EXHIBIT 99.1
FOR IMMEDIATE RELEASE
JANUARY 16, 2003
CONTACTS:
Analysts Media
Jay Gould (614) 480-4060 Jeri Grier (614) 480-5413
Susan Stuart (614) 480-3878 Karen Del Toro (614) 480-3077
HUNTINGTON BANCSHARES REPORTS
2002 FOURTH QUARTER AND FULL YEAR RESULTS
- FOURTH QUARTER $0.36 GAAP EARNINGS PER SHARE
- FULL YEAR $1.49 GAAP EARNINGS PER SHARE / $1.35 OPERATING EARNINGS PER SHARE
ANNOUNCES NEW 8 MILLION SHARE REPURCHASE AUTHORIZATION
PROVIDES 2003 EARNINGS OUTLOOK OF $1.50-$1.53 PER SHARE
COLUMBUS, Ohio - Huntington Bancshares Incorporated (NASDAQ: HBAN;
www.huntington.com) today reported 2002 fourth quarter and full year earnings.
GAAP EARNINGS
Fourth quarter GAAP earnings were $85.1 million, or $0.36 per common share.
This compares with GAAP earnings of $65.6 million, or $0.26 per common share, in
the year-ago fourth quarter, and $98.1 million, or $0.41 per common share, in
the third quarter of 2002. Full year 2002 GAAP earnings were $363.2 million, or
$1.49 per common share, compared with $178.5 million, or $0.71 per common share,
in 2001.
OPERATING EARNINGS(1)
Fourth quarter earnings of $85.1 million, or $0.36 per common share, were
up 7% and 13%, respectively, from the year-ago fourth quarter operating earnings
of $79.6 million, or $0.32 per common share, and up 4% and 6%, respectively,
from third quarter 2002 operating earnings of $82.2 million, or $0.34 per common
share. Full year 2002 operating earnings of $328.5 million, or $1.35 per common
share, were up 7% and 11%, respectively, from full year 2001 operating earnings
of $307.5 million or $1.22 per common share.
- 1 -
(1) Results from the 2001 second quarter through the third quarter of 2002 were
significantly impacted by a number of non-operating items, primarily
related to the strategic restructuring announced in July 2001 and the
subsequent sale of the Florida banking and insurance operations in the 2002
first quarter. Therefore, solely for analytical purposes and as an aid to
better understand underlying trends, certain data are presented on an
operating basis which excludes the impact of restructuring and other
charges, the gain from the sale of Florida banking operations and its
related run-rate impact from prior periods, and other non-operating items.
(Please refer to the schedules beginning on page 10, as well as the 2002
fourth quarter's Quarterly Financial Review for schedules reconciling
reported with operating earnings and additional schedules that exclude the
impact of the sold Florida operations.)
MANAGEMENT COMMENTS
"A year ago we established a 2002 operating earnings target of $1.32-$1.36
per share," said Thomas Hoaglin, chairman, president and chief executive
officer. "While this was an ambitious goal given the uncertain economic
environment and the fact that we were only in the very early stages of our
turnaround, we are extremely pleased to report full-year operating earnings at
the top end of that range. These results confirm the progress we have made thus
far in improving Huntington's operating performance."
"Looking at fourth quarter performance, strong loan growth was again a
highlight," he continued. "This reflected continued good growth in consumer
loans, most notably mortgages and home equity-related loans. Total commercial
and commercial real estate loans also increased. Excluding retail certificates
of deposit, average core deposits increased 3% annualized during the quarter and
were up 13% from a year ago. The just-released FDIC deposit data shows an
increase in deposit market share in all our states and major markets as of June
2002."
"Another highlight in the quarter was the 9% growth in non-interest income
driven by increases in deposit service charges, brokerage and insurance income,
and mortgage banking income, all of which are core fee income categories.
Expenses grew 5% from the third quarter, primarily reflecting higher personnel
costs related to incentive compensation and benefits."
- 2 -
"The credit actions we announced last week accelerating the disposition and
resolution of selected problem credits was a significant achievement," he
continued. "Importantly, our efforts over the last 18 months in improving our
credit culture, tightening underwriting standards and practices, and
strengthening our reserves, positioned us to take advantage of an economically
attractive opportunity to accelerate the disposition of these problem assets. As
a result, we enter 2003 from a stronger overall credit quality position,
including non-performing coverage and loan loss reserve ratios significantly
better than the median of our peer bank competitors."
"On the strategic front, we completed installation of our new customer
service technology in all our banking offices. This was a yearlong undertaking
involving hundreds of employees and, thanks to their efforts, was successfully
completed on time and under budget. Today, every front-line banking office
associate is better equipped with the technology needed to serve our customers."
"Lastly, we repurchased 4.2 million Huntington shares, bringing the 2002
purchases to 19.2 million shares at a value of $370 million," he concluded.
DISCUSSION OF RESULTS - ON AN OPERATING BASIS
Fourth quarter 2002 results compared with sequential third quarter
performance on an operating basis reflected:
- 13% annualized growth in managed loans reflecting growth in home
equity, residential mortgage, auto loans and leases, and total
commercial and commercial real estate loans
- 4.07% net interest margin, down from 4.26%
- 9% increase in non-interest income despite a $6.2 million pre-tax
mortgage servicing impairment
- 5% increase in non-interest expense and a 54.0% efficiency ratio, up
from 53.1%
- 1.76% loan loss reserve to loans ratio, down from 2.00%
- 269% non-performing assets coverage ratio, up from 191%
- 7.62% tangible common equity ratio, down from 8.00%
- 3 -
- Repurchased 4.2 million common shares bringing 2002 repurchases to
19.2 million shares at a cost of $370 million
Net interest income increased $0.3 million from the third quarter
reflecting the benefit of a $1.1 billion, or 5%, increase in average earning
assets due to growth in both loans and securities, mostly offset by a 4%
decrease in the margin. The net interest margin declined to 4.07% from 4.26%.
The decline was driven by a number of factors including the inability to fully
reflect the latest reduction in market rates in our deposit prices, growth in
lower rate, but higher quality, auto loans and leases, and heavy prepayments of
higher rate mortgages. Compared with the year-ago fourth quarter, net interest
income was up $14.2 million, or 6%, reflecting the combination of an 11%
increase in average earning assets, partially offset by a 4% decline in the net
interest margin from 4.26%.
Adjusting for any acquired, securitized, and sold portfolios, average
managed loans increased 13% on an annualized basis from the third quarter
impacted by a 20% annualized growth in consumer loans. Average residential
mortgages grew 72% annualized, reflecting continued strong demand for
residential mortgages and the promotion of adjustable rate mortgage products.
Average home equity loans and lines of credit increased 17% annualized with
average managed auto loans and leases up 12% annualized. Total average
commercial and commercial real estate loans increased 4% annualized reflecting
seasonal growth in dealer floor plan loans, as well as growth in small business
loans. Compared with the year-ago quarter, total average managed loans were up
10%.
Although interest rates are at low absolute levels, retail certificates of
deposit (CDs) are currently a relatively expensive source of funds. Other more
attractive funding sources were being emphasized which resulted in average
retail CD balances declining $149 million. Total core deposits, excluding retail
CDs, increased $90 million, or 3%, annualized.
Non-interest income, excluding securities gains, was up $10.0 million, or
9%, from the third quarter. This increase was spread over a number of core fee
income categories. Service charges on deposit accounts increased $3.7 million,
or 10%. Brokerage and insurance income increased $2.5 million, or 18%, driven
primarily by capital market activities. Mortgage banking income increased $5.1
million despite mortgage servicing rights impairment. Such impairments were
- 4 -
$6.2 million and $6.6 million in the fourth and third quarters, respectively.
These impairments reflected unusually high loan prepayment activity over the
second half of 2002, due to the rapidly declining interest rate environment.
Compared with the year-ago quarter, non-interest income excluding
securities gains was up 8%. Primarily contributing to this year-over-year
increase were a 17% increase in deposit service charges, a 9% increase in
brokerage and insurance income, a 20% increase in bank owned life insurance
income, a 14% increase in other service charges, primarily electronic banking
fees, and a 12% increase in other income. These increases were partially offset
by a 24% decline in mortgage banking income caused primarily by mortgage
servicing rights impairment in the 2002 fourth quarter.
Non-interest expense was up $9.0 million, or 5%, from the third quarter
driven primarily by a $6.4 million, or 6%, increase in personnel costs. This
increase reflected higher performance-based compensation and higher benefit
expenses. Also contributing to the linked-quarter increase was a $2.1 million
increase in outside data processing and other services, reflecting volume driven
costs, especially in the mortgage company, and a $1.9 million increase in
professional services influenced by costs supporting the fourth quarter credit
actions. These increases were partially offset by declines in net occupancy and
marketing expenses of $1.4 million and $1.3 million, respectively.
Compared with the 2001 fourth quarter, non-interest expense was up $15.3
million, or 8%, primarily due to a $13.8 million, or 14%, increase in personnel
cost. Contributing equally to this increase were salary expense, incentive
compensation, and benefit costs. The increased salary expense reflected higher
staffing levels associated with the broad-based strengthening of the management
team, including the credit workout area. Higher sales commissions were reflected
across all lines of business. Outside data processing and other services was up
$1.8 million, or 12%, and professional services increased $2.0 million, or 32%.
These increases were influenced by the same factors affecting linked quarter
comparisons. Net occupancy expense decreased $1.8 million, or 12%, while the
amortization of intangible expense declined $2.4 million due the implementation
of SFAS 142, Goodwill and Other Intangible Assets, at the beginning of 2002.
- 5 -
The fourth quarter efficiency ratio increased to 54.0% from 53.1% in the
third quarter and 52.7% in the year-ago quarter.
Net charge-offs for the 2002 fourth quarter were $94.9 million, or an
annualized 1.84%, including the $51.3 million in charge-offs associated with the
fourth quarter credit actions previously announced January 7, 2003, and recapped
below. Excluding these charge-offs, net charge-offs were $43.6 million and
represented an annualized 0.84% of average loans. This performance was
essentially flat with third quarter performance of $43.7 million and an
annualized 0.87% of average loans. Excluding the impact of the fourth quarter
credit actions, as well as the net charge-offs on exited portfolios for which
reserves were previously established, net charge-offs represented 0.81% of
average loans, down from 0.83% in the third quarter.
The over 30-day delinquent but still accruing ratio for total loans
decreased 12 basis points to 1.70% at the end of the fourth quarter from 1.82%
at the end of the third quarter. This reflected an improvement in the total
commercial and commercial real estate delinquency ratio to 1.00% from 1.45%,
partially offset by an increase in consumer delinquencies to 2.26% from 2.11%.
Loan loss provision expense in the fourth quarter was $57.4 million,
exceeding the adjusted $43.6 million in net charge-offs by $13.8 million, or
32%. The December 31, 2002, allowance for loan losses as a percent of period-end
loans was 1.76%, down from the 2.00% level at September 30, 2002, reflecting the
impact of the fourth quarter credit actions, and compares to 2.05% a year ago.
The allowance for loan losses as a percent of non-performing assets increased to
269% at December 31, 2002, from 191% at the end of the third quarter and 176% at
the end of the prior year.
Non-performing assets at December 31, 2002 were $136.7 million and
represented 0.65% of period-end loans and other real estate owned. This was down
from $214.1 million, or 1.05%, at September 30, 2002, and $219.6 million, or
1.16%, at the end of last year. The $77.4 million decline in non-performing
assets from September 30, 2002 included the $47.2 million sale of non-performing
assets as part of the fourth quarter credit actions, plus the net $30.2 million
reduction in other non-performing assets during the quarter. Year end
non-performing assets continued to be concentrated in the manufacturing and
services sectors.
- 6 -
2002 FOURTH QUARTER CREDIT ACTIONS
As announced January 7, 2003, fourth quarter credit quality results were
significantly impacted by two credit actions. The first was the sale of $47.2
million in non-performing assets with $21.4 million of related charge-offs. The
second was the full charge-off of a $29.9 million credit exposure to one health
care finance company that was classified as a non-performing asset in November
2002. These two actions resulted in $51.3 million of charge-offs in the fourth
quarter. The $29.9 million health care credit had no impact on non-performing
asset comparisons between September 30, 2002 and December 31, 2002, as this
asset went on non-performing status and was subsequently charged-off within the
fourth quarter. These credit actions had no fourth quarter net earnings impact,
as existing reserves were sufficient to absorb the $51.3 million in charge-offs.
CAPITAL MANAGEMENT / NEW SHARE REPURCHASE AUTHORIZATION
At December 31, 2002, the tangible equity to assets ratio was 7.62%, down
from 8.00% at September 30, 2002. This decrease reflected the impact of the
company's share repurchase program and growth in assets, partially offset by
earnings growth. During the quarter 4.2 million shares were repurchased,
bringing the full-year repurchases to 19.2 million shares at a cost of $370
million.
Huntington's board of directors has authorized a new share repurchase
program of up to 8 million shares. This represents 3% of the 232.9 million
shares outstanding on December 31, 2002, and $153 million worth of stock based
on the closing price of $19.11 on January 15, 2003. Purchases will be made from
time-to-time in the open market or through privately negotiated transactions
depending upon market conditions. The earlier share repurchase authorization of
February 2002, with approximately 2.6 million shares remaining, was cancelled
and replaced by this new program.
"Maintaining an open share repurchase authorization provides a useful and
shareholder-beneficial capital management tool," said Hoaglin, "and our current
authorization was approaching fulfillment. We expect to repurchase the balance
of the shares not purchased under the cancelled program, although we have no
specific timetable for completing the full program.
- 7 -
Shares will be purchased from time to time as warranted by a number of factors
including market conditions and management of capital resources."
"There have been a lot of strategic changes at Huntington over the last 18
months," he said. "Most important was the sale of the Florida banking operations
and the resultant recapitalization of the company. The proceeds from this sale
raised the tangible equity to asset ratio to 9.06% at the end of the first
quarter. The repurchase of our stock during 2002 reduced this ratio to 7.62% at
the end of the year. An important objective of the strategic restructuring plan
was to position the company to have the flexibility that comes with being well
capitalized. To that end, we are targeting a long-term tangible equity to asset
ratio of 7.00%. This compares favorably with the 6.50%-6.75% level of other,
comparably sized and rated, bank holding companies. We view this as a long-term
target and not one we expect to hit every quarter."
2003 OUTLOOK
"The direction of the economy and interest rates will remain significant
factors on 2003 performance," said Hoaglin. "Our planning assumptions are that
over the course of the year, and mostly in the second half, we will see slight
economic improvement in all our markets. Interest rates are expected to remain
at relatively low levels, though a slight pick-up late in the year is probable."
"Net interest income is expected to improve modestly. While we expect
continued loan growth, pressure on the net interest margin will be a dampening
factor on net interest income growth. Consumer loan growth is again expected to
do well though it will likely moderate from 2002 growth rates. Further, we are
targeting modest commercial loan growth as our small business banking initiative
gathers momentum. Non-interest income growth is also expected, led by service
charges and broker and insurance income increases; however mortgage banking
income will most likely decline given the heavy refinancing activity of the last
18 months."
- 8 -
"Expenses will increase reflecting a number of factors including the costs
of our investment in staff and technology this past year, higher pension and
benefit expense, and plans to add a few new branches. On the credit quality
front, we anticipate continued improvement including lower underlying net
charge-offs and a modest decline in non-performing assets."
"Reflecting these factors, we are targeting earnings of $1.50 - $1.53 per
share in 2003, or an increase of 11% - 13% from last year," he concluded.
CONFERENCE CALL/WEBCAST INFORMATION
Huntington's senior management will host a conference call this afternoon to
discuss these developments at 1:30p.m. EST. The call may be accessed via a live
Internet webcast at www.huntington-ir.com or through a dial-in telephone number
at (800) 482-2225. Slides will be available at www.huntington-ir.com just prior
to 12:30p.m. EST, today for review during the call. A replay of the webcast will
be archived in the Investor Relations section of Huntington's web site
www.huntington.com. A telephone replay will be available two hours after the
completion of the call through January 31, 2003, at (888) 211-2648; conference
ID 2818230. The conference call transcript and slides will be filed with the
Securities and Exchange Commission on Form 8-K.
FORWARD-LOOKING STATEMENT
This press release contains certain 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
news release are based on information available at the time of the release.
Huntington assumes no obligation to update any forward-looking statement.
ABOUT HUNTINGTON
Huntington Bancshares Incorporated is a $28 billion regional bank holding
company headquartered in Columbus, Ohio. Through its affiliated companies,
Huntington has more than 137 years of serving the financial needs of its
customers. Huntington provides innovative retail and commercial financial
products and services through more than 300 regional banking offices in Indiana,
Kentucky, Michigan, Ohio and West Virginia. Huntington also offers retail and
commercial financial services online at www.huntington.com; through its
technologically advanced, 24-hour telephone bank; and through its network of
more than 900 ATMs. Selected financial service activities are also conducted in
other states including: Dealer Sales offices in Florida, Georgia, Tennessee,
Pennsylvania and Arizona; Private Financial Group offices in Florida; and
Mortgage Banking offices in Florida, Maryland and New Jersey. International
banking services are made available through the headquarters office in Columbus
and additional offices located in the Cayman Islands and Hong Kong.
###
- 9 -
HUNTINGTON BANCSHARES INCORPORATED
CONSOLIDATED RESULTS OF OPERATIONS
THREE MONTHS ENDED
---------------------------------------------------------------------------------------------
DECEMBER 31, 2002 December 31, 2001
- ----------------------------------------------------------------------------------- ---------------------------------------------
Restructuring Restructuring
(in thousands, except per Reported and Other Florida Operating Reported and Other Florida Operating
share amounts) Earnings Items (1) Items Earnings Earnings Items (1) Items Earnings
- ----------------------------------------------------------------------------------- ---------------------------------------------
Net Interest Income $249,702 $ -- $ -- $249,702 $255,238 $ -- $ 19,692 $235,546
Provision for Loan Losses 57,418 -- -- 57,418 108,275 50,000 3,994 54,281
Securities Gains 2,339 -- -- 2,339 89 -- -- 89
Non-Interest Income 123,682 -- -- 123,682 133,008 -- 18,717 114,291
Gain on Sale of Florida Operations -- -- -- -- -- -- -- --
Merchant Services Gain -- -- -- -- -- -- -- --
Non-Interest Expense 202,695 -- -- 202,695 227,354 -- 39,925 187,429
Special Charges -- -- -- -- 15,143 15,143 -- --
- ----------------------------------------------------------------------------------- ---------------------------------------------
Income Before Income Taxes 115,610 -- -- 115,610 37,563 (65,143) (5,510) 108,216
Income Taxes 30,475 -- -- 30,475 (28,086) (55,300) (1,417) 28,631
- ----------------------------------------------------------------------------------- ---------------------------------------------
Net Income $ 85,135 $ -- $ -- $ 85,135 $ 65,649 $ (9,843) $ (4,093) $ 79,585
=================================================================================== ==============================================
Net Income per Common
Share -- Diluted $0.36 $0.00 $0.00 $0.36 $0.26 ($0.04) ($0.02) $0.32
=================================================================================== ==============================================
TWELVE MONTHS ENDED
----------------------------------------------------------------------------------------------
DECEMBER 31, 2002 December 31, 2001
- -----------------------------------------------------------------------------------------------------------------------------------
Restructuring Restructuring
(in thousands, except per Reported and Other Florida Operating Reported and Other Florida Operating
share amounts) Earnings Items (1) Items(2) Earnings Earnings Items (1) Items Earnings
- -------------------------------------------------------------------------------- ------------------------------------------------
Net Interest Income $983,802 $ -- $ 9,724 $974,078 $996,182 $ -- $ 82,273 $913,909
Provision for Loan Losses 227,340 -- 5,186 222,154 308,793 121,718 15,121 171,954
Securities (Losses) Gains 4,902 -- -- 4,902 723 (5,250) -- 5,973
Non-Interest Income 480,015 -- 13,343 466,672 508,757 -- 76,992 431,765
Gain on Sale of Florida Operations 175,344 175,344 -- -- -- -- -- --
Merchant Services Gain 24,550 24,550 -- -- -- -- -- --
Non-Interest Expense 795,864 -- 20,210 775,654 923,630 -- 162,887 760,743
Special Charges 56,184 56,184 -- -- 99,957 99,957 -- --
- -------------------------------------------------------------------------------- ------------------------------------------------
Income Before Income Taxes 589,225 143,710 (2,329) 447,844 173,282 (226,925) (18,743) 418,950
Income Taxes 226,000 107,482 (804) 119,322 (5,239) (111,924) (4,730) 111,415
- -------------------------------------------------------------------------------- ------------------------------------------------
Net Income $363,225 $ 36,228 $(1,525) $328,522 $178,521 $(115,001) $(14,013) $307,535
================================================================================ ================================================
Net Income per Common
Share -- Diluted $1.49 $0.15 ($0.01) $1.35 $0.71 ($0.46) ($0.05) $1.22
================================================================================ ================================================
(1) Includes charges related to the July 2002 Merchant Services gain, the
February 2002 gain on sale of Florida operations, and Huntington's
strategic refocusing plan. Income taxes for 2001 include 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) Includes results of Florida operations through February 15, 2002, and the
impact of J. Rolfe Davis Insurance Agency through June 30, 2002.
HUNTINGTON BANCSHARES INCORPORATED
QUARTERLY KEY STATISTICS
REPORTED BASIS
PERCENT CHANGE(6) VS.
---------------------
(in thousands, except per share amounts) 4Q02 3Q02 4Q01 3Q02 4Q01
- ----------------------------------------------------------------------------------------------------- ---------------------
Net Interest Income $ 249,702 $ 249,416 $ 255,238 0.1% (2.2)%
Provision for Loan Losses 57,418 60,249 108,275 (4.7) (47.0)
Securities Gains 2,339 1,140 89 N.M. N.M.
Non-Interest Income 123,682 113,692 133,008 8.8 (7.0)
Gain on Sale of Florida Operations -- -- -- -- --
Merchant Services Gain -- 24,550 -- (100.0) --
Non-Interest Expense 202,695 193,723 227,354 4.6 (10.8)
Special Charges -- -- 15,143 -- (100.0)
- ----------------------------------------------------------------------------------------------------- -----------------------
Income Before Income Taxes 115,610 134,826 37,563 (14.3) 207.8
Income Taxes 30,475 36,703 (28,086) (17.0) (208.5)
- ----------------------------------------------------------------------------------------------------- -----------------------
NET INCOME $ 85,135 $ 98,123 $ 65,649 (13.2)% 29.7%
===================================================================================================== =======================
Net Income per common share - diluted $0.36 $0.41 $0.26 (12.2)% 38.5%
Cash dividends declared per common share $0.16 $0.16 $0.16 --% --%
Book value per common share at end of period $9.89 $9.85 $9.62 0.4% 2.8%
Average common shares - basic 233,581 239,925 251,193 (2.6)% (7.0)%
Average common shares - diluted 235,083 241,357 251,858 (2.6)% (6.7)%
Return on average assets 1.26% 1.51% 0.93%
Return on average shareholders' equity 15.1% 17.1% 11.0%
Net interest margin 4.07% 4.26% 4.11%
Efficiency ratio 54.0% 53.1% 55.8%
Average loans $20,672,470 $19,989,415 $21,512,582 3.4% (3.9)%
Average loans - managed(1) $21,793,958 $21,133,860 $22,747,539 3.1% (4.2)%
Average loans - managed - linked quarter
annualized growth rate(2) 13.3% 11.3% 2.7%
Average earning assets $24,529,181 $23,435,434 $24,881,811 4.7% (1.4)%
Average core deposits(3) $15,008,428 $15,070,096 $18,236,197 (0.4)% (17.7)%
Average core deposits - linked quarter
annualized growth rate(3) (1.6)% 10.4% 8.7%
Average core deposits - excluding CDs $11,706,907 $11,617,335 $13,207,697 0.8% (11.4)%
Average core deposits excl. CDs - linked quarter
annualized growth rate 3.1% 15.6% 12.4%
Average total assets - reported $26,854,908 $25,777,810 $27,977,049 4.2% (4.0)%
Average shareholders' equity $ 2,240,973 $ 2,277,898 $ 2,361,214 (1.6)% (5.1)%
Total assets at end of period $27,578,710 $26,739,012 $28,500,159 3.1% (3.2)%
Total shareholders' equity at end of period $ 2,303,831 $ 2,339,786 $ 2,416,440 (1.5)% (4.7)%
Net charge-offs (NCOs) - incl exited businesses $ 94,938 $ 43,700 $ 56,146 N.M.% 69.1%
NCOs as a % of average loans - incl exited businesses 1.84% 0.87% 1.04%
NCOs - excluding exited businesses $ 93,114 $ 41,843 $ 52,518 N.M.% 77.3%
NCOs as a % of average loans - excluding
exited businesses 1.81% 0.83% 0.98%
Non-performing loans (NPLs) $ 128,069 $ 203,454 $ 221,109 (37.1)% (42.1)%
Non-performing assets (NPAs) $ 136,723 $ 214,129 $ 227,493 (36.1)% (39.9)%
NPAs as a % of total loans and other
real estate (OREO) 0.65% 1.05% 1.05%
Allowance for loan losses (ALL) as a %
of total loans at the end of period 1.76% 2.00% 1.90%
ALL as a % of NPLs 287.7% 200.7% 185.7%
ALL as a % of NPAs 269.4% 190.7% 180.5%
Tier 1 risk-based capital(4)(5) 8.69% 9.14% 7.24%
Total risk-based capital(4)(5) 11.59% 12.10% 10.29%
Tier 1 leverage(4) 8.89% 9.42% 7.41%
Average equity/assets 8.34% 8.84% 8.44%
Tangible equity/assets(5) 7.62% 8.00% 6.12%
(1) Includes securitized indirect auto loans.
(2) Annualized growth percentages normalized for asset securitizations, loan
sales, and acquisition of LeaseNet.
(3) Includes non-interest bearing and interest bearing demand deposits, savings
deposits, CDs under $100,000 and IRA deposits.
(4) Estimated.
(5) At end of period. Tangible equity (total equity less intangible assets)
divided by tangible assets (total assets less intangible assets).
(6) Not normalized.
N.M. - Not Meaningful.
HUNTINGTON BANCSHARES INCORPORATED
ANNUAL KEY STATISTICS
REPORTED BASIS
PERCENT
(in thousands, except per share amounts) 2002 2001 CHANGE(5)
- ------------------------------------------------------------------------------------------------ ---------
Net Interest Income $ 983,802 $ 996,182 (1.2)%
Provision for Loan Losses 227,340 308,793 (26.4)
Securities Gains 4,902 723 N.M.
Non-Interest Income 480,015 508,757 (5.6)
Gain on sale of Florida operations 175,344 -- --
Merchant Services Gain 24,550 -- --
Non-Interest Expense 795,864 923,630 (13.8)
Special Charges 56,184 99,957 (43.8)
- ------------------------------------------------------------------------------------------------ ---------
Income Before Income Taxes 589,225 173,282 240.0
Income Taxes 226,000 (5,239) N.M.
- ------------------------------------------------------------------------------------------------ ---------
NET INCOME $ 363,225 $ 178,521 103.5%
================================================================================================ =========
Net Income per common share - diluted $1.49 $0.71 109.9%
Cash dividends declared per common share $0.64 $0.72 (11.1)%
Book value per common share at end of period $9.89 $9.62 2.8%
Average common shares - basic 242,279 251,078 (3.5)%
Average common shares - diluted 244,012 251,716 (3.1)%
Return on average assets 1.40% 0.63%
Return on average shareholders' equity 15.7% 7.5%
Net interest margin 4.19% 4.02%
Efficiency ratio 54.0% 58.4%
Average loans $20,166,528 $21,149,091 (5.5)%
Average loans - managed(1) $21,326,244 $22,445,132 (4.5)%
Average earning assets $23,594,946 $24,966,305 (5.8)%
Average total assets - reported $26,035,530 $28,137,172 (7.7)%
Average core deposits(2) $15,265,736 $17,669,636 (13.6)%
Average core deposits - excluding CDs $11,645,551 $12,689,693 (8.2)%
Average shareholders' equity $ 2,307,475 $ 2,381,820 (3.2)%
Total assets at end of period $27,578,710 $28,500,159 (3.2)%
Total shareholders' equity at end of period $ 2,303,831 $ 2,416,440 (4.7)%
Net charge-offs (NCOs) - incl exited businesses $ 239,319 $ 189,447 26.3%
NCOs as a % of average loans - incl exited businesses 1.19% 0.90%
NCOs - excluding exited businesses $ 229,505 $ 174,537 31.5%
NCOs as a % of average loans - excluding
exited businesses 1.14% 0.83%
Non-performing loans (NPLs) $ 128,069 $ 221,109 (42.1)%
Non-performing assets (NPAs) $ 136,723 $ 227,493 (39.9)%
NPAs as a % of total loans and other
real estate (OREO) 0.65% 1.05%
Allowance for loan losses (ALL) as a %
of total loans at the end of period 1.76% 1.90%
ALL as a % of NPLs 287.7% 185.7%
ALL as a % of NPAs 269.4% 180.5%
Tier 1 risk-based capital(3)(4) 8.69% 7.24%
Total risk-based capital(3)(4) 11.59% 10.29%
Tier 1 leverage(3) 8.89% 7.41%
Average equity/assets 8.86% 8.47%
Tangible equity/assets(4) 7.62% 6.12%
(1) Includes securitized indirect auto loans.
(2) Includes non-interest bearing and interest bearing demand deposits, savings
deposits, CDs under $100,000 and IRA deposits.
(3) Estimated.
(4) At end of period. Tangible equity (total equity less intangible assets)
divided by tangible assets (total assets less intangible assets).
(5) Percent changes for average loans, assets, deposits, and equity are
normalized for asset securitizations, loan sales, and acquisition of
LeaseNet.
N.M. - Not Meaningful.
HUNTINGTON BANCSHARES INCORPORATED
QUARTERLY KEY STATISTICS
OPERATING BASIS (1)
PERCENT CHANGE(5) VS.
---------------------
(in thousands, except per share amounts) 4Q02 3Q02 4Q01 3Q02 4Q01
- ------------------------------------------------------------------------------------------------------ ---------------------
Net Interest Income $ 249,702 $ 249,416 $ 235,546 0.1% 6.0%
Provision for Loan Losses 57,418 60,249 54,281 (4.7) 5.8
Securities Gains 2,339 1,140 89 105.2 N.M.
Non-Interest Income 123,682 113,692 114,291 8.8 8.2
Non-Interest Expense 202,695 193,723 187,429 4.6 8.1
- ------------------------------------------------------------------------------------------------------ ---------------------
Income Before Income Taxes 115,610 110,276 108,216 4.8 6.8
Income Taxes 30,475 28,110 28,631 8.4 6.4
- ------------------------------------------------------------------------------------------------------ ---------------------
NET INCOME $ 85,135 $ 82,166 $ 79,585 3.6% 7.0%
====================================================================================================== =====================
Net Income per common share - diluted $ 0.36 $ 0.34 $ 0.32 5.9% 12.5%
Return on average assets 1.26% 1.26% 1.28%
Return on average shareholders' equity 15.1% 14.3% 13.4%
Net interest margin 4.07% 4.26% 4.26%
Efficiency ratio 54.0% 53.1% 52.7%
Average loans $20,672,470 $19,989,415 $18,807,146 3.4% 9.9%
Average loans - managed(2) $21,793,958 $21,133,860 $20,042,103 3.1% 8.7%
Average loans - managed - linked quarter
annualized growth rate(3) 13.3% 11.3% 1.1%
Average earning assets $24,529,181 $23,435,434 $22,176,375 4.7% 10.6%
Average core deposits(4) $15,008,428 $15,070,096 $13,824,036 (0.4)% 8.6%
Average core deposits - linked quarter
annualized growth rate(4) (1.6)% 10.4% 9.6%
Average core deposits - excluding CDs $11,706,907 $11,617,335 $10,400,090 0.8% 12.6%
Average core deposits excl. CDs - linked quarter
annualized growth rate 3.1% 15.6% 13.0%
Average total assets $26,854,908 $25,777,810 $24,613,326 4.2% 9.1%
Average shareholders' equity $ 2,240,973 $ 2,277,898 $ 2,361,214 (1.6)% (5.1)%
Net charge-offs (NCOs) - incl exited businesses $ 94,938 $ 43,700 $ 50,149 N.M.% 89.3%
NCOs as a % of average loans - incl exited businesses 1.84% 0.87% 1.06%
NCOs - excluding exited businesses $ 93,114 $ 41,843 $ 46,521 N.M.% N.M.%
NCOs as a % of average loans - excluding
exited businesses 1.81% 0.83% 0.99%
Non-performing loans (NPLs) $ 128,069 $ 203,454 $ 213,262 (37.1)% (39.9)%
Non-performing assets (NPAs) $ 136,723 $ 214,129 $ 219,646 (36.1)% (37.8)%
NPAs as a % of total loans and other
real estate (OREO) 0.65% 1.05% 1.16%
Allowance for loan losses (ALL) as a %
of total loans at the end of period 1.76% 2.00% 2.05%
ALL as a % of NPLs 287.7% 200.7% 181.4%
ALL as a % of NPAs 269.4% 190.7% 176.2%
(1) Reported basis adjusted to exclude the July 2002 Merchant Services gain,
the results of the Florida banking operations and the impact from the
February 2002 sale, the July 2002 sale of J. Rolfe Davis Insurance Agency,
Inc., and restructuring and other charges.
(2) Includes securitized indirect auto loans.
(3) Annualized growth percentages normalized for asset securitizations, loan
sales, and acquisition of LeaseNet.
(4) Includes non-interest bearing and interest bearing demand deposits, savings
deposits, CDs under $100,000 and IRA deposits.
(5) Not normalized.
N.M. - Not Meaningful.
HUNTINGTON BANCSHARES INCORPORATED
ANNUAL KEY STATISTICS
OPERATING BASIS(1)
PERCENT
(in thousands, except per share amounts) 2002 2001 CHANGE (4)
- ---------------------------------------------------------------------------------------------- ----------
Net Interest Income $ 974,078 $ 913,909 6.6%
Provision for Loan Losses 222,154 171,954 29.2
Securities Gains 4,902 5,973 (17.9)
Non-Interest Income 466,672 431,765 8.1
Non-Interest Expense 775,654 760,743 2.0
- ---------------------------------------------------------------------------------------------- ----------
Income Before Income Taxes 447,844 418,950 6.9
Income Taxes 119,322 111,415 7.1
- ---------------------------------------------------------------------------------------------- ----------
NET INCOME $ 328,522 $ 307,535 6.8%
============================================================================================== ==========
Net Income per common share - diluted $1.35 $1.22 10.7%
Return on average assets 1.28% 1.23%
Return on average shareholders' equity 14.2% 12.9%
Net interest margin 4.21% 4.11%
Efficiency ratio 53.6% 55.4%
Average loans $19,828,951 $18,595,172 5.5%
Average loans - managed(2) $20,988,667 $19,891,213 6.0%
Average earning assets $23,257,615 $22,412,659 2.9%
Average total assets $25,598,761 $24,923,610 2.0%
Average core deposits(3) $14,703,245 $13,337,965 10.3%
Average core deposits - excluding CDs $11,287,383 $ 9,964,969 13.2%
Average shareholders' equity $ 2,307,475 $ 2,381,820 (4.2)%
Net charge-offs (NCOs) - incl exited businesses $ 232,814 $ 173,809 33.9%
NCOs as a % of average loans - incl exited businesses 1.17% 0.93%
NCOs - excluding exited businesses $ 223,000 $ 158,899 40.3%
NCOs as a % of average loans - excluding
exited businesses 1.12% 0.86%
Non-performing loans (NPLs) $ 128,069 $ 213,262 (39.9)%
Non-performing assets (NPAs) $ 136,723 $ 219,646 (37.8)%
NPAs as a % of total loans and other
real estate (OREO) 0.65% 1.16%
Allowance for loan losses (ALL) as a %
of total loans at the end of period 1.76% 2.05%
ALL as a % of NPLs 287.7% 181.4%
ALL as a % of NPAs 269.4% 176.2%
(1) Reported basis adjusted to exclude the July 2002 Merchant Services gain,
the results of the Florida banking operations and the impact from the
February 2002 sale, the July 2002 sale of J. Rolfe Davis Insurance Agency,
Inc., and restructuring and other charges.
(2) Includes securitized indirect auto loans.
(3) Includes non-interest bearing and interest bearing demand deposits, savings
deposits, CDs under $100,000 and IRA deposits.
(4) Percent changes for average loans, assets, deposits, and equity are
normalized for asset securitizations, loan sales, and acquisition of
LeaseNet.
N.M. - Not Meaningful.
HUNTINGTON BANCSHARES INCORPORATED
QUARTERLY FINANCIAL REVIEW
DECEMBER 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
Quarterly Loan Loss Reserve and Net Charge-Off Analysis 7
Quarterly Non-Performing Assets and Past Due Loans 8
Quarterly Stock Summary, Capital, and Other Data 9
Consolidated Annual Average Balance Sheets and Net Interest Margin Analysis 10-12
Selected Annual Income Statement Data 13
Annual Loan Loss Reserve and Net Charge-Off Analysis 14
Annual Non-Performing Assets and Past Due Loans 15
Operating Basis
- - Definition of Operating Basis 16
- - Consolidated Statements of Income 17
- - Loans and Deposits 18
- - Consolidated Quarterly Average Balance Sheets and Net Interest Margin
Analysis 19 - 20
- - Selected Quarterly Income Statement Data 21
- - Selected Annual Income Statement Data 22
- - Loan Loss Reserve and Net Charge-Off Analysis 23
- - Non-Performing Assets and Past Due Loans 24
HUNTINGTON BANCSHARES INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME
REPORTED BASIS
THREE MONTHS ENDED DECEMBER 31, CHANGE
- ------------------------------------------------------------------------ --------------------------
(in thousands, except per share amounts) 2002 2001 Amount Percent
- ------------------------------------------------------------------------ --------------------------
Net Interest Income $249,702 $ 255,238 $ (5,536) (2.2)%
Provision for loan losses 57,418 108,275 (50,857) (47.0)
- ------------------------------------------------------------------------ --------------------------
NET INTEREST INCOME
AFTER PROVISION FOR LOAN LOSSES 192,284 146,963 45,321 30.8
- ------------------------------------------------------------------------ --------------------------
Total non-interest income 126,021 133,097 (7,076) (5.3)
Total non-interest expense 202,695 242,497 (39,802) (16.4)
- ------------------------------------------------------------------------ --------------------------
INCOME BEFORE INCOME TAXES 115,610 37,563 78,047 207.8
Income taxes 30,475 (28,086) 58,561 (208.5)
- ------------------------------------------------------------------------ --------------------------
NET INCOME $ 85,135 $ 65,649 $ 19,486 29.7%
======================================================================== ==========================
PER COMMON SHARE
Net income
Basic $0.36 $0.26 $0.10 38.5%
Diluted $0.36 $0.26 $0.10 38.5%
Cash dividends declared $0.16 $0.16 $ -- --%
AVERAGE COMMON SHARES
Basic 233,581 251,193 (17,612) (7.0)%
Diluted 235,083 251,858 (16,775) (6.7)%
- -------------------------------------------------------------------------------------------------------------
TWELVE MONTHS ENDED DECEMBER 31, CHANGE
- ------------------------------------------------------------------------ -------------------------
(in thousands, except per share amounts) 2002 2001 Amount Percent
- ------------------------------------------------------------------------ -------------------------
Net Interest Income $983,802 $ 996,182 $ (12,380) (1.2)%
Provision for loan losses 227,340 308,793 (81,453) (26.4)
- ------------------------------------------------------------------------ -------------------------
NET INTEREST INCOME
AFTER PROVISION FOR LOAN LOSSES 756,462 687,389 69,073 10.0
- ------------------------------------------------------------------------ -------------------------
Total non-interest income 684,811 509,480 175,331 34.4
Total non-interest expense 852,048 1,023,587 (171,539) (16.8)
- ------------------------------------------------------------------------ -------------------------
INCOME BEFORE INCOME TAXES 589,225 173,282 415,943 240.0
Income taxes 226,000 (5,239) 231,239 N.M.
- ------------------------------------------------------------------------ -------------------------
NET INCOME $363,225 $ 178,521 $ 184,704 103.5%
======================================================================== =========================
PER COMMON SHARE
Net income
Basic $1.50 $0.71 $ 0.79 111.3%
Diluted $1.49 $0.71 $ 0.78 109.9%
Cash dividends declared $0.64 $0.72 $ (0.08) (11.1)%
AVERAGE COMMON SHARES
Basic 242,279 251,078 (8,799) (3.5)%
Diluted 244,012 251,716 (7,704) (3.1)%
N.M. - Not Meaningful.
Page 1
HUNTINGTON BANCSHARES INCORPORATED
CONSOLIDATED BALANCE SHEETS
REPORTED BASIS
- ------------------------------------------------------------------------------------------------ -----------------------------
Change December '02 vs. '01
DECEMBER 31, December 31, -----------------------------
(in thousands) 2002 2001 Amount Percent
- ------------------------------------------------------------------------------------------------ -----------------------------
ASSETS
Cash and due from banks $ 969,483 $ 1,138,366 $ (168,883) (14.8)%
Interest bearing deposits in banks 37,300 21,205 16,095 75.9
Trading account securities 241 13,392 (13,151) (98.2)
Federal funds sold and securities
purchased under resale agreements 49,280 83,275 (33,995) (40.8)
Loans held for sale 528,379 629,386 (101,007) (16.0)
Securities available for sale - at fair value 3,403,369 2,849,579 553,790 19.4
Investment securities - fair value $7,725
and $12,499, respectively 7,546 12,322 (4,776) (38.8)
Total loans (1) 20,955,925 21,601,873 (645,948) (3.0)
Less allowance for loan losses 368,395 410,572 (42,177) (10.3)
- ------------------------------------------------------------------------------------------------ -----------------------------
Net loans 20,587,530 21,191,301 (603,771) (2.8)
- ------------------------------------------------------------------------------------------------ -----------------------------
Bank owned life insurance 886,214 843,183 43,031 5.1
Premises and equipment 341,366 452,036 (110,670) (24.5)
Goodwill and other intangible assets 218,567 716,054 (497,487) (69.5)
Customers' acceptance liability 16,745 13,670 3,075 22.5
Accrued income and other assets 532,690 536,390 (3,700) (0.7)
- ------------------------------------------------------------------------------------------------ -----------------------------
TOTAL ASSETS $27,578,710 $28,500,159 $ (921,449) (3.2)%
================================================================================================ =============================
LIABILITIES AND SHAREHOLDERS' EQUITY
Total deposits(1) $17,499,326 $20,187,304 $(2,687,978) (13.3)%
Short-term borrowings 2,541,016 1,955,926 585,090 29.9
Bank acceptances outstanding 16,745 13,670 3,075 22.5
Medium-term notes 2,045,123 1,795,002 250,121 13.9
Federal Home Loan Bank Advances 1,013,000 17,000 996,000 N.M.
Subordinated notes and other long-term debt 788,678 927,330 (138,652) (15.0)
Company obligated mandatorily redeemable preferred
capital securities of subsidiary trusts holding solely
junior subordinated debentures of the Parent Company 300,000 300,000 -- --
Accrued expenses and other liabilities 1,070,991 887,487 183,504 20.7
- ------------------------------------------------------------------------------------------------ -----------------------------
Total Liabilities 25,274,879 26,083,719 (808,840) (3.1)
================================================================================================ =============================
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 232,878,851 and
251,193,814 shares, respectively 2,484,421 2,490,724 (6,303) (0.3)
Less 24,987,404 and 6,672,441
treasury shares, respectively (475,399) (123,849) (351,550) N.M.
Accumulated other comprehensive income 62,300 25,488 36,812 N.M.
Retained earnings 232,509 24,077 208,432 N.M.
- ------------------------------------------------------------------------------------------------ -----------------------------
Total Shareholders' Equity 2,303,831 2,416,440 (112,609) (4.7)
- ------------------------------------------------------------------------------------------------ -----------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $27,578,710 $28,500,159 $ (921,449) (3.2)%
================================================================================================ =============================
(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)
DECEMBER 31, 2002 DECEMBER 31, 2001
- -------------------------------------------------------------------------------------- -----------------------
BY LOAN TYPE BALANCE % BALANCE %
- --------------------------------------------------------------------------------------------------------------------
Commercial $ 5,874,144 28.0 $ 6,439,372 29.8
Commercial real estate 3,462,299 16.5 3,818,441 17.7
- --------------------------------------------------------------------------------------------------------------------
Total Commercial and Commercial Real Estate 9,336,443 44.5 10,257,813 47.5
- --------------------------------------------------------------------------------------------------------------------
Consumer
Auto leases - Indirect (unearned income $431,340 and
$500,430, respectively) 3,203,421 15.3 3,207,514 14.8
Auto loans - Indirect 3,072,017 14.7 2,883,279 13.3
Home equity 3,200,169 15.3 3,582,028 16.6
Residential mortgage 1,748,985 8.3 1,127,825 5.2
Other loans 394,890 1.9 543,414 2.6
- --------------------------------------------------------------------------------------------------------------------
Total Consumer 11,619,482 55.5 11,344,060 52.5
- --------------------------------------------------------------------------------------------------------------------
TOTAL LOANS $20,955,925 100.0 $21,601,873 100.0
====================================================================================================================
TOTAL LOANS BY BUSINESS SEGMENT
Regional Banking
Central Ohio/West Virginia $ 4,823,759 23.0 $ 4,264,143 19.7
Northern Ohio 2,607,021 12.4 2,694,081 12.5
Southern Ohio/Kentucky 1,505,686 7.2 1,327,355 6.1
West Michigan 1,871,478 8.9 1,837,094 8.5
East Michigan 1,191,817 5.7 936,899 4.3
Indiana 682,666 3.3 695,354 3.2
- --------------------------------------------------------------------------------------------------------------------
Total Regional Banking 12,682,427 60.5 11,754,926 54.3
- --------------------------------------------------------------------------------------------------------------------
Dealer Sales 7,022,059 33.5 6,239,117 29.0
Private Financial Group 1,061,528 5.1 762,771 3.5
Treasury/Other 189,911 0.9 121,534 0.6
- --------------------------------------------------------------------------------------------------------------------
TOTAL LOANS EXCLUDING FLORIDA 20,955,925 100.0 18,878,348 87.4
- --------------------------------------------------------------------------------------------------------------------
Florida -- -- 2,723,525 12.6
- --------------------------------------------------------------------------------------------------------------------
TOTAL LOANS $20,955,925 100.0 $21,601,873 100.0
====================================================================================================================
DEPOSIT COMPOSITION BY DEPOSIT TYPE AND BY BUSINESS SEGMENT
- --------------------------------------------------------------------------------------------------------------------
(in thousands)
DECEMBER 31, 2002 DECEMBER 31, 2001
- -------------------------------------------------------------------------------------- -----------------------
BY DEPOSIT TYPE BALANCE % BALANCE %
- --------------------------------------------------------------------------------------------------------------------
Demand deposits
Non-interest bearing $ 3,073,869 17.6 $ 3,635,173 18.0
Interest bearing 5,374,095 30.7 5,723,160 28.4
Savings deposits 2,851,158 16.3 3,466,305 17.2
Other domestic time deposits 3,956,306 22.6 5,868,451 29.1
- --------------------------------------------------------------------------------------------------------------------
TOTAL CORE DEPOSITS(1) 15,255,428 87.2 18,693,089 92.7
- --------------------------------------------------------------------------------------------------------------------
Domestic time deposits of $100,000 or more 731,959 4.2 1,130,563 5.6
Brokered time deposits and negotiable CDs 1,092,754 6.2 137,915 0.7
Foreign time deposits 419,185 2.4 225,737 1.0
- --------------------------------------------------------------------------------------------------------------------
TOTAL DEPOSITS $17,499,326 100.0 $20,187,304 100.0
====================================================================================================================
TOTAL DEPOSITS BY BUSINESS SEGMENT
Regional Banking
Central Ohio/West Virginia $ 5,361,228 30.6 $ 5,217,459 25.8
Northern Ohio 3,602,085 20.6 3,255,847 16.1
Southern Ohio/Kentucky 1,365,225 7.8 1,290,832 6.4
West Michigan 2,401,866 13.7 2,226,500 11.0
East Michigan 1,962,081 11.2 1,895,470 9.4
Indiana 612,585 3.5 577,699 2.9
- --------------------------------------------------------------------------------------------------------------------
Total Regional Banking 15,305,070 87.4 14,463,807 71.6
- --------------------------------------------------------------------------------------------------------------------
Dealer Sales 58,651 0.3 82,684 0.4
Private Financial Group 924,145 5.3 716,693 3.6
Treasury/Other(2) 1,211,460 7.0 256,201 1.3
- --------------------------------------------------------------------------------------------------------------------
TOTAL DEPOSITS EXCLUDING FLORIDA 17,499,326 100.0 15,519,385 76.9
- --------------------------------------------------------------------------------------------------------------------
Florida -- -- 4,667,919 23.1
- --------------------------------------------------------------------------------------------------------------------
TOTAL DEPOSITS $17,499,326 100.0 $20,187,304 100.0
====================================================================================================================
(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) FOURTH Third Second First Fourth Third Second First
- ---------------------------------------------------------------------------------------------------------------------------------
ASSETS
Interest bearing deposits in banks $ 34 $ 35 $ 29 $ 34 $ 14 $ 5 $ 5 $ 5
Trading account securities 9 7 6 5 8 8 39 48
Federal funds sold and securities purchased
under resale agreements 83 76 68 62 86 86 93 164
Mortgages held for sale 467 267 174 381 433 344 420 240
Securities:
Taxable 3,029 2,953 2,735 2,713 2,720 2,896 3,368 3,606
Tax exempt 234 108 96 101 108 140 201 248
- ---------------------------------------------------------------------------------------------------------------------------------
Total Securities 3,263 3,061 2,831 2,814 2,828 3,036 3,569 3,854
- ---------------------------------------------------------------------------------------------------------------------------------
Loans:
Commercial 5,696 5,502 5,614 6,045 6,491 6,681 6,741 6,678
Real Estate (2)
Construction 1,071 1,248 1,259 1,291 1,333 1,236 1,170 1,145
Commercial 2,459 2,316 2,233 2,364 2,397 2,346 2,294 2,324
Consumer
Auto leases - Indirect 3,210 3,172 3,113 3,166 3,229 3,243 3,222 3,117
Auto loans - Indirect 2,969 2,793 2,597 2,730 2,903 2,806 2,575 2,499
Home equity 3,168 3,062 2,911 3,209 3,554 3,456 3,344 3,239
Residential mortgage 1,702 1,492 1,390 1,185 1,051 1,006 1,075 1,078
Other loans 397 404 413 482 554 574 600 624
- ---------------------------------------------------------------------------------------------------------------------------------
Total Consumer 11,446 10,923 10,424 10,772 11,291 11,085 10,816 10,557
- ---------------------------------------------------------------------------------------------------------------------------------
Total Loans 20,672 19,989 19,530 20,472 21,512 21,348 21,021 20,704
- ---------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses 421 406 400 415 393 358 316 307
- ---------------------------------------------------------------------------------------------------------------------------------
Net loans 20,251 19,583 19,130 20,057 21,119 20,990 20,705 20,397
- ---------------------------------------------------------------------------------------------------------------------------------
Total earning assets 24,528 23,435 22,638 23,768 24,881 24,827 25,147 25,015
- ---------------------------------------------------------------------------------------------------------------------------------
Cash and due from banks 717 763 722 819 876 910 910 952
Intangible assets 225 202 213 536 720 732 741 749
All other assets 1,806 1,784 1,784 1,836 1,893 1,877 1,867 1,830
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $26,855 $25,778 $24,957 $26,544 $27,977 $27,988 $28,349 $28,239
=================================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Core deposits
Non-interest bearing deposits $ 2,955 $ 2,868 $ 2,739 $ 3,041 $ 3,406 $ 3,341 $ 3,252 $ 3,213
Interest bearing demand deposits 5,305 5,269 4,920 5,148 5,519 5,096 4,799 4,597
Savings deposits 2,746 2,766 2,808 3,097 3,388 3,472 3,547 3,505
Other domestic time deposits 4,002 4,167 4,226 5,015 5,923 5,940 5,718 5,950
- ---------------------------------------------------------------------------------------------------------------------------------
Total core deposits 15,008 15,070 14,693 16,301 18,236 17,849 17,316 17,265
- ---------------------------------------------------------------------------------------------------------------------------------
Domestic time deposits of $100,000 or more 735 777 844 1,052 1,199 1,262 1,294 1,368
Brokered time deposits and negotiable CDs 1,057 907 649 302 109 120 118 167
Foreign time deposits 409 370 296 270 230 257 377 267
- ---------------------------------------------------------------------------------------------------------------------------------
Total deposits 17,209 17,124 16,482 17,925 19,774 19,488 19,105 19,067
- ---------------------------------------------------------------------------------------------------------------------------------
Short-term borrowings 2,515 2,108 1,886 1,998 1,907 2,140 2,759 2,504
Medium-term notes 1,832 1,752 1,910 1,967 1,863 1,990 2,005 2,240
Federal Home Loan Bank advances 848 228 14 17 17 17 18 24
Subordinated notes and other long-term debt,
including preferred capital securities 1,147 1,215 1,215 1,216 1,166 1,167 1,162 1,147
- ---------------------------------------------------------------------------------------------------------------------------------
Total interest bearing liabilities 20,596 19,559 18,768 20,082 21,321 21,461 21,797 21,769
- ---------------------------------------------------------------------------------------------------------------------------------
All other liabilities 1,063 1,073 1,107 1,051 889 811 897 869
Shareholders' equity 2,241 2,278 2,343 2,370 2,361 2,375 2,403 2,388
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $26,855 $25,778 $24,957 $26,544 $27,977 $27,988 $28,349 $28,239
=================================================================================================================================
(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. In addition, residential construction loans have
been reclassified from Real Estate - Construction to Residential mortgage
loans.
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) FOURTH Third Second First Fourth Third Second First
- ---------------------------------------------------------------------------------------------------------------------------------
ASSETS
Interest bearing deposits in banks 1.93% 2.06% 2.44% 2.02% 2.09% 3.75% 5.09% 5.24%
Trading account securities 3.37 4.95 5.37 2.79 3.59 3.83 5.15 5.52
Federal funds sold and securities purchased
under resale agreements 1.83 1.40 1.51 1.43 2.18 3.20 4.21 5.78
Mortgages held for sale 5.84 6.57 7.07 6.51 6.64 7.18 6.96 7.19
Securities:
Taxable 5.53 6.01 6.33 6.43 6.62 6.71 6.26 6.72
Tax exempt 7.15 7.52 7.69 7.76 7.81 7.38 7.26 7.55
- -------------------------------------------------------------------------------------------------------------------------------
Total Securities 5.64 6.07 6.37 6.48 6.66 6.75 6.32 6.77
- -------------------------------------------------------------------------------------------------------------------------------
Loans: (2)
Commercial 5.74 5.86 5.84 5.75 6.16 7.19 7.78 8.55
Real Estate
Construction 4.26 4.70 5.14 4.99 5.66 6.97 8.02 8.69
Commercial 5.96 6.31 6.54 6.80 6.96 7.67 7.98 8.41
Consumer
Auto leases - Indirect 7.02 7.69 7.58 7.51 7.59 7.89 7.89 7.92
Auto loans - Indirect 8.53 8.92 9.07 9.00 9.34 9.54 9.88 9.89
Home equity 5.82 5.96 6.05 6.56 7.50 8.13 8.85 9.38
Residential mortgage 5.69 5.96 6.21 6.62 7.11 7.51 7.74 7.91
Other loans 8.14 8.58 8.62 8.59 9.59 9.33 9.45 9.53
- -------------------------------------------------------------------------------------------------------------------------------
Total Consumer 6.92 7.32 7.38 7.56 8.07 8.43 8.73 8.93
- -------------------------------------------------------------------------------------------------------------------------------
Total Loans 6.34 6.64 6.70 6.77 7.22 7.87 8.31 8.74
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Total earning assets 6.22% 6.54% 6.64% 6.71% 7.13% 7.71% 7.98% 8.39%
- -------------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Core deposits
Non-interest bearing deposits
Interest bearing demand deposits 1.57% 1.77% 1.84% 1.80% 2.00% 2.74% 2.87% 3.29%
Savings deposits 1.73 1.81 1.83 1.87 2.11 3.00 3.42 3.85
Other domestic time deposits 4.26 4.40 4.51 4.88 5.19 5.52 5.83 6.01
- -------------------------------------------------------------------------------------------------------------------------------
Total core deposits 2.50 2.68 2.78 2.98 3.30 3.94 4.21 4.58
- -------------------------------------------------------------------------------------------------------------------------------
Domestic time deposits of $100,000 or more 3.29 3.29 3.33 3.58 4.68 4.82 5.33 5.97
Brokered time deposits and negotiable CDs 2.25 2.37 2.48 2.48 3.55 4.42 5.57 6.37
Foreign time deposits 1.29 1.43 1.38 1.91 1.99 3.39 4.11 5.45
- -------------------------------------------------------------------------------------------------------------------------------
Total deposits 2.49 2.66 2.77 2.99 3.38 4.00 4.31 4.73
- -------------------------------------------------------------------------------------------------------------------------------
Short-term borrowings 1.86 1.88 1.97 2.36 2.65 3.69 4.37 5.37
Medium-term notes 3.26 3.37 3.21 3.43 4.58 6.12 6.59 6.64
Federal Home Loan Bank advances 1.84 2.04 5.97 6.10 6.10 6.10 6.15 6.29
Subordinated notes and other long-term debt,
including preferred capital securities 3.80 3.99 4.03 4.12 4.94 5.17 5.96 6.83
- -------------------------------------------------------------------------------------------------------------------------------
Total interest bearing liabilities 2.53% 2.73% 2.82% 3.04% 3.51% 4.23% 4.62% 5.12%
- -------------------------------------------------------------------------------------------------------------------------------
Net interest rate spread 3.69% 3.81% 3.82% 3.67% 3.62% 3.48% 3.36% 3.27%
Impact of non-interest bearing funds on margin 0.38 0.45 0.48 0.47 0.49 0.56 0.61 0.66
- -------------------------------------------------------------------------------------------------------------------------------
NET INTEREST MARGIN 4.07% 4.26% 4.30% 4.14% 4.11% 4.04% 3.97% 3.93%
=================================================================================================================================
(1) Fully tax equivalent yields are calculated assuming a 35% tax rate.
(2) Individual loan components include applicable 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
- ---------------------------------------------------------------------------------------------------
(in thousands, except per share amounts) FOURTH Third Second First
- ---------------------------------------------------------------------------------------------------
NET INTEREST INCOME $249,702 $249,416 $241,859 $242,825
Provision for loan losses 57,418 60,249 53,892 55,781
- ---------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 192,284 189,167 187,967 187,044
- ---------------------------------------------------------------------------------------------------
Service charges on deposit accounts 41,177 37,460 35,354 38,530
Brokerage and insurance income 16,431 13,943 17,677 18,792
Trust services 15,306 14,997 16,247 15,501
Bank Owned Life Insurance income 11,443 11,443 11,443 11,676
Mortgage banking 11,410 6,289 10,725 19,565
Other service charges and fees 10,890 10,837 10,529 10,632
Other 17,025 18,723 15,039 10,931
- ---------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST INCOME BEFORE GAIN ON SALE
OF FLORIDA OPERATIONS, MERCHANT SERVICES GAIN,
AND SECURITIES GAINS (LOSSES) 123,682 113,692 117,014 125,627
Gain on sale of Florida operations -- -- -- 175,344
Merchant Services gain -- 24,550 -- --
Securities gains (losses) 2,339 1,140 966 457
- ---------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST INCOME 126,021 139,382 117,980 301,428
- ---------------------------------------------------------------------------------------------------
Personnel costs 113,852 107,477 105,146 114,285
Equipment 17,337 17,378 16,659 16,949
Outside data processing and other services 17,209 15,128 16,592 18,439
Net occupancy 13,454 14,815 14,756 17,239
Professional services 8,026 6,083 6,267 5,401
Marketing 6,186 7,491 7,231 7,003
Telecommunications 5,714 5,609 5,320 6,018
Printing and supplies 3,999 3,679 3,683 3,837
Franchise and other taxes 2,532 2,283 2,313 2,328
Amortization of intangible assets 204 204 235 1,376
Other 14,182 13,576 13,858 14,511
- ---------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST EXPENSE BEFORE SPECIAL CHARGES 202,695 193,723 192,060 207,386
Special charges -- -- -- 56,184
- ---------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST EXPENSE AFTER SPECIAL CHARGES 202,695 193,723 192,060 263,570
- ---------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 115,610 134,826 113,887 224,902
Income taxes 30,475 36,703 31,647 127,175
- ---------------------------------------------------------------------------------------------------
NET INCOME $ 85,135 $ 98,123 $ 82,240 $ 97,727
===================================================================================================
PER COMMON SHARE
Net Income - Diluted $ 0.36 $ 0.41 $ 0.33 $ 0.39
Cash Dividends Declared $ 0.16 $ 0.16 $ 0.16 $ 0.16
RETURN ON:
Average total assets 1.26% 1.51% 1.32% 1.49%
Average total shareholders' equity 15.1% 17.1% 14.1% 16.7%
Net interest margin (2) 4.07% 4.26% 4.30% 4.14%
Efficiency ratio (3) 54.0% 53.1% 53.3% 55.7%
REVENUE - FULLY TAXABLE EQUIVALENT (FTE)
Net Interest Income $249,702 $249,416 $241,859 $242,825
Tax Equivalent Adjustment (2) 1,869 1,096 1,071 1,169
- ---------------------------------------------------------------------------------------------------
Net Interest Income 251,571 250,512 242,930 243,994
Non-Interest Income 126,021 139,382 117,980 301,428
- ---------------------------------------------------------------------------------------------------
TOTAL REVENUE $377,592 $389,894 $360,910 $545,422
===================================================================================================
TOTAL REVENUE EXCLUDING SECURITIES GAINS (LOSSES) $375,253 $388,754 $359,944 $544,965
===================================================================================================
2001
- --------------------------------------------------------------------------------------------------------
(in thousands, except per share amounts) Fourth Third Second First
- --------------------------------------------------------------------------------------------------------
NET INTEREST INCOME $255,238 $249,787 $248,033 $243,124
Provision for loan losses 108,275 49,559 117,495 33,464
- --------------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 146,963 200,228 130,538 209,660
- --------------------------------------------------------------------------------------------------------
Service charges on deposit accounts 42,753 41,719 40,673 38,907
Brokerage and insurance income 20,966 19,912 19,388 18,768
Trust services 15,321 15,485 15,178 14,314
Bank Owned Life Insurance income 9,560 9,560 9,561 9,560
Mortgage banking 15,768 14,616 18,733 10,031
Other service charges and fees 12,552 12,350 12,217 11,098
Other 16,088 15,755 14,956 12,968
- --------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST INCOME BEFORE GAIN ON SALE
OF FLORIDA OPERATIONS, MERCHANT SERVICES GAIN,
AND SECURITIES GAINS (LOSSES) 133,008 129,397 130,706 115,646
Gain on sale of Florida operations -- -- -- --
Merchant Services gain -- -- -- --
Securities gains (losses) 89 1,059 (2,503) 2,078
- --------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST INCOME 133,097 130,456 128,203 117,724
- --------------------------------------------------------------------------------------------------------
Personnel costs 118,143 120,767 122,068 117,662
Equipment 20,593 20,151 19,844 19,972
Outside data processing and other services 17,992 17,375 17,671 16,654
Net occupancy 19,950 19,266 18,188 19,780
Professional services 6,235 5,912 6,763 4,969
Marketing 6,345 6,921 7,852 9,939
Telecommunications 6,793 6,859 7,207 7,125
Printing and supplies 4,293 4,450 4,565 5,059
Franchise and other taxes 2,893 2,470 2,246 2,120
Amortization of intangible assets 10,100 10,114 10,435 10,576
Other 14,017 14,605 16,457 20,234
- --------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST EXPENSE BEFORE SPECIAL CHARGES 227,354 228,890 233,296 234,090
Special charges 15,143 50,817 33,997 --
- --------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST EXPENSE AFTER SPECIAL CHARGES 242,497 279,707 267,293 234,090
- ---------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 37,563 50,977 (8,552) 93,294
Income taxes (28,086)(1) 8,348 (10,929) 25,428
- --------------------------------------------------------------------------------------------------------
NET INCOME $ 65,649 $ 42,629 $ 2,377 $ 67,866
- --------------------------------------------------------------------------------------------------------
PER COMMON SHARE
Net Income - Diluted $ 0.26 $ 0.17 $ 0.01 $ 0.27
Cash Dividends Declared $ 0.16 $ 0.16 $ 0.20 $ 0.20
RETURN ON:
Average total assets 0.93% 0.60% 0.03% 0.97%
Average total shareholders' equity 11.0% 7.1% 0.4% 11.53%
Net interest margin (2) 4.11% 4.04% 3.97% 3.93%
Efficiency ratio (3) 55.8% 57.5% 58.6% 53.9%
REVENUE - FULLY TAXABLE EQUIVALENT (FTE)
Net Interest Income $255,238 $249,787 $248,033 $243,124
Tax Equivalent Adjustment (2) 1,292 1,442 1,616 2,002
- --------------------------------------------------------------------------------------------------------
Net Interest Income 256,530 251,229 249,649 245,126
Non-Interest Income 133,097 130,456 128,203 117,724
- --------------------------------------------------------------------------------------------------------
TOTAL REVENUE $389,627 $381,685 $377,852 $362,850
========================================================================================================
TOTAL REVENUE EXCLUDING SECURITIES GAINS (LOSSES) $389,538 $380,626 $380,355 $360,772
========================================================================================================
(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
QUARTERLY LOAN LOSS RESERVE AND NET CHARGE-OFF ANALYSIS
REPORTED BASIS
2002
- -----------------------------------------------------------------------------------------------------------
(in thousands) FOURTH Third Second First
- -----------------------------------------------------------------------------------------------------------
ALLOWANCE FOR LOAN LOSSES, BEGINNING
OF PERIOD $ 408,378 $ 393,011 $ 386,053 $ 410,572
Loan losses (108,238) (56,591) (57,482) (67,527)
Recoveries of loans previously charged off 13,300 12,891 12,582 11,746
- -----------------------------------------------------------------------------------------------------------
Net loan losses (94,938) (43,700) (44,900) (55,781)
- -----------------------------------------------------------------------------------------------------------
Provision for loan losses 57,418 60,249 53,892 55,781
Allowance of assets purchased / (sold) -- 1,264 -- (22,297)
Allowance of securitized loans (2,463) (2,446) (2,034) (2,222)
- -----------------------------------------------------------------------------------------------------------
ALLOWANCE FOR LOAN LOSSES, END OF PERIOD $ 368,395 $ 408,378 $ 393,011 $ 386,053
===========================================================================================================
Allowance for loan losses as a % of total loans 1.76% 2.00% 2.00% 2.00%
Allowance for loan losses as a % of non-
performing loans 287.7% 200.7% 185.3% 175.9%
Allowance for loan losses as a % of non-
performing assets 269.4% 190.7% 176.1% 171.2%
NET CHARGE-OFFS BY LOAN TYPE
Commercial $ 59,725 $ 16,808 $ 21,468 $ 19,527
Commercial real estate 7,536 4,085 2,037 3,983
- -----------------------------------------------------------------------------------------------------------
Total commercial and commercial real estate 67,261 20,893 23,505 23,510
- -----------------------------------------------------------------------------------------------------------
Consumer
Auto leases 12,510 10,117 8,401 12,809
Auto loans 8,778 6,869 5,733 10,217
- -----------------------------------------------------------------------------------------------------------
Total auto leases and loans 21,288 16,986 14,134 23,026
- -----------------------------------------------------------------------------------------------------------
Home equity 3,526 2,934 3,096 3,950
Residential mortgage 72 123 555 122
Other loans 967 907 1,225 1,425
- -----------------------------------------------------------------------------------------------------------
Total consumer 25,853 20,950 19,010 28,523
- -----------------------------------------------------------------------------------------------------------
Total net charge-offs, excluding exited businesses 93,114 41,843 42,515 52,033
Net charge-offs related to exited businesses 1,824 1,857 2,385 3,748
- -----------------------------------------------------------------------------------------------------------
TOTAL NET CHARGE-OFFS - INCLUDING EXITED
BUSINESSES $ 94,938 $ 43,700 $ 44,900 $ 55,781
===========================================================================================================
NET CHARGE-OFFS - ANNUALIZED PERCENTAGES
Commercial 4.19% 1.21% 1.53% 1.31%
Commercial real estate 0.85 0.45 0.23 0.44
- -----------------------------------------------------------------------------------------------------------
Total commercial and commercial real estate 2.92 0.91 1.04 0.98
- -----------------------------------------------------------------------------------------------------------
Consumer
Auto leases 1.56 1.27 1.08 1.64
Auto loans 1.21 1.01 0.92 1.59
- -----------------------------------------------------------------------------------------------------------
Total auto leases and loans 1.39 1.15 1.01 1.62
- -----------------------------------------------------------------------------------------------------------
Home equity 0.45 0.38 0.43 0.50
Residential mortgage 0.02 0.03 0.16 0.04
Other loans 0.99 0.91 1.22 1.23
- -----------------------------------------------------------------------------------------------------------
Total consumer 0.91 0.77 0.74 1.09
- -----------------------------------------------------------------------------------------------------------
TOTAL NET CHARGE-OFFS - EXCLUDING EXITED
BUSINESSES 1.81 0.83 0.88 1.04
Net charge-offs related to exited businesses 0.03 0.04 0.04 0.07
- -----------------------------------------------------------------------------------------------------------
NET CHARGE-OFFS AS A % OF AVERAGE LOANS -
INCLUDING EXITED BUSINESSES (1) 1.84% 0.87% 0.92% 1.11%
===========================================================================================================
2001
- -----------------------------------------------------------------------------------------------------------
(in thousands) Fourth Third Second First
- -----------------------------------------------------------------------------------------------------------
ALLOWANCE FOR LOAN LOSSES, BEGINNING
OF PERIOD $ 360,446 $ 352,243 $ 301,777 $ 297,880
Loan losses (66,808) (49,386) (75,472) (35,649)
Recoveries of loans previously charged off 10,662 9,643 10,007 7,556
- -----------------------------------------------------------------------------------------------------------
Net loan losses (56,146) (39,743) (65,465) (28,093)
- -----------------------------------------------------------------------------------------------------------
Provision for loan losses 108,275 49,559 117,495 33,464
Allowance of assets purchased / (sold) -- -- -- --
Allowance of securitized loans (2,003) (1,613) (1,564) (1,474)
- -----------------------------------------------------------------------------------------------------------
ALLOWANCE FOR LOAN LOSSES, END OF PERIOD $ 410,572 $ 360,446 $ 352,243 $ 301,777
===========================================================================================================
Allowance for loan losses as a % of total loans 1.90% 1.67% 1.67% 1.45%
Allowance for loan losses as a % of non-
performing loans 185.7% 178.4% 225.7% 272.2%
Allowance for loan losses as a % of non-
performing assets 180.5% 171.6% 212.2% 241.6%
NET CHARGE-OFFS BY LOAN TYPE
Commercial $ 22,555 $ 9,474 $ 13,190 $ 6,781
Commercial real estate 797 3 1,624 1,305
- -----------------------------------------------------------------------------------------------------------
Total commercial and commercial real estate 23,352 9,477 14,814 8,086
- -----------------------------------------------------------------------------------------------------------
Consumer
Auto leases 12,634 10,395 17,535 6,813
Auto loans 10,183 6,524 22,783 8,790
- -----------------------------------------------------------------------------------------------------------
Total auto leases and loans 22,817 16,919 40,318 15,603
- -----------------------------------------------------------------------------------------------------------
Home equity 4,153 4,866 2,935 2,634
Residential mortgage 376 109 241 59
Other loans 1,820 1,186 3,061 1,711
- -----------------------------------------------------------------------------------------------------------
Total consumer 29,166 23,080 46,555 20,007
- -----------------------------------------------------------------------------------------------------------
Total net charge-offs, excluding exited businesses 52,518 32,557 61,369 28,093
Net charge-offs related to exited businesses 3,628 7,186 4,096 --
- -----------------------------------------------------------------------------------------------------------
TOTAL NET CHARGE-OFFS - INCLUDING EXITED
BUSINESSES $ 56,146 $ 39,743 $ 65,465 $ 28,093
===========================================================================================================
NET CHARGE-OFFS - ANNUALIZED PERCENTAGES
Commercial 1.38% 0.56% 0.79% 0.41%
Commercial real estate 0.08 -- 0.19 0.15
- -----------------------------------------------------------------------------------------------------------
Total commercial and commercial real estate 0.91 0.37 0.66 0.32
- -----------------------------------------------------------------------------------------------------------
Consumer
Auto leases 1.55 1.27 2.18 0.89
Auto loans 1.46 0.98 3.83 1.43
- -----------------------------------------------------------------------------------------------------------
Total auto leases and loans 1.51 1.14 2.88 1.13
- -----------------------------------------------------------------------------------------------------------
Home equity 0.46 0.56 0.35 0.33
Residential mortgage 0.14 0.04 0.09 0.02
Other loans 1.35 0.85 2.15 1.11
- -----------------------------------------------------------------------------------------------------------
Total consumer 1.04 0.84 1.76 0.77
- -----------------------------------------------------------------------------------------------------------
TOTAL NET CHARGE-OFFS - EXCLUDING EXITED
BUSINESSES 0.98 0.61 1.18 0.55
Net charge-offs related to exited businesses 0.06 0.13 0.07 --
- -----------------------------------------------------------------------------------------------------------
NET CHARGE-OFFS AS A % OF AVERAGE LOANS -
INCLUDING EXITED BUSINESSES (1) 1.04% 0.74% 1.25% 0.55%
===========================================================================================================
(1) Exited businesses include Second Tier auto and Truck and Equipment lending.
Page 7
HUNTINGTON BANCSHARES INCORPORATED
QUARTERLY NON-PERFORMING ASSETS AND PAST DUE LOANS
REPORTED BASIS
2002 2001
- ----------------------------------------------------------------------------------- ----------------------------------------------
(in thousands) FOURTH Third Second First Fourth Third Second First
- ------------------------------------------------------------------------------------------------------------------------------------
Non-accrual loans:
Commercial $ 91,861 $147,392 $156,252 $162,959 $159,637 $148,177 $116,044 $ 62,716
Commercial real estate 26,765 47,537 45,795 43,295 48,360 40,882 26,870 34,893
Residential mortgage 9,443 8,488 8,776 11,896 11,836 11,666 11,868 11,949
- ------------------------------------------------------------------------------------------------------------------------------------
Total Nonaccrual Loans 128,069 203,417 210,823 218,150 219,833 200,725 154,782 109,558
Renegotiated loans -- 37 1,268 1,268 1,276 1,286 1,290 1,297
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-PERFORMING LOANS 128,069 203,454 212,091 219,418 221,109 202,011 156,072 110,855
Other real estate, net 8,654 10,675 11,146 6,112 6,384 8,050 9,913 14,031
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-PERFORMING ASSETS $136,723 $214,129 $223,237 $225,530 $227,493 $210,061 $165,985 $124,886
====================================================================================================================================
Non-performing loans as a %
of total loans 0.61% 0.99% 1.08% 1.13% 1.02% 0.94% 0.74% 0.53%
Non-performing assets as a %
of total loans and other
real estate 0.65% 1.05% 1.14% 1.17% 1.05% 0.97% 0.79% 0.60%
ACCRUING LOANS PAST DUE 90 DAYS
OR MORE $ 73,122 $ 68,262 $ 58,449 $ 61,746 $ 91,635 $ 92,791 $ 67,077 $102,658
====================================================================================================================================
2002 2001
- ------------------------------------------------------------------------------ ---------------------------------------------------
(in thousands) FOURTH Third Second First Fourth Third Second First
- ------------------------------------------------------------------------------------------------------------------------------------
NON-PERFORMING ASSETS,
BEGINNING OF PERIOD $214,129 $223,237 $225,530 $227,493 $210,061 $165,985 $124,886 $105,397
New non-performing assets 65,506 47,219 73,002 74,446 85,986 94,990 95,037(2) 53,869
Returns to accruing status (12,658) (380) (337) (3,749) (1,549) (884) (82) (252)
Loan losses (72,767) (25,480) (28,297) (26,072) (34,580) (12,480) (13,188) (7,243)
Payments (28,500) (26,308) (44,303) (37,663) (28,315) (34,219) (19,332) (24,973)
Sales (28,987) (4,215) (2,358) (8,925)(1) (4,110) (3,331) (21,306)(2) (1,892)
Other (3) -- 56 -- -- -- -- (30) (20)
- ------------------------------------------------------------------------------------------------------------------------------------
NON-PERFORMING ASSETS,
END OF PERIOD $136,723 $214,129 $223,237 $225,530 $227,493 $210,061 $165,985 $124,886
====================================================================================================================================
(1) Includes $6.5 million related to the sale of Florida operations.
(2) Includes $14.9 million related to investment in Pacific Gas & Electric
commercial paper.
(3) Includes loans acquired and provision for OREO losses.
Page 8
HUNTINGTON BANCSHARES INCORPORATED
QUARTERLY STOCK SUMMARY, CAPITAL, AND OTHER DATA
REPORTED BASIS
QUARTERLY COMMON STOCK SUMMARY
2002 2001
- -------------------------------------------------------------------------------- ------------------------------------------------
FOURTH Third Second First Fourth Third Second First
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stock Price
High $ 19.980 $ 20.430 $ 21.770 $ 20.310 $ 17.490 $ 19.280 $ 17.000 $ 18.000
Low 16.160 16.000 18.590 16.660 14.510 15.150 13.875 12.625
Close 18.710 18.190 19.420 19.700 17.190 17.310 16.375 14.250
Average Closing Price 18.769 19.142 20.089 18.332 16.269 17.696 14.936 15.258
Dividends
Cash dividends declared on
common stock $ 0.16 $ 0.16 $ 0.16 $ 0.16 $ 0.16 $ 0.16 $ 0.20 $ 0.20
Common shares
outstanding (000s)
Average -- Basic 233,581 239,925 246,106 250,749 251,193 251,148 251,024 250,998
Average -- Diluted 235,083 241,357 247,867 251,953 251,858 252,203 251,448 251,510
Ending 232,879 237,544 242,920 249,992 251,194 251,193 251,057 251,002
Common Share Repurchase
Program (000s)
Authorized Under Repurchase
Program 22,000
Number of Shares Repurchased 4,110 6,262 7,329 1,458
- --------------------------------------------------------------------------------
Remaining Shares Authorized
to Repurchase 2,841 6,951 13,213 20,542
================================================================================
Note: Intra-day and closing stock price quotations were obtained from NASDAQ.
================================================================================
CAPITAL DATA - END OF PERIOD
2002 2001
- ------------------------------------------------------------------------------ ---------------------------------------------------
(in millions) FOURTH (1) Third Second First Fourth Third Second First
- ------------------------------------------------------------------------------ ---------------------------------------------------
Total Risk-Adjusted Assets $27,249 $26,343 $25,309 $24,954 $27,896 $27,757 $27,375 $27,230
Tier 1 Risk-Based Capital Ratio 8.69% 9.14% 9.72% 10.26% 7.24% 6.97% 7.01% 7.19%
Total Risk-Based Capital Ratio 11.59% 12.10% 12.75% 13.40% 10.29% 10.13% 10.20% 10.31%
Tier 1 Leverage Ratio 8.89% 9.42% 9.94% 9.72% 7.41% 7.10% 6.96% 7.12%
Tangible Equity / Asset Ratio 7.62% 8.00% 8.51% 9.06% 6.12% 6.08% 5.94% 5.99%
====================================================================================================================================
OTHER DATA - END OF PERIOD
2002 2001
- ---------------------------------------------------------------------------------------------------- -------------------------------
FOURTH Third Second First Fourth Third Second First
- ------------------------------------------------------------------------------------------------------------------------------------
Number of employees (full-time equivalent)
Huntington, Excluding Florida Operations Sold 8,177 8,117 8,174 8,342 8,521 8,487 8,566 8,537
Florida Operations Sold (2) -- -- -- -- 1,222 1,232 1,215 1,225
- ------------------------------------------------------------------------------------------------------------------------------------
Total Huntington 8,177 8,117 8,174 8,342 9,743 9,719 9,781 9,762
====================================================================================================================================
Number of domestic full-service banking offices
Huntington, Excluding Florida Operations Sold (3) 343 336 336 339 338 366 371 371
Florida Operations Sold -- -- -- -- 143 143 143 143
- ------------------------------------------------------------------------------------------------------------------------------------
Total Huntington (3) 343 336 336 339 481 509 514 514
====================================================================================================================================
(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
HUNTINGTON BANCSHARES INCORPORATED
- -------------------------------------------------------------------------------
CONSOLIDATED AVERAGE ANNUAL BALANCE SHEETS AND NET INTEREST MARGIN ANALYSIS -
REPORTED BASIS
(in millions)
AVERAGE BALANCE
- --------------------------------------------------------------------------------------------------------------------------
Fully Tax Equivalent Basis(1) 2002 2001 2000 1999 1998 1997
- --------------------------------------------------------------------------------------------------------------------------
ASSETS
Interest bearing deposits in banks $ 33 $ 7 $ 6 $ 9 $ 10 $ 9
Trading account securities 7 25 15 13 11 10
Federal funds sold and securities purchased
under resale agreements 72 107 87 22 229 44
Mortgages held for sale 322 360 109 232 289 131
Securities:
Taxable 2,859 3,144 4,316 4,885 4,896 5,351
Tax exempt 135 174 273 297 247 264
- --------------------------------------------------------------------------------------------------------------------------
Total Securities 2,994 3,318 4,589 5,182 5,143 5,615
- --------------------------------------------------------------------------------------------------------------------------
Loans:
Commercial 5,712 6,647 6,446 6,128 5,629 5,302
Real Estate(2)
Construction 1,217 1,221 1,184 1,000 764 797
Commercial 2,343 2,340 2,187 2,235 2,304 2,250
Consumer
Auto leases - Indirect 3,166 3,204 2,969 2,361 1,769 1,488
Auto loans - Indirect 2,773 2,697 2,982 3,432 3,249 3,081
Home equity 3,087 3,399 2,991 2,345 1,935 1,644
Residential mortgage 1,444 1,052 1,382 1,489 1,365 1,527
Other loans 425 589 528 1,099 1,419 1,492
- --------------------------------------------------------------------------------------------------------------------------
Total Consumer 10,895 10,941 10,852 10,726 9,737 9,232
- --------------------------------------------------------------------------------------------------------------------------
Total Loans 20,167 21,149 20,669 20,089 18,434 17,581
- --------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses 410 344 303 301 280 252
- --------------------------------------------------------------------------------------------------------------------------
Net loans 19,757 20,805 20,366 19,788 18,154 17,329
- --------------------------------------------------------------------------------------------------------------------------
Total earning assets 23,595 24,966 25,475 25,547 24,116 23,390
- --------------------------------------------------------------------------------------------------------------------------
Cash and due from banks 757 912 1,008 1,039 975 910
Intangible assets 293 736 709 682 487 250
All other assets 1,801 1,867 1,832 1,772 1,594 853
- --------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $26,036 $28,137 $28,721 $28,739 $26,892 $25,151
==========================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Core deposits
Non-interest bearing deposits $ 2,902 $ 3,304 $ 3,421 $ 3,497 $ 3,287 $ 2,774
Interest bearing demand deposits 5,161 5,005 4,291 4,097 3,585 3,204
Savings deposits 2,853 3,478 3,563 3,740 3,277 3,056
Other domestic time deposits 4,349 5,883 5,872 5,823 6,291 5,857
- --------------------------------------------------------------------------------------------------------------------------
Total core deposits 15,265 17,670 17,147 17,157 16,440 14,891
- --------------------------------------------------------------------------------------------------------------------------
Domestic time deposits of $100,000 or more 851 1,280 1,502 1,449 1,688 1,557
Brokered time deposits and negotiable CDs 731 128 502 238 182 365
Foreign time deposits 337 283 539 363 103 382
- --------------------------------------------------------------------------------------------------------------------------
Total deposits 17,184 19,361 19,690 19,207 18,413 17,195
- --------------------------------------------------------------------------------------------------------------------------
Short-term borrowings 2,128 2,325 1,966 2,549 2,084 2,826
Medium-term notes 1,865 2,024 2,894 3,122 2,903 1,983
Federal Home Loan Bank advances 279 19 13 5 53 117
Subordinated notes and other long-term debt,
including preferred capital securities 1,198 1,161 1,111 998 823 621
- --------------------------------------------------------------------------------------------------------------------------
Total interest bearing liabilities 19,752 21,586 22,253 22,384 20,989 19,969
- --------------------------------------------------------------------------------------------------------------------------
All other liabilities 1,075 865 768 711 552 514
Shareholders' equity 2,307 2,382 2,279 2,147 2,064 1,894
- --------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $26,036 $28,137 $28,721 $28,739 $26,892 $25,151
==========================================================================================================================
(1) Fully tax equivalent yields are calculated assuming a 35% tax rate.
(2) Residential construction loans have been reclassified from Real Estate -
Construction to Residential mortgage loans.
Page 25
HUNTINGTON BANCSHARES INCORPORATED
- --------------------------------------------------------------------------------
CONSOLIDATED AVERAGE ANNUAL BALANCE SHEETS AND NET INTEREST MARGIN ANALYSIS -
REPORTED BASIS
(in millions)
INTEREST INCOME/EXPENSE
- --------------------------------------------------------------------------------------------------------------------------------
Fully Tax Equivalent Basis (1) 2002 2001 2000 1999 1998 1997
- --------------------------------------------------------------------------------------------------------------------------------
Assets
Interest bearing deposits in banks $ 0.8 $ 0.2 $ 0.3 $ 0.4 $ 1.0 $ 0.5
Trading account securities 0.3 1.3 1.1 0.8 0.6 0.6
Federal funds sold and securities purchased
under resale agreements 1.1 4.4 5.5 1.2 12.9 2.4
Mortgages held for sale 20.5 25.0 8.7 16.3 20.2 10.1
Securities:
Taxable 173.0 206.9 269.5 297.0 308.8 339.8
Tax exempt 10.1 13.0 20.8 23.5 21.9 25.3
- --------------------------------------------------------------------------------------------------------------------------------
Total Securities 183.1 219.9 290.3 320.5 330.7 365.1
- --------------------------------------------------------------------------------------------------------------------------------
Loans:(2)
Commercial 330.6 493.2 572.8 501.0 488.5 472.2
Real Estate
Construction 58.3 88.6 108.2 85.8 71.2 75.1
Commercial 148.7 180.4 186.7 184.6 201.5 205.1
Consumer
Auto leases - Indirect 235.8 250.6 235.9 194.4 142.5 130.3
Auto loans - Indirect 245.9 260.2 279.0 296.6 291.4 279.0
Home equity 188.3 286.8 261.1 202.3 180.5 155.0
Residential mortgage 87.3 79.5 106.1 111.5 109.5 126.5
Other loans 36.1 55.8 61.1 120.0 159.2 171.4
- --------------------------------------------------------------------------------------------------------------------------------
Total Consumer 793.4 932.9 943.2 924.8 883.1 862.2
- --------------------------------------------------------------------------------------------------------------------------------
Total Loans 1,331.0 1,695.1 1,810.9 1,696.2 1,644.3 1,614.6
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Total interest income 1,536.8 1,945.9 2,116.8 2,035.4 2,009.7 1,993.3
- --------------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Core deposits
Non-interest bearing deposits
Interest bearing demand deposits 90.1 134.6 144.0 106.5 96.4 84.4
Savings deposits 51.7 107.7 146.4 126.0 114.0 100.4
Other domestic time deposits 197.1 331.4 335.4 299.1 349.2 329.7
- --------------------------------------------------------------------------------------------------------------------------------
Total core deposits 338.9 573.7 625.8 531.6 559.6 514.5
- --------------------------------------------------------------------------------------------------------------------------------
Domestic time deposits of $100,000 or more 28.8 66.8 90.4 76.6 96.4 87.6
Brokered time deposits and negotiable CDs 17.3 6.6 31.9 12.8 10.5 21.8
Foreign time deposits 4.9 10.8 34.0 18.6 5.9 22.2
- --------------------------------------------------------------------------------------------------------------------------------
Total deposits 389.9 657.9 782.1 639.6 672.4 646.1
- --------------------------------------------------------------------------------------------------------------------------------
Short-term borrowings 42.7 95.9 113.1 114.3 97.7 146.4
Medium-term notes 61.7 121.7 189.3 170.0 164.6 116.2
Federal Home Loan Bank advances 5.6 1.2 0.8 0.3 2.9 6.2
Subordinated notes and other long-term debt,
including preferred capital securities 47.9 66.7 80.8 60.0 40.7 39.3
- --------------------------------------------------------------------------------------------------------------------------------
Total interest expense 547.8 943.4 1,166.1 984.2 978.3 954.2
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME (FTE) (1) $ 989.0 $1,002.5 $ 950.7 $1,051.2 $1,031.4 $1,039.1
================================================================================================================================
(1) Fully tax equivalent yields are calculated assuming a 35% tax rate.
(2) Individual loan components above include applicable fees.
Page 26
HUNTINGTON BANCSHARES INCORPORATED
CONSOLIDATED AVERAGE ANNUAL BALANCE SHEETS AND NET INTEREST
MARGIN ANALYSIS - REPORTED BASIS
AVERAGE RATE (3)
- ------------------------------------------------------------------------------------------------------------------------------------
Fully Tax Equivalent Basis (1) 2002 2001 2000 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Interest bearing deposits in banks 2.38% 3.43% 5.03% 4.04% 5.22% 5.47%
Trading account securities 4.11 5.13 7.11 5.89 5.71 5.70
Federal funds sold and securities purchased
under resale agreements 1.56 4.19 6.33 5.58 5.64 5.50
Mortgages held for sale 6.35 6.95 7.96 7.03 6.99 7.75
Securities:
Taxable 6.06 6.58 6.24 6.08 6.31 6.35
Tax exempt 7.42 7.49 7.61 7.90 8.83 9.55
- ------------------------------------------------------------------------------------------------------------------------------------
Total Securities 6.12 6.63 6.33 6.18 6.43 6.50
- ------------------------------------------------------------------------------------------------------------------------------------
Loans: (2)
Commercial 5.79 7.42 8.89 8.18 8.68 8.91
Real Estate
Construction 4.79 7.25 9.14 8.58 9.31 9.42
Commercial 6.35 7.71 8.53 8.26 8.75 9.12
Consumer
Auto leases - Indirect 7.45 7.82 7.94 8.23 8.05 8.75
Auto loans - Indirect 8.87 9.65 9.36 8.66 9.00 9.13
Home equity 6.10 8.44 8.73 8.62 9.32 9.43
Residential mortgage 6.05 7.55 7.68 7.48 8.03 8.29
Other loans 8.49 9.47 11.57 10.86 11.12 11.31
- ------------------------------------------------------------------------------------------------------------------------------------
Total Consumer 7.28 8.53 8.69 8.62 9.07 9.34
- ------------------------------------------------------------------------------------------------------------------------------------
Total Loans 6.60 8.01 8.76 8.44 8.92 9.18
- ------------------------------------------------------------------------------------------------------------------------------------
Total earning assets 6.51% 7.79% 8.31% 7.97% 8.33% 8.52%
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Core deposits
Non-interest bearing deposits
Interest bearing demand deposits 1.75% 2.69% 3.36% 2.60% 2.69% 2.64%
Savings deposits 1.81 3.10 4.11 3.37 3.48 3.28
Other domestic time deposits 4.53 5.63 5.71 5.14 5.55 5.63
- ------------------------------------------------------------------------------------------------------------------------------------
Total core deposits 2.74 3.99 4.56 3.89 4.25 4.25
- ------------------------------------------------------------------------------------------------------------------------------------
Domestic time deposits of $100,000 or more 3.39 5.22 6.01 5.28 5.71 5.63
Brokered time deposits and negotiable CDs 2.36 5.12 6.35 5.40 5.82 5.97
Foreign time deposits 1.47 3.82 6.31 5.14 5.66 5.81
- ------------------------------------------------------------------------------------------------------------------------------------
Total deposits 2.73 4.10 4.81 4.07 4.44 4.48
- ------------------------------------------------------------------------------------------------------------------------------------
Short-term borrowings 2.01 4.12 5.75 4.48 4.69 5.18
Medium-term notes 3.31 6.01 6.54 5.45 5.67 5.86
Federal Home Loan Bank advances 2.00 6.17 6.32 5.19 5.57 5.30
Subordinated notes and other long-term debt,
including preferred capital securities 4.00 5.75 7.17 5.93 4.87 6.24
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest bearing liabilities 2.77% 4.37% 5.24% 4.40% 4.66% 4.78%
- ------------------------------------------------------------------------------------------------------------------------------------
Net interest rate spread 3.74% 3.42% 3.07% 3.57% 3.67% 3.74%
Impact of non-interest bearing funds on margin 0.45% 0.60% 0.66% 0.54% 0.61% 0.70%
- ------------------------------------------------------------------------------------------------------------------------------------
NET INTEREST MARGIN 4.19% 4.02% 3.73% 4.11% 4.28% 4.44%
====================================================================================================================================
(1) Fully tax equivalent yields are calculated assuming a 35% tax rate.
(2) Individual loan components include applicable fees.
(3) Loan and deposit average rates include impact of applicable derivatives.
Page 27
HUNTINGTON BANCSHARES INCORPORATED
Selected Annual Income Statement Data
Reported Basis
- ------------------------------------------------------------------------------------------------------------------------------------
(in thousands of dollars, except per
share amounts) 2002 2001 2000 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME $ 983,802 $ 996,182 $ 942,432 $1,041,762 $1,021,093 $1,027,230
Provision for loan losses 227,340 308,793 90,479 88,447 105,242 107,797
- ------------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 756,462 687,389 851,953 953,315 915,851 919,433
- ------------------------------------------------------------------------------------------------------------------------------------
Service charges on
deposit accounts 152,521 164,052 160,727 156,315 126,403 117,852
Brokerage and insurance income 66,843 79,034 61,871 52,076 36,710 27,084
Trust services 62,051 60,298 53,613 52,030 50,754 48,102
Mortgage banking 47,989 59,148 38,025 56,890 60,006 55,715
Bank Owned Life Insurance income 46,005 38,241 39,544 37,560 28,712 --
Other service charges and fees 42,888 48,217 43,883 37,301 29,202 22,705
Other 61,718 59,767 58,795 59,901 67,090 63,403
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST INCOME BEFORE
GAIN ON SALE OF FLORIDA OPERATIONS,
MERCHANT SERVICES GAIN, CREDIT CARD
PORTFOLIO, AND SECURITIES GAINS 480,015 508,757 456,458 452,073 398,877 334,861
Gain on sale of Florida operations 175,344 --- --- --- --- ---
Merchant Services gain 24,550 --- --- --- --- ---
Gains on sale of credit card portfolio --- --- --- 108,530 9,530 ---
Securities gains 4,902 723 37,101 12,972 29,793 7,978
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST INCOME 684,811 509,480 493,559 573,575 438,200 342,839
- ------------------------------------------------------------------------------------------------------------------------------------
Personnel costs 440,760 478,640 421,750 419,901 428,539 392,793
Equipment 68,323 80,560 78,069 66,666 62,040 57,867
Outside data processing and other
services 67,368 69,692 62,011 62,886 74,795 66,683
Net occupancy 60,264 77,184 75,882 62,169 54,123 49,509
Marketing 27,911 31,057 34,884 32,506 32,260 32,782
Professional services 25,777 23,879 20,819 21,169 25,160 24,931
Telecommunications 22,661 27,984 26,225 28,519 29,429 21,527
Printing and supplies 15,198 18,367 19,634 20,227 23,673 21,584
Franchise and other taxes 9,456 9,729 11,077 14,674 22,103 19,836
Amortization of intangible assets 2,019 41,225 39,207 37,297 25,689 13,019
Other 56,127 65,313 46,059 49,314 46,118 51,414
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST EXPENSE BEFORE
SPECIAL CHARGES 795,864 923,630 835,617 815,328 823,929 751,945
Special Charges 56,184 99,957 50,000 96,791 90,000 51,163
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST EXPENSE AFTER
SPECIAL CHARGES 852,048 1,023,587 885,617 912,119 913,929 803,108
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 589,225 173,282 459,895 614,771 440,122 459,164
Income taxes 226,000 (5,239)(1) 131,449 192,697 138,354 166,501
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 363,225 $ 178,521 $ 328,446 $ 422,074 $ 301,768 $ 292,663
====================================================================================================================================
PER COMMON SHARE
Net Income - Diluted $ 1.49 $ 0.71 $ 1.32 $ 1.65 $ 1.17 $ 1.14
Cash Dividends Declared $ 0.64 $ 0.72 $ 0.76 $ 0.68 $ 0.62 $ 0.56
RETURN ON:
Average total assets 1.40% 0.63% 1.14% 1.47% 1.12% 1.16%
Average total shareholders'
equity 15.7% 7.5% 14.4% 19.7% 14.6% 15.5%
Net interest margin (2) 4.19% 4.02% 3.73% 4.11% 4.28% 4.44%
Efficiency ratio (3) 54.0% 58.4% 56.2% 51.8% 55.8% 54.9%
REVENUE - FULLY TAXABLE
EQUIVALENT (FTE)
Net Interest Income $ 983,802 $ 996,182 $ 942,432 $1,041,762 $1,021,093 $1,027,230
Tax Equivalent Adjustment (2) 5,205 6,352 8,310 9,423 10,307 11,864
- ------------------------------------------------------------------------------------------------------------------------------------
Net Interest Income 989,007 1,002,534 950,742 1,051,185 1,031,400 1,039,094
Non-Interest Income 684,811 509,480 493,559 573,575 438,200 342,839
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL REVENUE $1,673,818 $ 1,512,014 $1,444,301 $1,624,760 $1,469,600 $1,381,933
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL REVENUE EXCLUDING
SECURITIES GAINS $1,668,916 $ 1,511,291 $1,407,200 $1,611,788 $1,439,807 $1,373,955
====================================================================================================================================
(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 13
HUNTINGTON BANCSHARES INCORPORATED
ANNUAL LOAN LOSS RESERVES AND ASSET QUALITY
REPORTED BASIS
- -----------------------------------------------------------------------------------------------------------------------------------
(in thousands) 2002 2001 2000 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------------------------
ALLOWANCE FOR LOAN LOSSES, BEGINNING
OF YEAR $ 410,572 $ 297,880 $ 299,309 $ 290,948 $ 258,171 $ 230,778
Loan losses (289,838) (227,315) (110,845) (112,291) (126,355) (110,723)
Recoveries of loans previously charged off 50,519 37,868 27,756 32,205 31,848 22,542
- -----------------------------------------------------------------------------------------------------------------------------------
Net Loan Losses (239,319) (189,447) (83,089) (80,086) (94,507) (88,181)
- -----------------------------------------------------------------------------------------------------------------------------------
Provision for loan losses 227,340 308,793 90,479 88,447 105,242 107,797
Allowance of assets (sold)/purchased and other (21,033) -- 7,900 -- 22,042 7,777
Allowance of securitized loans (9,165) (6,654) (16,719) -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
ALLOWANCE FOR LOAN LOSSES, END OF YEAR $ 368,395 $ 410,572 $ 297,880 $ 299,309 $ 290,948 $ 258,171
===================================================================================================================================
Allowance for loan losses as a % of total loans 1.76% 1.90% 1.45% 1.45% 1.50% 1.46%
Allowance for loan losses as a % of non-
performing loans 287.7% 185.7% 316.9% 360.3% 377.2% 359.6%
Allowance for loan losses as a % of non-
performing assets 269.4% 180.5% 282.6% 304.7% 302.8% 296.3%
NET CHARGE-OFFS BY LOAN TYPE
Commercial $ 117,528 $ 52,000 $ 13,812 $ 10,900 $ 19,966 $ 18,903
Commercial real estate 17,641 3,729 1,327 1,585 (46) 677
- -----------------------------------------------------------------------------------------------------------------------------------
Total commercial and commercial real estate 135,169 55,729 15,139 12,485 19,920 19,580
- -----------------------------------------------------------------------------------------------------------------------------------
Consumer
Auto leases 43,837 47,377 21,442 10,557 12,124 8,768
Auto loans 31,597 48,280 32,280 28,582 24,128 26,208
- -----------------------------------------------------------------------------------------------------------------------------------
Total auto leases and loans 75,434 95,657 53,722 39,139 36,252 34,976
- -----------------------------------------------------------------------------------------------------------------------------------
Home equity 13,506 14,588 6,909 6,096 5,530 1,768
Residential mortgage 872 785 1,007 1,136 876 1,631
Other loans 4,524 7,778 6,312 21,230 31,929 30,226
- -----------------------------------------------------------------------------------------------------------------------------------
Total consumer 94,336 118,808 67,950 67,601 74,587 68,601
- -----------------------------------------------------------------------------------------------------------------------------------
Total net charge-offs, excluding exited businesses 229,505 174,537 83,089 80,086 94,507 88,181
Net charge-offs related to exited businesses 9,814 14,910 -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL NET CHARGE-OFFS - INCLUDING EXITED
BUSINESSES $ 239,319 $ 189,447 $ 83,089 $ 80,086 $ 94,507 $ 88,181
===================================================================================================================================
NET CHARGE-OFFS AS A PERCENTAGE OF AVERAGE LOANS
Commercial 2.06% 0.78% 0.21% 0.18% 0.35% 0.36%
Commercial real estate 0.75 0.16 0.06 0.07 -- 0.03
- -----------------------------------------------------------------------------------------------------------------------------------
Total commercial and commercial real estate 1.20 0.46 0.13 0.12 0.21 0.22
- -----------------------------------------------------------------------------------------------------------------------------------
Consumer
Auto leases 1.38 1.48 0.72 0.45 0.69 0.59
Auto loans 1.18 1.90 1.08 0.83 0.74 0.85
- -----------------------------------------------------------------------------------------------------------------------------------
Total auto leases and loans 1.29 1.67 0.90 0.68 0.72 0.77
- -----------------------------------------------------------------------------------------------------------------------------------
Home equity 0.44 0.43 0.23 0.26 0.29 0.11
Residential mortgage 0.06 0.07 0.07 0.08 0.06 0.11
Other loans 1.09 1.37 1.20 1.93 2.25 2.03
- -----------------------------------------------------------------------------------------------------------------------------------
Total consumer 0.87 1.10 0.63 0.63 0.77 0.74
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL NET CHARGE-OFFS - EXCLUDING EXITED
BUSINESSES 1.14 0.83 0.40 0.40 0.51 0.50
Net charge-offs related to exited businesses 0.05 0.07 -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
NET CHARGE-OFFS AS a % OF AVERAGE LOANS -
INCLUDING EXITED BUSINESSES(1) 1.19% 0.90% 0.40% 0.40% 0.51% 0.50%
===================================================================================================================================
(1) Exited businesses include Second Tier auto and Truck and Equipment lending.
Page 14
HUNTINGTON BANCSHARES INCORPORATED
ANNUAL NON-PERFORMING ASSETS AND PAST DUE LOANS
REPORTED BASIS
- ------------------------------------------------------------------------------------------------------------------------------------
(in thousands) 2002 2001 2000 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Non-accrual loans:
Commercial $ 91,861 $159,637 $ 55,804 $ 42,958 $34,586 $36,459
Commercial real estate 26,765 48,360 26,702 26,916 23,424 16,128
Residential mortgage 9,443 11,836 10,174 11,866 14,419 13,394
- ------------------------------------------------------------------------------------------------------------------------------------
Total Nonaccrual Loans 128,069 219,833 92,680 81,740 72,429 65,981
Renegotiated loans -- 1,276 1,304 1,330 4,706 5,822
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-PERFORMING LOANS 128,069 221,109 93,984 83,070 77,135 71,803
Other real estate, net 8,654 6,384 11,413 15,171 18,964 15,343
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-PERFORMING ASSETS $136,723 $227,493 $105,397 $ 98,241 $96,099 $87,146
====================================================================================================================================
Non-performing loans as a % of total loans 0.61% 1.02% 0.46% 0.40% 0.40% 0.40%
Non-performing assets as a % of total loans
and other real estate 0.65% 1.05% 0.51% 0.47% 0.49% 0.49%
Accruing loans past due 90 days or more $ 73,122 $ 91,635 $ 80,306 $ 61,287 $51,037 $49,608
====================================================================================================================================
- -----------------------------------------------------------------------------------------------------------
(in thousands) 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------
NON-PERFORMING ASSETS, BEGINNING
OF PERIOD $227,493 $105,397 $ 98,241 $ 96,099
New non-performing assets 260,173 329,882 112,319 106,014
Returns to accruing status (17,124) (2,767) (5,914) (5,744)
Loan losses (152,616) (67,491) (18,052) (17,515)
Payments (136,774) (106,839) (68,982) (67,682)
Sales (44,485)(1) (30,639) (13,766) (10,899)
Other (2) 56 (50) 1,551 (2,032)
- -----------------------------------------------------------------------------------------------------------
NON-PERFORMING ASSETS, END OF PERIOD $136,723 $227,493 $105,397 $ 98,241
===========================================================================================================
(1) Includes $6.5 million related to the sale of Florida operations.
(2) Includes loans acquired and provision for OREO losses.
Page 15
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
Page 16
HUNTINGTON BANCSHARES INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME
OPERATING BASIS (1)
THREE MONTHS ENDED DECEMBER 31, CHANGE
- ----------------------------------------------------------------------------------- -------------------------
(in thousands, except per share amounts) 2002 2001 Amount Percent
- ----------------------------------------------------------------------------------- -------------------------
Net Interest Income $249,702 $235,546 $ 14,156 6.0%
Provision for loan losses 57,418 54,281 3,137 5.8
- ----------------------------------------------------------------------------------- -------------------------
NET INTEREST INCOME
AFTER PROVISION FOR LOAN LOSSES 192,284 181,265 11,019 6.1
- ----------------------------------------------------------------------------------- -------------------------
Total non-interest income 126,021 114,380 11,641 10.2
Total non-interest expense 202,695 187,429 15,266 8.1
- ----------------------------------------------------------------------------------- -------------------------
INCOME BEFORE INCOME TAXES 115,610 108,216 7,394 6.8
Income taxes 30,475 28,631 1,844 6.4
- ----------------------------------------------------------------------------------- -------------------------
NET INCOME $ 85,135 $ 79,585 $ 5,550 7.0%
=================================================================================== =========================
PER COMMON SHARE
Net income
Basic $0.36 $0.32 $ 0.04 12.5%
Diluted $0.36 $0.32 $ 0.04 12.5%
Cash dividends declared $0.16 $0.16 $ -- --%
AVERAGE COMMON SHARES
Basic 233,581 251,193 (17,612) (7.0)%
Diluted 235,083 251,858 (16,775) (6.7)%
=======================================================================================================================
TWELVE MONTHS ENDED DECEMBER 31, CHANGE
- ----------------------------------------------------------------------------------- -------------------------
(in thousands, except per share amounts) 2002 2001 Amount Percent
- ----------------------------------------------------------------------------------- -------------------------
Net Interest Income $974,078 $913,909 $60,169 6.6%
Provision for loan losses 222,154 171,954 50,200 29.2
- ----------------------------------------------------------------------------------- -------------------------
NET INTEREST INCOME
AFTER PROVISION FOR LOAN LOSSES 751,924 741,955 9,969 1.3
- ----------------------------------------------------------------------------------- -------------------------
Total non-interest income 471,574 437,738 33,836 7.7
Total non-interest expense 775,654 760,743 14,911 2.0
- ----------------------------------------------------------------------------------- -------------------------
INCOME BEFORE INCOME TAXES 447,844 418,950 28,894 6.9
Income taxes 119,322 111,415 7,907 7.1
- ----------------------------------------------------------------------------------- -------------------------
NET INCOME $328,522 $307,535 $20,987 6.8%
=================================================================================== =========================
PER COMMON SHARE
Net income
Basic $1.36 $1.22 $ 0.14 11.5%
Diluted $1.35 $1.22 $ 0.13 10.7%
Cash dividends declared $0.64 $0.72 $ (0.08) (11.1)%
AVERAGE COMMON SHARES
Basic 242,279 251,078 (8,799) (3.5)%
Diluted 244,012 251,716 (7,704) (3.1)%
(1) See page 16 for definition of Operating Basis.
Page 17
HUNTINGTON BANCSHARES INCORPORATED
LOANS AND DEPOSITS
OPERATING BASIS (1)
2002
- --------------------------------------------------------------------------------------------------------
(in thousands) FOURTH Third Second First
- --------------------------------------------------------------------------------------------------------
LOAN PORTFOLIO COMPOSITION - AVERAGE
Commercial $ 5,695,681 $ 5,502,183 $ 5,613,550 $ 5,661,005
Commercial real estate 3,529,306 3,563,855 3,491,797 3,437,456
- --------------------------------------------------------------------------------------------------------
Total Commercial and Commercial Real Estate 9,224,987 9,066,038 9,105,347 9,098,461
- --------------------------------------------------------------------------------------------------------
Consumer
Auto leases - Indirect 3,210,241 3,172,078 3,113,148 3,166,161
Auto loans - Indirect 2,968,719 2,792,757 2,596,908 2,559,700
Home equity 3,168,197 3,061,602 2,910,612 2,788,083
Residential mortgage 1,701,917 1,492,044 1,390,499 1,067,918
Other loans 398,409 404,896 413,975 424,111
- --------------------------------------------------------------------------------------------------------
Total Consumer 11,447,483 10,923,377 10,425,142 10,005,973
- --------------------------------------------------------------------------------------------------------
TOTAL LOANS $20,672,470 $19,989,415 $19,530,489 $19,104,434
========================================================================================================
LOAN PORTFOLIO COMPOSITION - END OF PERIOD
Commercial $ 5,874,144 $ 5,684,168 $ 5,591,280 $ 5,681,788
Commercial real estate 3,462,299 3,579,836 3,529,978 3,488,251
- --------------------------------------------------------------------------------------------------------
Total Commercial and Commercial Real Estate 9,336,443 9,264,004 9,121,258 9,170,039
- --------------------------------------------------------------------------------------------------------
Consumer
Auto leases - Indirect 3,203,421 3,206,046 3,120,317 3,126,101
Auto loans - Indirect 3,072,017 2,907,417 2,630,541 2,561,936
Home equity 3,200,169 3,134,529 2,990,726 2,830,814
Residential mortgage 1,748,985 1,544,044 1,380,437 1,232,004
Other loans 394,890 399,466 408,891 418,053
- --------------------------------------------------------------------------------------------------------
Total Consumer 11,619,482 11,191,502 10,530,912 10,168,908
- --------------------------------------------------------------------------------------------------------
TOTAL LOANS $20,955,925 $20,455,506 $19,652,170 $19,338,947
========================================================================================================
DEPOSIT COMPOSITION - AVERAGE
Demand deposits
Non-interest bearing $ 2,955,535 $ 2,867,573 $ 2,738,621 $ 2,737,978
Interest bearing 5,305,228 5,269,186 4,920,120 4,362,050
Savings deposits 2,745,615 2,765,886 2,807,874 2,829,922
Other domestic time deposits 4,002,050 4,167,451 4,225,696 4,097,383
- --------------------------------------------------------------------------------------------------------
TOTAL CORE DEPOSITS (2) 15,008,428 15,070,096 14,692,311 14,027,333
- --------------------------------------------------------------------------------------------------------
Domestic time deposits of $100,000 or more 734,747 776,600 843,815 958,812
Brokered time deposits and negotiable CDs 1,056,768 906,598 649,340 301,612
Foreign time deposits 409,548 370,313 296,428 267,512
- --------------------------------------------------------------------------------------------------------
TOTAL DEPOSITS $17,209,491 $17,123,607 $16,481,894 $15,555,269
========================================================================================================
DEPOSIT COMPOSITION - END OF PERIOD
Demand deposits
Non-interest bearing $ 3,073,869 $ 2,949,065 $ 2,769,936 $ 2,857,233
Interest bearing 5,374,095 5,203,413 5,105,196 4,747,283
Savings deposits 2,851,158 2,849,060 2,839,115 2,895,445
Other domestic time deposits 3,956,306 4,071,082 4,238,688 4,179,814
- --------------------------------------------------------------------------------------------------------
TOTAL CORE DEPOSITS (2) 15,255,428 15,072,620 14,952,935 14,679,775
- --------------------------------------------------------------------------------------------------------
Domestic time deposits of $100,000 or more 731,959 754,115 765,163 895,427
Brokered time deposits and negotiable CDs 1,092,754 979,075 849,347 451,173
Foreign time deposits 419,185 312,001 293,655 240,410
- --------------------------------------------------------------------------------------------------------
TOTAL DEPOSITS $17,499,326 $17,117,811 $16,861,100 $16,266,785
========================================================================================================
2001
- --------------------------------------------------------------------------------------------------------
(in thousands) Fourth Third Second First
- --------------------------------------------------------------------------------------------------------
LOAN PORTFOLIO COMPOSITION - AVERAGE
Commercial $ 5,750,830 $ 5,945,639 $ 5,986,587 $ 5,917,505
Commercial real estate 3,307,826 3,162,883 3,050,254 3,060,886
- --------------------------------------------------------------------------------------------------------
Total Commercial and Commercial Real Estate 9,058,656 9,108,522 9,036,841 8,978,391
- --------------------------------------------------------------------------------------------------------
Consumer
Auto leases - Indirect 3,229,203 3,242,864 3,221,612 3,117,196
Auto loans - Indirect 2,489,183 2,445,459 2,289,014 2,258,802
Home equity 2,753,141 2,709,125 2,663,676 2,617,242
Residential mortgage 831,223 771,473 829,720 821,466
Other loans 445,740 458,999 485,096 511,120
- --------------------------------------------------------------------------------------------------------
Total Consumer 9,748,490 9,627,920 9,489,118 9,325,826
- --------------------------------------------------------------------------------------------------------
TOTAL LOANS $18,807,146 $18,736,442 $18,525,959 $18,304,217
========================================================================================================
LOAN PORTFOLIO COMPOSITION - END OF PERIOD
Commercial $ 5,685,719 $ 5,912,371 $ 6,012,647 $ 5,974,635
Commercial real estate 3,398,233 3,268,360 3,088,507 3,058,468
- --------------------------------------------------------------------------------------------------------
Total Commercial and Commercial Real Estate 9,083,952 9,180,731 9,101,154 9,033,103
- --------------------------------------------------------------------------------------------------------
Consumer
Auto leases - Indirect 3,207,514 3,221,300 3,194,592 3,175,981
Auto loans - Indirect 2,501,054 2,509,504 2,300,212 2,136,365
Home equity 2,754,612 2,742,016 2,689,868 2,637,558
Residential mortgage 893,923 816,515 762,562 845,923
Other loans 437,293 475,552 500,194 495,759
- --------------------------------------------------------------------------------------------------------
Total Consumer 9,794,396 9,764,887 9,447,428 9,291,586
- --------------------------------------------------------------------------------------------------------
TOTAL LOANS $18,878,348 $18,945,618 $18,548,582 $18,324,689
========================================================================================================
DEPOSIT COMPOSITION - AVERAGE
Demand deposits
Non-interest bearing $ 2,824,035 $ 2,761,240 $ 2,667,334 $ 2,635,335
Interest bearing 4,013,874 3,687,335 3,455,963 3,309,619
Savings deposits 2,862,649 2,922,867 2,976,864 2,942,606
Other domestic time deposits 4,123,478 4,126,677 3,942,256 4,088,651
- --------------------------------------------------------------------------------------------------------
TOTAL CORE DEPOSITS (2) 13,824,036 13,498,119 13,042,417 12,976,211
- --------------------------------------------------------------------------------------------------------
Domestic time deposits of $100,000 or more 1,007,978 1,053,133 1,077,601 1,145,504
Brokered time deposits and negotiable CDs 108,591 119,646 118,321 166,505
Foreign time deposits 223,675 249,753 371,276 262,385
- --------------------------------------------------------------------------------------------------------
TOTAL DEPOSITS $15,164,280 $14,920,651 $14,609,615 $14,550,605
========================================================================================================
DEPOSIT COMPOSITION - END OF PERIOD
Demand deposits
Non-interest bearing $ 2,997,449 $ 2,889,319 $ 2,660,607 $ 2,660,698
Interest bearing 4,197,893 3,841,646 3,521,499 3,378,779
Savings deposits 2,943,508 2,929,922 3,061,890 3,036,951
Other domestic time deposits 4,077,510 4,214,865 3,833,761 4,057,346
- --------------------------------------------------------------------------------------------------------
TOTAL CORE DEPOSITS (2) 14,216,360 13,875,752 13,077,757 13,133,774
- --------------------------------------------------------------------------------------------------------
Domestic time deposits of $100,000 or more 944,361 1,114,421 955,616 1,130,647
Brokered time deposits and negotiable CDs 137,915 128,878 100,233 136,147
Foreign time deposits 220,749 359,452 404,069 187,368
- --------------------------------------------------------------------------------------------------------
TOTAL DEPOSITS $15,519,385 $15,478,503 $14,537,675 $14,587,936
========================================================================================================
(1) See page 16 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 18
HUNTINGTON BANCSHARES INCORPORATED
- --------------------------------------------------------------------------------
CONSOLIDATED QUARTERLY AVERAGE BALANCE SHEETS AND NET INTEREST MARGIN ANALYSIS
OPERATING BASIS(1)
(in millions)
2002 2001
- -------------------------------------------------------------------------------------------- -------------------------------------
Fully Tax Equivalent Basis (2) FOURTH Third Second First Fourth Third Second First
- ------------------------------------------------------------------------------------------------------------------------------------
Assets
Interest bearing deposits in banks $ 34 $ 35 $ 29 $ 34 $ 14 $ 5 $ 5 $ 4
Trading account securities 9 7 6 5 8 8 39 48
Federal funds sold and securities purchased
under resale agreements 83 76 68 62 86 86 93 164
Mortgages held for sale 467 267 174 381 433 344 420 240
Securities:
Taxable 3,029 2,953 2,735 2,713 2,720 2,896 3,368 3,606
Tax exempt 234 108 96 102 108 140 201 248
- ------------------------------------------------------------------------------------------------------------------------------------
Total Securities 3,263 3,061 2,831 2,815 2,828 3,036 3,569 3,854
- ------------------------------------------------------------------------------------------------------------------------------------
Loans:
Commercial 5,696 5,502 5,614 5,661 5,751 5,946 5,986 5,918
Real Estate(3)
Construction 1,071 1,248 1,259 1,241 1,227 1,129 1,056 1,032
Commercial 2,459 2,316 2,233 2,196 2,081 2,034 1,994 2,029
Consumer
Auto leases - Indirect 3,210 3,172 3,113 3,166 3,229 3,243 3,222 3,117
Auto loans - Indirect 2,969 2,793 2,597 2,560 2,489 2,445 2,289 2,259
Home equity 3,168 3,062 2,911 2,788 2,753 2,709 2,664 2,617
Residential mortgage 1,702 1,492 1,390 1,068 831 771 830 821
Other loans 397 404 413 424 446 459 485 511
- ------------------------------------------------------------------------------------------------------------------------------------
Total Consumer 11,446 10,923 10,424 10,006 9,748 9,627 9,490 9,325
- ------------------------------------------------------------------------------------------------------------------------------------
Total Loans 20,672 19,989 19,530 19,104 18,807 18,736 18,526 18,304
- ------------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses 421 406 400 403 371 315 279 272
- ------------------------------------------------------------------------------------------------------------------------------------
Net loans 20,251 19,583 19,130 18,701 18,436 18,421 18,247 18,032
- ------------------------------------------------------------------------------------------------------------------------------------
Total earning assets 24,528 23,435 22,638 22,401 22,176 22,215 22,652 22,614
- ------------------------------------------------------------------------------------------------------------------------------------
Cash and due from banks 717 763 722 774 798 831 830 867
- ------------------------------------------------------------------------------------------------------------------------------------
Intangible assets 225 202 213 210 211 215 217 218
- ------------------------------------------------------------------------------------------------------------------------------------
All other assets 1,806 1,784 1,784 1,798 1,799 1,787 1,773 1,736
- ------------------------------------------------------------------------------------------------------------------------------------
Total Assets $26,855 $25,778 $24,957 $24,780 $24,613 $24,733 $25,193 $25,163
====================================================================================================================================
Liabilities and Shareholders' Equity
Core deposits
Non-interest bearing deposits $ 2,955 $ 2,868 $ 2,739 $ 2,738 $ 2,824 $ 2,761 $ 2,667 $ 2,635
Interest bearing demand deposits 5,305 5,269 4,920 4,362 4,014 3,687 3,456 3,310
Savings deposits 2,746 2,766 2,808 2,830 2,863 2,923 2,977 2,942
Other domestic time deposits 4,002 4,167 4,226 4,097 4,123 4,127 3,942 4,089
- ------------------------------------------------------------------------------------------------------------------------------------
Total core deposits 15,008 15,070 14,693 14,027 13,824 13,498 13,042 12,976
- ------------------------------------------------------------------------------------------------------------------------------------
Domestic time deposits of $100,000 or more 735 777 844 959 1,008 1,053 1,078 1,146
Brokered time deposits and negotiable CDs 1,057 907 649 302 109 120 118 167
Foreign time deposits 409 370 296 268 224 250 371 262
- ------------------------------------------------------------------------------------------------------------------------------------
Total deposits 17,209 17,124 16,482 15,556 15,165 14,921 14,609 14,551
- ------------------------------------------------------------------------------------------------------------------------------------
Short-term borrowings 2,515 2,108 1,886 1,925 1,745 1,998 2,628 2,390
Medium-term notes 1,832 1,752 1,910 2,645 3,272 3,443 3,476 3,796
Federal Home Loan Bank advances 848 228 14 17 17 17 18 24
Subordinated notes and other long-term debt,
including preferred capital securities 1,147 1,215 1,215 1,215 1,166 1,167 1,162 1,147
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest bearing liabilities 20,596 19,559 18,768 18,620 18,541 18,785 19,226 19,273
- ------------------------------------------------------------------------------------------------------------------------------------
All other liabilities 1,063 1,073 1,107 1,052 887 812 897 867
Shareholders' equity 2,241 2,278 2,343 2,370 2,361 2,375 2,403 2,388
- ------------------------------------------------------------------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $26,855 $25,778 $24,957 $24,780 $24,613 $24,733 $25,193 $25,163
====================================================================================================================================
(1) See page 16 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 a September 2002
correction of an error involving construction loans with original
maturities over 5 years. In addition, residential construction loans were
reclassified from Real Estate - Construction to Residential mortgage loans.
Page 43
HUNTINGTON BANCSHARES INCORPORATED
- --------------------------------------------------------------------------------
CONSOLIDATED QUARTERLY AVERAGE BALANCE SHEETS AND NET INTEREST MARGIN ANALYSIS
OPERATING BASIS (1)
(in millions)
AVERAGE RATES (4)
-----------------------------------------------------------------------
2002 2001
- ----------------------------------------------------------------------------------------------- ----------------------------------
Fully Tax Equivalent Basis (2) FOURTH Third Second First Fourth Third Second First
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Interest bearing deposits in banks 1.93% 2.06% 2.44% 2.02% 2.09% 3.75% 5.09% 5.24%
Trading account securities 3.37 4.95 5.37 2.79 3.59 3.83 5.15 5.52
Federal funds sold and securities purchased
under resale agreements 1.83 1.40 1.51 1.43 2.18 3.20 4.21 5.78
Mortgages held for sale 5.84 6.57 7.07 6.51 6.64 7.18 6.96 7.19
Securities:
Taxable 5.53 6.01 6.33 6.43 6.62 6.71 6.26 6.72
Tax exempt 7.15 7.52 7.69 7.76 7.81 7.38 7.26 7.55
- ------------------------------------------------------------------------------------------------------------------------------------
Total Securities 5.64 6.07 6.37 6.48 6.66 6.75 6.32 6.77
- ------------------------------------------------------------------------------------------------------------------------------------
Loans:(3)
Commercial 5.74 5.86 5.84 5.72 6.10 7.19 7.74 8.51
Real Estate
Construction 4.26 4.70 5.14 4.97 5.58 6.94 8.02 8.70
Commercial 5.96 6.31 6.54 6.83 7.01 7.72 8.04 8.49
Consumer
Auto leases - Indirect 7.02 7.69 7.58 7.51 7.59 7.89 7.89 7.92
Auto loans - Indirect 8.53 8.92 9.07 9.00 9.57 9.86 10.18 10.09
Home equity 5.82 5.96 6.05 6.34 7.35 7.99 8.78 9.36
Residential mortgage 5.69 5.96 6.21 6.59 7.05 7.51 7.72 7.91
Other loans 8.14 8.58 8.62 8.69 9.53 9.24 9.28 9.61
- ------------------------------------------------------------------------------------------------------------------------------------
Total Consumer 6.92 7.32 7.38 7.52 8.07 8.45 8.75 8.94
- ------------------------------------------------------------------------------------------------------------------------------------
Total Loans 6.34 6.64 6.70 6.74 7.19 7.88 8.30 8.74
- ------------------------------------------------------------------------------------------------------------------------------------
Total earning assets 6.22% 6.54% 6.64% 6.68% 7.09% 7.70% 7.94% 8.36%
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Core deposits
Non-interest bearing deposits
Interest bearing demand deposits 1.57% 1.77% 1.84% 1.79% 1.93% 2.73% 2.87% 3.29%
Savings deposits 1.73 1.81 1.83 1.85 2.08 3.04 3.46 3.87
Other domestic time deposits 4.26 4.40 4.51 4.85 5.18 5.52 5.83 6.02
- ------------------------------------------------------------------------------------------------------------------------------------
Total core deposits 2.50 2.68 2.78 2.92 3.19 3.89 4.16 4.52
- ------------------------------------------------------------------------------------------------------------------------------------
Domestic time deposits of $100,000 or more 3.29 3.29 3.33 3.49 4.66 4.70 5.23 5.93
Brokered time deposits and negotiable CDs 2.25 2.37 2.48 2.48 3.55 4.42 5.57 6.37
Foreign time deposits 1.29 1.43 1.38 1.92 1.99 3.40 4.11 5.45
- ------------------------------------------------------------------------------------------------------------------------------------
Total deposits 2.49 2.66 2.77 2.93 3.29 3.95 4.27 4.70
- ------------------------------------------------------------------------------------------------------------------------------------
Short-term borrowings 1.86 1.88 1.97 2.39 2.73 3.75 4.40 5.40
Medium-term notes 3.26 3.37 3.21 3.00 3.45 4.82 5.51 5.81
Federal Home Loan Bank advances 1.84 2.04 5.97 6.10 6.10 6.10 6.15 6.29
Subordinated notes and other long-term debt,
including preferred capital securities 3.80 3.99 4.03 4.12 4.94 5.17 5.96 6.83
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest bearing liabilities 2.53% 2.73% 2.82% 2.96% 3.37% 4.17% 4.62% 5.14%
- ------------------------------------------------------------------------------------------------------------------------------------
Net interest rate spread 3.69% 3.81% 3.82% 3.72% 3.72% 3.53% 3.32% 3.22%
Impact of non-interest bearing funds on margin 0.38 0.45 0.48 0.49 0.54 0.64 0.71 0.77
- ------------------------------------------------------------------------------------------------------------------------------------
NET INTEREST MARGIN 4.07% 4.26% 4.30% 4.21% 4.26% 4.17% 4.03% 3.99%
- ------------------------------------------------------------------------------------------------------------------------------------
(1) See page 16 for definition of Operating Basis.
(2) Fully tax equivalent yields are calculated assuming a 35% tax rate.
(3) Individual loan components include applicable fees.
(4) Loan and deposit average rates include impact of applicable derivatives.
Page 44
HUNTINGTON BANCSHARES INCORPORATED
SELECTED QUARTERLY INCOME STATEMENT DATA
OPERATING BASIS (1)
2002 2001
- -------------------------------------------------------------------------------------- ------------------------------------------
(in thousands, except per share amounts) FOURTH Third Second First Fourth Third Second First
- -----------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME $249,702 $249,416 $241,859 $233,101 $235,546 $230,462 $225,883 $222,018
Provision for loan losses 57,418 60,249 53,892 50,595 54,281 46,027 41,937 29,709
- -----------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 192,284 189,167 187,967 182,506 181,265 184,435 183,946 192,309
- -----------------------------------------------------------------------------------------------------------------------------------
Service charges on deposit accounts 41,177 37,460 35,354 34,282 35,220 33,593 32,650 31,143
Brokerage and insurance income 16,431 13,943 14,967 14,587 15,066 13,943 13,185 12,232
Trust services 15,306 14,997 16,247 15,096 14,679 14,816 14,431 13,670
Bank Owned Life Insurance income 11,443 11,443 11,443 11,676 9,560 9,560 9,561 9,560
Mortgage banking 11,410 6,289 10,725 19,644 15,049 13,859 17,672 9,238
Other service charges and fees 10,890 10,837 10,529 9,118 9,582 9,547 9,383 8,415
Other 17,025 18,723 15,039 10,591 15,135 14,722 13,979 12,315
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST INCOME BEFORE
SECURITIES GAINS 123,682 113,692 114,304 114,994 114,291 110,040 110,861 96,573
Securities gains 2,339 1,140 966 457 89 1,059 2,747 2,078
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST INCOME 126,021 114,832 115,270 115,451 114,380 111,099 113,608 98,651
- -----------------------------------------------------------------------------------------------------------------------------------
Personnel costs 113,852 107,477 103,589 104,320 100,076 101,866 103,707 99,296
Equipment 17,337 17,378 16,608 15,582 18,117 17,580 17,363 17,503
Outside data processing and other services 17,209 15,128 16,592 17,097 15,414 14,650 15,100 14,122
Net occupancy 13,454 14,815 14,642 14,771 15,251 14,481 13,755 15,568
Professional services 8,026 6,083 6,265 5,242 6,069 5,754 6,481 4,793
Marketing 6,186 7,491 7,219 7,174 5,305 5,717 6,807 8,832
Telecommunications 5,714 5,609 5,302 5,282 5,647 5,728 5,964 5,952
Printing and supplies 3,999 3,679 3,671 3,519 3,511 3,693 3,688 4,098
Franchise and other taxes 2,532 2,283 2,313 2,326 2,885 2,439 2,229 2,116
Amortization of intangible assets 204 204 203 251 2,555 2,569 2,890 3,031
Other 14,182 13,576 13,781 13,487 12,599 12,577 14,459 18,506
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST EXPENSE 202,695 193,723 190,185 189,051 187,429 187,054 192,443 193,817
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 115,610 110,276 113,052 108,906 108,216 108,480 105,111 97,143
Income taxes 30,475 28,110 31,344 29,393 28,631 27,587 29,509 25,688
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 85,135 $ 82,166 $ 81,708 $ 79,513 $ 79,585 $ 80,893 $ 75,602 $ 71,455
===================================================================================================================================
NET INCOME PER COMMON SHARE - DILUTED $0.36 $0.34 $0.33 $0.32 $0.32 $0.32 $0.30 0.28
RETURN ON
Average total assets 1.26% 1.26% 1.31% 1.30% 1.28% 1.30% 1.20% 1.15%
Average total shareholders' equity 15.1% 14.3% 14.0% 13.6% 13.4% 13.5% 12.6% 12.1%
Net interest margin(2) 4.07% 4.26% 4.30% 4.21% 4.26% 4.17% 4.03% 3.99%
Efficiency ratio 54.0% 53.1% 53.2% 54.1% 52.7% 54.0% 56.0% 59.5%
Effective tax rate 26.4% 25.5% 27.7% 27.0% 26.5% 25.4% 28.1% 26.4%
REVENUE - FULLY TAXABLE EQUIVALENT (FTE)
Net Interest Income $249,702 $249,416 $241,859 $233,101 $235,546 $230,462 $225,883 $222,018
Tax Equivalent Adjustment(2) 1,869 1,096 1,071 1,169 1,292 1,442 1,616 2,002
- ------------------------------------------------------------------------------------------------------------------------------------
Net Interest Income 251,571 250,512 242,930 234,270 236,838 231,904 227,499 224,020
Non-Interest Income 126,021 114,832 115,270 115,451 114,380 111,099 113,608 98,651
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL REVENUE $377,592 $365,344 $358,200 $349,721 $351,218 $343,003 $341,107 $322,671
====================================================================================================================================
TOTAL REVENUE EXCLUDING SECURITIES GAINS $375,253 $364,204 $357,234 $349,264 $351,129 $341,944 $338,360 $320,593
====================================================================================================================================
(1) See page 16 for definition of Operating Basis.
(2) Calculated assuming a 35% tax rate.
Page 21
HUNTINGTON BANCSHARES INCORPORATED
SELECTED ANNUAL INCOME STATEMENT DATA
OPERATING BASIS (1)
TWELVE MONTHS ENDED ---------------------
DECEMBER 31, Change '02 vs. '01
- ------------------------------------------------------------------------- ---------------------
(in thousands, except per share amounts) 2002 2001 Amount Percent
- ------------------------------------------------------------------------- -------- -------
NET INTEREST INCOME $ 974,078 $ 913,909 $ 60,169 6.6%
Provision for loan losses 222,154 171,954 50,200 29.2
- ------------------------------------------------------------------------- -------- -------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 751,924 741,955 9,969 1.3
- ------------------------------------------------------------------------- -------- -------
Service charges on deposit accounts 148,273 132,606 15,667 11.8
Brokerage and insurance income 59,928 54,426 5,502 10.1
Trust services 61,646 57,596 4,050 7.0
Bank Owned Life Insurance income 46,005 38,241 7,764 20.3
Mortgage banking 48,068 55,818 (7,750) (13.9)
Other service charges and fees 41,374 36,927 4,447 12.0
Other 61,378 56,151 5,227 9.3
- ------------------------------------------------------------------------- -------- -------
TOTAL NON-INTEREST INCOME BEFORE
SECURITIES GAINS 466,672 431,765 34,907 8.1
Securities gains 4,902 5,973 (1,071) (17.9)
- ------------------------------------------------------------------------- -------- -------
TOTAL NON-INTEREST INCOME 471,574 437,738 33,836 7.7
- ------------------------------------------------------------------------- -------- -------
Personnel costs 429,238 404,945 24,293 6.0
Equipment 66,905 70,563 (3,658) (5.2)
Outside data processing and other services 66,026 59,286 6,740 11.4
Net occupancy 57,682 59,055 (1,373) (2.3)
Professional services 25,616 23,097 2,519 10.9
Marketing 28,070 26,661 1,409 5.3
Telecommunications 21,907 23,291 (1,384) (5.9)
Printing and supplies 14,868 14,990 (122) (0.8)
Franchise and other taxes 9,454 9,669 (215) (2.2)
Amortization of intangible assets 862 11,045 (10,183) (92.2)
Other 55,026 58,141 (3,115) (5.4)
- ------------------------------------------------------------------------- -------- -------
TOTAL NON-INTEREST EXPENSE 775,654 760,743 14,911 2.0
- ------------------------------------------------------------------------- -------- -------
INCOME BEFORE INCOME TAXES 447,844 418,950 28,894 6.9
Income taxes 119,322 111,415 7,907 7.1
- ------------------------------------------------------------------------- -------- -------
NET INCOME $ 328,522 $ 307,535 $ 20,987 6.8%
========================================================================= ======== =======
NET INCOME PER COMMON SHARE - DILUTED $ 1.35 $ 1.22 $ 0.13 10.7%
RETURN ON
Average total assets 1.28% 1.23%
Average total shareholders' equity 14.2% 12.9%
Net interest margin(2) 4.21% 4.11%
Efficiency ratio 53.6% 55.4%
Effective tax rate 26.6% 26.6%
REVENUE - FULLY TAXABLE EQUIVALENT (FTE)
Net Interest Income $ 974,078 $ 913,909 $ 60,169 6.6%
Tax Equivalent Adjustment(2) 5,205 6,352 (1,147) (18.1)
- ------------------------------------------------------------------------- -------- -------
Net Interest Income 979,283 920,261 59,022 6.4
Non-Interest Income 471,574 437,738 33,836 7.7
- ------------------------------------------------------------------------- -------- -------
TOTAL REVENUE $1,450,857 $1,357,999 $ 92,858 6.8%
========================================================================= ======== =======
TOTAL REVENUE EXCLUDING SECURITIES GAINS $1,445,955 $1,352,026 $ 93,929 6.9%
========================================================================= ======== =======
(1) See page 16 for definition of Operating Basis.
(2) Calculated assuming a 35% tax rate.
Page 22
HUNTINGTON BANCSHARES INCORPORATED
LOAN LOSS RESERVE AND NET CHARGE-OFF ANALYSIS
OPERATING BASIS (1)
2002
- ---------------------------------------------------------------------------------------------------
(in thousands) FOURTH Third Second First
- ---------------------------------------------------------------------------------------------------
ALLOWANCE FOR LOAN LOSSES, BEGINNING
OF PERIOD $ 408,378 $393,011 $386,053 $386,956
Loan losses (108,238) (56,591) (57,482) (60,191)
Recoveries of loans previously charged off 13,300 12,891 12,582 10,915
- ---------------------------------------------------------------------------------------------------
Net loan losses (94,938) (43,700) (44,900) (49,276)
- ---------------------------------------------------------------------------------------------------
Provision for loan losses 57,418 60,249 53,892 50,595
Allowance of assets purchased -- 1,264 -- --
Allowance of securitized loans (2,463) (2,446) (2,034) (2,222)
- ---------------------------------------------------------------------------------------------------
ALLOWANCE FOR LOAN LOSSES, END OF PERIOD $ 368,395 $408,378 $393,011 $386,053
===================================================================================================
Allowance for loan losses as a % of total loans 1.76% 2.00% 2.00% 2.00%
Allowance for loan losses as a % of non-
performing loans 287.7% 200.7% 185.3% 175.9%
Allowance for loan losses as a % of non-
performing assets 269.4% 190.7% 176.1% 171.2%
NET CHARGE-OFFS BY LOAN TYPE
Commercial $ 59,725 $ 16,808 $ 21,468 $ 16,092
Commercial real estate 7,536 4,085 2,037 3,723
- ---------------------------------------------------------------------------------------------------
Total commercial and commercial real estate 67,261 20,893 23,505 19,815
- ---------------------------------------------------------------------------------------------------
Consumer
Auto leases 12,510 10,117 8,401 12,809
Auto loans 8,778 6,869 5,733 8,888
- ---------------------------------------------------------------------------------------------------
Total auto leases and loans 21,288 16,986 14,134 21,697
- ---------------------------------------------------------------------------------------------------
Home equity 3,526 2,934 3,096 2,814
Residential mortgage 72 123 555 104
Other loans 967 907 1,225 1,098
- ---------------------------------------------------------------------------------------------------
Total consumer 25,853 20,950 19,010 25,713
- ---------------------------------------------------------------------------------------------------
Total net charge-off, excluding exited businesses 93,114 41,843 42,515 45,528
Net charge-offs related to exited businesses 1,824 1,857 2,385 3,748
- ---------------------------------------------------------------------------------------------------
TOTAL NET CHARGE-OFFS INCLUDING EXITED
BUSINESSES $ 94,938 $ 43,700 $ 44,900 $ 49,276
===================================================================================================
NET CHARGE-OFFS - ANNUALIZED PERCENTAGES
Commercial 4.19% 1.21% 1.53% 1.15%
Commercial real estate 0.85 0.45 0.23 0.44
- ---------------------------------------------------------------------------------------------------
Total commercial and commercial real estate 2.92 0.91 1.04 0.88
- ---------------------------------------------------------------------------------------------------
Consumer
Auto leases 1.56 1.27 1.08 1.64
Auto loans 1.21 1.01 0.92 1.47
- ---------------------------------------------------------------------------------------------------
Total auto leases and loans 1.39 1.15 1.01 1.57
- ---------------------------------------------------------------------------------------------------
Home equity 0.45 0.38 0.43 0.41
Residential mortgage 0.02 0.03 0.16 0.04
Other loans 0.99 0.91 1.22 1.09
- ---------------------------------------------------------------------------------------------------
Total consumer 0.91 0.77 0.74 1.06
- ---------------------------------------------------------------------------------------------------
TOTAL NET CHARGE-OFFS EXCLUDING EXITED
BUSINESSES 1.81% 0.83% 0.88% 0.97%
Net charge-offs related to exited businesses 0.03 0.04 0.04 0.08
- ---------------------------------------------------------------------------------------------------
NET CHARGE-OFFS AS a % OF AVERAGE LOANS -
INCLUDING EXITED BUSINESSES(3) 1.84% 0.87% 0.92% 1.05%
===================================================================================================
2001
- ---------------------------------------------------------------------------------------------------
(in thousands) Fourth Third Second First
- ---------------------------------------------------------------------------------------------------
ALLOWANCE FOR LOAN LOSSES, BEGINNING
OF PERIOD $334,827 $326,495 $276,116 $273,747
Loan losses (60,110) (45,063) (71,104) (33,222)
Recoveries of loans previously charged off 9,961 8,981 9,392 7,356
- ---------------------------------------------------------------------------------------------------
Net loan losses (50,149) (36,082) (61,712) (25,866)
- ---------------------------------------------------------------------------------------------------
Provision for loan losses 104,281(2) 46,027 113,655 29,709
Allowance of assets purchased -- -- -- --
Allowance of securitized loans (2,003) (1,613) (1,564) (1,474)
- ---------------------------------------------------------------------------------------------------
ALLOWANCE FOR LOAN LOSSES, END OF PERIOD $386,956 $334,827 $326,495 $276,116
===================================================================================================
Allowance for loan losses as a % of total loans 2.05% 1.77% 1.76% 1.51%
Allowance for loan losses as a % of non-
performing loans 181.4% 173.4% 222.1% 269.8%
Allowance for loan losses as a % of non-
performing assets 176.2% 166.4% 208.1% 237.2%
NET CHARGE-OFFS BY LOAN TYPE
Commercial $ 19,475 $ 8,755 $ 11,507 $ 5,998
Commercial real estate 867 3 1,704 1,316
- ---------------------------------------------------------------------------------------------------
Total commercial and commercial real estate 20,342 8,758 13,211 7,314
- ---------------------------------------------------------------------------------------------------
Consumer
Auto leases 12,634 10,395 17,535 6,813
Auto loans 8,474 5,351 21,652 8,150
- ---------------------------------------------------------------------------------------------------
Total auto leases and loans 21,108 15,746 39,187 14,963
- ---------------------------------------------------------------------------------------------------
Home equity 3,313 3,772 2,310 2,125
Residential mortgage 370 93 241 2
Other loans 1,388 527 2,667 1,462
- ---------------------------------------------------------------------------------------------------
Total consumer 26,179 20,138 44,405 18,552
- ---------------------------------------------------------------------------------------------------
Total net charge-off, excluding exited businesses 46,521 28,896 57,616 25,866
Net charge-offs related to exited businesses 3,628 7,186 4,096 --
- ---------------------------------------------------------------------------------------------------
TOTAL NET CHARGE-OFFS INCLUDING EXITED
BUSINESSES $ 50,149 $ 36,082 $ 61,712 $ 25,866
===================================================================================================
NET CHARGE-OFFS - ANNUALIZED PERCENTAGES
Commercial 1.34% 0.58% 0.77% 0.41%
Commercial real estate 0.10 -- 0.22 0.17
- ---------------------------------------------------------------------------------------------------
Total commercial and commercial real estate 0.89 0.38 0.59 0.33
- ---------------------------------------------------------------------------------------------------
Consumer
Auto leases 1.55 1.27 2.18 0.89
Auto loans 1.43 0.93 4.13 1.46
- ---------------------------------------------------------------------------------------------------
Total auto leases and loans 1.50 1.13 2.95 1.13
- ---------------------------------------------------------------------------------------------------
Home equity 0.48 0.55 0.35 0.33
Residential mortgage 0.18 0.05 0.12 0.00
Other loans 1.29 0.48 2.35 1.16
- ---------------------------------------------------------------------------------------------------
Total consumer 1.08 0.85 1.92 0.81
- ---------------------------------------------------------------------------------------------------
TOTAL NET CHARGE-OFFS EXCLUDING EXITED
BUSINESSES 0.99% 0.62% 1.26% 0.57%
Net charge-offs related to exited businesses 0.07 0.14 0.08 --
- ---------------------------------------------------------------------------------------------------
NET CHARGE-OFFS AS a % OF AVERAGE LOANS -
INCLUDING EXITED BUSINESSES(3) 1.06% 0.76% 1.34% 0.57%
===================================================================================================
(1) See page 16 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 23
HUNTINGTON BANCSHARES INCORPORATED
NON-PERFORMING ASSETS AND PAST DUE LOANS
OPERATING BASIS(1)
2002 2001
- -------------------------------------------------------------------------------------- -----------------------------------------
(in thousands) FOURTH Third Second First Fourth Third Second First
- ----------------------------------------------------------------------------------------------------------------------------------
Non-accrual loans:
Commercial $ 91,861 $147,392 $156,252 $162,959 $155,720 $143,132 $111,363 $ 57,646
Commercial real estate 26,765 47,537 45,795 43,295 45,180 37,772 23,418 32,108
Residential mortgage 9,443 8,488 8,776 11,896 11,086 10,923 10,916 11,303
- ----------------------------------------------------------------------------------------------------------------------------------
Total Nonaccrual Loans 128,069 203,417 210,823 218,150 211,986 191,827 145,697 101,057
Renegotiated loans -- 37 1,268 1,268 1,276 1,286 1,290 1,297
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-PERFORMING LOANS 128,069 203,454 212,091 219,418 213,262 193,113 146,987 102,354
Other real estate, net 8,654 10,675 11,146 6,112 6,384 8,050 9,913 14,031
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-PERFORMING ASSETS $136,723 $214,129 $223,237 $225,530 $219,646 $201,163 $156,900 $116,385
==================================================================================================================================
Non-performing loans as a % of total loans 0.61% 0.99% 1.08% 1.13% 1.13% 1.02% 0.79% 0.56%
Non-performing assets as a % of total loans
and other real estate 0.65% 1.05% 1.14% 1.17% 1.16% 1.06% 0.85% 0.63%
ACCRUING LOANS PAST DUE 90 DAYS OR MORE $ 73,122 $ 68,262 $ 58,449 $ 61,746 $ 76,295 $ 79,339 $ 54,228 $ 89,650
==================================================================================================================================
(1) See page 16 for definition of Operating Basis.
Page 24