Huntington Bancshares Incorporated · NASDAQ:HBAN
Huntington Bancshares — Q1 2011 Earnings Presentation
150 slides from Huntington Bancshares's earnings presentation, May 12, 2011
Slide 1: 2011 Second Quarter Investor Handout
2011 Second Quarter Investor Handout May 11, 2011 1
Slide 2: Table of Contents
Table of Contents Current Topics 3Quarterly Financial Review 18 Significant items impacting comparisons 24Income Statement 25 Revenue & PTPP Growth 26 Net interest margin 29 Noninterest income 32 Noninterest expense 35Balance Sheet 37AFS and Other Securities 41Loan Portfolio Overview 47 Credit expos
Slide 3: Current Topics
Current Topics 3
Slide 4: Our "Break Away" Strategic Plan
OptimizeCurrentFranchiseProfitability / pricingCross-sell / share-of- walletLaunch new brandInvest in capabilities and begin hiring Our "Break Away" Strategic Plan LaytheFoundationCapital and liquidityOrganiza- tional changes Build management depthCredit and Risk management Invest in theCoreBuild ou
Slide 5: The Strategic Plan: Positioned for Profitability and Growth
The Strategic Plan: Positioned for Profitability and Growth Retail and Business Banking Commercial Banking Auto Finance Wealth Advisors, Gov't Finance, and Home Lending Investing for the Long Term 2010 2011 2009 Credit and Risk Management Strategic Plan 24-Hour Grace (r)Added 150 Sm Bus. BankersGian
Slide 6: "Fair Play" Leverages a Distinct Moment in Time
" Fair Play" Leverages a Distinct Moment in Time Market share is up for grabsConsumer sentiment towards banks is negative Moebs Services forecasts large banks will lose 22% of their 45% market share by year end. Regulation is mandating fee income reductionsBanks are reacting by penalizing customers
Slide 7: "Fair Play": Builds Trust, Deepens Relationships, Drives Growth
"Fair Play": Builds Trust, Deepens Relationships, Drives Growth A foundation of service Accelerate new customer acquisition and increase existing customer satisfaction / retentionSell more and increase share of walletDrive growth through products that are straight forward and add differentiated cust
Slide 8: "Fair Play" Progress Report: 1. Foundation of Service
"Fair Play" Progress Report: 1. Foundation of Service Huntington started with the highest level of customer advocacy and has continued to separate itself from peers. MSR Group Branch Survey. Advocacy = customers who will repeat and recommendPeers: CMA, FITB, FMER,JPM, KEY, NCC/PNC, RBS/Charter One,
Slide 9: "Fair Play" Progress Report: 2. Accelerate New Customer Acquisition
(CHART) "Fair Play" Progress Report: 2. Accelerate New Customer Acquisition Consumer Checking Households 6.8% 9.1% (1) (1) Annualized A household starts with a checking accountConsumer accounts across all segments: Retail, WGH, and Auto. 3% in 2009 1,016 993 980 962 945 930 5.5% 7.5%(1) (000s) 9
Slide 10: "Fair Play" Progress Report: 3. Sell More and Increase Share of Wallet
(CHART) "Fair Play" Progress Report: 3. Sell More and Increase Share of Wallet Product Penetration - 4+ Services / HH 25 potential products or services counted: checking, savings, online bill pay, mortgage, brokerage account, insurance,... (CHART) (CHART) Product Penetration - 1 Services / HH Produc
Slide 11: "Fair Play" Progress Report: Consumer Checking Household Revenue
(CHART) "Fair Play" Progress Report: Consumer Checking Household Revenue $249 $240 $240 $245 $229 $227 Back above pre "Fair Play" and Reg E levels ($MM) 11
Slide 12: Launching Two New Consumer Checking Products
Making free checking better "Fair Play" Progress Report: 4. Launching Two New Consumer Checking Products Asterisk-Free CheckingTMNo hooks and adding benefitsMost Appealing Features:Free - No Monthly Maintenance FeeFree debit card usageFree ID Theft Resolution ServiceFree linked Savings AccountsNo OD
Slide 13: Asterisk-Free Checking: A Differentiated Entry Product
Why 80% Rated Asterisk-Free #1? - $0 Monthly Checking Fee - No Monthly Checking Fee Requirements (e.g. min balance, # of debit transactions, etc.) - 24-Hour Grace(r) (CHART) Asterisk-Free Checking(tm): A Differentiated Entry Product Asterisk-Free Checking(tm) significantly outperforms peer's product
Slide 14: Huntington Plus Checking: Best In Class Premium Product
(CHART) Why 53% Rated Huntington Plus #1? - Free Unlimited Checks - Interest Bearing - Free ID Theft Resolution Service - 24-Hour Grace(r) Huntington Plus Checking(tm): Best In Class Premium Product Huntington Plus Checking(tm) significantly outperforms peer's products in consumer preferenceIn a rec
Slide 15: "Fair Play" Next Steps: Continue to Drive Growth
"Fair Play" Next Steps: Continue to Drive Growth US Census Bureau FDIC 9.4 million households are within 5 miles of a Huntington branch1.0 million Huntington householdsOpportunities to gain new customers0.1 million (1) new household creation per year1.9 million (1) households experience a life event
Slide 16: "Fair Play" sets Huntington apart
"Fair Play" sets Huntington apart Huntington is resonating with consumersWhy do you rate Huntington >98% in service compared to any other company: - "The 24 hour grace period is absolutely excellent. I brag about it all the time. The people who I interact with at the branch - they're just the kindes
Slide 17: Important Messages
Important Messages Executing the 2009 strategic planThis is a new HuntingtonStronger management and increased accountability Improved credit, risk and financial discipline Improving performanceOur strategic initiatives continue to gain tractionOur "Fair Play" banking philosophy is workingMaking Prog
Slide 18: Quarterly Financial Review
Quarterly Financial Review 18
Slide 19: 2011 First Quarter Highlights
$126.4 MM reported net income $0.14 EPSIncludes $17.0 MM or $0.01 of additions to litigation reserves$240.9 MM pre-tax, pre-provision income (1), down $19.1 MM, or 7.4%$38.0 MM, or 5.6%, decrease in fully-taxable equivalent revenue$10.7 MM, or 2.6%, decrease in fully-taxable equivalent net interest
Slide 20: 2011 First Quarter Highlights (continued)
Strong reserves 185% ACL coverage of NALs, up from 166%3.07% period-end allowance for credit losses to total loans and leases, down from 3.39%Solid capital7.81% tangible common equity ratio, up 25 bps9.75% Tier 1 common risk-based capital ratio, up 46 bps12.07% and 14.85% Tier 1 and Total risk-based
Slide 21: Quarterly Performance Highlights
Quarterly Performance Highlights 1Q11 4Q10 3Q10 2Q10 1Q10 EPS $0.14 $0.05 $0.10 $0.03 $0.01 Pre-tax pre-provision income ($MM) (1) $240.9 $260.1 $265.2 $270.5 $251.8 Net interest margin 3.42% 3.37% 3.45% 3.46% 3.47% Efficiency ratio (2) 64.7% 61.4% 60.6% 59.4% 60.1% Return on average assets 0.96% 0.
Slide 22: 1Q11 Earnings Summary
1Q11 Earnings Summary After-tax EPS (1)Net income $126.4 MM Net income applicable to common shares $118.7 MM $0.14Significant Items Favorable/(Unfavorable) Earnings (2) EPS Additions to litigation reserves (17.0) $(0.01)(1) EPS reflected on a fully diluted basis(2) Impact on pre-tax GAAP earnings 22
Slide 23: Quarterly Earnings
Quarterly Earnings Change vs. any 4010 7210 4010 1010 Ant. Rt At Re Netinterestincome [QUOEN $ 4153 $ 3939 [$ (11H @%|$ 104 3% Provision 49.4 870 2350 18) (43) (7856) (79) Noninterest income 236.9 2842 2409 273 (10) 87 = @ Neninterest expense 430.7 4346 3981 ay 26 8% Pretax income 161.2 519 16 322 1
Slide 24: Significant Items Impacting Financial Performance Comparisons
Significant Items Impacting Financial Performance Comparisons - Reconciliation 2011 - 2010 Quarterly 24
Slide 25: Income Statement
Income Statement 25
Slide 26: Revenue and PTPP Growth
(CHART) Revenue and PTPP Growth (1) ($MM) (CHART) (1) Revenue is FTE; See Basis of Presentation for definition of PTPP, as well as PTPP Income reconciliation slide(2) Annualized PTPP Earnings Power (2) Revenue and PTPP Trends 26
Slide 27: Pre-Tax, Pre-Provision Income
Pre-Tax, Pre-Provision Income (1) 27
Slide 28: ROA Opportunity
ROA Opportunity Sensitivity Analysis on $241MM - 1Q11 1.10%-1.35% Long-Term Goal 28
Slide 29: Net Interest Income & Margin
(CHART) (CHART) Change 1Q11 vs. 4Q10:Deposits, Rate & Mix 12 bpsDay Count 6Swaps (6)Loans Yield & Mix (4) Other (3)Total Change 5 bps Net Interest Income & Margin (1) ($MM) (1) Fully-taxable equivalent basis Net Interest Margin (FTE) Net Interest Income (FTE) 29
Slide 30: Net Interest Margin - Yields & Rates
Net Interest Margin - Yields & Rates (CHART) (CHART) Earning Assets Total Deposits Fed Funds Net Interest Margin Loans Investment Securities Earning Asset Yields NIM - Yields & Rates 30
Slide 31: Managing Interest Rate Risk
(CHART) Managing Interest Rate Risk Estimated impact on annualized net interest income over the next 12-month period assuming a gradual change in rates over the next 12-month period above and beyond any rate change already implied in the current yield curve. Net Interest Income at Risk (1) Forward C
Slide 32: Noninterest Income Trends Linked Quarter
Noninterest Income Trends Linked Quarter 32
Slide 33: Noninterest Income Trends Prior-Year Quarter
Noninterest Income Trends Prior-Year Quarter 33
Slide 34: Mortgage Banking Income
Mortgage Banking Income ($MM) 1Q11 4Q10 3Q10 2Q10 1Q10 Origination & secondary marketing $19.8 $48.2 $35.8 $19.8 $13.6 Servicing fees 12.5 11.5 12.1 12.2 12.4 Amortization of capitalized servicing (9.9) (14.0) (13.0) (10.1) (10.1) Other mortgage banking income 3.8 4.8 5.0 3.7 3.2 Sub-total 26.2 50.5
Slide 35: Noninterest Expense Trends Linked Quarter
Noninterest Expense Trends Linked Quarter 35
Slide 36: Noninterest Expense Trends Prior-Year Quarter
Noninterest Expense Trends Prior-Year Quarter 36
Slide 37: Balance Sheet
Balance Sheet 37
Slide 38: Balance Sheet — Assets
Balance Sheet — Assets a io milions) “Amount Percent Assets ‘Cash and due from banks Ss 88 S (102) -78% Interest bearing deposts in banks 15 (2M) 64.3% Trading account securities 185 10 4 93% Loans held for sale 183 ar (163) 49.8% ‘Avalable-for-sale and other securties 9895886 376 4.2% Loans and lea
Slide 39: Balance Sheet - Liabilities & Shareholders' Equity
Balance Sheet - Liabilities & Shareholders' Equity 39
Slide 40: Earning Assets and Funding Composition
Earning Assets and Funding Composition (1) (CHART) (1) Average balances (2) Interest bearing liabilities + DDA noninterest bearing (CHART) Funding (2) Earning Asset Composition 40
Slide 41: Available-For-Sale (AFS) and Other Securities
Available-For-Sale (AFS) and Other Securities 41
Slide 42: AFS and Other Securities
(CHART) (CHART) AFS and Other Securities ($MM) % of Average Earning Assets Average Balance & Yield 42
Slide 43: AFS and Other Securities Trends
AFS and Other Securities Trends (1) Linked Quarter - Average Treasury/Agency debt with weighted average life of approximately 2.5 yearsAgency CMOs with weighted average life of approximately 3.9 yearsSecurity portfolio reduction due to timing of re-investment opportunitiesPurchased high rated covere
Slide 44: AFS and Other Securities Overview - 3/31/11
AFS and Other Securities Overview (1) - 3/31/11 44
Slide 45: Selected Securities - Assessment
Selected Securities - Assessment (1) Par Value Book Value Market Value OCIAlt-A mortgage backed $68 MM $65 MM $58 MM $(7) MM - Purchased 2006 % to Par Value 86% - 3 securities - senior tranche - 10/1 ARMs or 30 year fixed; no option ARMs - Cash flow analysis performed monthly to test for OTTI with t
Slide 46: AFS and Other Securities Mix Analysis
(CHART) AFS and Other Securities Mix Analysis 12/31/10$9.8 B (1)3.0 Years 12/31/08$4.0 B5.2 Years 12/31/09$8.2 B2.4 Years Excludes variable rate demand notes: $139 million at 12/31/10 and $124 million at 3/31/31 (1) 3/31/11$9.2 B (1)3.2 Years 46
Slide 47: Loan Portfolio Overview
Loan Portfolio Overview 47
Slide 48: Credit Exposure Composition
($B) 3/31/11 3/31/11 3/31/11 12/31/10 12/31/10 12/31/10 12/31/09 12/31/09 12/31/09 12/31/08 12/31/08 12/31/08 12/31/07 12/31/07 12/31/07 Amt Pct Amt Pct Amt Pct Amt Pct Amt Pct Commercial & industrial $13.3 35 % $13.1 34 % $12.9 35 % $13.5 33 % $13.1 33 % Commercial real estate 6.3 17 6.7 18 7.7 21
Slide 49: Total Loans and Leases Portfolio Overview
(CHART) Total Loans and Leases Portfolio Overview ($B) $19.9 $6.1 $2.9 $1.5 $2.7 $1.5 $0.8 $2.8 EOP Outstandings - $38.2 Billion (1) (1) 3/31/11 By State 49
Slide 50: Loan and Lease Trends Linked Quarter
Loan and Lease Trends Linked Quarter 50
Slide 51: Loan and Lease Trends Prior-Year Quarter
Loan and Lease Trends Prior-Year Quarter 51
Slide 52: Total Commercial Loans
Total Commercial Loans 52
Slide 53: Total Commercial Loans - Granularity
(CHART) Total Commercial Loans - Granularity EOP Outstandings - $19.6 Billion (1) (CHART) 771 2% 35,52098% (1) 3/31/11 Loans by Dollar Size # of Loans by Size $5 MM - < $10 MM 420$10 MM - < $25 MM 297$25 MM - < $50 MM 46> $50 MM 8Total 771 53
Slide 54: Commercial Loans - Risk Grade Distribution
(CHART) Commercial Loans - Risk Grade Distribution PD Risk Grades (Moody's or Regulatory Definition) Percent of End of Period Balances ($B) $23.6 $20.6 10% 16% 4% 8% 15% 18% 16% 20% 17% 22% 13% 14% 10% 12% 2% 3% 13% 6% 19% 15% 18% 15% 13% 2% $19.7 15% 11% 11% 5% 19% 16% 18% 15% 14% 3% $19.6 54
Slide 55: Commercial and Industrial Loans (C&I)
Commercial and Industrial Loans (C&I) 55
Slide 56: C&I - Overview
C&I - Overview EOP Outstandings - $13.3 Billion (1)Diversified by sector and geographically within our Midwest footprintGranular7 loans >$50 million... 4% of portfolio57 loans $20-$50 million... 11% of the portfolioFocus on middle market companies with $15-$100 million in salesCredit Quality Trends
Slide 57: C&I - Credit Risk Management Strategies
C&I - Credit Risk Management Strategies What We DoLend to defined relationship oriented clientsFollow disciplined credit policies and processesUnderstand our client's market / industry and their durable competitive advantageUnderwrite to historical cash flows with collateral as a secondary repayment
Slide 58: C&I Loan Portfolio Composition
(CHART) C&I Loan Portfolio Composition ($B) EOP Outstandings - $13.3 Billion (1) (1) 3/31/11 By Maturity $1.7 $5.2 $1.8 $1.4 $2.0 $1.0 $0.3 58
Slide 59: C&I - Trends
(CHART) C&I - Trends ($MM) Change Analysis Period-End Balance ($MM) 1Q11 vs. 4Q10 1Q11 vs. 1Q10 Originations $748 $2,762 Net payments / payoffs / takedowns (506) (1,324) Net reclassifications 30 (254) Charge-offs (36) (131) Net change $236 $1,054 1.8% 8.6% 59
Slide 60: C&I - Auto Industry
C&I - Auto Industry (1) Outstandings (2) ($MM) 1Q11 4Q10 3Q10 2Q10 1Q10 Suppliers Domestic $ 135 $ 127 $ 135 $ 136 $ 147 Foreign 23 22 22 24 24 Total suppliers 157 149 157 160 171 Dealers Floorplan-domestic 620 599 470 411 363 Floorplan-foreign 463 457 302 292 296 Total floorplan 1083 1056 772 703 6
Slide 61: Commercial Real Estate Loans (CRE)
Commercial Real Estate Loans (CRE) 61
Slide 62: CRE - Overview
CRE - Overview EOP Outstandings - $6.3 Billion (1)Granular portfolio with geographic and project diversification throughout our footprintConstruction lending targeted to major metro marketsCRE - Construction ($0.6 Billion)59% reduction in balances since 3/31/1067% of current balances to "Core" CRE r
Slide 63: CRE - Portfolio Composition
(CHART) CRE - Portfolio Composition Permanent 28% Mini-perm Traditional39% Construction 9% Non Project Loans 7% (CHART) Lines / Letters of Credit2% (1) 3/31/11 Permanent Qualified9% Mini-perm Traditional - Typically 2- to 5-year term loans to allow properties to reach stabilized operating levels aft
Slide 64: CRE - Trends
(CHART) CRE - Trends ($MM) Change Analysis Period-End Balance ($MM) 1Q11 vs. 4Q10 1Q11 vs. 1Q10 Originations $ 93 $ 260 Takedowns 124 617 Net payments / payoffs / other (458) (1,873) Net reclassifications (36) 133 Charge-offs (76) (295) Net change $(353) $(1,158) (5.3)% (15.5)% 64
Slide 65: CRE - Change Analysis
CRE - Change Analysis 4Q10 Construction Commercial Total CRE September 30, 2010 $738 $6,174 $6,912 New originations 0 55 55 Net pay-offs / takedowns / other (78) (185) (263) Charge-offs (10) (43) (53) December 31, 2010 $650 $6,001 $6,651 Net change $(88) $(173) $(261) 1Q11 Construction Commercial To
Slide 66: CRE - Core Characteristics
CRE - Core Characteristics EOP Outstandings - $3.9 Billion (1)Long-term Meaningful relationships... many have been customers for 20+ years with opportunities for additional cross-sellWell-seasoned regional or institutional owners, developers, and organizationsPrimarily Midwest footprint projects gen
Slide 67: CRE - Noncore Characteristics
CRE - Noncore Characteristics EOP Outstandings - $2.4 Billion (1)Limited opportunity to gain overall banking relationshipIncludes numerous performing, pass-rated loans not meeting desired return on capitalIncludes most "criticized" loans from the overall CRE portfolio27% aggressive credit markUpdate
Slide 68: CRE - Noncore Characteristics: SAD and Other
Special Assets Department (SAD) ($1.2 Billion)40% aggressive credit markActively working to exit... more aggressive terms - e.g., higher pricing, shorter amortization, sale, etc.The majority of "criticized" loans are managed within SADOther ($1.1 Billion)9% credit mark represents... 3.0X coverage of
Slide 69: CRE - Core vs. Noncore
CRE - Core vs. Noncore ($MM) O/S ACL Criticized NAL's Prior Charge-offs(1) ACL Credit Mark (2) 12/31/10 Core Total $4,042 $160 $379 $16 $ 5 3.96% 4.08% Noncore SAD 1,400 329 1,033 307 379 23.53 39.81 Noncore Other 1,209 105 299 41 5 8.68 9.09 Noncore Total 2,609 434 1,332 348 384 16.65 27.34 CRE Tot
Slide 70: CRE - Core vs. Noncore Change Analysis
CRE - Core vs. Noncore Change Analysis 4Q10 Core Noncore Total CRE September 30, 2010 $3,989 $2,923 $6,912 Originations 55 -- 55 Net payments / takedowns / other 3 (266) (263) Charge-offs (5) (48) (53) December 31, 2010 $4,042 $2,609 $6,651 Net change $53 $(314) $(261) 1Q11 Core Noncore Total CRE De
Slide 71: CRE - Maturity Schedule By Loan Type
CRE - Maturity Schedule By Loan Type - 3/31/11 ($MM) Within 12 Mos. 1 - 2 Years 2 - 5 Years 5+ Years Total Construction $ 421 $ 108 $ 52 $ 6 $ 587 Lines / letters of credit 75 41 16 11 142 Non project loans 233 83 105 50 471 Mini-perm traditional 1,498 614 493 6 2,612 Permanent qualified 143 115 271
Slide 72: Total Consumer Loans and Leases
Total Consumer Loans and Leases 72
Slide 73: Consumer Loans and Leases - 3/31/11
Consumer Loans and Leases - 3/31/11 ($B) Amt. Pct. Automobile $5.8 31% Home equity 7.8 42 Residential RE 4.5 24 Other consumer 0.5 3 Total consumer $18.6 100% (CHART) By Loan Type 73
Slide 74: Consumer Loan Credit Risk Management
Consumer Loan Credit Risk Management Objective Manage the Probability of DefaultFootprint Portfolio... markets we know and understandClient Selection... bias for high quality customers and relationship lending vs. third-party originationsDisciplined Underwriting... borrower ability to repay, collate
Slide 75: Automobile
Automobile 75
Slide 76: Automobile - Overview
Automobile - Overview EOP Outstandings - $5.8 Billion (1)Consistency of strategy and commitment to dealersFocus on high service quality and full dealer relationshipsSince 2001 focused on super-prime customers >750 FICOsFully automated origination and booking systemCredit Quality Trends Credit qualit
Slide 77: Auto Lending - Credit Risk Management Strategies
Auto Lending - Credit Risk Management Strategies Performance DriversBorrower quality - as measured at origination by:FICO score - Super Prime with consistent increasing trend FICO score distribution - consistent decline in <670 levels Custom Score - utilized to further segment FICO eligible applicat
Slide 78: Auto Loans - Production and Credit Quality Overview
Auto Loans - Production and Credit Quality Overview Auto Loans - Production and Credit Quality Overview (1) Annualized 78
Slide 79: Home Equity
Home Equity 79
Slide 80: Home Equity - Overview
Home Equity - Overview EOP Outstandings - $7.8 Billion (1)Focused on geographies within our Midwest footprintFocused on high quality borrowers... >730 FICOsBegan exit of broker channel in 2005... <7% of outstandings todayConservative underwriting - manage the probability of defaultHigh risk borrower
Slide 81: Home Equity - Credit Risk Management Strategies
Home Equity - Credit Risk Management Strategies Performance DriversBorrower quality - as measured at origination byCustom Score - utilized to further segment FICO eligible applications - continues to enhance predictive modeling FICO score - consistent increasing trend, with very limited under 670 pr
Slide 82: Residential Mortgages
Residential Mortgages 82
Slide 83: Residential Mortgages - Overview
Residential Mortgages - Overview EOP Outstandings - $4.5 Billion (1)Focused on geographies within our Midwest footprintTraditional product mix... very limited nontraditional exposure as we never originated sub-prime, payment option ARMs, or negative amortization loans$513 MM of Interest Only loans..
Slide 84: Residential Mortgages - Credit Risk Management Strategies
Residential Mortgages - Credit Risk Management Strategies Performance DriversStandard products and borrower quality - as measured at origination by:Secondary market underwritingFICO score - consistent increasing trendFICO score distribution - consistent decline in low score levels Non-standard produ
Slide 85: Residential Mortgages - Credit Risk Management Strategies
Residential Mortgages - Credit Risk Management Strategies Risk RecognitionWrite down to discounted current value less selling costs at 150 days past dueNonaccrual balances represent the realizable value estimate in future periodsContinued Focus on Borrower's Ability to Pay for New OriginationsAll lo
Slide 86: Residential Mortgages - LTV, FICO, Originations
Residential Mortgages - LTV, FICO, Originations (1) Weighted average FICOs reflect currently updated customer credit scores(2) Only owned-portfolio originationsWeighted average at origination 1Q11 4Q10 3Q10 2Q10 1Q10 Ending balance ($B) $4.5 $4.5 $4.5 $4.4 $4.6 Average LTV 78% 77% 77% 77% 76% Averag
Slide 87: Other Consumer Loans
Other Consumer Loans 87
Slide 88: Other Consumer Loans
Other Consumer loans EOP Outstandings - $0.5 Billion (1)Over collateralizedAutos, untitled vehicles, small boats, mobile homes and other miscellaneousPrimarily for existing customersPerformed within expectations over the past year, though varies by collateral type (1) 3/31/11 88
Slide 89: Credit Quality Review
Credit Quality Review 89
Slide 90: Credit Quality Trends Overview
Credit Quality Trends Overview Credit Quality Trends Overview Excludes loans guaranteed by the U.S. Government NALs divided by total loans and leases(3) NPAs divided by the sum of loans and leases, impaired loans held for sale, net other real estate and other NPAs(4) Criticized assets = commercial c
Slide 91: Total Commercial Loan - Delinquencies
Total Commercial Loan - Delinquencies (1) (CHART) (CHART) (1) Period end; delinquent but accruing as a % of related outstandings at EOP 90+ Days 30+ Days 91
Slide 92: Total Consumer Loan Delinquencies
(CHART) Total Consumer Loan Delinquencies (1) (CHART) (1) Period end; delinquent but accruing as a % of related outstandings at EOP 90+ Days 30+ Days 92
Slide 93: Consumer Loan Delinquencies
Consumer Loan Delinquencies (1) (CHART) (1) Period end; delinquent but accruing as a % of related outstandings at EOP(2) Excludes GNMA FAS 140 government guaranteed and Franklin in periods prior to 2Q10 (CHART) (2) (2) (2) (2) 90+ Days 30+ Days 93
Slide 94: Net Charge-offs
(CHART) Net Charge-offs ($MM) ($MM) Consumer Loans Commercial Loans (2) (CHART) (1) Includes $16.4 MM related to $39.8 million of residential mortgages sold and a $4.4 MM Franklin-related recovery (1) 94
Slide 95: Net Charge-offs ($MM)
Net Charge-offs ($MM) 1Q11 4Q10 3Q10 2Q10 1Q10 Commercial and industrial $42.2 $59.1 $62.2 $58.1 $75.4 Commercial real estate 67.7 44.9 63.7 81.7 85.3 Total commercial 109.9 104.0 125.9 139.9 160.7 Automobile 4.7 7.0 5.6 5.4 8.5 Home equity 26.7 29.2 27.8 44.5 37.9 Residential mortgages (1) 18.9 26.
Slide 96: Net Charge-off Ratios
Net Charge-off Ratios (1) 1Q11 4Q10 3Q10 2Q10 1Q10 Commercial and industrial 1.29% 1.85% 2.01% 1.90% 2.45% Commercial real estate 4.15 2.64 3.60 4.44 4.44 Total commercial 2.24 2.13 2.59 2.85 3.22 Automobile 0.33 0.51 0.43 0.47 0.80 Home equity 1.38 1.51 1.47 2.36 2.01 Residential mortgages (2) 1.70
Slide 97: Nonaccrual Loans & Nonperforming Assets
(CHART) Nonaccrual Loans & Nonperforming Assets ($MM) (CHART) ($MM) (28)% (18)% (8)% (32)% (52)% NAL Inflows NALs & NPAs - EOP (21)% 62% (18)% (19)% (15)% 97
Slide 98: Nonaccrual Loans (NALs) and Nonperforming Assets (NPAs)
Nonaccrual Loans (NALs) and Nonperforming Assets (NPAs) 98
Slide 99: Nonperforming Asset Flow Analysis
($MM) 1Q11 4Q10 3Q10 2Q10 1Q10 NPA beginning-of-period $844.8 $1,104.9 $1,582.7 $1,918.4 $2,058.1 Additions / increases 192.0 237.8 278.4 171.6 237.9 Franklin - net impact (3.5) (5.9) (251.4) (86.7) 15.0 Return to accruing status (70.9) (100.1) (111.2) (78.7) (80.8) Loan and lease losses (128.7) (12
Slide 100: Total Commercial Loans - Criticized Loan Flow Analysis
($MM) 1Q11 4Q10 3Q10 2Q10 1Q10 Criticized beginning-of-period $3,074 $3,638 $4,106 $4,608 $4,972 Additions / increases 170 290 408 280 306 Advances 62 52 75 79 91 Upgrades to "Pass" (239) (383) (391) (409) (273) Paydowns (295) (401) (409) (331) (324) Charge-offs (112) (121) (152) (121) (164) Critici
Slide 101: Accruing Troubled Debt Restructured Loans
Accruing Trouble Debt Restructured Loans 101
Slide 102: Provision, NCO, and ACL
(CHART) Provision, NCO, and ACL ($MM) (1) NCO % annualizedEnd of period (CHART) Allowance for Credit Losses vs.NALs (2) Loan Loss Provision vs.Net Charge-offs (1) 102
Slide 103: Relative Performance - LLR/Loans Ratios
(CHART) Relative Performance - LLR/Loans Ratios Source: SNL; company reports 103
Slide 104: Relative Performance - ALLL / NAL Coverage
(CHART) Relative Performance - ALLL / NAL Coverage Source: SNL; company reports 104
Slide 105: Rapid Improvement in Credit Quality - Nonaccrual Loans Ratio
Rapid Improvement in Credit Quality - Nonaccrual Loans Ratio 3/31/11 Change from 3/31/10 (CHART) Source: SNL; company reports (CHART) 105
Slide 106: Rapid Improvement in Credit Quality - Loan Loss Reserves / Nonaccrual Loans
Rapid Improvement in Credit Quality - Loan Loss Reserves / Nonaccrual Loans (CHART) (CHART) Source: SNL; company reports 3/31/11 Change from 3/31/10 106
Slide 107: Non-Franklin Credit Metrics Reconciliations
Non-Franklin Credit Metrics Reconciliations 107
Slide 108: Non-Franklin Credit Metrics Reconciliation
Non-Franklin Credit Metrics Reconciliation 108
Slide 109: Non-Franklin Credit Metrics Reconciliation
Non-Franklin Credit Metrics Reconciliation 109
Slide 110: Non-Franklin Credit Metrics Reconciliation
Non-Franklin Credit Metrics Reconciliation 110
Slide 111: Quarterly Net Charge-off Reconciliation
Quarterly Net Charge-off Reconciliation (1) (1) Annualized 111
Slide 112: Quarterly Net Charge-off Reconciliation
Quarterly Net Charge-off Reconciliation (1) (1) Annualized 112
Slide 113: Quarterly Net Charge-off Reconciliation
Quarterly Net Charge-off Reconciliation (1) (1) Annualized 113
Slide 114: Nonaccrual Loans, Nonperforming Assets & Accruing Restructured Loans
Nonaccrual Loans (NALs), Nonperforming Assets (NPA) & Accruing Restructured Loans (ARLs) 114
Slide 115: Nonaccrual Loans, Nonperforming Assets & Accruing Restructured Loans
Nonaccrual Loans (NALs), Nonperforming Assets (NPA) & Accruing Restructured Loans (ARLs) 115
Slide 116: Nonaccrual Loans, Nonperforming Assets & Accruing Restructured Loans
Nonaccrual Loans (NALs), Nonperforming Assets (NPA) & Accruing Restructured Loans (ARLs) 116
Slide 117: Deposits and Other Funding
Deposits and Other Funding 117
Slide 118: Deposits
(CHART) (CHART) Deposits ($B) Avg. Total Deposits - Rate / Mix CD Maturities & Avg. Rate on Maturities Rate 1.55% 1.37% 1.21% 1.06% 0.90% Estimates 118
Slide 119: Deposit Trends Linked Quarter
Deposit Trends Linked Quarter 119
Slide 120: Deposit Trends Prior-Year Quarter
Deposit Trends Prior-Year Quarter 120
Slide 121: Total Core Deposit Trends
Total Core Deposit Trends 121
Slide 122: Other Funding End of Period Balances
(CHART) Other Funding End of Period Balances ($B) $14.6 $11.5 13% 22% 16% 15% 8% 18% 39% 37% 17% 16% $8.8 14% 27% 2% 35% 22% $7.6 16% 22% 2% 27% 33% $9.4 16% 22% 2% 27% 33% 122
Slide 123: Capital
Capital 123
Slide 124: Capital
Capital (1) 1Q11 4Q10 3Q10 2Q10 1Q10 Total risk-weighted assets ($B) $43.0 $43.5 $42.7 $42.5 $42.5 Tier 1 leverage 9.80% 9.41% 10.54% 10.45% 10.05% Tier 1 risk-based capital 12.04 11.55 12.82 12.51 11.97 Total risk-based capital 14.85 14.46 15.08 14.79 14.28 Tang. common equity/ tang. assets 7.81 7.
Slide 125: Capital Ratios
(CHART) Capital Ratios (1) (1) End-of-period 4Q10 - Raised $920 MM of common equity and repurchased $1.4 billion of TARP related preferred shares 125
Slide 126: Shareholders' Equity and Key Equity Ratios
(CHART) Shareholders' Equity - Avg. (CHART) Capital Key Equity Ratios - EOP ($B) 4Q10 - Raised $920 MM of common equity and repurchased $1.4 billion of TARP related preferred shares 126
Slide 127: Capital Analysis - 3/31/11
(CHART) Capital Analysis - 3/31/11 (CHART) Source: SNL, Company reports. Tier 1 Common Risk-Based Tangible Common Equity TARP repaid bank 127
Slide 128: Franchise
Franchise 128
Slide 129: Huntington Bancshares Overview
Huntington Bancshares Overview Midwest financial services holding companyFounded - 1866Headquarters - Columbus, OhioTotal assets - $53 Billion Employees (1) - 11,319Franchise: Footprint 6 states: OH, MI, PA, IN, WV, KY 613 branches / 1,391 ATMs Retail and Business Banking 5 Areas - Mortgage banking
Slide 130: The Huntington Franchise
The Huntington Franchise Branches 119ATMs 240Detroit 4%Grand Rapids 10% Branches 346ATMs 744Akron 8%Canton 27%Cincinnati 4%Cleveland 5%Columbus 22%Dayton 6%Toledo 23% Youngstown 20% Branches 50ATMs 81Indianapolis 6% Branches 13ATMs 30 Branches 28ATMs 133Charleston 11% Excludes 9 PFG offices (3 in FL
Slide 131: A Strong Regional Presence
A Strong Regional Presence Source: SNL Financial, company presentations and filings FDIC deposit data as of June 30, 2010 Deposits - Top 12 MSAs MSA Rank BBs Deposits ShareColumbus, OH 1 69 $9,124 22.2%Cleveland, OH 5 62 3,941 7.8Detroit, MI 8 50 3,607 4.2Toledo, OH 1 42 2,306 22.9Pittsburgh, PA 7 4
Slide 132: Leadership Team
Leadership Team Leadership Team Business Segments Insurance, 132
Slide 133: Senior Leadership Team
Senior Leadership Team (1) Includes related experience outside of banking 133
Slide 134: Business Segment Overview
Business Segment Overview 134
Slide 135: Business Segment Loans & Deposits - 1Q11
Business Segment Loans & Deposits - 1Q11 Average Total Deposits - $41.7 B Average Total Loans - $38.1 B (CHART) (CHART) AFCRE $13.2B 35% Retail & Business Banking $11.8B 31% Treasury / Other $0.1B 0% Regional & Comm'l Banking $7.8B 21% WGH $5.2B 14% AFCRE $0.8B 2% Treasury / Other $0.7B 2% Retail &
Slide 136: Total Loans and Leases - By Business Segment
Total Loans and Leases - By Business Segment Total Loans and Leases - By Business Segment Avg. Outstandings - $38.1 Billion 1Q11 136
Slide 137: Total Deposits - By Business Segment
Total Deposits - By Business Segment Total Deposits - By Business Segment Avg. Balances - $40.7 Billion 1Q11 137
Slide 138: Business Segment Contribution
Business Segment Contribution ($MM) 1Q11 2010 2009 2008 Retail & Business Banking $54.9 $131.0 $(26.5) $257.8 Regional & Comm'l Banking 24.1 38.5 (158.7) 80.3 AFCRE 34.7 46.5 (588.2) (14.2) WGH 9.5 34.8 1.8 43.0 Treas. / Other 3.4 61.6 (251.3) (480.8) Unallocated goodwill impairment (1) -- (2,573.8)
Slide 139: Business Segment Overview
Business Segment Overview Commercial BankingExecutive - Jim Dunlap11 Region PresidentsMiddle Market Commercial BankingSpecialty BankingLarge CorporateHealth-careNot-for-ProfitEquipment / Technology LeasingInternational ServicesTreasury ManagementCapital MarketsDerivativesForeign ExchangeSecurities T
Slide 140: Commercial Banking Regions
11 Commercial Banking Regions GreaterAkron/Canton Mahoning Valley Central Ohio NW Ohio S. Ohio/KY GreaterCleveland Central Indiana West Michigan East Michigan West Virginia Pittsburgh Jim Dunlap 140
Slide 141: Regional Banking Presidents
Regional Banking Presidents 141
Slide 142: Retail and Business Banking Areas
5 Retail and Business Banking Areas Central Northwest West Northeast East Mary Navarro 142
Slide 143: Increase Convenience - Giant Eagle / Huntington Partnership
#1 in Ohio BranchesPlanned Rollout12% the cost of a traditional branch16 opened30 by end of 2011101 by end of 2015Cash flow breakeven in < 2 years Increase Convenience - Ohio Branch share source, SNL Financial, 6/30/2010 % of Branches % of Branches % of Branches MSA 6/10 Pro Forma (1) Pro Forma (1)
Slide 144: Retail & Business Banking Executives
Retail & Business Banking Executives 144
Slide 145: Business Segment Overview
Business Segment Overview Wealth Advisors, Government Finance, and Home Lending Executive - Dan BenhaseWealth AdvisorsTrust / Portfolio ManagementPrivate BankingRetail BrokerageGovernment FinancePublic Funds - Treasury Services and LendingCorporate TrustNational SettlementHome LendingMortgage Bankin
Slide 146: Safe Harbor Disclosures
Safe Harbor Disclosures 146
Slide 147: Forward-looking statements
This document contains certain forward-looking statements, including certain plans, expectations, goals, projections, and statements, which are subject to numerous assumptions, risks, and uncertainties. Actual results could differ materially from those contained or implied by such statements for a v
Slide 148: Use of non-GAAP financial measures
Use of non-GAAP financial measuresThis document may contain 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 fi
Slide 149: Significant Items
Significant ItemsFrom 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 b
Slide 150: Fully-taxable equivalent interest income and net interest margin
Fully-taxable equivalent interest income and net interest marginIncome from tax-exempt earning assets is increased by an amount equivalent to the taxes that would have been paid if this income had been taxable at statutory rates. This adjustment puts all earning assets, most notably tax-exempt munic
Huntington Bancshares — Q1 2011 Earnings Presentation on 6ix