UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY PERIOD ENDED March 31, 2004
Commission File Number: 000-33243
HUNTINGTON PREFERRED CAPITAL, INC.
| Ohio | 31-1356967 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
41 South High Street, Columbus, Ohio 43287
Registrant’s telephone number (614) 480-8300
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days.
Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes ¨ No x
As of April 30, 2004, 14,000,000 shares of common stock without par value were outstanding, all of which were held by affiliates of the registrant.
HUNTINGTON PREFERRED CAPITAL, INC.
2
Part I. Financial Information
| Item 1. | Financial Statements |
Huntington Preferred Capital, Inc.
Condensed Consolidated Balance Sheets
| (in thousands of dollars, except share data) |
March 31, 2004 |
December 31, 2003 |
March 31, 2003 |
|||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| Assets |
||||||||||||
| Cash with The Huntington National Bank |
$ | 4,576 | $ | 124,085 | $ | 28,249 | ||||||
| Interest bearing deposits with The Huntington National Bank |
82,288 | — | 668,594 | |||||||||
| Due from affiliates |
14,675 | 13,652 | 10,334 | |||||||||
| Loan participation interests: |
||||||||||||
| Commercial |
198,950 | 147,211 | 284,225 | |||||||||
| Commercial real estate |
4,264,002 | 4,245,092 | 3,951,895 | |||||||||
| Consumer |
662,908 | 622,575 | 575,545 | |||||||||
| Residential real estate |
275,284 | 288,190 | 132,123 | |||||||||
| Total loan participation interests |
5,401,144 | 5,303,068 | 4,943,788 | |||||||||
| Allowance for loan losses |
(79,842 | ) | (84,532 | ) | (125,884 | ) | ||||||
| Net loan participation interests |
5,321,302 | 5,218,536 | 4,817,904 | |||||||||
| Premises and equipment |
30,736 | 32,126 | 36,363 | |||||||||
| Accrued income and other assets |
17,351 | 17,579 | 21,614 | |||||||||
| Total Assets |
$5,470,928 | $5,405,978 | $5,583,058 | |||||||||
| Liabilities |
||||||||||||
| Allowance for unfunded loan participation commitments |
$ | 4,325 | $ | — | $ | — | ||||||
| Dividends payable and other liabilities |
1,243 | — | 2,068 | |||||||||
| Total Liabilities |
5,568 | — | 2,068 | |||||||||
| Shareholders’ Equity |
||||||||||||
| Preferred securities, Class A, 8.000% noncumulative, non-exchangeable; $1,000 par and liquidation value per share; 1,000 shares authorized, issued and outstanding |
1,000 | 1,000 | 1,000 | |||||||||
| Preferred securities, Class B, variable-rate noncumulative and conditionally exchangeable; $1,000 par and liquidation value per share; authorized 500,000 shares; 400,000 shares issued and outstanding |
400,000 | 400,000 | 400,000 | |||||||||
| Preferred securities, Class C, 7.875% noncumulative and conditionally exchangeable; $25 par and liquidation value; 2,000,000 shares authorized, issued, and outstanding |
50,000 | 50,000 | 50,000 | |||||||||
| Preferred securities, Class D, variable-rate noncumulative and conditionally exchangeable; $25 par and liquidation value; 14,000,000 shares authorized, issued, and outstanding |
350,000 | 350,000 | 350,000 | |||||||||
| Preferred securities, $25 par value, 10,000,000 shares authorized; no shares issued or outstanding |
— | — | — | |||||||||
| Common stock - without par value; 14,000,000 shares authorized, issued and outstanding |
4,604,978 | 4,604,978 | 4,715,351 | |||||||||
| Retained earnings |
59,383 | — | 64,639 | |||||||||
| Total Shareholders’ Equity |
5,465,361 | 5,405,978 | 5,580,990 | |||||||||
| Total Liabilities and Shareholders’ Equity |
$ | 5,470,929 | $5,405,978 | $5,583,058 | ||||||||
See notes to unaudited consolidated financial statements.
3
Huntington Preferred Capital, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
| Three Months Ended March 31, | |||||||
| (in thousands of dollars) |
2004 |
2003 | |||||
| Interest and fee income |
|||||||
| Interest on loan participation interests: |
|||||||
| Commercial |
$ | 2,094 | $ | 3,955 | |||
| Commercial real estate |
45,060 | 46,957 | |||||
| Consumer |
12,013 | 13,379 | |||||
| Residential real estate |
3,683 | 2,251 | |||||
| Total loan participation interest income |
62,850 | 66,542 | |||||
| Fees from loan participation interests |
611 | 2,733 | |||||
| Interest on deposits with The Huntington |
|||||||
| National Bank |
289 | 1,854 | |||||
| Total interest and fee income |
63,750 | 71,129 | |||||
| Provision (reduction) for credit losses |
(2,263 | ) | — | ||||
| Interest income after provision (reduction) for credit losses |
66,013 | 71,129 | |||||
| Non-interest income: |
|||||||
| Rental income |
1,469 | 1,806 | |||||
| Collateral fees |
197 | 160 | |||||
| Total non-interest income |
1,666 | 1,966 | |||||
| Non-interest expense: |
|||||||
| Servicing costs |
2,135 | 1,575 | |||||
| Depreciation |
1,353 | 1,401 | |||||
| Loss on disposal of fixed assets |
37 | 325 | |||||
| Other |
106 | 57 | |||||
| Total non-interest expense |
3,631 | 3,358 | |||||
| Income before provision for income taxes |
64,048 | 69,737 | |||||
| Provision for income taxes |
23 | 24 | |||||
| Net income |
$ | 64,025 | $69,713 | ||||
| Net income applicable to common shares |
$ | 59,383 | $64,639 | ||||
See notes to unaudited consolidated financial statements.
4
Huntington Preferred Capital, Inc.
Condensed Consolidated Statements of Changes in Shareholders’ Equity
| Preferred, Class A |
Preferred, Class B |
Preferred, Class C | |||||||||||||
| (in thousands) |
Shares |
Securities |
Shares |
Securities |
Shares |
Securities | |||||||||
| Three Months Ended March 31, 2003: |
|||||||||||||||
| Balance, beginning of period |
1 | $ | 1,000 | 400 | $ | 400,000 | 2,000 | $ | 50,000 | ||||||
| Comprehensive Income: |
|||||||||||||||
| Net income |
|||||||||||||||
| Total comprehensive income |
|||||||||||||||
| Balance, end of period (Unaudited) |
1 | $ | 1,000 | 400 | $ | 400,000 | 2,000 | $ | 50,000 | ||||||
| Three Months Ended March 31, 2004: |
|||||||||||||||
| Balance, beginning of period |
1 | $ | 1,000 | 400 | $ | 400,000 | 2,000 | $ | 50,000 | ||||||
| Comprehensive Income: |
|||||||||||||||
| Net income |
|||||||||||||||
| Total comprehensive income |
|||||||||||||||
| Balance, end of period (Unaudited) |
1 | $ | 1,000 | 400 | $ | 400,000 | 2,000 | $ | 50,000 | ||||||
| Preferred, Class D |
Preferred |
Common |
Retained Earnings |
Total |
|||||||||||||||||||
| (in thousands) |
Shares |
Securities |
Shares |
Securities |
Shares |
Securities |
|||||||||||||||||
| Three Months Ended March 31, 2003: |
|||||||||||||||||||||||
| Balance, beginning of period |
14,000 | $ | 350,000 | — | $ | — | 14,000 | $ | 4,715,351 | $ | — | $ | 5,516,351 | ||||||||||
| Comprehensive Income: |
|||||||||||||||||||||||
| Net income |
69,713 | 69,713 | |||||||||||||||||||||
| Total comprehensive income |
69,713 | ||||||||||||||||||||||
| Dividends declared on Class A preferred securities |
(80 | ) | (80 | ) | |||||||||||||||||||
| Dividends declared on Class B preferred securities |
(1,380 | ) | (1,380 | ) | |||||||||||||||||||
| Dividends declared on Class C preferred securities |
(984 | ) | (984 | ) | |||||||||||||||||||
| Dividends declared on Class D preferred securities |
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