Annual report pursuant to Section 13 and 15(d)

SEGMENT REPORTING

v3.3.1.900
SEGMENT REPORTING
 12 Months Ended
Dec. 31, 2015
Segment Reporting [Abstract]  
SEGMENT REPORTING
SEGMENT REPORTING
Our business segments are based on our internally-aligned segment leadership structure, which is how we monitor results and assess performance. We have five major business segments: Retail and Business Banking, Commercial Banking, Automobile Finance and Commercial Real Estate (AFCRE), Regional Banking and The Huntington Private Client Group (RBHPCG), and Home Lending. The Treasury / Other function includes our technology and operations, other unallocated assets, liabilities, revenue, and expense.
Business segment results are determined based upon our management reporting system, which assigns balance sheet and income statement items to each of the business segments. The process is designed around our organizational and management structure and, accordingly, the results derived are not necessarily comparable with similar information published by other financial institutions. Additionally, because of the interrelationships of the various segments, the information presented is not indicative of how the segments would perform if they operated as independent entities
Revenue is recorded in the business segment responsible for the related product or service. Fee sharing is recorded to allocate portions of such revenue to other business segments involved in selling to, or providing service to customers. Results of operations for the business segments reflect these fee sharing allocations.
The management accounting process that develops the business segment reporting utilizes various estimates and allocation methodologies to measure the performance of the business segments. Expenses are allocated to business segments using a two-phase approach. The first phase consists of measuring and assigning unit costs (activity-based costs) to activities related to product origination and servicing. These activity-based costs are then extended, based on volumes, with the resulting amount allocated to business segments that own the related products. The second phase consists of the allocation of overhead costs to all five business segments from Treasury / Other. We utilize a full-allocation methodology, where all Treasury / Other expenses, except reported Significant Items, and a small amount of other residual unallocated expenses, are allocated to the five business segments.
We use an active and centralized Funds Transfer Pricing (FTP) methodology to attribute appropriate income to the business segments. The intent of the FTP methodology is to transfer interest rate risk from the business segments by providing matched duration funding of assets and liabilities. The result is to centralize the financial impact, management, and reporting of interest rate risk in the Treasury / Other function where it can be centrally monitored and managed. The Treasury / Other function charges (credits) an internal cost of funds for assets held in (or pays for funding provided by) each business segment. The FTP rate is based on prevailing market interest rates for comparable duration assets (or liabilities).
Retail and Business Banking - The Retail and Business Banking segment provides a wide array of financial products and services to consumer and small business customers including but not limited to checking accounts, savings accounts, money market accounts, certificates of deposit, consumer loans, and small business loans. Other financial services available to consumer and small business customers include investments, insurance, interest rate risk protection, foreign exchange, and treasury management. Business Banking is defined as serving companies with revenues up to $20 million and consists of approximately 165,000 businesses
Commercial Banking - Through a relationship banking model, this segment provides a wide array of products and services to the middle market, large corporate, and government public sector customers located primarily within our geographic footprint. The segment is divided into seven business units: middle market, large corporate, specialty banking, asset finance, capital markets, treasury management, and insurance.
Automobile Finance and Commercial Real Estate - : This segment provides lending and other banking products and services to customers outside of our traditional retail and commercial banking segments. Our products and services include providing financing for the purchase of vehicles by customers at franchised automotive dealerships, financing the acquisition of new and used vehicle inventory of franchised automotive dealerships, and financing for land, buildings, and other commercial real estate owned or constructed by real estate developers, automobile dealerships, or other customers with real estate project financing needs. Products and services are delivered through highly specialized relationship-focused bankers and product partners.
Regional Banking and The Huntington Private Client Group - Regional Banking and The Huntington Private Client Group is closely aligned with our eleven regional banking markets. The Huntington Private Client Group is organized into units consisting of The Huntington Private Bank, The Huntington Trust, and The Huntington Investment Company. Our private banking, trust, and investment functions focus their efforts in our Midwest footprint and Florida.
Huntington sold Huntington Asset Advisors, Huntington Asset Services and Unified Financial Securities in the 2015 fourth quarter.
Home Lending - Home Lending originates and services consumer loans and mortgages for customers who are generally located in our primary banking markets. Consumer and mortgage lending products are primarily distributed through the Retail and Business Banking segment, as well as through commissioned loan originators. Home lending earns interest on loans held in the warehouse and portfolio, earns fee income from the origination and servicing of mortgage loans, and recognizes gains or losses from the sale of mortgage loans. Home Lending supports the origination and servicing of mortgage loans across all segments.
Listed below is certain financial information reconciled to Huntington’s December 31, 2015, December 31, 2014, and December 31, 2013, reported results by business segment:
 
Income Statements
(dollar amounts in thousands)
Retail & Business
Banking
 

Commercial
Banking
 
AFCRE
 
RBHPCG
 
Home
Lending
 
Treasury /
Other
 
Huntington
Consolidated
2015
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
$
1,030,238

 
$
365,181

 
$
381,189

 
$
115,608

 
$
65,884

 
$
(7,363
)
 
$
1,950,737

Provision for credit losses
42,828

 
49,460

 
4,931

 
65

 
2,670

 
—

 
99,954

Noninterest income
440,261

 
258,191

 
29,257

 
153,160

 
87,021

 
70,840

 
1,038,730

Noninterest expense
1,029,727

 
283,448

 
152,010

 
254,380

 
157,266

 
99,077

 
1,975,908

Provision (benefit) for income taxes
139,280

 
101,662

 
88,727

 
5,013

 
(2,461
)
 
(111,573
)
 
220,648

Net income (loss)
$
258,664


$
188,802


$
164,778


$
9,310


$
(4,570
)

$
75,973


$
692,957

2014
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
$
912,992

 
$
306,434

 
$
379,363

 
$
101,839

 
$
58,015

 
$
78,498

 
$
1,837,141

Provision (Benefit) for credit losses
75,529

 
31,521

 
(52,843
)
 
4,893

 
21,889

 
—

 
80,989

Noninterest income
409,746

 
209,238

 
26,628

 
173,550

 
69,899

 
90,118

 
979,179

Noninterest expense
982,288

 
249,300

 
156,715

 
236,634

 
136,374

 
121,035

 
1,882,346

Provision (benefit) for income taxes
92,722

 
82,198

 
105,742

 
11,852

 
(10,622
)
 
(61,299
)
 
220,593

Net income (loss)
$
172,199


$
152,653


$
196,377


$
22,010


$
(19,727
)

$
108,880


$
632,392

2013
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
$
902,526

 
$
281,461

 
$
366,508

 
$
105,862

 
$
51,839

 
$
(3,588
)
 
$
1,704,608

Provision (Benefit) for credit losses
137,978

 
27,464

 
(82,269
)
 
(5,376
)
 
12,249

 
(1
)
 
90,045

Noninterest income
398,065

 
200,573

 
46,819

 
186,430

 
106,006

 
74,303

 
1,012,196

Noninterest expense
964,193

 
254,629

 
156,469

 
236,895

 
141,489

 
4,328

 
1,758,003

Provision (benefit) for income taxes
69,447

 
69,979

 
118,694

 
21,271

 
1,437

 
(53,354
)
 
227,474

Net income
$
128,973


$
129,962


$
220,433


$
39,502


$
2,670


$
119,742


$
641,282


 
 
Assets at
December 31,
 
Deposits at
December 31,
(dollar amounts in thousands)
2015
 
2014
 
2015
 
2014
Retail & Business Banking
$
15,822,568

 
$
15,146,857

 
$
30,875,607

 
$
29,350,255

Commercial Banking
16,943,458

 
15,043,477

 
11,424,778

 
11,184,566

AFCRE
17,855,600

 
16,027,910

 
1,651,702

 
1,377,921

RBHPCG
3,458,847

 
3,871,020

 
7,690,581

 
6,727,892

Home Lending
3,917,198

 
3,949,247

 
361,881

 
326,841

Treasury / Other
13,046,880

 
12,259,499

 
3,290,430

 
2,764,676

Total
$
71,044,551

 
$
66,298,010

 
$
55,294,979

 
$
51,732,151