Huntington celebrates first quarter and SBA honors

April 25, 2011
| By Pete Daly |
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Huntington Bancshares has reported a “very solid first quarter,” and Michigan played no small part in that, according to the Columbus, Ohio-based bank’s regional president in Grand Rapids, Jim Dunlap.

“We made over 126 million dollars, and that’s up 3 percent from the previous quarter,” said Dunlap, adding that it equates to “14 cents a share. The analysts were expecting 12.”

Net income in the first quarter last year was $39.7 million, or one cent per common share.

Driving the numbers was the provision for credit losses, which declined more than $37 million, or 43 percent, from the 2010 fourth quarter.

Comparing the first quarter to the fourth quarter of 2010:

  • There was a 6 percent, or $38 million, decline in fully-taxable equivalent revenue, reflecting a $30.5 million decline in mortgage banking income.

  • 3.42 percent net interest margin, up 5 basis points.

  • 3 percent annualized growth in average total loans.

  • 3 percent annualized growth in average total core deposits.

  • 18 percent decline in nonaccrual loans.

  • 185 percent allowance for credit losses coverage of nonaccrual loans, up from 166 percent.

  • 0.96 percent return on average assets, up from 0.90.

  • 12.7 percent return on average tangible common shareholders’ equity.

  • 9.75 percent Tier 1 common risk-based capital.

  • 7.81 percent tangible common equity ratio, up from 7.56 percent.

“The core business” — loans and deposits — “is growing very nicely,” said Dunlap.

He noted that the federal Small Business Administration recently announced that Huntington was Michigan’s SBA Lender of the Year 2010 and ranks third nationally in terms of number and size of SBA loans it made in 2010.

Dunlap said Huntington’s SBA loans “outpaced some very sizeable competitors for two consecutive years.” Huntington has a total of $53 billion in assets and is primarily active in Ohio, Michigan, Pennsylvania, Indiana, West Virginia and Kentucky.

Dunlap said Huntington “saw solid long growth” in both of its Michigan divisions, the east side and the west side of the state. The bank’s growth on the west side was “very high single digits,” he said, but it was “medium double-digits in the east side of the state.”

The bank’s loan portfolio tripled in eastern Michigan, he added. That portfolio always has been much larger on the west side of the state, he said, “but at that pace, they will very quickly catch up to our size here.”

Dunlap said the average increase in manufacturing jobs nationally now is about 1.5 percent. “Michigan grew 6.1 percent, year over year, in manufacturing jobs. I don’t know why that isn’t more widely celebrated, but that’s where we are making loans,” said Dunlap.

Michigan’s manufacturing businesses, from the small companies on up to the major suppliers to the auto industry “are doing really well, compared to the national” measurements in job growth, said Dunlap.

Dunlap said Huntington has “changed our approach” to analyzing loan applications from businesses in Michigan. Where the traditional loan underwriter looks at the last three years of performance, Huntington looks at “much more current periods, the two quarters that were most recent.”

“Our middle market commercial loans grew by 11 percent” last year, he said.

Dunlap said the bank is lending going into the economic recovery “versus waiting for the recovery” and then making loans “after it is obvious to everyone (the recovery) has taken place.”

“We are bullish on Michigan. I’ve already made a lot of investments” in more Huntington employees in the state, said Dunlap.

He said he is also looking for additional ways to invest in Michigan to support its new political and financial leadership. “We have a great degree of confidence that this state is on the right track now and, in that regard, you will see me make additional announcements … on additional investments that I’m interested in making,” he said.

He indicated those announcements would be coming a month to six weeks from now.

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