On Aug 7, 2014, we issued an updated research report on Huntington Bancshares Incorporated (HBAN). This commercial and consumer banking services provider recently reported impressive second-quarter 2014 results, driven by strong organic growth.
Huntington reported second-quarter 2014 earnings of 19 cents per share, beating the Zacks Consensus Estimate by a penny. Moreover, prior-year quarter earnings were outpaced by 11.76%.
Results were aided by top-line growth. Further, loan and deposit balances exhibited growth. However, the quarter witnessed higher expenses. With the improvement in the economy of the Midwest region, management expects overall growth in business in the upcoming quarters, though it remains cautious owing to uncertainties in the broader economy.
The company is focused on acquiring the industry's best deposit franchise. Despite the overall sluggish economic environment, Huntington’s total deposits rose 5% year over year, while total loan balance increased 10% over the same time period in second-quarter 2014, primarily driven by increased lending activity in its construction and automobile sector. Therefore, both loan and deposit balances are poised to grow in an improving economy.
Given its robust liquidity position, Huntington is well positioned to expand via acquisitions. In 2014, Huntington completed the acquisition of Camco Financial and is set to strengthen its Michigan branch network by acquiring 24 branches in Michigan from Bank of America Corp. We believe that such efforts will help the company gain market share significantly and thereby enhance its profitability in the long run.
Following second-quarter 2014 results, the Zacks Consensus Estimate over the past 30 days rose around 2.8% to 74 cents per share for 2014. Also, for 2015 it increased about 2.6% to 79 cents per share, over the same time frame. Hence, Huntington currently carries a Zacks Rank #2 (Buy).
Key Picks from the Sector
Other Midwest banks worth considering include German American Bancorp Inc. (GABC), First Business Financial Services, Inc. (FBIZ) and MidWest One Financial Group, Inc. (MOFG). All three carry a Zacks Rank #2.