Huntington Reports 2Q Net Income of $174.54 Million

COLUMBUS, Ohio – Huntington Bancshares Inc., parent of Huntington National Bank, Thursday reported $174.54 million in net income for the second quarter, $154.67 million of which was applicable to common shares, or 19 cents per common share.

This compares to first-quarter net income of $171.31 million, $163.32 million applicable to common stock, or 20 cents per share, and year-ago quarter net income of $196.21 million, $188.24 million applicable to common shares, or 23 cents per common share.

The company attributed the lower profits in part to its acquisition of FirstMerit Corp., for which it recognized $21 million, or two cents a share, in pre-tax expense during the quarter. The after-tax effect is $14 million in lower profits.

FirstMerit, based in Akron, has some $25.5 billion in assets.

The board of directors declared a quarterly cash dividend of seven cents per common share, payable Oct. 3 to shareholders of record Sept. 19.

In a prepared statement, the chairman, president and CEO of Huntington, Steve Steinour, said, “We continued to deliver solid performance during the second quarter. The quarter demonstrated encouraging growth in business lending and ongoing strong performance in auto loans and residential mortgages. …

“Progress toward the proposed acquisition of FirstMerit continued to move forward, [which included] the divestiture of select Ohio branches primarily in the Canton and Ashtabula markets is another important milestone.”

Steinour also mentioned the likelihood of raising the dividend on common stock in the fourth quarter. The seven-cent per share payout began last December.

Key performance ratios for the quarters ended June 30, March 31, and June 30, 2015, follow:

• Return on average assets, 0.96%, 0.96%, 1.16%.
• Return on average common equity, 9.6%, 10.4%, 12.3%.
• Return on average tangible common equity, 11.0%, 11.9%, 14.4%.
• Net interest margin, 3.06%, 3.11%, 3.20%.
• Efficiency ratio, 66.1%, 64.6%, 61.7%.

Total revenues for the quarter ended June 30 were $787 million, of which fully taxed equivalent net interest income was $516 million, noninterest income $271 million, Huntington said.

This compares to first-quarter figures of $754 million in FTE total revenues of which $503 million was FTE net interest income, $242 million noninterest income. Year-ago quarter numbers are $780 in FTE total revenues — $$499 million in FTE net interest income, $282 million noninterest.

Noninterest income is derived from administering trusts, brokerage services, insurance premiums, mortgage-rights services, debit- and credit-card payment processing fees, and service charges on demand-deposit accounts, among others.

Noninterest expense – which includes salaries and benefits, data processing, rents, marketing, Federal Deposit Insurance Corp. premiums – was $524 million, up from $491 million the first quarter and $492 million the quarter ended June 30, 2015.

Personnel expense rose to $299 million from $285 million the first quarter and $282 million a year earlier.

Credit quality remained strong. With total assets of $73.954 billion (up 4% from Dec. 31), Huntington reported nonperforming assets at June 30 were $489.82 million. New nonperforming assets were &4.58 million, less than the $240.71 million reported for the first quarter and $125.11 million reported the year-ago quarter.

Nonperforming assets at March 31 were $524.87 million, $396.01 million at June 30, 2015.

Commercial and industrial nonaccrual loans and leases fell to $289.81 million at June 30, down from $307.82 million March 31. C&I loans and leases in arrears June 30, 2015, were $149.71 million.

Residential mortgages in arrears fell to $85.17 million at June 30 from $90.30 million March 31 and $91.20 million June 30, 2015.

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