Huntington Profit Falls 66% on $90M Hit

A $90 million restructuring charge pushed down fourth-quarter earnings at Huntington Bancshares by 66%, to $31 million, the company said Wednesday.

The charge, which was expected, covered a reorganization that included the elimination of 1,000 jobs, or 10% of the company's work force.

Huntington also said the restructuring was responsible for a 59% gain in fourth-quarter expenses, to $299 million.

Without the special charge, Huntington earned $91.5 million, or 43 cents per share. The per share figure met analysts' expectations.

Quarterly net interest income at the $28 billion-asset banking company reached $267 million, up 3% from a year earlier. The Columbus, Ohio, company credited strong loan demand.

Huntington said its cost-cutting program should produce $125 million of additional income by the end of 1999.

Analysts said Huntington's restructuring program needs to show progress over the next three quarters, since the company is an attractive takeover candidate.

"I think the Street is going to take a wait-and-see attitude," said Frank Barkocy, an analyst at Josephthal & Co., New York.

But one analyst said he was frustrated with the company, which has reengineered without much success in the past. "People are ready to see them do a year or two of earnings without doing a restructuring, or doing a merger, or anything else funky," said Timothy Willi, of A.G. Edwards & Sons Inc., St. Louis.

One part of the pretax charge-$32 million-is to cover the cost of leaving two unprofitable businesses: employee benefits administration and retail lockbox. Other portions are to cover severance ($26 million) and the closing of 34 branches ($20 million).

Separately, BB&T Corp. of Winston-Salem, N.C., said its fourth-quarter profits rose 53%, to $136.5 million. The $34.4 billion-asset company said it benefited from an increase in commercial loans.

Excluding special charges in the year-earlier period, BB&T's earnings gained 19%.

Earnings per share of 46 cents met estimates, and net interest income of $326 million improved 11%.

Noninterest income jumped 25% from the year-earlier quarter, to $139 million.

"Over all, the revenue growth at BB&T is stronger than at the average bank," said Michael Mayo, an analyst at Credit Suisse First Boston.

At $14 billion-asset Hibernia Corp. of New Orleans, net income in the quarter rose 23%, to $179 million. Earnings per share of 30 cents met expectations.

Hibernia said energy-related loans accounted for 4.7% of total loans.

In addition, the company said, "more than two-thirds of energy clients are well-capitalized public companies with decades of experience in the energy sector." +++

BB&T Corp.

Winston-Salem, N.C.

Dollar amounts in millions (except per share)

Fourth Quarter 4Q98 4Q97

Net income $136.5 $89.4

Per share 0.46 0.31

ROA 1.59% 1.19%

ROE 19.60% 15.27%

Net interest margin 4.31% 4.37%

Net interest income 343.4 309.4

Noninterest income 139.0 111.3

Noninterest expense 249.7 243.2

Year to Date 1998 1997

Net income $501.8 $360.4

Per share 1.71 1.23

ROA 1.55% 1.25%

ROE 19.73% 15.63%

Balance Sheet 12/31/98 12/31/97

Assets $34,427.2 $31,290.2

Deposits 23,046.8 21,376.0

Loans 23,380.4 20,954.3

Huntington Bancshares

Columbus, Ohio

Dollar amounts in millions (except per share)

Fourth Quarter 4Q98 4Q97

Net income $31.2 $90.6

Per share 0.15 0.42

ROA 0.45% 1.41%

ROE 6.10% 18.23%

Net interest margin 4.24% 4.44%

Net interest income 267.3 259.6

Noninterest income 106.7 87.5

Noninterest expense 298.9 188.5

Year to Date 1998 1997

Net income $301.8 $292.7

Per share 1.41 1.38

ROA 1.12% 1.16%

ROE 14.62% 15.45%

Balance Sheet 12/31/98 12/31/97

Assets $27,714.5 $25,429.7

Deposits 19,359.8 17,569.0

Loans 19,269.5 17,787.7

Hibernia Corp.

New Orleans, La.

Dollar amounts in millions (except per share)

Fourth Quarter 4Q98 4Q97

Net income $47.9 $33.5

Per share 0.30 0.20

ROA 1.42% 1.12%

ROE 14.67% 11.30%

Net interest margin 4.42% 4.57%

Net interest income 140.2 127.4

Noninterest income 49.2 42.2

Noninterest expense 104.1 110.6

Year to Date 1998 1997

Net income $178.6 $144.8

Per share 1.10 0.89

ROA 1.39% 1.29%

ROE 14.17% 12.79%

Balance Sheet 12/31/98 12/31/97

Assets $14,011.5 $12,388.2

Deposits 10,603.0 9,814.4

Loans 9,878.2 8,162.1 ===