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Huntington Bancshares Annual Report, Year Ended Dec 31, 2002

Filing Date
Filed March 20, 2003
Period End
December 31, 2002
In the record · 2016–202610-K1110-Q338-K254

HBAN filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 254 current reports (8-K) between 2016 and 2026.

  1. FY2016 annual report10-K · Feb ’17Feb ’17
  2. Leadership change8-K · Jun ’19Jun ’19
  3. Material agreement8-K · Aug ’21Aug ’21
  4. Material agreement8-K · Oct ’25Oct ’25

01—Abstract

Summary

Summary of the 10-K filed March 20, 2003. Cited figures are marked; the original filing is the authoritative source.

Huntington Bancshares Incorporated, a multi-state diversified financial holding company headquartered in Columbus, Ohio, reported net income of $363.2 milliona, or $1.49 per diluted share, for 2002, compared with $178.5 million, or $0.71 per share, in 2001.

The result included a $175.3 millionb pre-tax gain on the February 2002 sale of its Florida banking operations and a $24.6 million pre-tax Merchant Services gain, offset by $56.2 million of restructuring and special charges. On an operating basis, which excludes these non-operating items, earnings were $328.5 million, or $1.35 per share, up from $307.5 million, or $1.22 per share, in 2001. Operating return on average equity was 14.2% and return on average assets was 1.28%.

Credit quality and margins were mixed. Net charge-offs rose to 1.19% of average loans from 0.90%, largely due to $51.3 millionc of fourth-quarter 2002 commercial charge-offs from special credit actions, while non-performing assets fell to $136.7 million from $227.5 million. The allowance for loan and lease losses covered non-performing assets 269% versus 181% a year earlier.

The net interest margin was 4.19% on a reported basis, and operating net interest margin improved to 4.21% from 4.11%, though management noted the fourth-quarter margin declined to 4.07%. Total assets were $27.6 billiond at year-end, with deposits of $17.5 billion, and the Tier 1 risk-based capital ratio was 8.69%. The company repurchased 19.2 million shares for $370.0 million under a 22 million-share program authorized in February 2002, and in January 2003 authorized a new program of 8 million shares.

Book value per share was $9.89 at year-end, and cash dividends declared were $0.64 per share for 2002, down from $0.72 in 2001. The filing also notes that adoption of FASB Interpretation No. 46 is expected to require consolidation of one securitization trust holding $1,020 million of indirect automobile loans, with adoption no later than the third quarter of 2003.

02—Key points

Key Highlights

  1. Reported net income of $363.2 million ($1.49 diluted EPS) in 2002, up from $178.5 million ($0.71) in 2001, aided by a $175.3 million gain on the Florida banking sale.
  2. Operating earnings of $328.5 million ($1.35 per share) rose 7% from $307.5 million ($1.22), with operating ROE of 14.2% and ROA of 1.28%.
  3. Net charge-offs were 1.19% of average loans versus 0.90% in 2001, including $51.3 million of fourth-quarter 2002 special credit action charge-offs.
  4. Non-performing assets declined to $136.7 million from $227.5 million, and the allowance covered NPAs 269% compared with 181%.
  5. Repurchased 19.2 million shares for $370.0 million in 2002 and authorized a new 8 million-share repurchase program in January 2003.
  6. Total assets of $27.6 billion and total deposits of $17.5 billion at December 31, 2002, reduced by the sale of Florida operations with $4.8 billion in deposits.
  7. Tier 1 risk-based capital ratio of 8.69% and total risk-based capital ratio of 11.60%, with the bank rated well-capitalized.

03—Questions

Frequently Asked Questions

  1. How much of the 2002 earnings increase came from one-time items?

    Reported 2002 net income of $363.2 million included a $175.3 million pre-tax gain on the Florida banking sale and a $24.6 million Merchant Services gain, partly offset by $56.2 million of restructuring and special charges. On an operating basis, which excludes these items, earnings were $328.5 million, or $1.35 per share, up from $307.5 million, or $1.22 per share, in 2001.

  2. How did credit quality change during 2002?

    Net charge-offs rose to 1.19% of average loans from 0.90% in 2001, largely due to $51.3 million of fourth-quarter commercial charge-offs tied to special credit actions. Non-performing assets fell to $136.7 million from $227.5 million, and the allowance for loan and lease losses was $368.4 million, or 1.76% of total loans, down from 1.90%.

  3. Why did the company reduce its share count and what is the new buyback authorization?

    Huntington repurchased 19.2 million shares for $370.0 million under a 22 million-share program authorized in February 2002, using capital freed by the Florida sale. In January 2003 the board authorized a new program of 8 million shares, canceling the remaining 2.6 million shares under the prior authorization.

  4. What dividend did shareholders receive for 2002?

    Cash dividends declared were $0.64 per share for 2002, compared with $0.72 per share in 2001 and $0.76 per share in 2000. Quarterly dividends were $0.16 per share for each quarter of 2002, versus $0.20 in the first two quarters of 2001.

  5. What is the potential impact of the new consolidation accounting rule?

    Management believes adopting FASB Interpretation No. 46 will require consolidating one securitization trust formed in 2000, which at year-end 2002 held $1,020 million of indirect automobile loans and $1,000 million of secured debt. The company will adopt the standard no later than the end of the third quarter of 2003, and the effect on equity and results depends on the transition method chosen.

04—Continue

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