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Huntington's second-quarter profit drops 1 percent
youngstown
Columbus-based Huntington National Bank reported a 1 percent decline in its second-quarter profit Thursday, as deposits and loans at the bank proved to be a mixed bag from April through June.
The bank said it earned $150.7 million — $2.1 million less than it reported last year at the same time. Earnings per common share were 17 cents, beating analysts surveyed by FactSet, who forecast 16 cents per share.
Bank revenue, which fell short of analyst’s expectations, slid 1 percent, going from $688.5 million to $680.2 million in the second quarter.
Net interest income dropped to $424.9 million from $429 million as loans and deposits barely moved. Home-equity loans dropped, residential-mortgage lending stayed flat, and commercial real-estate loans decreased by 17 percent. Interest- bearing deposits also were unchanged from the year-ago period.
Huntington did report a 6 percent growth rate in its auto, commercial and industrial loans, though.
Stephen D. Steinour, chairman, president and chief executive officer, said the quarter still was a stable one, with bank officials predicting that business investment will move upward as the outlook for manufacturing in the region looks brighter on the strength of the automotive and oil and gas industries. Positive reports regarding growing consumer confidence also have the bank looking ahead.
“Huntington had a good quarter that demonstrates progress in our strategic priorities,” Steinour said in a statement. “I’m extremely pleased that we have returned to pre-recession, normal credit levels ahead of our prior expectations — this reflects our disciplined and prudent lending approach.”
Credit quality improved at the bank, in keeping with others in the industry this earnings season, as net charge-offs, or uncollectible loans, dropped dramatically by 59 percent to reach $34.8 million from $84.2 million a year earlier, boosted by higher rates of recovery. Nonperforming assets, meanwhile, declined 24 percent to $396.6 million from $523.2 million.
Steinour added that expense management failed to live up to the bank’s expectations last quarter. Personnel costs, for example, increased by 9 percent to reach $263.9 million, reflecting increased salaries and a jump in full-time employees working there.
The bank’s stock climbed 1.94 percent Thursday to close at $8.40 on the Nasdaq. Huntington declared a quarterly cash dividend of 5 cents Thursday, payable Oct. 1 to shareholders of record Sept. 17.
Huntington is Youngstown’s largest bank by deposits with 21.9 percent of the area’s market share, according to the Federal Deposit Insurance Corp.