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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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DATE OF REPORT: SEPTEMBER 30, 1997
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HUNTINGTON BANCSHARES INCORPORATED
(Exact Name of Registrant as specified in its charter)
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Maryland 0-2525 31-0724920
(STATE OR OTHER (COMMISSION FILE NO.) (IRS EMPLOYER
JURISDICTION OF INCORPORATION) IDENTIFICATION NUMBER)
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Huntington Center
41 South High Street
Columbus, Ohio 43287
(614) 480-8300
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER
INCLUDING AREA CODE OF REGISTRANT'S
PRINCIPAL EXECUTIVE OFFICES)
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N/A
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On September 30, 1997, First Michigan Bank Corporation, a Michigan
corporation and a registered bank holding company ("First Michigan"), was merged
(the "Merger") into Huntington Bancshares Incorporated, a Maryland corporation
and a registered bank holding company ("Huntington"), pursuant to the terms of
an Agreement and Plan of Merger and a Supplemental Agreement (collectively, the
"Merger Agreements"). As a result of the Merger, each outstanding share of First
Michigan's common stock, $1.00 par value ("First Michigan Common"), was
converted into 1.155 shares of Huntington's common stock, without par value
("Huntington Common"). Cash was paid for fractional shares. Approximately 32.2
million Huntington Common shares were issued in the Merger. In addition, each
outstanding First Michigan stock option was converted into an option to acquire
Huntington Common, with the number of Huntington Common shares subject to such
option equal to the number of First Michigan shares subject to the First
Michigan stock option multiplied by 1.155, rounded to the nearest whole share.
The Merger was accounted for as a pooling of interests under generally accepted
accounting principles. A copy of the News Release, dated September 30, 1997,
issued by Huntington relating to the consummation of the Merger is attached as
Exhibit 99(a) and is incorporated herein by reference.
Huntington's Registration Statement on Form S-4 (Registration No.
333-30313), which was declared effective by the Securities and Exchange
Commission on July 11, 1997 (the "Registration Statement"), sets forth certain
information concerning Huntington, First Michigan, and the Merger, including
without limitation, a description of the assets involved, the nature and amount
of consideration paid by Huntington, the method used for determining the amount
of such consideration, the nature of any material relationships between First
Michigan and Huntington or any officer or director of Huntington or any
associate of any such officer or director, the nature of First Michigan's
business and Huntington's intended use of the assets acquired in the Merger.
Such information, and the information set forth under the heading "Private
Securities Litigation Reform Act of 1995 - Forward Looking Statement
Disclosure" of Item 5, are incorporated herein by reference as additional
information in response to Item 2 of this Current Report on Form 8-K.
ITEM 5. OTHER INFORMATION.
On October 14, 1997, Huntington issued a news release announcing its
earnings for the third quarter and nine months ended September 30, 1997. The
information contained in the News Release, which is attached to this report as
Exhibit 99(b), is incorporated herein by reference.
Private Securities Litigation Reform Act of 1995 - Forward Looking Statement
Disclosure
The information contained or incorporated by reference in this
Current Report on Form 8-K may contain forward-looking statements which are
subject to numerous assumptions, risks, and uncertainties. Actual results could
differ materially from those contained or implied by such statements for a
variety of factors, including: changes in economic conditions, movements in
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interest rates, competitive pressures on product pricing and services, success
and timing of business strategies, and the nature and extent of legislative and
regulatory actions and reforms.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) The historical financial statements of First Michigan required by
Item 7(a) of Form 8-K will be filed by amendment to this Current
Report on Form 8-K not later than December 12, 1997.
(b) The following pro forma financial statements, which were included
on pages F-1 through F-7 of the Proxy Statement/Prospectus, dated
September 23, 1997, previously filed with the Securities and
Exchange Commission pursuant to 424(b)(3), are incorporated herein
by reference:
Introduction to Pro Forma Consolidated Financial Statements
Pro Forma Consolidated Balance Sheet as of June 30, 1997
Pro Forma Consolidated Statement of Income for the six months ended
June 30, 1997
Pro Forma Consolidated Statement of Income for the year ended
December 31, 1996
Pro Forma Consolidated Statement of Income for the year ended
December 31, 1995
Pro Forma Consolidated Statement of Income for the year ended
December 31, 1994
Notes to Pro Forma Consolidated Financial Statements
(c) Exhibits.
2(a) Agreement and Plan of Merger, dated May 5, 1997, between
Huntington Bancshares Incorporated and First Michigan Bank
Corporation -- previously filed as Exhibit A to the Joint
Proxy Statement/Prospectus, dated July 11, 1997, filed with
the Securities and Exchange Commission pursuant to 424(b)(3),
and incorporated herein by reference.
2(b) Supplemental Agreement, dated May 5, 1997, between Huntington
Bancshares Incorporated and First Michigan Bank Corporation --
previously filed as Exhibit B to the Joint Proxy
Statement/Prospectus, dated July 11, 1997, filed with the
Securities and Exchange Commission pursuant to 424(b)(3), and
incorporated herein by reference.
2(c) Warrant Purchase Agreement, dated May 5, 1997, between
Huntington Bancshares Incorporated and First Michigan Bank
Corporation -- previously filed as Exhibit 2(c) to Current
Report on Form 8-K, filed with the Securities and Exchange
Commission on May 7, 1997, and incorporated herein by
reference.
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2(d) Warrant to Purchase 5,268,716 shares of First Michigan Bank
Corporation common stock, dated May 5, 1997 -- previously
filed as Exhibit 2(d) to Current Report on Form 8-K, filed
with the Securities and Exchange Commission on May 7, 1997,
and incorporated herein by reference.
2(e) Agreement Not to Exercise Share Appreciation Rights, dated May
5, 1997, executed by certain executives of First Michigan Bank
Corporation -- previously filed as Exhibit 2(e) to
Registration Statement on Form S-4 (Registration No.
333-30313), filed with the Securities and Exchange Commission
on June 27, 1997, and incorporated herein by reference.
99(a) News Release, dated September 30, 1997, relating to the merger
of First Michigan Bank Corporation with and into Huntington
Bancshares Incorporated.
99(b) News Release, dated October 14, 1997, relating to Huntington's
earnings for the third quarter and nine months ended September
30, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HUNTINGTON BANCSHARES INCORPORATED
Date: October 15, 1997 By: /s/ GERALD R. WILLIAMS
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Gerald R. Williams
Executive Vice President
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Exhibit 99(a)
NEWSRELEASE [LOGO]
HUNTINGTON BANKS
FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION, CONTACT:
SUBMITTED: SEPTEMBER 30, 1997 LAURIE COUNSEL (614) 480-3878
CHERI GRAY (614) 480-3803
HUNTINGTON BANCSHARES COMPLETES ACQUISITION
OF FIRST MICHIGAN BANK CORPORATION
COLUMBUS, Ohio -- Huntington Bancshares announced today the completion
of its acquisition of First Michigan Bank Corporation based in Holland,
Michigan. Terms of the agreement called for First Michigan shareholders to
receive 1.155 shares of Huntington Bancshares common stock for each share of
First Michigan. The value of the transaction is approximately $1.2 billion.
"We are pleased to have First Michigan Bank Corporation join the
Huntington family," said Frank Wobst, chairman and chief executive officer of
Huntington Bancshares Incorporated. "We hope First Michigan's customers and
shareholders are as excited as we about the opportunities that lie ahead.
"The similar strategies of these two organizations make this a
valuable alliance in the Michigan market. Both have been focusing on enhancing
the sales culture, alternative delivery channels, and working diligently to
meet the ever-changing needs of the customer."
With over 131 years of serving the financial needs of its customers,
Huntington Bancshares Incorporated is a regional bank holding company
headquartered in Columbus, Ohio with assets in excess of $25 billion. The
Huntington provides innovative products and services through its 527 offices in
Ohio, Florida, Georgia, Indiana, Kentucky, Maryland, Michigan, New Jersey,
North Carolina, Pennsylvania, South Carolina, Virginia and West Virginia. The
Huntington also offers products and services through its
technologically-advanced, 24-hour telephone bank, a network of more than 1,000
ATMs and its Web Bank at www.huntington.com. Corporate communications and
financial information are also available at this web site address. Publicly
traded as NASDAQ:HBAN, the stock is included in the S&P 500 Index.
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Exhibit 99(b)
NEWSRELEASE [LOGO]
HUNTINGTON BANKS
Take control of your money.(TM)
FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION, CONTACT:
SUBMITTED: OCTOBER 14, 1997 ANNE CREEK (614) 480-3954
LAURIE COUNSEL (614) 480-3878
HUNTINGTON BANCSHARES' THIRD QUARTER
PRODUCES RECORD EARNINGS AND SUCCESSFUL MERGER
COLUMBUS, Ohio -- Huntington Bancshares Incorporated (NASDAQ:HBAN:
www.huntington.com) today reported another record earnings quarter. Prior to
pooling results for the First Michigan Bank acquisition, Huntington earned $.48
per share for the quarter and $1.36 for the nine months ended September 30,
1997, representing increases of 14.3% and 13.3%, respectively, versus the same
periods last year. For the quarter, Huntington's return on average equity was
18.12% and return on average assets was 1.39%. Continued strength in consumer
lending combined with strong fee income during the quarter contributed to the
earnings momentum.
Third quarter also represents the first quarter in which The
Huntington operated as one national bank. As of June 30, 1997, Huntington
collapsed its five primary subsidiary bank charters into one interstate
charter. The Huntington National Bank is one of the first regional banks in the
United States to operate as one bank.
Frank Wobst, chairman and chief executive officer of Huntington
Bancshares stated, "The movement to one integrated bank represents several
years of system and operational reorganization designed to provide significant
operating efficiencies while allowing Huntington customers the opportunity to
transact business regardless of geographic boundaries. I am extremely pleased
with the operational progress we have made and the continued strength of our
core earnings."
On September 30, 1997, Huntington closed the previously announced
acquisition of First Michigan Bank Corporation, a $3.6 billion asset multi-bank
holding company in western Michigan. As part of the integration, Huntington
successfully merged the fourteen banking
Visit The Huntington's web site at www.huntington.com
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charters of First Michigan into The Huntington National Bank. This acquisition
brings Huntington's total assets to $25.6 billion and increases market
capitalization to approximately $7.2 billion. In addition, Huntington's
Michigan presence more than doubles with assets of $7 billion, 137 banking
offices, and an electronic banking network currently serving over 350,000
households.
"The integration of First Michigan is proceeding nicely," said Wobst.
"Our expansion into western Michigan strengthens Huntington's presence in a
state where we have enjoyed much success and provides entry into one of the
fastest growing markets in the United States."
One-time merger related expenses during the quarter included the
previously announced $35 million restructure charge consisting primarily of
personnel, facilities and systems costs; $12.2 million in professional fees
incurred to effect the merger; and $8.8 million of other one-time charges
related to the merger.
Excluding the impact of these one-time charges, combined third quarter
earnings of the two companies increased 15.0% over the same period last year to
$.46 per share, compared with $.40 per common share on a restated basis. On
this same basis, earnings for the first nine months of 1997 grew 12.9% to $1.31
per common share compared with $1.16 per common share for the same period a
year ago.
Reported net income for the combined companies for the third quarter,
including the special one time charges, was $41.2 million or $.22 per common
share and for the first nine months was $202 million or $1.06 per common share.
Details of the combined results are as follows:
Net interest income was $257.2 million in the recent three months, an
increase of 13.7% over the same period in 1996. For the nine months ended
September 30, 1997, net interest income of $767.7 million was 15.3% higher than
the first nine months of last year. The 4.41% margin reported for the third
quarter was 16 basis points better than one year ago.
Non-interest income, excluding securities gains, totaled $94.9 million
and $247.4 million, respectively, in the recent quarter and nine months,
compared with $75.2 million and $222.5 million for the same periods last year.
Annualized growth in core fee income was 14% and 11% on both a quarter and
year-to-date basis. Significant growth continues to be seen in trust,
electronic banking, and investment product sales.
Non-interest expense, excluding the restructuring and other merger
related costs, totaled $193.7 million in the third quarter of 1997, compared
with $168.5 million in the same three
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months of 1996. The impact of higher advertising, marketing and volume driven
expenses in 1997 represent the majority of the increase. For the first nine
months of the year, non-interest expense of $563.4 million was 10.4% higher than
the same period last year.
During the third quarter, Huntington sold $263 million and securitized
$113 million of single family residential loans resulting in gains of
approximately $7.0 million. Excluding the impact of these sales and
securitizations, Huntington's loan growth continues to be strong with consumer
loans growing 13% and commercial loans growing 10.4% over the same nine months
last year.
Asset quality measures remain strong. Net charge-offs in the third
quarter declined to .41% compared with .56% in the second quarter and .46% for
the same period last year. Non-performing assets increased to $92.2 million
compared with $79.4 million as of September 30, 1996, and a second quarter 1997
total of $80.0 million. The increase resulted from a single large commercial
credit classified as non-performing during the quarter. Coverage ratios were
328.71% of non-performing loans and 277.31% of non-performing assets. During
the quarter, Huntington covered 154.63% of net charge-offs and increased the
allowance for loan losses to 1.46% of total loans, compared to second quarter
of 1.39%.
Average equity to assets was 7.67% for the recent quarter and 7.45%
for the first nine months of 1997. The company's Tier I and total risk-based
capital ratios were 8.86% and 11.95% respectively, and its Tier I leverage
ratio was 7.54% at September 30, 1997, well above the regulatory requirements
for a "well capitalized" bank.
With over 131 years of serving the financial needs of its customers,
Huntington Bancshares Incorporated is a regional bank holding company
headquartered in Columbus, Ohio with assets of $25.6 billion. Huntington
provides innovative products and services through its 527 offices in Ohio,
Florida, Georgia, Indiana, Kentucky, Maryland, Michigan, New Jersey, North
Carolina, Pennsylvania, South Carolina, Virginia and West Virginia. Huntington
also offers products and services through its technologically-advanced, 24-hour
telephone bank, a network of more than 1,000 ATMs and its Web Bank at
www.huntington.com. Corporate communications and financial information are also
available at this web site address. Publicly traded as NASDAQ:HBAN, the stock
is included in the S&P 500 Index.
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HUNTINGTON BANCSHARES INCORPORATED
COMPARATIVE SUMMARY (CONSOLIDATED)
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
CONSOLIDATED RESULTS THREE MONTHS ENDED NINE MONTHS ENDED
OF OPERATIONS SEPTEMBER 30, CHANGE SEPTEMBER 30, CHANGE
- ------------------------ ------------------------------- -------------------------------------
1997 1996 % 1997 1996 %
--------- --------- ----- ---------- ---------- -----
<S> <C> <C> <C> <C> <C> <C>
Interest Income $502,821 $445,453 12.9% $1,481,713 $1,323,016 12.0%
Interest Expense 245,663 219,217 12.1 714,046 656,983 8.7
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Net Interest Income 257,158 226,236 13.7 767,667 666,033 15.3
Provision for Loan Losses 28,351 22,978 23.4 81,562 51,333 58.9
Securities Gains 1,242 6,172 N.M. 6,944 13,379 (48.1)
Non-Interest Income 94,855 75,212 26.1 247,385 222,515 11.2
Non-Interest Expense 244,910 168,473 45.4 614,576 510,502 20.4
Provision for Income Taxes 38,762 38,725 0.1 123,844 114,955 7.7
-------- -------- ---------- ----------
NET INCOME $ 41,232 $ 77,444 (46.8)% $ 202,014 $ 225,137 (10.3%)
======== ======== ========== ==========
PER COMMON SHARE AMOUNTS (1)
Net Income $0.22 $0.40 (45.0)% $1.06 $1.16 (8.6%)
Cash Dividends Declared $0.20 $0.18 11.1% $0.56 $0.50 12.0%
Shareholders' Equity
(period end) $10.18 $9.27 9.8% $10.18 $9.27 9.8%
AVERAGE COMMON SHARES
OUTSTANDING (1) 191,245 191,711 (0.2)% 190,562 193,294 (1.4%)
KEY RATIOS
Return On:
Average Total Assets 0.65% 1.33% 1.08% 1.30%
Average Shareholders' Equity 8.41% 17.75% 14.48% 16.98%
Efficiency Ratio 55.11% 55.88% 55.26% 57.20%
Net Interest Margin 4.41% 4.25% 4.43% 4.20%
Average Equity/Average Assets 7.67% 7.47% 7.45% 7.64%
Tier I Risk-Based Capital Ratio
(period end) (2) 8.86% 8.32% 8.86% 8.32%
Total Risk-Based Capital Ratio
(period end) (2) 11.95% 11.57% 11.95% 11.57%
Tier I Leverage Ratio
(period end) (2) 7.54% 6.99% 7.54% 6.99%
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT
OF CONDITION DATA AT SEPTEMBER 30, CHANGE
- ------------------------ ---------------------------------------------------------
1997 1996 %
------------ ------------- -------
<S> <C> <C> <C>
Total Loans $ 17,692,634 $ 16,359,080 8.2%
Total Deposits $ 17,589,786 $ 16,153,791 8.9
Total Assets $ 25,576,135 $ 23,998,460 6.6
Shareholders' Equity $ 1,945,991 $ 1,766,689 10.1
ASSET QUALITY
Non-performing loans $ 78,454 $ 63,071
Total non-performing assets $ 92,216 $ 79,392
Allowance for loan losses/total loans 1.46% 1.41%
Allowance for loan losses/non-performing loans 328.71% 366.24%
Allowance for loan losses and other real
estate/non-performing assets 277.31% 282.47%
</TABLE>
(1) Adjusted for stock splits and stock dividends, as applicable.
(2) Estimated.
N.M.-Not meaningful
