Huntington Reports Net Income of $165.9M

COLUMBUS, Ohio – Huntington Bancshares Inc., holding company of Huntington National Bank, today reported first-quarter net income of $165.9 Million, or 19 cents per diluted share.

This compares to fourth-quarter net income of $163.6 million, or 19 cents per diluted share, and first-quarter 2014 net income of $149.1 million, or 17 cents per diluted share.

The Huntington board of directors declared a quarterly cash dividend of six cents per common share payable July 1 to shareholders of record June 17.

And the board authorized the repurchase of up to $366 million of common shares through June 30, 2016. During the first quarter, Huntington repurchased 4.9 million common shares at an average price of $10.45 per share.

Common shares traded at between $10 and $11 between Jan. 1 and March 31 and were trading at just above $11 at noon Wednesday.

In a prepared statement, the chairman, president and CEO, Steve Steinour said, “This year will be built on a strong foundation of focused execution of our strategies. Our solid first-quarter performance puts us on a path for success in 2015. Ongoing improvement in our expense control environment, continuing good core-deposit growth, and strong mortgage and capital-markets results were highlights for the quarter. We are committed to achieving another full year of positive operating leverage with appropriately risk-balanced growth.”

Key performance ratios for the quarters ended March 31 and Dec. 31 and March 31, 2014:

• Return on average assets, 1.02%, 1.00%, 1.01%.
• Return on average common equity, 10.6%, 10.3%, 9.9%.
• Net interest margin, 3.15%, 3.18%, 3.27%.
• Efficiency ratio, 63.5%, 66.2%, 66.4%.

Net interest income was $467.7 million was less than the $473.3 million recorded for the preceding quarter but more than $20 million higher than the $437.5 million recorded for the first quarter of 2014.

Noninterest income (fees and commissions) was $231.6 million, slightly less than the $233.3 million the last quarter of 2014 and nearly $17 million less than the $248.5 million for the first quarter a year ago.

Average earnings assets of $61.2 billion were $6.2 billion higher than the year-ago quarter of $55 billion and $1.2 billion above the preceding quarter’s $60.0 billion.

Huntington attributed the 11% increase from the year-ago quarter to:

• A $2 billion increase (or 29% rise) in average automobile loans, the quarter ended March 31 bring the fifth consecutive quarter that customers borrowed $1 billion of more to finance their vehicle purchases.
• $1.8 billion, or a 16% increase in average securities. The average balance included $800 million of direct purchases of municipal bonds.
• An increase of $1.5 billion, or 8%, in average commercial and industrial loans and leases.
• $400 million, or an 8% increase, in average residential mortgages as a result of the acquisition of Camco the first quarter of 2014 and a decrease in the rate of payoffs resulting from lower levels of customers refinancing their mortgages.

Average total deposits were 10% than the first quarter of 2014, Huntington noted, $52.1 billion versus $47.6 billion. They stood at $50.8 billion at Dec. 31.

Total core deposits were $48.8 billion, $45.2 billion and $47.6 billion respectively.

Average loans and leases rose 10% from the year ago-quarter, $47.8 billion versus $43.4 billion. They stood at $47.1 billion at year-end.

Net charge-offs fell to 0.20% of average loans and leases, down from 0.40% the same quarter a year ago. Net charge-offs for the first quarter was $24.43 million compared to $42.99 million the period ended March 31, 2014. $22.98 million was charged off the last quarter of 2014.

The provision for loan losses fell by nearly $4 million to $20.59 million from $24.36 million the first quarter of 2014.

Noninterest expense (salaries and benefits, rents, marketing, data processing, legal fees, Federal Deposit Insurance Corp. premiums) was $458.9 million compared to $483.3 million the preceding quarter and $460.1 million the year-ago quarter.

The number of employees rose only slightly during the year, from a full-time equivalent of 11,800 a year ago to 11,900 today as wages and benefits went to $264.9 million the first quarter from $263.3 million the fourth quarter of 2014 and $249.5 million the first quarter of last year.

Nonaccrual loans and leases were $364.41 million, $37.25 million, or 11%, greater than the $327.16 million recorded for first quarter of 2014. They were $300.24 million at Dec. 31. “The increase primarily was driven by one specific relationship,” Huntington said. “Given the low level of problem assets, some quarter-to-quarter volatility is expected.”

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