Huntington Bancshares reports net income

Quarter report of $355M

COLUMBUS — Huntington Bancshares Incorporated (Nasdaq: HBAN; reported net income for the 2018 second quarter of $355 million, an increase of 31 percent from the year-ago quarter.

Earnings per common share for the 2018 second quarter were $0.30, up 30 percent from the year-ago quarter.

Tangible book value per common share as of 2018 second quarter-end was $7.27, an 8 percent year-over-year increase. Return on average assets was 1.36 percent, return on average common equity was 13.2 percent, and return on average tangible common equity was 17.6 percent.

“Our second quarter results demonstrate high quality earnings driven by solid execution across the bank. We achieved or exceeded all of our long-term financial goals for the third quarter in a row, and remain on pace to deliver these goals on an annual basis, two years ahead of expectations,” said Steve Steinour, chairman, president, and CEO.

“As reflected by the 7 percent annualized growth in average commercial loans, the economies in our footprint continue to perform well, with strength across geographies, industries, and business stratifications. Average consumer loan growth was 9 percent annualized, driven by seasonal strength in our home lending and RV & marine lending businesses. Core deposit growth of 11 percent annualized more than fully funded the quarter’s loan growth, driven by our successful strategy to lock in fixed-rate certificates of deposit at attractive rates. We are encouraged by the outlook for continued loan and deposit growth in coming quarters. Our pipelines are steady, and customer sentiment remains strong.”

Consistent with its 2018 CCAR capital plan, last week Huntington announced that the board declared a quarterly cash dividend on the company’s common stock of $0.14 per share, a $0.03 per share, or 27 percent, increase compared with the prior quarter. The dividend is payable on Oct. 1, 2018, to shareholders of record on Sept. 17, 2018.

Huntington also announced that the board authorized the repurchase of up to $1.068 billion of common shares over the four quarters through the 2019 second quarter.

Purchases of common stock under the authorization may include open market purchases, privately negotiated transactions, and accelerated share repurchase (ASR) programs. During the 2018 third quarter, the company intends to enter into an ASR for approximately $400 million of common stock.

“We were pleased with the recent DFAST and CCAR stress test results which provided important industry comparisons, particularly through the independently-modeled cumulative loan losses. These results illustrated our strong earnings power and disciplined enterprise risk management,” Steinour said. “We are allocating capital consistent with our stated priorities: to support continued organic growth, to increase our quarterly dividend, and to return additional capital to our owners via share repurchases. This year will represent the eighth consecutive year of increased dividends.”

Specific 2018 second quarter highlights:

* Fully-taxable equivalent total revenue increased $45 million, or 4 percent, year-over-year

* Fully-taxable equivalent net interest income increased $34 million, or 4 percent, year-over-year

* Net interest margin of 3.29 percent, down 2 basis points from the year-ago quarter

* Noninterest income increased $11 million, or 3 percent, year-over-year

* Noninterest expense decreased $42 million, or 6 percent, year-over-year, as the year-ago quarter included $50 million of acquisition-related expense

* Effective tax rate of 13.8 percent, down from 22.4 percent in the year-ago quarter, primarily reflecting federal tax reform

* Average loans and leases increased $4.5 billion, or 7 percent, year-over-year, including a $3.4 billion, or 10 percent, increase in consumer loans and a $1.2 billion, or 3 percent, increase in commercial loans

* Average core deposits increased $3.1 billion, or 4 percent, year-over-year, driven by a $1.7 billion, or 9 percent, increase in money market deposits and a $1.6 billion, or 77%, increase in core certificates of deposit

* Net charge-offs equated to 0.16 percent of average loans and leases, representing the sixteenth consecutive quarter below the average through-the-cycle target range of 0.35 percent to 0.55 percent

* Nonperforming asset ratio of 0.57 percent, down from 0.61 percent a year ago

* Common Equity Tier 1 (CET1) risk-based capital ratio of 10.53 percent, up from 9.88 percent a year ago and above our 9 percent to 10 percent operating guideline

* Tangible common equity (TCE) ratio of 7.78 percent, up from 7.41 percent a year ago

* Tangible book value per common share (TBVPS) increased $0.53, or 8 percent, year-over-year to $7.27