Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING

v3.4.0.3
SEGMENT REPORTING
 3 Months Ended
Mar. 31, 2016
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.
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 operating basis financial information reconciled to Huntington’s March 31, 2016,  December 31, 2015, and March 31, 2015, reported results by business segment:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended March 31,
Income Statements
Retail & Business Banking
 
Commercial Banking
 
AFCRE
 
RBHPCG
 
Home Lending
 
Treasury/Other
 
Huntington Consolidated
(dollar amounts in thousands)
 
 
 
 
 
 
2016
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
$
264,688

 
$
100,863

 
$
95,569

 
$
39,279

 
$
13,016

 
$
(10,349
)
 
$
503,066

Provision for credit losses
12,196

 
34,756

 
(16,617
)
 
(479
)
 
(2,274
)
 
—

 
27,582

Noninterest income
117,559

 
58,581

 
7,252

 
27,807

 
11,650

 
19,018

 
241,867

Noninterest expense
273,729

 
90,428

 
40,204

 
49,997

 
25,608

 
11,114

 
491,080

Income taxes
33,713

 
11,991

 
27,732

 
6,149

 
466

 
(25,094
)
 
54,957

Net income (loss)
$
62,609

 
$
22,269

 
$
51,502

 
$
11,419

 
$
866

 
$
22,649

 
$
171,314

2015
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
$
248,650

 
$
74,918

 
$
95,162

 
$
26,824

 
$
15,277

 
$
6,854

 
$
467,685

Provision for credit losses
7,151

 
6,835

 
(1,383
)
 
2,645

 
5,343

 
—

 
20,591

Noninterest income
95,759

 
54,893

 
4,675

 
40,424

 
18,658

 
17,214

 
231,623

Noninterest expense
256,366

 
56,417

 
36,178

 
58,627

 
35,788

 
15,481

 
458,857

Income taxes
28,312

 
23,296

 
22,765

 
2,092

 
(2,519
)
 
(19,940
)
 
54,006

Net income (loss)
$
52,580

 
$
43,263

 
$
42,277

 
$
3,884

 
$
(4,677
)
 
$
28,527

 
$
165,854


 
Assets at
 
Deposits at
(dollar amounts in thousands)
March 31,
2016
 
December 31,
2015
 
March 31,
2016
 
December 31,
2015
Retail & Business Banking
$
15,786,893

 
$
15,746,086

 
$
31,302,518

 
$
30,875,607

Commercial Banking
17,954,911

 
17,022,387

 
11,257,864

 
11,424,778

AFCRE
18,503,547

 
17,856,368

 
1,607,598

 
1,651,702

RBHPCG
4,324,770

 
4,284,608

 
7,889,524

 
7,690,581

Home Lending
3,107,196

 
3,087,486

 
334,186

 
361,881

Treasury / Other
12,967,650

 
13,021,366

 
3,237,152

 
3,290,430

Total
$
72,644,967

 
$
71,018,301

 
$
55,628,842

 
$
55,294,979