On May 27, 2013, we reiterated our Neutral recommendation on
Huntington Bancshares Inc. ( HBAN ) based on its
healthy capital position and improving credit quality. But revenue
headwinds are a concern amid a tepid economic recovery, low
interest rate and a tough regulatory environment. Further, with the
anticipation of an expanding expense base, we remain somewhat
skeptical about its ability to augment earnings in the quarters
ahead.ENTERPRISE FINL (EFSC): Free Stock Analysis
ReportFIRST INTST MT (FIBK): Free Stock Analysis
ReportHUNTINGTON BANC (HBAN): Free Stock Analysis
ReportOLD SECOND BCP (OSBC): Free Stock Analysis
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Huntington's first-quarter 2013 earnings came in at 17 cents per
share, beating the Zacks Consensus Estimate by a penny. However,
results were stable compared with the prior-year quarter
Huntington's results reflected growth in net interest income and
reduced expenses. Net interest margin ascended 2 basis points year
over year to 3.42% as a result of the decline in the cost of
subordinated notes and other long-term debt along with reduced
total deposit costs.
However, declining revenues due to a drop in the non-interest
income was the headwind. Huntington's total revenue on a
fully-taxable-equivalent (FTE) basis was $682.3 million, down 3%
year over year. Moreover, the revenue figure was below the Zacks
Consensus Estimate of $693 million.
According to Huntington's management, though improving trends in
the Midwest region is being witnessed, customers are more concerned
owing to the uncertainties in the broader economy.
Following first-quarter 2013 results, over the last 60 days, the
Zacks Consensus Estimate for 2013 and 2014 remained stable at 67
cents and 69 cents per share, respectively. Hence, Huntington
carries a Zacks Rank #3 (Hold).
Other Stocks to Consider
Some Midwest banking stocks that are currently performing well
include Old Second Bancorp Inc. ( OSBC ), First
Interstate Bancsystem Inc. ( FIBK ) and
Enterprise Financial Services Corp. ( EFSC ). All these
companies carry a Zacks Rank #1 (Strong Buy).