE
Est. @
($MM) Final 3Q01
----- ----
Goodwill $505 $505
Sale of $2.8 B assets @ 6.50% 182 189
After tax gain 57 122
---- ----
744 816
Replenish capital to 6.50% (64) (140)
---- ----
Net capital available @ 6.50% $680 $676
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[HUNTINGTON LOGO]
CAPITAL TRENDS
($MM) 1Q02 4Q01 1Q01
---- ---- ----
Tier 1 risk-based capital 10.26 % 7.24 % 7.19 %
Total risk-based capital 13.40 10.29 10.31
Tier 1 leverage 9.72 7.41 7.12
Tangible equity/assets 9.03(1) 6.04 6.01
Double leverage 78 104 110
(1) Estimated at 7.5%-8.0% by 12/31/02 continuation of share repurchase program
30
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APPENDIX
31
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MANAGING INTEREST RATE RISK
Net Interest Income at Risk Economic Value at Risk
- --------------------------- ----------------------
Forward Curve +/- 2% Parallel Yield Curve Shift +/- 2%
- -------------------- ---------------------------------
Gradual Change in Rates Instantaneous Change in Rates
- ----------------------- -----------------------------
2% Rate Rise 2% Rate Fall
2Q00 -2.0% 1.6% +2% Rate Shock -2% Rate Shock
3Q00 -2.2% 1.8%
4Q00 -2.6% 2.0% 3Q00 -9.2% 5.3%
1Q01 -2.1% 1.7% 4Q00 -8.8% 4.6%
2Q01 -2.1% 1.8% 1Q01 -5.7% 3.3%
3Q01 -1.7% 1.5% 2Q01 -6.2% 3.6%
4Q01 -1.2% 0.8% 3Q01 -3.7% 0.7%
1Q02 -1.6% 1.4% 4Q01 -2.4% -0.7%
1Q02 -4.4% 1.2%
Board Policy Limit: -4.0% Board Policy Limit: -15.0%
32
[LOGO]
PERFORMANCE TRENDS
Loans (Avg)
- -----------
($B) Com'l Com'l RE Auto Ln/Lse HEL Res Mtg Other Total
2Q00 $6.4 $3.4 $6.0 $1.9 $1.5 $1.5 $20.8
3Q00 $6.5 $3.5 $5.7 $2.0 $1.3 $1.6 $20.6
4Q00 $6.5 $3.5 $5.7 $2.1 $0.9 $1.7 $20.5
1Q01 $6.7 $3.6 $5.6 $2.2 $1.0 $1.7 $20.7
2Q01 $6.7 $3.6 $5.8 $2.3 $0.9 $1.7 $21.0
3Q01 $6.7 $3.7 $6.0 $2.4 $0.9 $1.7 $21.3
4Q01 $6.5 $3.9 $6.1 $2.5 $0.9 $1.6 $21.5
1Q02 $6.0 $3.8 $5.9 $2.4 $1.0 $1.3 $20.5
1Q02 XFL $19.1
Core Deposits (Avg)
- -------------------
($B) Non.Int.Brg. Int. Brg. Other Dom.
DDA DDA Savings Time Total
1Q01 $3.2 $4.6 $3.5 $5.9 $17.3
2Q01 $3.3 $4.8 $3.5 $5.6 $17.3
3Q01 $3.3 $5.1 $3.5 $5.8 $17.8
4Q01 $3.4 $5.5 $3.4 $5.8 $18.2
1Q02 $3.0 $5.1 $3.1 $5.0 $16.3
1Q02 XFL $14.0
33
[LOGO]
LOAN PORTFOLIO - 3/31/02
By Type of Loan - Managed
- -------------------------
($B) Amt Pct
----- -----
Commercial $ 5.7 27.7
Commercial RE 3.6 17.7
----- -----
Total commercial 9.3 45.4
===== =====
Auto leases 3.1 15.2
Auto loans 3.8 18.3
Home equity lines 2.2 10.7
Residential real estate 1.1 5.2
Other consumer 1.0 5.2
----- -----
Total consumer 11.2 54.6
----- -----
Total loans $20.5 100.0
By Region or LOB
- ----------------
Central OH/WV 19%
Northern OH 13%
W. Michigan 9%
S. Ohio/KY 7%
E. Michigan 5%
Indiana 3%
Auto 36%
PFG 4%
Mortgage 4%
34
[LOGO]
COMMERCIAL LOAN PORTFOLIO - 3/31/02
$9.3 B By Industry Sector
- -------------------------
Services 25%
Manufacturing 15%
F.I.R.E. 28%
Retail Trade 12%
Construction 7%
Wholesale Trade 6%
Trans./Comm. 3%
Agriculture 2%
Energy 1%
Other 1%
# of Loans By Size
- ------------------
less than $5 MM - 19,699 98.4%
$5+ MM - 327 or 1.6%
$5 MM - less than $10 MM 205
$10 MM - less than $25 MM 107
$25 MM - less than $50 MM 12
$50+ MM 3
---
Total 327
35
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COMMERCIAL REAL ESTATE PORTFOLIO
$3.6 Billion
------------
By Region
Columbus Cleveland Cincinnati W. Michigan E. Michigan W. Virginia Indiana Florida
24% 17% 16% 15% 13% 9% 5% 1%
By Loan Type
Owner Occupied Construction Permanent Mini-perm
35% 35% 17% 13%
36
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COMMERCIAL REAL ESTATE PORTFOLIO
$3.6 Billion
------------
By Property Type
Raw Land 2%
Other 7%
Retail 25%
Industrial 19%
Office 15%
Multi-family 13%
Land Devel. 7%
Hotel 5%
Single-family 4%
Health Care 3%
37
[HUNTINGTON LOGO]
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
FORWARD LOOKING STATEMENT DISCLOSURE
This presentation and discussion, including related questions and
answers, may contain forward-looking statements, including certain plans,
expectations, goals, and projections which are subject to numerous assumptions,
risks, and uncertainties.
A number of factors, including but not limited to
those set forth under the heading "Business Risks" included in Item 1 of
Huntington's Annual Report on Form 10-K for the year ended December 31, 2001,
and other factors described from time to time in Huntington's other filings with
the Securities and Exchange Commission, could cause actual conditions, events,
or results to differ significantly from those described in the forward-looking
statements.
All forward-looking statements included in this discussion,
including related questions and answers, are based on information available at
the time of the discussion. Huntington assumes no obligation to update any
forward-looking statement.
38
[HUNTINGTON LOGO]
HUNTINGTON
39
- --------------------------------------------------------------------------------
HUNTINGTON BANCSHARES INCORPORATED
QUARTERLY FINANCIAL REVIEW
MARCH 2002
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
-----------------
Consolidated Financial Highlights 1
Consolidated Balance Sheets 2
Consolidated Statements of Income 3
Loans and Deposits 4
Non-Interest Income and Non-Interest Expense 5
Quarterly Net Interest Margin Analysis 6 & 7
Selected Quarterly Income Statement Data 8
Stock Summary, Key Ratios and Statistics, and Capital Data 9
Loan Loss Reserves 10
Asset Quality 11
Supplemental Selected Information, excluding Florida
Loans and Deposits, excluding Florida 12
Non-Interest Income and Non-Interest Expense, excluding Florida 13
Selected Quarterly Income Statement Data, excluding Florida 14
HUNTINGTON BANCSHARES INCORPORATED
CONSOLIDATED FINANCIAL HIGHLIGHTS
OPERATING BASIS (1)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
- ------------------------------------------------------------------------------------------------------------------
FOR THE THREE MONTHS ENDED MARCH 31, 2002 2001 % CHANGE
- ------------------------------------------------------------------------------------------------------------------
NET INCOME $ 77,456 $ 67,866 14.1%
PER COMMON SHARE AMOUNTS
Net income
Basic $0.31 $0.27 14.8
Diluted $0.31 $0.27 14.8
Cash dividends declared $0.16 $0.20 (20.0)
AVERAGE COMMON SHARES OUTSTANDING-DILUTED 251,953 251,510 0.2
KEY RATIOS
Return on:
Average total assets 1.18% 0.97% 21.6
Average shareholders' equity 13.26% 11.53% 15.0
Efficiency ratio 55.7% 62.0% (10.0)
Average equity/average assets 8.93% 8.46% 5.6
Net interest margin 4.14% 3.93% 5.3
- --------------------------------------------------------------------------------
(1) Income component excludes after-tax impact of the $56.8 million gain on
sale of Florida operations and $36.5 million restructuring and special
charges in 1Q '02.
Page 1
HUNTINGTON BANCSHARES INCORPORATED
CONSOLIDATED BALANCE SHEETS
- -------------------------------------------------------------------------------------------------------------------------
MARCH 31, DECEMBER 31, MARCH 31,
(in thousands, except share amounts) 2002 2001 2001
- -------------------------------------------------------------------------------------------------------------------------
ASSETS
Cash and due from banks $ 654,312 $ 1,138,366 $ 1,006,809
Interest bearing deposits in banks 29,537 21,205 5,011
Trading account securities 4,040 13,392 70,550
Federal funds sold and securities
purchased under resale agreements 60,118 83,275 155,738
Loans held for sale 184,353 629,386 388,545
Securities available for sale - at fair value 2,869,826 2,849,579 3,632,034
Investment securities - fair value $11,400; $12,499;
and $15,586, respectively 11,264 12,322 15,358
Total loans (1) 19,338,947 21,601,873 20,870,648
Less allowance for loan losses 386,053 410,572 301,777
- -------------------------------------------------------------------------------------------------------------------------
Net loans 18,952,894 21,191,301 20,568,871
- -------------------------------------------------------------------------------------------------------------------------
Bank owned life insurance 852,931 843,183 814,502
Goodwill and other intangible assets 209,942 716,054 745,023
Premises and equipment 362,135 452,036 457,504
Customers' acceptance liability 15,558 13,670 16,510
Accrued income and other assets 539,044 536,390 564,733
- -------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 24,745,954 $ 28,500,159 $ 28,441,188
- -------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Total deposits (1) $ 16,266,785 $ 20,187,304 $ 19,130,157
Short-term borrowings 1,803,250 1,955,926 2,700,351
Bank acceptances outstanding 15,558 13,670 16,510
Medium-term notes 1,969,398 1,795,002 2,084,859
Subordinated notes and other long-term debt 938,407 944,330 894,937
Company obligated mandatorily redeemable preferred
capital securities of subsidiary trusts holding solely
junior subordinated debentures of the Parent Company 300,000 300,000 300,000
Accrued expenses and other liabilities 1,018,618 887,487 909,118
- -------------------------------------------------------------------------------------------------------------------------
Total Liabilities 22,312,016 26,083,719 26,035,932
- -------------------------------------------------------------------------------------------------------------------------
Shareholders' equity
Preferred stock - authorized 6,617,808 shares;
none issued or outstanding --- --- ---
Common stock - without par value; authorized
500,000,000 shares; issued 257,866,255;
257,866,255; and 257,866,255 shares, respectively;
outstanding 249,991,932; 251,193,814; and
251,001,821 shares, respectively 2,486,832 2,490,724 2,491,848
Less 7,874,323; 6,672,441; and 6,864,434
treasury shares, respectively (144,199) (123,849) (126,532)
Accumulated other comprehensive income (loss) 9,484 25,488 (4,221)
Retained earnings 81,821 24,077 44,161
- -------------------------------------------------------------------------------------------------------------------------
Total Shareholders' Equity 2,433,938 2,416,440 2,405,256
- -------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 24,745,954 $ 28,500,159 $ 28,441,188
- -------------------------------------------------------------------------------------------------------------------------
(1) See Page 4 for detail of Loans and Deposits.
Page 2
HUNTINGTON BANCSHARES INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED
MARCH 31,
- --------------------------------------------------------------------------------
Operating Basis (1) 2002 2001
- --------------------------------------------------------------------------------
Interest and fee income
Loans $342,102 $446,785
Securities 44,781 63,834
Other 6,712 7,356
- --------------------------------------------------------------------------------
TOTAL INTEREST INCOME 393,595 517,975
- --------------------------------------------------------------------------------
Interest expense
Deposits 109,967 185,081
Short-term borrowings 11,605 33,163
Medium-term notes 16,598 36,663
Subordinated notes and other long-term debt 12,600 19,944
- --------------------------------------------------------------------------------
TOTAL INTEREST EXPENSE 150,770 274,851
- --------------------------------------------------------------------------------
NET INTEREST INCOME 242,825 243,124
Provision for loan losses 55,781 33,464
- --------------------------------------------------------------------------------
NET INTEREST INCOME
AFTER PROVISION FOR LOAN LOSSES 187,044 209,660
- --------------------------------------------------------------------------------
Total non-interest income (2) 126,084 117,724
Total non-interest expense (2) 207,386 234,090
- --------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 105,742 93,294
Income taxes 28,286 25,428
- --------------------------------------------------------------------------------
NET INCOME $ 77,456 $ 67,866
- --------------------------------------------------------------------------------
PER COMMON SHARE
Net income
Basic $ 0.31 $ 0.27
Diluted $ 0.31 $ 0.27
Cash dividends declared $ 0.16 $ 0.20
AVERAGE COMMON SHARES
Basic 250,749 250,998
Diluted 251,953 251,510
(1) Excludes after-tax impact of the $56.8 million gain on sale of Florida
operations and $36.5 million restructuring and special charges in 1Q '02.
(2) See Page 5 for detail of Non-Interest Income and Non-Interest Expense.
Page 3
HUNTINGTON BANCSHARES INCORPORATED
LOANS AND DEPOSITS
LOAN PORTFOLIO COMPOSITION
- ------------------------------------------------------------------------------------------------------------------------------------
MARCH 31, 2002 DECEMBER 31, 2001 MARCH 31, 2001
- ------------------------------------------------------------------------------------------------------------------------------------
(in thousands of dollars) BALANCE % BALANCE % BALANCE %
- ------------------------------------------------------------------------------------------------------------------------------------
Commercial (unearned income $5,662,
$2,859, and $1,343) $ 5,681,788 29.4 $ 6,439,372 29.8 $ 6,729,992 32.2
Commercial real estate 3,645,114 18.8 3,975,562 18.4 3,599,262 17.2
- ------------------------------------------------------------------------------------------------------------------------------------
Total Commercial and Commercial Real Estate 9,326,902 48.2 10,414,934 48.2 10,329,254 49.5
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer
Auto leases - Indirect (unearned income
$471,421, $500,430 and $520,569) 3,126,101 16.2 3,207,514 14.8 3,175,981 15.2
Auto loans - Indirect (unearned income $12,
$19, and $28) 2,561,936 13.2 2,883,279 13.3 2,511,652 12.0
Home equity lines 2,189,649 11.3 2,535,885 11.7 2,223,647 10.7
Residential mortgage 1,075,141 5.6 970,704 4.5 959,852 4.6
Other loans (unearned income $16,
$24, and $36) 1,059,218 5.5 1,589,557 7.4 1,670,262 8.0
- ------------------------------------------------------------------------------------------------------------------------------------
Total Consumer 10,012,045 51.8 11,186,939 51.8 10,541,394 50.5
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL LOANS $19,338,947 100.0 $21,601,873 100.0 $20,870,648 100.0
- ------------------------------------------------------------------------------------------------------------------------------------
DEPOSIT COMPOSITION
- ------------------------------------------------------------------------------------------------------------------------------------
MARCH 31, 2002 DECEMBER 31, 2001 MARCH 31, 2001
- ------------------------------------------------------------------------------------------------------------------------------------
(in thousands of dollars) BALANCE % BALANCE % BALANCE %
- ------------------------------------------------------------------------------------------------------------------------------------
Demand deposits
Non-interest bearing $ 2,857,233 17.6 $ 3,635,173 18.0 $ 3,256,604 17.0
Interest bearing 4,747,283 29.2 5,723,160 28.4 4,688,109 24.5
Savings deposits 2,895,445 17.8 3,466,305 17.2 3,607,404 18.9
Other domestic time deposits 4,179,814 25.7 5,868,451 29.1 5,897,999 30.8
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL CORE DEPOSITS (1) 14,679,775 90.3 18,693,089 92.7 17,450,116 91.2
- ------------------------------------------------------------------------------------------------------------------------------------
Domestic time deposits of $100,000 or more 895,427 5.5 1,130,563 5.6 1,350,813 7.1
Brokered time deposits and negotiable CDs 451,173 2.8 137,915 0.7 136,147 0.7
Foreign time deposits 240,410 1.4 225,737 1.0 193,081 1.0
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DEPOSITS $16,266,785 100.0 $20,187,304 100.0 $19,130,157 100.0
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Core deposits include non-interest bearing and interest bearing demand
deposits, savings deposits, CDs under $100,000, and IRA deposits.
Page 4
HUNTINGTON BANCSHARES INCORPORATED
NON-INTEREST INCOME AND NON-INTEREST EXPENSE
(IN THOUSANDS)
ANALYSIS OF NON-INTEREST INCOME
- -------------------------------------------------------------------------------------------
THREE MONTHS ENDED
MARCH 31,
- ------------------------------------------------------------------------------- PERCENT
Operating Basis (1) 2002 2001 CHANGE
- -------------------------------------------------------------------------------------------
Service charges on deposit accounts $ 38,530 $ 38,907 (1.0)%
Mortgage banking 19,565 10,031 95.0
Brokerage and insurance 18,792 18,768 0.1
Trust services 15,501 14,314 8.3
Bank Owned Life Insurance income 11,676 9,560 22.1
Other service charges and fees 10,632 11,098 (4.2)
Other 10,931 12,968 (15.7)
- -------------------------------------------------------------------------------------------
TOTAL NON-INTEREST INCOME BEFORE SECURITIES GAINS 125,627 115,646 8.6
Securities gains 457 2,078 (78.0)
- -------------------------------------------------------------------------------------------
TOTAL NON-INTEREST INCOME $126,084 $117,724 7.1%
- -------------------------------------------------------------------------------------------
ANALYSIS OF NON-INTEREST EXPENSE
- -------------------------------------------------------------------------------------------
THREE MONTHS ENDED
MARCH 31,
- ------------------------------------------------------------------------------ PERCENT
Operating Basis (1) 2002 2001 CHANGE
- -------------------------------------------------------------------------------------------
Personnel costs $114,285 $117,662 (2.9)%
Outside data processing and other services 18,439 16,654 10.7
Net occupancy 17,239 19,780 (12.9)
Equipment 16,949 19,972 (15.1)
Marketing 7,003 9,939 (29.5)
Telecommunications 6,018 7,125 (15.5)
Professional services 5,401 4,969 8.7
Printing and supplies 3,837 5,059 (24.2)
Franchise and other taxes 2,328 2,120 9.8
Amortization of intangible assets 1,376 10,576 (87.0)
Other 14,511 20,234 (28.3)
- -------------------------------------------------------------------------------------------
TOTAL NON-INTEREST EXPENSE $207,386 $234,090 (11.4)%
- -------------------------------------------------------------------------------------------
(1) Excludes gain on sale of Florida operations from Non-Interest Income and
restructuring and special charges from Non-Interest Expense.
Page 5
HUNTINGTON BANCSHARES INCORPORATED
QUARTERLY NET INTEREST MARGIN ANALYSIS
(IN MILLIONS OF DOLLARS)
AVERAGE BALANCES
- ---------------------------------------------------------------------------------------------------
2001
2002 ----------------------------------------
Fully Tax Equivalent Basis (1) FIRST FOURTH THIRD SECOND FIRST
- ---------------------------------------------------------------------------------------------------
ASSETS
Interest bearing deposits in banks $ 34 $ 14 $ 5 $ 5 $ 5
Trading account securities 5 8 8 39 48
Federal funds sold and securities purchased
under resale agreements 62 86 86 93 164
Loans held for sale 381 433 344 420 240
Securities:
Taxable 2,713 2,720 2,896 3,368 3,606
Tax exempt 101 108 140 201 248
- ---------------------------------------------------------------------------------------------------
Total Securities 2,814 2,828 3,036 3,569 3,854
- ---------------------------------------------------------------------------------------------------
Loans:
Commercial 6,045 6,491 6,681 6,741 6,678
Real Estate
Construction 1,455 1,492 1,388 1,303 1,263
Commercial 2,364 2,397 2,346 2,294 2,324
Consumer
Auto Leases - Indirect 3,166 3,229 3,243 3,222 3,117
Auto Loans - Indirect 2,730 2,903 2,806 2,575 2,499
Home Equity Lines 2,365 2,489 2,372 2,271 2,189
Residential Mortgage 1,021 892 854 942 960
Other Loans 1,326 1,619 1,658 1,673 1,674
- ---------------------------------------------------------------------------------------------------
Total Consumer 10,608 11,132 10,933 10,683 10,439
- ---------------------------------------------------------------------------------------------------
Total Loans 20,472 21,512 21,348 21,021 20,704
- ---------------------------------------------------------------------------------------------------
Allowance for loan losses 415 393 358 316 307
- ---------------------------------------------------------------------------------------------------
Net loans (2) 20,057 21,119 20,990 20,705 20,397
- ---------------------------------------------------------------------------------------------------
Total earning assets 23,768 24,881 24,827 25,147 25,015
- ---------------------------------------------------------------------------------------------------
Cash and due from banks 819 876 910 910 952
All other assets 2,372 2,613 2,609 2,608 2,579
- ---------------------------------------------------------------------------------------------------
TOTAL ASSETS $26,544 $27,977 $27,988 $28,349 $28,239
- ---------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Core deposits
Non-interest bearing deposits $ 3,041 $ 3,406 $ 3,341 $ 3,252 $ 3,213
Interest bearing demand deposits 5,148 5,519 5,096 4,799 4,597
Savings deposits 3,097 3,388 3,472 3,547 3,505
Other domestic time deposits 5,015 5,923 5,940 5,718 5,950
- ---------------------------------------------------------------------------------------------------
Total core deposits 16,301 18,236 17,849 17,316 17,265
- ---------------------------------------------------------------------------------------------------
Domestic time deposits of $100,000 or more 1,052 1,199 1,262 1,294 1,368
Brokered time deposits and negotiable CDs 302 109 120 118 167
Foreign time deposits 270 230 257 377 267
- ---------------------------------------------------------------------------------------------------
Total deposits 17,925 19,774 19,488 19,105 19,067
- ---------------------------------------------------------------------------------------------------
Short-term borrowings 1,998 1,907 2,140 2,759 2,504
Medium-term notes 1,967 1,863 1,990 2,005 2,240
Subordinated notes and other long-term debt,
including preferred capital securities 1,233 1,183 1,184 1,180 1,171
- ---------------------------------------------------------------------------------------------------
Total interest bearing liabilities 20,082 21,321 21,461 21,797 21,769
- ---------------------------------------------------------------------------------------------------
All other liabilities 1,051 889 811 897 869
Shareholders' equity 2,370 2,361 2,375 2,403 2,388
- ---------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $26,544 $27,977 $27,988 $28,349 $28,239
- ---------------------------------------------------------------------------------------------------
(1) Fully tax equivalent yields are calculated assuming a 35% tax rate.
(2) Net loan rate includes loan fees, whereas individual loan components above
are shown exclusive of fees.
Page 12
HUNTINGTON BANCSHARES INCORPORATED
QUARTERLY NET INTEREST MARGIN ANALYSIS
(IN MILLIONS OF DOLLARS)
AVERAGE RATES (3)
- -----------------------------------------------------------------------------------------------------------------------------------
2001
2002 ------------------------------------------------------
Fully Tax Equivalent Basis (1) FIRST FOURTH THIRD SECOND FIRST
- -----------------------------------------------------------------------------------------------------------------------------------
ASSETS
Interest bearing deposits in banks 2.02 % 2.09 % 3.75 % 5.09 % 5.24 %
Trading account securities 2.79 3.59 3.83 5.15 5.52
Federal funds sold and securities purchased
under resale agreements 1.43 2.18 3.20 4.21 5.78
Loans held for sale 6.51 6.64 7.18 6.96 7.19
Securities:
Taxable 6.43 6.62 6.71 6.26 6.72
Tax exempt 7.76 7.81 7.38 7.26 7.55
- -----------------------------------------------------------------------------------------------------------------------------------
Total Securities 6.48 6.66 6.75 6.32 6.77
- -----------------------------------------------------------------------------------------------------------------------------------
Loans:
Commercial 5.39 5.86 6.92 7.44 8.19
Real Estate
Construction 4.91 5.50 6.62 7.43 8.31
Commercial 6.62 6.85 7.54 7.92 8.40
Consumer
Auto Leases - Indirect 6.62 6.58 6.67 6.71 6.90
Auto Loans - Indirect 8.03 8.24 8.45 8.70 8.83
Home Equity Lines 5.12 6.22 7.00 8.04 8.93
Residential Mortgage 6.57 7.17 7.54 7.72 7.91
Other Loans 8.88 9.09 9.19 9.13 9.19
- -----------------------------------------------------------------------------------------------------------------------------------
Total Consumer 6.92 7.34 7.65 7.94 8.25
- -----------------------------------------------------------------------------------------------------------------------------------
Total Loans 6.29 6.71 7.34 7.75 8.25
- -----------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses
- -----------------------------------------------------------------------------------------------------------------------------------
Net loans (2) 6.77 7.22 7.87 8.31 8.74
- -----------------------------------------------------------------------------------------------------------------------------------
Total earning assets 6.71 % 7.12 % 7.70 % 7.98 % 8.39 %
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Core deposits
Non-interest bearing deposits
Interest bearing demand deposits 1.80 % 2.00 % 2.74 % 2.87 % 3.29 %
Savings deposits 1.87 2.11 3.00 3.42 3.85
Other domestic time deposits 4.99 5.19 5.52 5.83 6.01
- -----------------------------------------------------------------------------------------------------------------------------------
Total core deposits 2.46 2.68 3.20 3.42 3.73
- -----------------------------------------------------------------------------------------------------------------------------------
Domestic time deposits of $100,000 or more 3.05 4.68 4.82 5.33 5.97
Brokered time deposits and negotiable CDs 2.48 3.55 4.42 5.57 6.37
Foreign time deposits 1.91 1.99 3.39 4.11 5.45
- -----------------------------------------------------------------------------------------------------------------------------------
Total deposits 2.49 2.80 3.32 3.58 3.94
- -----------------------------------------------------------------------------------------------------------------------------------
Short-term borrowings 2.36 2.65 3.69 4.37 5.37
Medium-term notes 3.43 4.58 6.12 6.59 6.64
Subordinated notes and other long-term debt,
including preferred capital securities 4.14 4.96 5.19 5.96 6.81
- -----------------------------------------------------------------------------------------------------------------------------------
Total interest bearing liabilities 3.04 % 3.51 % 4.23 % 4.62 % 5.12 %
- -----------------------------------------------------------------------------------------------------------------------------------
Net interest rate spread 3.67 % 3.61 % 3.47 % 3.36 % 3.27 %
Impact of non-interest bearing funds on margin 0.47 % 0.50 % 0.57 % 0.61 % 0.66 %
- -----------------------------------------------------------------------------------------------------------------------------------
NET INTEREST MARGIN 4.14 % 4.11 % 4.04 % 3.97 % 3.93 %
- -----------------------------------------------------------------------------------------------------------------------------------
(1) Fully tax equivalent yields are calculated assuming a 35% tax rate.
(2) Net loan rate includes loan fees, whereas individual loan components above
are shown exclusive of fees.
(3) Loan and deposit average rates include impact of applicable derivatives.
Page 13
HUNTINGTON BANCSHARES INCORPORATED
SELECTED QUARTERLY INCOME STATEMENT DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
2002 2001
- ---------------------------------------------------------------------------------------------------------
Operating Basis (1) FIRST FOURTH THIRD SECOND FIRST
- ---------------------------------------------------------------------------------------------------------
TOTAL INTEREST INCOME $393,595 $443,751 $478,834 $498,959 $517,975
TOTAL INTEREST EXPENSE 150,770 188,513 229,047 250,926 274,851
- ---------------------------------------------------------------------------------------------------------
NET INTEREST INCOME 242,825 255,238 249,787 248,033 243,124
Provision for loan losses 55,781 58,275 49,559 45,777 33,464
- ---------------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 187,044 196,963 200,228 202,256 209,660
- ---------------------------------------------------------------------------------------------------------
Service charges on deposit accounts 38,530 42,753 41,719 40,673 38,907
Mortgage banking 19,565 15,768 14,616 18,733 10,031
Brokerage and insurance income 18,792 20,966 19,912 19,388 18,768
Trust services 15,501 15,321 15,485 15,178 14,314
Bank Owned Life Insurance income 11,676 9,560 9,560 9,561 9,560
Other service charges and fees 10,632 12,552 12,350 12,217 11,098
Other 10,931 16,088 15,755 14,956 12,968
- ---------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST INCOME BEFORE SECURITIES GAINS 125,627 133,008 129,397 130,706 115,646
Securities gains 457 89 1,059 2,747 2,078
- ---------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST INCOME 126,084 133,097 130,456 133,453 117,724
- ---------------------------------------------------------------------------------------------------------
Personnel costs 114,285 118,143 120,767 122,068 117,662
Outside data processing and other services 18,439 17,992 17,375 17,671 16,654
Net occupancy 17,239 19,950 19,266 18,188 19,780
Equipment 16,949 20,593 20,151 19,844 19,972
Marketing 7,003 6,345 6,921 7,852 9,939
Telecommunications 6,018 6,793 6,859 7,207 7,125
Professional services 5,401 6,235 5,912 6,763 4,969
Printing and supplies 3,837 4,293 4,450 4,565 5,059
Franchise and other taxes 2,328 2,893 2,470 2,246 2,120
Amortization of intangible assets 1,376 10,100 10,114 10,435 10,576
Other 14,511 14,017 14,605 16,457 20,234
- ---------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST EXPENSE 207,386 227,354 228,890 233,296 234,090
- ---------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 105,742 102,706 101,794 102,413 93,294
Income taxes 28,286 27,214 26,134 27,909 25,428
- ---------------------------------------------------------------------------------------------------------
NET INCOME $ 77,456 $ 75,492 $ 75,660 $ 74,504 $ 67,866
- ---------------------------------------------------------------------------------------------------------
PER COMMON SHARE
Net Income - Diluted $ 0.31 $ 0.30 $ 0.30 $ 0.30 $ 0.27
Cash Dividends Declared $ 0.16 $ 0.16 $ 0.16 $ 0.20 $ 0.20
FULLY TAX EQUIVALENT MARGIN:
Net Interest Income $242,825 $255,238 $249,787 $248,033 $243,124
Tax Equivalent Adjustment (2) 1,169 1,292 1,442 1,616 2,002
- ---------------------------------------------------------------------------------------------------------
Tax Equivalent Net Interest Income $243,994 $256,530 $251,229 $249,649 $245,126
- ---------------------------------------------------------------------------------------------------------
(1) Income component excludes after-tax impact of the $56.8 million gain on
sale of Florida operations in 1Q '02 and restructuring and special charges
($36.5 million in 1Q '02; $9.8 million in 4Q '01; $33.0 million in 3Q '01;
$72.1 million in 2Q '01).
(2) Calculated assuming a 35% tax rate.
Page 8
HUNTINGTON BANCSHARES INCORPORATED
STOCK SUMMARY, KEY RATIOS AND STATISTICS, AND CAPITAL DATA
QUARTERLY COMMON STOCK SUMMARY
- ------------------------------------------------------------------------------------
2002 2001
- ------------------------------------------------------------------------------------
1Q 4Q 3Q 2Q 1Q
- ------------------------------------------------------------------------------------
High $ 20.310 $ 17.490 $ 19.280 $ 17.000 $ 18.000
Low 16.660 14.510 15.150 13.875 12.625
Close 19.700 17.190 17.310 16.375 14.250
Cash dividends declared $ 0.16 $ 0.16 $ 0.16 $ 0.20 $ 0.20
Note: Stock price quotations were obtained from NASDAQ
KEY RATIOS AND STATISTICS
- ----------------------------------------------------------------------------------------
MARGIN ANALYSIS - AS A % 2002 2001
-------------------------------------------
OF AVERAGE EARNING ASSETS (1) 1Q 4Q 3Q 2Q 1Q
- ----------------------------------------------------------------------------------------
Interest Income 6.71% 7.12% 7.70% 7.98% 8.39%
Interest Expense 2.57% 3.01% 3.66% 4.01% 4.46%
- ----------------------------------------------------------------------------------------
Net Interest Margin 4.14% 4.11% 4.04% 3.97% 3.93%
- ----------------------------------------------------------------------------------------
RETURN ON (2)
Average total assets 1.18% 1.07% 1.07% 1.05% 0.97%
Average shareholders' equity 13.26% 12.68% 12.64% 12.43% 11.53%
Efficiency Ratio (2) 55.7% 55.8% 57.5% 58.6% 62.0%
Efficiency Ratio, excluding Florida (2) 54.1% 52.5% 54.0% 56.2% 60.2%
Effective tax rate 26.75% 26.50% 25.67% 27.25% 27.26%
CAPITAL DATA
- ----------------------------------------------------------------------------------------------------------
2002 2001
- ----------------------------------------------------------------------------------------------------------
(in millions of dollars) 1Q (3) 4Q 3Q 2Q 1Q
- ----------------------------------------------------------------------------------------------------------
Total Risk-Adjusted Assets $ 24,935 $ 27,896 $ 27,757 $ 27,375 $ 27,230
Tier 1 Risk-Based Capital Ratio 10.26% 7.24% 6.97% 7.01% 7.19%
Total Risk-Based Capital Ratio 13.40% 10.29% 10.13% 10.20% 10.31%
Tier 1 Leverage Ratio 9.72% 7.41% 7.10% 6.96% 7.12%
Tangible Equity/Asset Ratio 9.03% 6.04% 5.96% 5.97% 6.01%
(1) Presented on a fully tax equivalent basis assuming a 35% tax rate.
(2) Income component excludes the impact of the gain on sale of Florida
operations and restructuring and special charges.
(3) Estimated.
Page 9
HUNTINGTON BANCSHARES INCORPORATED
LOAN LOSS RESERVES
LOAN LOSS EXPERIENCE
- -----------------------------------------------------------------------------------------------------------------------
2002 2001
- -----------------------------------------------------------------------------------------------------------------------
(in thousands) 1Q 4Q 3Q 2Q 1Q
- ------------------------------------------------------------------------------------------------------------------------
ALLOWANCE FOR LOAN LOSSES, BEGINNING OF PERIOD $ 410,572 $ 360,446 $ 352,243 $ 301,777 $ 297,880
Loan losses (67,527) (66,808) (49,386) (75,472) (35,649)
Recoveries of loans previously charged off 11,746 10,662 9,643 10,007 7,556
- ------------------------------------------------------------------------------------------------------------------------
Net loan losses (55,781) (56,146) (39,743) (65,465) (28,093)
- ------------------------------------------------------------------------------------------------------------------------
Allowance of assets sold (22,297) -- -- -- --
Allowance of securitized loans (2,222) (2,003) (1,613) (1,564) (1,474)
Provision for loan losses (1) 55,781 108,275 49,559 117,495 33,464
- ------------------------------------------------------------------------------------------------------------------------
ALLOWANCE FOR LOAN LOSSES, END OF PERIOD $ 386,053 $ 410,572 $ 360,446 $ 352,243 $ 301,777
- ------------------------------------------------------------------------------------------------------------------------
AS A % OF AVERAGE TOTAL LOANS
Net loan losses--annualized 1.11% 1.04% 0.74% 1.25% 0.55%
Net loan losses--annualized excluding losses on
exited portfolios for which reserves were
previously established 1.04% 0.98% 0.61% 0.73% 0.55%
Provision for loan losses--annualized 1.11% 1.07% 0.92% 0.87% 0.66%
Allowance for loan losses as a % of total loans 2.00% 1.90% 1.67% 1.67% 1.45%
Net loan loss coverage (2) 2.90x 2.87x 3.81x 3.89x 4.51x
- ------------------------------------------------------------------------------------------------------------------------
(1) Includes the impact of restructuring and special charges in 4Q '01 and 2Q
'01.
(2) Income before taxes (excluding gain on sale of Florida operations and
restructuring and special charges) and the provision for loan losses to net
loan losses.
Page 10
HUNTINGTON BANCSHARES INCORPORATED
ASSET QUALITY
NON-PERFORMING ASSETS AND PAST DUE LOANS
- ----------------------------------------------------------------------------------------------------
2002 2001
- ----------------------------------------------------------------------------------------------------
(in thousands) 1Q 4Q 3Q 2Q 1Q
- ----------------------------------------------------------------------------------------------------
Non-accrual loans:
Commercial $162,959 $159,637 $148,177 $116,044 $ 62,716
Commercial real estate 43,295 48,360 40,882 26,870 34,893
Residential mortgage 11,896 11,836 11,666 11,868 11,949
- ----------------------------------------------------------------------------------------------------
Total Non-accrual Loans 218,150 219,833 200,725 154,782 109,558
Renegotiated loans 1,268 1,276 1,286 1,290 1,297
- ----------------------------------------------------------------------------------------------------
TOTAL NON-PERFORMING LOANS 219,418 221,109 202,011 156,072 110,855
Other real estate, net 6,112 6,384 8,050 9,913 14,031
- ----------------------------------------------------------------------------------------------------
TOTAL NON-PERFORMING ASSETS $225,530 $227,493 $210,061 $165,985 $124,886
- ----------------------------------------------------------------------------------------------------
Non-performing loans as a
% of total loans 1.13% 1.02% 0.94% 0.74% 0.53%
Non-performing assets as a
% of total loans and other real estate 1.17% 1.05% 0.97% 0.79% 0.60%
Allowance for loan losses as a % of
non-performing loans 176% 186% 178% 226% 272%
Allowance for loan losses and other real
estate as a % of non-performing assets 171% 180% 171% 211% 239%
Accruing loans past due 90 days or more $ 61,746 $ 91,635 $ 92,791 $ 67,077 $102,658
NON-PERFORMING ASSETS
- --------------------------------------------------------------------------------------------------------------------
2002 2001
- --------------------------------------------------------------------------------------------------------------------
(in thousands) 1Q 4Q 3Q 2Q 1Q
- --------------------------------------------------------------------------------------------------------------------
NON-PERFORMING ASSETS, BEGINNING OF PERIOD $ 227,493 $ 210,061 $ 165,985 $ 124,886 $ 105,397
New non-performing assets 74,446 85,986 94,990 95,037(2) 53,869
Loan losses (26,072) (34,580) (12,480) (13,188) (7,243)
Payments (37,663) (28,315) (34,219) (19,332) (24,973)
Sales (8,925)(1) (4,131) (3,331) (21,306)(2) (1,892)
Other (3,749) (1,528) (884) (112) (272)
- --------------------------------------------------------------------------------------------------------------------
NON-PERFORMING ASSETS, END OF PERIOD $ 225,530 $ 227,493 $ 210,061 $ 165,985 $ 124,886
- --------------------------------------------------------------------------------------------------------------------
(1) Includes $6.5 million related to the sale of Florida.
(2) Includes $14.9 million related to PG&E.
Page 11
SUPPLEMENTAL SELECTED INFORMATION,
EXCLUDING FLORIDA
HUNTINGTON BANCSHARES INCORPORATED
LOANS AND DEPOSITS, EXCLUDING FLORIDA
LOAN PORTFOLIO COMPOSITION
- -------------------------------------------------------------------------------------------------------------------------
MARCH 31, 2002 DECEMBER 31, 2001 MARCH 31, 2001
- -------------------------------------------------------------------------------------------------------------------------
(in thousands of dollars) BALANCE % BALANCE % BALANCE %
- -------------------------------------------------------------------------------------------------------------------------
Commercial $ 5,681,788 29.4 $ 5,685,719 30.0 $ 5,974,635 32.6
Commercial real estate 3,645,114 18.8 3,555,354 18.8 3,180,892 17.3
- -------------------------------------------------------------------------------------------------------------------------
Total Commercial and
Commercial Real Estate 9,326,902 48.2 9,241,073 48.8 9,155,527 49.9
- -------------------------------------------------------------------------------------------------------------------------
Consumer
Auto leases - Indirect 3,126,101 16.2 3,207,514 16.9 3,175,981 17.3
Auto loans - Indirect 2,561,936 13.2 2,519,630 13.3 2,151,365 11.7
Home equity lines 2,189,649 11.3 2,096,238 11.1 1,906,412 10.4
Residential mortgage 1,075,141 5.6 777,950 4.1 723,499 3.9
Other loans 1,059,218 5.5 1,095,590 5.8 1,226,905 6.7
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer 10,012,045 51.8 9,696,922 51.2 9,184,162 50.1
- -------------------------------------------------------------------------------------------------------------------------
TOTAL LOANS $19,338,947 100.0 $18,937,995 100.0 $18,339,689 100.0
- -------------------------------------------------------------------------------------------------------------------------
DEPOSIT COMPOSITION
- -------------------------------------------------------------------------------------------------------------------------
MARCH 31, 2002 DECEMBER 31, 2001 MARCH 31, 2001
- -------------------------------------------------------------------------------------------------------------------------
(in thousands of dollars) BALANCE % BALANCE % BALANCE %
- -------------------------------------------------------------------------------------------------------------------------
Demand deposits
Non-interest bearing $ 2,857,233 17.6 $ 2,997,391 19.3 $ 2,660,698 18.2
Interest bearing 4,747,283 29.2 4,197,893 27.0 3,378,779 23.2
Savings deposits 2,895,445 17.8 2,943,508 19.0 3,036,951 20.8
Other domestic time deposits 4,179,814 25.7 4,077,510 26.3 4,057,346 27.8
- -------------------------------------------------------------------------------------------------------------------------
TOTAL CORE DEPOSITS (2) 14,679,775 90.3 14,216,302 91.6 13,133,774 90.0
- -------------------------------------------------------------------------------------------------------------------------
Domestic time deposits of $100,000 or more 895,427 5.5 944,361 6.1 1,130,647 7.8
Brokered time deposits 451,173 2.8 137,915 0.9 136,147 0.9
Foreign time deposits 240,410 1.4 220,749 1.4 187,368 1.3
- -------------------------------------------------------------------------------------------------------------------------
TOTAL DEPOSITS $16,266,785 100.0 $15,519,327 100.0 $14,587,936 100.0
- -------------------------------------------------------------------------------------------------------------------------
(1) Core deposits include non-interest bearing and interest bearing demand
deposits, savings deposits, CDs under $100,000, and IRA deposits.
Page 12
HUNTINGTON BANCSHARES INCORPORATED
NON-INTEREST INCOME AND NON-INTEREST EXPENSE, EXCLUDING FLORIDA
(IN THOUSANDS)
ANALYSIS OF NON-INTEREST INCOME
- -------------------------------------------------------------------------------------------
THREE MONTHS ENDED
MARCH 31,
- ------------------------------------------------------------------------------- PERCENT
Operating Basis (1) 2002 2001 CHANGE
- -------------------------------------------------------------------------------------------
Service charges on deposit accounts $ 34,282 $ 31,143 10.1%
Mortgage banking 19,644 9,238 112.6
Brokerage and insurance 14,587 12,232 19.3
Trust services 15,096 13,670 10.4
Bank Owned Life Insurance income 11,676 9,560 22.1
Other service charges and fees 9,118 8,415 8.4
Other 10,591 12,315 (14.0)
- -------------------------------------------------------------------------------------------
TOTAL NON-INTEREST INCOME BEFORE SECURITIES GAINS 114,994 96,573 19.1
Securities gains 457 2,078 (78.0)
- -------------------------------------------------------------------------------------------
TOTAL NON-INTEREST INCOME $115,451 $ 98,651 17.0%
- -------------------------------------------------------------------------------------------
ANALYSIS OF NON-INTEREST EXPENSE
- -------------------------------------------------------------------------------------------
THREE MONTHS ENDED
MARCH 31,
- ------------------------------------------------------------------------------- PERCENT
Operating Basis (1) 2002 2001 CHANGE
- -------------------------------------------------------------------------------------------
Personnel costs $104,320 $ 99,296 5.1%
Outside data processing and other services 17,097 14,122 21.1
Net occupancy 14,771 15,568 (5.1)
Equipment 15,582 17,503 (11.0)
Marketing 7,174 8,832 (18.8)
Telecommunications 5,282 5,952 (11.3)
Professional services 5,242 4,793 9.4
Printing and supplies 3,519 4,098 (14.1)
Franchise and other taxes 2,326 2,116 9.9
Amortization of intangible assets 251 3,031 (91.7)
Other 13,487 18,506 (27.1)
- -------------------------------------------------------------------------------------------
TOTAL NON-INTEREST EXPENSE $189,051 $193,817 (2.5)%
- -------------------------------------------------------------------------------------------
(1) Excludes gain on sale of Florida operations from Non-Interest Income and
restructuring and special charges from Non-Interest Expense.
Page 13
HUNTINGTON BANCSHARES INCORPORATED
SELECTED QUARTERLY INCOME STATEMENT DATA, EXCLUDING FLORIDA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
2002 2001
- ----------------------------------------------------------------------------------------------------------
Operating Basis (1) FIRST FOURTH THIRD SECOND FIRST
- ----------------------------------------------------------------------------------------------------------
TOTAL INTEREST INCOME $369,521 $392,978 $427,654 $447,218 $466,098
TOTAL INTEREST EXPENSE 136,420 156,382 197,742 222,410 247,580
- ----------------------------------------------------------------------------------------------------------
NET INTEREST INCOME 233,101 236,596 229,912 224,808 218,518
Provision for loan losses 50,595 54,281 46,027 41,937 29,709
- ----------------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 182,506 182,315 183,885 182,871 188,809
- ----------------------------------------------------------------------------------------------------------
Service charges on deposit accounts 34,282 35,220 33,593 32,650 31,143
Mortgage banking 19,644 15,049 13,859 17,672 9,238
Brokerage and insurance income 14,587 15,066 13,943 13,185 12,232
Trust services 15,096 14,679 14,816 14,431 13,670
Bank Owned Life Insurance income 11,676 9,560 9,560 9,561 9,560
Other service charges and fees 9,118 9,582 9,547 9,383 8,415
Other 10,591 15,135 14,722 13,979 12,315
- ----------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST INCOME BEFORE SECURITIES GAINS 114,994 114,291 110,040 110,861 96,573
Securities gains 457 89 1,059 2,747 2,078
- ----------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST INCOME 115,451 114,380 111,099 113,608 98,651
- ----------------------------------------------------------------------------------------------------------
Personnel costs 104,320 100,076 101,866 103,707 99,296
Outside data processing and other services 17,097 15,414 14,650 15,100 14,122
Net occupancy 14,771 15,251 14,481 13,755 15,568
Equipment 15,582 18,117 17,580 17,363 17,503
Marketing 7,174 5,305 5,717 6,807 8,832
Telecommunications 5,282 5,647 5,728 5,964 5,952
Professional services 5,242 6,069 5,754 6,481 4,793
Printing and supplies 3,519 3,511 3,693 3,688 4,098
Franchise and other taxes 2,326 2,885 2,439 2,229 2,116
Amortization of intangible assets 251 2,555 2,569 2,890 3,031
Other 13,487 12,599 12,577 14,459 18,506
- ----------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST EXPENSE 189,051 187,429 187,054 192,443 193,817
- ----------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 108,906 109,266 107,930 104,036 93,643
Income taxes 29,393 28,999 27,394 27,463 24,463
- ----------------------------------------------------------------------------------------------------------
NET INCOME $ 79,513 $ 80,267 $ 80,536 $ 76,573 $ 69,180
- ----------------------------------------------------------------------------------------------------------
NET INCOME PER COMMON SHARE - DILUTED $ 0.32 $ 0.32 $ 0.32 $ 0.30 $ 0.28
FULLY TAX EQUIVALENT MARGIN:
Net Interest Income $233,101 $236,596 $229,912 $224,808 $218,518
Tax Equivalent Adjustment (2) 1,169 1,292 1,442 1,616 2,002
- ----------------------------------------------------------------------------------------------------------
Tax Equivalent Net Interest Income $234,270 $237,888 $231,354 $226,424 $220,520
- ----------------------------------------------------------------------------------------------------------
(1) Income component excludes after-tax impact of the $56.8 million gain on
sale of Florida operations in 1Q '02 and restructuring and special charges
($36.5 million in 1Q '02; $9.8 million in 4Q '01; $33.0 million in 3Q '01;
$72.1 million in 2Q '01).
(2) Calculated assuming a 35% tax rate.
Page 14