Zacks_Analysts' Blog : Huntington Bancshares Upgraded - Analyst Blog

We have upgraded our recommendation on Huntington Bancshares Inc. (HBAN) to Outperform from Neutral following a detailed analysis of the company’s fundamentals in light of the current economic environment.

The company’s loan portfolio is growing far more impressively than its peers.

Huntington reported first quarter 2011 earnings of 15 cents per share, beating the Zacks Consensus Estimate of 12 cents.

However, after including the impact of a one-time addition to litigation reserves, Huntington reported a profit of $126.4 million or 14 cents per share. This compares favorably with $122.9 million or 5 cents per share earned in the prior quarter and $39.7 million or a penny per share in the year-ago quarter.

Huntington’s better-than-expected results reflected a significant improvement in credit quality, a modest growth in loans and deposits, increase in net interest margin and low levels of non-interest expenses. However, the company’s top line declined during the quarter.

Huntington expects to report its second quarter 2011 earnings on Thursday, July 21, 2011, before the market opens. According to the Zacks Consensus Estimate, the company is expected to report earnings of 15 cents per share in the second quarter on revenue of $652 million.

Huntington remains focused on capitalizing on its growth opportunities. Strategic initiatives are right on track, and the company is poised to benefit from an economic rebound. By making active efforts to reduce its problem assets, the company has lowered the level of its criticized commercial loans. Though issues related to a sluggish economic recovery along its footprints and regulatory concerns remain, its solid capital position and tactical efforts are expected to reduce those impacts.

Huntington shares are maintaining a Zacks #3 Rank, which translates into a short-term ‘Hold’ recommendation. One of the closest peers of Huntington, Northern Trust Corporation (NTRS) also retains a Zacks #3 Rank.