The continued turnaround in the housing market helped Huntington Bancshares' profit to reach record levels in 2012.
The continued turnaround in the housing market helped Huntington Bancshares’ profit to reach record levels in 2012.
Yesterday, the bank said its fourth-quarter profit jumped 32 percent from the same period a year ago and was up 18 percent for the year.
Last year’s profit of $641 million was more than twice what it was in 2010 as the bank began its recovery from the depths of the recession that pushed its share price down to $1.
“The fourth quarter, like it was for all of 2012, was a solid quarter for Huntington,” Stephen Steinour, the company’s chairman, president and CEO, told analysts on a conference call.
The quarterly results, which were 2 cents ahead of analysts’ estimates, helped push the bank’s stock up 28 cents, or 4.2 percent, to $7 in trading yesterday.
Customers have been buying homes and refinancing mortgages, but in addition, Steinour said, the bank has been benefiting from the rebound in home construction.
“In many ways, we parallel our customers,” he said in an interview after the conference call. “ If our customers do well, then we do well.”
Steinour said the bank is poised for an even stronger 2013 on the back of a growing economy if Congress and President Barack Obama can reach a deal on the country’s finances early this year.
“There’s a core recovery that’s occurring,” he said.
But some customers began to delay investment decisions in the fourth quarter and remain hesitant as deadlines approach for lawmakers to raise the country’s debt ceiling and reach compromises over spending. Failing to act could push the country into recession, experts say.
“We expect the economy to perform reasonably well, but it could (surge) if we can get through this set of issues,” Steinour said, with the economy in the bank’s Midwest market continuing to do better than the U.S. as a whole.
Steinour said Huntington also is being cautious ahead of these deadlines. He said the company might delay opening up branch offices, launching products or hiring. It also could slow other investments until there is a resolution.
Steinour said the bank continues to gain customers through expanded small-business lending, free checking accounts and products that give customers 24 hours to cover overdrafts before a fee is imposed. It also has been expanding its operations with new offices in Giant Eagle stores in Ohio and Meijer stores in Michigan.
“It was an all-around positive quarter,” said Matt McCormick of Cincinnati investment advisory firm Bahl & Gaynor.
He said revenue growth for the quarter was solid, especially at a time when many banks are struggling in that area.
“You have to give them credit, and that’s why the market is pushing the stock higher,” he said.
firstname.lastname@example.orgEARNINGS Huntington Bancshares Fourth quarter 2012 2011 Revenue $737.2 million $647.9 million Net income $167.3 million $126.9 million Earnings per share 19 cents 14 cents Fiscal year 2012 2011 Revenue $2.8 billion $2.6 billion Net income $641 million $542.6 million Earnings per share 71 cents 59 cents Source: company reports