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Huntington Bancshares Q1 Profit Tops View - Update

Regional bank holding company Huntington Bancshares Inc. (HBAN) on Wednesday reported better-than expected profit for its first quarter, boosted by higher income as well as lower provision for bad loans. For the remainder of 2012, the company expects net interest income to be modestly higher than the first quarter level.

Stephen Steinour, chairman, president and chief executive officer, said, "Mortgage banking and our best-in-class indirect automobile businesses are performing as expected and taking full advantage of the current market conditions."

For its first quarter, net income applicable to common shares climbed to $145.22 million from $118.74 million last year. Earnings per share were $0.17, up from $0.14 per share last year. Analysts polled by Thomson Reuters expected the company to report earnings of $0.14 per share. Analysts' estimates typically exclude special items.

Fully-taxable equivalent net interest income grew 3 percent to $417.21 million helped by 3 percent increase in average total earning assets, partially offset by a 2 basis point decrease in the fully-taxable equivalent net interest margin. Total noninterest income increased 20 percent to $285.3 million.

Provision for credit losses fell 30 percent from last year to $34.41 million.

Huntington also announced that the board of directors has declared a quarterly cash dividend of $0.04 per share, payable July 2 to shareholders of record on June 18.

Looking ahead, the company said the momentum seeing in total loan and low-cost deposit growth is expected to continue. Noninterest income would show a modest increase from the first quarter level excluding certain impacts, primarily reflecting anticipated growth in new customers and increased contribution from key fee income activities.

For the full year, Huntington anticipates positive operating leverage and modest improvement in expense efficiency ratio, which will likely reflect the benefit of revenue growth.

The company also projects credit quality to experience continued improvement. "The level of provision for credit losses is currently at the low end of our long-term expectation, and we expect some quarterly volatility given the absolute low level and the uncertain and uneven nature of the economic recovery," the company said in its statement.

Huntington shares closed Tuesday's trading at $6.35, up $0.02 or 0.32 percent.

by RTT Staff Writer

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