Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe Now
Huntington Bancshares Inc., Ohio’s third-largest bank and a major banking player in Indiana, posted its first quarterly
profit since 2008 and said it would be profitable for 2010 as an improving economy helps credit trends.
First-quarter net income of $39.7 million, or 1 cent a share, compared with a loss of $2.43 billion, or $6.79, in the same
period a year earlier, Columbus-based Huntington said Tuesday in a prepared statement. The result included a net tax benefit
of $38.2 million. The average estimate of 15 analysts surveyed by Bloomberg was for a loss of 15 cents a share.
Huntington National Bank, a subsidiary of Huntington Bancshares, operates nearly 50 branches and has about 600 employees
in the Indianapolis area.
CEO Stephen Steinour has said 2009 probably marked the peak for credit losses and he is focusing on reducing bad loans this
year. The bank had five quarterly deficits before the first quarter and a $3.1 billion annual loss for 2009. Steinour became
Huntington’s chief in January 2009 after the bank took $1.4 billion from the federal Troubled Asset Relief Program.
Huntington projects it will be profitable for the year without providing a specific outlook. Analysts had estimated the bank
would turn profitable in the fourth quarter of 2010 with full-year profit in 2011.
“All our indicators are moving forward positively, our credit indicators are moving forward nicely, our revenue is
increasing and our net interest margin is expanding,” Steinour said. “We’re seeing significant reductions
in non-performing assets and past-due loans.”
Steinour said Huntington will need to be more confident about the economic recovery and show sustained profitability before
it repays TARP.
“The expectation of more meaningful profitability in FY11 will continue to drive shares higher over the next year,”
FBR Capital Markets Corp. analysts David Rochester and Michael Tarkan wrote in a report before earnings were released. “The
company has the capital, strategy, and the management team in place to achieve strong earnings power.” FBR rates the
stock “outperform.”
Net interest margin, the difference between what a bank pays on deposits and charges for loans, widened to 3.47 percent from
2.97 percent. The lender set aside $235 million in the first quarter to cover bad debts, decreasing from $292 million in the
same period a year earlier. Debt Huntington doesn’t expect to be repaid fell to $239 million from $342 million in the
first quarter of 2009.
Huntington shares rose to $6.13 each from $5.83 in trading before the official open of Tuesday's market after gaining
6.2 percent in trading Monday. The shares have advanced 60 percent in the last 12 months.
Please enable JavaScript to view this content.