Huntington National Bank 2003 Annual Report Download - page 40

MANAGEMENT’S DISCUSSION AND ANALYSIS
Table 2—Selected Annual Income Statements
Year Ended December 31,
2003 2002 2001 2000 1999
Change from 2002 Change from 2001
(in thousands of dollars, except per share amounts) Amount Percent Amount Percent
Total interest income $1,305,756 $ 12,561 1.0% $1,293,195 $(361,594) (21.9)% $1,654,789 $1,833,388 $1,795,214
Total interest expense 456,770 (86,851) (16.0) 543,621 (395,880) (42.1) 939,501 1,163,278 982,370
Net Interest Income 848,986 99,412 13.3 749,574 34,286 4.8 715,288 670,110 812,844
Provision for loan and lease losses 163,993 (30,433) (15.7) 194,426 (62,900) (24.4) 257,326 61,464 70,335
Net Interest Income After
Provision for Loan and Lease Losses 684,993 129,845 23.4 555,148 97,186 21.2 457,962 608,646 742,509
Operating lease income 489,698 (167,376) (25.5) 657,074 (34,659) (5.0) 691,733 623,835 489,971
Service charges on deposit accounts 167,840 14,276 9.3 153,564 (11,448) (6.9) 165,012 161,426 156,783
Trust services 61,649 (402) (0.6) 62,051 1,753 2.9 60,298 53,613 52,030
Brokerage and insurance 57,844 (8,999) (13.5) 66,843 (12,191) (15.4) 79,034 61,871 52,076
Mortgage banking 58,180 26,147 81.6 32,033 (22,485) (41.2) 54,518 32,772 52,960
Bank owned life insurance 43,028 (95) (0.2) 43,123 2,000 4.9 41,123 39,544 37,560
Other service charges and fees 41,446 (1,442) (3.4) 42,888 (5,329) (11.1) 48,217 43,883 37,301
Gain on sales of automobile loans 40,039 40,039 NM — — NM — — —
Gain on sale of branch offices 13,112 13,112 NM — — NM — — —
Securities gains 5,258 356 7.3 4,902 4,179 NM 723 37,101 12,972
Gain on sale of Florida operations — (182,470) NM 182,470 182,470 NM — — —
Merchant Services gain — (24,550) NM 24,550 24,550 NM — — —
Gains on sale of credit card portfolio — — NM — — NM — — 108,530
Other 91,059 18,853 26.1 72,206 12,922 21.8 59,284 69,157 54,675
Total Non-Interest Income 1,069,153 (272,551) (20.3) 1,341,704 141,762 11.8 1,199,942 1,123,202 1,054,858
Personnel costs 447,263 29,226 7.0 418,037 (36,173) (8.0) 454,210 396,230 396,380
Operating lease expense 393,270 (125,700) (24.2) 518,970 (39,656) (7.1) 558,626 494,800 346,027
Outside data processing and other services 66,118 (1,250) (1.9) 67,368 (2,324) (3.3) 69,692 62,011 62,886
Equipment 65,921 (2,402) (3.5) 68,323 (12,237) (15.2) 80,560 78,069 66,666
Net occupancy 62,481 2,942 4.9 59,539 (16,910) (22.1) 76,449 75,197 71,939
Professional services 42,448 9,363 28.3 33,085 223 0.7 32,862 22,721 21,169
Marketing 27,490 (421) (1.5) 27,911 (3,146) (10.1) 31,057 34,884 32,506
Telecommunications 21,979 (682) (3.0) 22,661 (5,323) (19.0) 27,984 26,225 28,519
Loss on early extinguishment of debt 15,250 15,250 NM — — NM — — —
Printing and supplies 13,009 (2,189) (14.4) 15,198 (3,169) (17.3) 18,367 19,634 20,227
Amortization of intangible assets 816 (1,203) (59.6) 2,019 (39,206) (95.1) 41,225 39,207 37,296
Restructuring (releases) charges (6,666) (55,639) NM 48,973 (30,984) (38.8) 79,957 — 46,791
Other 80,780 (11,283) (12.3) 92,063 625 0.7 91,438 34,153 64,373
Total Non-Interest Expense 1,230,159 (143,988) (10.5) 1,374,147 (188,280) (12.1) 1,562,427 1,283,131 1,194,779
Income Before Income Taxes 523,987 1,282 0.2 522,705 427,228 NM 95,477 448,717 602,588
Income taxes 138,294 (60,680) (30.5) 198,974 238,293 NM (39,319)(2) 126,299 188,433
Income before cumulative effect of change in
accounting principle 385,693 61,962 19.1 323,731 188,935 NM 134,796 322,418 414,155
Cumulative effect of change in accounting
principle, net of tax (1) (13,330) (13,330) NM — — NM — — —
Net Income $ 372,363 $ 48,632 15.0% $ 323,731 $ 188,935 140.2% $ 134,796 $ 322,418 $ 414,155
Per Common Share
Income before cumulative effect of change in
accounting principle—basic $ 1.68 $ 0.34 25.4% $ 1.34 $ 0.80 NM% $ 0.54 $ 1.30 $ 1.63
Net income per common share—basic 1.62 0.28 20.9 1.34 0.80 NM 0.54 1.30 1.63
Income before cumulative effect of change in
accounting principle—diluted 1.67 0.34 25.6 1.33 0.79 NM 0.54 1.29 1.62
Net income per common share—diluted 1.61 0.28 21.1 1.33 0.79 NM 0.54 1.29 1.62
Cash dividends declared 0.67 0.03 4.7 0.64 (0.08) (11.1) 0.72 0.76 0.68
Net Interest Income—Fully Taxable
Equivalent (FTE)
Net interest income $ 848,986 $ 99,412 13.3% $ 749,574 $ 34,286 4.8% $ 715,288 $ 670,110 $ 812,844
Tax equivalent adjustment (3) 9,684 4,479 86.1 5,205 (1,147) (18.1) 6,352 8,310 9,423
Net Interest Income—FTE $ 858,670 $ 103,891 13.8% $ 754,779 $ 33,139 4.6% $ 721,640 $ 678,420 $ 822,267
(1) Due to the adoption of FASB Interpretation No. 46 for variable interest entities.
(2) Reflects a $32.5 million reduction related to the issuance of $400 million of REIT subsidiary preferred stock, of which $50 million was sold to the public.
(3) Calculated assuming a 35% tax rate.
NM, not a meaningful value.
38 HUNTINGTON BANCSHARES INCORPORATED