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Exhibit 99.1
[LOGO HUNTINGTON]
CONTACTS:
Investors Media
Laurie Counsel/Cheri Gray Jeri Grier George Sard/Debbie Miller
614/480-3878/614-480-3803 614/480-5413 Citigate Sard Verbinnen
212/687-8080
HUNTINGTON BANCSHARES ANNOUNCES COMPREHENSIVE RESTRUCTURING AND STRATEGIC
REFOCUS ON CORE MIDWEST MARKETS
WILL STREAMLINE OPERATIONS AND REDEPLOY CAPITAL
TO INCREASE SHAREHOLDER VALUE
PLANS TO DIVEST FLORIDA OPERATIONS, REDUCE DIVIDEND BY 20%,
AND CONSOLIDATE 43 BANKING OFFICES IN OTHER STATES
CAPITAL RELEASED FROM FLORIDA SALE WILL BE USED TO
STRENGTHEN CAPITAL POSITION AND REPURCHASE SHARES
WILL TAKE RESTRUCTURING AND SPECIAL CHARGES OF APPROXIMATELY $140 MILLION
AFTER TAX IN THE 2ND, 3RD AND 4TH QUARTERS; EXPECTS 2Q EPS BEFORE CHARGES
OF $0.27 TO $0.29; FULL YEAR EPS BEFORE CHARGES OF $1.15 TO $1.17
COLUMBUS, OHIO, JULY 12, 2001 - Huntington Bancshares Incorporated
(NASDAQ: HBAN) today announced a comprehensive strategic and financial
restructuring to sharpen the Company's focus on its core Midwest markets,
streamline operations and reduce costs, and redeploy capital to increase
shareholder value.
Under the plan developed by new management and approved by the Board of
Directors, Huntington will divest its Florida operations, consolidate 43 banking
offices in its core Midwest franchise and reduce its quarterly dividend per
share by 20%, which will bring Huntington's dividend payout more in line with
industry peers. The Company has also implemented expense initiatives which are
expected to result in savings of approximately $36 million in 2001.
The actions announced today are expected to free up significant
capital, which will be used to strengthen Huntington's balance sheet, repurchase
shares and for other corporate purposes. It is expected that a major share
repurchase program will begin following Huntington's completion of the sale of
its Florida operations.
Huntington expects to take restructuring and special charges of
approximately $140 million after tax in the second, third and fourth quarters of
2001 related to exited businesses; branch consolidations; asset impairment;
staffing rationalization; and credit, accounting and legal reserves. Excluding
the impact of these charges in the second quarter, earnings per share in the
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quarter are expected to be in the range of $0.27 to $0.29, in line with
consensus analyst estimates. The Company also expects earnings per share for the
2001 full year, excluding non-recurring charges, in the range of $1.15 to $1.17.
Huntington will report quarterly results on July 17.
"Following an in-depth review over the past four months of all of our
businesses, we are moving ahead with a bold set of interrelated strategic and
financial actions to strengthen the Company, improve our financial flexibility
and execution, and provide a strong platform for focused growth in the years
ahead," said Thomas E. Hoaglin, who was named president and chief executive
officer earlier this year. "With the implementation of these initiatives, we are
taking significant steps to improve our core earnings, capital position and
operating efficiency - as well as creating a more focused, customer-centric
organization - which together we believe will materially improve our financial
performance and deliver more value to our shareholders."
Hoaglin added, "Huntington has a strong presence and brand name in its
primary midwestern markets - as well as solid franchises in corporate and retail
banking, private financial services and automobile financing. While we also have
a promising business located in attractive central Florida markets, this
business is not geographically strategic to our future and we believe it offers
greater value to a strategic buyer in that marketplace. With this restructuring,
we intend to begin the process of returning the Company to the ranks of the
nation's premier regional banks. To do so, we are determined to improve our
customer focus as we reinforce our position as a deeply rooted local bank with
national capabilities."
Huntington has retained Goldman Sachs and Morgan Stanley as financial
advisors and to assist in selling the Florida operations. The sale process will
begin immediately and is expected to be completed by year-end. Huntington, which
is the eighth-largest bank in Florida with deposits of approximately $4.5
billion, has 139 banking offices and 458 ATMs concentrated in the central part
of the state in such markets as Tampa/St. Petersburg, Orlando,
Sarasota/Bradenton, Ft. Myers, Lakeland, Leesburg and Melbourne, and a
processing center located in Lakeland.
Hoaglin commented, "While Florida is a high-potential franchise, we
believe we can unlock significant value through the sale of this valuable asset,
freeing up funds to enhance our capital position and provide increased value to
shareholders through a share repurchase. At the same time, the Florida sale will
enable us to focus our resources on growing our core Midwest franchises that are
strategically important to our future."
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In addition to selling its Florida operations, Huntington will
consolidate 43 banking offices in Ohio, Michigan, Indiana and West Virginia. The
consolidations will occur where there are two or more Huntington banking offices
in close proximity. "Rationalizing our branch network through consolidations
sets the stage for Huntington to build a stronger network going forward," said
Hoaglin.
Based on the restructuring plan, Huntington expects to improve its
tangible equity to assets ratio to a minimum of 6.5%. Huntington has also
established new financial targets, including annual earnings per share (EPS)
growth of 10-12%.
"Our objectives are ambitious, but we are confident that as a more
sharply focused and revitalized company we will attain these goals," said
Hoaglin. "We have a solid new management team in place comprised of both company
veterans and new talent from the outside, that is committed to serving customers
and meeting our financial objectives."
WEBCAST INFORMATION
Huntington senior management will hold an analyst and institutional
investor conference at 2 p.m. EDT to discuss today's announcement and the
Company's strategic direction. The conference will be available via a live audio
Webcast at www.streetfusion.com with a replay available on that site until
midnight on July 26.
ABOUT HUNTINGTON
Through its affiliated companies, Huntington has more than 135 years of
serving the financial needs of its customers. Huntington provides innovative
products and services through more than 500 offices in Florida, Indiana,
Kentucky, Maryland, Michigan, New Jersey, Ohio, and West Virginia. Huntington
also offers products and services online at www.huntington.com, through its
technologically advanced, 24-hour telephone bank, and through its network of
more than 1,400 ATMs.
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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; and extended
disruption of vital infrastructure. All forward-looking statements included in
this news release are based on information available at the time of the release.
Huntington assumes no obligation to update any forward-looking statement.