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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [Fee Required]
For the fiscal year ended December 31, 1994
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required]
Commission file Number 0-2525
Huntington Bancshares Incorporated
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(Exact name of registrant as specified in its charter)
Maryland 31-0724920
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Huntington Center, 41 S. High Street, Columbus, OH 43287
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (614) 480-8300
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Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock - Without Par Value
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(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [X] Yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of voting stock held by non-affiliates of the
registrant as of January 31, 1995, was $2,075,982,176. As of January 31, 1995,
130,377,186 shares of common stock without par value were outstanding.
Documents Incorporated By Reference
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Parts I and II of this Form 10-K incorporate by reference certain
information from the registrant's 1994 Annual Report to Shareholders. Part III
of this Form 10-K incorporates by reference certain information from the
registrant's definitive Proxy Statement for the 1995 Annual Shareholders'
Meeting.
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Huntington Bancshares Incorporated
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Part I
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ITEM 1: BUSINESS
Huntington Bancshares Incorporated (Huntington), incorporated in
Maryland in 1966, is a multi-state bank holding company headquartered in
Columbus, Ohio. Its subsidiaries conduct a full-service commercial and
consumer banking business, engage in mortgage banking, lease financing, trust
services, discount brokerage services, underwriting credit life and disability
insurance, and issuing commercial paper guaranteed by Huntington, and provide
other financial products and services. At December 31, 1994, Huntington's
subsidiaries had 185 banking offices in Ohio, 18 banking offices in Northern
Kentucky, 25 banking offices in Indiana, 40 banking offices in Michigan, 61
banking offices in West Virginia, 5 banking offices in Western Pennsylvania,
and 1 foreign office in the Cayman Islands. In addition, Huntington's
subsidiaries had 8 thrift offices in Florida and 2 thrift offices in Illinois.
The Huntington Mortgage Company (a wholly-owned subsidiary) has loan
origination offices throughout the Midwest and the East Coast. Foreign banking
activities, in total or with any individual country, are not significant to the
operations of Huntington. At December 31, 1994, Huntington and its
subsidiaries had 8,152 full-time equivalent employees.
Competition in the form of price and service from other banks and
financial companies such as savings and loans, credit unions, finance
companies, and brokerage firms is intense in most of the markets served by
Huntington and its subsidiaries. Mergers between and the expansion of
financial institutions both within and outside Ohio have provided significant
competitive pressure in major markets. The passage of reciprocal interstate
banking legislation in Ohio in 1985 has resulted in increased competitive
pressure. This legislation opened Ohio to nationwide reciprocal interstate
banking in October 1988.
In December 1994, Huntington completed the acquisition of FirstFed
Northern Kentucky Bancorp, Inc. (Covington, Kentucky), a $226 million savings
and loan holding company. Also, Huntington has signed definitive agreements to
acquire Security National Corporation, a one-bank holding company (Maitland,
Florida), Reliance Bank of Florida (Melbourne, Florida), and First Seminole
Bank (Lake Mary, Florida). These acquisitions are expected to be consummated
in the second quarter of 1995. The combined total assets of the pending
affiliations was $335 million at December 31, 1994.
REGULATORY MATTERS
GENERAL
As a registered bank holding company, Huntington is subject to the
supervision of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board") and is required to file with the Federal Reserve Board
reports and other information regarding its business operations and the
business operations of its subsidiaries. It is also subject to examination by
the Federal Reserve Board and is required to obtain Federal Reserve Board
approval prior to acquiring, directly or indirectly, ownership or control of
voting shares of any bank, if, after such acquisition, it would own or control
more than 5% of the voting stock of such bank. In addition, pursuant to
federal law and regulations promulgated by the Federal Reserve Board,
Huntington may only engage in, or own or control companies that engage in,
activities deemed by the Federal Reserve Board to be so closely related to
banking as to be a proper incident thereto. Prior to engaging in most new
business activities, Huntington must obtain approval from the Federal Reserve
Board. Because of its ownership of thrift institutions, Huntington is also
regulated as a savings and loan holding company by the Office of Thrift
Supervision (the "OTS").
Huntington's bank subsidiaries have deposits insured by the Bank
Insurance Fund ("BIF") of the Federal Deposit Insurance Corporation ("FDIC"),
and are subject to supervision, examination, and regulation by the Office of
the Comptroller of the Currency ("OCC") if a national bank, or by state banking
authorities and either the FDIC or the Federal Reserve Board if a
state-chartered bank. Certain deposits of certain of Huntington's bank
subsidiaries were acquired from savings associations and are insured by the
Savings Association Insurance Fund ("SAIF") of the FDIC. Huntington's thrift
subsidiaries, whose deposits are insured by the SAIF, are regulated primarily
by the OTS. Huntington's nonbank subsidiaries are also subject to supervision,
examination, and regulation by the Federal Reserve Board and examination by
applicable federal and state banking agencies. In addition to the impact of
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federal and state supervision and regulation, the banking and nonbanking
subsidiaries of Huntington are affected significantly by the actions of the
Federal Reserve Board as it attempts to control the money supply and credit
availability in order to influence the economy.
To the extent that the following information describes statutory or
regulatory provisions, it is qualified in its entirety by reference to such
statutory or regulatory provisions.
HOLDING COMPANY STRUCTURE
Huntington's depository institution subsidiaries are subject to
affiliate transaction restrictions under federal law which limit the transfer
of funds by the subsidiary banks and thrifts to the parent and any nonbank
subsidiaries of the parent, whether in the form of loans, extensions of credit,
investments, or asset purchases. Such transfers by any subsidiary bank or
thrift to its parent corporation or to any nonbank subsidiary are limited in
amount to 10% of the institution's capital and surplus and, with respect to
such parent and all such nonbank subsidiaries of the parent, to an aggregate of
20% of any such institution's capital and surplus. Furthermore, such loans and
extensions of credit are required to be secured in specified amounts. In
addition, all affiliate transactions must be conducted on terms and under
circumstances that are substantially the same as such transactions with
unaffiliated entities. Under applicable regulations, at December 31, 1994,
approximately $162 million was available for loans to Huntington from its
subsidiary banks and thrifts.
The Federal Reserve Board has a policy to the effect that a bank
holding company is expected to act as a source of financial and managerial
strength to each of its subsidiary banks and to commit resources to support
each such subsidiary bank. Under the source of strength doctrine, the Federal
Reserve Board may require a bank holding company to make capital injections
into a troubled subsidiary bank, and may charge the bank holding company with
engaging in unsafe and unsound practices for failure to commit resources to
such a subsidiary bank. This capital injection may be required at times when
Huntington may not have the resources to provide it. Any loans by a holding
company to any of its subsidiary banks are subordinate in right of payment to
deposits and to certain other indebtedness of such subsidiary bank. Moreover,
in the event of a bank or thrift holding company's bankruptcy, any commitment
by such holding company to a federal bank or thrift regulatory agency to
maintain the capital of a subsidiary bank or thrift will be assumed by the
bankruptcy trustee and entitled to a priority of payment.
In 1989, the United States Congress passed comprehensive financial
institutions legislation known as the Financial Institutions Reform, Recovery,
and Enforcement Act ("FIRREA"). Among other things, FIRREA established a new
principle of liability on the part of depository institutions insured by the
FDIC for any losses incurred by, or reasonably expected to be incurred by, the
FDIC after August 9, 1989, in connection with (i) the default of a commonly
controlled FDIC-insured depository institution, or (ii) any assistance provided
by the FDIC to a commonly controlled FDIC-insured depository institution in
danger of default. "Default" is defined generally as the appointment of a
conservator or receiver and "in danger of default" is defined generally as the
existence of certain conditions indicating that a "default" is likely to occur
in the absence of regulatory assistance. Accordingly, in the event that any
insured bank or thrift subsidiary of Huntington causes a loss to the FDIC,
other bank and thrift subsidiaries of Huntington could be required to
compensate the FDIC by reimbursing to it the amount of such loss, and such
reimbursement could cause a loss of Huntington's investment in such other
subsidiaries.
Federal law permits the OCC to order the pro rata assessment of
shareholders of a national bank whose capital stock has become impaired, by
losses or otherwise, to relieve a deficiency in such national bank's capital
stock. This statute also provides for the enforcement of any such pro rata
assessment of shareholders of such national bank to cover such impairment of
capital stock by sale, to the extent necessary, of the capital stock of any
assessed shareholder failing to pay the assessment. Similarly, the laws of
certain states provide for such assessment and sale with respect to the
subsidiary banks chartered by such states. Huntington, as the sole shareholder
of its subsidiary banks and thrifts, is subject to such provisions. Moreover,
under legislation that became effective August 10, 1993, the claims of a
receiver of an insured depository institution for administrative expenses and
the claims of holders of deposit liabilities of such an institution are
accorded priority over the claims of general unsecured creditors of such an
institution, including the holders of the institution's note obligations, in
the event of a liquidation or other resolution of such institution. As a
result of such legislation, claims of a receiver for administrative expenses
and claims of holders of deposit liabilities of Huntington's depository
subsidiaries
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(including the FDIC, as the subrogee of such holders) would receive priority
over the holders of notes and other senior debt of such subsidiaries in the
event of a liquidation or other resolution and over the interests of Huntington
as sole shareholder of its subsidiaries.
DIVIDEND RESTRICTIONS
Dividends from subsidiary banks and thrifts are a significant source of
funds for payment of dividends to the shareholders of bank holding companies.
There are, however, statutory limits on the amount of dividends that
Huntington's depository institution subsidiaries can pay to Huntington without
regulatory approval.
National banks may not pay a dividend in any amount greater than such
bank's undivided profits. In addition, the prior approval of the OCC is
required for the payment of a dividend by a national bank if the total of all
dividends declared by the bank in a calendar year would exceed the total of its
net income for the year combined with its retained net income for the two
preceding years. The OTS also imposes limits on capital distributions by
thrift institutions that generally allow dividends up to current net income and
up to one-half of the association's capital in excess of its regulatory
requirements, depending upon an institution's level of capital compliance.
Under these provisions and in accordance with the above-described formulas,
Huntington's subsidiary banks and thrifts could, without regulatory approval,
declare dividends to Huntington in 1995 of approximately $224 million plus an
additional amount equal to their net profits during 1995. In the year ended
December 31, 1994, Huntington declared cash dividends of approximately $93
million.
If, in the opinion of the applicable regulatory authority, a bank or
thrift under its jurisdiction is engaged in or is about to engage in an unsafe
or unsound practice (which, depending on the financial condition of the bank or
thrift, could include the payment of dividends), such authority may require,
after notice and hearing, that such bank or thrift cease and desist from such
practice. The Federal Reserve Board, the OCC, and the FDIC have issued policy
statements which provide that insured banks and bank holding companies should
generally only pay dividends out of current operating earnings.
FDIC INSURANCE
The level of deposit premiums affects the profitability of subsidiary
banks and thrifts and thus the potential flow of dividends to parent companies.
The FDIC has the authority to raise the insurance premiums for institutions in
the BIF or the SAIF to a level necessary to achieve a target reserve level of
1.25% of insured deposits within not more than 15 years from the enactment of
FIRREA. Changes in the fundamental features of the system of assessing
insurance premiums are also possible. In October 1994, the FDIC issued an
advance notice of proposed rule making seeking public comment on a possible
redefinition of the base on which insurance premiums are calculated. Such
redefinition could have a significant effect on individul institutions. In
addition, the FDIC has the authority to impose special assessments in certain
circumstances.
Under the risk-based insurance assessment system that became effective
January 1, 1994, the FDIC places each insured depository institution in one of
nine risk categories based on its level of capital and other relevant
information (such as supervisory evaluations). Assessment rates for deposit
insurance premiums currently range from 0.23% to 0.31% for all depository
institutions, depending upon the assessment category into which the insured
institution is placed. The FDIC proposed in February 1995 to widen the range
for BIF insured institutions to 0.04% for banks in the best risk classification
and 0.31% for banks in the riskiest classification, effective at a point,
expected to be early in the second half of 1995, when the 1.25% target reserve
level for the BIF is attained. The FDIC also proposed to maintain the current
range of assessment rates for the SAIF. Portions of the deposits of certain of
Huntington's bank subsidiaries are insured by the SAIF. The portion of a
bank's average assessment base that is attributable to the adjusted amount of
deposits acquired from savings associations is assessed at the rate applicable
to SAIF members and is treated as SAIF deposits. The insured depository
subsidiaries of Huntington are all subject to this risk-based assessment
system.
Huntington incurred $25.3 million of FDIC insurance expense during 1994.
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CAPITAL REQUIREMENTS
The Federal Reserve Board has issued risk-based capital ratio and
leverage ratio guidelines for bank holding companies such as Huntington. The
risk-based capital ratio guidelines establish a systematic analytical framework
that makes regulatory capital requirements more sensitive to differences in
risk profiles among banking organizations, takes off-balance sheet exposures
into explicit account in assessing capital adequacy, and minimizes
disincentives to holding liquid, low-risk assets. Under the guidelines and
related policies, bank holding companies must maintain capital sufficient to
meet both a risk-based asset ratio test and a leverage ratio test on a
consolidated basis. The risk-based ratio is determined by allocating assets
and specified off-balance sheet commitments into four weighted categories, with
higher weighting being assigned to categories perceived as representing greater
risk. A bank holding company's capital (as described below) is then divided by
total risk weighted assets to yield the risk-based ratio. The leverage ratio
is determined by relating core capital (as described below) to total assets
adjusted as specified in the guidelines. Each of Huntington's banking and
thrift subsidiaries is subject to substantially similar capital requirements
adopted by applicable regulatory agencies.
Generally, under the applicable guidelines, a financial institution's
capital is divided into two tiers. "Tier 1", or core capital, includes common
equity, noncumulative perpetual preferred stock (excluding auction rate
issues), and minority interests in equity accounts of consolidated
subsidiaries, less goodwill and, with certain limited exceptions, all other
intangible assets. Bank holding companies, however, may include cumulative
preferred stock in their Tier 1 capital, up to a limit of 25% of such Tier 1
capital. "Tier 2", or supplementary capital, includes, among other things,
cumulative and limited-life preferred stock, hybrid capital instruments,
mandatory convertible securities, qualifying subordinated debt, and the
allowance for loan and lease losses, subject to certain limitations. "Total
capital" is the sum of Tier 1 and Tier 2 capital.
The Federal Reserve Board and the other federal banking regulators
require that all intangible assets, with certain limited exceptions, be
deducted from Tier 1 capital. Under the Federal Reserve Board's rules, the
only types of intangible assets that may be included in (i.e., not deducted
from) a bank holding company's capital are readily marketable purchased
mortgage servicing rights ("PMSRs") and purchased credit card relationships
("PCCRs"), provided that, in the aggregate, the total amount of PMSRs and PCCRs
included in capital does not exceed 50% of Tier 1 capital. PCCRs are subject
to a separate sublimit of 25% of Tier 1 capital. The amount of PMSRs and PCCRs
that a bank holding company may include in its capital is limited to the lesser
of (i) 90% of such assets' fair market value (as determined under the
guidelines), or (ii) 100% of such assets' book value, each determined
quarterly. Identifiable intangible assets (i.e., intangible assets other than
goodwill) other than PMSRs and PCCRs, including core deposit intangibles,
acquired on or before February 19, 1992 (the date the Federal Reserve Board
issued its original proposal for public comment), generally will not be
deducted from capital for supervisory purposes, although they will continue to
be deducted for purposes of evaluating applications filed by bank holding
companies.
Under the risk-based guidelines, financial institutions are required to
maintain a risk-based ratio (total capital to risk-weighted assets) of 8%, of
which 4% must be Tier 1 capital. The appropriate regulatory authority may set
higher capital requirements when an institution's circumstances warrant.
Under the leverage guidelines, financial institutions are required to
maintain a leverage ratio (Tier 1 capital to adjusted total assets, as
specified in the guidelines) of at least 3%. The 3% minimum ratio is
applicable only to financial institutions that meet certain specified criteria,
including excellent asset quality, high liquidity, low interest rate exposure,
and the highest regulatory rating. Financial institutions not meeting these
criteria are required to maintain a leverage ratio which exceeds 3% by a
cushion of at least 100 to 200 basis points.
The guidelines also provide that financial institutions experiencing
internal growth or making acquisitions will be expected to maintain strong
capital positions substantially above the minimum supervisory level.
Furthermore, the Federal Reserve Board's guidelines indicate that the Federal
Reserve Board will continue to consider a "tangible Tier 1 leverage ratio" in
evaluating proposals for expansion or new activities. The tangible Tier 1
leverage ratio is the ratio of an institution's Tier 1 capital, less all
intangibles, to total assets, less all intangibles.
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Failure to meet applicable capital guidelines could subject the
financial institution to a variety of enforcement remedies available to the
federal regulatory authorities, including limitations on the ability to pay
dividends, the issuance by the regulatory authority of a capital directive to
increase capital, and the termination of deposit insurance by the FDIC, as well
as to the measures described below under "Federal Deposit Insurance Corporation
Improvement Act of 1991" as applicable to undercapitalized institutions.
As of December 31, 1994, the Tier 1 risk-based capital ratio, total
risk-based capital ratio, and leverage ratio for Huntington were as follows:
Requirement Huntington
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Tier 1 Risk-Based Capital Ratio 4.00% 9.55%
Total Risk-Based Capital Ratio 8.00% 13.57%
Tier 1 Leverage Ratio 3.00% 7.99%
As of December 31, 1994, each of Huntington's bank and thrift subsidiaries had
capital in excess of the minimum requirements.
The Federal Reserve Board, the OCC, and the FDIC proposed in September
1993 to revise their risk-based capital requirements to ensure that such
requirements provide for explicit consideration by commercial banks of interest
rate risk. It is anticipated that the regulatory agencies will issue a revised
proposed rule for further public comment. Pending issuance of such revised
proposal, Huntington's management cannot determine what effect, if any, an
interest rate risk component would have on the capital of its subsidiary
commercial banks.
FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991
In December 1991, Congress enacted the Federal Deposit Insurance
Corporation Improvement Act of 1991 ("FDICIA"), which substantially revised the
bank regulatory and funding provisions of the Federal Deposit Insurance Act and
made revisions to several other federal banking statutes.
Among other things, FDICIA requires federal banking regulatory
authorities to take "prompt corrective action" with respect to depository
institutions that do not meet minimum capital requirements. For these
purposes, FDICIA establishes five capital tiers: well capitalized, adequately
capitalized, undercapitalized, significantly undercapitalized, and critically
undercapitalized.
The federal banking regulatory agencies have adopted regulations to
implement the prompt corrective action provisions of FDICIA. Among other
things, the regulations define the relevant capital measures for the five
capital categories. An institution is deemed to be "well capitalized" if it
has a total risk-based capital ratio of 10% or greater, a Tier 1 risk-based
capital ratio of 6% or greater, and a Tier 1 leverage ratio of 5% or greater
and is not subject to a regulatory order, agreement, or directive to meet and
maintain a specific capital level for any capital measure. An institution is
deemed to be "adequately capitalized" if it has a total risk-based capital
ratio of 8% or greater, a Tier 1 risk-based capital ratio of 4% or greater,
and, generally, a Tier 1 leverage ratio of 4% or greater and the institution
does not meet the definition of a "well capitalized" institution. An
institution that does not meet one or more of the "adequately capitalized"
tests is deemed to be "undercapitalized". If the institution has a total
risk-based capital ratio that is less than 6%, a Tier 1 risk-based capital
ratio that is less than 3%, or a leverage ratio that is less than 3%, it is
deemed to be "significantly undercapitalized". Finally, an institution is
deemed to be "critically undercapitalized" if it has a ratio of tangible equity
(as defined in the regulations) to total assets that is equal to or less than
2%.
FDICIA generally prohibits a depository institution from making any
capital distribution (including payment of a cash dividend) or paying any
management fee to its holding company if the depository institution would
thereafter be undercapitalized. Undercapitalized institutions are subject to
growth limitations and are required to submit a capital restoration plan. If
any of Huntington's depository institution subsidiaries is required to submit a
capital restoration plan, Huntington would be required to provide a limited
guarantee regarding compliance with the plan as a condition of approval of such
plan by
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the appropriate federal banking agency. If an undercapitalized institution
fails to submit an acceptable plan, it is treated as if it is significantly
undercapitalized. Significantly undercapitalized institutions may be subject
to a number of requirements and restrictions, including orders to sell
sufficient voting stock to become adequately capitalized, requirements to
reduce total assets, and cessation of receipt of deposits from correspondent
banks. Critically undercapitalized institutions may not, beginning 60 days
after becoming critically undercapitalized, make any payment of principal or
interest on their subordinated debt. In addition, critically undercapitalized
institutions are subject to appointment of a receiver or conservator within 90
days of becoming critically undercapitalized.
Under FDICIA, a depository institution that is not well capitalized is
generally prohibited from accepting brokered deposits and offering interest
rates on deposits higher than the prevailing rate in its market. Huntington
expects that the FDIC's brokered deposit rule will not adversely affect the
ability of its depository institution subsidiaries to accept brokered deposits.
Under the regulatory definition of brokered deposits, as of December 31, 1994,
Huntington's depository subsidiaries had brokered deposits of $56.7 million,
compared to $34.3 million as of December 31, 1993.
FDICIA, as amended, directs that each federal banking regulatory agency
prescribe standards, by regulation or guideline, for depository institutions
relating to internal controls, information systems, internal audit systems,
loan documentation, credit underwriting, interest rate exposure, asset growth,
compensation, asset quality, earnings, and stock valuation. The Federal
Reserve Board has adopted a regulation in the form of guidelines covering most
of these items, and the other federal banking regulatory agencies are expected
to adopt identical regulations shortly. Huntington believes that the
regulation and guidelines will not have a material effect on the operations of
its depository institution subsidiaries.
RECENT DEVELOPMENTS
The Riegle-Neal Interstate Banking and Branching Efficiency Act of
1994, enacted in September 1994, provides for nationwide interstate banking and
branching. Under the law, interstate acquisitions of banks or bank holding
companies in any state by bank holding companies in any other state will be
permissible one year after enactment. Interstate branching and consolidations
of existing bank subsidiaries in different states will be permissible beginning
June 1, 1997. The permissibility of consolidations and branching may be
accelerated by "opt-ins" by individual states. A state may also, until June 1,
1997, adopt legislation to "opt-out" of interstate branching and
consolidations, but in that event the state's own banks become ineligible to
branch into, or consolidate their operations, in other states.
The Riegle Community Development and Regulatory Improvement Act of
1994, also enacted in September 1994, made several changes in existing law
affecting bank holding companies, including a reduction in the minimum
post-approval antitrust review waiting period for depository institution
mergers and acquisitions, and the substitution of a notice for an application
when a bank holding company proposes to engage in, or acquire a company to
engage in, nonbanking activities.
GUIDE 3 INFORMATION
Information required by Industry Guide 3 relating to statistical
disclosure by bank holding companies is set forth in Huntington's 1994 Annual
Report to Shareholders, and is incorporated herein by reference:
Table Page
Distribution of Assets, Liabilities and Shareholders'
Equity; Interest Rates and Interest Differential:
Average Balance Sheet 34, 35
Net Interest Earnings Analysis 34, 35
Change in Net Interest Income Due to
Changes in Average Volume and
Interest Rates 3 20
Investment Securities:
Book Value of Investments 8 24
Maturity Distribution and Yields 8 24
Securities Available for Sale:
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Table Page
Book Value of Investments 9 25
Maturity Distribution and Yields 9 25
Loan Portfolio:
Types of Loans 13 31
Maturities and Sensitivities to
Changes in Interest Rates 14 31
Non-accrual, Past Due and
Renegotiated Loans 12 30
Potential Problem Loans 31
Foreign Outstandings 33
Loan Concentrations 13 31
Summary of Loan Loss Experience:
Allowance for Loan Losses 4 21, 22
Allocation of Allowance for Loan Losses 5 21, 22
Deposits:
Average Balances 34, 35
Large CD Maturities 11 29
Return on Equity and Assets 1 18
Short-Term Borrowings 10 29
ITEM 2: PROPERTIES
The headquarters of Huntington and its lead subsidiary, The Huntington
National Bank, are located in the Huntington Center, a thirty-seven story
office building located in Columbus, Ohio. Of the building's total office
space available, Huntington occupies approximately 30 percent. The original
lease term is 25 years, expiring in 2009, with renewal options for up to 50
years with no purchase option. The Huntington National Bank is a limited
partner in the entity that owns the building. In addition to these
headquarters, Huntington's other major properties consist of a thirteen-story
and a twelve-story office building, both of which are located adjacent to the
Huntington Center; a twenty-one story office building, known as the Huntington
Building, located in Cleveland, Ohio; The Huntington Mortgage Company's
building, located in the greater Columbus area; an office complex located in
Troy, Michigan; and two data processing and operations centers located
throughout Ohio. Of these properties, Huntington owns the twelve-story and
thirteen-story office buildings, The Huntington Mortgage Company building, the
building in Troy, Michigan, and the operations centers located in Cleveland and
Columbus. All of the other major properties are held under long-term leases.
ITEM 3: LEGAL PROCEEDINGS
Information required by this item is set forth in Note 12 of Notes to
Consolidated Financial Statements on page 51 of the 1994 Annual Report to
Shareholders, and is incorporated herein by reference.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
Part II
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ITEM 5: MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
The common stock of Huntington Bancshares Incorporated is traded on the
NASDAQ National Market System under the symbol "HBAN". The stock is listed as
"HuntgBcshr" or "HuntBanc" in most newspapers. As of January 31, 1995,
Huntington had 30,943 shareholders of record.
Information regarding the high and low sale prices of Huntington Common
Stock and cash dividends declared on such shares, as required by this item, is
set forth in a table entitled "Market Prices, Key Ratios and Statistics, Non
Performing Assets (Quarterly Data)" on page 37 of the 1994 Annual
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Report to Shareholders, and is incorporated herein by reference. Information
regarding restrictions on dividends, as required by this item, is set forth
under "Item 1: Business-Regulatory Matters-Dividend Restrictions" above and in
Notes 9 and 21 of Notes to Consolidated Financial Statements on pages 49 and
56, respectively, of the 1994 Annual Report to Shareholders, and is
incorporated herein by reference.
ITEM 6: SELECTED FINANCIAL DATA
Information required by this item is set forth in Table 1 on page 18 of
Huntington's 1994 Annual Report to Shareholders, and is incorporated herein by
reference.
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Information required by this item is set forth on pages 18 - 33 of
Huntington's 1994 Annual Report to Shareholders, and is incorporated herein by
reference.
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information required by this item is set forth on pages 42 - 58
(consolidated financial statements), and on page 59 (report of independent
auditors), of Huntington's 1994 Annual Report to Shareholders, and is
incorporated herein by reference.
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
Part III
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ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information required by this item is set forth under the captions
"Class I Directors," "Class II Directors," and "Class III Directors" on pages 3
through 5, under the caption "Executive Officers of the Corporation" on pages
26 through 28, and under the caption "Compliance with Section 16(a) of the
Securities Exchange Act of 1934" on page 34, of Huntington's 1995 Proxy
Statement, and is incorporated herein by reference.
ITEM 11: EXECUTIVE COMPENSATION
Information required by this item is set forth under the caption
"Executive Compensation" on pages 10 through 19, and under the caption
"Compensation of Directors" on pages 6 through 8, of Huntington's 1995 Proxy
Statement, and is incorporated herein by reference.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information required by this item is set forth under the caption
"Ownership of Voting Stock" on pages 8 through 10 of Huntington's 1995 Proxy
Statement, and is incorporated herein by reference.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information required by this item is set forth under the caption
"Transactions With Directors and Officers" on page 10 of Huntington's 1995
Proxy Statement, and is incorporated herein by reference.
Part IV
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ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
(1) The following consolidated financial statements and report of
independent auditors appearing in Huntington's 1994 Annual Report to
Shareholders on the pages indicated below are incorporated by reference in Item
8:
9
10
Annual
Report Page
-----------
Consolidated Balance Sheets as of 42
December 31, 1994 and 1993
Consolidated Statements of Income 43
for the years ended December 31,
1994, 1993 and 1992
Consolidated Statements of Changes 44
in Shareholders' Equity for the years
ended December 31, 1994, 1993 and 1992
Consolidated Statements of Cash Flows 45
for the years ended December 31,
1994, 1993 and 1992
Notes to Consolidated Financial Statements 46-58
Report of Independent Auditors 59
(2) Huntington is not filing separately financial statement schedules
because of the absence of conditions under which they are required or because
the required information is included in the consolidated financial statements
or the notes thereto.
(3) The exhibits required by this item are listed in the Exhibit Index
on pages 12 through 13 of this Form 10-K. The management contracts and
compensatory plans or arrangements required to be filed as exhibits to this
Form 10-K are listed as Exhibits 10(a) through 10(s) in the Exhibit Index.
(b) During the quarter ended December 31, 1994, Huntington filed one Report
on Form 8-K. The report was dated October 18, 1994. The information contained
therein was filed under report item number five, "Other Events", and contained
Huntington's press release to announce the results of operations for the
quarter ended September 30, 1994.
(c) The exhibits to this Form 10-K begin on page 12.
(d) See Item 14(a)(2) above.
10
11
Signatures
- ----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized, on the 15th day of
February, 1995.
HUNTINGTON BANCSHARES INCORPORATED
----------------------------------
(Registrant)
By: /s/Frank Wobst By: /s/Gerald R. Williams
-------------------------------- ---------------------------------
Frank Wobst Gerald R. Williams
Director, Chairman and Executive Vice President and
Chief Executive Officer Chief Financial Officer
(Principal Executive Officer) (Principal Financial Officer)
By: /s/John D. Van Fleet
--------------------------------
John D. Van Fleet
Senior Vice President and
Corporate Controller
(Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated on the 15th day of February, 1995.
/s/Don Monroe Casto, III /s/Timothy P. Smucker
- -------------------------------- -----------------------------------
Don Monroe Casto, III Timothy P. Smucker
Director Director
/s/Don Conrad /s/Zuheir Sofia
- -------------------------------- -----------------------------------
Don Conrad Zuheir Sofia
Director Director
/s/John B. Gerlach /s/Marvin E. White
- -------------------------------- -----------------------------------
John B. Gerlach Marvin E. White
Director Director
/s/W. Lee Hoskins /s/William J. Williams
- -------------------------------- -----------------------------------
W. Lee Hoskins William J. Williams
Director Director
/s/Wm. J. Lhota
- -------------------------------- -----------------------------------
Wm. J. Lhota Milton A. Wolf
Director Director
/s/Gerald E. Mayo
- --------------------------------
Gerald E. Mayo
Director
11
12
Exhibit Index
- -------------
3(i). Articles of Restatement of Charter, Articles of Amendment to Articles of
Restatement of Charter, and Articles Supplementary -- previously
filed as Exhibit 3(i) to Annual Report on Form 10-K for the year
ended December 31, 1993, and incorporated herein by reference.
(ii). Bylaws -- previously filed as Exhibit 3(b) to Annual Report on Form 10-K
for the year ended December 31, 1987, and incorporated herein by
reference.
4(a). Instruments defining the Rights of Security Holders -- reference is made
to Articles V, VIII and X of Articles of Restatement of Charter, as
amended and supplemented. Instruments defining the rights of
holders of long-term debt will be furnished to the Securities and
Exchange Commission upon request.
(b). Rights Plan, dated February 22, 1990, between Huntington Bancshares
Incorporated and The Huntington Trust Company, National
Association -- previously filed as Exhibit 1 to Registration
Statement on Form 8-A, filed with the Securities and Exchange
Commission on February 22, 1990, and incorporated herein by
reference.
10. Material contracts:
(a) Employment Agreement, dated September 16, 1991, between Huntington
Bancshares Incorporated and Frank Wobst -- previously filed as
Exhibit 10(a) to Annual Report on Form 10-K for the year ended
December 31, 1991, and incorporated herein by reference.
(b) Employment Agreement, dated September 16, 1991, between Huntington
Bancshares Incorporated and Zuheir Sofia -- previously filed as
Exhibit 10(b) to Annual Report on Form 10-K for the year ended
December 31, 1991, and incorporated herein by reference.
(c) Employment Agreement, dated September 16, 1991, between Huntington
Bancshares Incorporated and W. Lee Hoskins -- previously filed
as Exhibit 10(c) to Annual Report on Form 10-K for the year
ended December 31, 1991, and incorporated herein by reference.
(d) Executive Agreement, dated September 16, 1991, between Huntington
Bancshares Incorporated and Frank Wobst -- previously filed as
Exhibit 10(f) to Annual Report on Form 10-K for the year ended
December 31, 1991, and incorporated herein by reference.
(e) Executive Agreement, dated September 16, 1991, between Huntington
Bancshares Incorporated and Zuheir Sofia -- previously filed as
Exhibit 10(g) to Annual Report on Form 10-K for the year ended
December 31, 1991, and incorporated herein by reference.
(f) Executive Agreement, dated September 16, 1991, between Huntington
Bancshares Incorporated and W. Lee Hoskins -- previously filed
as Exhibit 10(h) to Annual Report on Form 10-K for the year
ended December 31, 1991, and incorporated herein by reference.
(g) Form of Executive Agreement for certain executive officers --
previously filed as Exhibit 10(g) to Annual Report on Form 10-K
for the year ended December 31, 1993, and incorporated herein
by reference.
(h) Schedule identifying material details of Executive Agreements,
substantially similar to 10(g).
(i) Incentive Compensation Plan -- previously filed as Exhibit 10(i) to
Annual Report on Form 10-K for the year ended December 31,
1993, and incorporated herein by reference.
(j) Long-Term Incentive Compensation Plan, as amended and effective for
performance cycles beginning on or after January 1, 1992 --
previously filed as Exhibit 10(j) to Annual Report on Form 10-K
for the year ended December 31, 1993, and incorporated herein
by reference.
12
13
(k) Supplemental Executive Retirement Plan -- previously filed as Exhibit
10(g) to Annual Report on Form 10-K for the year ended December
31, 1987, and incorporated herein by reference.
(l) Deferred Compensation Plan and Trust for Directors -- reference is
made to Exhibit 4(a) of Post-Effective Amendment No. 2 to
Registration Statement on Form S-8, Registration No. 33-10546,
filed with the Securities and Exchange Commission on January
28, 1991, and incorporated herein by reference.
(m)(1) 1983 Stock Option Plan -- reference is made to Exhibit 4A of
Registration Statement on Form S-8, Registration No. 2-89672,
filed with the Securities and Exchange Commission on February
27, 1984, and incorporated herein by reference.
(2) 1983 Stock Option Plan -- Second Amendment -- previously filed
as Exhibit 10(j)(2) to Annual Report on Form 10-K for the
year ended December 31, 1987, and incorporated herein by
reference.
(3) 1983 Stock Option Plan -- Third Amendment -- previously filed
as Exhibit 10(j)(3) to Annual Report on Form 10-K for the
year ended December 31, 1987, and incorporated herein by
reference.
(4) 1983 Stock Option Plan -- Fourth Amendment -- previously filed
as Exhibit (m)(4) to Annual Report on Form 10-K for the year
ended December 31, 1993, and incorporated herein by reference.
(n)(1) 1990 Stock Option Plan -- reference is made to Exhibit 4(a) of
Registration Statement on Form S-8, Registration No.
33-37373, filed with the Securities and Exchange Commission
on October 18, 1990, and incorporated herein by reference.
(2) First Amendment to Huntington Bancshares Incorporated 1990
Stock Option Plan -- previously filed as Exhibit 10(q)(2) to
Annual Report on Form 10-K for the year ended December 31,
1991, and incorporated herein by reference.
(o) The Huntington Supplemental Stock Purchase and Tax Savings Plan and
Trust (as amended and restated as of February 9, 1990) --
previously filed as Exhibit 4(a) to Registration Statement on
Form S-8, Registration No. 33-44208, filed with the Securities
and Exchange Commission on November 26, 1991, and incorporated
herein by reference.
(p) Deferred Compensation Plan and Trust for Huntington Bancshares
Incorporated Directors -- reference is made to Exhibit 4(a) of
Registration Statement on Form S-8, Registration No. 33-41774,
filed with the Securities and Exchange Commission on July 19,
1991, and incorporated herein by reference.
(q) Huntington Bancshares Incorporated Retirement Plan For Outside
Directors, previously filed as Exhibit 10(t) to Annual Report
on Form 10-K for the year ended December 31, 1992, and
incorporated herein by reference.
(r) 1994 Stock Option Plan -- reference is made to Exhibit 4(a) of
Registration Statement on Form S-8, Registration No. 33-52553,
filed with the Securities and Exchange Commission on March 8,
1994, and incorporated herein by reference.
(s) Huntington Supplemental Retirement Income Plan
11. Statement re: Computation of Earnings Per Share
13. Portions of Huntington's 1994 Annual Report to Shareholders.
21. Subsidiaries of the Registrant.
23. Consent of Independent Auditors.
27. Financial Data Schedule
13