FOR IMMEDIATE RELEASE October 23, 2018 Analysts: Mark Muth (mark.muth@huntington.com), 614.480.4720 Media: Matt Samson (matt.b.samson@huntington.com), 312.263.0203 HUNTINGTON BANCSHARES INCORPORATED REPORTS 2018 THIRD QUARTER EARNINGS OF $0.33 PER COMMON SHARE Results Include 43% Year-Over-Year Increase in Earnings Per Common Share and Record Quarterly Revenue COLUMBUS, Ohio Huntington Bancshares Incorporated (Nasdaq: HBAN; www.huntington.com) reported net income for the 2018 third quarter of $378 million, an increase of 37% from the year-ago quarter. Earnings per common share for the 2018 third quarter were $0.33, up 43% from the year-ago quarter. Tangible book value per common share as of 2018 third quarter-end was $7.06, a 3% year-over-year increase. Return on average assets was 1.42%, return on average common equity was 14.3%, and return on average tangible common equity (ROTCE) was 19.0%. We delivered solid results again in the third quarter including record revenue and ROTCE above our longterm goal for the fourth consecutive quarter, said Steve Steinour, chairman, president, and CEO. Continued strong capital generation fuels our organic growth, supports our increased dividend, and allows us to return additional capital to our shareholders via share repurchases. "We have built sustainable competitive advantages in our key businesses that are driving high performance, and we expect to do so in the future, Steinour said. In the third quarter, we improved our funding composition with average core deposits increasing 6% year-over-year, characterized by growth in both consumer and commercial deposits. Also, the recently released FDIC data shows that we gained deposit market share in our largest markets. "Average loan growth remained strong at 7% year-over-year. Average consumer loans increased 10%, illustrating continued momentum in residential mortgage, RV and marine, and automobile lending. Average commercial loan balances increased 3% year-over-year, impacted by anticipated commercial real estate loan payoffs in the quarter. We remain optimistic for the rest of the year, as commercial originations picked up at the end of the quarter, and our local economies remain vibrant. The third quarter marked the end of the 2018 fiscal year for the U.S. Small Business Administration, during which Huntington earned the distinction of being the largest SBA 7(a) lender in the nation and the largest in our footprint for the tenth consecutive year. During the 2018 third quarter, Huntington increased the quarterly dividend $0.03 per share, or 27%, to $0.14 per common share. Huntington also repurchased $691 million of common shares in the quarter, which represents 65% of the total repurchase included in our 2018 CCAR capital plan. Included in the quarter's share repurchase activity is completion of the previously announced $400 million accelerated share repurchase (ASR). 1
Specific 2018 Third Quarter Highlights: Fully-taxable equivalent total revenue increased $51 million, or 5%, year-over-year Fully-taxable equivalent net interest income increased $39 million, or 5%, year-over-year Net interest margin of 3.32%, up 3 basis points from the year-ago quarter Noninterest income increased $12 million, or 4%, year-over-year Noninterest expense decreased $29 million, or 4%, year-over-year, as the year-ago quarter included $31 million of acquisition-related expense Efficiency ratio of 55.3%, down from 60.5% in the year-ago quarter Effective tax rate of 14.1%, down from 24.7% in the year-ago quarter, primarily reflecting federal tax reform Average loans and leases increased $4.5 billion, or 7%, year-over-year, including a $3.3 billion, or 10%, increase in consumer loans and a $1.2 billion, or 3%, increase in commercial loans Average core deposits increased $4.1 billion, or 6%, year-over-year, driven by a $2.9 billion, or 141%, increase in core certificates of deposit and a $1.2 billion, or 6%, increase in money market deposits Net charge-offs equated to 0.16% of average loans and leases, representing the seventeenth consecutive quarter below the average through-the-cycle target range of 0.35% to 0.55% Nonperforming asset ratio of 0.55%, down from 0.56% a year ago Common Equity Tier 1 (CET1) risk-based capital ratio of 9.89%, down from 9.94% a year ago and within our 9% to 10% operating guideline Tangible common equity (TCE) ratio of 7.25%, down from 7.42% a year ago Tangible book value per common share (TBVPS) increased $0.21, or 3%, year-over-year to $7.06 2
Table 1 Earnings Performance Summary (GAAP) 2018 2017 Third Second First Fourth Third (in millions, except per share data) Quarter Quarter Quarter Quarter Quarter Net Income $ 378 $ 355 $ 326 $ 432 $ 275 Diluted earnings per common share 0.33 0.30 0.28 0.37 0.23 Return on average assets 1.42% 1.36% 1.27% 1.67% 1.08% Return on average common equity 14.3 13.2 13.0 17.0 10.5 Return on average tangible common equity 19.0 17.6 17.5 22.7 14.1 Net interest margin 3.32 3.29 3.30 3.30 3.29 Efficiency ratio 55.3 56.6 56.8 54.9 60.5 Tangible book value per common share $ 7.06 $ 7.27 $ 7.12 $ 6.97 $ 6.85 Cash dividends declared per common share 0.14 0.11 0.11 0.11 0.08 Average diluted shares outstanding 1,104 1,123 1,125 1,130 1,106 Average earning assets $ 96,753 $ 96,363 $ 95,412 $ 93,937 $ 92,849 Average loans and leases 72,751 71,887 70,484 68,940 68,276 Average core deposits 77,680 75,386 73,392 73,946 73,549 Tangible common equity / tangible assets ratio 7.25% 7.78% 7.70% 7.34% 7.42% Common equity Tier 1 risk-based capital ratio 9.89 10.53 10.45 10.01 9.94 NCOs as a % of average loans and leases 0.16% 0.16% 0.21% 0.24% 0.25% NAL ratio 0.50 0.52 0.54 0.50 0.49 ALLL as a % of total loans and leases 1.04 1.02 1.01 0.99 0.98 ACL as a % of total loans and leases 1.17 1.15 1.13 1.11 1.10 Table 2 lists certain items that we believe are significant in understanding corporate performance and trends (see Basis of Presentation). There were no Significant Items in the 2018 third quarter. Table 2 Significant Items Influencing Earnings Three Months Ended Pre-Tax Impact After-Tax Impact ($ in millions, except per share) Amount Amount (1) EPS (2) September 30, 2018 net income $ 378 $ 0.33 None N/A June 30, 2018 net income $ 355 $ 0.30 None N/A March 31, 2018 net income $ 326 $ 0.28 None N/A December 31, 2017 net income $ 432 $ 0.37 Federal tax reform-related estimated tax benefit (3) N/A 123 0.11 September 30, 2017 net income $ 275 $ 0.23 Merger and acquisition-related net expenses $ (31 ) (20 ) (0.02 ) (1) Favorable (unfavorable) impact on net income. (2) EPS reflected on a fully diluted basis. (3) Represents the reasonable estimated impact of tax reform as of December 31, 2017. 3
Net Interest Income, Net Interest Margin, and Average Balance Sheet Table 3 Net Interest Income and Net Interest Margin Performance Summary Inherent Asset Sensitivity Drove NIM Expansion ($ in millions) 2018 2017 Third Second First Fourth Third Change (%) Quarter Quarter Quarter Quarter Quarter LQ YOY Net interest income $ 802 $ 784 $ 770 $ 770 $ 758 2% 6% FTE adjustment 8 7 7 12 13 14 (38) Net interest income - FTE 810 791 777 782 771 2 5 Noninterest income 342 336 314 340 330 2 4 Total revenue - FTE $ 1,152 $ 1,127 $ 1,091 $ 1,122 $ 1,101 2% 5% Change (bp) Yield / Cost LQ YOY Total earning assets 4.16% 4.07 % 3.91% 3.83% 3.78 % 9 38 Total loans and leases 4.60 4.49 4.32 4.23 4.20 11 40 Total securities 2.73 2.71 2.62 2.64 2.55 2 18 Total interest-bearing liabilities 1.13 1.05 0.82 0.73 0.68 8 45 Total interest-bearing deposits 0.73 0.59 0.43 0.37 0.35 14 38 Net interest rate spread 3.03 3.02 3.09 3.10 3.10 1 (7) Impact of noninterest-bearing funds on margin 0.29 0.27 0.21 0.20 0.19 2 10 Net interest margin 3.32% 3.29 % 3.30 % 3.30 % 3.29 % 3 3 See Pages 7-9 of Quarterly Financial Supplement for additional detail. Fully-taxable equivalent (FTE) net interest income for the 2018 third quarter increased $39 million, or 5%, from the 2017 third quarter. This reflected the benefit from the $3.9 billion, or 4%, increase in average earning assets and a three basis point increase in the FTE net interest margin (NIM) to 3.32%. Average earning asset yields increased 38 basis points year-over-year, driven by a 40 basis point improvement in loan yields. Average interest-bearing liability costs increased 45 basis points, although interest-bearing deposit costs only increased 38 basis points. The cost of short-term borrowings and long-term debt increased 103 basis points and 113 basis points, respectively. The benefit from noninterest-bearing funds increased 10 basis points versus the year-ago quarter. On a year-over-year basis, NIM was negatively impacted by 2 basis points as a result of the impact of federal tax reform on the FTE adjustment. Embedded within these yields and costs, FTE net interest income during the 2018 third quarter included $17 million, or approximately 7 basis points, of purchase accounting impact compared to $27 million, or approximately 12 basis points, in the year-ago quarter. Compared to the 2018 second quarter, FTE net interest income increased $19 million, or 2%, primarily reflecting a three basis point increase in NIM. Average earning asset yields increased 9 basis points sequentially, driven by an 11 basis point increase in loan yields. Average interest-bearing liability costs increased 8 basis points, primarily driven by a 14 basis point increase in average interest-bearing deposit costs. The benefit of noninterest-bearing funding improved 2 basis points linked quarter. The purchase accounting impact on the net interest margin was approximately 7 basis points in the 2018 third quarter, down 1 basis point from the prior quarter. 4
Table 4 Average Earning Assets Broad-based Consumer and C&I Loan Growth Reflects Underlying Economic Strength of the Footprint ($ in billions) 2018 2017 Third Second First Fourth Third Change (%) Quarter Quarter Quarter Quarter Quarter LQ YOY Commercial and industrial $ 28.9 $ 28.9 $ 28.2 $ 27.4 $ 27.6 0% 4% Commercial real estate 7.2 7.4 7.3 7.2 7.2 (3) (1) Total commercial 36.0 36.2 35.6 34.6 34.9 (1) 3 Automobile 12.4 12.3 12.1 12.0 11.7 1 6 Home equity 9.9 9.9 10.0 10.0 10.0 (1) (1) Residential mortgage 10.2 9.6 9.2 8.8 8.4 6 22 RV and marine finance 3.0 2.7 2.5 2.4 2.3 13 31 Other consumer 1.2 1.2 1.1 1.1 1.0 6 18 Total consumer 36.7 35.7 34.9 34.3 33.4 3 10 Total loans and leases 72.8 71.9 70.5 68.9 68.3 1 7 Total securities 23.2 23.8 24.4 24.3 23.8 (3) (3) Held-for-sale and other earning assets 0.8 0.7 0.6 0.7 0.8 18 6 Total earning assets $ 96.8 $ 96.4 $ 95.4 $ 93.9 $ 92.8 0% 4% See Page 7 of Quarterly Financial Supplement for additional detail. Average earning assets for the 2018 third quarter increased $3.9 billion, or 4%, from the year-ago quarter, primarily reflecting a $4.5 billion, or 7%, increase in average loans and leases. Average residential mortgage loans increased $1.8 billion, or 22%, driven by an increase in lending officers and expansion into the Chicago market. Average commercial and industrial (C&I) loans increased $1.2 billion, or 4%, reflecting growth in middle market, asset finance, energy, and corporate banking. Average RV and marine finance loans increased $0.7 billion, or 31%, reflecting the success of the well-managed expansion of the acquired business into 17 new states over the past two years. Average automobile loans increased $0.7 billion, or 6%, driven by continued strong originations while consistently increasing pricing over the past year. Average securities decreased $0.6 billion, or 3%, primarily due to runoff in the portfolio partially offset by continued growth in direct purchase municipal instruments in our commercial banking segment. Compared to the 2018 second quarter, average earning assets increased $0.4 billion, or less than 1%, primarily reflecting the $0.9 billion, or 1%, increase in average loans and leases. Average residential mortgage loans increased $0.6 billion, or 6%, driven by seasonality and the expansion of our home lending business. Average securities decreased $0.6 billion, or 3%, due to runoff in the portfolio. 5
Table 5 Average Liabilities Continued Growth in Core Deposits Drove Reduction in Wholesale Funding 2018 2017 Third Second First Fourth Third Change (%) ($ in billions) Quarter Quarter Quarter Quarter Quarter LQ YOY Demand deposits - noninterest-bearing $ 20.2 $ 20.4 $ 20.6 $ 21.7 $ 21.7 (1)% (7)% Demand deposits - interest-bearing 19.6 19.1 18.6 18.2 17.9 2 9 Total demand deposits 39.8 39.5 39.2 39.9 39.6 1 0 Money market deposits 21.5 20.9 20.7 20.7 20.3 3 6 Savings and other domestic deposits 11.4 11.1 11.2 11.3 11.6 3 (1) Core certificates of deposit 4.9 3.8 2.3 1.9 2.0 30 141 Total core deposits 77.7 75.4 73.4 73.9 73.5 3 6 Other domestic deposits of $250,000 or more 0.3 0.2 0.2 0.4 0.4 17 (34) Brokered deposits and negotiable CDs 3.5 3.7 3.3 3.4 3.6 (3) (1) Total deposits $ 81.5 $ 79.3 $ 76.9 $ 77.7 $ 77.5 3 % 5 % Short-term borrowings $ 1.7 $ 3.1 $ 5.2 $ 2.8 $ 2.4 (44 )% (28)% Long-term debt 8.9 9.2 9.0 9.2 8.9 (3 ) (0) Total debt $ 10.6 $ 12.3 $ 14.2 $ 12.0 $ 11.3 (14 )% (6 )% Total interest-bearing liabilities $ 71.9 $ 71.2 $ 70.6 $ 68.1 $ 67.2 1 % 7 % See Page 7 of Quarterly Financial Supplement for additional detail. Average total interest-bearing liabilities increased $4.8 billion, or 7%, from the year-ago quarter. Average total deposits for the 2018 third quarter increased $4.0 billion, or 5%, from the year-ago quarter, while average total core deposits increased $4.1 billion, or 6%. Average core certificates of deposit (CDs) increased $2.9 billion, or 141%, reflecting initiatives during the past three quarters to grow fixed-rate, term consumer deposits in light of the rising interest rate environment. Average money market deposits increased $1.2 billion, or 6%, primarily reflecting growth in consumer balances and continued shifting commercial customer preferences for higher yielding deposit products. Average demand deposits increased $0.2 billion, or less than 1%, primarily driven by a $0.2 billion, or 5%, increase in average consumer noninterest-bearing demand deposits. Average short-term borrowings decreased $0.7 billion, or 28%, as continued growth in core deposits reduced reliance on wholesale funding. Compared to the 2018 second quarter, average total core deposits increased $2.3 billion, or 3%. Average core CDs increased $1.1 billion, or 30%, as a result of continued initiatives to grow fixed-rate, term consumer deposits in light of the rising interest rate environment. Average money market deposits increased $0.6 billion, or 3%, primarily driven by a $0.5 billion, or 4%, increase in average consumer money market deposits. Average short-term borrowings decreased $1.4 billion, or 44%, as continued growth in core deposits reduced reliance on wholesale funding. 6
Noninterest Income Table 6 Noninterest Income Household / Relationship Growth and OCR Strategy Continued to Drive Noninterest Income Growth 2018 2017 Third Second First Fourth Third Change (%) ($ in millions) Quarter Quarter Quarter Quarter Quarter LQ YOY Service charges on deposit accounts $ 93 $ 91 $ 86 $ 91 $ 91 2 % 2 % Cards and payment processing income 57 56 53 53 54 2 6 Trust and investment management services 43 42 44 41 39 2 10 Mortgage banking income 31 28 26 33 34 11 (9 ) Insurance income 19 21 21 21 18 (10 ) 6 Capital markets fees 22 21 19 23 22 5 0 Bank owned life insurance income 19 17 15 18 16 12 19 Gain on sale of loans and leases 16 15 8 17 14 7 14 Securities gains (losses) (2) (4) NM NM Other income 44 45 42 47 42 (2 ) 5 Total noninterest income $ 342 $ 336 $ 314 $ 340 $ 330 2 % 4 % See Pages 10-11 of Quarterly Financial Supplement for additional detail. Reported noninterest income for the 2018 third quarter increased $12 million, or 4%, from the year-ago quarter, and increased $6 million, or 2%, compared to the 2018 second quarter. The growth represents ongoing household / relationship acquisition and execution of our strategies including our Optimal Customer Relationship (OCR) strategy. 7
Noninterest Expense (see Basis of Presentation) Table 7 Noninterest Expense (GAAP) Continued Strong Expense Control 2018 2017 Third Second First Fourth Third Change (%) ($ in millions) Quarter Quarter Quarter Quarter Quarter LQ YOY Personnel costs $ 388 $ 396 $ 376 $ 373 $ 377 (2)% 3 % Outside data processing and other services 69 69 73 71 80 0 (14) Net occupancy 38 35 41 36 55 9 (31) Equipment 38 38 40 36 45 0 (16) Deposit and other insurance expense 18 18 18 19 19 0 (5) Professional services 17 15 11 18 15 13 13 Marketing 12 18 8 10 17 (33) (29) Amortization of intangibles 13 13 14 14 14 0 (7) Other expense 58 50 52 56 58 16 0 Total noninterest expense $ 651 $ 652 $ 633 $ 633 $ 680 (0)% (4)% (in thousands) Average full-time equivalent employees 15.8 15.7 15.6 15.4 15.5 1 % 2 % Table 8 - Impacts of Significant Items 2018 2017 Third Second First Fourth Third ($ in millions) Quarter Quarter Quarter Quarter Quarter Personnel costs $ $ $ $ $ 4 Outside data processing and other services 4 Net occupancy 14 Equipment 7 Deposit and other insurance expense Professional services 2 Marketing Amortization of intangibles Other expense Total noninterest expense $ $ $ $ $ 31 8
Table 9 - Adjusted Noninterest Expense (Non-GAAP) 2018 2017 Third Second First Fourth Third Change (%) ($ in millions) Quarter Quarter Quarter Quarter Quarter LQ YOY Personnel costs $ 388 $ 396 $ 376 $ 373 $ 373 (2)% 4% Outside data processing and other services 69 69 73 71 76 0 (9) Net occupancy 38 35 41 36 41 9 (7) Equipment 38 38 40 36 38 0 0 Deposit and other insurance expense 18 18 18 19 19 0 (5) Professional services 17 15 11 18 13 13 31 Marketing 12 18 8 10 17 (33) (29) Amortization of intangibles 13 13 14 14 14 0 (7) Other expense 58 50 52 56 58 16 0 Total noninterest expense $ 651 $ 652 $ 633 $ 633 $ 649 (0)% 0% See Page 10 of Quarterly Financial Supplement for additional detail. Reported noninterest expense for the 2018 third quarter decreased $29 million, or 4%, from the year-ago quarter, primarily reflecting the $31 million of acquisition-related Significant Items in the year-ago quarter. Outside data processing and other services decreased $11 million, or 14%, reflecting the $4 million decrease in acquisition-related Significant Items and the benefit of a debit card-related vendor migration completed in the year-ago quarter. Marketing expense decreased $5 million, or 29%, reflecting the timing of marketing campaigns and deposit promotions. Personnel costs increased $11 million, or 3%, primarily reflecting performance-based incentive compensation and increased benefits costs, partially offset by a $4 million decrease in acquisitionrelated Significant Items. Reported noninterest expense decreased $1 million, or less than 1%, from the 2018 second quarter. Personnel costs decreased $8 million, or 2%, primarily reflecting the grant of annual long-term equity incentive compensation in the 2018 second quarter. Marketing expense decreased $6 million, or 33%, reflecting the timing of marketing campaigns and deposit promotions. Operational losses and franchise tax expense, both within other expense, partially offset these decreases. 9
Credit Quality Table 10 Credit Quality Metrics NCOs and NALs Remain Near Cyclical Lows 2018 2017 ($ in millions) September 30, June 30, March 31, December 31, September 30, Total nonaccrual loans and leases $ 370 $ 378 $ 383 $ 349 $ 338 Total other real estate 27 28 30 33 42 Other NPAs (1) 6 6 7 7 7 Total nonperforming assets 403 412 420 389 387 Accruing loans and leases past due 90 days or more 154 132 106 115 119 NPAs + accruing loans and lease past due 90 days or more $ 557 $ 544 $ 526 $ 504 $ 506 NAL ratio (2) 0.50% 0.52 % 0.54% 0.50% 0.49% NPA ratio (3) 0.55 0.57 0.59 0.55 0.56 (NPAs+90 days)/(loans+oreo) 0.76 0.75 0.74 0.72 0.74 Provision for loan and leases losses $ 49 $ 48 $ 68 $ 57 $ 50 Provision for unfunded loan commitments & letters of credit losses 4 8 (2) 8 (6) Provision for credit losses $ 53 $ 56 $ 66 $ 65 $ 43 Net charge-offs 29 28 38 41 43 Net charge-offs / Average total loans 0.16% 0.16 % 0.21% 0.24% 0.25% Allowance for loans and lease losses $ 761 $ 741 $ 721 $ 691 $ 675 Allowance for unfunded loan commitments and letters of credit 97 93 85 87 79 Allowance for credit losses (ACL) $ 858 $ 834 $ 806 $ 778 $ 754 ALLL as a % of: Total loans and leases 1.04 % 1.02 % 1.01 % 0.99 % 0.98 % NALs 206 197 188 198 200 NPAs 189 180 172 178 175 ACL as a % of: Total loans and leases 1.17 % 1.15 % 1.13 % 1.11 % 1.10 % (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 other real estate. See Pages 12-15 of Quarterly Financial Supplement for additional detail. Overall asset quality performance remained strong. The consumer portfolio metrics continue to reflect the expected results associated with our focus on high quality borrowers. The commercial portfolios have performed consistently, with some quarter-to-quarter volatility as a result of the absolute low level of problem loans. 10
Nonaccrual loans and leases (NALs) increased $32 million, or 9%, from the year-ago quarter to $370 million, or 0.50% of total loans and leases. The year-over-year increase was centered in the C&I portfolio with no specific industry or geographic trends. The commercial real estate portfolio was relatively flat, while there was a decline in the residential portfolio. A $15 million decline in OREO balances partially offset the increase in NALs, resulting in a modest 4% year-over-year increase in nonperforming assets (NPAs) to $403 million, or 0.55% of total loans and leases and OREO. The decline in OREO assets reflected reductions in both commercial and residential properties. On a linked quarter basis, NALs decreased $8 million, or 2%, while NPAs decreased $9 million, or 2%. The provision for credit losses increased $10 million year-over-year to $53 million in the 2018 third quarter. Net charge-offs (NCOs) decreased $14 million to $29 million. The decrease was a direct result of lower chargeoff activity in the commercial portfolio resulting in a net recovery position in the 2018 third quarter. Consumer charge-offs have remained consistent over the past year. NCOs represented an annualized 0.16% of average loans and leases in the current quarter, consistent with the prior quarter and down from 0.25% in the year-ago quarter. We continue to be pleased with the net charge-off performance within each portfolio and in total. The allowance for loan and lease losses (ALLL) as a percentage of total loans and leases increased to 1.04% compared to 0.98% a year ago, while the ALLL as a percentage of period-end total NALs increased to 206% from 200% over the same period. The increase in the ALLL is primarily the result of loan growth and the continued migration of the acquired loan portfolio into the originated portfolio. The allowance for credit losses (ACL) as a percentage of total loans and leases increased to 1.17% compared to 1.10% a year ago. We believe the level of the ALLL and ACL are appropriate given the low level of problem loans and the current composition of the overall loan and lease portfolio. Capital Table 11 Capital Ratios Share Repurchase Activity Demonstrates Strong Capital Management 2018 2017 ($ in billions) September 30, June 30, March 31, December 31, September 30, Tangible common equity / tangible assets ratio 7.25% 7.78 % 7.70 % 7.34% 7.42% Common equity tier 1 risk-based capital ratio (1) 9.89% 10.53 % 10.45 % 10.01% 9.94% Regulatory Tier 1 risk-based capital ratio (1) 11.33% 11.99 % 11.94 % 11.34% 11.30% Regulatory Total risk-based capital ratio (1) 13.36% 13.97 % 13.92 % 13.39% 13.39% Total risk-weighted assets (1) $ 83.6 $ 83.0 $ 81.4 $ 80.3 $ 78.6 (1) Figures are estimated and are presented on a Basel III standardized approach basis. See Pages 16-17 of Quarterly Financial Supplement for additional detail. The tangible common equity to tangible assets ratio was 7.25% at September 30, 2018, down 17 basis points from a year ago. Common Equity Tier 1 (CET1) risk-based capital ratio was 9.89% at September 30, 2018, down from 9.94% a year ago. The regulatory Tier 1 risk-based capital ratio was 11.33% compared to 11.30% at September 30, 2017. Consistent with the 2018 CCAR capital plan, the Company repurchased $691 million of common stock during the 2018 third quarter at an average cost of $15.82 per share. Included in the quarter's share repurchase activity, the Company completed the previously announced $400 million ASR. As contemplated in our 2018 CCAR capital plan, the ASR effectively offset the impact of the $363 million Series A preferred equity conversion in the 2018 first quarter. 11
Income Taxes The provision for income taxes was $62 million in the 2018 third quarter compared to $90 million in the 2017 third quarter. The effective tax rates for the 2018 third quarter and 2017 third quarter were 14.1% and 24.7%, respectively, with the year-over-year decrease primarily reflecting the impact of federal tax reform. The 2018 third quarter and 2017 third quarter included $3 million and $1 million, respectively, of tax benefits related to stock-based compensation. The 2018 third quarter also included $3 million of tax benefits related to the Tax Cuts and Jobs Act. The provision for income taxes and the effective tax rate for the nine months ended September 30, 2018 was $178 million and 14.4%, respectively. At September 30, 2018, we had a net federal deferred tax liability of $111 million and a net state deferred tax asset of $26 million. Expectations - 2018 Full-year revenues are expected to increase approximately 4.0% to 4.5%. During the 2018 fourth quarter, the company expects to realize approximately $20 million of securities losses related to portfolio restructuring. Full-year noninterest expense is expected to decrease approximately 2.0% to 2.5%. During the 2018 fourth quarter, the company expects to realize approximately $40 million of expense due to the previously announced branch and corporate facility consolidations. The full-year NIM is expected to expand 2-4 basis points, as core NIM expansion more than offsets the anticipated reduction in the benefit of purchase accounting. The 2018 efficiency ratio is expected to approximate 56.5% to 57.0%. Average loans and leases are expected to increase approximately 5.5% to 6.5% on an annual basis. Average total deposits are expected to increase approximately 3.5% to 4.5%, while average core deposits are expected to increase 4.5% to 5.5%. Asset quality metrics are expected to remain better than our average through-the-cycle target ranges, with some moderate quarterly volatility. The effective tax rate for full year 2018 is expected to be in the range of 14.5% to 15.0%. Conference Call / Webcast Information Huntington s senior management will host an earnings conference call on October 23, 2018, at 9:00 a.m. (Eastern Daylight Time). The call may be accessed via a live Internet webcast at the Investor Relations section of Huntington s website, www.huntington.com, or through a dial-in telephone number at (877) 407-8029; Conference ID #13683722. Slides will be available in the Investor Relations section of Huntington s website about an hour prior to the call. A replay of the webcast will be archived in the Investor Relations section of Huntington s website. A telephone replay will be available approximately two hours after the completion of the call through November 2, 2018 at (877) 660-6853 or (201) 612-7415; conference ID #13683722. Please see the 2018 Third Quarter Quarterly Financial Supplement for additional detailed financial performance metrics. This document can be found on the Investor Relations section of Huntington's website, http://www.huntington.com. About Huntington Huntington Bancshares Incorporated is a regional bank holding company headquartered in Columbus, Ohio, with $106 billion of assets and a network of 970 branches and 1,860 ATMs across eight Midwestern states. Founded in 1866, The Huntington National Bank and its affiliates provide consumer, small business, commercial, treasury management, wealth management, brokerage, trust, and insurance services. Huntington also provides auto dealer, equipment finance, national settlement and capital market services that extend beyond its core states. Visit huntington.com for more information. 12
Caution regarding Forward-Looking Statements This communication contains certain forward-looking statements, including, but not limited to, certain plans, expectations, goals, projections, and statements, which are not historical facts and are subject to numerous assumptions, risks, and uncertainties. Statements that do not describe historical or current facts, including statements about beliefs and expectations, are forward-looking statements. Forward-looking statements may be identified by words such as expect, anticipate, believe, intend, estimate, plan, target, goal, or similar expressions, or future or conditional verbs such as will, may, might, should, would, could, or similar variations. The forwardlooking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995. While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors which could cause actual results to differ materially from those contained or implied in the forwardlooking statements: changes in general economic, political, or industry conditions; uncertainty in U.S. fiscal and monetary policy, including the interest rate policies of the Federal Reserve Board; volatility and disruptions in global capital and credit markets; movements in interest rates; competitive pressures on product pricing and services; success, impact, and timing of our business strategies, including market acceptance of any new products or services implementing our Fair Play banking philosophy; the nature, extent, timing, and results of governmental actions, examinations, reviews, reforms, regulations, and interpretations, including those related to the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Basel III regulatory capital reforms, as well as those involving the OCC, Federal Reserve, FDIC, and CFPB; and other factors that may affect our future results. Additional factors that could cause results to differ materially from those described above can be found in our 2017 Annual Report on Form 10-K, as well as our subsequent Securities and Exchange Commission ("SEC") filings, which are on file with the SEC and available in the Investor Relations section of our website, http://www.huntington.com, under the heading Publications and Filings. All forward-looking statements speak only as of the date they are made and are based on information available at that time. We do not assume any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements. Basis of Presentation Use of Non-GAAP Financial Measures This document contains GAAP financial measures and non-gaap financial measures where management believes it to be helpful in understanding Huntington s results of operations or financial position. Where non-gaap financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this document, conference call slides, or the Form 8-K related to this document, all of which can be found in the Investor Relations section of Huntington s website, http://www.huntington.com. Annualized Data Certain returns, yields, performance ratios, or quarterly growth rates are presented on an annualized basis. This is done for analytical and decision-making purposes to better discern underlying performance trends when compared to full-year or year-over-year amounts. For example, loan and deposit growth rates, as well as net charge-off percentages, are most often expressed in terms of an annual rate like 8%. As such, a 2% growth rate for a quarter would represent an annualized 8% growth rate. Fully-Taxable Equivalent Interest Income and Net Interest Margin Income from tax-exempt earning assets is increased by an amount equivalent to the taxes that would have been paid if this income had been taxable at statutory rates. This adjustment puts all earning assets, most notably tax-exempt municipal securities and certain lease assets, on a common basis that facilitates comparison of results to results of competitors. 13
Earnings per Share Equivalent Data Significant income or expense items may be expressed on a per common share basis. This is done for analytical and decision-making purposes to better discern underlying trends in total corporate earnings per share performance excluding the impact of such items. Investors may also find this information helpful in their evaluation of the company s financial performance against published earnings per share mean estimate amounts, which typically exclude the impact of Significant Items. Earnings per share equivalents are usually calculated by applying an effective tax rate to a pre-tax amount to derive an after-tax amount, which is divided by the average shares outstanding during the respective reporting period. Occasionally, when the item involves special tax treatment, the after-tax amount is disclosed separately, with this then being the amount used to calculate the earnings per share equivalent. Rounding Please note that columns of data in this document may not add due to rounding. Significant Items From time to time, revenue, expenses, or taxes are impacted by items judged by management to be outside of ordinary banking activities and/or by items that, while they may be associated with ordinary banking activities, are so unusually large that their outsized impact is believed by management at that time to be infrequent or short term in nature. We refer to such items as Significant Items. Most often, these Significant Items result from factors originating outside the company e.g., regulatory actions/assessments, windfall gains, changes in accounting principles, one-time tax assessments/refunds, and litigation actions. In other cases they may result from management decisions associated with significant corporate actions out of the ordinary course of business e.g., merger/restructuring charges, recapitalization actions, and goodwill impairment. Even though certain revenue and expense items are naturally subject to more volatility than others due to changes in market and economic environment conditions, as a general rule volatility alone does not define a Significant Item. For example, changes in the provision for credit losses, gains/losses from investment activities, and asset valuation write-downs reflect ordinary banking activities and are, therefore, typically excluded from consideration as a Significant Item. Management believes the disclosure of Significant Items, when appropriate, aids analysts/investors in better understanding corporate performance and trends so that they can ascertain which of such items, if any, they may wish to include/exclude from their analysis of the company s performance - i.e., within the context of determining how that performance differed from their expectations, as well as how, if at all, to adjust their estimates of future performance accordingly. To this end, Management has adopted a practice of listing Significant Items in its external disclosure documents (e.g., earnings press releases, quarterly performance discussions, investor presentations, and Forms 10-Q and 10-K). Significant Items for any particular period are not intended to be a complete list of items that may materially impact current or future period performance. A number of items could materially impact these periods, including those described in Huntington s 2017 Annual Report on Form 10-K and other factors described from time to time in Huntington s other filings with the Securities and Exchange Commission. ### 14
Exhibit 99.2 HUNTINGTON BANCSHARES INCORPORATED Quarterly Financial Supplement September 30, 2018 Table of Contents Quarterly Key Statistics Year to Date Key Statistics Consolidated Balance Sheets Loans and Leases Composition Deposits Composition Consolidated Quarterly Average Balance Sheets Consolidated Quarterly Net Interest Margin - Interest Income / Expense Consolidated Quarterly Net Interest Margin - Yield Selected Quarterly Income Statement Data Quarterly Mortgage Banking Income Quarterly Credit Reserves Analysis Quarterly Net Charge-Off Analysis Quarterly Nonaccrual Loans and Leases (NALs) and Nonperforming Assets (NPAs) Quarterly Accruing Past Due Loans and Leases and Accruing and Nonaccruing Troubled Debt Restructured Loans Quarterly Capital Under Current Regulatory Standards (Basel III) and Other Capital Data Quarterly Common Stock Summary, Non-Regulatory Capital, and Other Data Consolidated Year to Date Average Balance Sheets Consolidated Year to Date Net Interest Margin - Interest Income / Expense Consolidated Year to Date Net Interest Margin - Yield Selected Year to Date Income Statement Data Year to Date Mortgage Banking Income Year to Date Credit Reserves Analysis Year to Date Net Charge-Off Analysis Year to Date Nonaccrual Loans and Leases (NALs) and Nonperforming Assets (NPAs) Year to Date Accruing Past Due Loans and Leases and Accruing and Nonaccruing Troubled Debt Restructured Loans 1 2 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
Notes: The preparation of financial statement data in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect amounts reported. Actual results could differ from those estimates. Certain prior period amounts have been reclassified to conform to the current period s presentation. Fully-Taxable Equivalent Basis Interest income, yields, and ratios on a FTE basis are considered non-gaap financial measures. Management believes net interest income on a FTE basis provides a more accurate picture of the interest margin for comparison purposes. The FTE basis also allows management to assess the comparability of revenue arising from both taxable and tax-exempt sources. The FTE basis assumes a federal statutory tax rate of 21 percent and 35 percent for periods prior to January 1, 2018. Non-Regulatory Capital Ratios In addition to capital ratios defined by banking regulators, the Company considers various other measures when evaluating capital utilization and adequacy, including: Tangible common equity to tangible assets, and Tangible common equity to risk-weighted assets using Basel III definition. These non-regulatory capital ratios are viewed by management as useful additional methods of reflecting the level of capital available to withstand unexpected market conditions. Additionally, presentation of these ratios allows readers to compare the Company s capitalization to other financial services companies. These ratios differ from capital ratios defined by banking regulators principally in that the numerator excludes preferred securities, the nature and extent of which varies among different financial services companies. These ratios are not defined in GAAP or federal banking regulations. As a result, these non-regulatory capital ratios disclosed by the Company may be considered non- GAAP financial measures. Because there are no standardized definitions for these non-regulatory capital ratios, the Company s calculation methods may differ from those used by other financial services companies. Also, there may be limits in the usefulness of these measures to investors. As a result, the Company encourages readers to consider the consolidated financial statements and other financial information contained in the related press release in their entirety, and not to rely on any single financial measure.
Quarterly Key Statistics(1) Three Months Ended September 30, June 30, September 30, Percent Changes vs. (amounts in millions, except per share amounts) 2018 2018 2017 2Q18 3Q17 Net interest income(3) $ 810 $ 791 $ 771 2% 5% FTE adjustment (8) (7) (13) (14) 38 Net interest income 802 784 758 2 6 Provision for credit losses 53 56 43 (5) 23 Noninterest income 342 336 330 2 4 Noninterest expense 651 652 680 (4) Income before income taxes 440 412 365 7 21 Provision for income taxes 62 57 90 9 (31) Net income 378 355 275 6 37 Dividends on preferred shares 18 21 19 (14) (5) Net income applicable to common shares $ 360 $ 334 $ 256 8% 41% Net income per common share - diluted $ 0.33 $ 0.30 $ 0.23 10% 43% Cash dividends declared per common share 0.14 0.11 0.08 27 75 Tangible book value per common share at end of period 7.06 7.27 6.85 (3) 3 Number of common shares repurchased (000) 43,670 9,645 100 353 Average common shares - basic 1,084,536 1,103,337 1,086,038 (2) Average common shares - diluted 1,103,740 1,122,612 1,106,491 (2) Ending common shares outstanding 1,061,529 1,104,227 1,080,946 (4) (2) Return on average assets 1.42% 1.36% 1.08% Return on average common shareholders equity 14.3 13.2 10.5 Return on average tangible common shareholders equity(2) 19.0 17.6 14.1 Net interest margin(3) 3.32 3.29 3.29 Efficiency ratio(4) 55.3 56.6 60.5 Effective tax rate 14.1 13.8 24.7 Average total assets $ 105,355 $ 104,821 $ 101,290 1 4 Average earning assets 96,753 96,363 92,849 4 Average loans and leases 72,751 71,887 68,276 1 7 Average loans and leases - linked quarter annualized growth rate 4.8% 8.0% 5.5% Average total deposits $ 81,498 $ 79,290 $ 77,544 3 5 Average core deposits(5) 77,680 75,386 73,549 3 6 Average core deposits - linked quarter annualized growth rate 12.2% 10.9% 7.0% Average shareholders equity 11,156 11,333 10,745 (2) 4 Average common total shareholders' equity 9,953 10,130 9,674 (2) 3 Average tangible common shareholders' equity 7,713 7,880 7,443 (2) 4 Total assets at end of period 105,652 105,358 101,988 4 Total shareholders equity at end of period 10,934 11,472 10,699 (5) 2 NCOs as a % of average loans and leases 0.16% 0.16% 0.25% NAL ratio 0.50 0.52 0.49 NPA ratio(6) 0.55 0.57 0.56 Allowance for loan and lease losses (ALLL) as a % of total loans and leases at the end of period 1.04 1.02 0.98 ALLL plus allowance for unfunded loan commitments and letters of credit (ACL) as a % of total loans and leases at the end of period 1.17 1.15 1.10 Common equity tier 1 risk-based capital ratio(7) 9.89 10.53 9.94 Tangible common equity / tangible asset ratio(8) 7.25 7.78 7.42 See Notes to the Year to Date and Quarterly Key Statistics. 1
Year to Date Key Statistics(1) Nine Months Ended September 30, Change (amounts in millions, except per share amounts) 2018 2017 Amount Percent Net interest income(3) $ 2,378 $ 2,271 $ 107 5% FTE adjustment (22) (38) 16 42 Net interest income 2,356 2,233 123 6 Provision for credit losses 175 136 39 29 Noninterest income 992 967 25 3 Noninterest expense 1,936 2,082 (146) (7) Income before income taxes 1,237 982 255 26 Provision for income taxes 178 228 (50) (22) Net Income 1,059 754 305 40 Dividends on preferred shares 51 57 (6) (11) Net income applicable to common shares $ 1,008 $ 697 $ 311 45% Net income per common share - diluted $ 0.90 $ 0.63 $ 0.27 43% Cash dividends declared per common share 0.36 0.24 0.12 50 Average common shares - basic (000) 1,090,570 1,087,115 3,455 Average common shares - diluted 1,116,978 1,107,878 9,100 1 Return on average assets 1.35% 1.00% Return on average common shareholders equity 13.5 9.8 Return on average tangible common shareholders equity(2) 18.0 13.3 Net interest margin(3) 3.31 3.30 Efficiency ratio(4) 56.2 63.0 Effective tax rate 14.4 23.2 Average total assets $ 104,680 $ 100,589 $ 4,091 4 Average earning assets 96,182 91,913 4,269 5 Average loans and leases 71,716 67,539 4,177 6 Average total deposits 79,261 76,684 2,577 3 Average core deposits(5) 75,501 72,454 3,047 4 Average shareholders equity 11,116 10,588 528 5 Average common total shareholders' equity 9,959 9,517 442 5 Average tangible common shareholders' equity 7,710 7,277 433 6 NCOs as a % of average loans and leases 0.18% 0.23% NAL ratio 0.50 0.49 NPA ratio(6) 0.55 0.56 See Notes to the Year to Date and Quarterly Key Statistics. 2
Key Statistics Footnotes (1) Comparisons for all presented periods are impacted by a number of factors. Refer to Significant Items. (2) Net income applicable to common shares excluding expense for amortization of intangibles for the period divided by average tangible common shareholders equity. Average tangible common shareholders equity equals average total common shareholders equity less average intangible assets and goodwill. Expense for amortization of intangibles and average intangible assets are net of deferred tax liability, and calculated assuming a 21% tax rate and a 35% tax rate for periods prior to December 31, 2017. (3) On a fully-taxable equivalent (FTE) basis assuming a 21% tax rate and a 35% tax rate for periods prior to January 1, 2018. (4) Noninterest expense less amortization of intangibles divided by the sum of FTE net interest income and noninterest income excluding securities gains (losses). (5) Includes noninterest-bearing and interest-bearing demand deposits, money market deposits, savings and other domestic deposits, and core certificates of deposit. (6) NPAs include other real estate owned. (7) September 30, 2018, figures are estimated. (8) Tangible common equity (total common equity less goodwill and other intangible assets) divided by tangible assets (total assets less goodwill and other intangible assets). Other intangible assets are net of deferred tax liability, calculated at a 21% tax rate and a 35% tax rate for periods prior to December 31, 2017. 3
Consolidated Balance Sheets September 30, December 31, (dollar amounts in millions, except number of shares) 2018 2017 Percent Changes Assets Cash and due from banks $ 1,299 $ 1,520 (15)% Interest-bearing deposits in banks 43 47 (9) Trading account securities 83 86 (3) Available-for-sale securities 13,727 14,869 (8) Held-to-maturity securities 8,465 9,091 (7) Other securities 565 600 (6) Loans held for sale 792 488 62 Loans and leases(1) 73,370 70,117 5 Allowance for loan and lease losses (761) (691) (10) Net loans and leases 72,609 69,426 5 Bank owned life insurance 2,494 2,466 1 Premises and equipment 827 864 (4) Goodwill 1,993 1,993 Other intangible assets 306 346 (12) Servicing rights 251 238 5 Accrued income and other assets 2,198 2,151 2 Total assets $ 105,652 $ 104,185 1 % Liabilities and shareholders equity Liabilities Deposits(2) $ 81,689 $ 77,041 6 % Short-term borrowings 1,348 5,056 (73) Long-term debt 9,385 9,206 2 Accrued expenses and other liabilities 2,296 2,068 11 Total liabilities 94,718 93,371 1 Shareholders' equity Preferred stock 1,203 1,071 12 Common stock 11 11 Capital surplus 9,358 9,707 (4) Less treasury shares, at cost (44) (35) (26) Accumulated other comprehensive loss (790) (528) (50) Retained earnings (deficit) 1,196 588 103 Total shareholders equity 10,934 10,814 1 Total liabilities and shareholders equity $ 105,652 $ 104,185 1 % Common shares authorized (par value of $0.01) 1,500,000,000 1,500,000,000 Common shares issued 1,065,251,488 1,075,294,946 Common shares outstanding 1,061,529,259 1,072,026,681 Treasury shares outstanding 3,722,229 3,268,265 Preferred stock, authorized shares 6,617,808 6,617,808 Preferred shares issued 2,707,571 2,702,571 Preferred shares outstanding 740,500 1,098,006 (1) See page 5 for detail of loans and leases. (2) See page 6 for detail of deposits. 4
Loans and Leases Composition September 30, June 30, March 31, December 31, September 30, (dollar amounts in millions) 2018 2018 2018 2017 2017 Ending Balances by Type: Total loans Commercial: Commercial and industrial $ 29,196 40% $ 28,850 40% $ 28,622 40% $ 28,107 40% $ 27,469 40% Commercial real estate: Construction 1,111 2 1,083 1 1,167 2 1,217 2 1,182 2 Commercial 5,962 8 6,118 8 6,245 9 6,008 9 6,024 9 Commercial real estate 7,073 10 7,201 9 7,412 11 7,225 11 7,206 11 Total commercial 36,269 50 36,051 49 36,034 51 35,332 51 34,675 51 Consumer: Automobile 12,375 17 12,390 17 12,146 17 12,100 17 11,876 17 Home equity 9,850 13 9,907 14 9,987 14 10,099 14 9,985 15 Residential mortgage 10,459 14 10,006 14 9,357 13 9,026 13 8,616 13 RV and marine finance 3,152 4 2,846 4 2,549 3 2,438 3 2,371 3 Other consumer 1,265 2 1,206 2 1,090 2 1,122 2 1,064 1 Total consumer 37,101 50 36,355 51 35,129 49 34,785 49 33,912 49 Total loans and leases $ 73,370 100% $ 72,406 100% $ 71,163 100% $ 70,117 100% $ 68,587 100% September 30, June 30, March 31, December 31, September 30, (dollar amounts in millions) 2018 2018 2018 2017 2017 Ending Balances by Business Segment: Consumer and Business Banking $ 22,271 30% $ 21,888 30% $ 21,471 31% $ 21,379 31% $ 20,921 31% Commercial Banking(1) 26,465 36 26,373 36 26,311 37 25,767 37 25,297 37 Vehicle Finance 18,880 26 18,569 26 18,090 25 17,818 25 17,363 25 RBHPCG 5,734 8 5,527 8 5,227 7 5,145 7 5,012 7 Treasury / Other 20 49 64 8 (6) Total loans and leases $ 73,370 100% $ 72,406 100% $ 71,163 100% $ 70,117 100% $ 68,587 100% Average Balances by Business Segment: Consumer and Business Banking $ 22,049 30% $ 21,653 31% $ 21,429 31% $ 21,096 31% $ 20,769 31% Commercial Banking(1) 26,322 36 26,505 37 25,969 37 25,208 37 25,209 37 Vehicle Finance 18,640 26 18,280 25 17,814 25 17,497 25 17,242 25 RBHPCG 5,641 8 5,355 7 5,181 7 5,071 7 4,937 7 Treasury / Other 99 94 91 68 119 Total loans and leases $ 72,751 100% $ 71,887 100% $ 70,484 100% $ 68,940 100% $ 68,276 100% (1) We announced a change within our executive leadership team, which became effective during the 2017 fourth quarter. As a result, the Commercial Real Estate operating unit is now included as an operating unit within the Commercial Banking segment. 5