UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY PERIOD ENDED MARCH 31, 1997
Commission File Number 0-2525
HUNTINGTON BANCSHARES INCORPORATED
Maryland 31-0724920
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
41 South High Street, Columbus, Ohio 43287
Registrant's telephone number (614) 480-8300
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
--- ---
There were 144,739,081 shares of Registrant's without par value common stock
outstanding on April 30, 1997.
PART I. FINANCIAL INFORMATION
1. FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS
- ------------------------------------------------------------------------------------------------------------------
(in thousands of dollars) MARCH 31, DECEMBER 31, MARCH 31,
1997 1996 1996
------------ ------------ ------------
Assets
Cash and due from banks ............................ $ 834,960 $ 915,636 $ 789,092
Interest bearing deposits in banks ................. 1,219 1,704 1,666
Trading account securities ......................... 2,856 1,873 13,466
Federal funds sold and securities
purchased under resale agreements ............. 10,143 8,116 5,833
Mortgages held for sale ............................ 106,761 119,202 155,528
Securities available for sale - at fair value ...... 4,897,160 4,743,933 4,954,577
Investment securities - fair value $60,092; $61,107;
and $75,392, respectively ..................... 59,662 60,444 74,213
Total loans (1) .................................... 14,869,139 14,260,747 13,369,308
Less allowance for loan losses ................ 208,763 199,058 197,375
------------ ------------ ------------
Net loans .......................................... 14,660,376 14,061,689 13,171,933
------------ ------------ ------------
Premises and equipment ............................. 320,835 311,793 310,985
Customers' acceptance liability .................... 59,247 56,248 68,312
Accrued income and other assets .................... 650,259 570,875 592,377
------------ ------------ ------------
TOTAL ASSETS ....................................... $ 21,603,478 $ 20,851,513 $ 20,137,982
============ ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Total deposits (1) ................................. $ 13,940,274 $ 13,385,891 $ 13,006,213
Short-term borrowings .............................. 3,709,118 3,944,703 3,150,974
Bank acceptances outstanding ....................... 59,247 56,248 68,312
Long-term debt ..................................... 1,909,869 1,556,326 1,985,806
Accrued expenses and other liabilities ............. 415,894 396,831 424,167
------------ ------------ ------------
Total Liabilities ............................. 20,034,402 19,339,999 18,635,472
------------ ------------ ------------
Shareholders' equity
Preferred stock - authorized 6,617,808 shares;
none outstanding
Common stock - without par value; authorized
300,000,000 shares; issued and outstanding
151,884,156; 151,884,156; and 141,402,769
shares, respectively ..................... 1,264,664 1,264,664 1,056,209
Less 6,831,006; 9,284,844; and 8,392,446
treasury shares, respectively ............ (154,822) (204,634) (193,213)
Capital surplus ............................... 253,319 237,348 241,079
Net unrealized losses on securities
available for sale ....................... (60,924) (14,569) (3,954)
Retained earnings ............................. 266,839 228,705 402,389
------------ ------------ ------------
Total Shareholders' Equity .................... 1,569,076 1,511,514 1,502,510
------------ ------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ......... $ 21,603,478 $ 20,851,513 $ 20,137,982
============ ============ ============
See notes to consolidated financial statements.
(1) See page 7 for detail of total loans and total deposits.
2
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CONSOLIDATED STATEMENTS OF INCOME
- -------------------------------------------------------------------------------------------
(in thousands of dollars, except per share amounts) THREE MONTHS ENDED MARCH 31,
Interest and fee income 1997 1996
------------ ------------
Loans ........................................ $ 324,897 $ 290,129
Securities ................................... 78,199 80,653
Other ........................................ 2,088 3,514
------------ ------------
TOTAL INTEREST INCOME .............. 405,184 374,296
------------ ------------
Interest Expense
Deposits ..................................... 116,376 113,535
Short-term borrowings ........................ 50,868 44,537
Long-term debt ............................... 26,420 31,506
------------ ------------
TOTAL INTEREST EXPENSE ............. 193,664 189,578
------------ ------------
NET INTEREST INCOME ................ 211,520 184,718
------------ ------------
Provision for loan losses ......................... 18,892 11,823
------------ ------------
NET INTEREST INCOME
AFTER PROVISION FOR LOAN LOSSES 192,628 172,895
------------ ------------
Total non-interest income (1) ..................... 65,801 68,162
Total non-interest expense (1) .................... 155,315 143,496
------------ ------------
INCOME BEFORE INCOME TAXES ......... 103,114 97,561
Provision for income taxes ........................ 36,664 34,736
------------ ------------
NET INCOME ......................... $ 66,450 $ 62,825
============ ============
PER COMMON SHARE (2)
Net income ................................... $ 0.47 $ 0.42
Cash dividends declared ...................... $ 0.20 $ 0.18
AVERAGE COMMON SHARES OUTSTANDING (2) ............. 142,820,759 148,559,506
See notes to consolidated financial statements.
(1) See page 8 for detail of non-interest income and non-interest expense.
(2) Adjusted for the ten percent stock dividend distributed July 31, 1996, as
applicable.
3
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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
- -----------------------------------------------------------------------------------------------------------------------------------
(in thousands, except per share amounts) Net
Unrealized
Common Common Treasury Treasury Capital Gains (Losses) Retained
Shares Stock Shares Stock Surplus on Securities Earnings Total
------- ---------- ------- --------- -------- ------------- -------- ----------
Three Months Ended March 31, 1996:
Balance, beginning of period 141,403 $1,056,209 (8,352) $(180,632) $235,802 $ 40,972 $366,514 $1,518,865
Stock issued for acquisition 4,733 102,760 5,037 107,797
Net income 62,825 62,825
Cash dividends declared
$(.18 per share) (26,950) (26,950)
Stock options exercised 19 376 (298) 78
Treasury shares purchased (5,189) (124,313) (124,313)
Treasury shares sold:
Shareholder dividend reinvestment plan 326 7,050 390 7,440
Employee benefit plans 71 1,546 148 1,694
Change in net unrealized gains (losses)
on securities available for sale (44,926) (44,926)
------- ---------- ------ --------- -------- -------- -------- ----------
Balance, end of period 141,403 $1,056,209 (8,392) $(193,213) $241,079 $ (3,954) $402,389 $1,502,510
======= ========== ====== ========= ======== ======== ======== ==========
Three Months Ended March 31, 1997:
Balance, beginning of period 151,884 $1,264,664 (9,285) $(204,634) $237,348 $(14,569) $228,705 $1,511,514
Stock issued for acquisition 3,468 78,527 15,122 93,649
Net income 66,450 66,450
Cash dividends declared
$(.20 per share) (28,316) (28,316)
Stock options exercised 61 978 (686) 292
Treasury shares purchased (1,429) (37,578) (37,578)
Treasury shares sold:
Shareholder dividend reinvestment plan 285 6,325 1,101 7,426
Employee benefit plans 69 1,560 434 1,994
Change in net unrealized gains (losses)
on securities available for sale (46,355) (46,355)
------- ---------- ------ --------- -------- -------- -------- ----------
Balance, end of period 151,884 $1,264,664 (6,831) $(154,822) $253,319 $(60,924) $266,839 $1,569,076
======= ========== ====== ========= ======== ======== ======== ==========
See notes to consolidated financial statements.
4
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------
(in thousands of dollars) Three Months Ended March 31,
1997 1996
----------- -----------
OPERATING ACTIVITIES
Net Income ........................................................... $ 66,450 $ 62,825
Adjustments to reconcile net income to net cash
provided by operating activities
Provision for loan losses .................................. 18,892 11,823
Provision for depreciation and amortization ................ 13,130 21,178
Deferred income tax expense (benefit) ...................... 9,187 (66)
Increase in trading account securities ..................... (983) (542)
Decrease in mortgages held for sale ........................ 12,441 4,177
Net gains on sales of securities ........................... (1,977) (7,090)
Decrease in accrued income receivable ...................... 3,788 1,199
Net (increase) decrease in other assets .................... (24,380) 506
Increase in accrued expenses ............................... 20,087 20,968
Net increase (decrease) in other liabilities ............... 30,932 (374)
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES .......... 147,567 114,604
----------- -----------
INVESTING ACTIVITIES
Decrease in interest bearing deposits in banks ....................... 485 282,927
Proceeds from :
Maturities and calls of investment securities .................... 1,378 6,061
Maturities and calls of securities available for sale ............ 151,327 69,208
Sales of securities available for sale ........................... 563,059 1,032,686
Purchases of:
Investment securities ............................................ (722) --
Securities available for sale .................................... (754,807) (1,060,567)
Proceeds from sales of loans ......................................... 25,667 35,657
Net loan originations, excluding sales ............................... (343,464) (37,302)
Proceeds from disposal of premises and equipment ..................... 4,208 522
Purchases of premises and equipment .................................. (11,855) (11,769)
Proceeds from sales of other real estate ............................. 3,333 2,299
Net cash received from purchase of subsidiaries ...................... 9,204 631
----------- -----------
NET CASH (USED FOR) PROVIDED BY INVESTING ACTIVITIES (352,187) 320,353
----------- -----------
FINANCING ACTIVITIES
Increase (decrease) in total deposits ................................ 74,846 (61,715)
Decrease in short-term borrowings .................................... (245,931) (377,841)
Proceeds from issuance of long-term debt ............................. 542,500 200,000
Payment of long-term debt ............................................ (189,014) (317,275)
Dividends paid on common stock ....................................... (28,564) (26,589)
Acquisition of treasury stock ........................................ (37,578) (124,313)
Proceeds from issuance of treasury stock ............................. 9,712 9,212
----------- -----------
NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES 125,971 (698,521)
----------- -----------
CHANGE IN CASH AND CASH EQUIVALENTS ................ (78,649) (263,564)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ... 923,752 1,058,489
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ......... $ 845,103 $ 794,925
=========== ===========
See notes to consolidated financial statements.
5
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Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
A. The accompanying unaudited consolidated financial statements reflect all
adjustments (consisting of normal recurring accruals) which are, in the opinion
of management, necessary for a fair presentation of the results for the interim
periods. The Notes to the Consolidated Financial Statements appearing in
Huntington's 1996 Annual Report to Shareholders should be read in conjunction
with these interim financial statements.
B. In June 1996, the Financial Accounting Standards Board (FASB) issued
Statement No. 125, "Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities" (FAS 125). The standard provides that,
following a transfer of financial assets, an entity is to recognize the
financial and servicing assets it controls and the liabilities it has incurred,
derecognize financial assets when control has been surrendered, and derecognize
liabilities when extinguished. The Statement is effective for transactions
occurring after December 31, 1996. The FASB also subsequently issued FAS No. 127
that delayed until January 1, 1998, the effective date of certain provisions of
FAS 125. Transactions subject to the later effective date include securities
lending, repurchase agreements, dollar rolls, and similar secured financing
arrangements. Application of the new rules did not have a material impact on
Huntington's first quarter 1997 consolidated financial statements. Huntington
also does not expect a material impact in the future.
In February 1997, the FASB issued Statement No. 128, "Earnings Per Share"
(FAS 128), which is required to be adopted on December 31, 1997. At that time,
Huntington will report both basic and diluted earnings per share, with all prior
periods restated to conform to the new method. The impact of FAS 128 is not
expected to be material.
C. Huntington acquired Citi-Bancshares, Inc. (Citi-Bancshares), a $548 million
one-bank holding company headquartered in Leesburg, Florida, in February 1997.
Huntington exchanged common stock and cash for all the common stock of
Citi-Bancshares. The transaction was accounted for as a purchase; accordingly,
the results of Citi-Bancshares have been included in the consolidated financial
statements from the date of acquisition.
In May 1997, Huntington entered into a merger agreement with First Michigan
Bank Corporation (First Michigan), a $3.6 billion bank holding company
headquartered in Holland, Michigan. Under the terms of the merger, First
Michigan shareholders will receive 1.05 shares of Huntington stock for every 1
share of First Michigan stock in a transaction accounted for as a
pooling-of-interests. The acquisition is expected to be completed in the third
quarter of 1997, subject to shareholder and regulatory approvals.
D. Per common share amounts have been calculated based on the weighted average
number of common shares outstanding in each period, adjusted as applicable for
the ten percent stock dividend issued July 31, 1996. The dilutive effects of
unexercised stock options and convertible debentures were not significant for
any period presented.
E. Certain amounts in the prior year's financial statements have been
reclassified to conform with the 1997 presentation. These reclassifications had
no effect on net income.
6
- --------------------------------------------------------------------------------
FINANCIAL REVIEW
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LOAN PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
(in thousands of dollars) March 31, December 31, March 31,
1997 1996 1996
----------- ----------- -----------
Commercial .................. $ 4,688,601 $ 4,462,636 $ 4,311,967
Real Estate
Construction ............. 516,669 473,970 374,178
Commercial ............... 1,692,808 1,617,078 1,614,090
Residential .............. 1,227,554 1,120,800 1,148,113
Consumer
Loans .................... 5,418,402 5,403,616 5,078,645
Leases ................... 1,325,105 1,182,647 842,315
----------- ----------- -----------
TOTAL LOANS ............ $14,869,139 $14,260,747 $13,369,308
=========== =========== ===========
- --------------------------------------------------------------------------------
DEPOSIT COMPOSITION
- --------------------------------------------------------------------------------
(in thousands of dollars) March 31, December 31, March 31,
1997 1996 1996
----------- ----------- -----------
Demand deposits
Non-interest bearing ..... $ 2,454,495 $ 2,463,442 $ 2,010,396
Interest bearing ......... 2,624,494 2,586,695 2,873,281
Savings deposits ............ 2,787,396 2,624,383 2,486,925
Certificates of deposit of
$100,000 or more .......... 1,052,335 928,927 990,825
Other domestic time
deposits ................... 4,638,054 4,371,994 4,447,207
Foreign time deposits ....... 383,500 410,450 197,579
----------- ----------- -----------
TOTAL DEPOSITS ......... $13,940,274 $13,385,891 $13,006,213
=========== =========== ===========
7
Financial Review
- --------------------------------------------------------------------------------
ANALYSIS OF NON-INTEREST INCOME
- --------------------------------------------------------------------------------
(in thousands of dollars) THREE MONTHS ENDED
MARCH 31, PERCENT
1997 1996 CHANGE
------- ------- ------
Service charges on deposit accounts ....... $23,795 $22,461 5.94 %
Mortgage banking .......................... 7,179 8,877 (19.13)
Trust services ............................ 9,871 8,793 12.26
Credit card fees .......................... 4,051 4,836 (16.23)
Investment product sales .................. 4,130 3,239 27.51
Electronic banking fees ................... 3,925 1,666 135.59
Securities gains .......................... 1,977 7,090 N.M.
Other ..................................... 10,873 11,200 (2.92)
------- -------
Total Non-Interest Income ................. $65,801 $68,162 (3.46)%
======= =======
- --------------------------------------------------------------------------------
ANALYSIS OF NON-INTEREST EXPENSE
- --------------------------------------------------------------------------------
(in thousands of dollars)
THREE MONTHS ENDED
MARCH 31, PERCENT
1997 1996 CHANGE
-------- -------- ----
Salaries ................................. $ 60,662 $ 55,819 8.68%
Commissions .............................. 4,405 3,607 22.12
Employee benefits ........................ 16,448 17,216 (4.46)
Net occupancy ............................ 11,431 10,874 5.12
Equipment ................................ 11,137 9,614 15.84
Advertising .............................. 6,421 2,865 124.12
Printing and supplies .................... 3,833 3,495 9.67
Credit card and electronic banking ....... 2,653 3,572 (25.73)
Legal and loan collection ................ 2,354 1,894 24.29
Other .................................... 35,971 34,540 4.14
-------- --------
Total Non-Interest Expense ............... $155,315 $143,496 8.24%
======== ========
N.M. - Not meaningful
8
Management's Discussion and Analysis
INTRODUCTION
Management's discussion and analysis contains forward-looking statements
that are intended to enhance the reader's ability to assess the future financial
performance of Huntington Bancshares Incorporated (Huntington). Because these
statements are subject to numerous assumptions, risks, and uncertainties, actual
results could be materially different. The following factors, among others, may
have such an impact: changes in economic conditions; movements in interest
rates; competitive pressures on product pricing and services; success and timing
of business strategies; and the nature and extent of legislative and regulatory
actions and reforms.
On May 5, 1997, Huntington signed a definitive agreement to acquire
First Michigan Bank Corporation (First Michigan), a $3.6 billion bank holding
company headquartered in Holland, Michigan. Under the terms of the merger, the
shareholders of First Michigan will receive 1.05 shares of Huntington common
stock for every 1 share of First Michigan common stock in a fixed, tax-free
exchange. First Michigan had total loans and deposits of $2.6 billion and $3.0
billion, respectively, and total equity of $279 million at March 31, 1997. Upon
consummation of the pooling-of-interests transaction, Huntington expects to
report a pre-tax charge to earnings estimated at $35 million. Subject to
shareholder and regulatory approvals, the merger is anticipated to be completed
late in the third quarter of 1997.
OVERVIEW
Huntington reported earnings of $66.5 million for the first quarter of
1997 compared with $62.8 million for the same period last year. On a per share
basis, net income was $.47, an increase of 11.9% from $.42 per share in the
first quarter of 1996. Huntington's return on average equity (ROE) and return on
average assets (ROA) were 17.75% and 1.28%, respectively, during the recent
three months versus 16.02% and 1.26% in the same period one year ago.
Total assets were $21.6 billion at March 31, 1997, up 3.6% from year end
and 7.3% from first quarter 1996. This growth was attributable to a broad-based
increase in loans, with particularly strong results in the consumer category,
which showed a 13.3% rise in average balances versus last year's first three
months. Also contributing to the higher asset total was the February 1997
acquisition of Citi-Bancshares, Inc. (Citi-Bancshares), a $548 million one-bank
holding company headquartered in Leesburg, Florida.
Total deposits grew 4.1% from December 31, 1996, and 7.2% compared with
one year ago, principally as a result of the Citi-Bancshares acquisition. Core
deposits represent Huntington's most significant source of funding; when
combined with other core funding sources, they provide approximately 70% of
Huntington's funding needs.
Huntington's wholesale liability mix changed somewhat during the recent
three months, as certain short-term borrowings were replaced upon maturity with
medium term notes having a contractual term greater than one year (a component
of long-term debt). The January 1997 issuance of $200 million
9
of capital securities by a special-purpose subsidiary of Huntington also
increased long-term debt. The capital securities were a cost-effective means of
strengthening Huntington's regulatory capital position.
Shareholders' equity increased approximately 4.0% versus both December
and March 31, 1996. Excluding the effect of net unrealized losses on securities
available for sale, equity was up 6.8% and 8.2%, respectively. The higher equity
was primarily the result of common stock issued by Huntington in the
Citi-Bancshares acquisition.
RESULTS OF OPERATIONS
NET INTEREST INCOME
Net interest income was $211.5 million for the three months ended March
31, 1997, a 14.5% increase from $184.7 million in the same period last year.
Interest rate swaps and other off-balance sheet financial instruments used for
asset/liability management purposes provided a $1.8 million benefit versus a
reduction of $15.1 million one year ago. Higher loan volumes also contributed to
the increase in net interest income. The net interest margin, on a fully tax
equivalent basis, was 4.35% during the most recent quarter versus 4.03% in the
first three months of 1996. The latter percentage was negatively impacted by
off-balance sheet interest rate contracts that reduced the first quarter 1996
margin by 33 basis points, a significant component of which was amortization of
net losses from closed positions. At March 31, 1997, deferred gains and losses
remaining to be amortized were immaterial.
PROVISION FOR LOAN LOSSES
The provision for loan losses was $18.9 million in the first quarter
of 1997, up from $11.8 million in the same period last year. Net charge-offs
(annualized) as a percent of average total loans were .43% in the recent three
months, compared with .34% in the first quarter one year ago and .46% for all of
1996.
NON-INTEREST INCOME
Non-interest income, excluding securities transactions, was $63.8
million in the recent three months compared with $61.1 million in the same
period last year. Solid growth in electronic banking fees, investment product
sales, and trust services was somewhat offset by decreases in mortgage banking
income and credit card fees. Mortgage banking income declined in large part
because the first quarter 1996 total included a non-recurring gain from the sale
of portfolio loans. Credit card fees were lower, as Huntington sold a portion of
its interest in certain payment processing contracts in April 1996 in connection
with the formation of a strategic alliance.
Huntington realized gains from securities transactions of $2.0 million
in the first quarter of 1997 versus $7.1 million in the same period one year
ago. The higher gains last year resulted from the sale of collateralized
mortgage obligations and mortgage backed securities to reduce price and/or
prepayment risk.
10
NON-INTEREST EXPENSE
Non-interest expense increased 8.2% from one year ago. Adjusting for the
effect of acquisitions accounted for under the purchase method, the increase was
6.2%. Advertising costs associated with Huntington's branding campaign also
contributed to the growth in expenses. Personnel costs (salaries, commissions,
and benefits) were up 6.4%, which is indicative of more full-time equivalent
employees and normal salary adjustments. The larger organization, driven by
higher business volumes, acquisitions, and new business initiatives, also
contributed to an increase in various other components of non-interest expense.
The efficiency ratio was solid at 56.3% versus 58.2% in first quarter 1996.
INTEREST RATE RISK MANAGEMENT
Huntington seeks to achieve consistent growth in net interest income
and net income while managing volatility arising from shifts in interest rates.
The Asset and Liability Management Committee (ALCO) oversees financial risk
management, establishing broad policies and specific operating limits that
govern a variety of financial risks inherent in Huntington's operations,
including interest rate, liquidity, and market risks. On and off-balance sheet
strategies and tactics are reviewed and monitored regularly by ALCO to ensure
consistency with approved risk tolerances.
Interest rate risk management is a dynamic process, encompassing both
the business flows onto the balance sheet and the changing market and business
environment. Effective management of interest rate risk begins with
appropriately diversified investments and funding sources. To accomplish its
overall balance sheet objectives, Huntington regularly accesses a variety of
markets--money, bond, and futures and options--as well as numerous trading
exchanges. In addition, dealers in over-the-counter financial instruments
provide availability of interest rate swaps as needed.
Measurement and monitoring of interest rate risk is an ongoing process.
A key element in this process is Huntington's estimation of the amount that net
interest income will change over a twelve to twenty-four month period given a
directional shift in interest rates. The income simulation model used by
Huntington captures all assets, liabilities, and off-balance sheet financial
instruments, accounting for significant variables which are believed to be
affected by interest rates. These include prepayment speeds on mortgages and
consumer installment loans, principal amortization and maturities on other
financial instruments, and balance sheet growth assumptions. The model captures
embedded options, e.g. interest rate caps/floors or call options, and accounts
for changes in rate relationships, as various rate indices lead or lag changes
in market rates. While these assumptions are inherently uncertain, management
utilizes probabilities and, therefore, believes that the model provides an
accurate estimate of Huntington's interest rate risk exposure. Management
reporting of this information is regularly shared with the Board of Directors.
At March 31, 1997, the results of Huntington's interest sensitivity
analysis indicated that net interest income would be relatively unchanged by a
100 basis points increase or decrease in the federal funds rate (assuming the
change occurs evenly over the next year and that corresponding changes in other
market rates occur as forecasted). Net interest income would be expected to
increase 0.9% if rates were to fall 200 basis points versus a decline in net
interest income of 2.4% if rates rose 200 basis points.
11
Active interest rate risk management necessitates the use of various
types of off-balance sheet financial instruments, primarily interest rate swaps.
Risk that is created by different indices on products, by unequal terms to
maturity of assets and liabilities, and by products that are appealing to
customers but incompatible with current risk limits can be eliminated or
decreased in a cost efficient manner by utilizing interest rate swaps. In
addition, the swap strategy has enabled Huntington to lower the overall cost of
raising wholesale funds. Similarly, financial futures, interest rate caps and
floors, options, and forward rate agreements are used to control financial risk
effectively. Off-balance sheet instruments are often preferable to similar cash
instruments because, though performing identically, they require less capital
while preserving access to the marketplace.
The following table illustrates the approximate market values, estimated
maturities and weighted average rates of the interest rate swaps used by
Huntington in its interest rate risk management program. The valuation of
interest rate swap contracts is largely a function of the financial market's
expectations regarding the future direction of interest rates. Accordingly,
current market values are not necessarily indicative of the future impact of the
swaps on net interest income. This will depend, in large part, on the shape of
the yield curve as well as interest rate levels. With respect to the variable
rate information and the indexed amortizing swap maturities presented in the
table below, management made no assumptions regarding future changes in interest
rates.
Average
Notional Maturity Market Average Rate
(dollars in millions) Value (years) Value Receive Pay
----- ------- ----- ------- ---
March 31, 1997:
ASSET CONVERSION SWAPS
Receive fixed $ 800 1.61 $ (9.2) 5.65% 5.56%
Receive fixed-amortizing 92 1.25 (1.2) 5.27 5.94
------ -------
TOTAL ASSET CONVERSION SWAPS $ 892 1.57 $ (10.4) 5.61% 5.60%
====== =======
LIABILITY CONVERSION SWAPS
Receive fixed $1,305 2.19 $ 3.5 6.17% 5.58%
Receive fixed-amortizing 195 2.25 (4.5) 5.63 5.63
Pay fixed 50 .44 (.5) 5.56 8.05
------ -------
TOTAL LIABILITY CONVERSION SWAPS $1,550 2.14 $ (1.5) 6.08% 5.66%
====== =======
BASIS PROTECTION SWAPS $ 285 2.12 $ (.3) 5.64% 5.63%
====== =======
The pay rates on Huntington's receive-fixed swaps vary based on
movements in the applicable London inter-bank offered rate (LIBOR).
Receive-fixed asset conversion swaps with a notional value of $200 million have
embedded written LIBOR-based call options. Also, receive-fixed liability
conversion swaps with a notional value of $150 million have embedded written
LIBOR-based caps. The portfolio of amortizing swaps consists primarily of
contracts that are indexed to the prepayment experience of a specified pool of
mortgage loans. As market interest rates change, the amortization of the
notional value of the swap will also change, generally slowing as rates increase
and accelerating when rates fall. Basis swaps are contracts which provide for
both parties to receive interest payments according to different
12
rate indices and are used to protect against changes in spreads between market
rates. The receive and pay amounts applicable to Huntington's basis swaps are
based predominantly on LIBOR.
The notional values of the swap portfolio represent contractual amounts
on which interest payments to be exchanged are based. These notional values do
not represent direct credit exposures. At March 31, 1997, Huntington's credit
risk from interest rate swaps used for asset/liability management purposes was
$36.5 million, which represents the sum of the aggregate fair value of positions
that have become favorable to Huntington, including any accrued interest
receivable due from counterparties. In order to minimize the risk that a swap
counterparty will not satisfy its interest payment obligation under the terms of
the contract, Huntington performs credit reviews on all counterparties,
restricts the number of counterparties used to a select group of high quality
institutions, obtains collateral, and enters into formal netting arrangements.
Huntington has never experienced any past due amounts from a swap counterparty
and does not anticipate nonperformance in the future by any such counterparties.
The total notional amount of off-balance sheet instruments used by
Huntington on behalf of customers (for which the related interest rate risk is
offset by third party contracts) was $246 million at the recent quarter-end.
Total credit exposure from such contracts, represented by those instruments with
a positive fair value, was $1.5 million. These separate activities, which are
accounted for at fair value, are not a significant part of Huntington's
operations. Accordingly, they have been excluded from the above discussion of
off-balance sheet financial instruments and the related tables.
ASSET QUALITY
Huntington's exposure to credit risk is managed through the use of
consistent underwriting standards that emphasize "in-market" lending to
established borrowers. Highly leveraged transactions and excessive industry or
other concentrations are avoided. The credit administration function also
employs extensive monitoring procedures to ensure problem loans are promptly
identified and that loans adhere to corporate policy. These procedures provide
executive management with the information necessary to implement appropriate
change and take corrective action as needed.
Asset quality continues to be strong. Non-performing assets, consisting
of loans that are no longer accruing interest, loans that have been renegotiated
based upon financial difficulties of the borrower, and real estate acquired
through foreclosure, totaled $81.1 million at March 31, 1997, down 2.9% from one
year ago. Non-performing loans represented .41% of total loans and
non-performing assets as a percent of total loans and other real estate were
only .54%. Loans past due ninety days or more but continuing to accrue interest
(primarily consumer and residential real estate) were $35.9 million at the
recent quarter-end.
The allowance for loan losses (ALL) is maintained at a level considered
appropriate by management, based on its estimate of losses inherent in the loan
portfolio. The procedures employed by Huntington in evaluating the adequacy of
the ALL include an analysis of specific credits that are generally selected for
review on the basis of size and relative risk, portfolio trends, current and
historical loss experience, prevailing economic conditions, and other relevant
factors. At March 31, 1997, the ALL represented 1.40% of total loans and covered
non-performing loans 3.4 times; when combined with the allowance for other real
estate, it was 254.5% of total non-performing assets.
13
CAPITAL
Huntington places significant emphasis on the maintenance of strong
capital, which promotes investor confidence, provides access to the national
markets under favorable terms, and enhances business growth and acquisition
opportunities. Huntington also recognizes the importance of managing excess
capital and continually strives to maintain an appropriate balance between
capital adequacy and returns to shareholders. Capital is managed at each
subsidiary based upon the respective risks and growth opportunities, as well as
regulatory requirements.
Huntington's ratio of average equity to average assets was 7.21% in the
first three months of 1997 compared with 7.89% in the same period last year.
Huntington showed improvement in each of the key regulatory capital ratios, as
the proceeds from the issuance of capital securities by the special purpose
subsidiary are considered a component of Tier 1 capital under Federal Reserve
Board guidelines. In addition, each bank subsidiary had regulatory capital
ratios in excess of the levels established for "well-capitalized" institutions.
On February 21, 1996, the Board of Directors authorized Huntington to
repurchase up to 11.0 million additional shares of its common stock (adjusted
for the July 1996 stock dividend) through open market purchases and privately
negotiated transactions. The authorization represented a continuation of the
common stock repurchase program begun in August 1987 and provided that the
shares will be reserved for reissue in connection with Huntington's benefit
plans as well as for other corporate purposes. Huntington purchased 1.4 million
shares in the first quarter of 1997 at an aggregate cost of $37.6 million,
leaving 2.8 million shares available for repurchase. As a result of the pending
merger with First Michigan (discussed above), Huntington has suspended its
common stock repurchase program.
14
- --------------------------------------------------------------------------------
CONSOLIDATED FINANCIAL HIGHLIGHTS
- ----------------------------------------------------------------------------------
(in thousands, except per share amounts)
------- ------- -------
THREE MONTHS ENDED MARCH 31, 1997 1996 %Change
------- ------- -------
NET INCOME ........................... $66,450 $62,825 5.8%
PER COMMON SHARE AMOUNTS (1)
Net income ...................... $ 0.47 $ 0.42 11.9
Cash dividends declared ......... $ 0.20 $ 0.18 11.1
AVERAGE SHARES OUTSTANDING (1) ...... 142,821 148,559 (3.9)
KEY RATIOS
Return on:
Average total assets ............ 1.28% 1.26% 1.6
Average shareholders' equity .... 17.75% 16.02% 10.8
Efficiency ratio ..................... 56.27% 58.24% (3.4)
Average equity/average assets ........ 7.21% 7.89% (8.6)
NET INTEREST MARGIN .................. 4.35% 4.03% 7.9
----------- ----------- -----------
AT MARCH 31, 1997 1996 % Change
----------- ----------- -----------
Total Loans ............................. $14,869,139 $13,369,308 11.2 %
Total Deposits .......................... $13,940,274 $13,006,213 7.2
Total Assets ............................ $21,603,478 $20,137,982 7.3
Shareholders' Equity .................... $ 1,569,076 $ 1,502,510 4.4
Period-End Shares Outstanding (1) ....... 145,053 146,311 (0.9)
Shareholders' Equity Per Common Share (1) $ 10.82 $ 10.27 5.4
Total Risk-Adjusted Assets .............. $17,764,975 $16,618,923 6.9
Tier 1 Risk-Based Capital Ratio ......... 8.92% 7.94% 12.3
Total Risk-Based Capital Ratio .......... 12.34% 11.53% 7.0
Tier 1 Leverage Ratio ................... 7.60% 6.62% 14.8
(1) Adjusted for the ten percent stock dividend distributed July 31, 1996, as
applicable.
15
- --------------------------------------------------------------------------------
FINANCIAL REVIEW
- --------------------------------------------------------------------------------
INVESTMENT SECURITIES - AMORTIZED COST & FAIR VALUES BY MATURITY AT MARCH 31,
1997 AND DECEMBER 31, 1996
- ------------------------------------------------------------------------------------------------------
(in thousands of dollars) MARCH 31, 1997 DECEMBER 31, 1996
AMORTIZED COST FAIR VALUE AMORTIZED COST FAIR VALUE
- ------------------------------------------------------------------------------------------------------
U.S. Treasury
1-5 years .................. $ 156 $ 156 $ 156 $ 156
------- ------- ------- -------
Total ................... 156 156 156 156
------- ------- ------- -------
States and political subdivisions
Under 1 year ............... 13,558 13,612 13,875 13,955
1-5 years .................. 22,758 23,091 22,283 22,706
6-10 years ................. 19,293 19,351 20,143 20,304
Over 10 years .............. 3,897 3,882 3,987 3,986
------- ------- ------- -------
Total ................... 59,506 59,936 60,288 60,951
------- ------- ------- -------
Total Investment Securities ..... $59,662 $60,092 $60,444 $61,107
======= ======= ======= =======
16
- --------------------------------------------------------------------------------
FINANCIAL REVIEW
- --------------------------------------------------------------------------------
SECURITIES AVAILABLE FOR SALE - AMORTIZED COST & FAIR VALUES BY MATURITY AT
MARCH 31, 1997 AND DECEMBER 31, 1996
- --------------------------------------------------------------------------------
(in thousands of dollars) March 31, 1997 December 31, 1996
- --------------------------------------------------------------------------------------------------------
Amortized Cost Fair Value Amortized Cost Fair Value
-------------- ---------- -------------- ----------
U.S. Treasury
Under 1 year ...................... $ 10,005 $ 10,061 $ 58,572 $ 58,835
1-5 years ......................... 592,308 575,811 390,881 384,021
6-10 years ........................ 187,409 176,759 159,747 153,489
---------- ---------- ---------- ----------
Total .......................... 789,722 762,631 609,200 596,345
---------- ---------- ---------- ----------
Federal agencies
Mortgage-backed securities
Under 1 year ...................... 84 85 -- --
1-5 years ......................... 45,047 45,502 179,601 182,239
6-10 years ........................ 807,381 783,048 842,331 830,653
Over 10 years ..................... 379,845 375,719 259,214 259,519
---------- ---------- ---------- ----------
Total .......................... 1,232,357 1,204,354 1,281,146 1,272,411
---------- ---------- ---------- ----------
Other agencies
Under 1 year ...................... 30,722 30,807 63,586 63,823
1-5 years ......................... 1,806,519 1,781,474 1,843,924 1,845,256
6-10 years ........................ 220,855 217,949 176,519 175,143
Over 10 years ..................... 423,505 416,345 343,946 341,968
---------- ---------- ---------- ----------
Total .......................... 2,481,601 2,446,575 2,427,975 2,426,190
---------- ---------- ---------- ----------
Total U.S. Treasury and Federal agencies 4,503,680 4,413,560 4,318,321 4,294,946
---------- ---------- ---------- ----------
Other
Under 1 year ...................... 8,452 8,611 7,305 7,497
1-5 years ......................... 8,692 9,018 9,304 9,706
6-10 years ........................ 192,125 189,903 157,904 158,906
Over 10 years ..................... 270,878 269,005 265,534 265,649
Marketable equity securities ...... 8,480 7,063 8,480 7,229
---------- ---------- ---------- ----------
Total .......................... 488,627 483,600 448,527 448,987
---------- ---------- ---------- ----------
Total Securities Available for Sale .... $4,992,307 $4,897,160 $4,766,848 $4,743,933
========== ========== ========== ==========
17
- --------------------------------------------------------------------------------
FINANCIAL REVIEW
- -----------------------------------------------------------------------------------------------------------------------------
Loan Loss Experience
- -----------------------------------------------------------------------------------------------------------------------------
(in thousands of dollars) 1997 1996
--------- ---------------------------------------------------------
I Q IV Q III Q II Q I Q
--------- ---------------------------------------------------------
Allowance for loan losses, beginning of period $ 199,058 $ 200,215 $ 196,486 $ 197,375 $ 194,456
Allowance of assets acquired/other ........... 6,028 (293) -- -- 2,200
Loan losses .................................. (19,959) (27,166) (20,799) (17,417) (15,707)
Recoveries of loans previously charged off ... 4,744 5,168 4,278 4,685 4,603
Provision for loan losses .................... 18,892 21,134 20,250 11,843 11,823
--------- --------- --------- --------- ---------
Allowance for loan losses end of period ...... $ 208,763 $ 199,058 $ 200,215 $ 196,486 $ 197,375
========= ========= ========= ========= =========
As a % of average total loans
Net loan losses--annualized ................. 0.43% 0.62% 0.48% 0.38% 0.34%
Provision for loan losses--annualized ....... 0.53% 0.60% 0.59% 0.35% 0.36%
Allowance for loan losses as a % of total loans 1.40% 1.40% 1.44% 1.44% 1.48%
Net loan loss coverage (1) .................... 8.02 x 5.56 x 7.33 x 8.72 x 9.85 x
(1) Income before taxes and the provision for loan losses to net loan losses.
- --------------------------------------------------------------------------------
NON-PERFORMING ASSETS AND PAST DUE LOANS
(Quarter-End) 1997 1996
------- -------------------------------------------------
(in thousands of dollars) I Q IV Q III Q II Q I Q
------- -------------------------------------------------
Non-accrual loans ...................... $57,912 $47,155 $49,800 $51,470 $57,530
Renegotiated loans ..................... 3,313 3,326 5,174 5,558 5,578
------- ------- ------- ------- -------
Total Non-Performing Loans ............. 61,225 50,481 54,974 57,028 63,108
------- ------- ------- ------- -------
Other real estate, net ................. 19,850 16,772 15,610 21,720 20,386
------- ------- ------- ------- -------
Total Non-Performing Assets ............ $81,075 $67,253 $70,584 $78,748 $83,494
------- ------- ------- ------- -------
Non-performing loans as a
% of total loans ..................... 0.41% 0.35% 0.39% 0.42% 0.47%
Non-performing assets as a
% of total loans and other real estate 0.54% 0.47% 0.51% 0.57% 0.62%
Allowance for loan losses as a % of
non-performing loans ................. 340.98% 394.32% 364.20% 344.54% 312.76%
Allowance for loan losses and other real
estate as a % of non-performing assets 254.48% 291.69% 274.54% 238.03% 225.01%
Accruing loans past due 90 days or more $35,852 $34,056 $32,382 $29,859 $25,824
======= ======= ======= ======= =======
18
CONSOLIDATED AVERAGE BALANCES AND INTEREST RATES (QUARTERLY DATA)
Fully Tax Equivalent Basis (1) 1ST QUARTER 1997 4TH QUARTER 1996
--------------------- ----------------------
(in millions of dollars) AVERAGE YIELD/ AVERAGE YIELD/
BALANCE RATE BALANCE RATE
--------------------- ----------------------
Assets
Interest bearing deposits in banks ................................ $1 6.77% $2 5.26%
Trading account securities ........................................ 8 5.29 16 5.69
Federal funds sold and securities purchased under resale agreements 20 5.78 25 5.55
Mortgages held for sale ........................................... 86 7.74 101 7.97
Securities:
Taxable ..................................................... 4,878 6.36 4,632 6.35
Tax exempt .................................................. 91 8.96 85 8.89
------ ------
Total Securities ....................................... 4,969 6.41 4,717 6.40
------ ------
Loans
Commercial ................................................... 4,531 8.41 4,415 7.62
Real Estate
Construction ............................................ 496 8.83 454 8.45
Mortgage ................................................ 2,792 8.50 2,761 8.53
Consumer
Loans .................................................. 5,421 8.78 5,365 8.79
Leases ................................................. 1,252 7.84 1,112 7.90
------ ------
Total Loans ............................................. 14,492 8.53 14,107 8.29
Allowance for loan losses/loan fees ..................... 208 206
------ ------
Net loans ............................................... 14,284 9.00 13,901 8.60
------ ------
Total earning assets .................................... 19,576 8.34% 18,968 8.04%
------ ------
Cash and due from banks ........................................... 774 772
All other assets .................................................. 920 903
------ ------
Total Assets ...................................................... $21,062 $20,437
====== ======
Liabilities and Shareholders' Equity
Demand deposits
Non-interest bearing ......................................... $2,305 $2,349
Interest bearing ............................................. 2,574 2.37% 2,540 2.34%
Savings deposits .................................................. 2,591 3.32 2,518 3.32
Certificates of deposit of $100,000 or more ....................... 1,017 5.35 987 5.33
Other domestic time deposits ...................................... 4,462 5.53 4,402 5.64
Foreign time deposits ............................................. 401 5.65 390 5.71
------ ------
Total deposits ............................................... 13,350 4.26 13,186 4.30
------ ------
Short-term borrowings ............................................. 3,958 5.14 3,775 5.17
Long-term debt .................................................... 1,790 5.90 1,526 5.73
------ ------
Interest bearing liabilities ................................. 16,793 4.65% 16,138 4.64%
------ ------
All other liabilities ............................................. 446 442
Shareholders' equity .............................................. 1,518 1,508
------ ------
Total Liabilities and Shareholders' Equity ........................ $21,062 $20,437
====== ======
Net interest rate spread .......................................... 3.69% 3.40%
Impact of non-interest bearing funds on margin .................... 0.66% 0.70%
Net Interest Margin ............................................... 4.35% 4.10%
(1) Fully tax equivalent yields are calculated assuming a 35% tax rate.
19
- --------------------------------------------------------------------------------
CONSOLIDATED AVERAGE BALANCES AND INTEREST RATES (QUARTERLY DATA)
3RD QUARTER 1996 2ND QUARTER 1996 1ST QUARTER 1996
------------------------ ------------------------ ----------------------
AVERAGE YIELD/ AVERAGE YIELD/ AVERAGE YIELD/
BALANCE RATE BALANCE RATE BALANCE RATE
------- ---- ------- ---- ------- ----
$2 5.91% $2 9.43% $39 5.70%
-15 5.83 14 5.47 19 5.64
17 6.61 29 5.33 27 6.19
109 8.23 117 7.62 127 7.18
4,593 6.39 4,609 6.52 4,835 6.55
89 9.32 96 9.75 106 9.09
------- ------- ------
4,682 6.44 4,705 6.58 4,941 6.60
------- ------- ------
4,275 7.72 4,319 7.68 4,281 7.77
413 8.46 386 8.50 364 8.52
2,793 8.50 2,783 8.49 2,760 8.48
5,225 8.85 5,142 9.04 5,079 8.99
991 7.88 885 7.85 811 7.87
------- ------- ------
13,697 8.34 13,515 8.40 13,295 8.41
202 199 198
------- ------- ------
13,495 8.73 13,316 8.75 13,097 8.73
------- ------- ------
18,522 8.15% 18,382 8.19% 18,448 8.14%
------- ------- ------
754 755 746
853 906 988
------- ------- -------
$19,927 $19,844 $19,984
======= ======= =======
$2,315 $2,307 $2,391
2,561 2.36% 2,595 2.40% 2,506 2.53%
2,474 3.21 2,437 3.19 2,249 3.03
1,011 5.25 971 5.37 977 5.52
4,417 5.56 4,406 5.61 4,458 5.69
343 5.85 219 6.17 268 6.15
------- ------- -------
13,121 4.24 12,935 4.26 12,849 4.36
------- ------- -------
3,114 5.35 3,061 5.39 3,078 5.58
1,810 6.22 1,927 6.40 2,016 6.41
------- ------- -------
15,730 4.69% 15,616 4.75% 15,552 4.87%
------- ------- -------
406 430 464
1,476 1,491 1,577
------- ------- -------
$19,927 $19,844 $19,984
======= ======= =======
3.46% 3.44% 3.27%
0.70% 0.71% 0.76%
4.16% 4.15% 4.03%
20
- --------------------------------------------------------------------------------
SELECTED QUARTERLY INCOME STATEMENT DATA
1997 1996
-------- -----------------------------------------------
(in thousands of dollars, except per share amounts) IQ IVQ IIIQ IIQ IQ
-------- -------- -------- -------- --------
Total Interest Income ..................................... $405,184 $382,667 $378,422 $375,079 $374,296
Total Interest Expense .................................... 193,664 189,555 186,721 185,786 189,578
-------- -------- -------- -------- --------
Net Interest Income ....................................... 211,520 193,112 191,701 189,293 184,718
Provision for loan losses ................................. 18,892 21,134 20,250 11,843 11,823
-------- -------- -------- -------- --------
Net Interest Income After
Provision for Loan Losses ............................... 192,628 171,978 171,451 177,450 172,895
-------- -------- -------- -------- --------
Service charges on deposit accounts 23,795 23,418 23,342 23,132 22,461
Mortgage banking .......................................... 7,179 8,492 9,680 7,976 8,877
Trust services ............................................ 9,871 8,461 8,432 8,324 8,793
Credit card fees .......................................... 4,051 5,034 4,092 8,544 4,836
Investment product sales .................................. 4,130 3,000 2,694 3,286 3,239
Electronic banking fees ................................... 3,925 3,532 2,988 2,172 1,666
Securities gains .......................................... 1,977 4,240 6,173 200 7,090
Other ..................................................... 10,873 10,450 13,627 13,542 11,200
-------- -------- -------- -------- --------
Total Non-Interest Income ................................. 65,801 66,627 71,028 67,176 68,162
-------- -------- -------- -------- --------
Salaries .................................................. 60,662 58,083 58,475 56,776 55,819
Commissions ............................................... 4,405 3,441 3,117 3,480 3,607
Employee benefits ......................................... 16,448 10,952 13,858 14,801 17,216
Net occupancy ............................................. 11,431 10,232 10,602 10,835 10,874
Equipment ................................................. 11,137 11,578 10,670 10,267 9,614
Advertising ............................................... 6,421 2,685 2,845 4,052 2,865
Printing and supplies ..................................... 3,833 3,967 3,712 4,164 3,495
Credit card and electronic banking ........................ 2,653 3,659 4,255 4,023 3,572
Legal and loan collection ................................. 2,354 3,658 2,000 2,498 1,894
Other ..................................................... 35,971 29,151 32,044 34,570 34,540
-------- -------- -------- -------- --------
Total Non-Interest Expense ................................ 155,315 137,406 141,578 145,466 143,496
-------- -------- -------- -------- --------
Income Before Income Taxes ................................ 103,114 101,199 100,901 99,160 97,561
Provision for income taxes ................................ 36,664 33,474 34,438 34,072 34,736
-------- -------- -------- -------- --------
Net Income ................................................ $ 66,450 $ 67,725 $ 66,463 $ 65,088 $ 62,825
======== ======== ======== ======== ========
Per Common Share (1)
Net income .............................................. $ 0.47 $ 0.47 $ 0.46 $ 0.45 $ 0.42
Cash dividends declared ................................. $ 0.20 $ 0.20 $ 0.20 $ 0.18 $ 0.18
Fully Tax Equivalent Margin:
Net Interest Income ....................................... $211,520 $193,112 $191,701 $189,293 $184,718
Tax Equivalent Adjustment (2) ............................. 1,285 1,210 1,204 1,319 1,368
-------- -------- -------- -------- --------
Tax Equivalent Net Interest Income $212,805 $194,322 $192,905 $190,612 $186,086
======== ======== ======== ======== ========
(1) Adjusted for the ten percent stock dividend distributed July 31, 1996, as
applicable.
(2) Calculated assuming a 35% tax rate.
21
PART II. OTHER INFORMATION
In accordance with the instructions to Part II, the other specified items in
this part have been omitted because they are not applicable or the information
has been previously reported.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3. (i)(a) Articles of Restatement of Charter, Articles of
Amendment to Articles of Restatement of Charter, and
Articles Supplementary -- previously filed as Exhibit 3(i)
to Annual Report on Form 10-K for the year ended December
31, 1993, and incorporated herein by reference.
(i)(b) Articles of Amendment to Articles of Restatement
of Charter -- previously filed as Exhibit 3(i)(b) to
Quarterly Report on Form 10-Q for the quarter ended March
31, 1996, and incorporated herein by reference.
(ii) Bylaws -- previously filed as Exhibit 3(b) to Annual
Report on Form 10-K for the year ended December 31, 1987,
and incorporated herein by reference.
4. Instruments defining the Rights of Security Holders:
Reference is made to Articles Fifth, Eighth and Tenth of
Articles of Restatement of Charter, previously filed as
Exhibit 3(i) to Form 10-K for the year ended December 31,
1993, and incorporated herein by reference and to Articles
of Amendment to Articles of Restatement of Charter --
previously filed as Exhibit 3(i)(b) to Quarterly Report on
Form 10-Q for the quarter ended March 31, 1996, and
incorporated herein by reference. Also, reference is made to
Rights Plan, dated February 22, 1990, previously filed as
Exhibit 1 to Registration Statement on Form 8-A, and
incorporated herein by reference and to Amendment No. 1 to
the Rights Agreement, dated as of August 16, 1995,
previously filed as Exhibit 4(b) to Form 8-K filed with the
Securities and Exchange Commission on August 28, 1995, and
incorporated herein by reference. Instruments defining the
rights of holders of long-term debt will be furnished to the
Securities and Exchange Commission upon request.
11. Computation of Earnings Per Share
27. Financial Data Schedule
(b) Reports on Form 8-K
1. A report on Form 8-K, dated January 15, 1997, was filed
under report item numbers 5 and 7, concerning Huntington's
results of operations for the fourth quarter and year ended
December 31, 1996.
22
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Huntington Bancshares Incorporated
----------------------------------
(Registrant)
Date: May 15, 1997 /s/ Ralph K. Frasier
----------------------------------
Ralph K. Frasier
General Counsel and Secretary
Date: May 15, 1997 /s/ Gerald R. Williams
----------------------------------
Gerald R. Williams
Executive Vice President and
Chief Financial Officer (principal
accounting officer)
22