Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting

Segment Reporting
3 Months Ended
Sep. 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 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 $20 million and consists of approximately 156,000 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. During the 2014 third quarter, we moved our insurance brokerage business from Treasury / Other to Commercial Banking to align with a change in management responsibilities.

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

Three Months Ended September 30,
Retail &
Income Statements Business Commercial Home Treasury/ Huntington
(dollar amounts in thousands) Banking Banking AFCRE RBHPCG Lending Other Consolidated
Net interest income $ 230,318 $ 75,485 $ 99,262 $ 25,239 $ 14,620 $ 21,411 $ 466,335
Provision for credit losses 22,528 13,309 (18,334) 3,179 3,798 --- 24,480
Noninterest income 105,868 52,820 9,832 42,097 20,838 15,894 247,349
Noninterest expense 251,507 60,429 41,583 60,548 33,523 32,728 480,318
Income taxes 21,753 19,098 30,046 1,263 (652) (17,638) 53,870
Net income $ 40,398 $ 35,469 $ 55,799 $ 2,346 $ (1,211) $ 22,215 $ 155,016
Net interest income $ 224,824 $ 70,566 $ 92,372 $ 25,898 $ 13,433 $ (2,241) $ 424,852
Provision for credit losses 43,127 50,299 (77,686) (7,349) 3,009 --- 11,400
Noninterest income 105,227 57,100 10,822 43,664 18,377 18,577 253,767
Noninterest expense 242,343 63,381 40,011 57,060 36,853 (16,312) 423,336
Income taxes 15,603 4,895 49,304 6,948 (2,818) (8,885) 65,047
Net income $ 28,978 $ 9,091 $ 91,565 $ 12,903 $ (5,234) $ 41,533 $ 178,836
Nine Months Ended September 30,
Retail &
Income Statements Business Commercial Home Treasury/ Huntington
(dollar amounts in thousands) Banking Banking AFCRE RBHPCG Lending Other Consolidated
Net interest income $ 678,502 $ 218,257 $ 290,297 $ 76,399 $ 41,997 $ 58,437 $ 1,363,889
Provision for credit losses 63,962 30,905 (42,035) 5,353 20,308 2 78,495
Noninterest income 306,364 149,165 27,647 132,080 59,946 70,699 745,901
Noninterest expense 732,623 183,464 121,276 176,595 101,490 83,627 1,399,075
Income taxes 65,898 53,569 83,546 9,286 (6,949) (41,908) 163,442
Net income $ 122,383 $ 99,484 $ 155,157 $ 17,245 $ (12,906) $ 87,415 $ 468,778
Net interest income $ 678,244 $ 210,725 $ 273,105 $ 79,926 $ 38,139 $ (6,180) $ 1,273,959
Provision for credit losses 101,448 41,685 (89,857) 2,939 9,501 (2) 65,714
Noninterest income 292,370 152,109 32,694 144,029 85,599 55,503 762,304
Noninterest expense 719,443 193,423 117,323 176,479 109,285 (3,959) 1,311,994
Income taxes 52,403 44,704 97,417 15,588 1,733 (36,400) 175,445
Net income $ 97,320 $ 83,022 $ 180,916 $ 28,949 $ 3,219 $ 89,684 $ 483,110

Assets at Deposits at
September 30, December 31, September 30, December 31,
(dollar amounts in thousands) 2014 2013 2014 2013
Retail & Business Banking $ 15,061,958 $ 14,440,869 $ 29,265,196 $ 28,293,993
Commercial Banking 14,438,025 12,524,270 10,791,342 10,187,891
AFCRE 15,631,308 14,081,112 1,361,907 1,170,518
RBHPCG 3,830,366 3,736,785 5,897,868 6,094,135
Home Lending 3,929,146 3,742,527 268,610 329,511
Treasury / Other 11,439,826 10,941,611 2,544,914 1,430,670
Total $ 64,330,629 $ 59,467,174 $ 50,129,837 $ 47,506,718