Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting

v2.4.0.6
Segment Reporting
3 Months Ended
Mar. 31, 2013
Segment Reporting [Abstract]  
SEGMENT REPORTING

18. SEGMENT REPORTING

 

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.

 

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 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 and leases. Other financial services available to consumer and small business customers include investments, insurance services, interest rate risk protection products, foreign exchange hedging, and treasury management services. Huntington serves customers primarily through our network of traditional branches in Ohio, Michigan, Pennsylvania, Indiana, West Virginia, and Kentucky. Huntington also has branches located in grocery stores in Ohio and Michigan. In addition to our extensive branch network, customers can access Huntington through online banking, mobile banking, telephone banking, and over 1,400 ATMs.

 

Huntington established a “Fair Play” banking philosophy and built a reputation for meeting the banking needs of consumers in a manner which makes them feel supported and appreciated. 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 our 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 up to $25 million and consists of approximately 163,000 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.

 

Regional and Commercial Banking: This segment provides a wide array of products and services to the middle market and large corporate customers base located primarily within our eleven regional commercial banking markets. Products and services are delivered through a relationship banking model and include commercial lending, as well as depository and liquidity management products. Dedicated teams collaborate with our relationship bankers to deliver complex and customized treasury management solutions, equipment and technology leasing, international services, capital markets services such as interest rate risk protection products, foreign exchange hedging and sales, trading of securities, mezzanine investment capabilities, and employee benefit programs (insurance, 401(k)). The Commercial Banking team specializes in serving a number of industry segments such as not-for-profit organizations, health-care entities, and large publicly traded companies.

 

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 include financing for the purchase of automobiles by customers at automotive dealerships, financing the acquisition of new and used vehicle inventory of 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. 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 expand into selected markets outside of the Midwest and to actively deepen relationships while building a strong reputation.

The Commercial Real Estate team serves real estate developers, REITs, and other customers with lending needs that are secured by commercial properties. 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 provides these services through a unified sales team, which consists of private bankers, trust officers, and investment advisors. 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 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 mutual funds and Huntington Strategy Shares, our actively-managed exchange-traded 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.

Treasury / Other function includes our insurance brokerage business, which specializes in commercial property and casualty, employee benefits, personal lines, life and disability and specialty lines of insurance. Huntington also provides brokerage and agency services for residential and commercial title insurance and excess and surplus product lines of insurance. As an agent and broker we do not assume underwriting risks; instead we provide our customers with quality, noninvestment insurance contracts. The Treasury / Other function also includes technology and operations, other unallocated assets, liabilities, revenue, and expense.

 

Listed below is certain operating basis financial information reconciled to Huntington's March 31, 2013, December 31, 2012, and March 31, 2012, reported results by business segment:

 

      Three Months Ended March 31,
      Retail &   Regional &                  
Income Statements   Business   Commercial         Treasury/   Huntington
(dollar amounts in thousands )   Banking Banking   AFCRE   WGH Other   Consolidated
                             
2013                          
Net interest income $ 205,240   69,399   88,070   43,668   17,793   $ 424,170
Provision for credit losses   32,547   (7,243)   (7,504)   11,792   ---     29,592
Noninterest income   87,266   30,302   8,355   94,654   31,632     252,209
Noninterest expense   239,766   52,415   36,911   91,992   21,709     442,793
Income taxes   7,068   19,085   23,456   12,088   (9,483)     52,214
Net income $ 13,125 $ 35,444 $ 43,562 $ 22,450 $ 37,199   $ 151,780
                             
2012                          
Net interest income $ 221,301   64,202   90,330   46,829   (5,453)   $ 417,209
Provision for credit losses   48,839   13,280   (42,254)   14,541   ---     34,406
Noninterest income   89,256   31,933   34,719   87,638   41,774     285,320
Noninterest expense   234,861   45,867   38,839   90,917   52,192     462,676
Income taxes   9,400   12,946   44,962   10,153   (25,284)     52,177
Net income $ 17,457 $ 24,042 $ 83,502 $ 18,856 $ 9,413   $ 153,270
                             
 
 

    Assets at     Deposits at
    March 31,     December 31,       March 31,     December 31,  
(dollar amounts in thousands)   2013     2012       2013     2012  
                           
Retail & Business Banking $ 14,474,672   $ 14,362,630     $ 28,719,332   $ 28,367,264  
Regional & Commercial Banking   11,978,858     11,540,966       5,626,852     5,862,858  
AFCRE   12,235,143     12,085,128       969,707     995,035  
WGH   7,477,667     7,570,256       10,015,400     9,507,785  
Treasury / Other   9,888,626     10,594,205       1,535,850     1,519,741  
Total $ 56,054,966   $ 56,153,185     $ 46,867,141   $ 46,252,683