Exhibit 99.3
HUNTINGTON BANCSHARES INCORPORATED
Quarterly Financial Review
June 2001
Table of Contents
-----------------
Consolidated Financial Highlights............................................ 1
Consolidated Balance Sheets.................................................. 2
Consolidated Statements of Income............................................ 3
Loans and Deposits........................................................... 4
Non-Interest Income and Non-Interest Expense................................. 5
Consolidated Average Balances and Interest Rates (Quarterly)................. 6 & 7
Selected Quarterly Income Statement Data..................................... 8
Stock Summary, Key Ratios and Statistics, and Capital Data................... 9
Loan Loss Reserves and Asset Quality......................................... 10
Huntington Bancshares Incorporated
Consolidated Financial Highlights
On an Operating Basis /(1)/
(in thousands, except per share amounts)
------------ ----------- ----------
For the Three Months Ended June 30, 2001 2000 % Change
- ---------------------------------------------------------- ------------ ----------- ----------
Net Income................................................ $ 74,504 $ 97,521 (23.6)%
Per Common Share Amounts/(2)/............................. (2)
Net income
Basic........................................... $ 0.30 $ 0.40 (25.0)
Diluted......................................... $ 0.30 $ 0.40 (25.0)
Cash dividends declared.............................. $ 0.20 $ 0.18 11.1
Average Common Shares Outstanding-Diluted /(2)/........... 251,448 245,652 2.4
Key Ratios
Return on:
Average total assets................................. 1.05% 1.37% (23.4)
Average shareholders' equity......................... 12.43% 17.79% (30.1)
Efficiency ratio.......................................... 58.59% 53.90% 8.7
Average equity/average assets............................. 8.48% 7.72% 9.8
Net interest margin....................................... 3.97% 3.72% 6.7
Tangible or "Cash Basis" Ratios /(3)/
Net Income Per Common Share -- Diluted /(2)/.............. $ 0.33 $ 0.42 (21.4)
Return on:
Average total assets................................. 1.19% 1.49% (20.1)
Average shareholders' equity......................... 13.72% 18.97% (27.7)
------------ ----------- ----------
For the Six Months Ended June 30, 2001 2000 % Change
- ---------------------------------------------------------- ------------ ----------- ----------
Net Income................................................ $ 142,370 $ 201,694 (29.4)%
Per Common Share Amounts /(2)/
Net income
Basic........................................... $ 0.57 $ 0.82 (30.5)
Diluted......................................... $ 0.57 $ 0.82 (30.5)
Cash dividends declared.............................. $ 0.40 $ 0.36 11.1
Average Common Shares Outstanding-Diluted /(2)/........... 251,479 247,431 1.6
Key Ratios
Return on:
Average total assets................................. 1.01% 1.41% (28.4)
Average shareholders' equity......................... 11.98% 18.39% (34.9)
Efficiency ratio.......................................... 60.23% 53.91% 11.7
Average equity/average assets............................. 8.47% 7.67% 10.4
Net interest margin....................................... 3.95% 3.75% 5.3
Tangible or "Cash Basis" Ratios /(3)/
Net Income Per Common Share -- Diluted /(2)/.............. $ 0.63 $ 0.87 (27.6)
Return on:
Average total assets................................. 1.15% 1.53% (24.8)
Average shareholders' equity......................... 13.29% 19.57% (32.1)
/(1)/ Income component excludes the after-tax impact of $72,127 of
Restructuring and Other Charges.
/(2)/ Adjusted for stock splits and stock dividends, as applicable.
/(3)/ Tangible or "Cash Basis" net income excludes amortization of goodwill.
Related asset amount excluded from total assets and shareholders' equity.
Huntington Bancshares Incorporated
Consolidated Balance Sheets
(in thousands of dollars)
------------ ------------ ------------
June 30, December 31, June 30,
2001 2000 2000
------------ ------------ ------------
Assets
Cash and due from banks..................................................... $ 908,686 $ 1,322,700 $ 1,139,025
Interest bearing deposits in banks.......................................... 4,893 4,970 4,976
Trading account securities.................................................. 4,291 4,723 24,310
Federal funds sold and securities
purchased under resale agreements......................................... 59,725 133,183 137,203
Loans held for sale......................................................... 376,671 155,104 100,900
Securities available for sale - at fair value............................... 3,190,686 4,090,525 4,357,699
Investment securities - fair value $15,159; $16,414;
and $17,254, respectively................................................. 14,978 16,336 17,609
Total loans /(1)/........................................................... 21,127,862 20,610,191 20,522,443
Less allowance for loan losses............................................ 352,243 297,880 296,891
------------ ------------ ------------
Net loans................................................................... 20,775,619 20,312,311 20,225,552
------------ ------------ ------------
Bank owned life insurance................................................... 824,062 804,941 784,070
Premises and equipment...................................................... 457,749 454,844 439,007
Customers' acceptance liability............................................. 15,335 17,366 13,532
Accrued income and other assets............................................. 1,315,455 1,282,374 1,340,480
------------ ------------ ------------
Total Assets................................................................ $ 27,948,150 $ 28,599,377 $ 28,584,363
============ ============ ============
Liabilities and Shareholders' Equity
Total deposits /(1)/........................................................ $ 18,996,922 $ 19,777,245 $ 19,758,934
Short-term borrowings....................................................... 2,585,773 1,987,759 1,720,611
Bank acceptances outstanding................................................ 15,337 17,366 13,532
Medium-term notes........................................................... 1,983,603 2,467,150 2,939,150
Subordinated notes and other long-term debt................................. 890,371 870,976 870,756
Company obligated mandatorily redeemable preferred
capital securities of subsidiary trusts holding solely
junior subordinated debentures of the Parent Company...................... 300,000 300,000 300,000
Accrued expenses and other liabilities...................................... 822,622 812,834 714,726
------------ ------------ ------------
Total Liabilities......................................................... 25,594,628 26,233,330 26,317,709
------------ ------------ ------------
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;
257,866,255; and 233,844,820 shares, respectively;
outstanding 251,056,761; 250,859,470; and
228,502,954 shares, respectively........................................ 2,490,682 2,493,645 2,253,224
Less 6,809,494; 7,006,765; and 5,341,866
treasury shares, respectively........................................... (125,095) (129,432) (122,245)
Accumulated other comprehensive income.................................... (8,388) (24,520) (105,987)
Retained earnings......................................................... (3,677) 26,354 241,662
------------ ------------ ------------
Total Shareholders' Equity................................................ 2,353,522 2,366,047 2,266,654
------------ ------------ ------------
Total Liabilities and Shareholders' Equity.................................. $ 27,948,150 $ 28,599,377 $ 28,584,363
============ ============ ============
------------ ------------ ------------
(1) See page 4 for detail on total loans and total deposits.
Page 2
Huntington Bancshares Incorporated
Consolidated Statements of Income
(in thousands of dollars, except per share amounts)
----------------------------------- -----------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
----------------------------------- -----------------------------------
On an Operating Basis/(1)/ 2001 2000 2001 2000
- -------------------------------------------------- --------------- -------------- --------------- -------------
Interest and fee income
Loans.......................................... $ 434,697 $ 448,597 $ 881,482 $ 888,243
Securities..................................... 55,434 66,891 119,268 140,042
Other.......................................... 8,828 4,008 16,184 6,768
--------------- -------------- --------------- -------------
Total Interest Income................. 498,959 519,496 1,016,934 1,035,053
--------------- -------------- --------------- -------------
Interest expense
Deposits....................................... 170,288 192,213 355,369 374,862
Short-term borrowings.......................... 30,039 25,216 63,202 49,980
Medium-term notes.............................. 32,940 48,839 69,603 99,197
Subordinated notes and other long-term debt.... 17,659 20,422 37,603 37,517
--------------- -------------- --------------- -------------
Total Interest Expense................ 250,926 286,690 525,777 561,556
--------------- -------------- --------------- -------------
Net Interest Income................... 248,033 232,806 491,157 473,497
Provision for loan losses......................... 45,777 15,834 79,241 31,535
--------------- -------------- --------------- -------------
Net Interest Income
After Provision for Loan Losses.. 202,256 216,972 411,916 441,962
--------------- -------------- --------------- -------------
Total non-interest income/(2)/.................... 133,453 115,664 251,177 241,358
Total non-interest expense/(2)/................... 233,296 198,076 467,386 398,182
--------------- -------------- --------------- -------------
Income Before Income Taxes............ 102,413 134,560 195,707 285,138
Provision for income taxes........................ 27,909 37,039 53,337 83,444
--------------- -------------- --------------- -------------
Net Income............................ $ 74,504 $ 97,521 $ 142,370 $ 201,694
=============== ============== =============== =============
Per Common Share /(3)/
Net income
Basic...................................... $ 0.30 $ 0.40 $ 0.57 $ 0.82
Diluted.................................... $ 0.30 $ 0.40 $ 0.57 $ 0.82
Cash dividends declared........................ $ 0.20 $ 0.18 $ 0.40 $ 0.36
Average Common Shares /(3)/
Basic...................................... 251,024,374 244,834,775 250,983,996 246,404,512
Diluted.................................... 251,447,651 245,651,908 251,479,136 247,431,449
--------------- -------------- --------------- -------------
/(1)/ Excludes the after-tax impact of $72,127 of Restructuring and Other
Charges.
/(2)/ See page 5 for detail of non-interest income and non-interest expense.
/(3)/ Adjusted for stock splits and stock dividends, as applicable.
Page 3
Huntington Bancshares Incorporated
Loans and Deposits
(in thousands of dollars)
- --------------------------------------------------------------------------------
Loan Portfolio Composition
- --------------------------------------------------------------------------------
----------------------- -------------------- ----------------------
June 30, 2001 December 31, 2000 June 30, 2000
----------------------- -------------------- ----------------------
Balance % Balance % Balance %
------------- -------- ------------ ------- ----------- --------
Commercial (unearned income $1,196; $1,538; $1,958)....... 6,753,809 32.0 $ 6,633,985 32.2 $ 6,552,186 31.8
Real Estate
Construction.......................................... 1,335,208 6.3 1,318,899 6.4 1,277,718 6.2
Commercial............................................ 2,304,603 10.9 2,253,477 10.9 2,186,768 10.7
Consumer
Loans (unearned income $3,521; $4,150; $4,933)........ 6,695,233 31.7 6,388,036 31.0 6,230,548 30.4
Leases (unearned income $520,564; $515,445; $470,868). 3,194,592 15.1 3,069,210 14.9 2,930,547 14.3
Residential Mortgage.................................. 844,417 4.0 946,584 4.6 1,344,676 6.6
------------ ------------ ------------
Total Loans.......................................... $ 21,127,862 100.0 $ 20,610,191 100.0 $ 20,522,443 100.0
============ ============ ============
- --------------------------------------------------------------------------------
Deposit Composition
- --------------------------------------------------------------------------------
----------------------- -------------------- ----------------------
June 30, 2001 December 31, 2000 June 30, 2000
----------------------- -------------------- ----------------------
Balance % Balance % Balance %
------------- -------- ------------ ------- ----------- --------
Demand deposits
Non-interest bearing.................................. $ 3,258,252 17.2 $ 3,480,876 17.6 $ 3,498,325 17.7
Interest bearing...................................... 4,878,355 25.7 4,645,127 23.5 4,373,313 22.1
Savings deposits........................................... 3,640,318 19.2 3,527,796 17.8 3,670,456 18.6
Certificates of deposit
Less than $100,000..................................... 5,447,117 28.7 5,938,486 30.0 5,847,359 29.6
$100,000 or more....................................... 1,262,827 6.6 1,520,547 7.7 1,547,303 7.8
------------ ------------ -----------
Total core deposits.................................. 18,486,869 97.4 19,112,832 96.6 18,936,756 95.8
------------ ------------ -----------
Other domestic time deposits............................... 100,233 0.5 256,106 1.3 416,693 2.1
Foreign time deposits...................................... 409,820 2.1 408,307 2.1 405,485 2.1
------------ ------------ -----------
Total Deposits...................................... $ 18,996,922 100.0 $ 19,777,245 100.0 $19,758,934 100.0
============ ============ ===========
Huntington Bancshares Incorporated
Noninterest Income and Noninterest Expense
(in thousands of dollars)
- --------------------------------------------------------------------------------
Analysis of Non-Interest Income
- --------------------------------------------------------------------------------
--------------------- ---------- ----------------------- ---------
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- Percent ----------------------- Percent
On an Operating Basis/(1)/ 2001 2000 Change 2001 2000 Change
- ------------------------------------------------ -------- ------ ---------- -------- --------- ---------
Service charges on deposit accounts............ $ 40,673 $ 40,097 1.4% $ 79,580 $ 81,757 (2.7)%
Brokerage and insurance income................. 19,388 13,945 39.0 38,156 29,229 30. 5
Mortgage banking............................... 18,733 8,122 130.6 28,764 16,637 72. 9
Trust services................................. 15,178 13,165 15.3 29,492 26,028 13. 3
Electronic banking fees........................ 12,217 11,250 8.6 23,315 21,099 10. 5
Bank Owned Life Insurance income............... 9,561 9,486 0.8 19,121 18,672 2. 4
Other.......................................... 14,956 19,485 (23.2) 27,924 23,059 21. 1
-------- -------- -------- -------- --------
Total Non-Interest income before securities
gains....................................... 130,706 115,550 13.1 246,352 216,481 13. 8
Securities gains............................... 2,747 114 N.M. 4,825 24,877 N.M.
-------- -------- -------- -------- --------
Total Non-Interest Income...................... $133,453 $115,664 15.4% $251,177 $241,358 4.1%
======== ======== ======== ======== ========
- --------------------------------------------------------------------------------
Analysis of Non-Interest Expense
- --------------------------------------------------------------------------------
--------------------- ---------- ---------------------- ----------
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- Percent --------------------- Percent
On an Operating Basis/(1)/ 2001 2000 Change 2001 2000 Change
- ------------------------------------------------ -------- -------- ---------- -------- -------- ----------
Personnel and related costs.................... $122,068 $104,133 17.2% $239,730 $206,477 16.1%
Equipment...................................... 19,844 18,863 5.2 39,816 38,275 4.0
Net occupancy.................................. 18,188 18,613 (2.3) 37,968 37,748 0.6
Outside data processing and other services..... 17,671 15,336 15.2 34,325 30,338 13.1
Amortization of intangible assets.............. 10,435 9,206 13.4 21,011 18,402 14.2
Marketing...................................... 7,852 7,742 1.4 17,791 15,735 13.1
Telecommunications............................. 7,207 6,472 11.4 14,332 13,221 8.4
Legal and other professional services.......... 6,763 4,815 40.5 11,732 9,315 26.0
Printing and supplies.......................... 4,565 4,956 (7.9) 9,624 9,573 0.5
Franchise and other taxes...................... 2,246 2,635 (14.8) 4,366 5,073 (13.9)
Other.......................................... 16,457 5,305 210.2 36,691 14,025 161.6
--------- -------- -------- -------- --------
Total Non-Interest Expense..................... $233,296 $198,076 17.8% $467,386 $398,182 17.4%
========= ======== ======== ======== ========
/(1)/ Excludes the impact Restructuring and Other Charges.
N.M. - Not Meaningful.
Huntington Bancshares Incorporated
- --------------------------------------------------------------------------------
Consolidated Average Balances and Interest Rates (Quarterly Data)
------------------------- --------------------------
Second Quarter 2001 First Quarter 2001
------------------------ --------------------------
Fully Tax Equivalent Basis/(1)/ Average Yield/ Average Yield/
(in millions of dollars) Balance Rate Balance Rate
- ------------------------------------------------- --------- ----------- ------------ --------
Assets
Interest bearing deposits in banks............... $ 5 5.27% $ 5 5.05%
Trading account securities....................... 39 5.15 48 5.52
Federal funds sold and securities purchased
under resale agreements....................... 93 4.21 164 5.78
Mortgages held for sale.......................... 420 6.96 240 7.19
Securities:
Taxable.................................... 3,368 6.26 3,606 6.72
Tax exempt................................. 201 7.26 248 7.55
--------- ------------
Total Securities...................... 3,569 6.32 3,854 6.77
--------- ------------
Loans:
Commercial.................................. 6,741 7.44 6,678 8.19
Real Estate
Construction........................... 1,303 7.43 1,263 8.31
Commercial............................. 2,294 7.92 2,324 8.40
Consumer
Loans................................. 6,552 8.57 6,397 8.95
Leases................................ 3,189 6.71 3,082 6.90
Residential Mortgage.................. 942 7.72 960 7.91
--------- ------------
Total Consumer........................ 10,683 7.94 10,439 8.25
--------- ------------
Total Loans...................................... 21,021 7.75 20,704 8.25
--------- ------------
Allowance for loan losses........................ 316 307
--------- ------------
Net loans /(2)/.................................. 20,705 8.31 20,397 8.74
--------- ------------
Total earning assets............................. 25,147 7.98% 25,015 8.39%
--------- ------------
Cash and due from banks.......................... 903 950
All other assets................................. 2,608 2,579
--------- ------------
Total Assets..................................... $ 28,342 $ 28,237
========= ============
Liabilities and Shareholders' Equity
Core deposits
Non-interest bearing deposits............... $ 3,245 $ 3,211
Interest bearing demand deposits............ 4,799 2.87% 4,597 3.29%
Savings deposits............................ 3,547 3.42 3,505 3.85
Certificates of deposit..................... 7,012 5.74 7,318 6.01
--------- ------------
Total core deposits.................... 18,603 3.55 18,631 3.89
--------- ------------
Other domestic time deposits..................... 118 5.57 167 6.37
Foreign time deposits............................ 377 4.11 267 5.45
--------- ------------
Total deposits.............................. 19,098 3.58 19,065 3.94
--------- ------------
Short-term borrowings............................ 2,759 4.37 2,504 5.37
Medium-term notes................................ 2,005 6.59 2,240 6.64
Subordinated notes and other long-term debt,
including preferred capital securities........ 1,180 5.96 1,171 6.81
--------- ------------
Interest bearing liabilities................ 21,797 4.62% 21,769 5.12%
--------- ------------
All other liabilities............................ 897 869
Shareholders' equity............................. 2,403 2,388
--------- ------------
Total Liabilities and Shareholders' Equity $ 28,342 $ 28,237
========= ============
--------- ------------
Net interest rate spread............................ 3.36% 3.27%
Impact of non-interest bearing funds on margin...... 0.61% 0.66%
Net Interest Margin................................. 3.97% 3.93%
____________________________________________________
/(1)/ Fully tax equivalent yields are calculated assuming a 35% tax rate.
/(2)/ Net loan rate includes loan fees, whereas individual loan components above
are shown exclusive of fees.
Page 6
Huntington Bancshares Incorporated
- --------------------------------------------------------------------------------
Consolidated Average Balances and Interest Rates (Quarterly Data)
--------------------- --------------------- ---------------------
Fourth Quarter 2000 Third Quarter 2000 Second Quarter 2000
- --------------------------------------------------- --------------------- --------------------- ---------------------
Fully Tax Equivalent Basis/(1)/ Average Yield/ Average Yield/ Average Yield/
(in millions of dollars) Balance Rate Balance Rate Balance Rate
- --------------------------------------------------- ---------- -------- ---------- -------- ---------- --------
Assets
Interest bearing deposits in banks................. $ 5 5.50% $ 5 6.13% $ 6 5.13%
Trading account securities......................... 17 6.56 11 6.54 18 8.67
Federal funds sold and securities purchased
under resale agreements......................... 85 6.53 136 6.43 105 6.10
Mortgages held for sale............................ 129 7.74 99 8.51 99 8.11
Securities:
Taxable...................................... 4,410 6.31 4,273 6.33 4,067 6.20
Tax exempt................................... 264 7.53 270 7.57 276 7.63
---------- ---------- ----------
Total Securities........................ 4,674 6.38 4,543 6.40 4,343 6.29
---------- ---------- ----------
Loans:
Commercial.................................... 6,543 8.65 6,454 8.74 6,439 8.65
Real Estate
Construction............................. 1,306 8.87 1,283 8.88 1,254 8.72
Commercial............................... 2,227 8.64 2,193 8.60 2,172 8.51
Consumer
Loans................................... 6,425 8.90 6,392 8.82 6,530 8.38
Leases.................................. 3,049 6.92 2,976 6.79 2,895 6.71
Residential Mortgage.................... 940 7.94 1,325 7.64 1,473 7.62
---------- ---------- ----------
Total Consumer.......................... 10,414 8.24 10,693 8.11 10,898 7.83
---------- ---------- ----------
Total Loans........................................ 20,490 8.45 20,623 8.41 20,763 8.21
---------- ---------- ----------
Allowance for loan losses.......................... 302 302 302
---------- ---------- ----------
Net loans /(2)/...................................... 20,188 8.96 20,321 8.90 20,461 8.69
---------- ---------- ----------
Total earning assets............................... 25,400 8.47% 25,417 8.43% 25,334 8.27%
---------- ---------- ----------
Cash and due from banks............................ 960 968 1,046
All other assets................................... 2,597 2,615 2,496
---------- ---------- ----------
Total Assets....................................... $ 28,655 $ 28,698 $ 28,574
---------- ========== ==========
Liabilities and Shareholders' Equity
Core deposits
Non-interest bearing deposits................. $ 3,308 $ 3,425 $ 3,485
Interest bearing demand deposits.............. 4,496 3.62% 4,385 3.47% 4,228 3.32%
Savings deposits.............................. 3,498 4.28 3,528 4.14 3,583 4.21
Certificates of deposit....................... 7,522 6.07 7,450 5.94 7,247 5.64
---------- ---------- ----------
Total core deposits...................... 18,824 4.96 18,788 4.82 18,543 4.65
---------- ---------- ----------
Other domestic time deposits....................... 365 6.68 433 6.55 506 6.28
Foreign time deposits.............................. 322 6.37 561 6.63 626 6.66
---------- ---------- ----------
Total deposits................................ 19,511 5.02 19,782 4.93 19,675 4.78
---------- ---------- ----------
Short-term borrowings.............................. 2,133 6.00 2,014 6.12 1,761 5.77
Medium-term notes.................................. 2,665 6.85 2,592 6.81 3,042 6.46
Subordinated notes and other long-term debt,
including preferred capital securities.......... 1,171 7.42 1,171 7.39 1,148 7.08
---------- ---------- ----------
Interest bearing liabilities.................. 22,172 5.46% 22,134 5.39% 22,141 5.21%
---------- ---------- ----------
All other liabilities.............................. 822 787 743
Shareholders' equity............................... 2,353 2,352 2,205
---------- ---------- ----------
Total Liabilities and Shareholders' Equity......... $ 28,655 $ 28,698 $ 28,574
========== ========== ==========
---------- ---------- ----------
Net interest rate spread........................... 3.01% 3.04% 3.06%
Impact of non-interest bearing funds on margin..... 0.69% 0.70% 0.66%
Net Interest Margin................................ 3.70% 3.74% 3.72%
- --------------------------------------------------- -------- -------- --------
/(1)/ Fully tax equivalent yields are calculated assuming a 35% tax rate.
/(2)/ Net loan rate includes loan fees, whereas individual loan components
above are shown exclusive of fees.
Huntington Bancshares Incorporated
Selected Quarterly Income Statement Data
(in thousands of dollars, except per share amounts)
------------------- ------------------------------
2001 2000
------------------- ------------------------------
On an Operating Basis /(1)/ 2 Q 1 Q 4 Q 3 Q 2 Q
- ---------------------------------------------------- -------- -------- -------- -------- --------
Total Interest Income............................... $498,959 $517,975 $537,661 $535,791 $519,496
Total Interest Expense.............................. 250,926 274,851 304,595 299,922 286,690
-------- -------- -------- -------- --------
Net Interest Income................................. 248,033 243,124 233,066 235,869 232,806
Provision for loan losses........................... 45,777 33,464 32,548 26,396 15,834
-------- -------- -------- -------- --------
Net Interest Income After
Provision for Loan Losses......................... 202,256 209,660 200,518 209,473 216,972
-------- -------- -------- -------- --------
Service charges on deposit accounts................. 40,673 38,907 39,248 39,722 40,097
Brokerage and insurance income...................... 19,388 18,768 17,078 15,564 13,945
Mortgage banking.................................... 18,733 10,031 11,976 9,412 8,122
Trust services...................................... 15,178 14,314 14,404 13,181 13,165
Electronic banking fees............................. 12,217 11,098 11,546 11,238 11,250
Bank Owned Life Insurance income.................... 9,561 9,560 11,086 9,786 9,486
Other............................................... 14,956 12,968 24,366 11,370 19,485
-------- -------- -------- -------- --------
Total Non-Interest Income before securities
gains............................................ 130,706 115,646 129,704 110,273 115,550
Securities gains.................................... 2,747 2,078 845 11,379 114
-------- -------- -------- -------- --------
Total Non-Interest Income........................... 133,453 117,724 130,549 121,652 115,664
-------- -------- -------- -------- --------
Personnel and related costs......................... 122,068 117,662 105,810 109,463 104,133
Equipment........................................... 19,844 19,972 20,811 18,983 18,863
Net occupancy....................................... 18,188 19,780 18,614 19,520 18,613
Outside data processing and other services.......... 17,671 16,654 16,142 15,531 15,336
Amortization of intangible assets................... 10,435 10,576 10,494 10,311 9,206
Marketing........................................... 7,852 9,939 10,592 8,557 7,742
Telecommunications.................................. 7,207 7,125 6,524 6,480 6,472
Legal and other professional services............... 6,763 4,969 6,785 4,719 4,815
Printing and supplies............................... 4,565 5,059 5,212 4,849 4,956
Franchise and other taxes........................... 2,246 2,120 3,163 2,841 2,635
Other............................................... 16,457 20,234 19,703 12,331 5,305
-------- -------- -------- -------- --------
Total Non-Interest Expense.......................... 233,296 234,090 223,850 213,585 198,076
-------- -------- -------- -------- --------
Income Before Income Taxes.......................... 102,413 93,294 107,217 117,540 134,560
Provision for income taxes.......................... 27,909 25,428 30,995 34,510 37,039
-------- -------- -------- -------- --------
Net Income.......................................... $ 74,504 $ 67,866 $ 76,222 $ 83,030 $ 97,521
======== ======== ======== ======== ========
Per Common Share /(2)/
Net income
Diluted........................................ $ 0.30 $ 0.27 $ 0.30 $ 0.33 $ 0.40
Diluted - Cash Basis........................... $ 0.33 $ 0.30 $ 0.33 $ 0.36 $ 0.42
Cash Dividends Declared............................ $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.18
Fully Tax Equivalent Margin:
Net Interest Income................................. $248,033 $243,124 $233,066 $235,869 $232,806
Tax Equivalent Adjustment /(3)/..................... 1,616 2,002 2,057 2,022 2,074
-------- -------- -------- -------- --------
Tax Equivalent Net Interest Income.................. $249,649 $245,126 $235,123 $237,891 $234,880
======== ======== ======== ======== ========
-------- --------- -------- -------- --------
/(1)/ Excludes the after-tax impact of Restructuring and Other Charges ($72,127
in 2Q 2001 and $32,500 in 3Q 2000).
/(2)/ Adjusted for stock splits and stock dividends, as applicable.
/(3)/ Calculated assuming a 35% tax rate.
Page 8
Huntington Bancshares Incorporated
Stock Summary, Key Ratios and Statistics, and Capital Data
- --------------------------------------------------------------------------------
Quarterly Common Stock Summary/(1)/
- --------------------------------------------------------------------------------
----------------------------- --------------------------------------------
2001 2000
----------------------------- --------------------------------------------
2 Q 1 Q 4 Q 3 Q 2 Q
------------- ------------ ------------ ------------ ----------
High........................................... $ 17.00 $ 18.000 $ 16.375 $ 18.813 $ 21.307
Low............................................ 13.875 12.625 12.516 14.375 14.091
Close.......................................... 16.375 14.250 16.188 14.688 14.375
Cash dividends declared........................ $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.18
------------- ------------ ------------ ------------ ----------
Note: Stock price quotations were obtained from NASDAQ.
- --------------------------------------------------------------------------------
Key Ratios and Statistics
- --------------------------------------------------------------------------------
----------------------------- --------------------------------------------
Margin Analysis - As a % 2001 2000
----------------------------- --------------------------------------------
of Average Earning Assets/(2)/ 2 Q 1 Q 4 Q 3 Q 2 QQ
- ---------------------------------------------- ------------- ------------ ------------ ------------ ----------
Interest Income............................... 7.98% 8.39% 8.47% 8.43% 8.27%
Interest Expense.............................. 4.01% 4.46% 4.77% 4.69% 4.55%
------------- ------------ ------------ ------------ ----------
Net Interest Margin...................... 3.97% 3.93% 3.70% 3.74% 3.72%
============= ============ ============ ============ ==========
Return on/(3)/
- ----------------------------------------------
Average total assets.......................... 1.05% 0.97% 1.06% 1.15% 1.37%
Average total assets - cash basis............. 1.19% 1.11% 1.19% 1.29% 1.49%
Average shareholders' equity.................. 12.43% 11.53% 12.89% 14.04% 17.79%
Average shareholders' equity - cash basis..... 13.72% 12.86% 14.20% 15.33% 18.97%
Efficiency Ratio/(3)/......................... 58.59% 61.95% 58.48% 58.38% 53.90%
Effective tax rate/(3)/....................... 27.25% 27.26% 28.91% 29.36% 27.53%
------------- ------------ ------------ ------------ ----------
- --------------------------------------------------------------------------------
Capital Data
- --------------------------------------------------------------------------------
----------------------------- --------------------------------------------
2001 2000
----------------------------- --------------------------------------------
(in millions of dollars) 2 Q 1 Q 4 Q 3 Q 2 QQ
- ---------------------------------------------- ------------- ------------ ------------ ------------ ----------
Total Risk-Adjusted Assets/(4)/............... $ 27,378 $ 27,230 $ 26,880 $ 26,370 $ 25,900
Tier 1 Risk-Based Capital Ratio/(4)/.......... 7.00% 7.20% 7.19% 7.20% 7.40%
Total Risk-Based Capital Ratio/(4)/........... 10.19% 10.33% 10.46% 10.64% 10.90%
Tier 1 Leverage Ratio/(4)/.................... 6.94% 7.13% 6.93% 6.80% 6.89%
Tangible Equity/Asset Ratio................... 5.97% 6.01% 5.87% 5.73% 5.78%
------------- ------------ ------------ ------------ ----------
/(1)/ Adjusted for stock splits and stock dividends, as applicable.
/(2)/ Presented on a fully tax equivalent basis assuming a 35% tax rate.
/(3)/ Income component excludes the impact of Restructuring and Other Charges.
/(4)/ Estimated.
Page 9
Huntington Bancshares Incorporated
Loan Loss Reserves and Asset Quality
(in thousands of dollars)
- --------------------------------------------------------------------------------
Loan Loss Experience
- --------------------------------------------------------------------------------
------------------------------ ----------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------ ----------------------------------
2001/(1)/ 2000 2001/(1)/ 2000
-------------- ------------- ------------- -------------
Allowance for loan losses, beginning of period.............. $ 301,777 $ 296,743 $ 297,880 $ 299,309
Allowance acquired.......................................... --- 7,900 --- 7,900
Loan losses................................................. (75,472) (22,810) (111,121) (48,417)
Recoveries of loans previously charged off.................. 10,007 7,280 17,563 14,620
Allowance of securitized loans.............................. (1,564) (8,056) (3,038) (8,056)
Provision for loan losses................................... 117,495 15,834 150,959 31,535
-------------- ------------- ------------- -------------
Allowance for loan losses end of period..................... $ 352,243 $ 296,891 $ 352,243 $ 296,891
============== ============= ============= =============
As a % of average total loans
Net loan losses--annualized............................... 1.25% 0.30% 0.90% 0.33%
Net loan losses--annualized excluding special charges..... 0.73% 0.30% 0.64% 0.33%
Allowance for loan losses as a % of total loans............. 1.67% 1.45% 1.67% 1.45%
Net loan loss coverage /(2)/................................ 2.26x 9.68x 2.94x 9.37x
-------------- ------------- ------------- -------------
/(1)/ Including restructuring and other charges unless otherwise indicated.
/(2)/ Income before taxes (excluding restructuring and other charges) and the
provision for loan losses to net loan losses.
- --------------------------------------------------------------------------------
Non-Performing Assets and Past Due Loans
- --------------------------------------------------------------------------------
------------------------------ ----------------------------------------------------
2001 2000
------------------------------ ----------------------------------------------------
2 Q 1 Q 4 Q 3 Q 2 Q
------------- -------------- ------------- ------------- -------------
Non-accrual loans:
Commercial................................... $ 116,044 $ 62,716 $ 55,804 $ 44,918 $ 45,138
Real Estate
Construction.............................. 4,572 6,735 8,687 7,973 8,736
Commercial................................ 22,298 28,158 18,015 13,722 12,714
Residential............................... 11,868 11,949 10,174 8,588 11,548
------------- -------------- ------------- ------------- -------------
Total Nonaccrual Loans....................... 154,782 109,558 92,680 75,201 78,136
Renegotiated loans........................... 1,290 1,297 1,304 1,311 1,317
------------- -------------- ------------- ------------- -------------
Total Non-Performing Loans................... 156,072 110,855 93,984 76,512 79,453
Other real estate, net....................... 9,913 14,031 11,413 11,982 15,670
------------- -------------- ------------- ------------- -------------
Total Non-Performing Assets.................. $ 165,985 $ 124,886 $ 105,397 $ 88,494 $ 95,123
============= ============== ============= ============= =============
Non-performing loans as a
% of total loans.......................... 0.74% 0.53% 0.46% 0.38% 0.39%
Non-performing assets as a
% of total loans and other real estate.... 0.79% 0.60% 0.51% 0.44% 0.46%
Allowance for loan losses as a % of
non-performing loans...................... 225.69% 272.23% 316.95% 385.15% 373.67%
Allowance for loan losses and other real
estate as a % of non-performing assets.... 211.20% 239.42% 279.16% 326.77% 306.89%
Accruing loans past due 90 days or more...... $ 67,077 $ 102,658 $ 80,306 $ 80,290 $ 62,775
============= ============== ============= ============= =============
------------- -------------- ------------- ------------- -------------
Page 10
Huntington Bancshares
Incorporated
[LOGO]
Second Quarter 2001
Earnings Review
July 17, 2001
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 FORWARD LOOKING STATEMENT
DISCLOSURE
================================================================================
Today's conference call and discussion, including related questions and
answers, may contain forward-looking statements, including certain plans,
expectations, goals, and projections which are subject to numerous assumptions,
risks and uncertainties. Actual results could differ materially from those
contained or implied by such statements for a variety of factors including:
. Changes in economic conditions
. Movements in interest rates
. Competitive pressures on product pricing and services
. Success and timing of business strategies
. The successful integration of acquired businesses
. The nature, extent and timing of governmental actions and reforms
. Extended disruption of vital infrastructure
All forward-looking statements included in this conference call and discussion,
included related questions and answers, are based on information available at
the time of the call. Huntington assumes no obligation to update any forward-
looking statement.
[LOGO]
Today's speakers [LOGO]
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
----------------------------------------------------------
Tom Hoaglin
President and Chief Executive Officer
Mike McMennamin
Vice Chairman and Chief Financial Officer
-----------------------------------------------------------
Second Quarter 2001 Operating Earnings [LOGO]
================================================================================
($ In Millions)
Reported Charges Operating
Net Interest Income $ 248.0 $ 248.0
Provision (117.5) $ (71.7) (45.8)
Non-Interest Income 130.7 130.7
Security Gains (2.5) (5.3) 2.7
Non-Interest Expense (267.3) (34.0) (233.3)
-------- ------- ---------
Pre-Tax Income $ (8.6) $(110.0) $ 102.4)
-------- ------- ---------
Net Income $ 2.4 $ (72.1) $ 74.5
-------- ======= ---------
EPS $ 0.O1 $ 0.30
======== =========
Estimated Restructuring and other Charges [LOGO]
================================================================================
------------- Timing
---------------------
($ in millions) Total 2Q 3Q-4Q
------- -------- -------
Restructuring $ 64 $ 64
Branches/ATMs/ops
Florida retention/transition
Corporate overhead
Facilities
e-Commerce
Impairment 45 37 8
I/O strip
PG&E
Auto residuals
Other
Credit 72 72 --
120 day delinquencies
Sub-prime auto
Truck & equipment
Other reserves 34 2 32
------- --------- -------
Total pre-tax charge $ 215 $111 $104
-------------
Earnings Per Share [LOGO]
================================================================================
GAAP 2Q01 1Q01 2Q00
----- ----- -----
Operating (1) $0.30 $0.27 $0.40
Core $0.28 $0.28 $0.37
Non-Core Items 2Q01 1Q01 2Q00
----- ----- -----
Better (Worse)
Mortgage Loan Sale $ 2.0
Security Gain (Loss) 2.7 $(2.1)/(2)/
Branch Sale Gain 1.2
$ 9.8
Accrual Adjustments ----- ----- -----
TOTAL $ 5.9 $(2.1) $ 9.8
(1) Excluding after-tax impact of $72.1MM of restructuring and other charges
(2) Includes PG&E Loss of $4.2MM
Cash Basis Performance/1/ [LOGO]
- -------------------------------------------------------------------------------
2Q01/2/ 1Q01 2Q01
---- ---- ----
EPS $ 0.33 $ 0.30 $ 0.42
ROA 1.19% 1.11% 1.49%
ROE 13.72% 12.86% 18.97%
(1) Cash basis ratios are based on operating earnings excluding goodwill
amortization of $7.1 million (2Q01), $7.2 million (1Q01), and $5.9 million
(2Q00), net of tax
(2) Income component excludes after-tax impact of $72.1MM of restructuring and
other charges
Key Performance Indicators [LOGO]
==================================================================
2Q01/1/ 1Q01 2Q00
---- ---- ----
EPS $ 0.30 $ 0.27 $ 0.40
ROA 1.05% 0.97% 1.37%
ROE 12.43% 11.53% 17.79%
Efficiency Ratio 58.59% 61.95% 53.90%
NIM% 3.97% 3.93% 3.72%
Tangible Equity/Assets/2/ 5.97% 6.01% 5.78%
(1) Income component excludes after-tax impact of $72.1MM of restructuring and
other charges
(2) Period end
Second Quarter Overview/1/ [LOGO]
vs. 1Q01
* NIM - 3.93% - 3.97%
* 5% managed loan growth
* Efficiency ratio of 62.0% - 58.6%
* Expenses down $0.8MM
* Revenue up $20MM
* Net charge offs - 0.55% - 0.73%
* NPAs - 0.60% - 0.79%
(1) Excludes after-tax impact of $72.1MM restructuring and other charges
Income Statement [LOGO]
($ In Millions)
2Q01 /1/ 1Q01 2Q00
------- ------- -------
Net Interest Income $ 248.0 $ 243.1 $ 232.8
Provision (45.8) (33.5) (15.8)
Non-Interest Income 130.7 115.6 115.6
Security Gains 2.7 2.1 0.1
Non-Interest Expense (233.3) (234.1) (198.1)
------- ------- -------
Pre-Tax Income $ 102.4 $ 93.0 $ 134.6
------- ------- -------
Net Income $ 74.5 $ 67.9 $ 97.5
======= ======= =======
(1) Excludes after-tax impact of $72.1MM of restructuring and other charges
Managed Loan Growth [LOGO]
Average Balance ($ Billions)
Annualized Growth
2Q01 vs. 1Q01 vs. 2001 vs.
2Q01 1Q01 4Q00 2Q00
------ ------ ------ ------
Commercial $ 6.7B 4% 9% 2%
Commercial Real Estate 3.6 1 6 4
------- ------ ------ ------
Total Commercial/CRE 10.3 3% 8% 3%
Auto Loan/Lease 7.1 6 --- 10
Consumer 4.0 8 8 12
Residential Real Estate 0.9 --- 20 9
------- ------ ------ ------
Total Consumer $ 12.0 6% 5% 11%
------- ------ ------ ------
Managed Loans $ 22.3B 5% 6% 7%
=======
Note: Growth percentages normalized for acquisitions, portfolio sales and
securitizations.
Non-Interest Income [LOGO]
($ In Millions)
Better or (Worse) vs.
---------------------
2Q01 1Q01($) 1Q01(%)/1/ 2Q00(%)
---- ------- ---------- ------
Service Charges $ 40.7 $ 1.8 5% 1%
Brokerage/Insurance 19.4 .6 3 39
Trust Income 15.2 .9 6 15
Electronic Banking 12.2 1.1 10 9
Mortgage Banking 18.7 8.7 87 131
Other 24.5 2.0 9 (15)
------ ------- ---------- ------
Total Non-Interest Income /2/ $130.7 $ 15.1 13% 13%
====== =======
(1) Linked quarter percentage growth is not annualized
(2) Excludes security gains
Non-Interest Expense [LOGO]
==============================================================================
$ In Millions
Better or (Worse) vs.
---------------------
2Q01 1Q01 ($) 1Q01 (%)/1/ 2Q00 (%)
---- -------- ----------- --------
Personnel & Related Costs $122.1 $(4.4) (4)% (17)%
Occupancy & Equipment 38.0 1.7 4 (1)
Outside Services 17.7 (1.0) (6) (15)
Amortization of Intangibles 10.4 0.1 1 (13)
Marketing 7.9 2.1 21 (1)
Other 37.2 2.3 6 (54)
------ ----- ---- ----
Non-Interest Expense $233.3 $ 0.8 --- % (18)%
====== =====
(1) Linked quarter percentage growth is not annualized
[GRAPH APPEARS HERE]
NPAs/Total Loans + Oreo [LOGO]
Percent
--------------------------------------------------------------
1Q99 2Q99 3Q99 4Q99 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01
- --------------- ------ ------ ----- ----- ----- ----- ----- ----- ----- ------
* Huntington 0.48 0.46 0.47 0.47 0.45 0.46 0.44 0.51 0.6 0.79
- --------------- ------ ------ ----- ----- ----- ----- ----- ----- ----- ------
[] Peer Average 0.55 0.52 0.54 0.55 0.55 0.59 0.61 0.68 0.83
- ------------------------------------------------------------------------------
Peer Group: ASO, BBT, CMA, FITB, FSR, KEY, NCC, OK, RGBK, USB
[GRAPH APPEARS HERE]
NCO / Average Loans/1/ [LOGO]
===============================================================================
Percent
----------------------------------------------------------------------
1Q99 2Q99 3Q99 4Q99 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01
- --------------------------------------------------------------------------------
* 0.51 0.38 0.39 0.32 0.35 0.3 0.46 0.5 0.55 0.73
- --------------------------------------------------------------------------------
[_] 0.4 0.4 0.39 0.47 0.42 0.37 0.45 0.49 0.59
- --------------------------------------------------------------------------------
* Huntington [_] Peer Average
Peer Group: ASO, BBT, CMA, FITB, FSR, KEY, NCC, OK, RGBK, USB
(1) Excludes impact of restructuring and other charges
Net Charge-Offs Summary [LOGO]
================================================================================
2Q01/1/ 1Q01 2Q00
------- ---- ----
Commercial 0.67% 0.41% 0.15%
Commercial R/E 0.18 0.15 0.03
Consumer 0.95 0.78 0.47
----- ---- ----
Total 0.73% 0.55% 0.30%
(1) Excludes impact of restructuring and other charges
Consumer Charge-Offs [LOGO]
- --------------------------------------------------------------------------------
2Q01/1/ 1Q01 2Q00
------- ---- ----
Indirect 1.50% 1.43% 0.74%
Vehicle Lease 1.37 0.89 0.57
------- ---- ----
Subtotal 1.43 1.13 0.66
Installment 0.63 0.61 0.46
Home Equity Lines 0.31 0.34 0.25
Residential R/E 0.10 0.03 0.03
------- ---- ----
TOTAL 0.95% 0.78% 0.47%
(1) Excludes impact of restructuring and other charges
Credit Quality [LOGO]
================================================================================
2Q01 1Q01 2Q00
---- ---- ----
NPAs/Total Loans + OREO 0.79% 0.60% 0.46%
90+ Days Past Due 0.32 0.49 0.31
Consumer 0.48 0.69 0.46
Com/CRE 0.15 0.29 0.15
Reserve/Total Loans 1.67 1.45 1.45
Reserve/NPAs 211.20% 239.42% 306.89%
Allowance for Loan Losses [LOGO]
- --------------------------------------------------------------------------------
($ in millions)
2Q01 Special 2Q01
operating charge reported
--------- ------ --------
Balance at March 31, 2001 $301.8 $ -- $301.8
Net charge-offs (38.1) (27.4) (65.5)
Provision 45.8 71.7 117.5
Other (1.6) -- (1.6)
------ ------ ------
Balance at June 30, 2001 $307.9 $ 44.3 $352.2
Annualized loan losses .73% 1.25%
ALL as % of total loans 1.45% 1.67%
================================================================================
Earnings Projection - 2002
2002 Earnings Projection [LOGO]
=================================================================
EPS
---
2001 EPS estimate $1.15 - $1.17
Growth 0.12 - 0.13
Restructure charge/branch consol. 0.04 - 0.06
Florida market disposition 0.02 - 0.06
Accounting change - goodwill 0.11 - 0.11
------------
2002 EPS estimate $1.44 - $1.53
Goodwill and CDI Amortization [LOGO]
================================================================================
($ in millions)
Projected Balances at December 2001
-----------------------------------
Assets HBI Florida HBI ex-Florida
- ------ --- ------- --------------
Goodwill $ 663 $ 472 $ 191
Core deposit intangible 54 54 ---
----- ----- -----
$ 717 $ 526 $ 191
Amortization Per Share/1/
- -------------------------
Goodwill $0.11 $ .07 $ .04
Core deposit intangible .02 .02 ---
----- ----- -----
$0.13 $ .09 $ .04
(1) Prior to pending change in accounting for goodwill
- Assumes 251.5 million shares outstanding
Excess Capital - Florida Sale [LOGO]
- ----------------------------------------------------------------------------
($ in millions)
Capital Generated/Released
. Intangibles $ 526
. Sale of $2,600MM assets (@6.50%) 170
--------
. After tax gain (deposit premium * than book value) ?
--------
. Total Capital Available 696 + ?
Capital Required
. After-tax charge (140)
. Replenish capital to 6.50% (18) (158)
------- --------
Net capital available for stock repurchase $ 538 + ?
* Denotes greater than
2002 Earnings Projection [LOGO]
Florida Market Disposition Components
-------------------------------------
. Florida earnings give up/1/ =
(Cash earnings - CDI amortization)
. Stock repurchase of $300 - $400MM +
. Earnings on excess funding +
---------
$.02 - .06
(1) Excludes benefit from elimination of goodwill amortization ($0.07 in 2002)
[LOGO OF HUNTINGTON BANCSHARES APPEARS HERE]