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Huntington Holds Steady, CEO Touts 'Wallet Share' (Update 1)

Coveted noninterest-bearing demand deposits totaled $12.9 billion, growing 6% from the first quarter, and 7% year-over-year. Average Money market deposit balances were $15.1 billion in the second quarter, growing only slightly from the first quarter but up 14% from a year earlier.

Huntington's second-quarter noninterest income totaled $248.7 million, declining from $252.2 million the previous quarter and $253.8 million during the second quarter of 2012.

Huntington's second-quarter mortgage banking income declined to $33.7 billion from $45.2 billion the previous quarter and $38.3 billion a year earlier. With rising long-term interest rates, gain-on-sale margins have been declining for mortgage loans. The bank also said "the benefit of net mortgage servicing rights (MSR) decreased by $2.5 million," from a year earlier.

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Steinour says Huntington's "theme is customer growth, with annualized growth in consumer deposits of 11.8% in the first quarter. We continue to take market share. In this low-rate environment it has not translated to significant revenue yet, but it will."

The bank has been emphasizing "share of wallet" for deposit customers for some time.

"Our customer acquisition continues to improve. We have just under 47% of our consumer checking households having six products or services. The more products and services we have, the more likely it is for those customers to stick with us over the long term," Steinour says.

Steinour characterizes Huntington's second-quarter numbers as "solid."

"There was a lot of change going on during the first half of the year," Steinour says. He is particularly focused on comments from Federal Reserve chairman Bernanke indicating the central bank may pull back on its monetary stimulus this year.

"Bernanke's comments about tapering are a benchmark for the U.S. economy and growth. This poses a challenge to the industry for mortgage banking income but will be very positive for the opportunities economic expansion affords us."

Basel III

Huntington reported a June 30 Basel 1 Tier 1 common equity ratio of 10.71%, increasing from 10.08% a year earlier, and said the Federal Reserve's capital rules finalized on July 2 would lower the Tier 1 common equity ratio by about 60 basis points.

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