Maryland
|
|
1-34073
|
|
31-0724920
|
(State or other jurisdiction
of incorporation)
|
|
(Commission
File Number)
|
|
(IRS Employer
Identification No.)
|
Huntington Center
41 South High Street
Columbus, Ohio
|
|
43287
|
(Address of principal executive offices)
|
|
(Zip Code)
|
¨
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
¨
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
¨
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
¨
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Item 2.02.
|
Results of Operations and Financial Condition.
|
Item 9.01.
|
Financial Statements and Exhibits.
|
(d)
|
Exhibits.
|
|
|
|
HUNTINGTON BANCSHARES INCORPORATED
|
||
|
|
|
|
|
|
Date:
|
January 25, 2017
|
|
By:
|
|
/s/ Howell D. McCullough III
|
|
|
|
|
|
Howell D. McCullough III
|
|
|
|
|
|
Chief Financial Officer
|
|
|
|
•
|
Closing of the acquisition of FirstMerit Corporation (FirstMerit), which added approximately $26.8 billion of total assets, $15.5 billion of total loans and leases, and $21.2 billion of total deposits
|
•
|
FirstMerit integration proceeding as planned; branch conversion and consolidations scheduled for 2017 first quarter, and required branch divestiture completed during 2016 fourth quarter
|
•
|
Estimated FirstMerit annualized cost savings of $255 million are specifically identified and expected to be fully implemented by 2017 third quarter; revenue enhancements also identified and already being realized
|
•
|
Increased cash dividends for sixth consecutive year; end-of-year dividend yield of 2.4%
|
•
|
$8.8 billion
, or
18%
,
increase
in average loans and leases, including a
$4.0 billion
, or
20%
,
increase
in commercial and industrial loans and a
$1.8 billion
, or
20%
,
increase
in automobile loans
|
•
|
$9.3 billion
, or
18%
,
increase
in average total core deposits, including a
$7.1 billion
, or
31%
, increase in average demand deposits and a
$2.8 billion
, or
53%
,
increase
in average savings and other domestic deposits
|
•
|
$540 million
, or
18%
, increase in fully-taxable equivalent revenue, including a
$429 million
, or
22%
, increase in fully-taxable equivalent net interest income
|
•
|
Net interest margin of
3.16%
, an increase of 1 basis point
|
•
|
$111 million
, or
11%
,
increase
in noninterest income, including a
$44 million
, or
16%
,
increase
in service charges on deposit accounts and a
$26 million
, or
18%
,
increase
in cards and payment processing income
|
•
|
Net charge-offs (NCOs) of
0.19%
of average loans and leases, up from
0.18%
. 2016 represents the third consecutive year with NCOs below our long-term financial goal of 0.35% to 0.55%
|
•
|
$0.50, or
7%
, decrease in tangible book value per common share (TBVPS) to
$6.41
|
•
|
$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 automobile loans
|
•
|
$7.9 billion
, or
54%
, increase in average securities, including an increase of $0.9 billion of direct purchase municipal instruments in our Commercial banking segment
|
•
|
$20.5 billion
, or
40%
,
increase
in average total core deposits, driven by a
$14.4 billion
, or
60%
,
increase
in demand deposits and a
$7.1 billion
, or
135%
,
decrease
in savings and other domestic deposits
|
•
|
$304 million
, or
39%
, increase in fully-taxable equivalent revenue, including a
$242 million
, or
48%
, increase in fully-taxable equivalent net interest income
|
•
|
Net interest margin of
3.25%
, an increase of 16 basis points, primarily due to purchase accounting impact
|
•
|
$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 in gain on sale of loans, and a
$12 million
, or
31%
,
increase
in cards and payment processing income
|
•
|
Net charge-offs represented
0.26%
of average loans and leases, up from
0.18%
|
|
Full Year
|
|
2016
|
|
2015
|
||||||||||||||
($ in millions, except per share data)
|
2016
|
|
2015
|
|
Fourth Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||||
Net income
|
$
|
685
|
|
|
$
|
693
|
|
|
$
|
212
|
|
|
$
|
127
|
|
|
$
|
178
|
|
Diluted earnings per common share
|
0.67
|
|
|
0.81
|
|
|
0.18
|
|
|
0.11
|
|
|
0.21
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Return on average assets
|
0.82
|
%
|
|
1.01
|
%
|
|
0.84
|
%
|
|
0.58
|
%
|
|
1.00
|
%
|
|||||
Return on average common equity
|
8.2
|
|
|
10.7
|
|
|
8.2
|
|
|
5.4
|
|
|
10.8
|
|
|||||
Return on average tangible common equity
|
10.2
|
|
|
12.4
|
|
|
11.4
|
|
|
7.0
|
|
|
12.4
|
|
|||||
Net interest margin
|
3.16
|
|
|
3.15
|
|
|
3.25
|
|
|
3.18
|
|
|
3.09
|
|
|||||
Efficiency ratio
|
67.9
|
|
|
64.5
|
|
|
65.4
|
|
|
75.0
|
|
|
63.7
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Tangible book value per common share
|
$
|
6.41
|
|
|
$
|
6.91
|
|
|
$
|
6.41
|
|
|
$
|
6.48
|
|
|
$
|
6.91
|
|
Cash dividends declared per common share
|
0.29
|
|
|
0.25
|
|
|
0.08
|
|
|
0.07
|
|
|
0.07
|
|
|||||
Average diluted shares outstanding (000’s)
|
918,790
|
|
|
817,129
|
|
|
1,104,358
|
|
|
952,081
|
|
|
810,143
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Average earning assets
|
$
|
76,363
|
|
|
$
|
63,023
|
|
|
$
|
91,463
|
|
|
$
|
79,687
|
|
|
$
|
64,961
|
|
Average loans and leases
|
57,454
|
|
|
48,646
|
|
|
66,405
|
|
|
60,722
|
|
|
49,827
|
|
|||||
Average core deposits
|
59,380
|
|
|
50,121
|
|
|
72,070
|
|
|
62,022
|
|
|
51,585
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Tangible common equity / tangible assets ratio
|
7.14
|
%
|
|
7.82
|
%
|
|
7.14
|
%
|
|
7.14
|
%
|
|
7.82
|
%
|
|||||
Common equity Tier 1 risk-based capital ratio
|
9.53
|
|
|
9.79
|
|
|
9.53
|
|
|
9.09
|
|
|
9.79
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
NCOs as a % of average loans and leases
|
0.19
|
%
|
|
0.18
|
%
|
|
0.26
|
%
|
|
0.26
|
%
|
|
0.18
|
%
|
|||||
NAL ratio
|
0.63
|
|
|
0.74
|
|
|
0.63
|
|
|
0.61
|
|
|
0.74
|
|
|||||
ACL as a % of total loans and leases
|
1.10
|
|
|
1.33
|
|
|
1.10
|
|
|
1.06
|
|
|
1.33
|
|
Three Months Ended
|
Pre-Tax
Impact |
|
After-Tax Impact
|
||||||||||
($ in millions, except per share)
|
Amount
|
|
Amount
(1)
|
|
EPS
(2)
|
||||||||
December 31, 2016 – net income
|
|
|
$
|
212
|
|
|
$
|
0.18
|
|
||||
•
|
|
Merger and acquisition-related net expenses
|
$
|
(96
|
)
|
|
(63
|
)
|
|
(0.06
|
)
|
||
September 30, 2016 – net income
|
|
|
$
|
127
|
|
|
$
|
0.11
|
|
||||
•
|
|
Merger and acquisition-related net expenses
|
$
|
(159
|
)
|
|
(107
|
)
|
|
(0.11
|
)
|
||
June 30, 2016 – net income
|
|
|
$
|
175
|
|
|
$
|
0.19
|
|
||||
•
|
|
Merger and acquisition-related net expenses
|
$
|
(21
|
)
|
|
(14
|
)
|
|
(0.02
|
)
|
||
March 31, 2016 – net income
|
|
|
$
|
171
|
|
|
$
|
0.20
|
|
||||
•
|
|
Merger and acquisition-related net expenses
|
$
|
(6
|
)
|
|
(4
|
)
|
|
(0.01
|
)
|
||
December 31, 2015 - net income
|
|
|
$
|
178
|
|
|
$
|
0.21
|
|
||||
•
|
|
Franchise repositioning-related expense
|
$
|
(8
|
)
|
|
(5
|
)
|
|
(0.01
|
)
|
||
•
|
|
Merger and acquisition-related net gains
(3)
|
—
|
|
|
$
|
—
|
|
|
—
|
|
(1)
|
Favorable (unfavorable) impact on net income
|
(2)
|
EPS reflected on a fully diluted basis
|
(3)
|
Noninterest income and noninterest expense was recorded related to the integration of Huntington Technology Finance (HTF) and the sale of Huntington Asset Advisors (HAA), Huntington Asset Services (HASI), and Unified Financial Securities (Unified), resulting in a net gain less than $1 million.
|
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|||||||||||||||
($ in millions)
|
Full Year
|
|
Full Year
|
|
Change YOY
|
|
Fourth Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
Change (%)
|
|||||||||||||||
LQ
|
|
YOY
|
||||||||||||||||||||||||||
Net interest income
|
$
|
2,369
|
|
|
$
|
1,951
|
|
|
21
|
%
|
|
$
|
735
|
|
|
$
|
625
|
|
|
$
|
497
|
|
|
18
|
%
|
|
48
|
%
|
FTE adjustment
|
42
|
|
|
32
|
|
|
32
|
|
|
13
|
|
|
11
|
|
|
8
|
|
|
19
|
|
|
49
|
|
|||||
Net interest income - FTE
|
2,411
|
|
|
1,983
|
|
|
22
|
|
|
748
|
|
|
636
|
|
|
505
|
|
|
18
|
|
|
48
|
|
|||||
Noninterest income
|
1,150
|
|
|
1,039
|
|
|
11
|
|
|
334
|
|
|
302
|
|
|
272
|
|
|
11
|
|
|
23
|
|
|||||
Total revenue - FTE
|
$
|
3,561
|
|
|
$
|
3,022
|
|
|
18
|
%
|
|
$
|
1,082
|
|
|
$
|
938
|
|
|
$
|
777
|
|
|
15
|
%
|
|
39
|
%
|
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|||||||||
|
Full Year
|
|
Full Year
|
|
Change YOY
|
|
Fourth Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
Change bp
|
|||||||||
Yield / Cost
|
|
LQ
|
|
YOY
|
||||||||||||||||||
Total earning assets
|
3.50
|
%
|
|
3.41
|
%
|
|
9
|
bp
|
|
3.60
|
%
|
|
3.52
|
%
|
|
3.37
|
%
|
|
8 bp
|
|
|
23 bp
|
Total loans and leases
|
3.81
|
|
|
3.64
|
|
|
17
|
|
3.95
|
|
|
3.81
|
|
|
3.59
|
|
|
14
|
|
|
36
|
|
Total securities
|
2.54
|
|
|
2.60
|
|
|
(6)
|
|
2.58
|
|
|
2.47
|
|
|
2.58
|
|
|
11
|
|
|
—
|
|
Total interest-bearing liabilities
|
0.48
|
|
|
0.37
|
|
|
11
|
|
0.48
|
|
|
0.49
|
|
|
0.41
|
|
|
(1
|
)
|
|
7
|
|
Total interest-bearing deposits
|
0.23
|
|
|
0.22
|
|
|
1
|
|
0.23
|
|
|
0.22
|
|
|
0.23
|
|
|
1
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net interest rate spread
|
3.02
|
|
|
3.04
|
|
|
(2)
|
|
3.12
|
|
|
3.03
|
|
|
2.96
|
|
|
9
|
|
|
16
|
|
Impact of noninterest-bearing funds on margin
|
0.14
|
|
|
0.11
|
|
|
3
|
|
0.13
|
|
|
0.15
|
|
|
0.13
|
|
|
(2
|
)
|
|
—
|
|
Net interest margin
|
3.16
|
%
|
|
3.15
|
%
|
|
1
|
bp
|
|
3.25
|
%
|
|
3.18
|
%
|
|
3.09
|
%
|
|
7 bp
|
|
|
16 bp
|
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|||||||||||||||
($ in billions)
|
Full
|
|
Full
|
|
YOY
|
|
Fourth
|
|
Third
|
|
Fourth
|
|
Change (%)
|
|||||||||||||||
Year
|
|
Year
|
|
Change
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
LQ
|
|
YOY
|
|||||||||||||||
Commercial and industrial
|
$
|
23.7
|
|
|
$
|
19.7
|
|
|
20
|
%
|
|
$
|
27.7
|
|
|
$
|
25.0
|
|
|
20.2
|
|
|
11
|
%
|
|
37
|
%
|
|
Commercial real estate
|
6.0
|
|
|
5.2
|
|
|
15
|
|
|
7.2
|
|
|
6.4
|
|
|
5.3
|
|
|
13
|
|
|
37
|
|
|||||
Total commercial
|
29.7
|
|
|
25.0
|
|
|
19
|
|
|
34.9
|
|
|
31.3
|
|
|
25.5
|
|
|
12
|
|
|
37
|
|
|||||
Automobile
|
10.5
|
|
|
8.8
|
|
|
20
|
|
|
10.9
|
|
|
11.4
|
|
|
9.3
|
|
|
(5
|
)
|
|
17
|
|
|||||
Home equity
|
9.1
|
|
|
8.5
|
|
|
7
|
|
|
10.1
|
|
|
9.3
|
|
|
8.5
|
|
|
9
|
|
|
19
|
|
|||||
Residential mortgage
|
6.7
|
|
|
5.9
|
|
|
13
|
|
|
7.7
|
|
|
7.0
|
|
|
6.1
|
|
|
10
|
|
|
27
|
|
|||||
RV and marine finance
|
0.7
|
|
|
—
|
|
|
—
|
|
|
1.8
|
|
|
0.9
|
|
|
—
|
|
|
101
|
|
|
-
|
|
|||||
Other consumer
|
0.7
|
|
|
0.5
|
|
|
54
|
|
|
1.0
|
|
|
0.8
|
|
|
0.5
|
|
|
17
|
|
|
75
|
|
|||||
Total consumer
|
27.8
|
|
|
23.7
|
|
|
17
|
|
|
31.5
|
|
|
29.4
|
|
|
24.4
|
|
|
7
|
|
|
29
|
|
|||||
Total loans and leases
|
57.5
|
|
|
48.6
|
|
|
18
|
|
|
66.4
|
|
|
60.7
|
|
|
49.8
|
|
|
9
|
|
|
33
|
|
|||||
Total securities
|
17.8
|
|
|
13.6
|
|
|
30
|
|
|
22.4
|
|
|
18.2
|
|
|
14.5
|
|
|
23
|
|
|
54
|
|
|||||
Held-for-sale and other earning assets
|
1.2
|
|
|
0.7
|
|
|
55
|
|
|
2.6
|
|
|
0.8
|
|
|
0.6
|
|
|
231
|
|
|
343
|
|
|||||
Total earning assets
|
$
|
76.4
|
|
|
$
|
63.0
|
|
|
21
|
%
|
|
$
|
91.5
|
|
|
$
|
79.7
|
|
|
$
|
65.0
|
|
|
15
|
%
|
|
41
|
%
|
•
|
$7.9 billion
, or
54%
, increase in average securities, primarily reflecting the FirstMerit acquisition, as well as the reinvestment of cash flows and additional investment in Liquidity Coverage Ratio (LCR) Level 1 qualifying securities. The
2016 fourth quarter
average balance included $2.9 billion of direct purchase municipal instruments in our commercial banking segment, up from $2.0 billion in the year-ago quarter.
|
•
|
$7.5 billion
, or
37%
,
increase
in average commercial and industrial (C&I) loans and leases, primarily reflecting the impact of the FirstMerit acquisition, the $0.6 billion increase in automobile dealer floorplan loans, and the $0.4 billion increase in corporate banking.
|
•
|
$2.0 billion
, or
37%
,
increase
in commercial real estate (CRE) loans, primarily reflecting the FirstMerit acquisition.
|
•
|
$1.8 billion
increase in average RV and marine finance loans, which was a new product offering for Huntington acquired with FirstMerit.
|
•
|
$1.6 billion
, or
17%
,
increase
in average automobile loans, primarily reflecting the addition of the FirstMerit portfolio. The increase also reflects continued strength in new and used automobile originations across our 23-state auto finance lending footprint, while maintaining our underwriting consistency and discipline, partially offset by the impact of the $1.5 billion auto loan securitization.
|
•
|
$1.6 billion
, or
19%
,
increase
in average home equity loans and lines of credit, primarily reflecting the FirstMerit acquisition.
|
•
|
$1.6 billion
, or
27%
,
increase
in average residential mortgage loans, reflecting increased demand for residential mortgage loans across our footprint and the addition of the FirstMerit portfolio.
|
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
|
|
|||||||||||||||||
|
Full
|
|
Full
|
|
YOY
|
|
Fourth
|
|
Third
|
|
Fourth
|
|
Change (%)
|
|||||||||||||||
($ in billions)
|
Year
|
|
Year
|
|
Change
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
LQ
|
|
YOY
|
|||||||||||||
Demand deposits - noninterest bearing
|
$
|
19.0
|
|
|
$
|
16.3
|
|
|
17
|
%
|
|
$
|
23.2
|
|
|
$
|
20.0
|
|
|
$
|
17.2
|
|
|
16
|
%
|
|
35
|
%
|
Demand deposits - interest bearing
|
11.0
|
|
|
6.6
|
|
|
67
|
|
|
15.3
|
|
|
12.4
|
|
|
6.9
|
|
|
24
|
|
|
121
|
|
|||||
Total demand deposits
|
30.0
|
|
|
22.9
|
|
|
31
|
|
|
38.5
|
|
|
32.4
|
|
|
24.1
|
|
|
19
|
|
|
60
|
|
|||||
Money market deposits
|
19.1
|
|
|
19.4
|
|
|
(2
|
)
|
|
18.6
|
|
|
18.5
|
|
|
19.8
|
|
|
1
|
|
|
(6
|
)
|
|||||
Savings and other domestic deposits
|
8.0
|
|
|
5.2
|
|
|
53
|
|
|
12.3
|
|
|
8.9
|
|
|
5.2
|
|
|
38
|
|
|
135
|
|
|||||
Core certificates of deposit
|
2.3
|
|
|
2.6
|
|
|
(12
|
)
|
|
2.6
|
|
|
2.3
|
|
|
2.4
|
|
|
15
|
|
|
8
|
|
|||||
Total core deposits
|
59.4
|
|
|
50.1
|
|
|
18
|
|
|
72.1
|
|
|
62.0
|
|
|
51.6
|
|
|
16
|
|
|
40
|
|
|||||
Other domestic deposits of $250,000 or more
|
0.4
|
|
|
0.3
|
|
|
59
|
|
|
0.4
|
|
|
0.4
|
|
|
0.4
|
|
|
2
|
|
|
(8
|
)
|
|||||
Brokered deposits and negotiable CDs
|
3.5
|
|
|
2.8
|
|
|
27
|
|
|
4.3
|
|
|
3.9
|
|
|
2.9
|
|
|
9
|
|
|
46
|
|
|||||
Deposits in foreign offices
|
0.2
|
|
|
0.5
|
|
|
(59
|
)
|
|
0.2
|
|
|
0.2
|
|
|
0.4
|
|
|
(22
|
)
|
|
(62
|
)
|
|||||
Total deposits
|
$
|
63.5
|
|
|
$
|
53.6
|
|
|
18
|
%
|
|
$
|
76.9
|
|
|
$
|
66.5
|
|
|
$
|
55.3
|
|
|
16
|
%
|
|
39
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Short-term borrowings
|
$
|
1.5
|
|
|
$
|
1.3
|
|
|
14
|
%
|
|
$
|
2.6
|
|
|
$
|
1.3
|
|
|
$
|
0.5
|
|
|
101
|
%
|
|
402
|
%
|
Long-term debt
|
8.0
|
|
|
5.6
|
|
|
44
|
|
|
8.6
|
|
|
8.5
|
|
|
6.8
|
|
|
1
|
|
|
27
|
|
|||||
Total debt
|
$
|
9.5
|
|
|
$
|
6.9
|
|
|
38
|
%
|
|
$
|
11.2
|
|
|
$
|
9.8
|
|
|
$
|
7.3
|
|
|
14
|
%
|
|
53
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Interest-bearing liabilities
|
$
|
54.0
|
|
|
$
|
44.2
|
|
|
22
|
%
|
|
$
|
64.9
|
|
|
$
|
56.3
|
|
|
$
|
45.5
|
|
|
15
|
%
|
|
43
|
%
|
•
|
$14.4 billion
, or
60%
, increase in average total demand deposits, including a
$6.1 billion
, or
35%
,
increase
in average noninterest bearing demand deposits and an
$8.4 billion
, or
121%
,
increase
in average interest bearing demand deposits. The increase in average total demand deposits was comprised of a $9.8 billion, or 62%, increase in average commercial demand deposits and a $4.6 billion, or 55%, increase in average consumer demand deposits.
|
•
|
$6.8 billion
, or
158%
,
increase
in average savings deposits, reflecting continued banker focus across all segments on obtaining our customers' full deposit relationship.
|
•
|
$3.9 billion, or
53%
, increase in average total debt, reflecting a
$2.1 billion
, or
402%
,
increase
in average short-term borrowings and a
$1.8 billion
, or
27%
,
increase
in average long-term debt. The increase in average long-term debt reflected the issuance of $2.0 billion of holding company-level senior debt during 2016.
|
•
|
$1.3 billion
, or
46%
,
increase
in average brokered deposits and negotiable CDs, impacted by the FirstMerit acquisition.
|
•
|
$1.2 billion
, or
6%
,
decrease
in average money market deposits. During the 2016 third quarter, changes to commercial accounts resulted in the reclassification of $2.8 billion of deposits from money market into interest bearing demand deposits. This decrease was partially offset by the impact of the FirstMerit acquisition.
|
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
|
|
|||||||||||||||||
|
Full
|
|
Full
|
|
YOY
|
|
Fourth
|
|
Third
|
|
Fourth
|
|
Change (%)
|
|||||||||||||||
($ in millions)
|
Year
|
|
Year
|
|
Change
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
LQ
|
|
YOY
|
|||||||||||||
Service charges on deposit accounts
|
$
|
324
|
|
|
$
|
280
|
|
|
16
|
%
|
|
$
|
92
|
|
|
$
|
87
|
|
|
$
|
73
|
|
|
5
|
%
|
|
26
|
%
|
Cards and payment processing income
|
169
|
|
|
143
|
|
|
18
|
|
|
49
|
|
|
44
|
|
|
38
|
|
|
11
|
|
|
31
|
|
|||||
Mortgage banking income
|
128
|
|
|
112
|
|
|
15
|
|
|
38
|
|
|
41
|
|
|
31
|
|
|
(8
|
)
|
|
19
|
|
|||||
Trust services
|
108
|
|
|
106
|
|
|
2
|
|
|
34
|
|
|
29
|
|
|
25
|
|
|
18
|
|
|
35
|
|
|||||
Insurance income
|
65
|
|
|
65
|
|
|
(1
|
)
|
|
16
|
|
|
16
|
|
|
16
|
|
|
4
|
|
|
6
|
|
|||||
Brokerage income
|
62
|
|
|
60
|
|
|
3
|
|
|
17
|
|
|
15
|
|
|
14
|
|
|
16
|
|
|
18
|
|
|||||
Capital markets fees
|
60
|
|
|
54
|
|
|
11
|
|
|
19
|
|
|
15
|
|
|
14
|
|
|
27
|
|
|
36
|
|
|||||
Bank owned life insurance income
|
58
|
|
|
52
|
|
|
10
|
|
|
17
|
|
|
14
|
|
|
13
|
|
|
18
|
|
|
27
|
|
|||||
Gain on sale of loans
|
47
|
|
|
33
|
|
|
43
|
|
|
25
|
|
|
8
|
|
|
10
|
|
|
233
|
|
|
147
|
|
|||||
Securities (losses) gains
|
—
|
|
|
1
|
|
|
(111
|
)
|
|
(2
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other income
|
129
|
|
|
133
|
|
|
(3
|
)
|
|
30
|
|
|
33
|
|
|
37
|
|
|
(11
|
)
|
|
(21
|
)
|
|||||
Total noninterest income
|
$
|
1,150
|
|
|
$
|
1,039
|
|
|
11
|
%
|
|
$
|
334
|
|
|
$
|
302
|
|
|
$
|
272
|
|
|
11
|
%
|
|
23
|
%
|
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
|
|
||||||||||||||
|
Full
|
|
Full
|
|
|
|
Fourth
|
|
Third
|
|
Fourth
|
|
|
||||||||||||
($ in millions)
|
Year
|
|
Year
|
|
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
|
|
|
||||||||||
Service charges on deposit accounts
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
Cards and payment processing income
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|||||
Mortgage banking income
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|||||
Trust services
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|||||
Insurance income
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|||||
Brokerage income
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|||||
Capital markets fees
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|||||
Bank owned life insurance income
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|||||
Gain on sale of loans
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|||||
Securities (losses) gains
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|||||
Other income
|
(1
|
)
|
|
3
|
|
|
|
|
(1
|
)
|
|
—
|
|
|
3
|
|
|
|
|
|
|||||
Total noninterest income
|
$
|
(1
|
)
|
|
$
|
3
|
|
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
3
|
|
|
|
|
|
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
|
|
|||||||||||||||||
|
Full
|
|
Full
|
|
YOY
|
|
Fourth
|
|
Third
|
|
Fourth
|
|
Change (%)
|
|||||||||||||||
($ in millions)
|
Year
|
|
Year
|
|
Change
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
LQ
|
|
YOY
|
|||||||||||||
Service charges on deposit accounts
|
$
|
324
|
|
|
$
|
280
|
|
|
16
|
%
|
|
$
|
92
|
|
|
$
|
87
|
|
|
$
|
73
|
|
|
5
|
%
|
|
26
|
%
|
Cards and payment processing income
|
169
|
|
|
143
|
|
|
18
|
|
|
49
|
|
|
44
|
|
|
38
|
|
|
11
|
|
|
31
|
|
|||||
Mortgage banking income
|
128
|
|
|
112
|
|
|
15
|
|
|
38
|
|
|
41
|
|
|
31
|
|
|
(8
|
)
|
|
19
|
|
|||||
Trust services
|
108
|
|
|
106
|
|
|
2
|
|
|
34
|
|
|
29
|
|
|
25
|
|
|
18
|
|
|
35
|
|
|||||
Insurance income
|
65
|
|
|
65
|
|
|
(1
|
)
|
|
16
|
|
|
16
|
|
|
16
|
|
|
4
|
|
|
6
|
|
|||||
Brokerage income
|
62
|
|
|
60
|
|
|
3
|
|
|
17
|
|
|
15
|
|
|
14
|
|
|
16
|
|
|
18
|
|
|||||
Capital markets fees
|
60
|
|
|
54
|
|
|
11
|
|
|
19
|
|
|
15
|
|
|
14
|
|
|
27
|
|
|
36
|
|
|||||
Bank owned life insurance income
|
58
|
|
|
52
|
|
|
10
|
|
|
17
|
|
|
14
|
|
|
13
|
|
|
18
|
|
|
27
|
|
|||||
Gain on sale of loans
|
47
|
|
|
33
|
|
|
43
|
|
|
25
|
|
|
8
|
|
|
10
|
|
|
233
|
|
|
147
|
|
|||||
Securities (losses) gains
|
—
|
|
|
1
|
|
|
(111
|
)
|
|
(2
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other income
|
130
|
|
|
129
|
|
|
1
|
|
|
31
|
|
|
33
|
|
|
34
|
|
|
(6
|
)
|
|
(9
|
)
|
|||||
Total adjusted noninterest income
|
$
|
1,151
|
|
|
$
|
1,035
|
|
|
11
|
%
|
|
$
|
335
|
|
|
$
|
302
|
|
|
$
|
268
|
|
|
11
|
%
|
|
25
|
%
|
•
|
$19 million
, or
26%
,
increase
in service charges on deposit accounts, reflecting the benefit of continued new customer acquisition. Of the increase, $12 million was attributable to consumer deposit accounts, while $7 million was attributable to commercial deposit accounts.
|
•
|
$15 million
, or
147%
, increase in gain on sale of loans, reflecting a $6 million auto loan securitization gain and $5 million of gains on non-relationship C&I and CRE loan sales, both of which were related to the balance sheet optimization strategy completed in the 2016 fourth quarter.
|
•
|
$12 million
, or
31%
,
increase
in cards and payment processing income, due to higher card-related income and underlying customer growth.
|
•
|
$9 million
, or
35%
,
increase
in trust services, primarily related to the FirstMerit acquisition.
|
•
|
$6 million
, or
19%
,
increase
in mortgage banking income, reflecting a $7 million increase from net mortgage servicing rights (MSR) hedging-related activities.
|
•
|
$8 million
, or
21%
,
decrease
in other income, reflecting $8 million unfavorable impact related to ineffectiveness of derivatives used to hedge fixed-rate, long-term debt.
|
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
|
|
|||||||||||||||||
|
Full
|
|
Full
|
|
YOY
|
|
Fourth
|
|
Third
|
|
Fourth
|
|
Change (%)
|
|||||||||||||||
($ in millions)
|
Year
|
|
Year
|
|
Change
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
LQ
|
|
YOY
|
|||||||||||||
Personnel costs
|
$
|
1,349
|
|
|
$
|
1,122
|
|
|
20
|
%
|
|
$
|
360
|
|
|
$
|
405
|
|
|
$
|
289
|
|
|
(11
|
)%
|
|
25
|
%
|
Outside data processing and other services
|
305
|
|
|
231
|
|
|
32
|
|
|
89
|
|
|
91
|
|
|
64
|
|
|
(3
|
)
|
|
39
|
|
|||||
Equipment
|
165
|
|
|
125
|
|
|
26
|
|
|
60
|
|
|
41
|
|
|
32
|
|
|
46
|
|
|
88
|
|
|||||
Net occupancy
|
153
|
|
|
122
|
|
|
32
|
|
|
49
|
|
|
41
|
|
|
33
|
|
|
19
|
|
|
50
|
|
|||||
Professional services
|
105
|
|
|
50
|
|
|
21
|
|
|
23
|
|
|
47
|
|
|
13
|
|
|
(51
|
)
|
|
78
|
|
|||||
Marketing
|
63
|
|
|
52
|
|
|
109
|
|
|
21
|
|
|
14
|
|
|
12
|
|
|
49
|
|
|
78
|
|
|||||
Deposit and other insurance expense
|
54
|
|
|
45
|
|
|
21
|
|
|
16
|
|
|
15
|
|
|
11
|
|
|
6
|
|
|
42
|
|
|||||
Amortization of intangibles
|
30
|
|
|
28
|
|
|
9
|
|
|
14
|
|
|
9
|
|
|
4
|
|
|
56
|
|
|
272
|
|
|||||
Other expense
|
225
|
|
|
201
|
|
|
12
|
|
|
91
|
|
|
48
|
|
|
42
|
|
|
88
|
|
|
119
|
|
|||||
Total noninterest expense
|
$
|
2,450
|
|
|
$
|
1,976
|
|
|
24
|
%
|
|
$
|
723
|
|
|
$
|
712
|
|
|
$
|
499
|
|
|
2
|
%
|
|
45
|
%
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Number of employees (Average full-time equivalent)
|
16.0
|
|
|
12.2
|
|
|
31
|
%
|
|
16.0
|
|
|
14.5
|
|
|
12.4
|
|
|
10
|
%
|
|
29
|
%
|
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
|
|
|
|
||||||||||||
|
Full
|
|
Full
|
|
|
|
Fourth
|
|
Third
|
|
Fourth
|
|
|
||||||||||||
($ in millions)
|
Year
|
|
Year
|
|
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
|
|
|
||||||||||
Personnel costs
|
$
|
76
|
|
|
$
|
5
|
|
|
|
|
$
|
(5
|
)
|
|
$
|
76
|
|
|
$
|
2
|
|
|
|
|
|
Outside data processing and other services
|
46
|
|
|
4
|
|
|
|
|
15
|
|
|
28
|
|
|
2
|
|
|
|
|
|
|||||
Equipment
|
25
|
|
|
—
|
|
|
|
|
20
|
|
|
7
|
|
|
5
|
|
|
|
|
|
|||||
Net occupancy
|
15
|
|
|
5
|
|
|
|
|
7
|
|
|
5
|
|
|
—
|
|
|
|
|
|
|||||
Professional services
|
58
|
|
|
5
|
|
|
|
|
9
|
|
|
34
|
|
|
1
|
|
|
|
|
|
|||||
Marketing
|
6
|
|
|
—
|
|
|
|
|
4
|
|
|
1
|
|
|
—
|
|
|
|
|
|
|||||
Other expense
|
56
|
|
|
39
|
|
|
|
|
44
|
|
|
8
|
|
|
—
|
|
|
|
|
|
|||||
Total noninterest expense
|
$
|
281
|
|
|
$
|
58
|
|
|
|
|
$
|
95
|
|
|
$
|
159
|
|
|
$
|
10
|
|
|
|
|
|
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|||||||||||||||
|
Full
|
|
Full
|
|
YOY
|
|
Fourth
|
|
Third
|
|
Fourth
|
|
Change (%)
|
|||||||||||||||
($ in millions)
|
Year
|
|
Year
|
|
Change
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
LQ
|
|
YOY
|
|||||||||||||
Personnel costs
|
$
|
1,273
|
|
|
$
|
1,117
|
|
|
14
|
%
|
|
$
|
365
|
|
|
$
|
329
|
|
|
$
|
287
|
|
|
11
|
%
|
|
27
|
%
|
Outside data processing and other services
|
258
|
|
|
227
|
|
|
14
|
|
|
73
|
|
|
63
|
|
|
62
|
|
|
16
|
|
|
18
|
|
|||||
Equipment
|
140
|
|
|
125
|
|
|
12
|
|
|
40
|
|
|
34
|
|
|
27
|
|
|
18
|
|
|
48
|
|
|||||
Net occupancy
|
138
|
|
|
117
|
|
|
18
|
|
|
42
|
|
|
37
|
|
|
33
|
|
|
14
|
|
|
27
|
|
|||||
Professional services
|
47
|
|
|
45
|
|
|
4
|
|
|
14
|
|
|
13
|
|
|
12
|
|
|
8
|
|
|
17
|
|
|||||
Marketing
|
57
|
|
|
52
|
|
|
10
|
|
|
17
|
|
|
14
|
|
|
12
|
|
|
21
|
|
|
42
|
|
|||||
Deposit and other insurance expense
|
54
|
|
|
45
|
|
|
20
|
|
|
16
|
|
|
15
|
|
|
11
|
|
|
7
|
|
|
45
|
|
|||||
Amortization of intangibles
|
30
|
|
|
28
|
|
|
7
|
|
|
14
|
|
|
9
|
|
|
4
|
|
|
56
|
|
|
250
|
|
|||||
Other expense
|
170
|
|
|
162
|
|
|
5
|
|
|
47
|
|
|
40
|
|
|
41
|
|
|
18
|
|
|
15
|
|
|||||
Total adjusted noninterest expense
|
$
|
2,167
|
|
|
$
|
1,918
|
|
|
13
|
%
|
|
$
|
628
|
|
|
$
|
553
|
|
|
$
|
488
|
|
|
14
|
%
|
|
29
|
%
|
•
|
$71 million
, or
25%
,
increase
in personnel costs, reflecting an $84 million increase in salaries related to the May implementation of annual merit increases and a 29% increase in the number of average full-time equivalent employees, partially offset by a $13 million decrease in benefits expense related to an $18 million gain on the settlement of a portion of the FirstMerit pension plan liability during the 2016 fourth quarter.
|
•
|
$49 million
, or
119%
,
increase
in other expense, primarily reflecting a $40 million contribution in the 2016 fourth quarter to achieve the philanthropic plans related to FirstMerit.
|
•
|
$28 million
, or
88%
,
increase
in equipment expense, reflecting the impact of the FirstMerit acquisition.
|
•
|
$25 million
, or
39%
,
increase
in outside data processing and other services expense, primarily related to ongoing technology investments and the impact of the FirstMerit acquisition.
|
•
|
$17 million
, or
50%
,
increase
in net occupancy costs, reflecting the FirstMerit acquisition.
|
•
|
$10 million
, or
272%
,
increase
in amortization of intangibles reflecting the FirstMerit acquisition.
|
•
|
$10 million
, or
78%
,
increase
in professional services, primarily related to $9 million of acquisition-related Significant Items in the 2016 fourth quarter.
|
•
|
$9 million
, or
78%
,
increase
in marketing, related to the FirstMerit acquisition.
|
|
2016
|
|
2015
|
||||||||||||||||
($ in millions)
|
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
||||||||||
Total nonaccrual loans and leases
|
$
|
423
|
|
|
$
|
404
|
|
|
$
|
461
|
|
|
$
|
499
|
|
|
$
|
372
|
|
Total other real estate, net
|
51
|
|
|
71
|
|
|
29
|
|
|
26
|
|
|
27
|
|
|||||
Other NPAs
(1)
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total nonperforming assets
|
481
|
|
|
475
|
|
|
490
|
|
|
525
|
|
|
399
|
|
|||||
Accruing loans and leases past due 90 days or more
|
129
|
|
|
135
|
|
|
99
|
|
|
106
|
|
|
106
|
|
|||||
NPAs + accruing loans and lease past due 90 days or more
|
$
|
610
|
|
|
$
|
610
|
|
|
$
|
589
|
|
|
$
|
631
|
|
|
$
|
505
|
|
NAL ratio
(2)
|
0.63
|
%
|
|
0.61
|
%
|
|
0.88
|
%
|
|
0.97
|
%
|
|
0.74
|
%
|
|||||
NPA ratio
(3) (4)
|
0.72
|
|
|
0.72
|
|
|
0.93
|
|
|
1.02
|
|
|
0.79
|
|
|||||
(NPAs+90 days)/(Loans+OREO)
|
0.91
|
|
|
0.92
|
|
|
1.12
|
|
|
1.22
|
|
|
1.00
|
|
|||||
Provision for credit losses
|
$
|
75
|
|
|
$
|
64
|
|
|
$
|
25
|
|
|
$
|
28
|
|
|
$
|
36
|
|
Net charge-offs
|
44
|
|
|
40
|
|
|
17
|
|
|
9
|
|
|
22
|
|
|||||
Net charge-offs / Average total loans
|
0.26
|
%
|
|
0.26
|
%
|
|
0.13
|
%
|
|
0.07
|
%
|
|
0.18
|
%
|
|||||
Allowance for loans and lease losses
|
$
|
638
|
|
|
$
|
617
|
|
|
$
|
623
|
|
|
$
|
614
|
|
|
$
|
598
|
|
Allowance for unfunded loan commitments and letters of credit
|
98
|
|
|
88
|
|
|
74
|
|
|
75
|
|
|
72
|
|
|||||
Allowance for credit losses (ACL)
|
$
|
736
|
|
|
$
|
705
|
|
|
$
|
697
|
|
|
$
|
689
|
|
|
$
|
670
|
|
ACL as a % of:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total loans and leases
|
1.10
|
%
|
|
1.06
|
%
|
|
1.33
|
%
|
|
1.34
|
%
|
|
1.33
|
%
|
|||||
NALs
|
174
|
|
|
174
|
|
|
151
|
|
|
138
|
|
|
180
|
|
|||||
NPAs
|
153
|
|
|
148
|
|
|
142
|
|
|
131
|
|
|
168
|
|
(1)
|
Other nonperforming assets includes certain impaired investment securities.
|
(2)
|
Total NALs as a % of total loans and leases.
|
(3)
|
Total NPAs as a % of sum of loans and leases and net other real estate.
|
(4)
|
Excludes nonaccruing troubled debt restructured home equity loans previously transferred to held-for-sale for the quarters ending December 31, 2015 through June 30, 2016.
|
|
|
2016
|
|
2015
|
||||||||||||||||
($ in millions)
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|