Huntington Bancshares Incorporated · NASDAQ:HBAN
Huntington Bancshares — Barclays Global Financial Services Conference 2017
32 slides from Huntington Bancshares's conference presentation, Sep 13, 2017
Slide 1: Barclays Global Financial Services Conference
Huntington Bancshares Incorporated Barclays Global Financial Services Conference September 13, 2017 Welcome ©2017 Huntington Bancshares Incorporated. All rights reserved. (NASDAQ: HBAN) Exhibit 99.1
Slide 2: Disclaimer
Disclaimer 2 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 Update
Huntington Update 3
Slide 4: Huntington Bancshares Overview
MI WI IL IN PA WV KY OH 4 (1) Total includes 11 Private Client Group Offices Combined GDP of 8 state core footprint represents 4th largest economy in world(2) MSA Rank Branches Deposits Share Columbus, OH 1 97 $20,453 32.1% Cleveland, OH 2 153 8,976 14.0 Detroit, MI 6 121 6,542 5.4 Akron, OH 1 56 5,
Slide 5: Driving Toward Best-in-Class Return Profile
Driving Toward Best-in-Class Return Profile 5 Focused the Business Model Aggregate Moderate-to-Low Risk Appetite Invested in the Franchise (1) Source: SNL Financial Built the Brand Disciplined Execution Strong Management / Shareowner Alignment
Slide 6: FirstMerit Acquisition Accelerated Achievement of Long-Term Financial Goals
FirstMerit Acquisition Accelerated Achievement of Our Long-Term Financial Goals 6 Long-Term Financial Goal 1H17 (GAAP) 1H17 Adjusted (1) (Non-GAAP) FY2017 Adjusted (Non-GAAP) Expectation 2018 Target Revenue (FTE) Growth 4% - 6% +39% +38% +23% Expense Growth Positive Operating Leverage +38% +29% +1
Slide 7: High Confidence in FirstMerit Deal Economics
High Confidence in FirstMerit Deal Economics On pace to meet or exceed originally announced cost savings and revenue enhancements 7 $255+ MM Cost Savings ✔ Implementation of all cost savings complete ✔ Eliminated 42% of legacy FirstMerit expense base ✔ Fully converted all operating systems to HBAN s
Slide 8: Delivering FMER Economics
Delivering FMER Economics Cost savings remain on pace and revenue initiatives ramping 8 FMER integration nearly complete, as planned o Systems conversions successfully completed o Consumer deposit retention has outperformed modeled assumptions with balances up 2%1 vs. 10% runoff assumption Achie
Slide 9: FMER Revenue Enhancement Opportunities
FMER Revenue Enhancement Opportunities Initiatives provide additional near-term and long-term upside 9 Home Lending Expansion SBA Lending Expansion • Expanded HBAN SBA lending expertise into IL and WI markets & deepened coverage in overlap markets • SBA FY2017 YTD 1: #3 bank in dollars in both IL an
Slide 10: Positioned for Strong Relative Performance Through-the-Cycle
Common Equity Tier 1 (CET1) Ratio 2017 CCAR minimum (3) 2Q17 Actual Total Risk-Based Capital Ratio 2017 CCAR minimum (3) 2Q17 Actual Positioned for Strong Relative Performance Through-the-Cycle 10 Commercial Consumer 2Q17 Average Balance Sheet MixPretax Pre-Provision Net Revenue (1) Dodd-Frank Act S
Slide 11: Auto Finance Update
Auto Finance Update 11
Slide 12: History & Deep Dealer Relationships Drive Value
Dealer Relationships Indirect Auto • Consistently in the business for 60 years • Super-prime, average FICO ~760 • Top 3 bank in J.D. Power • Custom Score with predictive modeling • Strong market position • Local Market execution with tenured staff • Used vehicle focus Commercial Relationships • Loca
Slide 13: Value Proposition Drives Premium Pricing
13 Value Proposition Drives Premium Pricing Huntington’s unique value proposition for dealers • Local sales and underwriting: 11 regional sales offices with tenured local sales and local underwriting regularly calling on dealers - a strategy unique in the market. Underwriters directly compensated ba
Slide 14: Value Proposition Drives Premium Pricing
14 Value Proposition Drives Premium Pricing Credit-adjusted indirect auto loan yields lead peers Pricing: • Credit-adjusted yield among the highest of our peers • New origination credit-adjusted yield of 3.36% in 2Q17 Operational Efficiencies: • Highly leverageable infrastructure • Innovative and pr
Slide 15: Huntington Auto Finance
Huntington Auto Finance Significant presence in our markets and in our industry 15 11 strategically located regional offices servicing our dealer partners in 23 states: Ohio New Hampshire Indiana Tennessee Michigan Minnesota West Virginia New Jersey Pennsylvania Connecticut Kentucky Iowa Wisconsin N
Slide 16: Expansion Markets Fuel Growth in Originations
Expansion Markets Fuel Growth in Originations 16 ($ MMs) 2016 Texas, Kansas, and Missouri 2015 Illinois, North Dakota, and South Dakota 2013 Iowa and Connecticut 2011 Minnesota, Wisconsin, New Jersey, and Tennessee 2010 Eastern Pennsylvania and New England – Take advantage of market turmoil – Abilit
Slide 17: Loan Design and Custom Auto Finance Scorecard
Loan Design Pricing matrix: Enabled by a 1,000 point pricing matrix, our proprietary loan design pricing sales tool provides the dealer with 20 unique credit approvals on a single application, making it easier for the dealer to discuss a variety of options regarding amount and term. 17 Huntington’s
Slide 18: Automobile Loans: $11.6 Billion
($MM) 1H17 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Originations $3,081 $5,816 $5,207 $5,242 $4,220 $4,021 $3,575 $3,428 $1,586 $2,213 $1,911 % New Vehicles 45% 49% 48% 49% 46% 45% 52% 48% 37% 44% 47% Avg. LTV 89% 89% 90% 89% 89% 88% 88% 88% 92% 95% 97% Avg. FICO 765 765 764 764 760 758 760
Slide 19: C&I – Auto Dealer: $3.3 Billion
(1) End of period (2) NCOs in 2008-2010 related to CRE loans; zero NCOs related to floorplan loans 19 C&I – Auto Dealer: $3.3 Billion(1) A consistent approach for over 60 years: high touch, local delivery, and dealer-centric Outstandings ($MM) 1H17 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 F
Slide 20: Closing Remarks
aN ae osing Remarks O ) ¢ O O— J) { {/ / (
Slide 21: Important Messages
Strong economic outlook for Midwest footprint Completed FirstMerit integration; implemented all cost savings ahead of original schedule and building revenue opportunities Focused on three areas with sustainable competitive advantages o Consumer o Small to Medium Enterprises (including Commerci
Slide 22: Appendix
Appendix 22
Slide 23: 2017 First Half Highlights
2017 First Half Highlights Continued focus on realizing FirstMerit deal economics and driving top tier performance 23 Financial Highlights Y/Y EPS $0.40 +3% Net Interest Margin 3.31% +23 bp Net Interest Income (FTE) $1,499 46% Noninterest Income $638 24% Total Revenue (FTE) $2,136 39% Noninterest Ex
Slide 24: Huntington's Peer Group
Huntington’s Peer Group 24 $ in millions Total Assets Total Deposits Total Loans Market Capitalization Price / Dividend YieldConsensus 2017E Consensus 2018E Tangible Book PNC Financial Services Group, Inc. $372,190 $259,176 $218,034 $58,228 14.6x 13.1x 1.8x 2.5% BB&T Corporation 221,192 156,968 143,
Slide 25: Footprint Economic Indicators
Footprint Economic Indicators Leading indicators signal optimism for 2017 25 Sources: US Bureau of Labor Statistics; Federal Reserve Bank of Philadelphia; Haver Analytics • 6 of 8 Huntington footprint states grew faster than the nation in the economic recovery that began in July 2009. • The Huntingt
Slide 26: Unemployment Rates in Top Deposit MSAs
Unemployment Rates in Top Deposit MSAs Our largest deposit markets compare favorably with U.S. 26 Sources: US Bureau of Labor Statistics; Federal Reserve Bank of Philadelphia; Haver Analytics • According to the Philadelphia FRB coincident economic indicator, economic activity grew faster than the na
Slide 27: Reconciliation: Revenue, Noninterest Income, and Expense Growth
27 Reconciliation Revenue, Noninterest Income, and Noninterest Expense Growth ($ in millions) GAAP Adjustment (1) Adjusted 1H17 Net interest income (FTE) $1,499 -- $1,499 1H17 Noninterest income $638 $2 (2) $636 1H17 Total Revenue $2,136 $2 (2) $2,134 1H16 Net interest income (FTE) $1,028 -- $1,028
Slide 28: Reconciliation: Efficiency Ratio and ROTCE
28 Reconciliation Efficiency Ratio and ROTCE ($ in millions) GAAP Adjustment (1) Adjusted 1H17: Noninterest expense $1,402 $124 (2) $1,278 Amortization of intangibles $29 -- $29 Noninterest expense less amortization of intangibles A $1,373 $1,250 Total revenue (FTE) $2,136 $2 $2,134 Securities gains
Slide 29: Reconciliation: Pretax Pre-Provision Net Revenue (PPNR)
29 Reconciliation Pretax Pre-Provision Net Revenue (PPNR) ($ in millions) 1H17 2016 2015 2014 2013 Net interest income – FTE $1,499 $2,412 $1,983 $1,865 $1,732 Noninterest income 638 1,151 1,039 961 1,012 Total revenue 2,136 3,563 3,022 2,826 2,744 Less: significant items 2 1 3 1 0 Less: gain on sec
Slide 30: Auto Loan Net Charge-offs: Originated vs Acquired
2Q17 1Q17 4Q16 ($MM) Originated Acquired Total Originated Acquired Total Originated Acquired Total Average Auto Loans $10,205 $1,119 $11,324 $9,791 $1,272 $11,063 $9,416 $1,450 $10,866 % of Avg Auto Loans 90% 10% 100% 88% 12% 100% 87% 13% 100% Reported Net Charge-offs (NCOs) $5.1 $3.2 $8.3 $8.6 $3.8
Slide 31: 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 32: 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
Huntington Bancshares — Barclays Global Financial Services Conference 2017 on 6ix