Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting

Segment Reporting
3 Months Ended
Sep. 30, 2012
Segment Reporting [Abstract]  



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 traditional banking network of over 690 branches as well as our convenience branches located in grocery stores in Ohio, Michigan, Pennsylvania, Indiana, West Virginia, and Kentucky. In addition to our extensive branch network, customers can access Huntington through online banking, mobile banking, telephone banking, and over 1,300 ATMs.


Huntington has established a “Fair Play” banking philosophy and is building a reputation for meeting the banking needs of consumers in a manner which makes them feel supported and appreciated. In 2010, Huntington brought innovation to the checking account by providing consumers with a 24-hour grace period to correct a shortfall in an account and avoid the associated overdraft fees. 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 Huntington's 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 less than $15 million and consists of approximately 130,000 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, from our program helping businesses that had struggled in the economic downturn but are now showing several quarters of profitability, to our participation in the Small Business Administration programs.


Regional and Commercial Banking: This segment provides a wide array of products and services to the middle market and large corporate client base located primarily within our core geographic banking markets. Huntington products in this segment include commercial lending, as well as depository and liquidity management products. Dedicated teams collaborate with our primary 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 government entities, not-for-profit organizations, health-care entities, and large, publicly traded companies. Commercial bankers personally deliver these products and services directly and with cross-segment product partners. Huntington consistently strives to develop extensive relationships with clients creating defined relationship plans which identify needs and offer solutions.


The primary focus for Regional and Commercial Banking is our ability to gain a deeper relationship with our existing customers and to increase our market share through our unique customer solution strategy. This includes a comprehensive cross-sell approach to capture the untapped opportunities within our customer and prospect community. This strategy embodies a shift from credit-only focus, to a total customer solution approach with an increasing share-of-wallet.


The Regional and Commercial Banking business model includes eleven regional markets driven by local execution. These markets are supported by expertise in large corporate and middle market segments, by capabilities in treasury management and equipment finance, and by vertical strategies within the healthcare and not-for-profit industries.


The commercial portfolio includes a distribution across industries and segments which resembles the market demographics of our footprint. A strategic focus of Regional and Commercial Banking is to target underpenetrated markets within our footprint and capitalize on opportunities in industries such as not-for-profit and healthcare.


In addition, Regional and Commercial Banking expanded the leadership, investment, and capabilities for treasury management and equipment finance. With our investments in treasury management, Huntington differentiated itself through our implementation experience and the speed at which products and services are delivered to our customers. In equipment finance, Huntington distinguished itself through aggressive business development and local service delivery and by strategically aligning with our bank partners to drive market share.


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 of automotive dealerships; financing for the purchase of new and used vehicle inventory by 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 our cross segment 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 professional real estate developers, REITs, and other customers with lending needs that are secured by commercial properties. Huntington has a clear focus on experienced, well-managed, well-capitalized top tier real estate developers who are capable of operating in all economic phases of the real estate industry. 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 former private bankers, trust officers, and investment advisors; Huntington Asset Advisors, which provides investment management services; Huntington Asset Services, which offers administrative and operational support to fund complexes; and retirement plan services. 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 public finance, brokerage, 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, and 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 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.


Listed below is certain operating basis financial information reconciled to Huntington's September 30, 2012, December 31, 2011, and September 30, 2011, reported results by business segment:


      Three Months Ended September 30,
      Retail &   Regional &                  
Income Statements   Business   Commercial         Treasury/   Huntington
(dollar amounts in thousands )   Banking Banking   AFCRE   WGH Other   Consolidated
Net interest income $ 213,270   69,995   89,573   48,181   9,279   $ 430,298
Provision for credit losses   38,347   4,933   (13,948)   7,672   ---     37,004
Noninterest income   99,751   33,320   10,000   82,139   35,857     261,067
Noninterest expense   252,241   50,660   38,437   95,049   21,916     458,303
Income taxes   7,852   16,703   26,279   9,659   (32,202)     28,291
Net income $ 14,581 $ 31,019 $ 48,805 $ 17,940 $ 55,422   $ 167,767
Net interest income $ 229,613   61,320   94,380   49,381   (28,216)   $ 406,478
Provision for credit losses   36,467   16,530   (19,979)   10,568   ---     43,586
Noninterest income   110,756   34,030   28,362   54,565   30,846     258,559
Noninterest expense   246,454   50,623   40,348   92,416   9,277     439,118
Income taxes   20,107   9,869   35,831   337   (27,202)     38,942
Net income $ 37,341 $ 18,328 $ 66,542 $ 625 $ 20,555   $ 143,391
      Nine Months Ended September 30,
      Retail &   Regional &                  
Income Statements   Business   Commercial         Treasury/     Huntington
(dollar amounts in thousands )   Banking Banking   AFCRE   WGH Other   Consolidated
Net interest income $ 656,216   202,116   266,765   143,396   7,976   $ 1,276,469
Provision for credit losses   103,233   42,542   (61,030)   23,185   ---     107,930
Noninterest income   286,745   100,724   55,018   250,370   107,349     800,206
Noninterest expense   727,486   148,219   115,802   279,988   93,753     1,365,248
Income taxes   39,285   39,228   93,454   31,708   (73,921)     129,754
Net income $ 72,957 $ 72,851 $ 173,557 $ 58,885 $ 95,493   $ 473,743
Net interest income $ 702,666   178,787   271,510   145,614   (84,432)   $ 1,214,145
Provision for credit losses   94,825   23,957   (30,050)   40,036   ---     128,768
Noninterest income   311,598   94,657   57,886   187,443   99,687     751,271
Noninterest expense   705,201   143,040   125,652   265,161   59,172     1,298,226
Income taxes   74,983   37,256   81,828   9,751   (81,151)     122,667
Net income $ 139,255 $ 69,191 $ 151,966 $ 18,109 $ 37,234   $ 415,755

    Assets at   Deposits at
    September 30,     December 31,     September 30,     December 31,  
(dollar amounts in millions)   2012     2011     2012     2011  
Retail & Business Banking $ 14,318   $ 13,889   $ 28,220   $ 27,536  
Regional & Commercial Banking   11,333     10,186     6,205     4,683  
AFCRE   12,758     12,873     922     881  
WGH   7,834     7,474     9,816     9,115  
Treasury / Other   10,200     10,029     1,578     1,065  
Total $ 56,443   $ 54,451   $ 46,741   $ 43,280