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Huntington Bancshares Annual Report, Year Ended Dec 31, 2019

Filing Date
Filed February 14, 2020
Period End
December 31, 2019
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. Deal closed8-K · Aug ’16Aug ’16
  2. Leadership change8-K · May ’22May ’22
  3. Leadership change8-K · Sep ’26Sep ’26

01—Abstract

Summary

Summary of the 10-K filed February 14, 2020. 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 2019 net income of $1.4 billiona, up 1% from the prior year, with diluted earnings per common share of $1.27, up 6%.

Fully-taxable equivalent net interest income rose $20 millionb, or 1%, while FTE net interest margin declined 7 basis points to 3.26%. Noninterest income increased $133 million, or 10%, to $1.5 billion, and noninterest expense rose $74 million, or 3%, to $2.7 billion. The provision for credit losses increased $52 million, or 22%, to $287 million, primarily due to higher commercial losses, and net charge-offs rose to $265 million, or 0.35% of average loans and leases.

Capital and balance sheet metrics were stronger. The CET1 risk-based capital ratio was 9.88%, up 23 basis points, and the tangible common equity to tangible assets ratio was 7.88%, up 67 basis points. Total assets were $109.0 billionc at year end.

The company repurchased $441 milliond of common stock during 2019, and its board authorized up to $513 million of repurchases over the four quarters through the 2020 second quarter. The quarterly common dividend was increased 7% to $0.15 per share starting in the third quarter of 2019. The filing also highlights credit quality pressure in the commercial book, particularly the oil and gas portfolio.

Total NPAs increased 29% from the prior year, and nonaccrual loans and leases rose to $468 million, or 0.62% of total loans and leases. The company disclosed that adoption of the CECL accounting standard on January 1, 2020, is expected to increase its total ACL by approximately $393 million, to an estimated $1,280 million.

02—Key points

Key Highlights

  1. Net income of $1.4 billion in 2019, up 1% from 2018; diluted EPS of $1.27, up 6%.
  2. Net interest income (FTE) rose $20 million, or 1%, while FTE net interest margin fell 7 basis points to 3.26%.
  3. Noninterest income increased $133 million, or 10%, to $1.5 billion, led by mortgage banking income up $59 million, or 55%.
  4. Provision for credit losses rose $52 million, or 22%, to $287 million; net charge-offs were $265 million, or 0.35% of average loans and leases.
  5. Nonaccrual loans and leases reached $468 million, or 0.62% of total loans and leases, and total NPAs rose 29%, driven largely by the oil and gas portfolio.
  6. CET1 risk-based capital ratio of 9.88%, up 23 basis points; tangible common equity to tangible assets of 7.88%, up 67 basis points.
  7. Repurchased $441 million of common stock in 2019 and authorized up to $513 million more through the 2020 second quarter; quarterly dividend raised 7% to $0.15.

03—One dollar

04—Financials

Financial Highlights

Figures from 10-KFY2019filed February 14, 2020
Revenue$939.00MNet Income$1.41B150.3% Net MarginEPS (Diluted)$1.27Total Assets$109.00BCash & Equivalents$1.17BFree Cash Flow$1.47B

Financial Statements

FY2019 against FY2018

Line itemFY2019FY2018Change
Revenue$939.00M$881.00M+6.6%
Interest Expense$988.00M$760.00M+30.0%
Net Income$1.41B$1.39B+1.3%
EPS (Basic)$1.29$1.22+5.7%
EPS (Diluted)$1.27$1.20+5.8%
Shares Outstanding (Basic)1.04B1.08B−3.9%
Shares Outstanding (Diluted)1.06B1.11B−4.5%

05—Questions

Frequently Asked Questions

  1. How did Huntington perform financially in 2019?

    Huntington reported 2019 net income of $1.4 billion, up 1% from the prior year, and diluted earnings per common share of $1.27, up 6%. Growth was supported by a 10% increase in noninterest income, while noninterest expense rose 3% to $2.7 billion.

  2. What drove the increase in credit costs?

    The provision for credit losses increased $52 million, or 22%, to $287 million, primarily attributed to higher commercial losses. Net charge-offs rose to $265 million from $145 million in 2018, with the increase centered in the commercial portfolio.

  3. How strong is Huntington's capital position?

    The CET1 risk-based capital ratio was 9.88% at December 31, 2019, up 23 basis points, and the Tier 1 risk-based capital ratio was 11.26%. The filing states that Huntington's capital ratios were above the well-capitalized standards.

  4. What is the expected impact of the CECL accounting change?

    The company adopted CECL on January 1, 2020. Based on portfolio composition at December 31, 2019, the adoption is expected to increase the total ACL by approximately $393 million, to an estimated $1,280 million, with the increase largely attributable to the consumer portfolio.

  5. What are shareholders receiving through dividends and buybacks?

    The quarterly common dividend was raised 7% to $0.15 per share starting in the third quarter of 2019, and total common dividends declared for 2019 were $0.58 per share. The board authorized up to $513 million in share repurchases over the four quarters through the 2020 second quarter.

06—Continue

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