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Buy Huntington Bancshares for Solid Rate Play: Merrill Lynch

The Federal Open Market Committee has repeatedly said it was likely to leave the federal funds rate in its current range at least until the U.S. unemployment rate moves below 6.5%. But top FOMC and Federal Reserve officials have given conflicting statements recently about the timing of a curtailment of the Fed's bond-buying. The market always anticipates monetary policy changes, and the recent rise in market rates on the 10-year could signal a policy change in the near-term.

In its quarterly 10-Q filing with the Securities and Exchange Commission, Huntington said a 200 basis-point parallel shift in long and short-term interest rates would increase its net interest income by 3.1%, based on its first-quarter numbers.

A Balanced Rate play

"For investors looking to add 'rate sensitive' names, we would point to HBAN, a less recognized rate sensitive bank which in our view trades at a reasonable absolute P/E (10.5x) and a discounted relative P/E (0.75x) to peers , and offers relative margin defensibility today," Penala wrote.

HBAN Chart HBAN data by YCharts

Interested in more on Huntington Bancshares? See TheStreet Ratings' report card for this stock.


-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
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SYM TRADE IT LAST %CHG
CMA $47.63 0.61%
FITB $20.21 -0.15%
HBAN $10.90 0.14%
KEY $14.47 0.49%
ZION $28.38 0.21%

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