Huntington Bancshares Incorporated · NASDAQ:HBAN
Huntington Bancshares — 2018 RBC Capital Markets Financial Institutions Conference
26 slides from Huntington Bancshares's conference presentation, Mar 7, 2018
Slide 1: Huntington Bancshares 2018 RBC Capital Markets Financial Institutions Conference
Huntington Bancshares Incorporated 2018 RBC Capital Markets Financial Institutions Conference March 7, 2018 Welcome ©2018 Huntington Bancshares Incorporated. All rights reserved. (NASDAQ: HBAN) Exhibit 99.1
Slide 2: Disclaimer: Caution Regarding Forward-Looking Statements
Disclaimer 1 CAUTION REGARDING FORWARD-LOOKING STATEMENTS This communication contains certain forward-looking statements, including, but not limited to, certain plans, expectations, goals, projections, and statements, which are not historical facts and are subject to numerous assumptions, risks, and
Slide 3: Huntington Bancshares Overview
Ranked #2 in deposit market share in Ohio (15%) and #6 in Michigan (7%) Founded in 1866 in Columbus, Ohio Traditional regional bank with strategic focus on small to medium-sized businesses, consumers, and vehicle finance Huntington Bancshares Overview $104 billion asset Midwest financial service
Slide 4: Well-Defined Strategy Builds Upon Our Sustainable, Competitive Advantages
Small and Medium Businesses Consumer Vehicle Finance 3 Well-Defined Strategy Builds Upon Our Sustainable, Competitive Advantages Delivering consistent, through-the-cycle shareowner returns Drive continued growth in market share and share of wallet through execution of Optimal Customer Relationship
Slide 5: Driving Toward a Best-in-Class Return Profile
0% 3% 6% 9% 12% 15% 0% 4% 8% 12% 16% 20% Driving Toward a Best-in-Class Return Profile Actions taken since 2009 accelerated performance 4 Focused the Business Model Aggregate Moderate-to-Low Risk Appetite Invested in the Franchise (1) See reconciliation on slide 17; Peer data on a core basis, Source
Slide 6: Net Interest Margin (FTE)
Net Interest Margin (FTE) Managing NIM with disciplined loan and deposit pricing 5 3.41% 3.38% 3.45% 3.42% 3.37% 3.44% 3.41% 3.52% 3.60% 3.70% 3.75% 3.78% 3.83% [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRANGE] [CELLRA
Slide 7: Cycle-to-Date Cumulative Deposit Beta
Cycle-to-Date Cumulative Deposit Beta Deposit beta remains in-line with peers with an expected through the cycle beta of approximately 50% 6 10% 9% 4% 0% 3% 6% 10% 13% 13% -4% 3% 5% 8% 6% 6% 8% 11% 12% 14% 21% 23% 20% 14% 17% 24% 23% -9% -8% -4% -5% 0% 1% 2% 4% 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q1
Slide 8: Delivering FirstMerit Deal Economics
Delivering FirstMerit Deal Economics Exceeded original cost savings and revenue enhancements 7 Strong Cultural and Strategic Fit • Our teams are fully integrated, focused, and performing • Improved deposit market share in Ohio and Michigan; entered Chicago & Wisconsin markets with a niche (primarily
Slide 9: Achieved All Long-Term Financial Goals in 4Q17
Achieved All Long-Term Financial Goals in 4Q17 8 Long-Term Financial Goal GAAP Adjusted (Non-GAAP)1 GAAP Adjusted (Non-GAAP)1 Revenue (FTE) Growth (Y/Y) 4% - 6% +4% +4% +22% +22% Expense Growth (Y/Y) Positive Operating Leverage (7%) 1% +13% +18% Efficiency Ratio 56% - 59% 55% 55% 61% 57% NCO 35 - 55
Slide 10: Long-Term Financial Goals – Tax Reform Update
9 Long-Term Financial Goal Tax Reform Adjusted Long-Term Financial Goal 2018 Target Revenue (FTE) Growth (Y/Y) 4% - 6% 4% - 6% Expense Growth (Y/Y) Positive Operating Leverage Positive Operating Leverage Efficiency Ratio 56% - 59% 56% - 59% NCO 35 - 55 bp 35 - 55 bp ROTCE 13% - 15% 15% - 17%
Slide 11: Strategic Planning Process
Top-Line Revenue Growth Business Model Evolution & Disruption 10 Strategic Planning Process Initiated the strategic planning process in 1Q18 which will yield new long-term goals for the company Initial areas of focus for the 2018 Strategic Planning Process: Capital Optimization 2014 Strategic Plan O
Slide 12: Capital
Pro Forma* 4Q17 3Q17 2Q17 1Q17 4Q16 Tang. common equity / tang. assets 7.65% 7.34% 7.42% 7.41% 7.28% 7.16% Common equity Tier 1 (CET1) 10.46 10.01 9.94 9.88 9.74 9.56 Tier 1 leverage 9.58 9.09 8.96 8.98 8.76 8.70 Tier 1 risk-based capital 11.95 11.34 11.30 11.24 11.11 10.92 Total risk-based capital
Slide 13: Positioned for Strong Relative Performance Through-the-Cycle
2.41% 2.27% 8.0% 8.0% 4.5% 4.5% 6.0% 1.7% 6.0% 1.5% 14.0% 9.7% 10.5% 6.0% Minimum Buffer Common Equity Tier 1 (CET1) Ratio 2017 CCAR minimum (4) 4Q17 Pro Forma (5) Total Risk-Based Capital Ratio 2017 CCAR minimum (4) 4Q17 Pro Forma (5) Positioned for Strong Relative Performance Through-the-Cycle 12
Slide 14: Important Messages
Good economic outlook for Midwest footprint FirstMerit integration complete; fully implemented all cost saves and executing on revenue synergies Focused on three areas with sustainable competitive advantages o Consumer o Small to Medium Enterprises (including Commercial Real Estate) o Vehicle
Slide 15: Appendix
Appendix 14
Slide 16: 2018 Expectations
2018 Expectations 15 Avg Loan Balances 4% - 6% growth (assumes $500 MM Auto securitization in 3Q18) Avg Deposit Balances 3% - 5% growth Revenue 4% - 6% growth (assumes no rate hikes in 2018) Net Interest Margin GAAP NIM flat; Core NIM up modestly (new money yields above back book yields across all l
Slide 17: Huntington's Peer Group
Huntington’s Peer Group 16 $ in millions Total Assets Total Deposits Total Loans Market Capitalization Price / Dividend Yield Consensus 2018E Consensus 2019E Tangible Book PNC Financial Services Group, Inc. $380,768 $265,053 $220,458 $74,573 15.1x 13.6x 2.2x 1.9% BB&T Corporation 221,642 157,371 143
Slide 18: Reconciliation: Efficiency Ratio, ROTCE and ROCE
17 Reconciliation Efficiency Ratio, ROTCE and ROCE ($ in millions) GAAP Adjustment (1) Adjusted Full Year 2017: Noninterest expense $2,714 $155 (2) $2,559 Amortization of intangibles $56 -- $56 Noninterest expense less amortization of intangibles A $2,658 $2,503 Total revenue (FTE) $4,359 ($2) $4,35
Slide 19: Reconciliation: Net Interest Margin
18 Reconciliation Net Interest Margin ($ in millions) 4Q17 3Q17 2Q17 1Q17 4Q16 3Q16 Net Interest Income (FTE) – reported $782 $771 $757 $742 $748 $636 Purchase accounting impact (performing loans) 20 22 27 30 35 20 Purchase accounting impact (credit impaired loans) 4 4 5 5 4 1 Total Loan Purchase Ac
Slide 20: Reconciliation: Revenue, Noninterest Income, and Expense Growth
19 Reconciliation Revenue, Noninterest Income, and Noninterest Expense Growth ($ in millions) GAAP Adjustment (1) Adjusted 4Q17 Net interest income (FTE) $782 -- $782 4Q17 Noninterest income $340 -- $340 4Q17 Total Revenue $1,122 -- $1,122 4Q16 Net interest income (FTE) $748 -- $748 4Q16 Noninterest
Slide 21: Reconciliation: Revenue, Noninterest Income, and Expense Growth
20 Reconciliation Revenue, Noninterest Income, and Noninterest Expense Growth ($ in millions) GAAP Adjustment (1) Adjusted 2017 Net interest income (FTE) $3,052 -- $3,052 2017 Noninterest income $1,307 $2 (2) $1,305 2017 Total Revenue $4,359 $2 (2) $4,357 2016 Net interest income (FTE) $2,412 -- $2,
Slide 22: Reconciliation: Capital Ratios
21 Reconciliation Capital ratios ($ in millions) GAAP Preferred Equity Conversion Preferred Equity Issuance Adjusted Total tangible common equity (TCE) A $7,477 $362 -- $7,839 Total tangible assets B $101,919 -- $493 $102,411 TCE Ratio A / B 7.34% 0.35% -0.04% 7.65% CET 1 capital C $8,041 $362 -- $8
Slide 23: Reconciliation: Pretax Pre-Provision Net Revenue (PPNR)
22 Reconciliation Pretax Pre-Provision Net Revenue (PPNR) ($ in millions) 4Q17 4Q16 2017 2016 2015 2014 Net interest income – FTE $782 $748 $3,052 $2,412 $1,983 $1,865 Noninterest income 340 334 1,307 1,151 1,039 961 Total revenue 1,122 1,082 4,359 3,563 3,022 2,826 Less: Significant Items 0 (1) 2 1
Slide 24: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures This document contains GAAP financial measures and non-GAAP financial measures where management believes it to be helpful in understanding Huntington’s results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP fina
Slide 25: Significant Items
Significant Items From time to time, revenue, expenses, or taxes are impacted by items judged by Management 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 their outsized impact is believed
Slide 26: Investor Relations Contact
Welcome ©2018 Huntington Bancshares Incorporated. All rights reserved. (NASDAQ: HBAN) Mark A. Muth Director of Investor Relations Office: 614.480.4720 E-mail: mark.muth@huntington.com For additional information, please visit: http://www.huntington.com
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