Huntington Bancshares Incorporated · NASDAQ:HBAN
Huntington Bancshares — Credit Suisse Financial Services Forum 2013
29 slides from Huntington Bancshares's conference presentation, Feb 12, 2013
Slide 1: Credit Suisse Financial Services Forum February 12, 2013
Credit Suisse Financial Services Forum February 12, 2013
Slide 2: 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. Forward-looking statements may be identified by words such as expect, anticipate, believe, intend
Slide 3: Participants
Participants 3 Presenter Don Kimble Senior Executive Vice President - Chief Financial Officer Mary Navarro Senior Executive Vice President - Retail and Business Banking Director Also Present Todd Beekman Senior Vice President - Investor Relations Mark Muth Vice President - Investor Relations
Slide 4: Discussion Topics
2012 Highlights & Kimble Strategic Plan Update Retail & Branch Philosophy, Navarro In-store Progress Report & Customer Update Performance vs. Peers & Kimble Important Messages Discussion Topics 4
Slide 5: 2012 Full Year Highlights
1.15% return on average assets $0.71 earnings per share, up $0.12 from the prior year $204 MM, or 8%, increase in fully-taxable equivalent revenue $87 MM, or 5%, increase in fully-taxable equivalent net interest income, reflecting: $3.1 B, or 8%, growth in average core deposits (includes impact of $
Slide 6: 2012 Highlights (cont'd)
Continued customer growth and OCR (1) success Consumer checking account households 12.2% growth since 4Q11 78.3% with 4+ products or services penetration, up from 73.5% in 4Q11 Commercial relationships 9.2% growth since 4Q11 35.0% with 4+ products or services penetration, up from 31.4% in 4Q11 Capit
Slide 7: Other Highlights
Recognized as one of the Best Banks in America 2012 by MONEY Magazine(1) Ranked highest in the nation by JD Power in the Small Business Banking Satisfaction Study Completed two auto loan securitizations totaling $2.3 B in assets Integration and conversion of Fidelity Bank successfully completed $0.8
Slide 8: Delivering Positive Operating Leverage
Refer to appendix slide "Reconciliation" Delivering Positive Operating Leverage 8
Slide 9: Retail & Business Banking: ~30% of HBAN
(CHART) (CHART) (CHART) Loans - $40.4 B Loans- $12.7 B 59% Home Equity 27% C&I 8% Mortgage 4% CRE 2% Other Deposits - $46.8 B (CHART) Deposits - $28.3 B 34% Demand Deposits 29% MMDA 17% Savings 20% CDs Revenue - $312.7 MM Revenue- $737.2 MM 68% Spread Revenues 32% Fee Income HBAN 4Q12 Average Total
Slide 10: Retail Philosophy: Convenience Drives Retail Banking
Retail Philosophy: Convenience Drives Retail Banking Source: Novantas 2012 Multi-Channel Survey, Huntington footprint states & HBAN Transaction Data What Customers Say Footprint Survey What Customers Do HBAN Transaction Data Over 65% of Huntington consumer customers have visited a branch in the last
Slide 11: Customers Want Digital and Branches
Mixed Branch Only Customers Want Digital and Branches New Checking Customers Total Customer Portfolio Portfolio Portfolio Source: Novantas Analysis, Huntington Transaction Data Though digital segments will increase at the expense of branch dominant, the majority of customers prefer multi-channel con
Slide 12: Preferred Channel by Transaction Type
Preferred Channel by Transaction Type Sales Happen Face to Face (CHART) Source: Novantas 2012 Multi-Channel Survey, Huntington footprint states 12 Check Account Balance Research Bank Products Deposit Withdrawal Transfer Funds Pay Bills Replace a Card Resolve Issue Get Financial Advice Open New Accou
Slide 13: Optimizing the Retail Network
Optimizing the Retail Network Branch, In-Store, High Function ATMs & Digital Branch, In-Store, High Function ATMs & Digital Branch, In-Store, High Function ATMs & Digital 1 2
Slide 14: Why We Believe in In-Stores
Why We Believe in In-Stores In-Store = Convenience = Acquisition Source: Huntington Transaction Data, Novantas Analysis & Opinion / Food Marketing Institute (FMI) 2012 U.S. Grocery Shopping Trends Source: Huntington Transaction Data, Novantas Analysis & Opinion / Food Marketing Institute (FMI) 2012
Slide 15: Evolution of the In-Store Strategy
Evolution of the In-Store Strategy Expected to be Breakeven in 2014 Expected to be Breakeven in 2014 Expected to be Breakeven in 2014 92 branches opened: 4 in 4Q10, 28 in 2011, 60 in 2012 Total in-store strategy: ~$20 MM negative PTPPI in 2012 Approximate annualized PTPPI contribution per in-store b
Slide 16: Consumer Checking Account Household Growth
Consumer Checking Account Household Growth (CHART) 32% growth since 2009... footprint population growth of <1%(1) 12% growth in 2012 In-store = 13% of total branches but 27% of net new households in 2012 Consumer Checking Households 32% (000s) (1) Source: US Census Bureau 16
Slide 17: New Customers Compared to Footprint
New Customers Compared to Footprint: Younger, Higher Income, More Educated Sources: www.census.gov, Acxiom demographics 17 New Traditional Branch Customers New In-Store Branch Customers
Slide 18: Consumer Checking Household Revenue
(CHART) Consumer Checking Household Revenue ($MM) Pre-Reg E 4Q12 exceeds pre-"Fair Play", Durbin, and Reg E levels Includes net interest income and noninterest income Post-Durbin 18
Slide 19: Investments across all channels
Investments across all channels: Digital, ATM, traditional, & in-store Taking share by driving household growth Positive demographics with diverse mix Reduce delivery costs for services and sales Sales happen face to face Convenience Matters ... Be Where The Customers Are 19
Slide 20: Challenge / Opportunity
Challenge / Opportunity HBAN Economy Customer sentiment is influenced by the uncertainty in Washington Midwestern strength and soundness of HBAN strategy will drive growth. Interest Rates Prolonged low interest rate environment NIM is not expected to fall below the mid 3.30%'s. Loan Growth Economic
Slide 21: Positioned Well Relative to Peers: NIM & Loan Yields
Positioned Well Relative to Peers More stable NIM & Loan Yields; Deposit Opportunity 21 (CHART) (CHART) Source: SNL Peers include ASBC, BBT, CMA, FHN, FITB, FNFG, KEY, MTB, PNC, RF, STI, & ZION. Refer to Appendix slide "Reconciliation" for purchase accounting adjustments (CHART) D bp D bp 4Q12 vs. H
Slide 22: Positioned Well Relative to Peers: Fee Growth
Positioned Well Relative to Peers OCR-Driven Fee Growth, Better Fee Mix 22 (CHART) (CHART) Source: SNL Peers include ASBC, BBT, CMA, FHN, FITB, FNFG, KEY, MTB, PNC, RF, STI, & ZION. Mortgage data unavailable for ASBC (4Q12 only), CMA, KEY, PNC, & ZION. OCR & Relationship -Driven Fee Income Growth (F
Slide 23: Comparison of Selected Performance Metrics Among Top 100 BHCs
(CHART) 100 largest BHCs, ranked by assets ; data reflects 2012 vs. 2011 Source: SNL Financial, as of 2/8/13 Peer average includes ASBC, BBT, CMA, FHN, FITB, FNFG, KEY, MTB, PNC, RF, STI, and ZION. Top Quartile Second Quartile Third Quartile Bottom Quartile Best Worst Comparison of Selected Performa
Slide 24: Important Messages
Important Messages Multi-year process of executing our long-term strategic plan Strategic investments added over $50 MM of pre-tax income in 2012 In-Store to be breakeven in 2014 Moderating level of investment given economic uncertainty Continuously looking for improving efficiencies / effectiveness
Slide 25: Use of non-GAAP financial measures
Use of non-GAAP financial measures This 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 f
Slide 26: Earnings per share equivalent data
Earnings per share equivalent data Significant income or expense items may be expressed on a per common share basis. This is done for analytical and decision-making purposes to better discern underlying trends in total corporate earnings per share performance excluding the impact of such items. Inve
Slide 27: 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 28: Reconciliation
Reconciliation Significant Items Impacting Financial Performance Comparisons 28 Adjustments Related to Purchase Accounting
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