01—Abstract
Summary
Summary of the 10-K filed February 15, 2019. Cited figures are marked; the original filing is the authoritative source.
Huntington Bancshares Incorporated, a multi-state diversified regional bank holding company headquartered in Columbus, Ohio, reported 2018 net income of $1.4 billiona, a 17% increase from the prior year, with diluted earnings per common share of $1.20, up 20%.
Fully-taxable equivalent net interest income rose $167 millionb, or 5%, reflecting 4% average earning asset growth and a net interest margin of 3.33%, up three basis points. Noninterest income was $1.3 billion, up 1%, while noninterest expense fell 2% to $2.6 billion, largely because of prior-year FirstMerit acquisition-related costs. The provision for credit losses was $235 million, up $34 million, or 17%, mainly due to loan growth.
Total loans and leases reached $74.9 billionc at December 31, 2018, up 7% from $70.1 billion, and total assets were $108.8 billion. Net charge-offs were $145 million, or 0.20% of average loans, down from $159 million, and nonperforming assets declined 1%. The regulatory CET1 risk-based capital ratio was 9.65%, down 36 basis points, and the company repurchased $939 million of common stock during 2018.
On June 28, 2018, the Federal Reserve notified Huntington it had no objection to its 2018 capital plan, which included a 27% increase in the quarterly dividend to $0.14 per share and up to $1.068 billiond of share repurchases over four quarters. The filing also describes the regulatory outlook.
Under the Economic Growth Act, Huntington, with consolidated assets between $100 billion and $250 billion, expects to be treated as a Category IV banking organization under proposed tailoring rules, which would reduce certain enhanced prudential standards, though the rules remained subject to finalization. Huntington was not subject to supervisory or company-run stress testing for the 2019 capital plan cycle.
02—Key points
Key Highlights
- Net income of $1.393 billion in 2018, up 17% from $1.186 billion in 2017; diluted EPS of $1.20, up 20%.
- Net interest income rose 5% on a FTE basis to $3.219 billion, with net interest margin up three basis points to 3.33%.
- Noninterest expense fell 2% to $2.647 billion; no Significant Items were recorded in 2018 versus $154 million of FirstMerit-related expense in 2017.
- Total loans and leases grew 7% to $74.9 billion, while net charge-offs declined to $145 million (0.20% of average loans).
- Regulatory CET1 ratio was 9.65%, down 36 basis points; the tangible common equity ratio was 7.21%.
- Huntington repurchased $939 million of common stock in 2018 and raised its quarterly dividend 27% to $0.14 per share.
- Huntington was not subject to supervisory or company-run stress testing for the 2019 capital plan cycle under the Federal Reserve's February 5, 2019 announcement.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2018filed February 15, 2019Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $881.00M— | — |
| Interest Expense | $760.00M$431.00M | +76.3% |
| Net Income | $1.39B$1.19B | +17.5% |
| EPS (Basic) | $1.22$1.02 | +19.6% |
| EPS (Diluted) | $1.20$1.00 | +20.0% |
| Shares Outstanding (Basic) | 1.08B1.08B | −0.3% |
| Shares Outstanding (Diluted) | 1.11B1.14B | −2.7% |
05—Questions
Frequently Asked Questions
How did Huntington's profitability change in 2018?
Net income rose 17% to $1.4 billion and diluted EPS rose 20% to $1.20. Net interest income increased $167 million on a FTE basis, and noninterest expense declined $67 million, largely because 2017 included $154 million of FirstMerit acquisition-related expense.
How much did Huntington return to shareholders in 2018?
The company repurchased $939 million of common stock at an average cost of $15.23 per share, including a $400 million accelerated share repurchase. Quarterly common dividends were $0.14 per share starting in the third quarter of 2018, and total declared common dividends were $0.50 per share for the year.
What was the credit quality trend?
Net charge-offs fell to $145 million, or 0.20% of average loans and leases, from $159 million. Nonperforming assets declined 1% to $387 million, while the provision for credit losses rose to $235 million on loan growth, and the ACL reached $868 million.
How strong is Huntington's capital position?
At December 31, 2018, the CET1 risk-based capital ratio was 9.65% and the total risk-based capital ratio was 12.98%, both above well-capitalized standards. The company stated it expected to continue exceeding applicable requirements.
What regulatory changes could affect Huntington?
Under the Economic Growth Act, Huntington with $100 billion to $250 billion in assets is proposed to be a Category IV banking organization, which would reduce certain enhanced prudential standards, stress testing, and liquidity requirements. The company noted the proposed rules remain subject to finalization and may change.
06—Continue