Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting

Segment Reporting
9 Months Ended
Sep. 30, 2011
Segment Reporting [Abstract]  



During the 2010 fourth quarter, Huntington reorganized our business segments to better align certain business unit reporting with segment executives to accelerate cross-sell results and provide greater focus on the execution of strategic plans. We have four major business segments: Retail and Business Banking, Regional and Commercial Banking, Automobile Finance and Commercial Real Estate, and Wealth Advisors, Government Finance, and Home Lending. A Treasury / Other function includes our insurance business and other unallocated assets, liabilities, revenue, and expense. All periods have been reclassified to conform to the current period classification.


Segment results are determined based upon the Company's management reporting system, which assigns balance sheet and income statement items to each of the business segments. The process is designed around the Company's organizational and management structure and, accordingly, the results derived are not necessarily comparable with similar information published by other financial institutions. A description of each segment and table of financial results is presented below.


Retail and Business Banking: The Retail and Business Banking segment provides a wide array of financial products and services including but not limited to loans, deposits, investment, and treasury management services to our consumer and small business customers. Huntington serves customers primarily through our traditional banking network of over 600 branches as well as our convenience branches located in grocery stores and retirement centers in Ohio, Michigan, Pennsylvania, Indiana, West Virginia, and Kentucky. In addition to our extensive branch network, customers can access Huntington through online banking, mobile banking, 24-hour telephone banking, and over 1,300 ATMs.


Huntington has established a “Fair Play” banking philosophy and is building a reputation for meeting the banking needs of consumers in a manner which makes them feel supported and appreciated. In 2010, Huntington brought innovation to the checking account by providing consumers with a 24-hour grace period to correct a shortfall in an account and avoid the associated overdraft fees. Huntington believes customers are recognizing this and other efforts as key differentiators and it is earning us more customers and deeper relationships.


Business Banking is a dynamic and growing part of Huntington's business and we are committed to being the bank of choice for small businesses in our markets. Business Banking is defined as companies with revenues less than $15 million and consists of approximately 130,000 businesses. Huntington continues to develop products and services that are designed specifically to meet the needs of small business. Huntington continues to look for ways to help companies find solutions to their capital needs, from our program helping businesses that had struggled in the economic downturn but are now showing several quarters of profitability, to our participation in the Small Business Administration programs. As of September 30, 2011, the SBA reported that Huntington ranked first in our footprint and third in the nation in the number of SBA loans originated during the SBA fiscal year.



Regional and Commercial Banking: This segment provides a variety of banking products and services to customers within our primary banking markets that generally have larger credit exposures and sales revenues compared with our Retail and Business Banking customers. Huntington products in this segment include commercial loans, international trade, treasury management, leasing, capital market services including interest rate risk protection products, and mezzanine investment capabilities. Regional and Commercial Banking also focuses on financial solutions for corporate and institutional customers including investment banking, sales and trading of securities, and retirement plan services. The Regional and Commercial Banking team has significantly expanded its equipment leasing capabilities, as well as focused on serving the commercial banking needs of key verticals including not-for-profit organizations, healthcare entities, and large corporations. Commercial bankers personally deliver these products and services directly and with cross-segment product partners. Huntington consistently strives to develop extensive relationships with clients creating defined relationship plans which identify needs and offer solutions.


The primary focus for Regional and Commercial Banking is our ability to gain a deeper relationship with our existing customers and to increase our market share through our unique customer solution strategy. This includes a comprehensive cross-sell approach to capture the untapped opportunities within our customer and prospect community. This strategy embodies a shift from credit-only focus, to a total customer solution approach with an increasing share-of-wallet.


The Regional and Commercial Banking business model includes eleven regional markets driven by local execution. These markets are supported by expertise in large corporate and middle market segments, by capabilities in treasury management and equipment finance, and by vertical strategies within the healthcare and not-for-profit industries.


The commercial portfolio includes a distribution across industries and segments which resembles the market demographics of our footprint. A strategic focus of Regional and Commercial Banking is to target underpenetrated markets within our footprint and capitalize on opportunities in industries such as not-for-profit and healthcare.


In addition, Regional and Commercial Banking expanded the leadership, investment, and capabilities for treasury management and equipment finance. With our investments in treasury management, Huntington differentiated itself through our implementation experience and the speed at which products and services are delivered to our customers. In equipment finance, Huntington distinguished itself through aggressive business development and local service delivery and by strategically aligning with our bank partners to drive market share. The increase in originations during the current period reflected the strategic decision to enter three new markets: business aircraft finance, rail industry finance, and lender finance.



Automobile Finance and Commercial Real Estate: This segment provides lending and other banking products and services to customers outside of our normal retail and commercial banking segments. Our products and services are delivered through highly specialized relationship-focused bankers and our cross segment product partners. Huntington creates well-defined relationship plans which identify needs where solutions are developed and customer commitments are obtained.


The Automotive Finance team services automobile dealerships, its owners, and consumers buying automobiles through these dealerships. Huntington has provided new and used automobile financing and dealer services throughout the Midwest since the early 1950s. This consistency in the market and our focus on working with strong dealerships, has allowed us to actively deepen relationships while building a strong reputation.


The Commercial Real Estate team serves professional real estate developers, and REITs. Huntington has a clear focus on experienced, well-managed, well-capitalized top tier real estate developers who are capable of operating in all economic phases of the real estate industry. Most of our customers are located within our footprint.


Wealth Advisors, Government Finance, and Home Lending: This segment consists of our wealth management, government banking, and home lending businesses. In wealth management, Huntington provides financial services to high net worth clients in our primary banking markets and Florida. Huntington Wealth Advisors delivers a comprehensive solution through a unified sales team providing private banking, investment, insurance, and trust services. Aligned with the eleven regional commercial banking markets, this coordinated service model delivers products and services directly and through the other segment product partners. A fundamental point of differentiation is our commitment to be in the market, working closely with clients and their other advisors to identify needs, offer solutions and provide ongoing advice in an optimal client experience.


The Government Finance Group provides financial products and services to government and other public sector entities in our primary banking markets. A locally based team of relationship managers works with clients to meet their public finance, brokerage, trust, lending, and treasury management needs.


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. Closely aligned, our Community Development group serves an important role as it focuses on delivering on our commitment to the communities Huntington serves.


The segment also includes the related businesses of investment management, investment servicing, custody, corporate trust and retirement plan services. Huntington Asset Advisors provides investment management services through a variety of internal and external channels, including advising the Huntington Funds, our proprietary family of funds. Huntington Asset Services offers administrative and operational support to fund complexes, including fund accounting, transfer agency, administration, and distribution services. Our retirement plan services business offers fully bundled and third party distribution of a variety of qualified and non-qualified plan solutions, and the national settlements business focuses on providing banking solutions to the litigation settlement market.


Listed below is certain operating basis financial information reconciled to Huntington's September 30, 2011, December 31, 2010, and September 30, 2010, reported results by business segment:


      Three Months Ended September 30,
      Retail &   Regional &                  
Income Statements   Business   Commercial         Treasury/   Huntington
(dollar amounts in thousands )   Banking Banking   AFCRE   WGH Other   Consolidated
Net interest income $ 229,613   61,320   94,380   49,381   (28,216)   $ 406,478
Provision for credit losses   36,467   16,530   (19,979)   10,568   ---     43,586
Noninterest income   110,756   34,030   28,362   54,565   30,846     258,559
Noninterest expense   246,441   50,329   40,347   92,416   9,585     439,118
Income taxes   20,111   9,972   35,831   337   (27,309)     38,942
Operating/reported net income $ 37,350 $ 18,519 $ 66,543 $ 625 $ 20,354   $ 143,391
Net interest income $ 220,192 $ 53,970   86,105   43,626   6,069   $ 409,962
Provision for credit losses   59,316   3,731   37,132   18,983   (2)     119,160
Noninterest income   101,900   27,000   21,368   89,303   27,572     267,143
Noninterest expense   232,028   40,711   40,318   88,623   25,629     427,309
Income taxes   10,762   12,785   10,508   8,863   (13,228)     29,690
Operating/reported net income $ 19,986 $ 23,743 $ 19,515 $ 16,460 $ 21,242   $ 100,946
      Nine Months Ended September 30,
      Retail &   Regional &                  
Income Statements   Business   Commercial         Treasury/     Huntington
(dollar amounts in thousands )   Banking Banking   AFCRE   WGH Other   Consolidated
Net interest income $ 702,666   178,787   271,510   145,614   (84,432)   $ 1,214,145
Provision for credit losses   94,825   23,957   (30,050)   40,036   ---     128,768
Noninterest income   311,598   94,657   57,886   187,443   99,687     751,271
Noninterest expense   705,216   142,189   125,649   265,151   60,021     1,298,226
Income taxes   74,978   37,554   81,829   9,755   (81,449)     122,667
Operating/reported net income $ 139,245 $ 69,744 $ 151,968 $ 18,115 $ 36,683   $ 415,755
Net interest income $ 637,863   155,686   247,319 $ 120,511 $ 42,132   $ 1,203,511
Provision for credit losses   150,320   57,607   202,440   45,700   91,507     547,574
Noninterest income   300,444   80,667   58,625   246,704   91,198     777,638
Noninterest expense   670,458   115,457   114,366   261,876   77,056     1,239,213
Income taxes   41,136   22,151   (3,802)   20,875   (75,445)     4,915
Operating/reported net income $ 76,393 $ 41,138 $ (7,060) $ 38,764 $ 40,212   $ 189,447

    Assets at     Deposits at
    September 30,     December 31,     September 30,     September 30,     December 31,     September 30,
(dollar amounts in millions)   2011     2010     2010     2011     2010     2010
Retail & Business Banking $ 13,650   $ 13,088   $ 13,147   $ 28,095   $ 29,298   $ 28,735
Regional & Commercial Banking   9,757     8,720     8,286     4,173     3,538     3,217
AFCRE   12,351     13,233     13,078     817     753     776
WGH   7,132     6,971     6,756     9,013     7,449     7,247
Treasury / Other   12,089     11,808     11,980     1,122     816     1,097
Total $ 54,979   $ 53,820   $ 53,247   $ 43,220   $ 41,854   $ 41,072