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Huntington Focuses on Long-Term Market Share Growth

NEW YORK ( TheStreet) -- Huntington Bancshares (HBAN - Get Report) CEO Stephen Steinour said the company is staying focused on growing its market share, setting up an eventual revenue payoff when interest rates finally begin to rise.

The Columbus, Ohio, lender reported Wednesday first-quarter net income of $151.8 million, or 17 cents a share, beating the consensus EPS estimate of 16 cents among analysts polled by Thomson Reuters. In comparison, the company earned $167.3 million, or 19 cents a share, in the fourth quarter, and $153.3 million, or 17 cents a share, in the first quarter of 2012.

Huntington CEO Stephen Steinour

Huntington's net interest income was $430.1 million, declining from $429.5 million the previous quarter, but increasing from $421.1 million a year earlier. The sequential decrease in net interest income mainly resulted from a lower number of days in the quarter, although the net interest margin narrowed to 3.42% in the fourth quarter from 3.45% in the fourth quarter. The margin was unchanged from a year earlier.

The year-over-year net interest income growth reflects 4% growth in in average loans and leases, with coveted commercial and industrial loans growing 14% to $17 billion in the first quarter. Meanwhile, average interest-bearing liabilities were down slightly year-over-year. Average noninterest bearing checking account grew 8% year-over year to $12.2 billion, although they were down 7% from the fourth quarter, because of the bank's "effort to reduce collateralized deposits," and because of "a recent uptick among our business customers of drawing down cash balances to support working capital needs," according to Steinour.

Huntington's first-quarter noninterest income totaled $252.2 million, declining from $297.7 million in the fourth quarter, and $285.3 million in the first quarter of 2012.

Typical quarter-over-quarter and year-over-year comparisons of Huntington's earnings don't tell the entire story. For example, the company booked $14.1 million in gains on an auto loan securitization during the fourth quarter, and $23 million in gains from a similar securitization in the first quarter of 2012. Huntington didn't conduct an auto loan securitization in the first quarter, and has no plans to do so until the second half of 2013.

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