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NEWS RELEASE [HUNTINGTON LOGO]
FOR IMMEDIATE RELEASE
SUBMITTED: JANUARY 13, 2000
FOR FURTHER INFORMATION, CONTACT:
MEDIA ANALYSTS
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DOROTHY BROWNLEY (614) 480-4531 LAURIE COUNSEL (614) 480-3878
CHERI GRAY (614) 480-3803
HUNTINGTON BANCSHARES REPORTS RECORD
1999 EARNINGS FOR FOURTH QUARTER AND FULL YEAR
COLUMBUS, Ohio -- Huntington Bancshares Incorporated (NASDAQ: HBAN;
www.huntington.com) today reported fourth quarter earnings of $114.9 million, or
$.50 per share, indicative of solid loan growth, strong expense control, and
continued high asset quality. These results represent significant increases of
25.6% and 28.2%, respectively, versus net income totaling $91.5 million and
earnings per share of $.39 one year ago. For comparison purposes with the prior
year, the preceding information and all other subsequent data for 1998 has been
adjusted to exclude the impact of the $90 million special charge recorded a year
ago. In terms of cash basis performance--reported earnings adjusted for goodwill
amortization--per share results improved to $.53, up 23.3% from fourth quarter
1998. For the full year, net income was a record $422.1 million, or $1.82 per
share. On a cash basis, Huntington earned $451.4 million in 1999, or $1.94 per
share.
As demonstrated in the table below, Huntington also posted substantial
increases in its return on average equity (ROE) and return on average assets
(ROA) versus the same periods last year.
Fourth Quarter Full Year
1999 1998 1999 1998
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ROE 21.64% 17.87% 19.66% 17.54%
ROE--cash basis 33.69 29.44 30.82 24.35
ROA 1.57 1.31 1.47 1.35
ROA--cash basis 1.71% 1.45% 1.61% 1.45%
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"The financial services industry continues to be characterized by rapid
change. Our company focused diligently over the past year on becoming more
efficient so that Huntington may avail itself of the many opportunities ahead,"
said Frank Wobst, chairman and chief executive officer of Huntington Bancshares
Incorporated. "I'm very thankful for the hard work and dedication of our
employees during this challenging time. Their willingness to embrace change will
serve the company well in the future. While 1999 was a good year and we are
pleased to have delivered on the aggressive plans we set for ourselves at the
outset of the year, we must not and will not rest on these laurels. In the
coming year, we intend to launch several growth initiatives to drive incremental
revenue and will pursue strategic acquisitions, particularly those that
accelerate our efforts to further improve our mix of fee-based income."
In October, Huntington completed the sale of its credit card portfolio
to The Chase Manhattan Bank. Approximately $541 million of receivables were
sold, resulting in a net gain of $108.5 million. This transaction was part of
the company's strategy to exit specific business lines and reinvest in
businesses with higher growth potential for Huntington. Under the related agent
bank arrangement with Chase, Huntington will continue to offer credit card
products with the Huntington name to customers in its banking markets.
Adjusted for the sale of the credit card portfolio, earning assets
increased 9.5% on a linked-quarter, annualized basis. Average total loans grew
12.2%, led by strong volumes in automobile leasing and home equity lending. Net
interest income was $252.7 million, down approximately 6% from both third
quarter 1999 and the final three months of 1998. Approximately one-half of the
decrease relates to the sale of the credit card portfolio. Net interest income
in future periods should be positively impacted by Huntington's ultimate
reinvestment plans for the proceeds. The results were also negatively impacted
by deposit funding pressures, recent increases in short-term rates by the
Federal Reserve, and Year 2000 concerns that caused a temporary spike in rates
and necessitated more cash being available in the banking offices. The net
interest margin was 3.94% for the fourth quarter and 4.11% for the full year.
Non-interest income (excluding securities gains) was up 7.1% from one
year ago despite softness in mortgage banking in the prevailing higher rate
environment and lower credit card revenue following the October 1999 portfolio
sale. Service charges, up 25.8% from last year's fourth quarter, continue to
benefit from higher fee income derived from retail deposit accounts. Increased
customer usage of Huntington's check card product and an increasing base of Web
Bank relationships helped drive electronic banking revenues up 25.4% from a year
ago. In the
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fourth quarter, Huntington reached an important milestone as it now has more
than 100,000 online customers. Moreover, 15% of the company's deposit customers
have Web-based accounts, one of the highest adoption rates among banks.
Brokerage and insurance income was up 35.8% from fourth quarter 1998, led by
retail investment sales, which posted record revenues for the year.
The company's emphasis on efficiency continues to be evident, as
operating expenses in the recent three months dropped from the preceding quarter
and were down 1.9% from the fourth quarter of 1998. Decreased personnel and
related expenses helped offset higher occupancy and equipment costs associated
with strategic spending for new banking offices and the move to Huntington's
state-of-the-art operations facility. The efficiency ratio was 51.8% for all of
1999.
During the fourth quarter, Huntington recorded a $58 million valuation
adjustment of vehicles underlying certain direct financing leases. Other
non-recurring items included $21 million in connection with the company's
"Huntington 2000+" program as well as other one-time expenses. Costs related to
the 2000+ initiative included amounts paid for management consulting and other
professional services as well as a special cash award to employees upon
Huntington achieving certain financial goals during the year. The company also
created a charitable foundation in December 1999 with initial funding of $15
million.
Asset quality remains sound. Net charge-offs were .32% of total loans
for the fourth quarter, while nonperforming assets were $98.2 million, or .47%
of total loans and other real estate. Coverage ratios were 360% of nonperforming
loans and three times nonperforming assets. The allowance for loan losses as a
percent of total loans was 1.45% at December 31, 1999.
Huntington's average equity to average assets was 7.27% in the recent
three-month period. The company and its bank subsidiary continue to maintain
healthy capital positions, exceeding requirements for a "well-capitalized"
institution. Tier I and total risk-based capital ratios were 7.51% and 10.71%,
respectively, at December 31, 1999.
Huntington Bancshares is a regional bank holding company headquartered
in Columbus, Ohio with assets of $29 billion. The Huntington has more than 134
years of serving the financial needs of its customers.
The Huntington provides innovative products and services through its
more than 600 offices in Florida, Georgia, Indiana, Kentucky, Maryland,
Michigan, New Jersey, North Carolina, Ohio, South Carolina, and West Virginia.
International banking services are made available through the headquarters
office in Columbus and additional offices located in the Cayman Islands and Hong
Kong. The Huntington also offers products and services through its
technologically advanced, 24-hour telephone bank, a network of more than 1,400
ATMs and its Web Bank at www.huntington.com.
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For faxed copies of current news releases, please call our
fax-on-demand service, Company News on Call, at (800) 758-5804 extension 423276.
FORWARD-LOOKING STATEMENT DISCLOSURE:
This press release contains certain forward-looking statements,
including certain plans, expectations, goals, and projections, which are subject
to numerous assumptions, risks, and uncertainties. Actual results could differ
materially from those contained or implied by such statements for a variety of
factors including: changes in economic conditions; movements in interest rates;
competitive pressures on product pricing and services; success and timing of
business strategies; the successful integration of acquired businesses; the
nature, extent, and timing of governmental actions and reforms; the risks of
Year 2000 disruption; and extended disruption of vital infrastructure.
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HUNTINGTON BANCSHARES INCORPORATED
CONSOLIDATED COMPARATIVE SUMMARY
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
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CONSOLIDATED RESULTS OF OPERATIONS
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THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
---------------------- CHANGE -------------------------- CHANGE
1999 1998 % 1999 1998 %
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Interest Income $515,516 $500,395 3.0 % $2,026,002 $1,999,364 1.3 %
Interest Expense 262,854 233,094 12.8 984,240 978,271 0.6
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Net Interest Income 252,662 267,301 (5.5) 1,041,762 1,021,093 2.0
Provision for Loan Losses 20,040 34,306 (41.6) 88,447 105,242 (16.0)
Non-Interest Income 114,338 106,711 7.1 452,073 398,877 13.3
Securities Gains 7,905 1,773 N.M. 12,972 29,793 (56.5)
Gains on Sales of Credit Cards 108,530 -- N.M. 108,530 9,530 N.M.
Non-Interest Expense 204,895 208,932 (1.9) 815,328 823,929 (1.0)
Non-Recurring Expenses/Special Charges 96,791 90,000 7.5 96,791 90,000 7.5
Provision for Income Taxes 46,769 11,329 312.8 192,697 138,354 39.3
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NET INCOME $114,940 $ 31,218 268.2 % $ 422,074 $ 301,768 39.9 %
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OPERATING EARNINGS (1)
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Net Income $114,940 $ 91,518 25.6 % $ 422,074 $ 362,068 16.6 %
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Net Income per Common Share (2)
Diluted $ 0.50 $ 0.39 28.2 % $ 1.82 $ 1.54 18.2 %
Diluted--Cash Basis (3) $ 0.53 $ 0.43 23.3 % $ 1.94 $ 1.64 18.3 %
Return On:
Average Total Assets 1.57% 1.31% 1.47% 1.35%
Average Shareholders' Equity 21.64% 17.87% 19.66% 17.54%
PER COMMON SHARE AMOUNTS - REPORTED (2)
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Net Income per Common Share--Diluted $ 0.50 $ 0.13 284.6 % $ 1.82 $ 1.29 41.3 %
Cash Dividends Declared $ 0.20 $ 0.18 11.1 % $ 0.76 $ 0.68 11.8 %
Shareholders' Equity (period end) $ 9.53 $ 9.27 2.8 % $ 9.53 $ 9.27 2.8 %
AVERAGE COMMON SHARES - DILUTED (2) 231,075 234,024 (1.3)% 232,406 234,800 (1.0)%
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KEY RATIOS
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THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
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1999 1998 1999 1998
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Efficiency Ratio 52.97% 52.98% 51.76% 55.80%
Net Interest Margin 3.94% 4.24% 4.11% 4.28%
Average Equity/Average Assets 7.27% 7.33% 7.47% 7.68%
Tier I Risk-Based Capital (4) 7.51% 7.10% 7.51% 7.10%
Total Risk-Based Capital (4) 10.71% 10.73% 10.71% 10.73%
Tier I Leverage (4) 6.71% 6.37% 6.71% 6.37%
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AVERAGE BALANCE SHEET DATA
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THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
----------------------------- CHANGE ------------------------------- CHANGE
1999 1998 % 1999 1998 %
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Total Loans $20,513,235 $19,269,453 6.5% $20,088,542 $18,433,892 9.0%
Total Deposits $19,422,791 $19,359,781 0.3 $19,207,347 $18,412,683 4.3
Total Assets $28,997,211 $27,714,488 4.6 $28,739,450 $26,891,558 6.9
Shareholders' Equity $ 2,107,526 $ 2,031,579 3.7 $ 2,146,735 $ 2,064,241 4.0
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PERIOD-END ASSET QUALITY
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1999 1998
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Non-performing loans $83,070 $77,135
Total non-performing assets $98,241 $96,099
Allowance for loan losses/total loans 1.45% 1.50%
Allowance for loan losses/non-performing loans 360.31% 377.19%
Allowance for loan losses and other real estate-performing assets 299.85% 301.00%
(1) Reported results, as adjusted, exclude the impact of the 1998 special
charge, net of related taxes.
(2) Adjusted for stock splits and stock dividends,
as applicable.
(3) Tangible or "Cash Basis" net income excludes amortization of
goodwill and other intangibles, net of income taxes.
(4) Estimated.
N.M. - Not Meaningful