Huntington Bancshares reports 2Q earnings up

COLUMBUS, Ohio -- Huntington Bancshares Inc. said Thursday its second-quarter earnings rose 26 percent, topping Wall Street forecasts, but the regional banking company also lowered its full-year outlook in anticipation of continued losses from loans and leases.

Huntington said it made $101.4 million, or 25 cents a share, for the quarter ended June 30 compared with profits of $80.5 million, or 34 cents a share, a year ago.

Analysts surveyed by Thomson Financial were expecting earnings of 23 cents per share.

Huntington's stock was up nearly 10 percent, or 56 cents, to $6.25 in midday trading on Thursday. Shares have traded as high as $21.12 and as low as $4.37 during the past year.

The company reduced its 2008 earnings forecast to a range of $1.25 to $1.35 per share, from a previous $1.45 to $1.50.

The revision stems from the need for Huntington to continue to put money aside to cover expected credit losses resulting from economic conditions, said Thomas Hoaglin, chairman, president and chief executive.

"The economy remains weak in our markets and this continues to put stress on borrowers," Hoaglin said in a statement. "As we entered this year, our expectation was that the economy would remain under stress and it is increasingly likely that we will not see any improvement until we are well into next year."

A Thomson Financial analysts' survey looked for an annual profit of $1.04 per share.

The second quarter saw Huntington accomplish its goal of significantly strengthening its balance sheet through steps announced with its first-quarter results, such as a 50 percent reduction in its dividend, Hoaglin said. The CEO on Thursday detailed additional measures taken by the company, including the sale of $473 million in mortgage loans.

Huntington and other Ohio-based banks, including Cleveland's National City Corp. and KeyCorp and Cincinnati-based Fifth Third Bancorp, have been trying to build up their capital bases that have been battered by mortgage defaults amid the region's severe housing slump.

Huntington also has been digging out from heavy costs associated with Franklin Credit, a troubled subprime mortgage lender tied to Sky Financial Group, which Huntington acquired last year.

For the first six months of the year, Huntington has made $228.2 million, or 59 cents per share, compared with $176.2 million, or 74 cents per share, last year.

Columbus-based Huntington Bancshares is a $56 billion bank holding company with more than 600 banking offices in Indiana, Kentucky, Michigan, Ohio, Pennsylvania and West Virginia.