Huntington Reports Q4 Net Income of $212M

COLUMBUS, Ohio — Huntington Bancshares Inc., holding company of Huntington Bank, Wednesday reported fourth-quarter net income of $212 million, or 18 cents a common share, and full-year 2016 net income of $685 million, or 67 cents per common share.

This compares to third-quarter net income of $127 million, or 11 cents a share, and year-ago quarter income of $178 million, or 21 cents a share.

Full-year 2015 income was $693 million, 1% higher than last year’s, or 81 cents a share, which was 15% higher than for 2016.

The acquisition of FirstMerit Corp. and related expenses affected the fourth-quarter performance by six cents a share, Huntington said in its earnings release. “Adjusted earnings per common share were 24 cents,” it said.

In a prepared statement, the president, chairman and CEO of Huntington, Steve Steinour, said, “We are very pleased with our strong close to 2016. We delivered positive operating leverage for the fourth consecutive year. We also executed our balance sheet optimization strategy in which we chose to shrink the balance sheet to replenish our capital ratios more quickly. This included the successful completion of a $1.5 billion auto loan securitization within the fourth quarter.”

He also said, “Integration of FirstMerit continues to go well and remains on track for branch conversion in mid-February.” In the fourth quarter, Huntington completed divestment of the branches the U.S. Department of Justice required to allow the acquisition, he said. The acquisition was completed Aug. 16, so the fourth quarter is the first to fully reflect the performance of combined entity.

FirstMerit brought $26.8 billion in assets to Huntington’s balance sheet along with $15.5 billion in loans and leases and $21.2 billion in deposits.

So Huntington has more than $100 billion in assets and total deposits of $63.5 billion. At. Dec. 31, 2015, total deposits stood at $53.6 billion.

Key performance ratios for the quarters ended Dec. 31, Sept. 30 and Dec. 31, 2015:

• Return on average assets, 0.84%, 0.58%, 1.00%.
• Return on average common equity, 8.2%, 5.4%, 10.8%.
• Net interest margin, 3.25%, 3.18%, 3.09%.
• Efficiency ratio, 65.4%, 75.0%, 63.7%.

Fourth-quarter highlights Huntington cited compared to the year-ago quarter:

• $16.6 billion, or 33%, increase in average loans and leases, including a $7.5 billion, or 37%, increase in commercial and industrial loans and a $1.6 billion, or 17%, increase in auto loans.
• $20.5 billion, or 40%, increase in average core deposits, driven by a $14.4 billion, or 60%, increase in demand deposits and a $7.1 billion decrease in savings and other domestic deposits.
• $62 million, or 23%, increase in noninterest income, including a $19 million, or 26%, increase in service charges on deposit accounts, a $15 million, or 147%, increase gain on the sale of loans, and a $12 million, or 31%, increase on cards and payment processing income.
• Net charge-offs of uncollectable debts represented 0.26% of average loans and leases, up from 0.18%.

Noninterest expense (includes salaries and employee benefits, data processing, occupancy and rents, marketing and Federal Deposit Insurance Corp. premiums) was $2.45 billion in 2016, up from $1.976 billion in 2015. Fourth-quarter expense was $723 million compared to $712 million in the third quarter and $499 million the year-ago quarter.

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