Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting

Segment Reporting
3 Months Ended
Jun. 30, 2014
Segment Reporting [Abstract]  



Our business segments are based on our internally-aligned segment leadership structure, which is how we monitor results and assess performance. During the 2014 first quarter, we reorganized our business segments to drive our ongoing growth and leverage the knowledge of our highly experienced team. We now 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. A Treasury / Other function includes our insurance brokerage business, along with technology and operations, other unallocated assets, liabilities, revenue, and expense. All periods presented have been reclassified to conform to the current period classification.


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 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.


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 five business units: middle market, large corporate, specialty banking, capital markets and treasury management.


Middle Market Banking primarily focuses on providing banking solutions to companies with annual revenues of $20 million to $250 million. Through a relationship management approach, various products, capabilities and solutions are seamlessly orchestrated in a client centric way.


Corporate Banking works with larger, often more complex companies with revenues greater than $250 million. These entities, many of which are publically traded, require a different and customized approach to their banking needs.


Specialty Banking offers tailored products and services to select industries that have a foothold in the Midwest. Each banking team is comprised of industry experts with a dynamic understanding of the market and industry. Many of these industries are experiencing tremendous change, which creates opportunities for Huntington to leverage our expertise and help clients navigate, adapt and succeed.


Capital Markets has two distinct product capabilities: corporate risk management services and institutional sales, trading & underwriting. The Capital Markets Group offers a full suite of risk management tools including commodities, foreign exchange and interest rate hedging services. The Institutional Sales, Trading & Underwriting team provides access to capital and investment solutions for both municipal and corporate institutions.


The Treasury Management team helps businesses manage their working capital programs and reduce expenses. Our liquidity solutions help customers save and invest wisely, while our payables and receivables capabilities help them manage purchases and the receipt of payments for good and services. All of this is provided while helping customers take a sophisticated approach to managing their overhead, inventory, equipment and labor.


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.


Regional Banking and The Huntington Private Client Group: RBHPCG business segment was created as the result of an organizational and management realignment that occurred in January 2014. Regional Banking and The Huntington Private Client Group is well positioned competitively as we have closely aligned with our eleven regional banking markets. A fundamental point of differentiation is our commitment to be actively engaged within our local markets - building connections with community and business leaders and offering a uniquely personal experience delivered by colleagues working within those markets.


The Huntington Private Client Group is organized into units consisting of The Huntington Private Bank, The Huntington Trust, The Huntington Investment Company, Huntington Community Development, Huntington Asset Advisors, and Huntington Asset Services. Our private banking, trust, investment and community development functions focus their efforts in our Midwest footprint and Florida; while our proprietary funds and ETFs, fund administration, custody and settlements functions target a national client base.


The Huntington Private Bank provides high net-worth customers with deposit, lending (including specialized lending options) and banking services.


The Huntington Trust also serves high net-worth customers and delivers wealth management and legacy planning through investment and portfolio management, fiduciary administration, trust services and trust operations. This group also provides retirement plan services and corporate trust to businesses.


The Huntington Investment Company, a registered investment advisor, consists of registered representatives who work with our Retail and Private Bank to provide investment solutions for our customers. This team offers a wide range of products and services, including financial planning, brokerage, annuities, IRAs, 529 plans, market linked CDs and other investment products.

Huntington Community Development focuses on improving the quality of life for our communities and the residents of low-to moderate-income neighborhoods by developing and delivering innovative products and services to support affordable housing and neighborhood stabilization.

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 Exchange Trade Funds.


Huntington Asset Services has a national clientele and offers administrative and operational support to fund complexes, including fund accounting, transfer agency, administration, custody and distribution services. This group also works with law firms and the court system to provide custody and settlement distribution services.


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 June 30, 2014, December 31, 2013, and June 30, 2013, reported results by business segment:


      Three Months Ended June 30,
      Retail &                          
Income Statements   Business   Commercial         Home   Treasury/ Huntington
(dollar amounts in thousands )   Banking Banking   AFCRE   RBHPCG Lending   Other Consolidated
Net interest income $ 228,343 $ 74,190 $ 100,017 $ 25,722 $ 14,349 $ 17,427   $ 460,048
Provision for credit losses   33,974   6,636   (15,680)   (145)   4,599   1     29,385
Noninterest income   107,534   33,382   11,120   46,869   18,822   32,340     250,067
Noninterest expense   245,840   49,717   40,411   60,024   32,844   29,800     458,636
Income taxes   19,622   17,927   30,242   4,449   (1,495)   (13,270)     57,475
Net income $ 36,441 $ 33,292 $ 56,164 $ 8,263 $ (2,777) $ 33,236   $ 164,619
Net interest income $ 226,882 $ 69,172 $ 90,085 $ 26,683 $ 12,301 $ (186)   $ 424,937
Provision for credit losses   25,811   (1,512)   (4,414)   656   4,182   (1)     24,722
Noninterest income   99,904   33,590   11,033   46,267   28,072   33,053     251,919
Noninterest expense   236,764   50,186   38,912   61,294   35,999   22,710     445,865
Income taxes   22,474   18,931   23,317   3,850   67   (13,370)     55,269
Net income $ 41,737 $ 35,157 $ 43,303 $ 7,150 $ 125 $ 23,528   $ 151,000
      Six Months Ended June 30,
      Retail &                          
Income Statements   Business   Commercial         Home   Treasury/   Huntington
(dollar amounts in thousands )   Banking Banking   AFCRE   RBHPCG Lending   Other   Consolidated
Net interest income $ 448,184 $ 142,626 $ 191,035 $ 51,160 $ 27,377 $ 37,172   $ 897,554
Provision for credit losses   41,434   17,596   (23,701)   2,174   16,511   1     54,015
Noninterest income   200,496   66,237   17,815   89,983   39,108   84,913     498,552
Noninterest expense   481,115   95,840   79,693   116,047   67,967   78,095     918,757
Income taxes   44,146   33,399   53,500   8,023   (6,298)   (23,198)     109,572
Net income $ 81,985 $ 62,028 $ 99,358 $ 14,899 $ (11,695) $ 67,187   $ 313,762
Net interest income $ 453,420 $ 139,995 $ 180,733 $ 54,028 $ 24,706 $ (3,775)   $ 849,107
Provision for credit losses   58,321   (8,614)   (12,171)   10,288   6,492   (2)     54,314
Noninterest income   187,143   63,780   21,873   100,365   67,222   68,154     508,537
Noninterest expense   477,100   98,536   77,313   119,418   72,432   43,859     888,658
Income taxes   36,800   39,849   48,112   8,640   4,551   (27,554)     110,398
Net income $ 68,342 $ 74,004 $ 89,352 $ 16,047 $ 8,453 $ 48,076   $ 304,274

    Assets at     Deposits at
    June 30,     December 31,       June 30,     December 31,  
(dollar amounts in thousands)   2014     2013       2014     2013  
Retail & Business Banking $ 14,921,282   $ 14,440,869     $ 28,836,414   $ 28,293,993  
Commercial Banking   14,073,991     12,410,339       9,792,549     10,187,891  
AFCRE   15,138,027     14,081,112       1,457,292     1,170,518  
RBHPCG   3,791,857     3,736,790       6,124,341     6,094,135  
Home Lending   3,906,233     3,742,527       283,783     329,511  
Treasury / Other   11,965,723     11,055,537       2,254,386     1,430,670  
Total $ 63,797,113   $ 59,467,174     $ 48,748,765   $ 47,506,718