EXHIBIT 99.1
HUNTINGTON BANCSHARES INCORPORATED, WEBCAST
JANUARY 31, 2002
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KEITH: -- Tom Hoaglin was appointed CEO last February and has really
turned this franchise around. It's been a year and you can already see the signs
of progress. The efficiency ratio has already improved from 62% earlier in 2001
when he took over to 56% by the end of the year. And Huntington also announced
the sale of the Florida franchise so it could better focus on its core Midwest
markets and deliver shareholder value through a share buyback. Here to provide
you with the full report card on the progress being made so far and the outlook
for 2002 is Tom Hoaglin, Chairman President and CEO of Huntington, CFO - Mike
McMennamin and head of dealer sales Nick Stanutz.
TOM HOAGLIN: Keith, thank you very much. Good morning. We really do,
Keith, appreciate the invitation to speak today. Thanks to you and your
colleagues for giving us this opportunity. I also want to introduce Jay Gould,
our Director of Investor of Relations. We're grateful for your interest in
Huntington. As Keith mentioned, I've now been at Huntington for a year.
For those of you who have not heard me speak in the past about
Huntington, let me just say a few words. A year ago, the company was very
centralized, very top down driven. Many employees were demoralized and didn't
have, or at least feel they had, an opportunity to make decisions to take care
of customers. Revenues weren't growing. As Keith mentioned, the efficiency ratio
was high. Earnings were headed steadily South. We really needed to get back to
basics.
The last year has been intense and filled with change, changes in
geographic focus, the management team, organizational structure, strategic
direction, culture and
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smaller changes like our decision to sell the corporate jet. And more recently,
to vacate our executive offices for more modest space.
Our goal has been to rebuild value for shareholders. That mission has
required us to create a better environment for Huntington employees... which we
refer to as "associates"... and a sharper focus on customers. We've made good
progress. We're now confronted with more credit quality issues than we had
expected. But, we do have good momentum in many parts of the business, reflected
in many financial measures.
I'll begin this morning with an overview of the company, the progress
we've been making in building a new Huntington, and highlights of achievements,
progress and successes to date. With credit on everyone's mind, Mike is going to
provide a detailed review. He'll then cover some recent financial performance
trends. I'll conclude with some high level comments regarding this year's
outlook. Then Mike, Nick and I will take your questions. So let's begin.
Following the Florida sale, Huntington will be a $26 billion Midwest
financial services company with primary businesses as outlined. The left side of
this chart shows that our footprint consists of a sizeable banking presence in
Ohio and Michigan with a smaller presence in Indiana, Kentucky and West
Virginia. The percentages represent the share of deposits in some of our
markets.
On the right side is a graph showing the fourth quarter line of
business earnings contribution. When our line of business results are recorded,
we typically allocate all of the mortgage banking and about half of the private
financial group's earnings to retail and
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corporate banking. But this presentation, which is before those internal
allocations, provides a better picture of our earnings sources on a macro level.
I should point out, however, that the corporate share of 17% is smaller than
would typically be the case because of their fourth quarter credit costs being
particularly high.
When we spoke to investors last July, we shared a list of objectives
associated with the corporate restructuring - most of which we wanted to
accomplish in the last half of 2001. This is our report card. The most notable
achievement was the agreement to sell our Florida franchise to SunTrust. This
was accomplished and attracted a 15% deposit premium, and we expect to close the
deal in mid-February. This transaction will free up about $800 million capital.
And, as previously announced, a significant portion of this capital will be used
to repurchase shares. We anticipate announcing our repurchase plan shortly after
the transaction closes.
Very importantly, a key achievement was the fact that operating
efficiencies were improved both due to revenue growth, which is perhaps not a
well-known fact, and expense reductions. All in all - a very busy and very
successful last half of the year.
Perhaps our biggest challenge is the building of a new culture. To this
end, these are some of our objectives. We've made progress but this is not a
done deal. Call it work in progress. But as CEO, I must tell you I'm very
encouraged by what I see. Through simple things like our "GO AHEAD" pin
reminding associates they're free to make decisions that benefit customers on
the spot without having to run everything up the headquarters' flag pole.
Everyday I see, hear and talk with associates who are feeling
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much more engaged and enthusiastic about the company. We also needed to take
decision-making closer to the customer. Our vision is to be the local bank with
national resources. This embodies the notion that customers have to feel they
can deal with decision makers - people who can make a difference for them. To
this end, we established six banking regions throughout our footprint, with five
of them headed by new presidents.
We also wanted to create a broad-based ownership by our associates. In
September, we approved a company-wide employee stock option plan in which
virtually all employees were granted stock options. These options vest in either
five years or whenever the stock price exceeds $25 for five consecutive trading
days. It's been very, very well received by our associates. We also needed to
install a sales culture. Here, I'd say were in the first innings of the game,
but there is progress.
On the retail banking side, we hired a proven executive specifically to
oversee the effort, and he's making a difference. The most notable is the weekly
sales management process now embedded throughout the retail bank. Today by 9:00
on Monday morning, all 3,900 retail bankers across the country know exactly what
there are supposed to do during the week. And by noon on Friday, they'll know
how they did.
On the commercial side, we introduced the sales leadership system,
which includes weekly sales meetings, pipeline management, and sales growth
setting and tracking. This is basic blocking and tackling others certainly have
done. But it was absent at Huntington.
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We're also instilling a culture of accountability. While we have income
statements at many organizational levels, this year we're rolling out P & Ls to
each banking office. When managers and their staff know how they're doing,
vis-a-vis other banking offices and with regard to their budget, they'll better
manage their business for profitable growth. Which leads to the last point -
creating pay for profitable performance incentive plans. Past incentive plans in
retail at Huntington, rewarded volume and production. They didn't necessarily
reward growing profits at the unit level. We've changed the plan to emphasize
profitable growth.
Developing a stronger credit culture, particularly in commercial
banking is a must for us. To this end, we've made several changes to improve the
credit process. In the old model, all commercial credit decisions including
shared national credits, flowed up through the Regional Presidents. But not
every President had the requisite body of knowledge or objectivity that an
independent Senior Lender would have.
So first, we created a new position of Senior Lender who reports to the
head of commercial banking to whom the Regional Presidents do not report. This
separated credit approval from credit origination for all credits greater than
$10 million. The person that we brought in to head this credit approval function
has 25 years of commercial loan and credit administration experience with
regional commercial banks. Importantly, we centralized the shared national
credit review, underwriting and approval processes through this function. This,
in turn, was augmented by the addition of a syndication function to manage our
exposure of syndicating other large credits.
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The graphic on the right hand side of this chart shows several things
regarding the new model for credit approval. First, to honor our local bank
vision, we have portfolio managers and underwriters in the regions with proper
authority limits - and I might add expertise - to make the vast majority of
credit decisions locally. On larger credits, the approval process routes first
to regional credit officers - these are people who reside in the region and
therefore, we think, retain the local perspective. They now report to the Senior
Lender to assure underwriting and approval consistency. Larger deals are
approved within a centralized approval process with higher approval authorities
as shown. But as Mike will detail later, we don't get up to these levels very
often. Which is why we spent considerable time re-educating everyone involved in
credit from origination through approval regarding exactly what a Huntington
deal is. This slide reviews the characteristics of a typical Huntington deal.
First Huntington is the customer's primary bank. That doesn't necessarily mean
we're the only bank, but we're the primary bank. Getting everyone on the same
page is obviously critical and it assures standardized underwriting.
Another priority would be credit quality within our dealer sales auto
finance business. This slide highlights some areas of progress we've made and
Mike will provide more detail in a few minutes.
Let me now turn to some of the success stories of last year and current
priorities for each business line. In many ways, regional banking, which
consists of our retail and commercial banking businesses, saw most of the
changes. Virtually all senior
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management was replaced. This has added new vitality and leadership to our local
bank. And we added new capabilities targeted at our larger commercial customers.
One was equipment leasing - an area of expertise we did not have. And another -
capital markets, which would include customer derivatives that generated about
$8 million in fees during its first year of operation.
This slide shows the growth in average loans and core deposits by
region from the second quarter of last year to the fourth for both retail and
commercial banking. For the second half of the year, loans grew at an annualized
rate of 2.8% for retail and 5.4% for commercial. The decline in retail loans in
our central Ohio region reflected the success of a five-year ARM mortgage
product, which we market heavily in this region during the fourth quarter. This
resulted in a dramatic shift in the mix of fourth quarter originations for this
particular region, toward first mortgages and away from home equity loans, which
has been a source of growth for the other regions. First mortgage originations
appear on the books of the Mortgage Company and are not included in these
numbers. Importantly, we're seeing loan growth in Michigan, where we've not been
able to grow during the last few years. Commercial loan growth was spread
throughout the regions. And, on the core deposit side, retail growth in Michigan
has been particularly strong reflecting their head start on some of their
marketing programs. But, virtually all regions performed very well in growing
deposits. On the commercial side, growth in all regions was seen, with the
exception of Michigan, which reflected a planned decline in public fund
deposits.
What are our immediate priorities in retail banking? As you look at
this list, with
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the exception of accelerating the West Michigan turn around, these would apply
to any well-run bank. I would note that this year we'll be rolling out a new
customer service system in all banking offices to give associates better
capabilities in serving customers. The good news is we don't have to move
outside the box to improve our results. We just have to execute better. And we
can.
For commercial banking, the number one priority is managing credit
risk. Dealer Sales also saw progress last year. And, our immediate priorities in
this line of business include continued focus on maintaining the credit quality
of new originations as well as using behavioral scoring to improve collection
results.
Our Private Financial Group had some very notable successes last year.
We added five new proprietary mutual funds with assets of $115 million at
year-end. Importantly, in a year that saw mostly negative return investment
performance, 14 of our 17 proprietary funds - Huntington Funds - posted positive
returns. These two factors contributed to the 12% increase in proprietary mutual
fund asset growth last year with total assets of $3 billion at year end. Annuity
sales totaled about $600 million, which was a record year and up about 61%.
Immediate priorities in this business are to keep building on our
successes to grow proprietary mutual fund assets as well as total assets under
management.
Lastly, our mortgage banking business had a banner year. Others did, we
did. We originated $3.5 billion of new loans - the highest level in eight years.
Today, our servicing portfolio is a little over $5 billion. Going forward, we've
got a couple of high
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priorities. First is to improve cross-sells with home equity lines of credit as
a primary emphasis, and second, to market intermediate ARM loans.
That's a pretty quick run-through. Now, let me turn this over to Mike
for some additional detail and color. Mike.
MIKE MCMENNAMIN: Thanks, Tom. This slide shows the composition of our
$22.8 million managed loan portfolio at year-end and includes $2.7 billion of
loans that are in Florida and also $1.2 billion of securitized auto loans. 46%
of our total portfolio is in commercial and commercial real estate. 32% in auto
loans and leases. And, of the remaining 22%, 70% is in home equity loans or home
equity lines.
The pie chart at the right shows a breakdown of loans by regions and
line of business. In Huntington's organizational structure, loans are managed
either on a line of business or on a regional basis. The Indirect Auto Business,
The Private Financial Group and Huntington Mortgage Company are managed as lines
of business for the company as a whole and represent 39% of total loans, with
the remaining 61% being managed by the six regions - primarily commercial and
retail loans.
The next slide shows the industry composition of our $10.4 billion
commercial and commercial real estate portfolio. This represents a fairly
typical industry composition with services, manufacturing and financial,
insurance and real estate comprising 68% of the total portfolio. Manufacturing
represents 14%.
The right hand pie chart shows the break out of our 26,000 commercial
and commercial real estate loans by loan size. Almost 99% of the loans are less
than $5
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million with only 365 loans in the company above this threshold. Only 21 of
those loans are greater than $25 million and there are two loans included in
that group over $50 million. As Tom mentioned just a minute ago, any loans
greater than $10 million are approved centrally.
Non performing assets totaled $227 million at the end of the year - a
$122 million increase during the year. This increase was driven both by a
deterioration in credit quality and by a more aggressive process of identifying
problem loans. We brought in a new head of loan review in the middle of last
year. And he's spent the last six months combing through the portfolio.
With the dramatic slow down in the economy, the manufacturing sector
has been the most adversely affected in our market area. Lots of sales volume,
aggressive capital structures and heavy overhead have all contributed to this
sector's problem. Manufacturing loans represent 14% of our total commercial
portfolio, 25% of our non-performers and 39% of the $122 million increase in
non-performing assets last year.
The financial, insurance and real estate sectors performed well.
Consisting predominantly of companies in the real estate business, this sector
has enjoyed good growth and absorption levels in our market. Although this
sector typically lagged general economic conditions, we feel comfortable with
our commercial real estate exposure. Loans to these businesses represent 29% of
our commercial portfolio, 15% of non- performers and account for only 20% of the
increase in non-performing assets last year.
We feel this portfolio is well-balanced, and we have little concern
about industry
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concentration. The portfolio mix has remained relatively constant for some
period of time. Shared national credits and larger exposures have adversely
impacted our overall credit quality, and we expect those trends to continue
through the first half of this year.
Turning to the indirect auto business, which represents 32% of our
total loan portfolio, the pie charts on the left side show the composition of
loan and lease originations from the last two years. Origination volume was
relatively unchanged at $3.4 billion last year, with 65% of that volume being
loans and 35% leases versus 60% and 40% respectively the year before. This mix
shift away from leasing has been manufacturer-induced through their incentive
programs, which have been geared more towards loans than leases. Additionally,
the reduction in lease residual values in the last two years and the resulting
increase in monthly lease payments versus loan payments has contributed to
moving customers away from the lease product. The right-hand pie chart shows the
movement towards more new car financing in 2001 as opposed to used car, and
again, driven by the structure of the manufacturers' incentive programs. For the
majority of the year, these programs focused more on cash rebates than interest
rate subvention that tended to lead to more available new car units available
for bank financing.
This next slide shows accumulative loss rates on three separate
vintages of our managed auto loan and lease portfolio. On the left hand chart,
the lowest line represents accumulative losses on loans originated between the
fourth quarter of 1998 and the third quarter of 1999, which was a good
underwriting period for Huntington. Losses on this book of business are on track
to generate an estimated annual loss of 75 basis points over
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their life. The dark line at the top of the graph represents accumulative losses
on loans originated from the fourth quarter of 1999 through the third quarter of
2000. And this is the book of business that's our problem child. The credit
quality of the loans booked during this period was weaker, with 18% of these
loans in the lower FICO score tiers. This part of the portfolio has been, and
still represents, a disproportionate share of our credit losses. Annual losses
on these loans over their life are expected to be over 200 basis points. While
this vintage is having an adverse impact on our portfolio results, the relative
impact is diminishing as the relative size of this vintage is being reduced over
time. Loans originated during this time period have declined from 42% of the
total managed portfolio a year ago to 25% in December of this last year.
The new vintage of loans, which is the middle line, originated since
the fourth quarter of 2000, are of significantly better credit quality although
this vintage, as well as all vintages, is being adversely impacted by economic
conditions. The average FICO score on this vintage is higher than either of the
two earlier vintages. We expect the lifetime per annum losses on this vintage to
be less than 100 basis points.
The next slide shows our quarterly charge-off trend over the last eight
quarters and the composition of these charge-offs. Charge-offs in this chart and
table exclude charge-offs on the portfolios we've exited and for which reserves
were established in the second quarter. The commercial real estate installment
loans, home equity line portfolio and residential real estate portfolios, which
comprise 40% of our total loan portfolio, performed relatively well in this
adverse economic environment. The C & I portfolios
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saw charge-offs increasing significantly. And, we also experienced significant
weakening in the auto lease portfolio.
The next slide shows the increase in the loan loss reserve in 2001 with
our reserve ratio increasing from 1.45% to 1.90% at year end in 2001 - a 31%
increase. The table shows our relative loan loss reserve position at year end
where we have the third highest ratio among 19 other regional bank holding
companies, where the median of these 19 banks is 1.48%. For perspective here,
we're showing our year-end 2000 reserve ratio at 1.45%. We were eighth among
this same group of banks who had a median ratio of 1.42%. There is no question
that our credit quality has deteriorated significantly during the past year, but
we feel we've taken the difficult, but certainly necessary, steps to maintain a
strong reserve position---perhaps even to a greater extent than have other
banks.
Let's turn to financial performance. At our July 12th investor
conference, where we outlined our new strategic direction, we also provided
guidance for some key financial drivers for the second half of 2001. This slide
shows how we performed versus that guidance. Loan growth came in roughly at 5%
for the second half - obviously a little slower than we had projected, and that
was related to the economic slowdown. The second-half net interest margin was
4.08% versus the 3.90% that we had projected in July---we benefited from the
decline in rates and being slightly liability sensitive. Our annualized revenue
growth in the second half was approximately 5%. That was driven by the increase
in our net interest margin and also growth in non-interest income. The
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efficiency ratio came in a little bit lower than the 57% to 59% range that we
had projected. Now, the obvious problem area here is that our charge-offs in the
second-half were 89 basis points versus our projected 65 basis points. These
higher charge-offs and charge-offs at that higher level versus the projection
cost us $0.06 to $0.07 cents of earnings in the second-half of the year. You may
recall that after the increase in the loan loss reserve, the 1.67% in the second
quarter, our intention was to return the loan loss to 1.45%. This was a
beginning level as losses were realized on portfolios that we had exited, and
for which we had established reserves, in the second quarter's special charge.
With the economic weakness and higher charge-offs experienced in the second
half, we reversed this policy course, and we actually increased further in the
fourth quarter to 1.90%. We had estimated earnings per share in the second half
at $0.58 to $0.60. We earned $0.60, in spite of the significant higher
charge-offs.
I'm going to show you a series of slides that show some key performance
indicators over the last eight quarters. There's a series of other slides we
won't talk about today which are included in the appendix.
As you can see, our earnings per share in the left chart has stabilized
over the last four or five quarters albeit at a lower level than that of the
first half of 2000.
The right hand chart shows the quarterly trend in pre-tax income,
excluding loan loss provision expense and security gains. From this perspective,
you get a significantly different picture than the earnings per share trend
shows. That is, you get an upward trend in quarterly earnings and you also get
earnings at a higher absolute level in the
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second half of 2001 than the first half of 2000. The point here is that we're
making significant progress in turning the company around, but this progress is
being masked by the increase in our loan loss provision expense.
The next slide shows steady progress that we're making in net interest
income and net interest margin during the past year. The increase from the low
of 3.70% in the fourth quarter of last year to 4.11% in the fourth quarter this
year has been influenced, among other things, by a planned reduction of lower
margin investment securities over the year as shown in the right hand chart.
The next slide shows two graphs that illustrate our interest rate risk
management efforts from two perspectives. First, on the left hand side, our net
interest income at risk over the next 12 months. And secondly, the economic
value of equity, that is the market value of the firm under different interest
rate scenarios. Our interest rate risk has been declining over the last year as
interest rates have come down. And, it is at a very modest absolute level today.
The next slide shows that we experienced solid 7.5% revenue growth in
2001 with steady quarterly progression. Even if we exclude the $19 million
increase in mortgage banking revenues - revenues increased 6.2% versus the prior
year. We've also made good progress in reducing the efficiency ratio this year
both with expense reduction three quarters in a row and revenue increases.
As you know, our capital position is going to improve significantly
with the Florida sale a couple of weeks away. The tangible common equity to
tangible asset ratio
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will increase from 6.04% at the end of 2001 to 9 1/8% to 9 1/4% upon completion
of this sale. The right hand chart shows the progress we've made in recent
quarterS in improving our capital ratios. The ratio has improved from
approximately 5.5% to slightly over 6% over the last seven quarters in spite of
very weak earnings performance, and also in spite of $148 million of
restructuring charges, of which $115 million occurred in 2001. The primary
driver of the improved capital position was operating earnings, net of
dividends, partially offset by the restructuring charges.
We obviously have a long way to go to improve Huntington's financial
performance to that of a top tier regional bank. We do feel we've made a lot of
progress in 2001. We're starting to show some consistent improvement in our
financial ratios albeit they're being masked by deterioration in credit quality.
We've increased the loan loss reserve from the middle of the pack to a much
higher level than all but a couple of top-tier regional banks. Our obvious
challenge is to deal with the credit deterioration a significant part of which
has been occasioned by the economic weakened, but certainly some of which is
related to specific Huntington issues.
We now turn the presentation back over to Tom.
TOM HOAGLIN: Let me close this morning with a few comments regarding
the outlook for 2002. First, and to no one's surprise a key determinant of 2002
earnings will be the economic environment, the level of interest rates, and
credit quality. The assumption we have made is that the weakness of the economy
will continue through the first half of the year with a modest recovery in the
second half. As a result, we expect to
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see continued high-levels of net charge-offs and non-performing assets for at
least the next couple of quarters. We're not looking for significant
deterioration beyond fourth quarter levels, but pressure will remain on credit
performance. Regarding interest rates, our view is that short term rates will
increase. Perhaps 150 to 200 basis points during the year and the yield curve
will flatten. We've not made any changes in our performance assumptions since we
held the fourth quarter earnings conference call a couple of weeks ago.
Relative to our key priorities, let me underscore that our very top
priority is managing credit quality. These are some of the others. The first two
are inter-linked. One is to complete the sale of Florida - targeted again for
the middle of February. Second is to announce shortly thereafter the stock
repurchase program. Improving our product cross-selling in all lines of business
is high priority, so is continuing the progress we've seen thus far in turning
around the performance of our West Michigan region. The remaining items listed
will always be on our priority list, just as they are for any great company.
And, while we have made progress in each of these over the second half of last
year, we still have plenty of opportunities to do much better. In sum, 2002
boils down to executing the game plan.
Let me close with a re-visit of the long-term financial performance
targets outlined last July. Our message today is that over the last eight
months, we've positioned the company to move toward these goals. Further, we're
making specific and quantifiable progress in a number of areas, including loan
and deposit growth as well as improving
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our operating efficiencies and returns. We're not there yet, but we are on our
way.
This concludes our prepared remarks. Now Mike, Nick and I are pleased
to take any questions you may have.
MALE SPEAKER: What is the average coupon in the auto loan and lease
book? And then these - are these 100 basis points of annualized charge-offs?
MIKE MCMENNAMIN: The average coupon rate in the fourth quarter was
somewhere in the 9.5% range.
TOM HOAGLIN: Other questions, yes sir?
MALE SPEAKER: (question)
TOM HOAGLIN: You're speaking about return on assets for West Michigan?
MALE SPEAKER: (question)
TOM HOAGLIN: We're not really focused on - internally we're not focused
on return on assets for particular regions. What we are seeing in West Michigan
is after a long and steady period of decline in the few years following the
acquisition of some banks there. In the late 90's, we reversed the trend of loss
of customers, loss of accounts, loss of deposits. We have a motivated team up
there. We've really revamped the management team almost top to bottom. There is
turmoil in that market as a result of other changes from competitors and we feel
that despite what Huntington did following acquisitions in the past that we're
getting lots of opportunities to bring back business to the bank. So, I feel
very good about that.
MALE SPEAKER: (question)
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TOM HOAGLIN: Okay. Good suggestion.
MALE SPEAKER: Can you discuss the REIT in light of the PNC issues?
MIKE MCMENNAMIN: Huntington set up a fully-owned subsidiary in May of
1998. The purpose that it was set up was to - one, consolidate a lot of our real
estate assets into one bucket. Secondly, it was a vehicle that was expected
would have the capability of generating or raising tier-one regulatory capital
at some point. That continues to be its purpose. We did sell some preferred
stock in the fourth quarter of 2001 for the purpose of raising regulatory
capital including a preferred stock offering of $50 million to the public. It is
important to understand that this structure is a consolidated entity. It's a
wholly-owned subsidiary of Huntington National Bank, which in turn is a
wholly-owned subsidiary of Huntington Bancshares Incorporated. All of the assets
roll right up to the bank into the corporation and all the consolidated numbers.
It's not off balance sheet.
MALE SPEAKER: (question)
MIKE MCMENNAMIN: The only other off-balance sheet transactions we have
are two auto loan securitizations, which were done in the first half of 2000.
There's approximately $1.2 billion of loans that are in those structures. One
was a public transaction - a half a billion dollar transaction in January of
2000. That's amortized down to about $200 million. And the second is a revolving
five-year $1 billion securitization that was effective in June of 2000 that
still has $1 billion - with the revolving feature still having $1 billion
outstanding. Those are the only off-balance sheet transactions other
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than the generic interest rate swaps, which I think everybody has. We have
customer swaps and we have swaps that we use for our own interest rate
management purposes.
TOM HOAGLIN: Other questions? Yes sir.
MALE SPEAKER: (question)
TOM HOAGLIN: Our thinking there is that at such point in time as we see
clear evidence of improved credit quality from improved economic situation, we
would re-evaluate that 1.9% level. We established that just out of an abundance
of caution. But we did not make a statement in the process that that would be a
level that we would maintain in perpetuity. So hopefully we will, during the
latter part of 2002, get a clear signal of improved conditions and be able to
reassess that level.
MIKE MCMENNAMIN: Having said that, when we showed our earnings
expectations for 2002 that does not assume any declines in the loan loss reserve
ratio to go into earnings.
TOM HOAGLIN: Is that Keith?
MALE SPEAKER: (question)
TOM HOAGLIN: Do you mean to say how much --
MALE SPEAKER: If you are top tier......How much of a difference is
there in terms of the top tier versus the bottom tier?
TOM HOAGLIN: I don't - in the bottom tier, I don't think there would be
any bit of - and we're going to be pretty strict about that. Keith I do not know
exactly how much for example our top selling branch person would be able to
make. It would be his or her
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compensation - we can certainly get you that information. Do you have a sense of
that Mike?
MIKE MCMENNAMIN: My sense is that it will probably be 30 to 35 to 45%
difference in total compensation. That is if you assume that the - that the top
performer received a incentive compensation and the bottom performer received
absolutely none. I think incentive compensation would be some place in the 30 to
45% range for the top performers.
TOM HOAGLIN: Other questions? Yes sir?
MALE SPEAKER: (question)
TOM HOAGLIN: What else was included of value?
MALE SPEAKER: (question)
TOM HOAGLIN: I think Mike, it's safe to say that SunTrust and for that
matter, other bidders in the process were assessing the value of our primarily
our retail banking operation down there. We are selling loan portfolios as well
- - selling about $2.7 to $2.9 billion loans and about $4.7 billion give or take
in deposits. We are retaining - what I would call our Private Financial Group,
meaning private banking and trust related offices in Naples and Stuart as well
as our Dealer Sales (our auto finance operations) and mortgage operations in
Florida. But, their assessment basically was on the basis of retail banking and
deposits and loan portfolios.
MALE SPEAKER: (question)
MIKE MCMENNAMIN: No the deposit levels are determined - once the
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transaction closes the deposit levels have been determined and that's final.
It's not dependent upon any growth or lack of growth from that point forward.
TOM HOAGLIN: Great. Thank you very much for your interest in
Huntington. We're sure pleased to be here.