Annual report pursuant to Section 13 and 15(d)

SEGMENT REPORTING

v3.6.0.2
SEGMENT REPORTING
 12 Months Ended
Dec. 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: Consumer and Business Banking, Commercial Banking, Commercial Real Estate and Vehicle Finance (CREVF), 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.
The management accounting policies and processes utilized in compiling segment financial information are highly subjective and, unlike financial accounting, are not based on authoritative guidance similar to GAAP. As a result, reported segment results are not necessarily comparable with similar information reported by other financial institutions. Furthermore, changes in management structure or allocation methodologies and procedures result in changes in reported segment financial data. Accordingly, certain amounts have been reclassified to conform to the current period presentation.
We use an active and centralized 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).
Consumer and Business Banking - The Consumer 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, investments, consumer loans, credit cards, and small business loans. Other financial services available to consumer and small business customers include mortgages, 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 254,000 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.
Commercial Real Estate and Vehicle Finance - 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 automobiles, light-duty trucks, recreational vehicles and marine craft at franchised 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 - The core business of The Huntington Private Client Group is The Huntington Private Bank, which consists of Private Banking, Wealth & Investment Management, and Retirement plan services. The Huntington Private Bank provides high net-worth customers with deposit, lending (including specialized lending options), and banking services. The Huntington Private Bank also delivers wealth management and legacy planning through investment and portfolio management, fiduciary administration, and trust services. This group also provides retirement plan services to corporate businesses. The Huntington Private Client Group also provides corporate trust services and institutional and mutual fund custody 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 Consumer and Business Banking and Regional Banking and the Private Client Group segments, as well as through commissioned loan originators. Home lending earns interest portfolio loans and loans held-for-sale, 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 financial information reconciled to Huntington’s December 31, 2016, December 31, 2015, and December 31, 2014, reported results by business segment:
Income Statements
(dollar amounts in thousands)
Consumer & Business Banking
 
Commercial Banking
 
CREVF
 
RBHPCG
 
Home Lending
 
Treasury / Other
 
Huntington
Consolidated
2016
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
$
1,272,713

 
$
512,995

 
$
468,969

 
$
177,431

 
$
58,354

 
$
(121,144
)
 
$
2,369,318

Provision (benefit) for credit losses
71,945

 
98,816

 
26,922

 
(3,467
)
 
(3,412
)
 
(2
)
 
190,802

Noninterest income
558,811

 
275,258

 
40,582

 
120,687

 
90,358

 
64,035

 
1,149,731

Noninterest expense
1,208,585

 
385,783

 
170,276

 
196,194

 
124,683

 
322,964

 
2,408,485

Provision (benefit) for income taxes
192,848

 
106,279

 
109,324

 
36,887

 
9,604

 
(247,001
)
 
207,941

Net income (loss)
$
358,146


$
197,375


$
203,029


$
68,504


$
17,837


$
(133,070
)

$
711,821

2015
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
$
1,027,950

 
$
379,409

 
$
381,231

 
$
139,188

 
$
50,404

 
$
(27,445
)
 
$
1,950,737

Provision (benefit) for credit losses
42,777

 
49,534

 
4,890

 
87

 
2,671

 
(5
)
 
99,954

Noninterest income
478,142

 
258,778

 
29,254

 
114,814

 
87,021

 
70,721

 
1,038,730

Noninterest expense
1,099,779

 
284,026

 
152,010

 
195,667

 
144,848

 
99,578

 
1,975,908

Provision (benefit) for income taxes
127,238

 
106,619

 
88,755

 
20,387

 
(3,533
)
 
(118,818
)
 
220,648

Net income (loss)
$
236,298


$
198,008


$
164,830


$
37,861


$
(6,561
)

$
62,521


$
692,957

2014
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
$
912,992

 
$
306,434

 
$
379,363

 
$
101,839

 
$
58,015

 
$
78,498

 
$
1,837,141

Provision (benefit) for credit losses
75,529

 
31,521

 
(52,843
)
 
4,893

 
21,889

 
—

 
80,989

Noninterest income
409,746

 
209,238

 
26,628

 
173,550

 
69,899

 
90,118

 
979,179

Noninterest expense
982,288

 
249,300

 
156,715

 
236,634

 
136,374

 
121,035

 
1,882,346

Provision (benefit) for income taxes
92,722

 
82,198

 
105,742

 
11,852

 
(10,622
)
 
(61,299
)
 
220,593

Net income (loss)
$
172,199


$
152,653


$
196,377


$
22,010


$
(19,727
)

$
108,880


$
632,392


 
 
Assets at
December 31,
 
Deposits at
December 31,
(dollar amounts in thousands)
2016
 
2015
 
2016
 
2015
Consumer & Business Banking
$
21,796,887

 
$
15,759,561

 
$
44,860,515

 
$
30,964,241

Commercial Banking
23,918,429

 
17,022,387

 
15,616,241

 
11,498,883

CREVF
23,580,331

 
17,856,358

 
1,886,626

 
1,649,301

RBHPCG
5,553,012

 
4,277,970

 
8,521,401

 
7,530,241

Home Lending
3,502,304

 
3,080,690

 
639,418

 
361,881

Treasury / Other
21,363,134

 
13,021,335

 
4,083,516

 
3,290,432

Total
$
99,714,097

 
$
71,018,301

 
$
75,607,717

 
$
55,294,979