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:
|
October 26, 2016
|
|
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 scheduled for 2017 first quarter, and required branch divestiture expected to be completed during 2016 fourth quarter
|
•
|
Estimated FirstMerit annualized cost savings of $255 million are specifically identified and expected to be fully implemented within one year; potential revenue enhancements also identified and execution already begun
|
•
|
Continued balance sheet optimization strategy following completion of FirstMerit acquisition, resulting in movement of $2.6 billion of loans to Loans Held-For-Sale
|
•
|
Recently announced 14% increase in quarterly cash dividend to $0.08 per share
|
•
|
$182 million
, or
24%
, year-over-year increase in fully-taxable equivalent revenue, comprised of a
$132 million
, or
26%
, increase in fully-taxable equivalent net interest income and a
$49 million
, or
19%
,
increase
in noninterest income
|
•
|
Net interest margin of
3.18%
, an increase of
2
basis points from the year-ago quarter
|
•
|
$186 million
, or
35%
, year-over-year
increase
in noninterest expense, including $159 million of FirstMerit acquisition-related expense during the
2016 third quarter
compared to $43 million of Significant Items during the year-ago quarter
|
•
|
$11.7 billion
, or
24%
, year-over-year
increase
in average loans and leases, primarily driven by a
$5.2 billion
, or
26%
,
increase
in commercial and industrial (C&I) loans and a
$2.5 billion
, or
28%
,
increase
in automobile loans
|
•
|
$4.4 billion
, or
32%
, year-over-year increase in average securities, including a net increase of $0.8 billion of direct purchase municipal instruments in our Commercial Banking segment
|
•
|
$11.1 billion
, or
22%
, year-over-year
increase
in average core deposits, driven by a
$5.8 billion
, or
87%
, increase in interest-bearing demand deposits and a
$3.0 billion
, or
18%
,
increase
in noninterest-bearing demand deposits
|
•
|
$0.40, or
6%
, year-over-year decrease in tangible book value per common share (TBVPS) to
$6.48
|
|
2016
|
|
2015
|
||||||||||||||||
($ in millions, except per share data)
|
Third
|
|
Second
|
|
First
|
|
Fourth
|
|
Third
|
||||||||||
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|||||||||||
Net Income
|
$
|
127
|
|
|
$
|
175
|
|
|
$
|
171
|
|
|
$
|
178
|
|
|
$
|
153
|
|
Diluted earnings per common share
|
0.11
|
|
|
0.19
|
|
|
0.20
|
|
|
0.21
|
|
|
0.18
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Return on average assets
|
0.58
|
%
|
|
0.96
|
%
|
|
0.96
|
%
|
|
1.00
|
%
|
|
0.87
|
%
|
|||||
Return on average common equity
|
5.4
|
|
|
9.6
|
|
|
10.4
|
|
|
10.8
|
|
|
9.3
|
|
|||||
Return on average tangible common equity
|
7.0
|
|
|
11.0
|
|
|
11.9
|
|
|
12.4
|
|
|
10.7
|
|
|||||
Net interest margin
|
3.18
|
|
|
3.06
|
|
|
3.11
|
|
|
3.09
|
|
|
3.16
|
|
|||||
Efficiency ratio
|
75.0
|
|
|
66.1
|
|
|
64.6
|
|
|
63.7
|
|
|
69.1
|
|
|||||
|
|
#160;
|
|
|
|
|
|
|
|
||||||||||
Tangible book value per common share
|
$
|
6.48
|
|
|
$
|
7.29
|
|
|
$
|
7.12
|
|
|
$
|
6.91
|
|
|
$
|
6.88
|
|
Cash dividends declared per common share
|
0.07
|
|
|
0.07
|
|
|
0.07
|
|
|
0.07
|
|
|
0.06
|
|
|||||
Average diluted shares outstanding (000’s)
|
952,081
|
|
|
810,371
|
|
|
808,349
|
|
|
810,143
|
|
|
814,326
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Average earning assets
|
$
|
79,687
|
|
|
$
|
67,863
|
|
|
$
|
66,234
|
|
|
$
|
64,961
|
|
|
$
|
63,323
|
|
Average loans and leases
(1)
|
60,722
|
|
|
51,932
|
|
|
50,618
|
|
|
49,827
|
|
|
49,046
|
|
|||||
Average core deposits
|
62,022
|
|
|
51,895
|
|
|
51,363
|
|
|
51,585
|
|
|
50,891
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Tangible common equity / tangible assets ratio
|
7.14
|
%
|
|
7.96
|
%
|
|
7.89
|
%
|
|
7.82
|
%
|
|
7.89
|
%
|
|||||
Common equity Tier 1 risk-based capital ratio
|
9.09
|
|
|
9.80
|
|
|
9.73
|
|
|
9.79
|
|
|
9.72
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
NCOs as a % of average loans and leases
|
0.26
|
%
|
|
0.13
|
%
|
|
0.07
|
%
|
|
0.18
|
%
|
|
0.13
|
%
|
|||||
NAL ratio
|
0.61
|
|
|
0.88
|
|
|
0.97
|
|
|
0.74
|
|
|
0.72
|
|
|||||
ACL as a % of total loans and leases
|
1.06
|
|
|
1.33
|
|
|
1.34
|
|
|
1.33
|
|
|
1.32
|
|
(1)
|
Excludes loans held for sale
|
Three Months Ended
|
Pre-Tax
Impact |
|
After-Tax Impact
|
||||||||||
($ in millions, except per share)
|
Amount
|
|
Amount
(1)
|
|
EPS
(2)
|
||||||||
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)
|
—
|
|
|
—
|
|
|
—
|
|
|||
September 30, 2015 – net income
|
|
|
$
|
153
|
|
|
$
|
0.18
|
|
||||
•
|
|
Addition to litigation reserves
|
$
|
(38
|
)
|
|
(25
|
)
|
|
(0.03
|
)
|
||
•
|
|
Merger and acquisition-related net expenses
|
(5
|
)
|
|
(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 $1 million.
|
($ in billions)
|
|
|
|
|
||||
As of August 16, 2016
(1)
|
||||||||
Assets
|
|
Liabilities
|
||||||
Commercial and industrial
|
$
|
7.3
|
|
|
Demand deposits - noninterest-bearing
|
$
|
6.3
|
|
Commercial real estate
|
1.8
|
|
|
Demand deposits - interest-bearing
|
3.6
|
|
||
Total commercial
|
9.1
|
|
|
Total demand deposits
|
9.9
|
|
||
Automobile
|
1.6
|
|
|
Money market deposits
|
1.5
|
|
||
Home equity
|
1.4
|
|
|
Savings and other domestic deposits
|
7.2
|
|
||
Residential mortgage
|
1.1
|
|
|
Core certificates of deposit
|
1.1
|
|
||
RV and marine finance
|
1.8
|
|
|
Total core deposits
|
19.7
|
|
||
Other consumer
|
0.5
|
|
|
Other domestic deposits of $250,000 or more
|
—
|
|
||
Total consumer
|
6.4
|
|
|
Brokered deposits and negotiable CDs
|
1.5
|
|
||
Total loans and leases
|
15.5
|
|
|
Deposits in foreign offices
|
—
|
|
||
Total securities
|
7.4
|
|
|
Total deposits
|
$
|
21.2
|
|
|
Held-for-sale and other earning assets
|
0.8
|
|
|
|
|
|||
Total earning assets
|
$
|
23.7
|
|
|
Short-term borrowings
|
$
|
1.2
|
|
|
|
|
Long-term debt
|
0.5
|
|
|||
|
|
|
Total debt
|
$
|
1.7
|
|
|
2016
|
|
2015
|
|
|
|
|
||||||||||||||||||
($ in millions)
|
Third
|
|
Second
|
|
First
|
|
Fourth
|
|
Third
|
|
Change (%)
|
||||||||||||||
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
LQ
|
|
YOY
|
||||||||||||||
Net interest income
|
$
|
625
|
|
|
$
|
506
|
|
|
$
|
503
|
|
|
$
|
497
|
|
|
$
|
495
|
|
|
24
|
%
|
|
26
|
%
|
FTE adjustment
|
11
|
|
|
10
|
|
|
9
|
|
|
8
|
|
|
8
|
|
|
10
|
|
|
38
|
|
|||||
Net interest income - FTE
|
636
|
|
|
516
|
|
|
512
|
|
|
505
|
|
|
504
|
|
|
23
|
|
|
26
|
|
|||||
Noninterest income
|
302
|
|
|
271
|
|
|
242
|
|
|
272
|
|
|
253
|
|
|
11
|
|
|
19
|
|
|||||
Total revenue - FTE
|
$
|
938
|
|
|
$
|
787
|
|
|
$
|
754
|
|
|
$
|
778
|
|
|
$
|
757
|
|
|
19
|
%
|
|
24
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Change bp
|
|||||||||
Yield / Cost
|
|
|
|
|
|
|
|
|
|
|
LQ
|
|
YOY
|
|||||||
Total earning assets
|
3.52
|
%
|
|
3.41
|
%
|
|
3.44
|
%
|
|
3.37
|
%
|
|
3.42
|
%
|
|
11
|
|
|
10
|
|
Total loans and leases
|
3.81
|
|
|
3.63
|
|
|
3.67
|
|
|
3.59
|
|
|
3.65
|
|
|
18
|
|
|
16
|
|
Total securities
|
2.47
|
|
|
2.56
|
|
|
2.56
|
|
|
2.58
|
|
|
2.59
|
|
|
(9
|
)
|
|
(12
|
)
|
Total interest-bearing liabilities
|
0.49
|
|
|
0.50
|
|
|
0.46
|
|
|
0.41
|
|
|
0.39
|
|
|
(1
|
)
|
|
10
|
|
Total interest-bearing deposits
|
0.22
|
|
|
0.23
|
|
|
0.24
|
|
|
0.23
|
|
|
0.22
|
|
|
(1
|
)
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net interest rate spread
|
3.03
|
|
|
2.91
|
|
|
2.98
|
|
|
2.96
|
|
|
3.03
|
|
|
12
|
|
|
—
|
|
Impact of noninterest-bearing funds on margin
|
0.15
|
|
|
0.15
|
|
|
0.13
|
|
|
0.13
|
|
|
0.13
|
|
|
—
|
|
|
2
|
|
Net interest margin
|
3.18
|
%
|
|
3.06
|
%
|
|
3.11
|
%
|
|
3.09
|
%
|
|
3.16
|
%
|
|
12
|
|
|
2
|
|
|
2016
|
|
2015
|
|
|
|
|
||||||||||||||||||
($ in billions)
|
Third
|
|
Second
|
|
First
|
|
Fourth
|
|
Third
|
|
Change (%)
|
||||||||||||||
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
LQ
|
|
YOY
|
||||||||||||||
Commercial and industrial
|
$
|
25.0
|
|
|
$
|
21.3
|
|
|
$
|
20.6
|
|
|
$
|
20.2
|
|
|
$
|
19.8
|
|
|
17
|
%
|
|
26
|
%
|
Commercial real estate
|
6.4
|
|
|
5.2
|
|
|
5.2
|
|
|
5.3
|
|
|
5.3
|
|
|
22
|
|
|
20
|
|
|||||
Total commercial
|
31.3
|
|
|
26.6
|
|
|
25.9
|
|
|
25.5
|
|
|
25.1
|
|
|
18
|
|
|
25
|
|
|||||
Automobile
|
11.4
|
|
|
10.1
|
|
|
9.7
|
|
|
9.3
|
|
|
8.9
|
|
|
12
|
|
|
28
|
|
|||||
Home equity
|
9.3
|
|
|
8.4
|
|
|
8.4
|
|
|
8.5
|
|
|
8.5
|
|
|
10
|
|
|
9
|
|
|||||
Residential mortgage
|
7.0
|
|
|
6.2
|
|
|
6.0
|
|
|
6.1
|
|
|
6.0
|
|
|
13
|
|
|
16
|
|
|||||
RV and marine finance
|
0.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
NM
|
|
|
NM
|
|
|||||
Other consumer
|
0.8
|
|
|
0.6
|
|
|
0.6
|
|
|
0.5
|
|
|
0.5
|
|
|
34
|
|
|
65
|
|
|||||
Total consumer
|
29.4
|
|
|
25.4
|
|
|
24.8
|
|
|
24.4
|
|
|
23.9
|
|
|
16
|
|
|
23
|
|
|||||
Total loans and leases
|
60.7
|
|
|
51.9
|
|
|
50.6
|
|
|
49.8
|
|
|
49.0
|
|
|
17
|
|
|
24
|
|
|||||
Total securities
|
18.2
|
|
|
15.3
|
|
|
15.1
|
|
|
14.5
|
|
|
13.7
|
|
|
19
|
|
|
32
|
|
|||||
Held-for-sale and other earning assets
|
0.8
|
|
|
0.7
|
|
|
0.5
|
|
|
0.6
|
|
|
0.6
|
|
|
14
|
|
|
33
|
|
|||||
Total earning assets
|
$
|
79.7
|
|
|
$
|
67.9
|
|
|
$
|
66.2
|
|
|
$
|
65.0
|
|
|
$
|
63.3
|
|
|
17
|
%
|
|
26
|
%
|
•
|
$5.2 billion
, or
26%
,
increase
in average C&I loans and leases, impacted by the mid-quarter FirstMerit acquisition. This increase also reflects organic growth in equipment finance leases, automobile dealer floorplan lending, and corporate banking.
|
•
|
$4.4 billion
, or
32%
, increase in average securities, impacted by the mid-quarter FirstMerit acquisition, the reinvestment of cash flows and additional investment in Liquidity Coverage Ratio (LCR) Level 1 qualifying securities, and a $0.8 billion increase in direct purchase municipal instruments in our Commercial Banking segment, offset by sales of certain securities following the closing of the FirstMerit acquisition.
|
•
|
$2.5 billion
, or
28%
,
increase
in average automobile loans, impacted by the mid-quarter FirstMerit acquisition. The 2016 third quarter represented the eleventh consecutive quarter of greater than $1.0 billion in automobile loan originations, while maintaining our underwriting consistency and discipline.
|
•
|
$1.1 billion
, or
20%
, increase in average commercial real estate (CRE) loans, impacted by the mid-quarter FirstMerit acquisition.
|
•
|
$1.0 billion
, or
16%
,
increase
in average residential mortgage loans, impacted by the mid-quarter FirstMerit acquisition as well as increased demand for residential mortgage loans across our footprint.
|
•
|
$0.9 billion
increase in RV and marine finance loans, reflecting the acquisition of the product offering in the FirstMerit transaction.
|
•
|
$0.7 billion
, or
9%
, increase in average home equity loans, impacted by the mid-quarter FirstMerit acquisition.
|
|
2016
|
|
2015
|
|
|
||||||||||||||||||||
|
Third
|
|
Second
|
|
First
|
|
Fourth
|
|
Third
|
|
Change (%)
|
||||||||||||||
($ in billions)
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
LQ
|
|
YOY
|
||||||||||||
Demand deposits - noninterest-bearing
|
$
|
20.0
|
|
|
$
|
16.5
|
|
|
$
|
16.3
|
|
|
$
|
17.2
|
|
|
$
|
17.0
|
|
|
21
|
%
|
|
18
|
%
|
Demand deposits - interest-bearing
|
12.4
|
|
|
8.4
|
|
|
7.8
|
|
|
6.9
|
|
|
6.6
|
|
|
46
|
|
|
87
|
|
|||||
Total demand deposits
|
32.4
|
|
|
24.9
|
|
|
24.1
|
|
|
24.1
|
|
|
23.6
|
|
|
30
|
|
|
37
|
|
|||||
Money market deposits
|
18.5
|
|
|
19.5
|
|
|
19.7
|
|
|
19.8
|
|
|
19.5
|
|
|
(6
|
)
|
|
(5
|
)
|
|||||
Savings and other domestic deposits
|
8.9
|
|
|
5.4
|
|
|
5.3
|
|
|
5.2
|
|
|
5.2
|
|
|
65
|
|
|
70
|
|
|||||
Core certificates of deposit
|
2.3
|
|
|
2.0
|
|
|
2.3
|
|
|
2.4
|
|
|
2.5
|
|
|
14
|
|
|
(10
|
)
|
|||||
Total core deposits
|
62.0
|
|
|
51.8
|
|
|
51.4
|
|
|
51.5
|
|
|
50.9
|
|
|
20
|
|
|
22
|
|
|||||
Other domestic deposits of $250,000 or more
|
0.4
|
|
|
0.4
|
|
|
0.5
|
|
|
0.4
|
|
|
0.2
|
|
|
(5
|
)
|
|
76
|
|
|||||
Brokered deposits and negotiable CDs
|
3.9
|
|
|
2.9
|
|
|
2.9
|
|
|
2.9
|
|
|
2.8
|
|
|
34
|
|
|
40
|
|
|||||
Deposits in foreign offices
|
0.2
|
|
|
0.2
|
|
|
0.3
|
|
|
0.4
|
|
|
0.5
|
|
|
(7
|
)
|
|
(61
|
)
|
|||||
Total deposits
|
$
|
66.5
|
|
|
$
|
55.3
|
|
|
$
|
55.1
|
|
|
$
|
55.2
|
|
|
$
|
54.4
|
|
|
20
|
%
|
|
22
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Short-term borrowings
|
$
|
1.3
|
|
|
$
|
1.0
|
|
|
$
|
1.1
|
|
|
$
|
0.5
|
|
|
$
|
0.8
|
|
|
26
|
%
|
|
55
|
%
|
Long-term debt
|
8.5
|
|
|
7.9
|
|
|
7.2
|
|
|
6.8
|
|
|
6.0
|
|
|
7
|
|
|
40
|
|
|||||
Total debt
|
$
|
9.8
|
|
|
$
|
8.9
|
|
|
$
|
8.3
|
|
|
$
|
7.3
|
|
|
$
|
6.8
|
|
|
10
|
%
|
|
42
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total interest-bearing liabilities
|
$
|
56.3
|
|
|
$
|
47.8
|
|
|
$
|
47.0
|
|
|
$
|
45.5
|
|
|
$
|
44.3
|
|
|
18
|
%
|
|
27
|
%
|
•
|
$8.8 billion, or
37%
, increase in average demand deposits, impacted by the mid-quarter FirstMerit acquisition. Average interest-bearing demand deposits
increased
$5.8 billion
, or
87%
, and average noninterest-bearing demand deposits
increased
$3.0 billion
, or
18%
. The increase in average total demand deposits was comprised of a $6.1 billion, or 39%, increase in average commercial demand deposits and a $2.7 billion, or 33%, increase in average consumer demand deposits.
|
•
|
$3.7 billion
, or
70%
,
increase
in savings and other domestic deposits, impacted by the mid-quarter FirstMerit acquisition.
|
•
|
$2.9 billion, or
42%
, increase in average total debt, primarily reflecting the issuance of $3.3 billion of senior debt over the past five quarters.
|
•
|
$1.1 billion
, or
40%
,
increase
in brokered deposits and negotiable CDs, impacted by the mid-quarter FirstMerit acquisition.
|
•
|
$1.1 billion
, or
5%
,
decrease
in average money market deposits. During the 2016 third quarter, changes to commercial accounts resulted in the reclassification of $2.8 billion of deposits from money market into interest bearing demand deposits. This decrease was partially offset by the impact of the mid-quarter FirstMerit acquisition.
|
|
2016
|
|
2015
|
|
|
||||||||||||||||||||
|
Third
|
|
Second
|
|
First
|
|
Fourth
|
|
Third
|
|
Change (%)
|
||||||||||||||
($ in millions)
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
LQ
|
|
YOY
|
||||||||||||
Service charges on deposit accounts
|
$
|
87
|
|
|
$
|
76
|
|
|
$
|
70
|
|
|
$
|
73
|
|
|
$
|
75
|
|
|
15
|
%
|
|
16
|
%
|
Cards and payment processing income
|
44
|
|
|
39
|
|
|
36
|
|
|
38
|
|
|
37
|
|
|
13
|
|
|
21
|
|
|||||
Mortgage banking income
|
41
|
|
|
32
|
|
|
19
|
|
|
31
|
|
|
19
|
|
|
29
|
|
|
114
|
|
|||||
Trust services
|
29
|
|
|
22
|
|
|
23
|
|
|
25
|
|
|
25
|
|
|
29
|
|
|
16
|
|
|||||
Insurance income
|
16
|
|
|
16
|
|
|
16
|
|
|
16
|
|
|
16
|
|
|
(1
|
)
|
|
(2
|
)
|
|||||
Brokerage income
|
15
|
|
|
15
|
|
|
16
|
|
|
14
|
|
|
15
|
|
|
1
|
|
|
(2
|
)
|
|||||
Capital markets fees
|
15
|
|
|
13
|
|
|
13
|
|
|
14
|
|
|
13
|
|
|
13
|
|
|
16
|
|
|||||
Bank owned life insurance income
|
14
|
|
|
13
|
|
|
14
|
|
|
13
|
|
|
13
|
|
|
15
|
|
|
14
|
|
|||||
Gain on sale of loans
|
8
|
|
|
9
|
|
|
5
|
|
|
10
|
|
|
6
|
|
|
(19
|
)
|
|
28
|
|
|||||
Securities gains (losses)
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57
|
|
|
NM
|
|
|||||
Other income
|
33
|
|
|
36
|
|
|
30
|
|
|
37
|
|
|
35
|
|
|
(8
|
)
|
|
(3
|
)
|
|||||
Total noninterest income
|
$
|
302
|
|
|
$
|
271
|
|
|
$
|
242
|
|
|
$
|
272
|
|
|
$
|
253
|
|
|
12
|
%
|
|
19
|
%
|
|
2016
|
|
2015
|
|
||||||||||||||||
|
Third
|
|
Second
|
|
First
|
|
Fourth
|
|
Third
|
|
||||||||||
($ in millions)
|
Quarter
|
|
Quarter
|
|
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 gains (losses)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Other income
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
|||||
Total noninterest income
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
|
2016
|
|
2015
|
|
|
||||||||||||||||||||
|
Third
|
|
Second
|
|
First
|
|
Fourth
|
|
Third
|
|
Change (%)
|
||||||||||||||
($ in millions)
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
LQ
|
|
YOY
|
||||||||||||
Service charges on deposit accounts
|
$
|
87
|
|
|
$
|
76
|
|
|
$
|
70
|
|
|
$
|
73
|
|
|
$
|
75
|
|
|
15
|
%
|
|
16
|
%
|
Cards and payment processing income
|
44
|
|
|
39
|
|
|
36
|
|
|
38
|
|
|
37
|
|
|
13
|
|
|
21
|
|
|||||
Mortgage banking income
|
41
|
|
|
32
|
|
|
19
|
|
|
31
|
|
|
19
|
|
|
29
|
|
|
114
|
|
|||||
Trust services
|
29
|
|
|
22
|
|
|
23
|
|
|
25
|
|
|
25
|
|
|
29
|
|
|
16
|
|
|||||
Insurance income
|
16
|
|
|
16
|
|
|
16
|
|
|
16
|
|
|
16
|
|
|
(1
|
)
|
|
(2
|
)
|
|||||
Brokerage income
|
15
|
|
|
15
|
|
|
16
|
|
|
14
|
|
|
15
|
|
|
1
|
|
|
(2
|
)
|
|||||
Capital markets fees
|
15
|
|
|
13
|
|
|
13
|
|
|
14
|
|
|
13
|
|
|
13
|
|
|
16
|
|
|||||
Bank owned life insurance income
|
14
|
|
|
13
|
|
|
14
|
|
|
13
|
|
|
13
|
|
|
15
|
|
|
14
|
|
|||||
Gain on sale of loans
|
8
|
|
|
9
|
|
|
5
|
|
|
10
|
|
|
6
|
|
|
(19
|
)
|
|
28
|
|
|||||
Securities gains (losses)
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57
|
|
|
NM
|
|
|||||
Other income
|
33
|
|
|
36
|
|
|
30
|
|
|
41
|
|
|
35
|
|
|
(8
|
)
|
|
(3
|
)
|
|||||
Total noninterest income
|
$
|
302
|
|
|
$
|
271
|
|
|
$
|
242
|
|
|
$
|
275
|
|
|
$
|
253
|
|
|
12
|
%
|
|
19
|
%
|
•
|
$22 million
, or
114%
,
increase
in mortgage banking income, reflecting a 39% increase in mortgage origination volume and a $10 million impact from net MSR activity.
|
•
|
$12 million
, or
16%
,
increase
in service charges on deposit accounts, reflecting the benefit of continued new customer acquisition. Of the increase, $8 million was attributable to consumer deposit accounts, while $4 million was attributable to commercial deposit accounts.
|
•
|
$8 million
, or
21%
,
increase
in cards and payment processing income, due to higher credit and debit card related income and underlying customer growth.
|
|
2016
|
|
2015
|
|
|
||||||||||||||||||||
|
Third
|
|
Second
|
|
First
|
|
Fourth
|
|
Third
|
|
Change (%)
|
||||||||||||||
($ in millions)
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
LQ
|
|
YOY
|
||||||||||||
Personnel costs
|
$
|
405
|
|
|
$
|
299
|
|
|
$
|
285
|
|
|
$
|
289
|
|
|
$
|
286
|
|
|
35
|
%
|
|
41
|
%
|
Outside data processing and other services
|
91
|
|
|
63
|
|
|
62
|
|
|
64
|
|
|
59
|
|
|
45
|
|
|
56
|
|
|||||
Equipment
|
41
|
|
|
32
|
|
|
33
|
|
|
32
|
|
|
31
|
|
|
28
|
|
|
30
|
|
|||||
Net occupancy
|
41
|
|
|
31
|
|
|
31
|
|
|
33
|
|
|
29
|
|
|
35
|
|
|
43
|
|
|||||
Marketing
|
14
|
|
|
15
|
|
|
12
|
|
|
12
|
|
|
12
|
|
|
(2
|
)
|
|
19
|
|
|||||
Professional services
|
47
|
|
|
21
|
|
|
14
|
|
|
13
|
|
|
12
|
|
|
119
|
|
|
294
|
|
|||||
Deposit and other insurance expense
|
15
|
|
|
12
|
|
|
11
|
|
|
11
|
|
|
12
|
|
|
23
|
|
|
29
|
|
|||||
Amortization of intangibles
|
9
|
|
|
4
|
|
|
4
|
|
|
4
|
|
|
4
|
|
|
151
|
|
|
131
|
|
|||||
Other expense
|
48
|
|
|
47
|
|
|
39
|
|
|
42
|
|
|
82
|
|
|
3
|
|
|
(41
|
)
|
|||||
Total noninterest expense
|
$
|
712
|
|
|
$
|
524
|
|
|
$
|
491
|
|
|
$
|
499
|
|
|
$
|
527
|
|
|
36
|
%
|
|
35
|
%
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Number of employees (Average full-time equivalent)
|
14.5
|
|
|
12.4
|
|
|
12.4
|
|
|
12.4
|
|
|
12.4
|
|
|
17
|
%
|
|
17
|
%
|
|
2016
|
|
2015
|
||||||||||||||||
|
Third
|
|
Second
|
|
First
|
|
Fourth
|
|
Third
|
||||||||||
($ in millions)
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
||||||||||
Personnel costs
|
$
|
76
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
3
|
|
Outside data processing and other services
|
28
|
|
|
3
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|||||
Equipment
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net occupancy
|
7
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|||||
Marketing
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Professional services
|
34
|
|
|
11
|
|
|
4
|
|
|
1
|
|
|
1
|
|
|||||
Other expense
|
8
|
|
|
2
|
|
|
1
|
|
|
—
|
|
|
38
|
|
|||||
Total noninterest expense
|
$
|
159
|
|
|
$
|
21
|
|
|
$
|
5
|
|
|
$
|
10
|
|
|
$
|
43
|
|
|
2016
|
|
2015
|
|
|
||||||||||||||||||||
|
Third
|
|
Second
|
|
First
|
|
Fourth
|
|
Third
|
|
Change (%)
|
||||||||||||||
($ in millions)
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
LQ
|
|
YOY
|
||||||||||||
Personnel costs
|
$
|
329
|
|
|
$
|
294
|
|
|
$
|
285
|
|
|
$
|
287
|
|
|
$
|
283
|
|
|
12
|
%
|
|
16
|
%
|
Outside data processing and other services
|
63
|
|
|
60
|
|
|
62
|
|
|
62
|
|
|
57
|
|
|
5
|
|
|
11
|
|
|||||
Equipment
|
36
|
|
|
32
|
|
|
33
|
|
|
32
|
|
|
31
|
|
|
13
|
|
|
16
|
|
|||||
Net occupancy
|
34
|
|
|
30
|
|
|
31
|
|
|
28
|
|
|
29
|
|
|
13
|
|
|
17
|
|
|||||
Marketing
|
14
|
|
|
15
|
|
|
12
|
|
|
12
|
|
|
12
|
|
|
(7
|
)
|
|
17
|
|
|||||
Professional services
|
13
|
|
|
11
|
|
|
9
|
|
|
12
|
|
|
12
|
|
|
18
|
|
|
8
|
|
|||||
Deposit and other insurance expense
|
15
|
|
|
12
|
|
|
11
|
|
|
11
|
|
|
12
|
|
|
23
|
|
|
29
|
|
|||||
Amortization of intangibles
|
9
|
|
|
4
|
|
|
4
|
|
|
4
|
|
|
4
|
|
|
151
|
|
|
131
|
|
|||||
Other expense
|
40
|
|
|
46
|
|
|
38
|
|
|
41
|
|
|
43
|
|
|
(13
|
)
|
|
(7
|
)
|
|||||
Total noninterest expense
|
$
|
553
|
|
|
$
|
503
|
|
|
$
|
485
|
|
|
$
|
488
|
|
|
$
|
483
|
|
|
10
|
%
|
|
14
|
%
|
•
|
$119 million
, or
41%
,
increase
in personnel costs, primarily reflecting $76 million of acquisition-related personnel expense and a 17% increase in average full-time equivalent employees largely related to the in-store branch expansion and the addition of former FirstMerit colleagues.
|
•
|
$35 million
, or
294%
,
increase
in professional expense, reflecting $34 million of legal and consulting expense related to the FirstMerit acquisition.
|
•
|
$33 million
, or
56%
,
increase
in outside data processing and other services expense, reflecting $28 million of Significant Items related to the FirstMerit acquisition as well as ongoing technology investments.
|
•
|
$33 million
, or
41%
,
decrease
in other expense, primarily reflecting litigation reserve adjustments in the year-ago quarter.
|
|
2016
|
|
2015
|
||||||||||||||||
($ in millions)
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
||||||||||
Total nonaccrual loans and leases
|
$
|
404
|
|
|
$
|
461
|
|
|
$
|
499
|
|
|
$
|
372
|
|
|
$
|
356
|
|
Total other real estate, net
|
71
|
|
|
29
|
|
|
26
|
|
|
27
|
|
|
25
|
|
|||||
Other NPAs
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total nonperforming assets
|
475
|
|
|
490
|
|
|
525
|
|
|
399
|
|
|
381
|
|
|||||
Accruing loans and leases past due 90 days or more
|
135
|
|
|
99
|
|
|
106
|
|
|
106
|
|
|
106
|
|
|||||
NPAs + accruing loans and lease past due 90 days or more
|
$
|
610
|
|
|
$
|
589
|
|
|
$
|
631
|
|
|
$
|
505
|
|
|
$
|
487
|
|
NAL ratio
(2)
|
0.61
|
%
|
|
0.88
|
%
|
|
0.97
|
%
|
|
0.74
|
%
|
|
0.72
|
%
|
|||||
NPA ratio
(3) (4)
|
0.72
|
|
|
0.93
|
|
|
1.02
|
|
|
0.79
|
|
|
0.77
|
|
|||||
(NPAs+90 days)/(Loans+OREO)
|
0.92
|
|
|
1.12
|
|
|
1.22
|
|
|
1.00
|
|
|
0.98
|
|
|||||
Provision for credit losses
|
$
|
64
|
|
|
$
|
25
|
|
|
$
|
28
|
|
|
$
|
36
|
|
|
$
|
22
|
|
Net charge-offs
|
40
|
|
|
17
|
|
|
9
|
|
|
22
|
|
|
16
|
|
|||||
Net charge-offs / Average total loans
|
0.26
|
%
|
|
0.13
|
%
|
|
0.07
|
%
|
|
0.18
|
%
|
|
0.13
|
%
|
|||||
Allowance for loans and lease losses
|
$
|
617
|
|
|
$
|
623
|
|
|
$
|
614
|
|
|
$
|
598
|
|
|
$
|
592
|
|
Allowance for unfunded loan commitments and letters of credit
|
88
|
|
|
74
|
|
|
75
|
|
|
72
|
|
|
64
|
|
|||||
Allowance for credit losses (ACL)
(5)
|
$
|
705
|
|
|
$
|
697
|
|
|
$
|
689
|
|
|
$
|
670
|
|
|
$
|
656
|
|
ACL as a % of:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total loans and leases
|
1.06
|
%
|
|
1.33
|
%
|
|
1.34
|
%
|
|
1.33
|
%
|
|
1.32
|
%
|
|||||
NALs
|
174
|
|
|
151
|
|
|
138
|
|
|
180
|
|
|
184
|
|
|||||
NPAs
|
148
|
|
|
142
|
|
|
131
|
|
|
168
|
|
|
172
|
|
(1)
|
Other nonperforming assets include 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 September 30, 2015 through June 30, 2016.
|
(5)
|
Includes $693 million related to Originated loans and $12 million related to Acquired loans as of September 30, 2016.
|
|
|
2016
|
|
2015
|
||||||||||||||||
($ in millions)
|
|
Sept. 30,
|
|
June 30,
|
|
March 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
||||||||||
Tangible common equity / tangible assets ratio
|
|
7.14
|
%
|
|
7.96
|
%
|
|
7.89
|
%
|
|
7.82
|
%
|
|
7.89
|
%
|
|||||
Common equity tier 1 risk-based capital ratio
(1)
|
|
9.09
|
%
|
|
9.80
|
%
|
|
9.73
|
%
|
|
9.79
|
%
|
|
9.72
|
%
|
|||||
Regulatory Tier 1 risk-based capital ratio
(1)
|
|
10.40
|
%
|
|
11.37
|
%
|
|
10.99
|
%
|
|
10.53
|
%
|
|
10.49
|
%
|
|||||
Regulatory Total risk-based capital ratio
(1)
|
|
12.57
|
%
|
|
13.49
|
%
|
|
13.17
|
%
|
|
12.64
|
%
|
|
12.70
|
%
|
|||||
Total risk-weighted assets
(1)
|
|
$
|
80,473
|
|
|
$
|
60,717
|
|
|
$
|
59,798
|
|
|
$
|
58,420
|
|
|
$
|
57,839
|
|
(1)
|
Figures are estimated and are presented on a Basel III basis, including the standardized approach for calculating risk-weighted assets.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
Tangible common equity to tangible assets, and
|
•
|
Tangible common equity to risk-weighted assets using Basel III definition.
|
|
Three months ended
|
|
|
|
|
|
||||||||||||
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
|
Percent Changes vs.
|
||||||||||
(dollar amounts in thousands, except as noted)
|
2016
|
|
2016
|
|
2015
|
|
|
2Q16
|
|
3Q15
|
||||||||
Net interest income (3)
|
$
|
635,988
|
|
|
$
|
515,972
|
|
|
$
|
503,623
|
|
|
|
23
|
%
|
|
26
|
%
|
FTE adjustment
|
(10,598
|
)
|
|
(10,091
|
)
|
|
(8,168
|
)
|
|