Exhibit 99.3
[COMPANY LOGO - HUNTINGTON]
Third Quarter Earnings Review
October 17, 2002
[LOGO]
MEETING PARTICIPANTS
Tom Hoaglin
- Chairman, President and Chief Executive Officer
Mike McMennamin
- Vice Chairman and Chief Financial Officer
Nick Stanutz
- Exec. Vice President - Dealer Sales Group Head
Jay Gould
- Sr. Vice President - Investor Relations
2
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BASIS OF PRESENTATION - OPERATING BASIS
Reported results since the 2001 second quarter have been significantly impacted
by a number of items, primarily related to the strategic restructuring announced
in July 2001 and the subsequent sale of the Florida banking operations in the
2002 first quarter. In addition, reported 2002 first quarter results included
Florida operations for only half the quarter versus a full quarter for each
prior quarter. Also, the 2002 third quarter included a gain from the
restructuring of the Merchant Services business.
Therefore, to better understand underlying trends, the following slides and
discussion are on an OPERATING basis, unless otherwise noted, which excludes the
effect of these items from all prior periods, including the impact of the
Florida operations.
Please refer to the schedules accompanying the 2002 third quarter earnings press
release, as well as the 2002 third quarter Quarterly Financial Review for
schedules reconciling reported earnings with operating earnings and additional
schedules excluding the impact of the Florida operations.
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THIRD QUARTER HIGHLIGHTS
Reported Results
- ----------------
- - EPS of $0.41
- Includes $24.5 mm pre-tax gain ($16.0 mm after tax) from restructuring
Merchant Services business.
Operating Results
- -----------------
- - EPS of $0.34
- Includes $6.6 mm pre-tax mortgage servicing rights impairment
- - 11% annualized growth in loans
- - 10% annualized growth in core deposits
- - Improved credit quality trends
- 2nd consecutive quarterly decline in NPAs...down 4%
- 4th consecutive quarterly decline in new NPAs...down 35%
- 3rd consecutive quarterly decline in net charge-offs...down 3%
- Loan loss provision exceeded net charge-offs by $16.5 mm, or 38%
- Maintained 2.00% loan loss reserve ratio
- Increased NPA coverage to 191%
- - Repurchased 6.2 million shares...15.0 million shares to date
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THIRD QUARTER - OTHER ACHIEVEMENTS
INVESTING IN THE BUSINESS
- - Appointed new head of small business banking
- - Purchased LeaseNet Group Inc. - net $60 million in receivables
- - Restructured ownership interest in Huntington Merchant Services, LLC
- - Sold J. Rolfe Davis Insurance Agency, Inc.
INVESTING IN OUR EMPLOYEES
- - Announced second employee stock option grant
INVESTING IN OUR CUSTOMERS
- - New teller technology now in 64% of the branches...completion by year end
- - Launched new commercial loan processing system (CLOS)
- - Launched new Situs small cap mutual fund
- - Added another 28 new companies to our new business 401(k) platform
5
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FINANCIAL PERFORMANCE
6
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2002 THIRD QUARTER PERFORMANCE HIGHLIGHTS (1)
- - Net income $82.2 mm
- - Earnings per share $0.34
- - Managed loan growth 11% annualized
- - Core deposit growth 10% annualized
- - Net interest margin 4.26%
- - Efficiency ratio 53.1%
- - Net charge-offs - adjusted (2) 0.83%
- - NPAs $214.1 mm
- - Loan loss reserve / loans 2.00%
- - Tangible common equity ratio 8.00%
- - Mortgage service rights impairment $6.6 mm
(1) Excludes after-tax impact of $16.0 MM gain on the restructuring of the
merchant services business
(2) Excludes impact of net charge-offs on exited portfolios
7
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THIRD QUARTER 2002 EARNINGS
($MM) Reported Adjustments Operating
-------- ------------ ---------
Net interest income $ 249.4 $ 249.4
Provision (60.2) (60.2)
Non-interest income 113.7 113.7
Merchant services gain 24.5 $ 24.5 --
Securities gains 1.1 1.1
Non-interest expense (193.7) (193.7)
------- ------- -------
Pretax income 134.8 24.5 110.3
------- ------- -------
Net income $ 98.1 $ 16.0 $ 82.2
------- ------- -------
EPS $ 0.41 $ 0.07 $ 0.34
======= ======= =======
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PERFORMANCE HIGHLIGHTS (1)
3Q02 2Q02 3Q01
---- ---- ----
EPS - operating $0.34 $0.33 $0.32
ROA 1.26 % 1.31% 1.30%
ROE 14.3 14.0 13.5
Efficiency ratio (2) 53.1 53.2 54.0
NIM 4.26 4.30 4.17
Tangible common equity/assets (3) 8.00 8.51 6.08
(1) Operating basis - Excludes after tax impact of restructuring and other
charges of $33.0 MM in 3Q01, after tax impact of $16.0 MM gain on the
restructuring of the merchant services business in 3Q02, the impact of
Florida banking operations sold in 1Q02 and Florida insurance agency sold
7/2/02
(2) Excludes intangible amortization of $0.2 MM in 3Q02 and 2Q02, and $2.6 MM
in 3Q01
(3) Period end
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2002 THIRD QUARTER EARNINGS (1)
Change B (W) vs.
-----------------------
3Q01
2Q02 -------------
($MM) 3Q02 2Q02 3Q01 Amt. Amt. Pct.
---- ---- ---- ---- ---- ----
Net interest income $ 249.4 $ 241.9 $ 230.5 $ 7.6 $ 19.0 8.2%
Provision (60.2) (53.9) (46.0) (6.4) (14.2) (30.9)
Non-interest income 113.7 114.3 110.0 (0.6) 3.7 3.3
Securities gains 1.1 1.0 1.1 0.2 0.1 7.6
Non-interest expense (193.7) (190.2) (187.1) (3.5) (6.7) (3.6)
------- ------- ------- ------ ------ ---
Pretax income 110.3 113.1 108.5 (2.8) 1.8 1.7
------- ------- ------- ------ ------ ---
Net income $ 82.2 $ 81.7 $ 80.9 $ 0.5 $ 1.3 1.6%
------- ------- ------- ------ ------ ---
EPS $ 0.34 $ 0.33 $ 0.32 $ 0.01 $ 0.02 6.3%
======= ======= ======= ====== ====== ===
Revenue (FTE) (2) $ 364.2 $357.2 $ 341.9 $ 7.0 $ 22.3 6.5%
(1) Operating basis - Excludes after tax impact of restructuring and other
charges of $33.0 MM in 3Q01, after tax impact of $16.0 MM gain on the
restructuring of the merchant services business in 3Q02, the impact of
Florida banking operations sold in 1Q02 and Florida insurance agency sold
7/2/02
(2) Calculated assuming a 35% tax rate and excluding securities gains
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PERFORMANCE TRENDS (1)
EARNINGS PER SHARE
2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
$0.30 $0.32 $0.32 $0.32 $0.33 $0.34
PRETAX INCOME BEFORE LLP AND SECURITIES GAINS
Y/Y% Chg
($MM) -------------------
15% 10%
2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
$144 $153 $162 $159 $166 $169
(1) Operating basis - Excludes after tax impact of restructuring and other
charges of $33.0 MM in 3Q01, after tax impact of $16.0 MM gain on the
restructuring of the merchant services business in 3Q02, the impact of
Florida banking operations sold in 1Q02 and Florida insurance agency sold
7/2/02
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PERFORMANCE TRENDS (1)
Net Interest Income & Margin (FTE)
($MM)
2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
4.03% 4.17% 4.26% 4.21% 4.30% 4.26%
$227 $232 $237 $234 $243 $251
Earning Assets (Avg)
($B)
2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
$22.7 $22.2 $22.2 $22.4 $22.6 $23.4
(1) Excludes impact of Florida banking operations sold in 1Q02
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NET INTEREST MARGIN DRIVERS
- - Flattening of the yield curve
- - Auto loan and leases originations... higher quality... lower margin
- - Lower margin residential mortgages
- - Mortgage prepayment activity
- - "De facto" deposit repricing floors
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MANAGED LOAN GROWTH (1)
Average ($B) Annualized Growth
- ------- -----------------
3Q02 vs. 2Q02 vs. 3Q02 vs.
3Q02 2Q02 1Q02 3Q01
---- ---- ----- ----
Commercial $ 5.5 (8)% (3)% (8)%
Commercial real estate 3.7 10 6 13
------ ---- ----- ----
Total commercial/CRE 9.2 (1) -- --
------ ---- ----- ----
Auto loan / lease 7.1 14 (3) 2
Home equity 3.1 18 17 13
Residential real estate 1.3 81 75 138
Other consumer 0.4 (10) (10) (12)
----- ---- ----- ----
Total consumer 11.9 21 14 12
----- ---- ----- ----
Managed loans $21.1 11% 8% 7%
===== ==== ===== ====
(1) Growth percentages normalized for residential real estate loan
securitizations and impact of Florida banking operations sold in 1Q02
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CORE DEPOSIT TRENDS (1)
Average ($B) Annualized Growth
- ------- -----------------
3Q02 vs. 2Q02 vs. 3Q02 vs.
3Q02 2Q02 1Q02 3Q01
---- ---- ---- ----
Demand $ 2.9 19% --% 4%
Interest bearing 5.3 28 51 43
Savings 2.8 (6) (3) (5)
CD's 4.1 (5) 12 1
----- -- -- --
Total $15.1 10% 19% 12%
===== == == ==
(1) Growth percentages normalized for impact of Florida banking operations sold
in 1Q02
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NON-INTEREST INCOME (1)
($MM) Better or (Worse) vs.
---------------------
3Q02 2Q02 2Q02(2) 3Q01
---- ---- ---- ----
Deposit service charges $ 37.5 $ 2.1 6% 12%
Mortgage banking 6.3 (4.4) (41) (55)
Brokerage / insurance 13.9 (1.0) (7) --
Trust income 15.0 (1.3) (8) 1
Bank Owned Life Ins 11.4 -- -- 20
Other service charges 10.8 0.3 3 14
Other 18.7 3.7 24 27
-------- ------ --- ---
Total $ 113.7 $ (0.6) (1)% 3%
======== ====== === ===
Total excl mortgage banking $ 107.4 $ 3.8 4% 12%
(1) Excludes securities gains, gain on restructuring of Merchant Services
business in 3Q02, and Florida insurance agency sold 7/2/02
(2) Linked quarter percentage growth is not annualized.
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MORTGAGE SERVICING
3Q02 2Q02
---- ----
Mortgage servicing portfolio $5.2 B $5.4 B
Investor servicing portfolio $3.2 B $2.7 B
Mortgage servicing rights $27.9 MM $26.9 MM
MSR % of investor servicing portfolio 0.88 % 1.00 %
MSR % of equity 1.19 % 1.25%
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NON-INTEREST EXPENSE (1)
($MM) Better or (Worse) vs.
---------------------
3Q02 2Q02 2Q02(2) 3Q01
---- ---- ---- ---
Personnel costs $107.5 $(3.9) (4)% (6)%
Occupancy & equipment 32.2 (0.9) (3) --
Outside services 15.1 1.5 9 (3)
Marketing 7.5 (0.3) (4) (31)
Amortization of intangibles 0.2 -- -- nmv
Other 31.2 0.1 -- (3)
------ ----- --- --
Total $193.7 $(3.5) (2)% (4)%
====== ===== === ===
(1) Excludes pretax impact of restructuring charges and other charges of $50.8
MM in 3Q01 and Florida insurance agency sold 7/2/02
(2) Linked quarter percentage growth is not annualized
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EFFICIENCY RATIO (1)
1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
59.5% 56.0% 54.0% 52.7% 54.1% 53.2% 53.1%
(1) FTE Revenue excluding securities gains and gain on sale of Florida
operations/non-interest expense excludes intangible amortization and
restructuring and other charges. Excludes impact of Florida banking
operations sold in 1Q02 and Florida insurance agency sold 7/2/02
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CREDIT REVIEW
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CREDIT QUALITY OVERVIEW (1)
3Q02 2Q02 3Q01
---- ---- ----
NPAs / total loans + OREO 1.05% 1.14% 1.06%
Net charge-offs - adjusted (2) 0.83 0.88 0.62
90+ days past due 0.33 0.30 0.42
Consumer 0.42 0.41 0.55
Commercial 0.22 0.15 0.13
Commercial RE 0.25 0.20 0.54
Reserve / total loans 2.00 2.00 1.77
Reserve / NPAs 191 176 166
(1) Excludes impact of Florida banking operations sold in 1Q02.
(2) Excludes impact of net charge-offs on exited portfolios.
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NON-PERFORMING ASSET COMPOSITION (1)
($MM)
2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
0.85% 1.06% 1.16% 1.17% 1.14% 1.05%
$156.9 $201.2 $219.6 $225.5 $223.2 $214.1
(1) Excludes impact of Florida banking operations sold in 1Q02.
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NON-PERFORMING ASSET FLOW ANALYSIS - REPORTED BASIS(1)
Period End ($MM)
3Q02 2Q02 1Q02 4Q01 3Q01
---- ---- ---- ---- ----
NPA beginning of period $223.2 $225.5 $227.5 $210.1 $166.0
New NPAs 47.2 73.0 74.4 86.0 95.0
Loan losses (25.5) (28.3) (26.1) (34.6) (12.5)
Payments (26.3) (44.3) (37.7) (28.3) (34.2)
Sales (2) (4.2) (2.4) (8.9) (4.1) (3.3)
Acquired 0.1 -- -- -- --
Other (0.4) (0.3) (3.7) (1.5) (0.9)
----- ------ ------ ----- ------
NPA end of period $214.1 $223.2 $225.5 $227.5 $210.1
(1) Impact of Florida not material.
(2) 1Q02 includes $6.5 MM related to the sale of Florida banking operations and
2Q01 includes $14.9 MM related to PG & E.
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NON-PERFORMING ASSETS - BY SECTOR
Manufacturing 30%
F.I.R.E. 13%
Construction 7%
Retail Trade 2%
Agriculture 3%
Trans./Comm. 1%
Wholesale Trade 1%
Energy 0%
Other 9%
% OF $109 MM CHANGE VS 12/31/00
Services 40%
Manufacturing 53%
F.I.R.E. 16%
Construction 4%
Retail Trade 0%
Agriculture 2%
Trans./Comm. -1%
Wholesale Trade 0%
Energy 0%
Other -14%
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NET CHARGE-OFFS - ADJUSTED (1)
($MM)
2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
0.74% 0.62% 0.99% 0.97% 0.88% 0.83%
$34 $29 $47 $46 $43 $42
3Q02 2Q02 3Q01
---- ---- ----
Commercial 1.21% 1.53% 0.58%
Commercial real estate 0.43 0.22 0.00
---- ---- ----
Total commercial 0.90 1.02 0.38
---- ---- ----
Consumer
Auto loans - indirect 1.01 0.92 0.93
Auto lease 1.27 1.08 1.27
---- ---- ----
Indirect 1.15 1.01 1.13
Other direct 0.91 1.22 0.48
Home equity 0.38 0.43 0.55
Residential real estate 0.04 0.18 0.06
---- ---- ----
Total consumer 0.78 0.75 0.86
---- ---- ----
Total 0.83% 0.88% 0.62%
(1) Excludes impact of net charge-offs on exited portfolios. Reported total
consumer net charge-offs were 0.84% in 3Q02, 0.83% in 2Q02, and 1.11%
in 3Q01. Reported total net charge-offs were 0.87% in 3Q02, 0.92% in 2Q02
and 0.76% in 3Q01. Excludes impact of Florida banking operations sold
in 1Q02.
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VINTAGE PERFORMANCE
AUTO LOANS - INDIRECT
Cumulative Charge-off Rate
% of Portfolio @
-----------------
12/00 12/01 3/02 6/02 9/02
----- ----- ---- ---- ----
Pre - 4Q98 22% 8% 4% 3% 2%
- - 4Q98-3Q99 24% 12% 11% 9% 7%
- - 4Q99-3Q00 42% 25% 24% 20% 17%
- - 4Q00-4Q01 12% 55% 61% 43% 39%
- - 1Q02-3Q02 -- -- -- 25% 35%
--- --- --- --- ---
100% 100% 100% 100% 100%
# Quarters After Origination
AUTO LEASES
Cumulative Charge-off Rate
% of Portfolio @
-----------------
12/00 12/01 3/02 6/02 9/02
----- ----- ---- ---- ----
Pre - 4Q98 16% 6% 4% 3% 2%
- - 4Q98-3Q99 33% 22% 19% 16% 14%
- - 4Q99-3Q00 42% 31% 30% 27% 21%
- - 4Q00-4Q01 9% 41% 47% 38% 34%
- - 1Q02-3Q02 -- -- -- 16% 29%
--- --- --- --- ---
100% 100% 100% 100% 100%
# Quarters After Origination
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CONSUMER DELINQUENCY TRENDS (1)
30+ Days
3Q01 4Q01 1Q02 2Q02 3Q02
3.10% 3.32% 2.36% 2.26% 2.10%
90+ Days
3Q01 4Q01 1Q02 2Q02 3Q02
0.55% 0.60% 0.44% 0.41% 0.42%
(1) % of related outstandings at EOP. Excludes impact of Florida banking
operations sold in 1Q02
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LOAN LOSS RESERVE (1)
($MM)
2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
1.76% 1.77% 2.05% 2.00% 2.00% 2.00%
$326 $335 $387 $386 $393 $408
LOAN LOSS RESERVE FLOW ANALYSIS
($M) 3Q02 2Q02 1Q02
-------- -------- --------
LLR- beginning $ 393.0 $ 386.1 $ 387.0
Charge-offs (56.6) (57.5) (60.2)
Recoveries 12.9 12.6 10.9
-------- -------- --------
Net charge-offs (43.7) (44.9) (49.3)
Provision exp. 60.2 53.9 50.6
Assets purchased 1.3 -- --
Loans securitized (2.4) (2.0) (2.2)
-------- -------- --------
LLR-ending $ 408.4 $ 393.0 $ 386.1
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(1) Excludes impact of Florida banking operations sold in 1Q02
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CAPITAL REVIEW
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CAPITAL TRENDS - REPORTED BASIS (1)
3Q02 2Q02 3Q01
---- ---- ----
Tier 1 risk-based capital 9.13% 9.72% 6.97%
Total risk-based capital 12.09 12.75 10.13
Tier 1 leverage 9.41 9.94 7.10
Tangible equity / assets 8.00(2) 8.51 6.08
Double leverage (3) 86 83 110
(1) Period end
(2) Estimated at 7.5%-7.8% by 12/31/02 assuming continuation of share
repurchase program
(3) (Parent company investments in subsidiaries + goodwill) / equity
30
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SHARE REPURCHASE PROGRAM
Commitment to repurchase $300 - 400 MM
- - Program commenced February 21
- - Repurchased 15.0 million shares through September 30...$294 million
- - Committed to continued repurchase at reasonable prices and volumes
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FOCUS ON DEALER SALES
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DEALER SALES - A SIGNIFICANT BUSINESS
- - A Huntington core business since the early 1950's
- - 34% of Huntington's managed loan portfolio - 9/30/02
- - 550 employees
- - 3,500 dealer relationships
Avg. Managed Balances
---------------------
($MM) Loans Leases
1Q01 3,856 3,082
2Q01 3,891 3,189
3Q01 4,084 3,214
4Q01 4,138 3,204
1Q02 3,935 3,145
2Q02 3,766 3,094
3Q02 3,937 3,172
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DEALER SALES - BUSINESS MODEL
- - Local market presence - sales and underwriting
- - Provider of core products - loan, lease, floor plan
- - Ancillary products and services - treasury, cash management, investments
- - Tenure of staff
- - Customer service - efficient and effective
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DEALER SALES - GEOGRAPHIC PROFILE
9 Month Production
- -------------------
($MM)
2002 2001 % Chg.
---- ---- ------
Ohio $994 $992 2.0%
Florida 483 481 0.4
Michigan 340 393 (13.5)
Kentucky 221 213 3.8
Indiana 202 219 (7.8)
W. Virginia 116 156 (25.6)
Other 239 178 34.3
----- ------ ----
Total $2,595 $2,635 (1.5)%
[STATES MAP]
Ohio 38%
Florida 19
Michigan 13
Kentucky 9
Indiana 8
West Virginia 4
Arizona 3 - Entered market June 2001
Pennsylvania 2
Georgia 0 - Entered market August 2002
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DEALER SALES - MARKET SHARE IN MAJOR MARKETS
2000 2001 2002 YTD
---- ---- --------
OHIO
- ----
GMAC 12.3% 15.0% 13.1%
Ford Motor Credit 14.4 14.3 10.3
- -------------------------------------------------------------------------------
Huntington 7.8 6.3* 6.5
- -------------------------------------------------------------------------------
Fifth Third 4.8 4.7 5.9
National City 6.1 4.9 5.3
Chase 1.9 4.2 4.8
MICHIGAN
- --------
GMAC n/a 37.5 31.8
Ford Motor Credit n/a 17.1 10.4
Chrysler Finance Corp. n/a 8.3 9.4
Fifth Third n/a 3.2 5.3
Chase n/a 2.9 4.8
- -------------------------------------------------------------------------------
Huntington n/a 2.4* 3.2
- -------------------------------------------------------------------------------
FLORIDA
- -------
GMAC 9.5 11.3 11.4
Ford Motor Credit 15.8 15.1 11.0
SunTrust 8.0 7.6 9.9
- -------------------------------------------------------------------------------
Huntington 4.3 4.1* 4.0
- -------------------------------------------------------------------------------
Chase 2.1 4.1 3.5
*Market erosion caused by heavy 4Q01 GM incentives
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DEALER SALES - AUTO INDUSTRY VEHICLE SALES
(000's of units) 3Q02 3Q01 %
---- ---- ----
Change
------
New and used vehicle sales* (retail) 18,649 17,976 3.7%
Huntington vehicles financed 53 49 8.9%
* Source: JD Powers and Wall Street Journal
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INDIRECT AUTO - QUARTERLY PRODUCTION
($MM) 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Loans
Production $388 $489 $651 $454 $426 $613 $667 $504 $486 $498 $715
% new vehicles 36% 41% 46% 45% 43% 47% 50% 39% 47% 58% 57%
Avg. FICO 696 702 707 712 716 722 721 723 730 732 737
% less than 640 19.9% 16.9% 14.0% 9.2% 5.8% 4.7% 4.7% 3.1% 1.8% 1.4% 1.2%
Risk expected loss 1.40% 1.28% 1.18% 1.07% 0.91% 0.82% 0.84% 0.83% 0.67% 0.61% 0.55%
Leases
Production $375 $308 $352 $302 $271 $340 $318 $255 $213 $292 $391
% new vehicles 71% 68% 75% 79% 78% 80% 83% 83% 85% 90% 91%
Avg. residual 48% 45% 43% 44% 38% 38% 37% 36% 37% 38% 40%
Avg. FICO 699 699 703 712 713 712 710 717 727 732 735
% less than 640 13.2% 14.7% 12.4% 8.7% 6.7% 6.2% 6.4% 3.6% 0.9% 0.7% 0.6%
Risk expected loss 1.06% 1.15% 1.11% 0.89% 0.88% 0.84% 0.86% 0.79% 0.65% 0.57% 0.50%
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INDIRECT AUTO - CREDIT UNDERWRITING
Auto Loans
FICO - new production Risk expected loss
1Q00 696 1.40%
2Q00 702 1.28%
3Q00 707 1.18%
4Q00 712 1.07%
1Q01 716 0.91%
2Q01 722 0.82%
3Q01 721 0.84%
4Q01 723 0.83%
1Q02 730 0.67%
2Q02 732 0.61%
3Q02 737 0.55%
Auto Leases
FICO - new production Risk expected loss
1Q00 699 1.06%
2Q00 699 1.15%
3Q00 703 1.11%
4Q00 712 0.89%
1Q01 713 0.88%
2Q01 712 0.84%
3Q01 710 0.86%
4Q01 717 0.79%
1Q02 727 0.65%
2Q02 732 0.57%
3Q02 735 0.50%
[LOGO]
INDIRECT AUTO - CREDIT TRENDS
Auto Loans
3Q01 4Q01 1Q02 2Q02 3Q02
- -30 day Delinq. 3.43% 4.09% 2.23% 2.29% 2.13%
- -90 day Delinq. 0.55% 0.66% 0.42% 0.35% 0.37%
Net Charge-offs 0.93% 1.43% 1.47% 0.92% 1.01%
Auto Leases
3Q01 4Q01 1Q02 2Q02 3Q02
- -30 day Delinq. 2.89% 3.17% 2.42% 2.24% 2.09%
- -90 day Delinq. 0.46% 0.49% 0.33% 0.35% 0.34%
Net Charge-offs 1.27% 1.55% 1.64% 1.08% 1.27%
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AUTO LEASE RESIDUAL VALUE RISK MITIGATION
- - Residual value insurance
- - Reserve fund - $30 million at September 2002
- - Additional reserve funding of 1% of booked residuals on new production
- - Quarterly mark-to-market of residual values and assessment of
reserve adequacy
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DEALER SALES - PRIORITIES GOING FORWARD
REVENUE GROWTH
- - Increased penetration at existing "low market share" dealerships through
leveraging value proposition
- - Selected market expansion outside of core footprint
- - Increased penetration of Huntington products and services at "high
market share" dealerships
COST CONTROL / REDUCTION
- - Leverage existing infrastructure and recent investment in technological
capabilities
- - Pursue emerging workflow technology
- - Managing product profitability components... dealer commissions, fees
collected, etc.
42
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PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
FORWARD LOOKING STATEMENT DISCLOSURE
This presentation and discussion, including related questions and answers,
may contain forward-looking statements, including certain plans,
expectations, goals, and projections which are subject to numerous
assumptions, risks, and uncertainties.
A number of factors, including but not limited to those set forth under the
heading "Business Risks" included in Item 1 of Huntington's Annual Report
on Form 10-K for the year ended December 31, 2001, and other factors
described from time to time in Huntington's other filings with the
Securities and Exchange Commission, could cause actual conditions,
events, or results to differ significantly from those described in
the forward-looking statements.
All forward-looking statements included in this discussion, including related
questions and answers, are based on information available at the
time of the discussion. Huntington assumes no obligation to
update any forward-looking statement.
43
[LOGO]
APPENDIX
44
[LOGO]
HUNTINGTON
[LOGO]
MANAGING INTEREST RATE RISK
NET INTEREST INCOME AT RISK
FORWARD CURVE +/- 2%
GRADUAL CHANGE IN RATES
2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
- -2% Rate Fall 1.8% 1.5% 0.8% 1.4% 0.9% -0.2%
2% Rate Rise -2.1% -1.7% -1.2% -1.6% -1.3% -0.8%
ECONOMIC VALUE AT RISK
PARALLEL YIELD CURVE SHIFT +/- 2%
INSTANTANEOUS CHANGE IN RATES
2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
- -2% Rate Shock 3.6% 0.7% -0.7% 0.8% 0.1% -1.4%
+2% Rate Shock -6.2% -3.7% -2.4% -3.8% -3.0% -3.4%
46
[LOGO]
LOAN PORTFOLIO - 9/30/02
BY TYPE OF LOAN - MANAGED
($B) Amt Pct
------ -----
Commercial $ 5.7 26.3%
Commercial RE 3.8 17.5
------ ----
Total commercial 9.5 43.8
------ ----
Auto leases 3.2 14.8
Auto loans 4.0 18.7
Home equity 3.1 14.5
Residential real estate 1.4 6.3
Other consumer 0.4 1.8
------ ----
Total consumer 12.1 56.2
------ ----
Total loans $21.6 100.0%
BY REGION OR LOB - MANAGED
Central OH/WV 18%
Northern Ohio 13%
W. Michigan 8%
S. Ohio/KY 7%
E. Michigan 5%
Indiana 3%
Auto 36%
PFG 4%
Mortgage 5%
47
[LOGO]
COMMERCIAL LOAN PORTFOLIO - 9/30/02
$9.5 B BY INDUSTRY SECTOR
Services 24%
Manufacturing 14%
F.I.R.E. 29%
Retail Trade 12%
Construction 7%
Wholesale Trade 6%
Trans./Comm. 4%
Agriculture 2%
Energy 1%
Other 1%
# OF LOANS BY SIZE
less than $5MM 18,947
98.2%
$5+MM 345
1.8%
$5 MM - Less than $10 MM 224
$10 MM - Less than $25 MM 110
$25 MM - Less than $50 MM 91
$50+ MM 2
----
Total 345
48
[LOGO]
COMMERCIAL REAL ESTATE PORTFOLIO - 9/30/02
$3.8 Billion
----------------
By Property Type
Retail 23%
Industrial 18%
Office 16%
Land Devel. 7%
Single-family 5%
Hotel 5%
Health Care 3%
Raw Land 2%
Other 8%
[chart]
49
[LOGO]
COMMERCIAL REAL ESTATE PORTFOLIO - 9/30/02
$3.8 BILLION
By Region
E. Michigan 14%
W. Virginia 8%
Indiana 6%
Florida 1%
Columbus 21%
Cleveland 21%
Cincinnati 15%
W. Michigan 14%
[chart]
By Loan Type
Mini-perm 12%
Permanent 16%
Construction 37%
Owner occupied 34%
[chart]
50
[LOGO]
HOME EQUITY - QUARTERLY PRODUCTION
($MM) 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Loans
Production $ 70.7 $ 87.2 $ 79.8 $ 74.2 $ 70.5 $ 93.6 $ 72.8 $ 83.2 $ 76.2 $ 81.8 $ 63.7
Avg. LTV 79% 80% 79% 79% 80% 80% 78% 77% 79% 75% 72%
Avg. FICO 684 687 686 684 689 692 695 697 697 699 698
% less than 640 24.0% 22.0% 23.5% 23.0% 19.3% 18.8% 16.6% 15.6% 14.5% 14.5% 16.3%
Risk expected loss 0.74% 0.76% 0.64% 0.68% 0.55% 0.49% 0.49% 0.63% 0.41% 0.41% 0.45%
Lines
Production $ 199.3 $ 222.9 $ 220.0 $ 194.7 $ 211.1 $ 328.0 $ 285.0 $ 297.1 $ 314.3 $ 366.1 $ 347.0
Avg. LTV 80% 80% 80% 79% 79% 79% 78% 77% 78% 78% 78%
Avg. FICO 707 710 708 712 711 714 714 720 722 722 722
% less than 640 13.4% 12.1% 13.7% 11.0% 11.0% 10.4% 9.3% 7.3% 6.3% 6.4% 6.2%
Risk expected loss 0.62% 0.55% 0.59% 0.55% 0.53% 0.50% 0.60% 0.65% 0.52% 0.54% 0.48%
51
[LOGO]
HOME EQUITY - CREDIT UNDERWRITING
LOANS
[chart]
FICO - new production Risk expected loss
1Q00 684 0.74%
2Q00 687 0.76%
3Q00 686 0.64%
4Q00 684 0.68%
1Q01 689 0.55%
2Q01 692 0.49%
3Q01 695 0.49%
4Q01 697 0.63%
1Q02 697 0.41%
2Q02 699 0.41%
3Q02 698 0.45%
Lines
[chart]
FICO - new production Risk expected loss
1Q00 707 0.62%
2Q00 710 0.55%
3Q00 708 0.59%
4Q00 712 0.55%
1Q01 711 0.53%
2Q01 714 0.50%
3Q01 714 0.60%
4Q01 720 0.65%
1Q02 722 0.52%
2Q02 722 0.54%
3Q02 722 0.48%
52
[LOGO]
TOTAL DEPOSIT TRENDS (1)
Average ($B) Annualized Growth
- ------- -----------------
3Q02 vs 2Q02 vs. 3Q02 vs.
3Q02 2Q02 1Q02 3Q01
---- ---- ---- ----
Central Region $ 5.1 6% 6% 9%
No. Ohio Region 3.5 15 15 11
Cincinnati / Dayton Region 1.3 2 17 7
Indiana Region 0.7 37 22 17
E. Michigan Region 2.0 11 10 5
W. Michigan Region 2.5 (3) 58 9
----- -- --- --
Total Regions $15.1 8% 18% 9%
===== == === ==
(1) Excludes deposits attributable to Dealer Sales and PFG lines of business,
brokered deposits, and negotiable CDs. Normalized sale of Florida.
53
[LOGO]
PERFORMANCE TRENDS (1)
REVENUE (FTE)
($MM)
2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
$338 $342 $351 $349 $357 $364
(1) Excludes security gains and gain on restructuring of merchant services
business in 3Q02, gain on sale of the Florida banking operations in 1Q02,
impact of Florida banking operations sold in 1Q02 and Florida insurance
agency sold 7/2/02
54
[LOGO]
PERFORMANCE TRENDS (1)
LOAN LOSS PROVISION
($MM)
2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
$42 $46 $54 $51 $54 $60
NET INCOME
($MM)
2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
$76 $81 $80 $80 $82 $82
(1) Operating basis - Excludes after tax impact of restructuring and other
charges, gain on sale of Florida operations in 1Q02, impact of Florida
banking operations sold in 1Q02 and Florida insurance agency sold 7/2/02
55
[LOGO]
PERFORMANCE TRENDS (1)
RETURN ON AVERAGE ASSETS
2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
1.20% 1.30% 1.28% 1.30% 1.31% 1.26%
RETURN ON AVERAGE EQUITY
2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
12.6% 13.5% 13.4% 13.6% 14.0% 14.3%
(1) Operating basis - Excludes after tax impact of restructuring and other
charges of $33.0 MM in 3Q01, after tax impact of $16.0 MM gain on the
restructuring of the merchant services business in 3Q02, the impact of
Florida banking operations sold in 1Q02 and Florida insurance agency sold
7/2/02
56
[LOGO]
PRIVATE FINANCIAL GROUP
57
[LOGO]
PFG - BUSINESS OVERVIEW - 3Q02
BUSINESS LINES 9/30/02 ASSETS
- - Asset Management / Investment Advisory Mngd Total
---- -----
- Personal trust $ 4.7 B $7.4B
- Huntington Funds 2.7 2.7
- Institutional trust 0.5 12.9
- Corporate trust 0.2 2.7
- Haberer Registered Investment Advisor 0.4 0.4
--- -----
$8.5 B $26.1B
- - Brokerage 3Q02 2Q02
---- ----
- Mutual fund sales $ 32.4 MM $ 54.6 MM
- Annuity sales 151.8 152.6
------ ------
$184.2 $ 207.2
- - Private Banking (Avg. balances)
- Deposits $ 821 MM $ 776 MM
- Loans $ 919 $ 851
58
[LOGO]
PFG - FEE BASED REVENUE (1)
3Q02 REVENUE ($MM) VS. 3Q01
Trust fees $15.0 1.2%
Brokerage & Insurance 12.6 32.8
Other (2) 1.0 (9.1)
----- -----
Total $28.6 11.3%
(1) Excludes impact of Florida sale and sale of J Rolfe Davis
(2) Misc. banking fees on loans/deposits
REVENUE TRENDS
<Table>
Trust fees $13.7 $14.4 $14.8 $14.7 $15.1 $16.2 $15.0
Brokerage & Insurance $10.9 $11.1 $9.5 $12.7 $12.2 $13.1 $12.6
1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
</Table>
59
[LOGO]
PFG - HUNTINGTON FUNDS
- - Lipper 1 Year (9/30/02) rankings...
- New Economy Fund #3 of 387
- Dividend Capture Fund #8 of 472
- Mid Cap Fund Top 6% of 218
- - All equity funds in top quartile for 2002 YTD
60
[LOGO]
PFG - RETAIL INVESTMENT SALES SUCCESS (1)
2001 2001 Industry
Huntington Average Top Quartile
---------- --------- -------------
Sales penetration (2) 5.3% 3.4% 4.6%
Revenue penetration (3) $2,855 $3,081 $2,821
Profit penetration (4) $1,323 $ 679 $ 958
9 Mo. 2002 2001 Industry
Average monthly (5) Huntington Average Top Quartile
- ---------------- ---------- ------- ------------
Sales per licensed banker $70,996 $35,215 $61,158
Revenue per licensed banker $ 3,195 $ 1,585 $ 2,905
3Q02 3Q01
Huntington Fund sales % total funds sold 31% 5%
(1) Ken Kehrer & Associates survey
(2) Sales (dollars invested) of mutual funds and annuities divided by bank's
retail deposits
(4) Contribution of investment program to pretax profit per million of the
bank's retail deposits. Contribution is difference between program revenue
and program expenses
(5) Annualized
61
HUNTINGTON BANCSHARES INCORPORATED
QUARTERLY FINANCIAL REVIEW
SEPTEMBER 2002
TABLE OF CONTENTS
REPORTED BASIS
Consolidated Statements of Income 1
Consolidated Balance Sheets 2
Loans and Deposits 3
Consolidated Average Balance Sheets 4
Consolidated Quarterly Net Interest Margin Analysis 5
Selected Quarterly Income Statement Data 6
Loan Loss Reserves and Net Charge-Off Analysis 7
Non-Performing Assets and Past Due Loans 8
Stock Summary, Capital, and Other Data 9
OPERATING BASIS
- - Definition of Operating Basis 10
- - Consolidated Statements of Income 11
- - Loans and Deposits 12
- - Consolidated Average Balance Sheets 13
- - Quarterly Net Interest Margin Analysis 14
- - Selected Quarterly Income Statement Data 15
- - Loan Loss Reserves and Net Charge-Off Analysis 16
- - Non-Performing Assets and Past Due Loans 17
HUNTINGTON BANCSHARES INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME
REPORTED BASIS
THREE MONTHS ENDED SEPTEMBER 30, CHANGE
- ---------------------------------------------------------------------------------------- ---------------------------------
(in thousands, except per share amounts) 2002 2001 Amount Percent
- ---------------------------------------------------------------------------------------- ---------------------------------
Net Interest Income $ 249,416 $ 249,787 $ (371) (0.1)%
Provision for loan losses 60,249 49,559 10,690 21.6
- ---------------------------------------------------------------------------------------- ---------------------------------
NET INTEREST INCOME
AFTER PROVISION FOR LOAN LOSSES 189,167 200,228 (11,061) (5.5)
- ---------------------------------------------------------------------------------------- ---------------------------------
Total non-interest income 139,382 130,456 8,926 6.8
Total non-interest expense 193,723 279,707 (85,984) (30.7)
- ---------------------------------------------------------------------------------------- ---------------------------------
INCOME BEFORE INCOME TAXES 134,826 50,977 83,849 164.5
Income taxes 36,703 8,348 28,355 339.7
- ---------------------------------------------------------------------------------------- ---------------------------------
NET INCOME $ 98,123 $ 42,629 $ 55,494 130.2 %
- ---------------------------------------------------------------------------------------- ---------------------------------
PER COMMON SHARE
Net income
Basic $0.41 $0.17 $ 0.24 N.M. %
Diluted $0.41 $0.17 $ 0.24 N.M. %
Cash dividends declared $0.16 $0.16 $ --- --- %
AVERAGE COMMON SHARES
Basic 239,925 251,148 (11,223) (4.5)%
Diluted 241,357 252,203 (10,846) (4.3)%
- -----------------------------------------------------------------------------------------------------------------------------------
NINE MONTHS ENDED SEPTEMBER 30, CHANGE
- ---------------------------------------------------------------------------------------- ---------------------------------
(in thousands, except per share amounts) 2002 2001 Amount Percent
- ---------------------------------------------------------------------------------------- ---------------------------------
Net Interest Income $ 734,100 $ 740,944 $ (6,844) (0.9)%
Provision for loan losses 169,922 200,518 (30,596) (15.3)
- ---------------------------------------------------------------------------------------- ---------------------------------
NET INTEREST INCOME
AFTER PROVISION FOR LOAN LOSSES 564,178 540,426 23,752 4.4
- ---------------------------------------------------------------------------------------- ---------------------------------
Total non-interest income 558,790 376,383 182,407 48.5
Total non-interest expense 649,353 781,090 (131,737) (16.9)
- ---------------------------------------------------------------------------------------- ---------------------------------
INCOME BEFORE INCOME TAXES 473,615 135,719 337,896 249.0
Income taxes 195,525 22,847 172,678 N.M.
- ---------------------------------------------------------------------------------------- ---------------------------------
NET INCOME $ 278,090 $ 112,872 $ 165,218 146.4 %
- ---------------------------------------------------------------------------------------- ---------------------------------
PER COMMON SHARE
Net income
Basic $1.13 $0.45 $ 0.68 151.1 %
Diluted $1.13 $0.45 $ 0.68 151.1 %
Cash dividends declared $0.48 $0.56 $ (0.08) (14.3)%
AVERAGE COMMON SHARES
Basic 245,554 251,039 (5,485) (2.2)%
Diluted 247,021 251,537 (4,516) (1.8)%
N.M. - Not Meaningful.
Page 1
HUNTINGTON BANCSHARES INCORPORATED
CONSOLIDATED BALANCE SHEETS
REPORTED BASIS
- --------------------------------------------------------------------------------------------------------------------------
SEPTEMBER 30, December 31, September 30,
(in thousands) 2002 2001 2001
- --------------------------------------------------------------------------------------------------------------------------
ASSETS
Cash and due from banks $ 1,014,713 $ 1,138,366 $ 1,110,287
Interest bearing deposits in banks 33,700 21,205 4,958
Trading account securities 3,225 13,392 2,292
Federal funds sold and securities
purchased under resale agreements 64,574 83,275 63,311
Loans held for sale 369,724 629,386 294,077
Securities available for sale - at fair value 3,235,546 2,849,579 2,991,167
Investment securities - fair value $9,925; $12,499;
and $14,868, respectively 9,733 12,322 14,629
Total loans (1) 20,455,506 21,601,873 21,583,611
Less allowance for loan losses 408,378 410,572 360,446
- --------------------------------------------------------------------------------------------------------------------------
Net loans 20,047,128 21,191,301 21,223,165
- --------------------------------------------------------------------------------------------------------------------------
Bank owned life insurance 874,771 843,183 833,623
Premises and equipment 339,984 452,036 447,774
Goodwill and other intangible assets 218,424 716,054 726,094
Customers' acceptance liability 18,340 13,670 16,382
Accrued income and other assets 509,150 536,390 588,416
- --------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 26,739,012 $ 28,500,159 $ 28,316,175
- --------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Total deposits (1) $ 17,117,811 $ 20,187,304 $ 20,071,388
Short-term borrowings 2,620,022 1,955,926 1,789,043
Bank acceptances outstanding 18,340 13,670 16,382
Medium-term notes 1,737,750 1,795,002 1,995,603
Federal Home Loan Bank Advances 613,000 17,000 17,000
Subordinated notes and other long-term debt 943,168 927,330 882,605
Company obligated mandatorily redeemable preferred
capital securities of subsidiary trusts holding solely
junior subordinated debentures of the Parent Company 300,000 300,000 300,000
Accrued expenses and other liabilities 1,049,135 887,487 839,748
- --------------------------------------------------------------------------------------------------------------------------
Total Liabilities 24,399,226 26,083,719 25,911,769
- --------------------------------------------------------------------------------------------------------------------------
Shareholders' equity
Preferred stock - authorized 6,617,808 shares;
none outstanding --- --- ---
Common stock - without par value; authorized
500,000,000 shares; issued 257,866,255 shares;
outstanding 237,544,288; 251,193,814; and
251,193,211 shares, respectively 2,486,345 2,490,724 2,489,564
Less 20,321,967; 6,672,441; and 6,673,044
treasury shares, respectively (391,550) (123,849) (122,485)
Accumulated other comprehensive income 60,556 25,488 38,708
Retained earnings (deficit) 184,435 24,077 (1,381)
- --------------------------------------------------------------------------------------------------------------------------
Total Shareholders' Equity 2,339,786 2,416,440 2,404,406
- --------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 26,739,012 $ 28,500,159 $ 28,316,175
- --------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------- -------------------------------------
Change September '02 vs. '01
-------------------------------------
(in thousands) Amount Percent
- ---------------------------------------------------------- ------------------ ----------------
ASSETS
Cash and due from banks $ (95,574) (8.6) %
Interest bearing deposits in banks 28,742 N.M.
Trading account securities 933 40.7
Federal funds sold and securities
purchased under resale agreements 1,263 2.0
Loans held for sale 75,647 25.7
Securities available for sale - at fair value 244,379 8.2
Investment securities - fair value $9,925; $12,499;
and $14,868, respectively (4,896) (33.5)
Total loans (1) (1,128,105) (5.2)
Less allowance for loan losses 47,932 13.3
- ---------------------------------------------------------- -------------------------------------
Net loans (1,176,037) (5.5)
- ---------------------------------------------------------- -------------------------------------
Bank owned life insurance 41,148 4.9
Premises and equipment (107,790) (24.1)
Goodwill and other intangible assets (507,670) (69.9)
Customers' acceptance liability 1,958 12.0
Accrued income and other assets (79,266) (13.5)
- ---------------------------------------------------------- -------------------------------------
TOTAL ASSETS $(1,577,163) (5.6) %
- ---------------------------------------------------------- -------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Total deposits (1) $(2,953,577) (14.7) %
Short-term borrowings 830,979 46.4
Bank acceptances outstanding 1,958 12.0
Medium-term notes (257,853) (12.9)
Federal Home Loan Bank Advances 596,000 N.M.
Subordinated notes and other long-term debt 60,563 6.9
Company obligated mandatorily redeemable preferred
capital securities of subsidiary trusts holding solely
junior subordinated debentures of the Parent Company --- ---
Accrued expenses and other liabilities 209,387 24.9
- ---------------------------------------------------------- -------------------------------------
Total Liabilities (1,512,543) (5.8) %
- ---------------------------------------------------------- -------------------------------------
Shareholders' equity
Preferred stock - authorized 6,617,808 shares;
none outstanding --- ---
Common stock - without par value; authorized
500,000,000 shares; issued 257,866,255 shares;
outstanding 237,544,288; 251,193,814; and
251,193,211 shares, respectively (3,219) (0.1)
Less 20,321,967; 6,672,441; and 6,673,044
treasury shares, respectively (269,065) N.M.
Accumulated other comprehensive income 21,848 56.4
Retained earnings (deficit) 185,816 N.M.
- ---------------------------------------------------------- -------------------------------------
Total Shareholders' Equity (64,620) (2.7)
- ---------------------------------------------------------- -------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $(1,577,163) (5.6) %
- ---------------------------------------------------------- -------------------------------------
(1) See Page 3 for detail of Loans and Deposits.
N.M. - Not Meaningful.
Page 2
HUNTINGTON BANCSHARES INCORPORATED
LOANS AND DEPOSITS
REPORTED BASIS
LOAN PORTFOLIO COMPOSITION BY LOAN TYPE AND BY BUSINESS SEGMENT
- ----------------------------------------------------------------------------------------------------------------------------
(in thousands)
SEPTEMBER 30, 2002 DECEMBER 31, 2001
- ----------------------------------------------------------------------------------------- --------------------------------
BY LOAN TYPE BALANCE % BALANCE %
- ----------------------------------------------------------------------------------------------------------------------------
Commercial $ 5,684,168 27.8 $ 6,439,372 29.8
Commercial real estate 3,768,554 18.4 3,975,562 18.4
- ----------------------------------------------------------------------------------------------------------------------------
Total Commercial and Commercial Real Estate 9,452,722 46.2 10,414,934 48.2
- ----------------------------------------------------------------------------------------------------------------------------
Consumer
Auto leases - Indirect (unearned income $451,818,
$500,430, and $520,151, respectively) 3,206,046 15.7 3,207,514 14.8
Auto loans - Indirect 2,907,417 14.2 2,883,279 13.3
Home equity 3,134,529 15.3 3,582,028 16.6
Residential mortgage 1,355,326 6.6 970,704 4.5
Other loans 399,466 2.0 543,414 2.6
- ----------------------------------------------------------------------------------------------------------------------------
Total Consumer 11,002,784 53.8 11,186,939 51.8
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL LOANS $ 20,455,506 100.0 $ 21,601,873 100.0
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL LOANS BY BUSINESS SEGMENT
- --------------------------------------------------------------
Regional Banking
Central Ohio / West Virginia $ 4,778,406 23.4 $ 4,264,143 19.7
Northern Ohio 2,770,710 13.5 2,694,081 12.5
Southern Ohio / Kentucky 1,456,206 7.1 1,327,355 6.1
West Michigan 1,825,738 8.9 1,837,094 8.5
East Michigan 1,135,668 5.6 936,899 4.3
Indiana 683,024 3.3 695,354 3.2
- ----------------------------------------------------------------------------------------------------------------------------
Total Regional Banking 12,649,752 61.8 11,754,926 54.3
- ----------------------------------------------------------------------------------------------------------------------------
Dealer Sales 6,715,205 32.8 6,239,117 29.0
Private Financial Group 971,503 4.7 762,771 3.5
Treasury / Other 119,046 0.7 121,534 0.6
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL LOANS EXCLUDING FLORIDA 20,455,506 100.0 18,878,348 87.4
- ----------------------------------------------------------------------------------------------------------------------------
Florida --- --- 2,723,525 12.6
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL LOANS $ 20,455,506 100.0 $ 21,601,873 100.0
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
(in thousands)
SEPTEMBER 30, 2001
- ------------------------------------------------------------- ---------------------------------
BY LOAN TYPE BALANCE %
- ----------------------------------------------------------------------------------------------------
Commercial $ 6,655,550 30.8
Commercial real estate 3,858,039 17.9
- ----------------------------------------------------------------------------------------------------
Total Commercial and Commercial Real Estate 10,513,589 48.7
- ----------------------------------------------------------------------------------------------------
Consumer
Auto leases - Indirect (unearned income $451,818,
$500,430, and $520,151, respectively) 3,221,300 14.9
Auto loans - Indirect 2,884,841 13.4
Home equity 3,521,203 16.3
Residential mortgage 858,757 4.0
Other loans 583,921 2.7
- ----------------------------------------------------------------------------------------------------
Total Consumer 11,070,022 51.3
- ----------------------------------------------------------------------------------------------------
TOTAL LOANS $ 21,583,611 100.0
- ----------------------------------------------------------------------------------------------------
TOTAL LOANS BY BUSINESS SEGMENT
- -------------------------------------------------------------
Regional Banking
Central Ohio / West Virginia $ 4,348,385 20.1
Northern Ohio 2,792,014 12.9
Southern Ohio / Kentucky 1,323,263 6.1
West Michigan 1,851,089 8.6
East Michigan 885,641 4.1
Indiana 683,098 3.2
- ----------------------------------------------------------------------------------------------------
Total Regional Banking 11,883,490 55.0
- ----------------------------------------------------------------------------------------------------
Dealer Sales 6,326,698 29.4
Private Financial Group 675,517 3.1
Treasury / Other 59,913 0.3
- ----------------------------------------------------------------------------------------------------
TOTAL LOANS EXCLUDING FLORIDA 18,945,618 87.8
- ----------------------------------------------------------------------------------------------------
Florida 2,637,993 12.2
- ----------------------------------------------------------------------------------------------------
TOTAL LOANS $ 21,583,611 100.0
- ----------------------------------------------------------------------------------------------------
DEPOSIT COMPOSITION BY DEPOSIT TYPE AND BY BUSINESS SEGMENT
- ----------------------------------------------------------------------------------------------------------------------------
(in thousands)
SEPTEMBER 30, 2002 DECEMBER 31, 2001
- ----------------------------------------------------------------------------------------- --------------------------------
BY DEPOSIT TYPE BALANCE % BALANCE %
- ----------------------------------------------------------------------------------------------------------------------------
Demand deposits
Non-interest bearing $ 2,949,065 17.2 $ 3,635,173 18.0
Interest bearing 5,203,413 30.4 5,723,160 28.4
Savings deposits 2,849,060 16.6 3,466,305 17.2
Other domestic time deposits 4,071,082 23.8 5,868,451 29.1
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL CORE DEPOSITS (1) 15,072,620 88.0 18,693,089 92.7
- ----------------------------------------------------------------------------------------------------------------------------
Domestic time deposits of $100,000 or more 754,115 4.4 1,130,563 5.6
Brokered time deposits and negotiable CDs 979,075 5.7 137,915 0.7
Foreign time deposits 312,001 1.9 225,737 1.0
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL DEPOSITS $ 17,117,811 100.0 $ 20,187,304 100.0
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL DEPOSITS BY BUSINESS SEGMENT
- --------------------------------------------------------------
Regional Banking
Central Ohio / West Virginia $ 5,619,539 32.8 $ 5,217,459 25.8
Northern Ohio 3,551,743 20.7 3,255,847 16.1
Southern Ohio / Kentucky 1,346,093 7.9 1,290,832 6.4
West Michigan 2,419,650 14.1 2,226,500 11.0
East Michigan 1,938,215 11.3 1,895,470 9.4
Indiana 658,018 3.8 577,699 2.9
- ----------------------------------------------------------------------------------------------------------------------------
Total Regional Banking 15,533,258 90.6 14,463,807 71.6
- ----------------------------------------------------------------------------------------------------------------------------
Dealer Sales 48,112 0.3 82,684 0.4
Private Financial Group 773,709 4.5 716,693 3.6
Treasury / Other (2) 762,732 4.6 256,201 1.3
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL DEPOSITS EXCLUDING FLORIDA 17,117,811 100.0 15,519,385 76.9
- ----------------------------------------------------------------------------------------------------------------------------
Florida --- --- 4,667,919 23.1
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL DEPOSITS $ 17,117,811 100.0 $ 20,187,304 100.0
- ----------------------------------------------------------------------------------------------------------------------------
DEPOSIT COMPOSITION BY DEPOSIT TYPE AND BY BUSINESS SEGMENT
- ----------------------------------------------------------------------------------------------------
(in thousands)
SEPTEMBER 30, 2001
- ------------------------------------------------------------- ---------------------------------
BY DEPOSIT TYPE BALANCE %
- ----------------------------------------------------------------------------------------------------
Demand deposits
Non-interest bearing $ 3,464,430 17.3
Interest bearing 5,302,394 26.4
Savings deposits 3,458,986 17.2
Other domestic time deposits 6,034,306 30.1
- ----------------------------------------------------------------------------------------------------
TOTAL CORE DEPOSITS (1) 18,260,116 91.0
- ----------------------------------------------------------------------------------------------------
Domestic time deposits of $100,000 or more 1,315,414 6.6
Brokered time deposits and negotiable CDs 128,878 0.6
Foreign time deposits 366,980 1.8
- ----------------------------------------------------------------------------------------------------
TOTAL DEPOSITS $ 20,071,388 100.0
- ----------------------------------------------------------------------------------------------------
TOTAL DEPOSITS BY BUSINESS SEGMENT
- -------------------------------------------------------------
Regional Banking
Central Ohio / West Virginia $ 4,923,225 24.5
Northern Ohio 3,189,524 15.9
Southern Ohio / Kentucky 1,335,797 6.7
West Michigan 2,331,154 11.6
East Michigan 1,967,658 9.8
Indiana 558,573 2.8
- ----------------------------------------------------------------------------------------------------
Total Regional Banking 14,305,931 71.3
- ----------------------------------------------------------------------------------------------------
Dealer Sales 90,076 0.4
Private Financial Group 757,291 3.8
Treasury / Other (2) 325,205 1.6
- ----------------------------------------------------------------------------------------------------
TOTAL DEPOSITS EXCLUDING FLORIDA 15,478,503 77.1
- ----------------------------------------------------------------------------------------------------
Florida 4,592,885 22.9
- ----------------------------------------------------------------------------------------------------
TOTAL DEPOSITS $ 20,071,388 100.0
- ----------------------------------------------------------------------------------------------------
(1) Core deposits include non-interest bearing and interest bearing demand
deposits, savings deposits, CDs under $100,000, and IRA deposits.
(2) Comprised largely of brokered deposits and negotiable CDs.
Page 3
HUNTINGTON BANCSHARES INCORPORATED
- --------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED QUARTERLY AVERAGE BALANCE SHEETS
REPORTED BASIS
(in millions)
2002 2001
- ----------------------------------------------------------------------------------------------- -------------------------
Fully Tax Equivalent Basis (1) THIRD Second First Fourth Third
- --------------------------------------------------------------------------------------------------------------------------
ASSETS
Interest bearing deposits in banks $ 35 $ 29 $ 34 $ 14 $ 5
Trading account securities 7 6 5 8 8
Federal funds sold and securities purchased
under resale agreements 76 68 62 86 86
Mortgages held for sale 267 174 381 433 344
Securities:
Taxable 2,953 2,735 2,713 2,720 2,896
Tax exempt 108 96 101 108 140
- --------------------------------------------------------------------------------------------------------------------------
Total Securities 3,061 2,831 2,814 2,828 3,036
- --------------------------------------------------------------------------------------------------------------------------
Loans:
Commercial 5,502 5,614 6,045 6,491 6,681
Real Estate (2)
Construction 1,430 1,420 1,455 1,492 1,388
Commercial 2,316 2,233 2,364 2,397 2,346
Consumer
Auto leases - Indirect 3,172 3,113 3,166 3,229 3,243
Auto loans - Indirect 2,793 2,597 2,730 2,903 2,806
Home equity 3,062 2,911 3,209 3,554 3,456
Residential mortgage 1,310 1,229 1,021 892 854
Other loans 404 413 482 554 574
- --------------------------------------------------------------------------------------------------------------------------
Total Consumer 10,741 10,263 10,608 11,132 10,933
- --------------------------------------------------------------------------------------------------------------------------
Total Loans 19,989 19,530 20,472 21,512 21,348
- --------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses 406 400 415 393 358
- --------------------------------------------------------------------------------------------------------------------------
Net loans 19,583 19,130 20,057 21,119 20,990
- --------------------------------------------------------------------------------------------------------------------------
Total earning assets 23,435 22,638 23,768 24,881 24,827
- --------------------------------------------------------------------------------------------------------------------------
Cash and due from banks 763 722 819 876 910
Intangible assets 202 213 536 720 732
All other assets 1,784 1,784 1,836 1,893 1,877
- --------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 25,778 $ 24,957 $ 26,544 $ 27,977 $ 27,988
- --------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Core deposits
Non-interest bearing deposits $ 2,868 $ 2,739 $ 3,041 $ 3,406 $ 3,341
Interest bearing demand deposits 5,269 4,920 5,148 5,519 5,096
Savings deposits 2,766 2,808 3,097 3,388 3,472
Other domestic time deposits 4,167 4,218 5,015 5,923 5,940
- --------------------------------------------------------------------------------------------------------------------------
Total core deposits 15,070 14,685 16,301 18,236 17,849
- --------------------------------------------------------------------------------------------------------------------------
Domestic time deposits of $100,000 or more 777 852 1,052 1,199 1,262
Brokered time deposits and negotiable CDs 907 649 302 109 120
Foreign time deposits 370 296 270 230 257
- --------------------------------------------------------------------------------------------------------------------------
Total deposits 17,124 16,482 17,925 19,774 19,488
- --------------------------------------------------------------------------------------------------------------------------
Short-term borrowings 2,108 1,886 1,998 1,907 2,140
Medium-term notes 1,752 1,910 1,967 1,863 1,990
Federal Home Loan Bank advances 228 14 17 17 17
Subordinated notes and other long-term debt,
including preferred capital securities 1,215 1,215 1,216 1,166 1,167
- --------------------------------------------------------------------------------------------------------------------------
Total interest bearing liabilities 19,559 18,768 20,082 21,321 21,461
- --------------------------------------------------------------------------------------------------------------------------
All other liabilities 1,073 1,107 1,051 889 811
Shareholders' equity 2,278 2,343 2,370 2,361 2,375
- --------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 25,778 $ 24,957 $ 26,544 $ 27,977 $ 27,988
- --------------------------------------------------------------------------------------------------------------------------
(1) Fully tax equivalent yields are calculated assuming a 35% tax rate.
(2) Third quarter 2002 includes reclassification of $186 million in construction
loans to commercial real estate due to September 2002 correction of an error
involving construction loans with original maturities over 5 years.
Page 4
HUNTINGTON BANCSHARES INCORPORATED
- ----------------------------------------------------------------------------------------------------------------------
CONSOLIDATED QUARTERLY NET INTEREST MARGIN ANALYSIS
REPORTED BASIS
(in millions)
AVERAGE RATES (3)
--------------------------------------------------------------
2002 2001
- ---------------------------------------------------------------------------------------------- ----------------------
Fully Tax Equivalent Basis (1) THIRD Second First Fourth Third
- ----------------------------------------------------------------------------------------------------------------------
ASSETS
Interest bearing deposits in banks 2.06 % 2.44 % 2.02 % 2.09 % 3.75 %
Trading account securities 4.95 5.37 2.79 3.59 3.83
Federal funds sold and securities purchased
under resale agreements 1.40 1.51 1.43 2.18 3.20
Mortgages held for sale 6.57 7.07 6.51 6.64 7.18
Securities:
Taxable 6.01 6.33 6.43 6.62 6.71
Tax exempt 7.52 7.69 7.76 7.81 7.38
- ----------------------------------------------------------------------------------------------------------------------
Total Securities 6.07 6.37 6.48 6.66 6.75
- ----------------------------------------------------------------------------------------------------------------------
Loans:
Commercial 5.46 5.50 5.39 5.86 6.92
Real Estate
Construction 4.62 4.81 4.91 5.50 6.62
Commercial 6.16 6.36 6.62 6.85 7.54
Consumer
Auto leases - Indirect 6.23 6.42 6.62 6.58 6.67
Auto loans - Indirect 7.75 7.98 8.03 8.24 8.45
Home equity 5.62 5.72 6.30 7.20 7.87
Residential mortgage 5.98 6.23 6.57 7.17 7.54
Other loans 7.41 7.47 7.41 8.12 7.89
- ----------------------------------------------------------------------------------------------------------------------
Total Consumer 6.47 6.64 6.92 7.34 7.65
- ----------------------------------------------------------------------------------------------------------------------
Total Loans 6.02 6.15 6.29 6.71 7.34
- ----------------------------------------------------------------------------------------------------------------------
Loan fees 0.61 0.55 0.48 0.51 0.53
- ----------------------------------------------------------------------------------------------------------------------
Total Loans with fees (2) 6.63 6.70 6.77 7.22 7.87
- ----------------------------------------------------------------------------------------------------------------------
Total earning assets 6.52 % 6.64 % 6.71 % 7.12 % 7.70 %
- ----------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Core deposits
Non-interest bearing deposits
Interest bearing demand deposits 1.77 % 1.84 % 1.80 % 2.00 % 2.74 %
Savings deposits 1.81 1.83 1.87 2.11 3.00
Other domestic time deposits 4.40 4.61 4.99 5.19 5.52
- ----------------------------------------------------------------------------------------------------------------------
Total core deposits 2.17 2.29 2.46 2.68 3.20
- ----------------------------------------------------------------------------------------------------------------------
Domestic time deposits of $100,000 or more 3.29 2.82 3.05 4.68 4.82
Brokered time deposits and negotiable CDs 2.37 2.48 2.48 3.55 4.42
Foreign time deposits 1.43 1.38 1.91 1.99 3.39
- ----------------------------------------------------------------------------------------------------------------------
Total deposits 2.22 2.31 2.49 2.80 3.32
- ----------------------------------------------------------------------------------------------------------------------
Short-term borrowings 1.88 1.97 2.36 2.65 3.69
Medium-term notes 3.37 3.21 3.43 4.58 6.12
Federal Home Loan Bank advances 2.04 5.97 6.10 6.10 6.10
Subordinated notes and other long-term debt,
including preferred capital securities 3.99 4.03 4.12 4.94 5.17
- ----------------------------------------------------------------------------------------------------------------------
Total interest bearing liabilities 2.73 % 2.82 % 3.04 % 3.51 % 4.23 %
- ----------------------------------------------------------------------------------------------------------------------
Net interest rate spread 3.79 % 3.82 % 3.67 % 3.61 % 3.47 %
Impact of non-interest bearing funds on margin 0.47 0.48 0.47 0.50 0.57
- ----------------------------------------------------------------------------------------------------------------------
NET INTEREST MARGIN 4.26 % 4.30 % 4.14 % 4.11 % 4.04 %
- ----------------------------------------------------------------------------------------------------------------------
(1) Fully tax equivalent yields are calculated assuming a 35% tax rate.
(2) Total loans with fees rate includes loan fees, whereas individual loan
components above are shown exclusive of fees.
(3) Loan and deposit average rates include impact of applicable derivatives.
Page 5
HUNTINGTON BANCSHARES INCORPORATED
SELECTED QUARTERLY INCOME STATEMENT DATA
REPORTED BASIS
2002 2001
- ---------------------------------------------------------------------------------------------- --------------------------------
(in thousands, except per share amounts) THIRD Second First Fourth Third
- ------------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME $249,416 $241,859 $ 242,825 $255,238 $249,787
Provision for loan losses 60,249 53,892 55,781 108,275 49,559
- ------------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 189,167 187,967 187,044 146,963 200,228
- ------------------------------------------------------------------------------------------------------------------------------------
Service charges on deposit accounts 37,460 35,354 38,530 42,753 41,719
Trust services 14,997 16,247 15,501 15,321 15,485
Brokerage and insurance income 13,943 17,677 18,792 20,966 19,912
Bank Owned Life Insurance income 11,443 11,443 11,676 9,560 9,560
Other service charges and fees 10,837 10,529 10,632 12,552 12,350
Mortgage banking 6,289 10,725 19,565 15,768 14,616
Other 18,723 15,039 10,931 16,088 15,755
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST INCOME BEFORE GAIN ON SALE
OF FLORIDA OPERATIONS, MERCHANT SERVICES GAIN,
AND SECURITIES GAINS 113,692 117,014 125,627 133,008 129,397
Gain on sale of Florida operations --- --- 175,344 --- ---
Merchant Services gain 24,550 --- --- --- ---
Securities gains 1,140 966 457 89 1,059
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST INCOME 139,382 117,980 301,428 133,097 130,456
- ------------------------------------------------------------------------------------------------------------------------------------
Personnel costs 107,477 105,146 114,285 118,143 120,767
Equipment 17,378 16,659 16,949 20,593 20,151
Outside data processing and other services 15,128 16,592 18,439 17,992 17,375
Net occupancy 14,815 14,756 17,239 19,950 19,266
Marketing 7,491 7,231 7,003 6,345 6,921
Professional services 6,083 6,267 5,401 6,235 5,912
Telecommunications 5,609 5,320 6,018 6,793 6,859
Printing and supplies 3,679 3,683 3,837 4,293 4,450
Franchise and other taxes 2,283 2,313 2,328 2,893 2,470
Amortization of intangible assets 204 235 1,376 10,100 10,114
Other 13,576 13,858 14,511 14,017 14,605
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST EXPENSE BEFORE SPECIAL CHARGES 193,723 192,060 207,386 227,354 228,890
Special charges --- --- 56,184 15,143 50,817
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST EXPENSE AFTER SPECIAL CHARGES 193,723 192,060 263,570 242,497 279,707
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 134,826 113,887 224,902 37,563 50,977
Income taxes 36,703 31,647 127,175 (28,086)(1) 8,348
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 98,123 $ 82,240 $ 97,727 $ 65,649 $ 42,629
- ------------------------------------------------------------------------------------------------------------------------------------
PER COMMON SHARE
Net Income - Diluted $0.41 $0.33 $0.39 $0.26 $0.17
Cash Dividends Declared $0.16 $0.16 $0.16 $0.16 $0.16
RETURN ON:
Average total assets 1.51% 1.32% 1.49% 0.93% 0.60%
Average total shareholders' equity 17.1% 14.1% 16.7% 11.0% 7.1%
Net interest margin (2) 4.26% 4.30% 4.14% 4.11% 4.04%
Efficiency ratio (3) 53.2% 53.3% 55.7% 55.8% 57.5%
REVENUE - FULLY TAXABLE EQUIVALENT (FTE)
Net Interest Income $249,416 $241,859 $ 242,825 $255,238 $249,787
Tax Equivalent Adjustment (2) 1,096 1,071 1,169 1,292 1,442
- ------------------------------------------------------------------------------------------------------------------------------------
Net Interest Income 250,512 242,930 243,994 256,530 251,229
Non-Interest Income 139,382 117,980 301,428 133,097 130,456
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL REVENUE $389,894 $360,910 $ 545,422 $389,627 $381,685
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL REVENUE EXCLUDING SECURITIES GAINS $388,754 $359,944 $ 544,965 $389,538 $380,626
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Reflects a $32.5 million reduction related to the issuance of $400 million
of REIT subsidiary preferred stock, of which $50 million was issued to the
public.
(2) Calculated assuming a 35% tax rate.
(3) Excludes gain on sale of Florida operations and special charges.
Page 6
HUNTINGTON BANCSHARES INCORPORATED
LOAN LOSS RESERVE AND NET CHARGE-OFF ANALYSIS
REPORTED BASIS
2002 2001
- ----------------------------------------------------------------------------------------------------- ---------------------------
(in thousands) THIRD Second First Fourth Third
- -----------------------------------------------------------------------------------------------------------------------------------
ALLOWANCE FOR LOAN LOSSES, BEGINNING OF PERIOD $393,011 $386,053 $410,572 $360,446 $352,243
Loan losses (56,591) (57,482) (67,527) (66,808) (49,386)
Recoveries of loans previously charged off 12,891 12,582 11,746 10,662 9,643
- -----------------------------------------------------------------------------------------------------------------------------------
Net loan losses (43,700) (44,900) (55,781) (56,146) (39,743)
- -----------------------------------------------------------------------------------------------------------------------------------
Provision for loan losses 60,249 53,892 55,781 108,275 49,559
Allowance of assets purchased / (sold) 1,264 --- (22,297) --- ---
Allowance of securitized loans (2,446) (2,034) (2,222) (2,003) (1,613)
- -----------------------------------------------------------------------------------------------------------------------------------
ALLOWANCE FOR LOAN LOSSES, END OF PERIOD $408,378 $393,011 $386,053 $410,572 $360,446
- -----------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses as a % of total loans 2.00 % 2.00 % 2.00 % 1.90 % 1.67 %
Allowance for loan losses as a % of non-performing loans 200.7 % 185.3 % 175.9 % 185.7 % 178.4 %
Allowance for loan losses as a % of non-performing assets 190.7 % 176.1 % 171.2 % 180.5 % 171.6 %
NET CHARGE-OFFS BY LOAN TYPE
Commercial $ 16,808 $ 21,468 $ 19,527 $ 22,555 $ 9,474
Commercial real estate 4,085 2,037 3,983 797 3
- -----------------------------------------------------------------------------------------------------------------------------------
Total commercial and commercial real estate 20,893 23,505 23,510 23,352 9,477
- -----------------------------------------------------------------------------------------------------------------------------------
Consumer
Auto leases 10,117 8,401 12,809 12,634 10,395
Auto loans 6,869 5,733 10,217 10,183 6,524
- -----------------------------------------------------------------------------------------------------------------------------------
Total auto leases and loans 16,986 14,134 23,026 22,817 16,919
- -----------------------------------------------------------------------------------------------------------------------------------
Home equity 2,934 3,096 3,950 4,153 4,866
Residential mortgage 123 555 122 376 109
Other loans 907 1,225 1,425 1,820 1,186
- -----------------------------------------------------------------------------------------------------------------------------------
Total consumer 20,950 19,010 28,523 29,166 23,080
- -----------------------------------------------------------------------------------------------------------------------------------
Total net charge-offs, excluding exited businesses 41,843 42,515 52,033 52,518 32,557
Net charge-offs related to exited businesses 1,857 2,385 3,748 3,628 7,186
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL NET CHARGE-OFFS - INCLUDING EXITED BUSINESSES $ 43,700 $ 44,900 $ 55,781 $ 56,146 $ 39,743
- -----------------------------------------------------------------------------------------------------------------------------------
NET CHARGE-OFFS - ANNUALIZED PERCENTAGES
Commercial 1.21 % 1.53 % 1.31 % 1.38 % 0.56 %
Commercial real estate 0.43 0.22 0.42 0.08 0.00
- -----------------------------------------------------------------------------------------------------------------------------------
Total commercial and commercial real estate 0.90 1.02 0.97 0.89 0.36
- -----------------------------------------------------------------------------------------------------------------------------------
Consumer
Auto leases 1.27 1.08 1.64 1.55 1.27
Auto loans 1.01 0.92 1.59 1.46 0.98
- -----------------------------------------------------------------------------------------------------------------------------------
Total auto leases and loans 1.15 1.01 1.62 1.51 1.14
- -----------------------------------------------------------------------------------------------------------------------------------
Home equity 0.38 0.43 0.50 0.46 0.56
Residential mortgage 0.04 0.18 0.05 0.17 0.05
Other loans 0.91 1.22 1.23 1.35 0.85
- -----------------------------------------------------------------------------------------------------------------------------------
Total consumer 0.78 0.75 1.10 1.05 0.85
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL NET CHARGE-OFFS - EXCLUDING EXITED BUSINESSES 0.83 0.88 1.04 0.98 0.61
Net charge-offs related to exited businesses 0.03 0.04 0.07 0.06 0.13
- -----------------------------------------------------------------------------------------------------------------------------------
NET CHARGE-OFFS AS A % OF AVERAGE LOANS - INCLUDING
EXITED BUSINESSES (1) 0.87 % 0.92 % 1.11 % 1.04 % 0.74 %
- -----------------------------------------------------------------------------------------------------------------------------------
(1) Exited businesses include Second Tier auto and Truck and Equipment lending.
Page 7
HUNTINGTON BANCSHARES INCORPORATED
NON-PERFORMING ASSETS AND PAST DUE LOANS
REPORTED BASIS
2002 2001
- ------------------------------------------------------------------------------------------------- -------------------------------
(in thousands) THIRD Second First Fourth Third
- -----------------------------------------------------------------------------------------------------------------------------------
Non-accrual loans:
Commercial $ 147,392 $ 156,252 $ 162,959 $ 159,637 $ 148,177
Commercial real estate 47,537 45,795 43,295 48,360 40,882
Residential mortgage 8,488 8,776 11,896 11,836 11,666
- -----------------------------------------------------------------------------------------------------------------------------------
Total Nonaccrual Loans 203,417 210,823 218,150 219,833 200,725
Renegotiated loans 37 1,268 1,268 1,276 1,286
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-PERFORMING LOANS 203,454 212,091 219,418 221,109 202,011
Other real estate, net 10,675 11,146 6,112 6,384 8,050
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-PERFORMING ASSETS $ 214,129 $ 223,237 $ 225,530 $ 227,493 $ 210,061
- -----------------------------------------------------------------------------------------------------------------------------------
Non-performing loans as a % of total loans 0.99% 1.08% 1.13% 1.02% 0.94%
Non-performing assets as a % of total loans
and other real estate 1.05% 1.14% 1.17% 1.05% 0.97%
ACCRUING LOANS PAST DUE 90 DAYS OR MORE $ 68,262 $ 58,449 $ 61,746 $ 91,635 $ 92,791
- -----------------------------------------------------------------------------------------------------------------------------------
2002 2001
- ---------------------------------------------------------------------------------------------- --------------------------------
(in thousands) THIRD Second First Fourth Third
- -----------------------------------------------------------------------------------------------------------------------------------
NON-PERFORMING ASSETS, BEGINNING OF PERIOD $ 223,237 $ 225,530 $ 227,493 $ 210,061 $ 165,985
New non-performing assets 47,219 73,002 74,446 85,986 94,990
Acquired 56 --- --- --- ---
Loan losses (25,480) (28,297) (26,072) (34,580) (12,480)
Payments (26,308) (44,303) (37,663) (28,315) (34,219)
Sales (4,154) (2,358) (8,925) (1) (4,131) (3,331)
Other (441) (337) (3,749) (1,528) (884)
- -----------------------------------------------------------------------------------------------------------------------------------
NON-PERFORMING ASSETS, END OF PERIOD $ 214,129 $ 223,237 $ 225,530 $ 227,493 $ 210,061
- -----------------------------------------------------------------------------------------------------------------------------------
(1) Includes $6.5 million related to the sale of Florida operations.
Page 8
HUNTINGTON BANCSHARES INCORPORATED
STOCK SUMMARY, CAPITAL, AND OTHER DATA
REPORTED BASIS
2002 2001
- --------------------------------------------------------------------------------------------- --------------------------------
THIRD Second First Fourth Third
- -----------------------------------------------------------------------------------------------------------------------------------
High $ 20.430 $ 21.770 $ 20.310 $ 17.490 $ 19.280
Low 16.000 18.590 16.660 14.510 15.150
Close 18.190 19.420 19.700 17.190 17.310
Average Closing Price 19.142 20.089 18.332 16.269 17.696
Cash dividends declared $ 0.16 $ 0.16 $ 0.16 $ 0.16 $ 0.16
Note: Intra-day and closing stock price
quotations were obtained from NASDAQ.
- ------------------------------------------------------------------------------------------------------------------------------------
CAPITAL DATA - END OF PERIOD
2002 2001
- ------------------------------------------------------------------------------------------------ ---------------------------------
(in millions) THIRD (1) Second First Fourth Third
- -----------------------------------------------------------------------------------------------------------------------------------
Total Risk-Adjusted Assets $ 26,339 $ 25,309 $ 24,954 $ 27,896 $ 27,757
Tier 1 Risk-Based Capital Ratio 9.13% 9.72% 10.26% 7.24% 6.97%
Total Risk-Based Capital Ratio 12.09% 12.75% 13.40% 10.29% 10.13%
Tier 1 Leverage Ratio 9.41% 9.94% 9.72% 7.41% 7.10%
Tangible Equity / Asset Ratio 8.00% 8.51% 9.06% 6.12% 6.08%
- -----------------------------------------------------------------------------------------------------------------------------------
OTHER DATA - END OF PERIOD
2002 2001
- ------------------------------------------------------------------------------------------- --------------------------------
THIRD Second First Fourth Third
- ------------------------------------------------------------------------------------------------------------------------------------
Number of employees (full-time equivalent)
- ------------------------------------------
Huntington, excluding Florida operations sold 8,117 8,174 8,342 8,521 8,487
Florida operations sold (2) --- --- --- 1,222 1,232
- ----------------------------------------------------------------------------------------------------------------------------------
Total Huntington 8,117 8,174 8,342 9,743 9,719
- ----------------------------------------------------------------------------------------------------------------------------------
Number of domestic full-service banking offices
- -----------------------------------------------
Huntington, excluding Florida operations sold (3) 336 336 339 338 366
Florida operations sold --- --- --- 143 143
- ----------------------------------------------------------------------------------------------------------------------------------
Total Huntington (3) 336 336 339 481 509
- ----------------------------------------------------------------------------------------------------------------------------------
(1) Estimated.
(2) Excludes impact of support staff for Florida operations outside of Florida.
(3) Includes three Private Financial Group offices in Florida.
Page 9
SUPPLEMENTAL SELECTED INFORMATION -- OPERATING BASIS
EXCLUDES:
- RESULTS OF SOLD FLORIDA BANKING AND INSURANCE OPERATIONS
- FEBRUARY 2002 GAIN FROM SALE OF FLORIDA
BANKING OPERATIONS
- JULY 2002 GAIN FROM RESTRUCTURING OF
MERCHANT SERVICES BUSINESS
- RESTRUCTURING AND OTHER CHARGES
The results for the three months ended September 30, 2002 exclude the
pre-tax gain of $25.0 million on the restructuring of Huntington's
Merchant Services business. The related taxes for this transaction
amounted to $9.0 million. The same three-month period in 2001 excludes
$50.0 million of pre-tax restructuring and other charges and $17.8
million of related income taxes.
In addition to the Merchant Services gain, the first nine months of
2002 exclude the pre-tax impact of the $175.3 million gain on the sale
of the Florida banking operations along with $56.2 million of
restructuring and other charges and $98.9 million of related income
taxes. The first nine months of 2001 exclude $111.0 million of pre-tax
restructuring and other charges and $38.8 million of related income
taxes. All periods presented also exclude the results of the Florida
operations, including the J. Rolfe Davis Insurance Agency, Inc. up to
the date of sale in July 2002.
Page 10
HUNTINGTON BANCSHARES INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME
OPERATING BASIS (1)
THREE MONTHS ENDED SEPTEMBER 30, CHANGE
- ------------------------------------------------------------------------------------------- ------------------------------
(in thousands, except per share amounts) 2002 2001 Amount Percent
- ------------------------------------------------------------------------------------------- ------------------------------
Net Interest Income $ 249,416 $230,462 $ 18,954 8.2 %
Provision for loan losses 60,249 46,027 14,222 30.9
- ------------------------------------------------------------------------------------------- ------------------------------
NET INTEREST INCOME
AFTER PROVISION FOR LOAN LOSSES 189,167 184,435 4,732 2.6
- ------------------------------------------------------------------------------------------- ------------------------------
Total non-interest income 114,832 111,099 3,733 3.4
Total non-interest expense 193,723 187,054 6,669 3.6
- ------------------------------------------------------------------------------------------- ------------------------------
INCOME BEFORE INCOME TAXES 110,276 108,480 1,796 1.7
Income taxes 28,110 27,587 523 1.9
- ------------------------------------------------------------------------------------------- ------------------------------
NET INCOME $ 82,166 $ 80,893 $ 1,273 1.6 %
- ------------------------------------------------------------------------------------------- ------------------------------
PER COMMON SHARE
Net income
Basic $0.34 $0.32 $ 0.02 6.3 %
Diluted $0.34 $0.32 $ 0.02 6.3 %
Cash dividends declared $0.16 $0.16 $ --- $ --- %
AVERAGE COMMON SHARES
Basic 239,925 251,148 (11,223) (4.5)%
Diluted 241,357 252,203 (10,846) (4.3)%
- -----------------------------------------------------------------------------------------------------------------------------------
NINE MONTHS ENDED SEPTEMBER 30, CHANGE
- ------------------------------------------------------------------------------------------- ------------------------------
(in thousands, except per share amounts) 2002 2001 Amount Percent
- ------------------------------------------------------------------------------------------- ------------------------------
Net Interest Income $ 724,376 $678,363 $ 46,013 6.8 %
Provision for loan losses 164,736 117,673 47,063 40.0
- ------------------------------------------------------------------------------------------- ------------------------------
NET INTEREST INCOME
AFTER PROVISION FOR LOAN LOSSES 559,640 560,690 (1,050) (0.2)
- ------------------------------------------------------------------------------------------- ------------------------------
Total non-interest income 345,553 323,358 22,195 6.9
Total non-interest expense 572,959 573,314 (355) (0.1)
- ------------------------------------------------------------------------------------------- ------------------------------
INCOME BEFORE INCOME TAXES 332,234 310,734 21,500 6.9
Income taxes 88,847 82,784 6,063 7.3
- ------------------------------------------------------------------------------------------- ------------------------------
NET INCOME $ 243,387 $227,950 $ 15,437 6.8 %
- ------------------------------------------------------------------------------------------- ------------------------------
PER COMMON SHARE
Net income
Basic $0.99 $0.91 $ 0.08 8.8 %
Diluted $0.99 $0.91 $ 0.08 8.8 %
Cash dividends declared $0.48 $0.56 $ (0.08) (14.3)%
AVERAGE COMMON SHARES
Basic 245,554 251,039 (5,485) (2.2)%
Diluted 247,021 251,537 (4,516) (1.8)%
(1) See page 10 for definition of Operating Basis.
Page 11
HUNTINGTON BANCSHARES INCORPORATED
LOANS AND DEPOSITS
OPERATING BASIS (1)
2002 2001
- ------------------------------------------------------------------------------------------------- -------------------------------
(in thousands) THIRD Second First Fourth Third
- ------------------------------------------------------------------------------------------------- -------------------------------
LOAN PORTFOLIO COMPOSITION - AVERAGE
- ----------------------------------------------------
Commercial $ 5,502,183 $ 5,613,550 $ 5,661,005 $ 5,750,830 $ 5,945,639
Commercial real estate 3,745,799 3,652,906 3,601,097 3,467,082 3,314,778
- -----------------------------------------------------------------------------------------------------------------------------------
Total Commercial and Commercial Real Estate 9,247,982 9,266,456 9,262,102 9,217,912 9,260,417
- -----------------------------------------------------------------------------------------------------------------------------------
Consumer
Auto leases - Indirect 3,172,078 3,113,148 3,166,161 3,229,203 3,242,864
Auto loans - Indirect 2,792,757 2,596,908 2,559,700 2,489,183 2,445,459
Home equity 3,061,602 2,910,612 2,788,083 2,753,141 2,709,125
Residential mortgage 1,310,100 1,229,390 904,277 671,967 619,578
Other loans 404,896 413,975 424,111 445,740 458,999
- -----------------------------------------------------------------------------------------------------------------------------------
Total Consumer 10,741,433 10,264,033 9,842,332 9,589,234 9,476,025
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL LOANS $ 19,989,415 $ 19,530,489 $ 19,104,434 $ 18,807,146 $ 18,736,442
- -----------------------------------------------------------------------------------------------------------------------------------
LOAN PORTFOLIO COMPOSITION - END OF PERIOD
- ----------------------------------------------------
Commercial $ 5,684,168 $ 5,591,280 $ 5,681,788 $ 5,685,719 $ 5,912,371
Commercial real estate 3,768,554 3,699,424 3,645,114 3,555,354 3,432,502
- -----------------------------------------------------------------------------------------------------------------------------------
Total Commercial and Commercial Real Estate 9,452,722 9,290,704 9,326,902 9,241,073 9,344,873
- -----------------------------------------------------------------------------------------------------------------------------------
Consumer
Auto leases - Indirect 3,206,046 3,120,317 3,126,101 3,207,514 3,221,300
Auto loans - Indirect 2,907,417 2,630,541 2,561,936 2,501,054 2,509,504
Home equity 3,134,529 2,990,726 2,830,814 2,754,612 2,742,016
Residential mortgage 1,355,326 1,210,991 1,075,141 736,802 652,373
Other loans 399,466 408,891 418,053 437,293 475,552
- -----------------------------------------------------------------------------------------------------------------------------------
Total Consumer 11,002,784 10,361,466 10,012,045 9,637,275 9,600,745
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL LOANS $ 20,455,506 $ 19,652,170 $ 19,338,947 $ 18,878,348 $ 18,945,618
- -----------------------------------------------------------------------------------------------------------------------------------
DEPOSIT COMPOSITION - AVERAGE
- ----------------------------------------------------
Demand deposits
Non-interest bearing $ 2,867,573 $ 2,738,621 $ 2,737,978 $ 2,824,035 $ 2,761,240
Interest bearing 5,269,186 4,920,120 4,362,050 4,013,874 3,687,335
Savings deposits 2,765,886 2,807,874 2,829,922 2,862,649 2,922,867
Other domestic time deposits 4,167,451 4,218,104 4,097,383 4,123,478 4,126,677
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL CORE DEPOSITS (2) 15,070,096 14,684,719 14,027,333 13,824,036 13,498,119
- -----------------------------------------------------------------------------------------------------------------------------------
Domestic time deposits of $100,000 or more 776,600 852,407 958,812 1,007,978 1,053,133
Brokered time deposits and negotiable CDs 906,598 649,340 301,612 108,591 119,646
Foreign time deposits 370,313 296,428 267,512 223,675 249,753
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DEPOSITS $ 17,123,607 $ 16,482,894 $ 15,555,269 $ 15,164,280 $ 14,920,651
- -----------------------------------------------------------------------------------------------------------------------------------
DEPOSIT COMPOSITION - END OF PERIOD
- ----------------------------------------------------
Demand deposits
Non-interest bearing $ 2,949,065 $ 2,769,936 $ 2,857,233 $ 2,997,449 $ 2,889,319
Interest bearing 5,203,413 5,105,196 4,747,283 4,197,893 3,841,646
Savings deposits 2,849,060 2,839,115 2,895,445 2,943,508 2,929,922
Other domestic time deposits 4,071,082 4,238,688 4,179,814 4,077,510 4,214,865
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL CORE DEPOSITS (2) 15,072,620 14,952,935 14,679,775 14,216,360 13,875,752
- -----------------------------------------------------------------------------------------------------------------------------------
Domestic time deposits of $100,000 or more 754,115 765,163 895,427 944,361 1,114,421
Brokered time deposits and negotiable CDs 979,075 849,347 451,173 137,915 128,878
Foreign time deposits 312,001 293,655 240,410 220,749 359,452
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DEPOSITS $ 17,117,811 $ 16,861,100 $ 16,266,785 $ 15,519,385 $ 15,478,503
- -----------------------------------------------------------------------------------------------------------------------------------
(1) See page 10 for definition of Operating Basis.
(2) Core deposits include non-interest bearing and interest bearing demand
deposits, savings deposits, CDs under $100,000, and IRA deposits.
Page 12
HUNTINGTON BANCSHARES INCORPORATED
- ------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED QUARTERLY AVERAGE BALANCE SHEETS
OPERATING BASIS (1)
(IN MILLIONS)
2002 2001
- ---------------------------------------------------------- --------------------------------------- -------------------------
Fully Tax Equivalent Basis (2) THIRD Second First Fourth Third
- ------------------------------------------------------------------------------------------------------------------------------
ASSETS
Interest bearing deposits in banks $ 35 $ 29 $ 34 $ 14 $ 5
Trading account securities 7 6 5 8 8
Federal funds sold and securities purchased
under resale agreements 76 68 62 86 86
Mortgages held for sale 267 174 381 433 344
Securities:
Taxable 2,953 2,735 2,713 2,720 2,896
Tax exempt 108 96 102 108 140
- ------------------------------------------------------------------------------------------------------------------------------
Total Securities 3,061 2,831 2,815 2,828 3,036
- ------------------------------------------------------------------------------------------------------------------------------
Loans:
Commercial 5,502 5,614 5,661 5,751 5,946
Real Estate (3)
Construction 1,430 1,420 1,405 1,386 1,281
Commercial 2,316 2,233 2,196 2,081 2,034
Consumer
Auto leases - Indirect 3,172 3,113 3,166 3,229 3,243
Auto loans - Indirect 2,793 2,597 2,560 2,489 2,445
Home equity 3,062 2,911 2,788 2,753 2,709
Residential mortgage 1,310 1,229 904 672 619
Other loans 404 413 424 446 459
- ------------------------------------------------------------------------------------------------------------------------------
Total Consumer 10,741 10,263 9,842 9,589 9,475
- ------------------------------------------------------------------------------------------------------------------------------
Total Loans 19,989 19,530 19,104 18,807 18,736
- ------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses 406 400 403 371 315
- ------------------------------------------------------------------------------------------------------------------------------
Net loans 19,583 19,130 18,701 18,436 18,421
- ------------------------------------------------------------------------------------------------------------------------------
Total earning assets 23,435 22,638 22,401 22,176 22,215
- ------------------------------------------------------------------------------------------------------------------------------
Cash and due from banks 763 722 774 798 831
Intangible assets 202 213 210 211 215
All other assets 1,784 1,784 1,798 1,799 1,787
- ------------------------------------------------------------------------------------------------------------------------------
Total Assets $ 25,778 $24,957 $24,780 $ 24,613 $24,733
- ------------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Core deposits
Non-interest bearing deposits $ 2,868 $ 2,739 $ 2,738 $ 2,824 $ 2,761
Interest bearing demand deposits 5,269 4,920 4,362 4,014 3,687
Savings deposits 2,766 2,808 2,830 2,863 2,923
Other domestic time deposits 4,167 4,218 4,097 4,123 4,127
- ------------------------------------------------------------------------------------------------------------------------------
Total core deposits 15,070 14,685 14,027 13,824 13,498
- ------------------------------------------------------------------------------------------------------------------------------
Domestic time deposits of $100,000 or more 777 852 959 1,008 1,053
Brokered time deposits and negotiable CDs 907 649 302 109 120
Foreign time deposits 370 296 268 224 250
- ------------------------------------------------------------------------------------------------------------------------------
Total deposits 17,124 16,482 15,556 15,165 14,921
- ------------------------------------------------------------------------------------------------------------------------------
Short-term borrowings 2,108 1,886 1,925 1,745 1,998
Medium-term notes 1,752 1,910 2,645 3,272 3,443
Federal Home Loan Bank advances 228 14 17 17 17
Subordinated notes and other long-term debt,
including preferred capital securities 1,215 1,215 1,215 1,166 1,167
- ------------------------------------------------------------------------------------------------------------------------------
Total interest bearing liabilities 19,559 18,768 18,620 18,541 18,785
- ------------------------------------------------------------------------------------------------------------------------------
All other liabilities 1,073 1,107 1,052 887 812
Shareholders' equity 2,278 2,343 2,370 2,361 2,375
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 25,778 $24,957 $24,780 $ 24,613 $24,733
- ------------------------------------------------------------------------------------------------------------------------------
(1) See page 10 for definition of Operating Basis.
(2) Fully tax equivalent yields are calculated assuming a 35% tax rate.
(3) Third quarter 2002 includes reclassification of $186 million in construction
loans to commercial real estate due to September 2002 correction of an error
involving construction loans with original maturities over 5 years.
Page 13
HUNTINGTON BANCSHARES INCORPORATED
- --------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED QUARTERLY NET INTEREST MARGIN ANALYSIS
OPERATING BASIS (1)
(IN MILLIONS)
AVERAGE RATES (4)
--------------------------------------------------------------------
2002 2001
- ---------------------------------------------------------- ---------------------------------------- --------------------------
Fully Tax Equivalent Basis (2) THIRD Second First Fourth Third
- --------------------------------------------------------------------------------------------------------------------------------
ASSETS
Interest bearing deposits in banks 2.06 % 2.44 % 2.02 % 2.09 % 3.75 %
Trading account securities 4.95 5.37 2.79 3.59 3.83
Federal funds sold and securities purchased
under resale agreements 1.40 1.51 1.43 2.18 3.20
Mortgages held for sale 6.57 7.07 6.51 6.64 7.18
Securities:
Taxable 6.01 6.33 6.43 6.62 6.71
Tax exempt 7.52 7.69 7.76 7.81 7.38
- --------------------------------------------------------------------------------------------------------------------------------
Total Securities 6.07 6.37 6.48 6.66 6.75
- --------------------------------------------------------------------------------------------------------------------------------
Loans:
Commercial 5.46 5.50 5.37 5.81 6.93
Real Estate
Construction 4.62 4.81 4.91 5.49 6.60
Commercial 6.16 6.36 6.66 6.88 7.58
Consumer
Auto leases - Indirect 6.23 6.42 6.62 6.58 6.67
Auto loans - Indirect 7.75 7.98 7.98 8.29 8.61
Home equity 5.62 5.72 6.09 7.05 7.73
Residential mortgage 5.98 6.23 6.60 7.10 7.55
Other loans 7.41 7.47 7.64 8.26 8.04
- --------------------------------------------------------------------------------------------------------------------------------
Total Consumer 6.47 6.64 6.86 7.27 7.59
- --------------------------------------------------------------------------------------------------------------------------------
Total Loans 6.02 6.15 6.25 6.65 7.32
- --------------------------------------------------------------------------------------------------------------------------------
Loan fees 0.61 0.55 0.49 0.53 0.56
- --------------------------------------------------------------------------------------------------------------------------------
Total Loans with fees (3) 6.63 6.70 6.74 7.18 7.88
- --------------------------------------------------------------------------------------------------------------------------------
Total earning assets 6.52 % 6.64 % 6.68 % 7.08 % 7.69 %
- --------------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Core deposits
Non-interest bearing deposits
Interest bearing demand deposits 1.77 % 1.84 % 1.79 % 1.93 % 2.73 %
Savings deposits 1.81 1.83 1.85 2.08 3.04
Other domestic time deposits 4.40 4.61 4.99 5.18 5.52
- --------------------------------------------------------------------------------------------------------------------------------
Total core deposits 2.17 2.29 2.39 2.54 3.09
- --------------------------------------------------------------------------------------------------------------------------------
Domestic time deposits of $100,000 or more 3.29 2.82 2.91 4.66 4.70
Brokered time deposits and negotiable CDs 2.37 2.48 2.48 3.55 4.42
Foreign time deposits 1.43 1.38 1.92 1.99 3.40
- --------------------------------------------------------------------------------------------------------------------------------
Total deposits 2.22 2.31 2.41 2.68 3.22
- --------------------------------------------------------------------------------------------------------------------------------
Short-term borrowings 1.88 1.97 2.39 2.73 3.75
Medium-term notes 3.37 3.21 3.00 3.45 4.82
Federal Home Loan Bank advances 2.04 5.97 6.10 6.10 6.10
Subordinated notes and other long-term debt,
including preferred capital securities 3.99 4.03 4.12 4.94 5.17
- --------------------------------------------------------------------------------------------------------------------------------
Total interest bearing liabilities 2.73 % 2.82 % 2.96 % 3.37 % 4.17 %
- --------------------------------------------------------------------------------------------------------------------------------
Net interest rate spread 3.79 % 3.82 % 3.72 % 3.71 % 3.52 %
Impact of non-interest bearing funds on margin 0.47 0.48 0.49 0.55 0.65
- --------------------------------------------------------------------------------------------------------------------------------
NET INTEREST MARGIN 4.26 % 4.30 % 4.21 % 4.26 % 4.17 %
- --------------------------------------------------------------------------------------------------------------------------------
(1) See page 10 for definition of Operating Basis.
(2) Fully tax equivalent yields are calculated assuming a 35% tax rate.
(3) Total loans with fees rate includes loan fees, whereas individual loan
components above are shown exclusive of fees.
(4) Loan and deposit average rates include impact of applicable derivatives.
Page 14
HUNTINGTON BANCSHARES INCORPORATED
SELECTED QUARTERLY INCOME STATEMENT DATA
OPERATING BASIS (1)
2002 2001
- ----------------------------------------------------------------------------------------------- -------------------------------
(in thousands, except per share amounts) THIRD Second First Fourth Third
- ----------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME $ 249,416 $ 241,859 $233,101 $235,546 $230,462
Provision for loan losses 60,249 53,892 50,595 54,281 46,027
- ----------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 189,167 187,967 182,506 181,265 184,435
- ----------------------------------------------------------------------------------------------------------------------------------
Service charges on deposit accounts 37,460 35,354 34,282 35,220 33,593
Trust services 14,997 16,247 15,096 14,679 14,816
Brokerage and insurance income 13,943 14,967 14,587 15,066 13,943
Bank Owned Life Insurance income 11,443 11,443 11,676 9,560 9,560
Other service charges and fees 10,837 10,529 9,118 9,582 9,547
Mortgage banking 6,289 10,725 19,644 15,049 13,859
Other 18,723 15,039 10,591 15,135 14,722
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST INCOME BEFORE SECURITIES GAINS 113,692 114,304 114,994 114,291 110,040
Securities gains 1,140 966 457 89 1,059
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST INCOME 114,832 115,270 115,451 114,380 111,099
- ----------------------------------------------------------------------------------------------------------------------------------
Personnel costs 107,477 103,589 104,320 100,076 101,866
Equipment 17,378 16,608 15,582 18,117 17,580
Outside data processing and other services 15,128 16,592 17,097 15,414 14,650
Net occupancy 14,815 14,642 14,771 15,251 14,481
Marketing 7,491 7,219 7,174 5,305 5,717
Professional services 6,083 6,265 5,242 6,069 5,754
Telecommunications 5,609 5,302 5,282 5,647 5,728
Printing and supplies 3,679 3,671 3,519 3,511 3,693
Franchise and other taxes 2,283 2,313 2,326 2,885 2,439
Amortization of intangible assets 204 203 251 2,555 2,569
Other 13,576 13,781 13,487 12,599 12,577
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST EXPENSE 193,723 190,185 189,051 187,429 187,054
- ----------------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 110,276 113,052 108,906 108,216 108,480
Income taxes 28,110 31,344 29,393 28,631 27,587
- ----------------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 82,166 $ 81,708 $ 79,513 $ 79,585 $ 80,893
- ----------------------------------------------------------------------------------------------------------------------------------
NET INCOME PER COMMON SHARE - DILUTED $0.34 $0.33 $0.32 $0.32 $0.32
RETURN ON
Average total assets 1.26% 1.31% 1.30% 1.28% 1.30%
Average total shareholders' equity 14.3% 14.0% 13.6% 13.4% 13.5%
Net interest margin (2) 4.26% 4.30% 4.21% 4.26% 4.17%
Efficiency ratio 53.1% 53.2% 54.1% 52.7% 54.0%
Effective tax rate 25.5% 27.7% 27.0% 26.5% 25.4%
REVENUE - FULLY TAXABLE EQUIVALENT (FTE)
Net Interest Income $ 249,416 $ 241,859 $233,101 $235,546 $230,462
Tax Equivalent Adjustment (2) 1,096 1,071 1,169 1,292 1,442
- ----------------------------------------------------------------------------------------------------------------------------------
Net Interest Income 250,512 242,930 234,270 236,838 231,904
Non-Interest Income 114,832 115,270 115,451 114,380 111,099
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL REVENUE $ 365,344 $ 358,200 $349,721 $351,218 $343,003
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL REVENUE EXCLUDING SECURITIES GAINS $ 364,204 $ 357,234 $349,264 $351,129 $341,944
- ----------------------------------------------------------------------------------------------------------------------------------
(1) See page 10 for definition of Operating Basis.
(2) Calculated assuming a 35% tax rate.
Page 15
HUNTINGTON BANCSHARES INCORPORATED
LOAN LOSS RESERVE AND NET CHARGE-OFF ANALYSIS
OPERATING BASIS (1)
2002 2001
- ------------------------------------------------------------------------------------------------- ---------------------------------
(in thousands) THIRD Second First Fourth Third
- -----------------------------------------------------------------------------------------------------------------------------------
ALLOWANCE FOR LOAN LOSSES, BEGINNING OF PERIOD $393,011 $386,053 $386,956 $334,827 $326,495
Loan losses (56,591) (57,482) (60,191) (60,110) (45,063)
Recoveries of loans previously charged off 12,891 12,582 10,915 9,961 8,981
- -----------------------------------------------------------------------------------------------------------------------------------
Net loan losses (43,700) (44,900) (49,276) (50,149) (36,082)
- -----------------------------------------------------------------------------------------------------------------------------------
Provision for loan losses 60,249 53,892 50,595 104,281 (2) 46,027
Allowance of assets purchased 1,264 --- --- --- ---
Allowance of securitized loans (2,446) (2,034) (2,222) (2,003) (1,613)
- -----------------------------------------------------------------------------------------------------------------------------------
ALLOWANCE FOR LOAN LOSSES, END OF PERIOD $408,378 $393,011 $386,053 $386,956 $334,827
- -----------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses as a % of total loans 2.00 % 2.00 % 2.00 % 2.05 % 1.77 %
Allowance for loan losses as a % of non-performing loans 200.7 % 185.3 % 175.9 % 181.4 % 173.4 %
Allowance for loan losses as a % of non-performing assets 190.7 % 176.1 % 171.2 % 176.2 % 166.4 %
NET CHARGE-OFFS BY LOAN TYPE
Commercial $ 16,808 $ 21,468 $ 16,092 $ 19,475 $ 8,755
Commercial real estate 4,085 2,037 3,723 867 3
- -----------------------------------------------------------------------------------------------------------------------------------
Total commercial and commercial real estate 20,893 23,505 19,815 20,342 8,758
- -----------------------------------------------------------------------------------------------------------------------------------
Consumer
Auto leases 10,117 8,401 12,809 12,634 10,395
Auto loans 6,869 5,733 8,888 8,474 5,351
- -----------------------------------------------------------------------------------------------------------------------------------
Total auto leases and loans 16,986 14,134 21,697 21,108 15,746
- -----------------------------------------------------------------------------------------------------------------------------------
Home equity 2,934 3,096 2,814 3,313 3,772
Residential mortgage 123 555 104 370 93
Other loans 907 1,225 1,098 1,388 527
- -----------------------------------------------------------------------------------------------------------------------------------
Total consumer 20,950 19,010 25,713 26,179 20,138
- -----------------------------------------------------------------------------------------------------------------------------------
Total net charge-off, excluding exited businesses 41,843 42,515 45,528 46,521 28,896
Net charge-offs related to exited businesses 1,857 2,385 3,748 3,628 7,186
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL NET CHARGE-OFFS INCLUDING EXITED BUSINESSES $ 43,700 $ 44,900 $ 49,276 $ 50,149 $ 36,082
- -----------------------------------------------------------------------------------------------------------------------------------
NET CHARGE-OFFS - ANNUALIZED PERCENTAGES
Commercial 1.21 % 1.53 % 1.15 % 1.34 % 0.58 %
Commercial real estate 0.43 0.22 0.42 0.10 0.00
- -----------------------------------------------------------------------------------------------------------------------------------
Total commercial and commercial real estate 0.90 1.02 0.87 0.88 0.38
- -----------------------------------------------------------------------------------------------------------------------------------
Consumer
Auto leases 1.27 1.08 1.64 1.55 1.27
Auto loans 1.01 0.92 1.47 1.43 0.93
- -----------------------------------------------------------------------------------------------------------------------------------
Total auto leases and loans 1.15 1.01 1.57 1.50 1.13
- -----------------------------------------------------------------------------------------------------------------------------------
Home equity 0.38 0.43 0.41 0.48 0.55
Residential mortgage 0.04 0.18 0.05 0.22 0.06
Other loans 0.91 1.22 1.09 1.29 0.48
- -----------------------------------------------------------------------------------------------------------------------------------
Total consumer 0.78 0.75 1.07 1.10 0.86
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL NET CHARGE-OFFS EXCLUDING EXITED BUSINESSES 0.83 % 0.88 % 0.97 % 0.99 % 0.62 %
Net charge-offs related to exited businesses 0.03 0.04 0.07 0.07 0.15
- -----------------------------------------------------------------------------------------------------------------------------------
NET CHARGE-OFFS AS A % OF AVERAGE LOANS - INCLUDING
EXITED BUSINESSES (3) 0.87 % 0.92 % 1.05 % 1.06 % 0.76 %
- -----------------------------------------------------------------------------------------------------------------------------------
(1) See page 10 for definition of Operating Basis.
(2) Includes provision of $50.0 million recorded to increase the loan loss
reserve in light of the higher charge-offs and non-performing assets
experienced in the second half of 2001.
(3) Exited businesses include Second Tier auto and Truck and Equipment lending.
Page 16
HUNTINGTON BANCSHARES INCORPORATED
NON-PERFORMING ASSETS AND PAST DUE LOANS
OPERATING BASIS (1)
2002 2001
- ------------------------------------------------------------------------------------------- ----------------------------------
(in thousands) THIRD Second First Fourth Third
- --------------------------------------------------------------------------------------------------------------------------------
Non-accrual loans:
Commercial $ 147,392 $ 156,252 $ 162,959 $ 155,720 $ 143,132
Commercial real estate 47,537 45,795 43,295 45,180 37,772
Residential mortgage 8,488 8,776 11,896 11,086 10,923
- --------------------------------------------------------------------------------------------------------------------------------
Total Nonaccrual Loans 203,417 210,823 218,150 211,986 191,827
Renegotiated loans 37 1,268 1,268 1,276 1,286
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-PERFORMING LOANS 203,454 212,091 219,418 213,262 193,113
Other real estate, net 10,675 11,146 6,112 6,384 8,050
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-PERFORMING ASSETS $ 214,129 $ 223,237 $ 225,530 $ 219,646 $ 201,163
- --------------------------------------------------------------------------------------------------------------------------------
Non-performing loans as a % of total loans 0.99% 1.08% 1.13% 1.13% 1.02%
Non-performing assets as a % of total loans
and other real estate 1.05% 1.14% 1.17% 1.16% 1.06%
ACCRUING LOANS PAST DUE 90 DAYS OR MORE $ 68,262 $ 58,449 $ 61,746 $ 76,295 $ 79,339
- --------------------------------------------------------------------------------------------------------------------------------
(1) See page 10 for definition of Operating Basis.
Page 17