Huntington tops banks in SBA loans, issues earnings report
By Tom McParland
Huntington Bank announced it now is the country’s top lender of Small Business Administration loans amid a mixed quarterly earnings report that showed slightly declining earnings to start 2014.
In the first six months of SBA’s fiscal year, which ended March 31, the Columbus-based bank ranked No. 1 in number of 7(a) loans issued, a considerable feat considering Huntington is the nation’s 33rd-largest bank and operates in only six states, the bank announced Wednesday.
Since Oct. 1, the bank has made 1,804 of the government-backed loans, including 1,050 loans totaling nearly $119 million in Ohio.
The SBA guarantees up to 80 percent of the 7(a) loans, which are made by private lenders. The idea is to reduce the lenders’ risk, while also providing financing to small business to put toward equipment purchases, working capital and other needs.
Though only a small part of its $22.5 billion commercial-lending segment, Huntington sees the loans as vital to the health of small businesses and the overall economy, bank officials said.
“Small businesses are the foundation of our Main Street economies throughout the United States,” CEO Steve Steinour said in a statement. “These businesses generate two-thirds of all new jobs and help keep our neighborhoods healthy. Huntington is committed to supporting small-business growth as a key way to strengthen our communities as they continue through the economic recovery.”
Huntington’s announcement coincided with the release of its first quarterly earnings report of this year.
According to a filing with the U.S. Securities and Exchange Commission, the bank’s net revenue dipped 3 percent to $149.1 million, compared with $153.3 million during the first quarter of 2013. Earnings per share were 17 cents, unchanged in the year-over-year comparison.
Revenue increased by less than 1 percent to $691.9 million.
Huntington attributed the slight downtick mostly to one-time losses associated with its acquisition of Ohio-based community bank Camco Financial Corp. and additions to its litigation reserves.
“If you build those out, it would have been a more favorable comparison,” Mark Muth, assistant director of investor relations, said in a conference call with reporters.
Meanwhile, average loans and leases were up more than 6 percent to $43.4 billion, driven primarily by a $2 billion, or 40 percent, spike in automobile loans.
Huntington also said it is moving forward with a $250 million buyback of common stock over the next four quarters. First submitted in the bank’s capital plan in January, the re-purchase will help fund growth, pay for a cash dividend and reduce debt incurred from a number of actions, including the bank’s recent acquisition of 11 branches in Michigan from Bank of America, Muth said.
Additionally, Huntington declared a cash dividend of 5 cents per share of common stock, payable July 1 to shareholders of record June 17.