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Huntington Continues Strong Growth

Consumer loans held in portfolio declined 6% during the second quarter to $17.7 billion, mainly because the company "reclassified $1.3 billion of automobile loans into held for sale at the end of the quarter in preparation for an expected securitization in the second half of 2012."

Total period-end deposits increased 2% sequentially and 11% year-over-year, to $46.1 billion as of June 30, with coveted noninterest-bearing demand deposits growing 4% during the second quarter and 50% year-over-year, to $12.3 billion.

Huntington CEO Stephen Steinour said the company's second-quarter results "showed the benefit of 11.6% annualized growth in consumer checking account households and 11.9% annualized growth in commercial relationships, with both electronic banking and service charges on deposits up over 9%," adding that "not only are we gaining customers, we are selling deeper with 76.0% of consumer checking account households and 32.6% commercial relationships now with 4 or more products or services."

When asked about the company's lending success, Steinour says "our lending is a reflection of a better Midwest economy and our ability to compete and take market share." Most of Huntington's loan and deposit growth has been from commercial customers, and "the way we approach this is with the relationship."

Steinour says "we're not just trying to make a loan; we're trying to create a relationship through which other products are sold," and that Huntington is "very focused on small and medium sized businesses here." When asked about particular industries that are growing, the CEO says "the manufacturing sector has clearly gotten much better, and it is much broader than autos. There is a lot of export activity out of Michigan, Indiana and Ohio, and a fair amount of commercial construction going on, related to health care."

Steinour ads that "there is a gas play in western Pennsylvania, through Ohio and parts of Michigan, not just on the drilling side, but with lots of different supply elements coming together."

Huntington's second-quarter return on average assets was 1.10%, compared to 1.13% the previous quarter, and 1.11% a year earlier. The company's second-quarter return on average tangible common equity was 11.1%, declining from 11.4% in the first quarter, and 11.6% in the second quarter of 2011.

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