Huntington Bancshares Incorporated Reports Net Income of $151.8 Million, or $0.17 Per Common Share,

Huntington Bancshares Incorporated Reports Net Income of $151.8 Million, or $0.17 Per Common Share, for the 2013 First Quarter, Down 1% from the Year-Ago Quarter and Down 9% from the Prior Quarter

Declares 25% Increase in Quarterly Cash Dividend on Common Stock to $0.05 Per Share

Specific highlights compared with 2012 First Quarter:

  • $0.58, or 11%, increase in tangible book value per common share to $5.91
  • 1.10% return on average assets, down from 1.13%
  • $682.3 million of fully-taxable equivalent revenue, a 3% decrease
  • $8.9 million, or 2%, increase in fully-taxable equivalent net interest income, reflecting:
    • 3.42% fully-taxable equivalent net interest margin, up 2 basis points
    • 4% growth in average total loans
    • 5% growth in average core deposits
  • $33.1 million, or 12%, decrease in noninterest income, reflecting a $24.2 million, or 90%, decrease in gain on sale of loans
  • $19.9 million, or 4%, decrease in noninterest expense
  • Delivered positive operating leverage and a modest improvement in efficiency ratio
  • NCOs declined 38% and were an annualized 0.51% of total loans
  • 19% decline in nonaccrual loans to 0.92% of total loans and leases, down from 1.15%

Specific highlights compared with 2012 Fourth Quarter:

  • $54.9 million, or 7%, decrease in fully-taxable equivalent revenue, reflecting:
    • $9.4 million, or 2%, decrease in fully-taxable equivalent net interest income primarily due to fewer days in the quarter
    • 3.42% fully-taxable equivalent net interest margin, down 3 basis points
    • 5% annualized growth in average total loans
    • $18.1 million decrease in gain on sale of loans
    • $16.5 million decrease in mortgage banking income
  • $27.8 million, or 6%, decrease in noninterest expense
  • 4.7 million shares repurchased at an average price of $7.07 per share

COLUMBUS, Ohio--(BUSINESS WIRE)-- Huntington Bancshares Incorporated (NASDAQ: HBAN; www.huntington.com) reported 2013 first quarter net income of $151.8 million, a decrease of $1.5 million, or 1%, from the 2012 first quarter and a decrease of $15.5 million, or 9%, from the 2012 fourth quarter. Earnings per common share were $0.17, unchanged from the year ago quarter and down $0.02 from the prior quarter.

Huntington today announced two capital actions approved by the Board of Directors. First, they declared a quarterly cash dividend on the company's common stock of $0.05 per common share. This represents a $0.01 per share, or 25%, increase from the prior quarter's dividend. The dividend is payable July 1, 2013, to shareholders of record on June 17, 2013. Second, the Board also approved the repurchase of up to $227 million of common stock. The new repurchase authorization represents a $45 million, or 25%, increase from the recently completed common stock repurchase authorization. Both actions were proposed in the January 2013 capital plan, which received no objections from the Federal Reserve.

Strategies Continue to Drive Business Performance

"The year is off to a solid start," said Stephen D. Steinour, chairman, president and chief executive officer. "This quarter's results continue to demonstrate that our strategies are working. We have differentiated Huntington by investing in innovative products and customer services, including our Fair Play approach. As a result, we are continuing to see double digit household growth and recognition by national entities of our focus on outstanding customer service.

"Huntington's growth has occurred in a challenging economic and regulatory environment. While some companies are hesitant to invest in light of the uncertain economy, we will continue to look for areas where we can improve efficiency, continue to deliver positive operating leverage, and selectively invest in our businesses in order to drive our long-term profitability," Steinour added.

Table 1 - Earnings Performance Summary

        2013     2012
First Fourth     Third     Second     First
($ in millions, except per share data)         Quarter Quarter Quarter Quarter Quarter
Net Income $ 151.8 $ 167.3 $ 167.8 $ 152.7 $ 153.3
Diluted earnings per common share 0.17 0.19 0.19 0.17 0.17
 
Return on average assets 1.10 % 1.19 % 1.19 % 1.10 % 1.13 %
Return on average common equity 10.7 11.6 11.9 11.1 11.4
Return on average tangible common equity 12.4 13.5 13.9 13.1 13.5
Net interest margin 3.42 3.45 3.38 3.42 3.40
Efficiency ratio 63.3 62.3 64.5 62.8 63.8
 
Tangible book value per common share $ 5.91 $ 5.78 $ 5.71 $ 5.49 $ 5.33
Cash dividends declared per common share 0.04 0.04 0.04 0.04 0.04
Average diluted shares outstanding (000's) 848,708 853,306 863,588 867,551 869,164
 
Average earning assets $ 50,960 $ 50,682 $ 51,330 $ 51,050 $ 49,767
Average loans 40,864 40,397 40,120 41,179 39,145
Average core deposits 43,616 44,310 43,764 42,781 41,387
 
Tangible common equity / tangible assets ratio 8.92 % 8.76 % 8.74 % 8.41 % 8.33 %
Tier 1 common risk-based capital ratio 10.62 10.48 10.28 10.08 10.15
 
NCOs as a % of average loans and leases 0.51 % 0.69 % 1.05 % 0.82 % 0.85 %
NAL ratio 0.92 1.00 1.11 1.19 1.15
ACL as a % of total loans and leases 1.91 1.99 2.09 2.28 2.37
 

Significant Items Influencing Financial Performance Comparisons

From time-to-time, revenue, expenses, or taxes are impacted by items we judge to be outside of ordinary banking activities and/or by items that, while they may be associated with ordinary banking activities, are so unusually large that we believe their outsized impact at that time to be infrequent or short term in nature. We believe the disclosure of such "Significant Items," when appropriate, aids analysts/investors in better understanding corporate performance trends. (See Significant Items under the Basis of Presentation for a full discussion.)

Table 2 highlights the Significant Items impacting reported results for the prior four quarters. There were no significant items in the current quarter.

Table 2 - Significant Items Influencing Earnings Performance Comparisons

Three Months Ended         Impact
(in millions, except per share) Amount (1)     EPS (2)
March 31, 2013 - net income $ 151.8

$

0.17

 
December 31, 2012 - net income $ 167.3

$

0.19

 
September 30, 2012 - net income $ 167.8

$

0.19

  • State deferred tax valuation allowance benefit
19.5 0.02
June 30, 2012 - net income $ 152.7

$

0.17

 
March 31, 2012 - net income $ 153.3

$

0.17

  • Bargain purchase gain, FDIC-assisted Fidelity Bank acquisition, pre-tax
11.4 0.01
  • Addition to litigation reserves, pre-tax
(23.5 ) (0.02 )

(1) Favorable (unfavorable) impact on net income; after-tax unless otherwise noted

(2) EPS reflected on a fully diluted basis
 

Net Interest Income, Net Interest Margin, and Average Balance Sheet

Table 3 - Net Interest Income and Net Interest Margin Performance Summary

        2013     2012    
First Fourth     Third     Second     First Change
($ in millions)         Quarter Quarter Quarter Quarter Quarter LQ     YOY
Net interest income $ 424.2 $ 434.1 $ 430.3 $ 429.0 $ 417.2 (2 ) % 2 %
FTE adjustment           5.9     5.5     5.3     5.7     3.9   8     51    
Net interest income - FTE 430.1 439.5 435.6 434.7 421.1 (2 ) 2
Noninterest income           252.2     297.7     261.1     253.8     285.3   (15 )   (12 )  
Total revenue - FTE         $ 682.3   $ 737.2   $ 696.6   $ 688.5   $ 706.5   (7 ) % (3 ) %
 
Change bps
Yield / Cost                             LQ YOY
Total earning assets 3.75 % 3.80 % 3.79 % 3.89 % 3.91 % (5 ) (16 )
Total loans and leases 4.03 4.13 4.12 4.18 4.21 (9 ) (18 )
Total securities 2.39 2.38 2.41 2.45 2.50 1 (12 )
 
Total interest-bearing liabilities 0.45 0.50 0.58 0.63 0.68 (4 ) (23 )
Total interest-bearing deposits 0.38 0.42 0.48 0.51 0.55 (4 ) (16 )
 
Net interest rate spread 3.30

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