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Huntington Bancshares reports profit

Friday, July 20, 2012

By Jamison Cocklin


Huntington Bancshares reported Thursday a second-quarter profit of $152.7 million, or 17 cents per share.

That number remains mostly unchanged from last quarter, but the bank saw a 5 percent gain in its profits compared with last year.

Total profit jumped from $145.9 million, or 16 cents per share, in 2011. The increase was driven in large part by 21 percent annual growth in loans and leases, as well as 13 percent annual growth in average total deposits.

Average commercial and industrial loans were “very strong,” according to the second-quarter earnings report, posting $1.3 billion, or 9 percent growth. Net interest income increased by 3 percent to $11.8 million.

Average total core deposits increased to $1.4 billion, or 3 percent from the previous quarter.

Mahoning Valley Regional President Frank Hierro said the gains in deposits and loans came from an admixture of strong regional investments and sustained customer-based services that gave the bank a boost in consumer banking.

He also cited the banks branching partnership with Giant Eagle, where Huntington has added three new locations in the last 60 days alone.

“Many of the things that deferred investments and slowed the economy have turned around,” he said. “We’re in a much stronger capital position.”

Huntington beat analysts who predicted a per-share profit of 16 cents on revenue of $687 million. Although the company managed only $682.8 million in second-quarter revenue, it rose by 3.6 percent from last year.

The company’s FDIC-assisted acquisition of Fidelity Bank last quarter elevated both noninterest income and noninterest expense.

Loan loss provisions rose to $36.5 million from the $34.4 million put aside in the first quarter and $35.8 million in 2011.

At the same time, net charge-offs, or uncollectible loans, were 0.82 percent of average loans, a decrease from 0.85 percent in the first quarter and 1.01 percent during the second quarter of 2011.

Earlier in the month, the Office of the Comptroller of the Currency warned that banks will face an increased possibility of losses when more than half the amount borrowed on home equity lines of credit will come due between 2014 and 2017.

Known as the initial draw period, when homeowners pay only interest on equity lines, thousands will face higher mortgage payments when they are required to pay both interest and principal.

In a report released in May, Deutsche Bank identified Huntington among one of the banks that run the highest risk of exposure to such losses.

But Todd Beekman, director of investor relations at Huntington refuted those claims by noting that 40 percent of the mortgages his bank holds are first-time loans.

He said home equity has improved at the bank by 14 basis points and second quarter earnings reflected a stronger credit position.

Huntington shares were trading around $6.54 on the NASDAQ, as of 2:30 p.m. on Thursday. Overall, the stock is up 20 percent this year.

The bank has 396 branches throughout Ohio.