Huntington reports profit of $167 million
By Jamison Cocklin
Huntington National Bank, bolstered by its fair-play banking initiative, government incentives to borrow and a strong Midwest market, saw its third-quarter profit rise 17 percent from where it stood a year ago.
The bank, Youngs-town’s largest by deposits, reported a profit of $167.8 million, or 19 cents per share, Thursday.
Record profits were partly driven by more mortgage originations and more of the bank’s customers refinancing their homes, said Frank Hierro, regional president of the Mahoning Valley at Huntington.
This year, the bank has opened more than 50 branches and hired nearly 500 employees to help lure customers. Additionally, the bank has worked to expand its market share by adding 66 in-store Giant Eagle locations and attracting customers with fee-free checking and 24-hour grace periods that allow them to avoid overdraft charges under its fair-play banking program.
Hierro added that the outlook for the Midwest is brighter than the rest of the country. The region’s recovery is occurring at a steadier pace on the back of manufacturers and export-oriented business.
Compared with the third quarter of 2011, when the bank reported a profit of $143.4 million, Huntington was able to increase its revenue by 4.2 percent to $696.6 million, as net interest income rose 6.2 percent.
Mortgage-banking income increased $6.3 million from the second quarter through a mix of new loans and refinancing.
Still, net charge-offs, or impaired loans that the bank deems not collectable, were 1.05 percent of loans, versus 0.92 percent last year, mainly as a result of new federal regulations, said Mark Muth, assistant director of investor relations.
The bank’s loan-loss provisions were $37 million in the third quarter, compared with $36.5 million in the second quarter.
Both Hierro and Muth added that core deposits, loan growth and a spike in customer relationships helped the bank’s bottom line. Since the first quarter of 2010, the bank has added more than 250,000 customers, and it has grown commercial relationships by 21 percent at the same time.
The bank expects auto, commercial and mortgage lending to grow modestly heading into next year, Hierro said.
The bank redeemed $150 million worth of trust preferred securities and repurchased 3.7 million common shares at an average price of $6.68 per share, which reduced third-quarter capital as the bank anticipated.
Higher health care and regulatory costs helped curb third-quarter profit slightly at the bank, but Huntington beat third-quarter earnings of 17 cents per share forecasted by industry analysts.